May 25, 2012

Financial Results for the Year Ended March 31, 2012

Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the year ended March 31, 2012.

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

P.1

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

P.3

3. Investment Activities of General Account Assets…………………

P.4

4. Non-consolidated Balance Sheets…………………

P.12

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

P.13

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

P.24

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

P.25

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

P.27

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

P.28

10. Risk-monitored Loans…………………

P.29

11. Solvency Margin Ratio…………………

P.30

12. Status of Separate Account…………………

P.32

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

P.39

Attached: Supplementary Materials for the Year Ended March 31, 2012

Financial Summary for the Year Ended March 31, 2012
1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies.
(i) Policies in Force
As of March 31, 2011
Number of policies

As of March 31, 2012

AmountNumber of policies

Amount(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)

Individual insurance

2,967

100.1

270,750

94.9

2,983

100.5

259,536

95.9

Individual annuities

755

100.9

29,754

99.8

770

102.0

29,989

100.8

3,722

100.2

300,504

95.4

3,753

100.8

289,526

96.3

SubtotalGroup insurance−− 162,472

101.8

−

− 160,562

98.8

Group annuities

−

−

98.2

−

−

100.3

19,664

19,720Notes: 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 payments have not yet commenced, and (b) the amount of policy reserve for an annuity for which payments havecommenced.
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, 2011

New business

Number of policies

AmountAmount

Net increase by
conversion
Amount(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Individual insurance

411

94.0

11,88598.4

14,75795.6(2,871)−

Individual annuities

37

95.1

1,209

95.8

1,238

96.0

(29)

−

449

94.1

13,09498.2

15,99595.7(2,901)−

Group insurance

−

−

529

102.8

529

102.8

−

−

Group annuities

−

−

4

511.9

4

511.9

−

−

Subtotal

Total
Year ended
March 31, 2012

New business

Number of policies

AmountAmountChanges(%, YoY)

Net increase by
conversion
Amount(Thousands)

Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Changes(%, YoY)(100 millionsof yen)Individual insurance

387

94.0

13,310112.0

15,226103.2(1,916)−

Individual annuities

43

115.7

1,427

118.1

1,452

117.2

(24)

−

430

95.8

14,737112.6

16,678104.3(1,940)−Group insurance

−

−

185

35.0

185

35.0

−

−

Group annuities

−

−

0

17.4

0

17.4

−

−

Subtotal

Changes(%, YoY)

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be held at
the time annuity payments are to commence.
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, 2011

Year ended March 31, 2012

Changes(%, YoY)

Amount of surrender and ｌapses(100 millions of yen)
Surrender and lapse ratio(%)

Changes(%, YoY)

17,684

92.7

16,46993.1

5.61(0.13)

5.48(0.13)

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

-1-

Fukoku Mutual Life Insurance Company

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

As of March 31, 2011

As of March 31, 2012

Changes(%, YoY)

Changes(%, YoY)

Individual insurance

2,848

97.0

2,809

98.6

Individual annuities

1,269

101.4

1,302

102.6

Total

4,118

98.3

4,111

99.8

1,018

101.0

1,035

101.7

Medical coverage and living benefits(ii) New Policies(100 millions of yen except percentage)

Year ended March 31, 2011

Year ended March 31, 2012

Changes(%, YoY)

Changes(%, YoY)

Individual insurance

195

100.6

205

105.0

Individual annuities

55

94.3

63

115.6

Total

250

99.2

268

107.4

76

87.9

83

108.7

Medical coverage and living benefits

Notes:1. Annualized premiums are calculated by using coefficients based on the premium payment method. (For single premium contracts,
the amount is calculated by dividing the premium by the coverage period.)
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, inwhich disability cause is excluded but causes such as specific illness are included.
Notes:3. Amounts of new policies include net increase by conversion.

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

Year ended March 31, 2011

Year ended March 31, 2012

Changes(%, YoY)

Changes(%, YoY)

Premium and other income

6,658

106.7

5,899

88.6

Investment income

1,464

99.1

1,456

99.5

Claims and other payments

6,140

108.8

4,827

78.6

Investment expenses

500

71.3

546

109.1

Ordinary profits

590

179.0

504

85.5

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

Year ended March 31, 2011

Year ended March 31, 2012

Changes(%, YoY)

Changes(%, YoY)

Unappropriated surplus

695

128.6

578

83.2

Reserve for dividends to policyholders

243

125.0

239

98.4

Net surplus

169

285.0

135

79.9

Unappropriated surplus carried forward

282

98.6

203

72.0

Note: Unappropriated surplus for the years ended March 31, 2011 and 2012 included reversal of voluntary surplus reserve of ¥7 millionand ¥7 million, respectively.

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

As of March 31, 2011

As of March 31, 2012

Changes(%, YoY)

Total assets

56,752-2-

101.1

Changes(%, YoY)

56,995

100.4

Fukoku Mutual Life Insurance Company

2. Policies in Force by Coverage Type[As of March 31, 2012](Thousands of number, 100 millions of yen)

Individual insurance Individual annuities

Group insurance

Total

NumberAmountNumberAmountNumberAmountNumberAmountIllness and accident

1,891

190,353−959

18,436

160,534

20,327

351,848

Accident

1,473

31,982

301

836

2,624

6,350

4,399

39,170

−

−

−

−

0

7

0

7

1,092

65,190770

29,029

8

28

1,870

94,249Accident

1,486

86

−

−

1,151

3

2,638

90

Illness

1,484

86

−

−

−

−

1,484

86

Others

2,001

100

−

−

0

0

2,002

100

Injury coverage

1,391

−

4

−

2,121

−

3,517

−

Surgical coverage

3,386

−

−

−

−

−

3,386

−

Disability coverage

64

3,991

0

0

−

−

64

3,991

Death coverage

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

Survival coverage

Worker's asset formation
insurance and annuities

Total

NumberAmountNumberAmountNumberAmount10,115

19,72018

354

10,13320,075(Thousands of number, millions of yen)(Thousands of number, millions of yen)

Medical careinsurance

Hospitalization coverage

NumberAmount337

120Group disability
insurance

Disability coverage

NumberAmount4

38

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

-3-

Fukoku Mutual Life Insurance Company

3. Investment Activities of General Account Assets(1) Asset Composition
As of March 31, 2011
AmountCash, deposits, call loans

237,739

Monetary claims bought
Money held in trust

Percentage(Millions of yen)
As of March 31, 2012
Percentage

Amount4.2 %94,857

1.7 %

1,424

0.0

1,351

0.0

33,1690.6

35,194

0.6

3,699,745

66.1

4,075,938

72.5

Domestic bonds

2,430,669

43.4

2,737,371

48.7

Domestic stocks

352,641

6.3

353,248

6.3

Foreign securities

862,075

15.4

927,377

16.5

Foreign bonds

687,834

12.3

729,001

13.0

Foreign stocks and other securities

174,240

3.1

198,375

3.5

54,3591.0

57,9401.0

1,143,863

20.4

1,039,363

18.5

Policy loans

71,4791.3

70,164

1.2

Ordinary loans

1,072,383

19.2

969,19917.2

281,2885.0

273,246

4.9

Securities

Other securities
Loans

Real estate
Deferred tax assets

87,332

1.6

47,1300.8

Others

112,466

2.0

54,4821.0(2,513)(0.0)(2,299)(0.0)

5,594,517

100.0

5,619,265

100.0

696,20712.4

770,441

13.7

Allowance for possible loan losses
Total
Foreign currency denominated assets(2) Changes (Increase/Decrease) in Assets(Millions of yen)
Year ended March 31, 2011
Cash, deposits, call loans
Monetary claims bought
Money held in trust
Securities
Domestic bonds
Domestic stocks
Foreign securities

77,735(327)
267(11,085)(135,308)(120,576)
240,002240,921(919)
4,796(77,082)(2,706)(74,375)
5,456
25,16255,045(83)
75,088237,512

Foreign bonds
Foreign stocks and other securities
Other securities
Loans
Policy loans
Ordinary loans
Real estate
Deferred tax assets
OthersAllowance for possible loan losses
Total
Foreign currency denominated assets-4-

Year ended March 31, 2012
(142,881)
(73)
2,024
376,192
306,702606
65,302
41,167
24,134
3,581(104,500)(1,315)(103,184)(8,041)(40,201)(57,984)
213
24,747
74,233

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)Interest, dividends and other income
Interest from deposits
Interest and dividends from securities
Interest from loans
Income from real estate for rent
Other interest and dividends
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Gains on sales of domestic bonds
Gains on sales of domestic stocks
Gains on sales of foreign securities
OthersGains on redemption of securities
Gains from derivative instruments, net
Foreign exchange gains, net

Year ended
March 31, 2011

Year ended
March 31, 2012

111,965899
72,78923,88314,141
252
361−
30,455
19,211
11,2394−

113,51793
76,26522,163
14,775219
162
12,872
16,854
11,747
3,780
1,326
−
338
−
−
103
148
143,996−
3,335

Reversal of allowance for possible loan losses
Other investment income
Total

−
−
281
146,400(4) Investment Expenses(Millions of yen)Interest expenses
Losses from trading securities, net
Losses on sales of securities
Losses on sales of domestic bonds
Losses on sales of domestic stocks
Losses on sales of foreign securities
Losses on valuation of securities
Losses on valuation of domestic bonds
Losses on valuation of domestic stocks
Losses on valuation of foreign securities
Others
Losses from derivative instruments, net
Foreign exchange losses, net
Depreciation of real estate for rent and other assets
Other investment expenses
Total

Year ended
March 31, 2011

Year ended
March 31, 2012

1,525
5,069
20,418908
13,036
6,473
5,922

1,409

−
5,870
52
−
−
2,654
5,732
5,717
47,040−24,925
1,324
17,027
6,573
7,986
1,444
6,017
−
524
5,725
1,874
6,477
6,208
54,608(5) Net Investment Income(Millions of yen)

Net investment income-5-Year ended
March 31, 2011

Year ended
March 31, 2012

99,35989,388

Fukoku Mutual Life Insurance Company

(6) Other Information on Investments(i) Investment Yield by Asset Categories(%)
Year ended
March 31, 2011

Cash, deposits, call loans
Monetary claims bought
Money held in trust
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other securities
Loans
Ordinary loans
Real estate
Total
Overseas investments

Year ended
March 31, 2012

0.15
1.07
1.10
1.87
2.47
0.39
0.94
1.09
0.42
2.02
1.86
1.72
1.80
0.97

0.09
(2.37)
0.47
1.59
2.19
(3.58)
2.00
2.27
0.97
2.04
1.88
1.48
1.60
2.07

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

(ii) Average Daily Balance(Millions of yen)
Year ended
March 31, 2011
Cash, deposits, call loans
Monetary claims bought
Money held in trust
Securities
Domestic bonds
Domestic stocks
Foreign securities
Foreign bonds
Foreign stocks and other securities
Loans
Ordinary loans
Real estate
Total
Overseas investments-6-

135,624
1,527
32,831
3,719,895
2,478,433
380,203
802,968
622,352
180,616
1,185,048
1,111,885
280,973
5,526,395
833,965

Year ended
March 31, 2012
118,319
1,386
34,832
3,896,952
2,531,543
339,239
965,504
766,140
199,363
1,097,945
1,027,906
280,305
5,594,403
974,312

Fukoku Mutual Life Insurance Company

(iii) Net Valuation Gains/Losses on Trading Securities(Millions of yen)
As of March 31, 2011
Net valuation gains/losses
Carrying value on
included in the statement
the balance sheetof operations
260,341(3,640)

Trading securities

As of March 31, 2012
Net valuation gains/losses
Carrying value on
included in the statement
the balance sheetof operations
248,2488,474

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, 2011

As of March 31, 2012

Gains/losses

Book value Fair value

Gains/losses

Book value Fair value

Gains

Losses

Gains

Losses427,312436,409

9,096

9,983

886

823,530

852,343

28,812

29,263450

Domestic bonds

378,178

387,523

9,345

9,345

−

777,527804,084

26,556

26,868311

Foreign bonds

49,134

48,885

(249)

637

886

46,002

48,258

2,256

2,394

138

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

652,180

672,087

19,90723,872

3,965

684,915722,269

37,35438,994

1,640

Domestic bonds

644,831664,759

19,92823,872

3,944

669,991

707,41237,42038,9711,550

Foreign bonds

7,349

7,328

(21)

0

21

14,923

14,857

(66)

23

90

1,393

868

(524)

−

524

1,393

854

(538)

−

538

2,331,356 2,347,024

15,66776,48660,818 2,202,478 2,300,260

97,782

135,997

38,215

1,389,523 1,407,660

18,13624,3696,232 1,218,715 1,273,929

55,21358,002

2,788

317,678

17,46043,32725,86740,42454,341

13,916
18,569Held-to-maturity debt securities

Policy-reserve-matching bonds

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

300,218

268,766

309,191

Foreign securities

593,121575,527(17,594)

7,582

25,177

663,501

666,928

3,426

21,996

Foreign bonds

411,835

403,179(8,656)

4,572

13,228458,405

469,945

11,54018,3406,800

Foreign stocks and other securities

181,285

172,347(8,938)3,010

11,948205,095

196,982(8,113)

3,656

11,769Other securities

48,491

46,158(2,333)

1,207

3,541

51,49450,211(1,283)

1,658

2,941

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

3,412,242 3,456,389

44,146110,342

66,195 3,712,316 3,875,727

163,410204,255

40,8452,412,533 2,459,943

Total
Domestic bonds

47,41057,587

10,176 2,666,234 2,785,425

119,191

123,841

4,650

Domestic stocks

300,218

317,678

17,46043,32725,867

268,766

309,191

40,42454,341

13,916

Foreign securities

650,998

632,608(18,390)

8,220

26,610725,821730,898

5,077

24,415

19,337

Foreign bonds

468,319459,392(8,927)

5,209

14,136519,332

533,061

13,72920,7587,028

Foreign stocks and other securities

182,678

173,215(9,462)

3,010

12,473

206,489

197,836(8,652)

3,656

12,308Other securities

48,491

46,158(2,333)

1,207

3,541

51,49450,211(1,283)

1,658

2,941

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

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

* Book value of securities whose market value are deemed extremely difficult to obtain are as follows:(Millions of yen)
As of March 31, 2011 As of March 31, 2012
Held-to-maturity debt securities−−

Unlisted foreign bonds−−

Others−−−−Investments in subsidiaries and affiliates

26,61635,969Available-for-sale securities

Policy-reserve-matching bonds

17,047

15,816

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

8,345

8,086

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

500−

Unlisted foreign bonds
Others
Total

-7-

−

−

8,201

7,729

43,66451,785

Fukoku Mutual Life Insurance Company

(v) Fair Value Information on Money Held in Trust(Millions of yen)
As of March 31, 2011
Carrying value on
the balance sheet

Money held in trust

33,169As of March 31, 2012

Gains/losses

Fair value

Gains33,169−−Losses−Carrying value on
the balance sheet

35,194

Gains/losses

Fair value

Gains35,194−−Losses−* Money held in trust for trading purpose(Millions of yen)
As of March 31, 2011

As of March 31, 2012

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet
32,169

Money held in trust for trading purpose

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet(0)34,1940* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)
As of March 31, 2011
Book value

As of March 31, 2012

Gains/losses

Fair value

Gains

Book value

Gains/losses

Fair value

Losses

Gains

LossesMoney held in trust for held-to-maturity

−

−

−

−

−

−

−

−

−

−

Money held in trust for policy-reserve-matching

−

−

−

−

−

−

−

−

−

−

Money held in trust for available-for-sale

−

−

−

−

−

−

−

−

−

−

-8-

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (General Account)(i) Gains and Losses on Derivatives(Millions of yen)Interestrelated
560
69
629
Interestrelated
249
(820)
(570)

As of March 31, 2011
Hedge accounting applied
Hedge accounting not applied
Total
As of March 31, 2012
Hedge accounting applied
Hedge accounting not applied
Total

Currencyrelated(2,290)(5,996)(8,287)
Currencyrelated(3,755)(762)(4,518)Stockrelated

Bondrelated

−
(123)
(123)
Stockrelated
−
(32)
(32)

Others−−−

Bondrelated−−−
Others

−
172
172

−
−
−

Total
(1,730)(6,049)(7,780)Total(3,506)(1,442)(4,948)

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of ¥2,290 million as of March 31, 2011and losses of ¥3,755 million as of March 31, 2012) included in gains and losses with hedge accounting applied, and gains andlosses with hedge accounting not applied are reported in the statements of operations.

(ii) Interest-related Transactions(Millions of yen)
As of March 31, 2011
Notional amount/contract value
Fair
Over
value
1 yearOver-the-counter transactions
Yen interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
Foreign interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
US dollar
Yen interest rate swaption contracts
Sold
Receipt fixed, payment floating[
Payment fixed, receipt floating[
BoughtReceipt fixed, payment floating[
Payment fixed, receipt floating[

As of March 31, 2012
Notional amount/contract value
Fair
Over
value
1 yearGains(losses)Gains(losses)

39,863−

17,905
−

560
−

560
−

17,700−12,700
−

249
−

249
−

−
16,404
16,404−
16,404
16,404

−
69
69

−
69
69

−
−
−

−
−
−

−
−
−

−
−
−

−[

−
− ]
−
− ]

−

−

−

−

−

−

−
− ]
500,000
1,376 ]

−
−

−

555

(820)

−
− ]
−
− ]

−

−
− ]
−
− ]

−

−
−

−[

−

−[

−
−

Total

−[

−

−

629

(570)

* Interest rate swap contracts by contractual maturity dates(Millions of yen)
As of March 31, 2012

As of March 31, 2011
Yen interest rate swap contracts
1 year or
shorter
Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
Average fixed rate (payment)
Foreign interest rate swap contracts

21,958
1.35%
0.45%
−
−
−
1 year or
shorter

Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
US dollar
Average fixed rate (payment)
US dollar

−
−
−
−
−
−
−
−

Over
1 year to
3 years
17,000
1.64%
0.62%
−
−
−
Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years
905
2.28%
1.25%
−
−
−
Over
3 years−−−
16,404
0.31%
0.31%
3.49%
3.49%

-9-

1 year or
shorter
5,000
1.64%
0.61%
−
−
−
1 year or
shorter
−
−
−
−
−
−
−
−

Over
1 year to
3 years
12,360
1.66%
0.61%
−
−
−
Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years
340
2.47%
1.24%
−
−
−
Over
3 years
−
−
−
−
−
−
−
−

Fukoku Mutual Life Insurance Company

(iii) Currency-related Transactions
As of March 31, 2011
Notional amount/
Fair
contract value
value
Over
1 yearOver-the-counter transactions
Currency forward contracts
Sold
US dollar
Euro
Australian dollar
Canadian dollar
British Pound
Bought342,733
188,104
55,921
48,03538,861
11,809−Currency Options
Sold
Calls
[
Puts
[
Bought
Calls
[
Puts
[
US dollar[
Euro[− 351,020− 189,857− 58,346− 50,617− 40,168− 12,030
−
−

−
−]
−
−]

−

−
−]
−
−]
−
−]
−
−]

−

−

Gains
(losses)(8,287)(1,752)(2,425)(2,582)(1,306)
(220)
−

− [

−
−

− [

−

− [

−
−

− [

−
−

− [

−
−

Total

− [

(Millions of yen)
As of March 31, 2012
Notional amount/
Fair
Gains
contract value
value(losses)Over
1 year286,498
146,877
67,93331,07523,66916,941−

290,984
148,62070,47730,89623,921
17,068
−
−

−
−]
−
−]

−

−
−]
46,215109 ]
35,71593 ]
10,50016 ]−(4,486)(1,742)(2,544)
178
(251)
(126)
−

−

−

−

−

−

−

77

(31)

59

(34)

18

2

−

−
−
−

(8,287)(4,518)Notes: 1. Figures in [ ] are option premiums which are included in balance sheet.
2. Forward exchange rates are used for exchange rates as of the end of fiscal year.
3. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward contracts
and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

(iv) Stock-related Transactions
As of March 31, 2011
Notional amount/Gainscontract value
Fair value(losses)Over
1 yearExchange-traded transactions
Yen stock index futures
Sold
Bought

9,636
−

−
−

9,760
−

Total

(123)
−

(Millions of yen)
As of March 31, 2012
Notional amount/Gainscontract value
Fair value(losses)Over
1 year

5,012
−

−
−

5,045
−

(32)
−

(123)

(32)

As of March 31, 2011
Notional amount/Gainscontract value
Fair value(losses)Over
1 year(Millions of yen)
As of March 31, 2012
Notional amount/Gainscontract value
Fair value(losses)Over
1 year(v) Bond-related Transactions

Exchange-traded transactions
Yen bond futures
Sold
Bought

−
−

−
−

−
−

−
−

28,446−−−28,402−44−

Foreign bond futures
Sold
Bought

−
−

−
−

−
−

−
−
−

10,771−−−

10,642
−

128
−
172

Total

- 10 -

Fukoku Mutual Life Insurance Company

(reference) Fair Value of Real Estate (Land and Leaseholds)(Millions of yen)
As of March 31, 2011
Carrying value on
the balance sheet
163,749

Fair value
230,903

As of March 31, 2012
Carrying value on
the balance sheet

Gains(losses)
67,153

161,252

Fair value
223,596

Gains(losses)
62,343

Notes: 1. As of March 31, 2011, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property

tax as of January 1, 2011 and the road rate as of January 1, 2010.
2. As of March 31, 2012, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value for property
tax as of January 1, 2012 and the road rate as of January 1, 2011.

- 11 -

Fukoku Mutual Life Insurance Company

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

Assets:Cash and deposits
CashBank deposits
Call loans
Monetary claims bought
Money held in trust
Securities
Government bonds
Local government bonds
Corporate bonds
StocksForeign securities
Other securities
Loans
Policy loans
Ordinary loans
Tangible fixed assets
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Other intangible fixed assets
Reinsurance receivables
Other assets
Accounts receivable
Prepaid expenses
Accrued income
Deposits
Differential account for futures trading
Derivatives
Suspense payments
Other assets
Deferred tax assets
Allowance for possible loan losses

As of March
31, 2011

As of March
31, 2012

237,823156
237,667−
1,424
33,1693,778,639
1,695,927
149,399
615,051
379,416884,02954,814
1,143,863
71,479
1,072,383
284,670
163,574
116,548
47
1,165
3,334
8,765
8,318
447
170
101,867
63,8591,653

29,345154
29,19165,6001,351
35,194
4,148,127
1,991,905
158,459
614,449
377,385
947,574
58,354
1,039,363
70,164
969,199
276,619
161,076
109,935
117
2,234
3,255
8,573
8,126
446
117
50,404
10,577
1,249

23,444
2,145
73
881
4,740

23,784
2,058
42
1,588
6,497
4,606

5,070
87,332(2,513)As of March As of March
31, 2011
31, 2012
Liabilities:
Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables
Subordinated bonds
Other liabilities
Corporate income tax payable
Accounts payable
Accrued expenses
Unearned income
Deposits received
Guarantee deposits received
Differential account for futures trading
Derivatives
Asset retirement obligations
Suspense receipts
Reserve for employees' retirement benefits
Reserve for price fluctuation of securities
Deferred tax liabilities for revaluation reserve for land
Total liabilities
Net assets:
Foundation funds
Accumulated foundation funds redeemed
Reserve for revaluation
Surplus
Legal reserve for future losses
Other surplus
Reserve for redemption of foundation funds
Reserve for dividend allowances
Accumulated fund for price fluctuation
Reserve for advanced depreciation of realestate for tax purpose

Other reserves
Unappropriated surplus
47,130 Total foundation funds, surplus and others(2,299) Net unrealized gains (losses) on available-for-salesecurities, net of tax
Deferred valuation gains (losses) under hedge accounting

Revaluation reserve for land, net of tax
Total valuation and translation adjustments
Total net assets
Total assets

5,675,214

5,699,527 Total liabilities and net assets- 12 -

5,216,576
31,053
5,132,317
53,205
86
35,214125,256
10,85072,288
9,989
435
5,637
13,402
−
8,661
2,846
1,143
50,10933,432
19,936
5,480,612

5,266,726
22,615
5,190,141
53,96967
32,896
48,377
1,291
5,894
11,169435
5,301
13,577
142
6,530
2,846
1,188
46,32035,48816,1955,446,071

40,00046,000112
96,763
2,249
94,51320,0003,895−

35,00071,000112
76,104
2,325
73,779−3,895
11,000

296

289

767
69,554
182,875

767
57,827
182,216

9,994

67,684365
1,366
11,726170
3,383
71,239194,601

253,455

5,675,214

5,699,527

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Operations

Ordinary revenues:
Premium and other income
Premium income
Reinsurance income
Investment income
Interest, dividends and other income
Interest on deposits
Interest and dividends on securities
Interest on loans
Income from real estate for rent
Other interest and dividends
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Gains from redemption of securities
Gains from derivative instruments, net
Reversal of allowance for possible loan losses
Other investment income
Gains from separate accounts, net
Other ordinary revenues
Fund receipt from annuity rider
Fund receipt from deposit of claims paid
Reversal of reserve for outstanding claims
Reversal of policy reserve
Reversal of reserve for employees' retirement benefits
OthersTotal ordinary revenues
Ordinary expenditures:
Claims and other payments
ClaimsAnnuities
Benefits
Surrenders
Other payments
Reinsurance premiums
Provision for policy reserve and others
Provision for reserve for outstanding claims
Provision for policy reserve
Interest on accumulated dividends to policyholders
Investment expenses
Interest expenses
Losses from trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Depreciation of real estate for rent and other assets
Other investment expenses
Losses from separate accounts, net
Operating expenses
Other ordinary expenditures
Claim deposit payments
Taxes
Depreciation
Provision for reserve for employees' retirement benefits
OthersTotal ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Reversal of allowance for possible loan losses
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Losses on reduction entry of real estate for tax purpose
Effect of applying the accounting standard for asset retirement obligations

Total extraordinary losses
Surplus before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net surplus for the year

- 13 -

Year ended March
31, 2011(Millions of yen)
Year ended March
31, 2012

665,844665,618
226
146,400
111,965899
72,78923,88314,141
252
361−
30,455
−
3,335
−
281
−
24,671
842
8,295−
13,081−
2,452
836,916

589,918
589,599319
145,676
113,51793
76,26522,163
14,775219
162
12,872
16,854
338
−
103
148
1,679
19,247
1,347
6,422
8,438
−
639
2,399
754,842614,005
176,286
91,536
185,770
130,881
29,194
335
5,828
5,711
−
116
50,074
1,525
5,069
20,418
5,922
−
2,654
5,732
5,717
3,034
86,511
21,49010,421
4,793
5,413
332
530
777,90959,006

482,797
140,375
94,983127,082
94,006
26,070278
57,906−57,82383
54,608
1,409−
24,925
7,986
5,725
1,874
6,477
6,208
−
88,725
20,375
9,746
4,831
5,276
−
520
704,41350,429

16
899
915

4,645
−
4,645

96
318
6,981
−
966
8,362
51,55913,406(3,370)10,035
41,524

160
433
2,056
9
−
2,659
52,414
8,623
15,01323,636
28,778

Fukoku Mutual Life Insurance Company

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

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent
to securities, and securities managed as trust assets in money held in trust, is as follows:i)

Trading securities are stated at fair market value. Costs of their sales are determined by themoving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.

iii)

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

iv)

Investments in subsidiaries and affiliates are stated at cost, cost being determined by themoving average method.

v)

Available-for-sale securities with fair market values are stated at fair market value based on
the market prices at the end of fiscal year. Costs of their sales are determined by the moving
average method. Net unrealized gains or losses on these available-for-sale securities, net oftaxes, are recorded as a separate component of net assets.
Available-for-sale securities whose fair market values are deemed extremely difficult toobtain are stated at cost, cost being determined by the moving average method, except for
public and corporate bonds including foreign bonds, of which the difference between
acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving
average method.

(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting- 14 -

Fukoku Mutual Life Insurance Company

from the revaluation, net of related taxes, is recorded as revaluation reserve for land as a separate
component of net assets and the related tax is recorded as deferred tax liabilities for revaluation
reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said
Ordinance with certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of tangible fixed assets is calculated by the following methods.
 Buildings (excluding lease assets)i)

Acquired on or before March 31, 1998: Previous declining-balance methodii)

Acquired on or after April 1, 1998 but on or before March 31, 2007: Previous straight-line
methodiii)

Acquired on or after April 1, 2007: Straight-line method

 Assets other than buildings (excluding lease assets)i)

Acquired on or before March 31, 2007: Previous declining-balance methodii)

Acquired on or after April 1, 2007: Declining-balance method Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities, except for investments in subsidiaries andaffiliates, are translated into Japanese yen at the effective exchange rate prevailing at the balance
sheet date. Investments in subsidiaries and affiliates are translated into Japanese yen at the exchange
rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i)

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

ii)

For the credits of borrowers who are not currently bankrupt but have a high possibility ofbankruptcy, the Company provides the amounts deemed as necessary considering theborrowers’ ability to pay, within the amounts after deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.

iii)

For the credits of borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses on
defaults during a certain past period.

All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,- 15 -

Fukoku Mutual Life Insurance Company

which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amount written-off as of March 31, 2012 was ¥287 million.
(7) Reserve for Employees’ Retirement Benefits
The Company adopts accounting standards for employees' retirement benefits (Business Accounting
Council dated June 16, 1998) and accounts for the reserve for employees’ retirement benefits basedon the projected benefit obligation and plan assets at the balance sheet date.
The Company adopts “Guidance on Accounting for Transfers between Retirement Benefit Plans”(ASBJ Guidance No.1 issued by the Accounting Standards Board of Japan on January 31, 2002) as
the Company transferred qualified retirement pension plans to defined benefit corporate pension plans,
and part of lump sum benefit plans to defined contribution pension plans on July 1, 2011.
(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessee
Finance lease transactions that do not transfer ownership to the lessee whose commencement day
was on or before March 31, 2008 continued to be accounted for in a manner similar to accounting
treatment for ordinary rental transactions.
(10) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“interest, dividends and other income” at the time of receiving lease fee. The corresponding cost of thelease transactions is recorded in “other investment expenses”, which is calculated by deducting anamount equivalent to the interest allocated over the lease term from the lease fee received.
(11) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement
No.10 issued by the Accounting Standards Board of Japan on August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of
foreign currency-denominated bonds classified as available-for-sale securities, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, valuation gains and losses on the foreign currency forward contracts are recorded in thestatements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments andthe hedged items, valuation gains and losses on the interest rate swaps are deferred until the maturityof the hedged transactions.
Deposits denominated in foreign currencies for which forward foreign exchange contracts are used
to hedge the foreign currency fluctuations are translated at the contract rates if the forward contracts
qualify for specific hedge accounting. In this case, exchange differences between the exchange rate on
the trade date and the forward contract rate are allocated to each fiscal year from the date contracted
to the date settled.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Consumption Taxes- 16 -

Fukoku Mutual Life Insurance Company

The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at theend of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method isapplied.
(14) Software
The software for internal use is amortized based on straight-line method over the estimated useful lives.
(15) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This
amount is deducted from bonds.
(16) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
2. Changes in Presentation
Effective for the fiscal year ended March 31, 2012, in accordance with the amendment of the
Enforcement Regulation of the Insurance Business Law, the presentation of financial statements has
been changed as follows.
(a) As for the statement of operations, “reversal of allowance for possible loan losses” which waspresented in “extraordinary gains” until previous fiscal year is included in “investment income”.
(b) As for the statement of changes in net assets, the item which was presented as “balance at theend of previous fiscal year” until previous fiscal year is presented as “balance at the beginning ofcurrent period”.
3. Financial Instruments
Asset management of the general accounts other than the separate accounts stipulated in Article 118
Paragraph 1 of the Insurance Business Law is conducted on the principle of prudent and profitable
investments, considering public and social responsibilities of the insurance business. Based on thispolicy, the Company allocates the fund, securing its liquidity, from the medium-to-long term viewpoints.
The Company is diversifying investments in assets such as foreign securities and equity securities
within the acceptable range of risk in order to enhance the profitability, although yen-denominatedinterest bearing assets including debt securities such as Japanese government bonds and loans are
the cores of the portfolios. Derivatives are mainly used to mitigate the market risk regarding thesecurities and loans. 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 “Basic Policy for Risk Management” established by the Board of- 17 -

Fukoku Mutual Life Insurance Company

Directors. Specifically, the Company eliminates excessive risk deviating from the basic principle andsecures 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 the possible maximum losses
which may arise from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets andliabilities as of March 31, 2012 were as follows:
Carrying
amountCall loans ..............................................................
Monetary claims bought:
Claims treated as loans ....................................
Total monetary claims bought ...........................
Money held in trust:
Trading securities..............................................
Total money held in trust ...................................
Securities:
Trading securities..............................................
Held-to-maturity debt securities ........................
Policy-reserve-matching bonds ........................
Investments in subsidiaries and affiliates .........
Available-for-sale securities ..............................
Total securities ..................................................
Loans:
Policy loans .......................................................
Ordinary loans ..................................................
Total loans .........................................................
Derivative instruments:
Hedge accounting not applied ..........................
Hedge accounting applied ................................
Total derivative instruments ..............................

Fair value

Difference(Millions of yen)―

65,60065,600

1,351
1,351

1,374
1,374

23
23

34,19434,19434,19434,194――

214,053
823,530
684,9151,393
2,300,260
4,024,152

214,053
852,343
722,269854
2,300,260
4,089,780―
28,81237,354(538 )―
65,62870,164
969,199
1,039,363

70,163995,761
1,065,924(0 )26,562
26,561(1,442 )(3,506 )(4,948 )(1,442 )(3,506 )(4,948 )―――(1) Call loans:
The fair values of 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“Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities
managed as trust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the end of
fiscal year. The fair values of other securities without the quoted market price are based on theprices reasonably calculated such as the prices offered by the information vendors or counterparty
financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships
whereby partnership assets consist of unlisted stocks whose fair values are deemed extremely
difficult to obtain, are excluded from above securities. The carrying amounts of investments in
subsidiaries and affiliates, unlisted stocks and investments in partnerships as of March 31, 2012were ¥35,969 million, ¥8,086 million and ¥7,729 million, respectively.

- 18 -

Fukoku Mutual Life Insurance Company

(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadline have not been set up
due to the characteristics that the loan is limited to the amount of cash surrender values. Therefore,
the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are based on their book values. The fairvalues of fixed interest rate loans are measured by discounting the future cash flows to the present
values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and borrowers who are not currently bankrupt but have a high possibility of bankruptcy
and monetary claims bought treated as loans are computed by deducting the amount of theallowance for doubtful accounts from the book values before direct write-offs.
(4) Derivative instruments:i)

The fair values of the futures and options traded at the exchange are measured at thesettlement price of the exchange.
ii) The fair values of 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.
4. Investment and Rental Property
The Company holds investment and rental properties such as office buildings in Tokyo and other areas.
The carrying amount and the fair value of these investment and rental properties as of March 31, 2012were ¥226,884 million and ¥275,039 million, respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estate appraisal standards which includes someadjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount ofinvestment and rental properties was ¥1,355 million as of March 31, 2012.
5. Loans Receivable
The amounts of credits to bankrupt borrowers, delinquent loans and restructured loans, which were
included in loans, were ¥280 million, ¥689 million and ¥2,053 million, respectively and their total
amounts were ¥3,023 million as of March 31, 2012. There was no balance of delinquent loans past 3
months or more as of March 31, 2012
The direct write-offs related to loans decreased credits to bankrupt borrowers by ¥1 million anddelinquent loans by ¥286 million as of March 31, 2012.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 Item 3 and 4 of the Enforcement Regulationsof the Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant
delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits whose accruing 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 payment or repayment ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of- 19 -

Fukoku Mutual Life Insurance Company

claim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers in
the restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past 3 months or more.
6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥137,319 million as of March 31, 2012.
7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were¥82,053 million as of March 31, 2012. The amount of separate account liabilities was the same as
separate account assets.
8. Receivables from/Payables to Subsidiaries
The total amounts of receivables from/payables to subsidiaries were ¥2,592 million and ¥1,544 million
as of March 31, 2012, respectively.
9. Monetary Claims to Directors
Monetary claims to directors as of March 31, 2012 were ¥5 million.
10. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2012 were ¥83,977 million and¥33,810million, respectively. Valuation allowance for deferred tax assets was ¥3,035 million.
Major components of deferred tax assets were ¥48,892 million of policy reserves, ¥14,257 millionof reserve for employees’ retirement benefits and ¥10,923 million of reserve for price fluctuation of
securities as of March 31, 2012. Major component of deferred tax liabilities was ¥30,097 million of net
unrealized gains on available-for-sale securities as of March 31, 2012.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2012 were 36.2%
and 45.1%, respectively. The major differences between the statutory tax rate and the actual effective
tax rate were 24.7% of the reduction of deferred tax assets due to the changes in tax rates and (16.6%)of reserve for dividends to the policyholders.
Following the promulgation of the “Act for Partial Amendment of the Income Tax Act, etc. for the
Purpose of Creating a Taxation System Responding to Changes in Economic and Social Structures”(Act No.114, 2011) and the “Act on Special Measures for Securing Financial Resources Necessary to
Implement Measures for Reconstruction following the Great East Japan Earthquake” (Act No.117,
2011) on December 2 ,2011 , the corporate income tax rate will be lowered from the fiscal year
beginning on April 1 ,2012 and a special restoration surtax will be imposed from the fiscal year
beginning on April 1 ,2012 through the fiscal year beginning on April 1 , 2014. The effective statutory
tax rate used by the Company for the calculation of deferred tax assets and deferred tax liabilities willconsequently be changed from the current rate of 36.2% to 33.3% for a temporary difference which is
expected to be reversed in the period from April 1, 2012 to March 31,2015, and to 30.8% for a
temporary difference which is expected to be reversed after April 1,2015. As a result of these changes,
deferred tax assets as for March 31,2012 decreased by ¥639 million and ¥7,009 million , respectively
and deferred tax liabilities for revaluation reserve for land as of March 31,2012 decreased by ¥1 millionand ¥2,853 million, respectively. Income taxes deferred for the fiscal year ended March 31, 2012
increased by ¥12,966 million.

- 20 -

Fukoku Mutual Life Insurance Company

11. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2012 were as follows:(Millions of yen)
Balance at the beginning of current fiscal year...........
Transfer from surplus in previous fiscal year ..............
Dividends paid in the current fiscal year .....................
Increase in interest .....................................................
Balance at the end of current fiscal year ....................

¥ 53,205
24,381(23,700)
83¥ 53,969

12. Stocks of Subsidiaries
The amount of stocks of subsidiaries the Company held as of March 31, 2012 was ¥37,362 million.
13. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2012 were ¥24,300 million of securities and ￥397 millionof bank deposits. Secured debts as of March 31, 2012 were ¥4,608 million.
14. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called “reservefor outstanding claims for ceded reinsurance”) was ¥1 million as of March 31, 2012.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve forceded reinsurance”) was ¥30 million as of March 31, 2012.
15. Adjustment Items for Redemption of Foundation Funds and Appropriation of Net Surplus
The total amount of adjustment items for redemption of foundation funds and appropriation of net
surplus defined in Article 30 Paragraph 2 of the Enforcement Regulation of the Insurance Business
Law was ¥71,351 million as of March 31, 2012.
16. Additional Foundation Funds
The Company raised additional foundation funds of ¥20,000 million during the fiscal year ended March
31, 2012 in accordance with Article 60 of the Insurance Business Law.
17. Redemption of Foundation Funds
In the fiscal year ended March 31, 2012, in connection with the redemption of foundation funds of¥25,000 million, the Company reversed the reserve for redemption of foundation funds and provided
the equivalent amount for accumulated foundation funds redeemed in accordance with Article 56 of the
Insurance Business Law.
18. Commitment LineAs of March 31, 2012, there were unused commitment line agreements under which the Company is
the lender of ¥1,023 million.
19. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.
20. Assets Denominated in Foreign Currencies- 21 -

Fukoku Mutual Life Insurance Company

Assets denominated in foreign currencies as of March 31, 2012 totaled to ¥791,485 million. The
principal foreign currency asset amounts as of March 31, 2012 were US$4,693 million and 2,024
million euros.
Liabilities denominated in foreign currencies as of March 31, 2012 totaled to ¥33,787 million. The
principal foreign currency liability amount as of March 31, 2012 was 306 million euros.
21. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under
Article 259 of the Insurance Business Law was estimated at ¥10,731 million as of March 31, 2012. The
contribution was charged as operating expenses in the year in which it was paid.
22. Reserve for Employees’ Retirement Benefits(1) The reserve for employees’ retirement benefits as of March 31, 2012 was calculated as follows:(Millions of yen)a. Projected benefit obligation ...................................................................
b. Fair value of pension plan assets ..........................................................
c. Unfunded benefit obligation (a+b) .........................................................
d. Unrecognized actuarial differences .......................................................
e. Unrecognized prior service cost ............................................................
f. Reserve for employees’ retirement benefits (c+d+e) ..............................

¥ (72,872)
17,167(55,704)
10,021(636)¥ (46,320)(2) Gross amount of retirement benefit expenses for the year ended March 31, 2012 was as follows:(Millions of yen)
Service cost ...............................................................................................
Interest cost ...............................................................................................
Expected return on pension plan assets ...................................................
Amortization of actuarial differences ..........................................................
Amortization of prior service cost ...............................................................

¥ 2,943
1,451
(471)
1,218
(20)
¥ 5,122(3) The assumptions used in calculation of the above information were as follows: Method of attributing the projected benefits to periods of service ........
 Discount rate ........................................................................................
 Expected rate of return on pension plan assets ...................................
 Amortization period of actuarial differences .........................................
 Amortization period of prior service cost ..............................................

- 22 -

Straight-line basis
2.0%
3.0%
10 years
10 years

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Transactions with Subsidiaries
The total amounts of revenues and expenditures in connection with subsidiaries were ¥966 million and¥7,682 million for the year ended March 31, 2012.
2. Gains on Sales of Securities
Major items of gains on sales of securities for the year ended March 31, 2012 were as follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 11,747
3,780
1,326

3. Losses on Sales of Securities
Major items of losses on sales of securities for the year ended March 31, 2012 were as follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................
Foreign securities .......................................................................

¥ 1,324
17,027
6,573

4. Losses on Valuation of Securities
Major items of losses on valuation of securities for the year ended March 31, 2012 were as follows:(Millions of yen)Domestic bonds ..........................................................................
Domestic stocks and others........................................................

¥ 1,444
6,017

5. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2012, provision for reserve for outstanding claims for ceded reinsurance
considered in calculation of provision for reserve for outstanding claims was ¥40 million and provision
for policy reserve for ceded reinsurance considered in calculation of reversal of policy reserve was ¥1
million.
6. Gains from Trading Securities
Major items of gains from trading securities for the year ended March 31, 2012 were as follows:(Millions of yen)Interest, dividends and other income..........................................
Gains (Losses) on sales of trading securities .............................
Gains (Losses) on valuation of trading securities .......................

¥ 7,556(977 )
8,474

7. Gains from Money Held in Trust
Gains from money held in trust for the year ended March 31, 2012 included valuation losses of ¥0
million.
8. Losses from Derivative Instruments
Losses from derivative instruments for the year ended March 31, 2012 included valuation gains of¥4,273 million.

- 23 -

Fukoku Mutual Life Insurance Company

6. Breakdown of Ordinary Profits (Fundamental Profit)
Year ended
March 31, 2011

(Millions of yen)
Year ended
March 31, 2012A

66,367

69,209

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

33,932
141−
30,455
3,335−−
40,879−11,884
20,418
5,922
−
2,654
−
(6,947)59,419
−
−
−
−
−
413
−
413
−
−
−
−
(413)
59,00622,19122
5,315
16,854−−−40,512−−
24,925
7,986
5,725
1,874
−
(18,321)50,888
−
−
−
−
−
459
−
115
92
−
−
251
(459)
50,429Fundamental profit

Notes: 1. The following amounts in respect of gains / losses from money held in trust have been excluded from
capital gains / losses and included in fundamental profit due to their income nature (being interest anddividend income): ¥220 million in respect of the year ended March 31, 2011 and ¥140 million in respectof the year ended March 31, 2012.
2. The following amounts in respect of gains / losses from trading securities have been excluded from
capital gains / losses and included in fundamental profit due to their income nature (being interest anddividend income): ¥6,814 million in respect of the year ended March 31, 2011 and ¥7,556 million in respectof the year ended March 31, 2012.
3. For the year ended March 31, 2012, other non-recurring losses represent the losses relating to revision of theCompany's retirement benefit plans.

Breakdown of Fundamental Profit(100 millions of yen)
Fundamental profit
Loading profit
Mortality and morbidity profit
Negative spread- 24 -

Year ended
March 31, 2011
663
56
691

Year ended
March 31, 2012
692
23
736

(83)

(68)

Fukoku Mutual Life Insurance Company

7. Non-consolidated Statements of Changes in Net Assets(Millions of yen)

Year ended
March 31, 2011

Year ended
March 31, 2012

Foundation funds, surplus and others:
Foundation funds
Balance at the beginning of current fiscal year

40,00040,000−−−40,00020,000(25,000)(5,000)35,00046,00046,000−−46,00025,00025,00071,000

112

112

−
112

−
112

2,187

2,249

62
62
2,249

76
76
2,325

15,00020,000

5,000
−
5,000
20,0005,000(25,000)(20,000)
−

3,895

3,895

−
3,895

−
3,895

−

−

−
−
−

11,00011,00011,000

303

296

(7)
(7)
296

(7)
(7)
289

767

767

−
767

−
767

54,07569,554(19,505)(62)(892)
41,524(5,000)−7(592)
15,47969,554(24,381)(76)(892)
28,778(5,000)(11,000)
7
837(11,727)
57,827

Changes in the current fiscal year
Financing of additional foundation funds
Redemption of foundation funds
Total changes in the current fiscal year
Balance at the end of current fiscal year
Accumulated foundation funds redeemed
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to accumulated foundation funds redeemed
Total changes in the current fiscal year
Balance at the end of current fiscal year
Reserve for revaluation
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Total changes in the current fiscal year
Balance at the end of current fiscal year
Surplus
Legal reserve for future losses
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to legal reserve for future losses
Total changes in the current fiscal year
Balance at the end of current fiscal year
Other surplus
Reserve for redemption of foundation funds
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to reserve for redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Total changes in the current fiscal year
Balance at the end of current fiscal year
Reserve for dividend allowances
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Total changes in the current fiscal year
Balance at the end of current fiscal year
Accumulated fund for price fluctuation
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to accumulated fund for price fluctuation
Total changes in the current fiscal year
Balance at the end of current fiscal year
Reserve for advanced depreciation of real estate for tax purpose
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Reversal of reserve for advanced depreciation of real estate for tax purpose
Total changes in the current fiscal year
Balance at the end of current fiscal year
Other reserves
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Total changes in the current fiscal year
Balance at the end of current fiscal year
Unappropriated surplus
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to reserve for dividends to policyholders
Additions to legal reserve for future losses
Payment of interest on foundation funds
Net surplus for the year
Additions to reserve for redemption of foundation funds
Additions to accumulated fund for price fluctuation
Reversal of reserve for advanced depreciation of real estate for tax purpose
Reversal of revaluation reserve for land
Total changes in the current fiscal year
Balance at the end of current fiscal year

- 25 -

Fukoku Mutual Life Insurance Company

7. Non-consolidated Statements of Changes in Net Assets (Continued)(Millions of yen)

Year ended
March 31, 2011

Year ended
March 31, 2012

Total surplus
Balance at the beginning of current fiscal year

76,22996,763(19,505)(892)
41,524−(592)
20,53396,763(24,381)(892)
28,778(25,000)
837(20,658)
76,104

162,341

182,875−(19,505)−(892)
41,524−−(592)
20,533
182,875

20,000(24,381)
25,000(892)
28,778(25,000)(25,000)
837(658)
182,216

48,291

9,994(38,297)(38,297)
9,994

57,69057,69067,684

538

365

(173)
(173)
365

(194)
(194)
170

773

1,366

592
592
1,366

2,016
2,016
3,383

49,604

11,726(37,878)(37,878)
11,72659,51259,512
71,239211,946

194,601−(19,505)−(892)
41,524−−(592)(37,878)(17,344)
194,601

20,000(24,381)
25,000(892)
28,778(25,000)(25,000)
837
59,51258,854
253,455

Changes in the current fiscal year
Additions to reserve for dividends to policyholders
Payment of interest on foundation funds
Net surplus for the year
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current fiscal year
Balance at the end of current fiscal year
Total foundation funds, surplus and others
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the year
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current fiscal year
Balance at the end of current fiscal year
Valuation and translation adjustments:
Net unrealized gains (losses) on available-for-sale securities, net of tax
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Deferred valuation gains (losses) under hedge accounting
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Revaluation reserve for land, net of tax
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Total valuation and translation adjustments
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Total net assets:
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the year
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year

- 26 -

Fukoku Mutual Life Insurance Company

8. Non-consolidated Statements of Surplus(Millions of Yen)
Year ended
March 31, 2011

Year ended
March 31, 2012

69,55457,827

7

32

7

32

Total

69,561

57,859Appropriation of surplus

41,35037,542

Reserve for dividends to policyholders

24,381

23,989Net surplus

16,96813,552

Legal reserve for future losses

76

74

Interest payment for foundation funds

892

621

16,00012,857

Reserve for redemption of foundation funds

5,000

9,000

Accumulated fund for price fluctuation

11,000−

Revaluation reserve for land, net of tax

−

3,857

28,211

20,317

Unappropriated surplus
Reversal of voluntary surplus reserve
Reversal of reserve for advanced depreciation of realestate for tax purpose

Voluntary surplus reserve

Unappropriated surplus carried forward

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

- 27 -

Fukoku Mutual Life Insurance Company

9. Disclosed Claims Based on Categories of Obligors(Millions of yen)
As of March 31, 2011 As of March 31, 2012
Claims against bankrupt and quasi-bankrupt obligors

491

360

Claims with collection risk

589

620

Claims for special attention

2,236

2,303

3,317

3,284

[0.29%][0.31%]

1,145,795

1,040,933

1,149,112

1,044,218

Subtotal[Percentage of total]
Claims against normal obligors
Total

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

- 28 -

Fukoku Mutual Life Insurance Company

10. Risk-monitored Loans(Millions of yen)
As of March 31, 2011 As of March 31, 2012
Credits to bankrupt borrowers

297

280

Delinquent loans

774

689

Delinquent loans past three months or more−−

Restructured loans

2,236

2,053

Total

3,308

3,023

[0.29%][0.29%][Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥1 million as of March 31, 2011and ¥1 million as of March 31, 2012. The amounts written-off related to delinquent loans were ¥258
million as of March 31, 2011 and ¥286 million as of March 31, 2012.
2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate
reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest of these loans is not recorded as income after determining that principal of or intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described in note 2 above, and exclude credits to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim orother terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past three months or more.

- 29 -

Fukoku Mutual Life Insurance Company

11. Solvency Margin Ratio(Millions of yen)

As of
As of
March 31, 2011 March 31, 2012
Total solvency margin(A)

581,306

642,235

Foundation funds and surplus

156,224

156,393

Reserve for price fluctuation of securities

33,43235,488Contingency reserve

146,071

146,187

Allowance for possible loan losses

1,957

1,761

Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)

14,10188,004

Net unrealized gains on real estate x 85%

73,17667,494

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

103,984

113,157

Qualifying subordinated debt

35,21432,896−−

ᇞ 10,000ᇞ 19,000

27,143

19,851

173,928

173,308

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

Deductible items
OthersTotal amount of risk

( R1  R8 ) 2  R2  R3  R7   R4
2

(B)

Insurance risk

R1

28,48527,630

3rd sector insurance risk

R8

9,443

9,568

Assumed investment yield risk

R2

42,76042,266

Minimum guarantee risk

R7

7

5

Investment risk

R3

122,801

122,852

Business risk

R4

4,069

4,046

668.4%

741.1%

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

Notes: 1. The figures at the end of fiscal year ending March 31are calculated based on Articles 86 and 87
of the Enforcement Regulation of the Insurance Business Law and Ministry of Finance Ordinance No. 50, 1996.
In accordance with Cabinet Office Ordinance No.23, 2010 and Financial Services Agency OrdinanceNo.48, 2010, the standards for the calculation of total solvency margin and total amount of risk areplanned to be revised to tighten margin calculation and tighten and refine risk measurements. The
revised standards will be officially applied at the end of fiscal year ending March 31, 2012. The figures
at the end of fiscal year ending March 31,2011are calculated by applying the revised standards
to the financial results as of March 31, 2012.
2. "Deductible items" represent the capital increase to the subsidiary, Fukokushinrai Life Insurance Co., Ltd.
3. "Minimum guarantee risk" is calculated by standard method.

- 30 -

Fukoku Mutual Life Insurance Company

(reference) Solvency Margin Ratio under the Old Standards(Millions of yen)

As ofMarch 31, 2011
Total solvency margin(A)

593,497

Foundation funds and surplus

156,224

Reserve for price fluctuation of securities

33,432

Contingency reserve

146,071

Allowance for possible loan losses

1,957

Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)

14,101

Net unrealized gains on real estate x 85%

73,176

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

103,984

Qualifying subordinated debt

35,214

Deductible items(10,000)

Others39,334

Total amount of risk

( R1  R8 ) 2  R2  R3  R7   R4
2

(B)

109,064

Insurance risk

R1

28,485

3rd sector insurance risk

R8

9,443

Assumed investment yield risk

R2

18,528Minimum guarantee risk

R7

11

Investment risk

R380,783Business risk

R4

2,745

Solvency margin ratio(A)(1/2) x (B)1,088.3%x 100

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

- 31 -

Fukoku Mutual Life Insurance Company

12. Status of Separate Account(1) Separate Account Assets by Products(Millions of yen)
As of
As of
March 31, 2011 March 31, 2012
AmountAmountIndividual variable insurance−−

Individual variable annuities

538

500

Group annuities

82,74281,552

Total

83,28082,053(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, 2012
Number ofAmountpolicies

As of March 31, 2011
Number ofAmountpolicies
Individual variable annuities

185

594

174

551

(ii) Breakdown of Separate Account Assets for Individual Variable Annuities(Millions of yen)
As of March 31, 2012
AmountPercentage

As of March 31, 2011
AmountPercentage
Cash, deposits, call loans

82

15.4

86

17.3

Securities

455

84.6

413

82.7

Domestic bonds

−

−

−

−

Domestic stocks

−

−

−

−

Foreign securities

−

−

−

−

Foreign bonds

−

−

−

−

Foreign stocks and other securities

−

−

−

−

455

84.6

413

82.7

Loans

−

−

−

−

Others−−−−Allowance for possible loan losses

−

−

−

−

538

100.0

500

100.0

Other securities

Total- 32 -

Fukoku Mutual Life Insurance Company

(iii) Investment Income and Expenses of Separate Account for Individual Variable Annuities(Millions of yen)
Year ended March 31, 2011

Year ended March 31, 2012

AmountAmountInterest, dividends and other income

12

Gains on sales of securities−−

Gains of redemption of securities−−

Gains on valuation of securities

30

47

Foreign exchange gains, net−−

Gains from derivative instruments−−

Other investment income−−

Losses on sales of securities

3

2

Losses on redemption of securities−−

Losses on valuation of securities

57

36

Foreign exchange losses, net−−

Losses from derivative instruments−−

Other investment expenses

−

−

(28)

11

Net investment income(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, 2012

As of March 31, 2011

Trading securities

Carrying valueon the balancesheet

Net valuation
gains/losses
included in thestatementof operations

Carrying valueon the balancesheet

Net valuation
gains/losses
included in thestatementof operations

455

(26)

413

11

Note: The company has no balances of money held in trust and derivative instruments.

- 33 -

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)

Trading securities

As of March 31, 2011
Net valuation gains/losses
Carrying value on
included in the statementbalance sheetof operations(4,697)339,235

As of March 31, 2012
Net valuation gains/losses
Carrying value on
included in the statementbalance sheetof operations
11,188
320,437

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

Fair Value Information on Securities (with fair value, other than trading securities)(Millions of yen)
As of March 31, 2011

Book value

As of March 31, 2012

Gains/losses

Fair value

Gains
Held-to-maturity debt securities

Book value

Fair value

Gains/losses

Losses

Gains

Losses427,312436,409

9,096

9,983

886

823,530

852,343

28,812

29,263

Domestic bonds

378,178

387,523

9,345

9,345

−

777,527804,084

26,556

26,868311

Foreign bonds

49,134

48,885

(249)

637

886

46,002

48,258

2,256

2,394

138

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

652,180

672,087

19,90723,872

3,965

684,915722,269

37,35438,994

1,640

Domestic bonds

644,831664,759

19,92823,872

3,944

669,991

707,41237,42038,9711,550

Foreign bonds

7,349

7,328

(21)

0

21

14,923

14,857

(66)

23

90

1,393

868

(524)

−

524

1,393

854

(538)

−

538
38,215

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

450

2,331,356

2,347,024

15,66776,48660,8182,202,478

2,300,260

97,782

135,997

Domestic bonds

1,389,523

1,407,660

18,13624,3696,232

1,218,715

1,273,929

55,21358,002

2,788

Domestic stocks

300,218

317,678

17,46043,32725,867

268,766

309,191

40,42454,341

13,916
18,569Foreign securities

593,121575,527(17,594)

7,582

25,177

663,501

666,928

3,426

21,996

Foreign bonds

411,835

403,179(8,656)

4,572

13,228458,405

469,945

11,54018,3406,800

Foreign stocks and other securities

181,285

172,347(8,938)3,010

11,948205,095

196,982(8,113)

3,656

11,769Other securities

48,491

46,158(2,333)

1,207

3,541

51,49450,211(1,283)

1,658

2,941

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

3,412,242

3,456,389

44,146110,342

66,195

3,712,316

3,875,727

163,410204,255

40,845

Domestic bonds

2,412,533

2,459,943

47,41057,587

10,176

2,666,234

2,785,425

119,191

123,841

4,650

Domestic stocks

300,218

317,678

17,46043,32725,867

268,766

309,191

40,42454,341

13,916

Foreign securities

650,998

632,608(18,390)

8,220

26,610725,821730,898

5,077

24,415

19,337

Foreign bonds

468,319459,392(8,927)

5,209

14,136519,332

533,061

13,72920,7587,028

Foreign stocks and other securities

182,678

173,215(9,462)

3,010

12,473

206,489

197,836(8,652)

3,656

12,308

Total

Other securities

48,491

46,158(2,333)

1,207

3,541

51,49450,211(1,283)

1,658

2,941

Money held in trust

−

−

−

−

−

−

−

−

−

−

Monetary claims bought

−

−

−

−

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

−

−

−

−

Others

−

−

−

−

−

−

−

−

−

−

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

・ Held-to-maturity Debt Securities(Millions of yen)
As of March 31, 2011
Carrying
value on thebalancesheet

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

As of March 31, 2012

Fair value Differences

Carrying
value on thebalance
sheet

Fair value Differences

402,605

412,589

9,983

714,247

743,51129,263

Domestic bonds

378,178

387,523

9,345

672,831699,699

26,868Foreign bonds

24,42725,065637

41,41643,811

2,394

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−

24,706

23,819(886)

109,282

108,832(450)

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

−

−

−

104,696

104,384(311)

24,706

23,819

(886)

4,586

4,447

(138)

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−

Domestic bonds
Foreign bonds- 34 -

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)
As of March 31, 2011
Carrying
value on thebalancesheet

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

As of March 31, 2012

Fair value Differences

Carrying
value on thebalance
sheet

Fair value Differences

533,017556,889

23,872641,293680,288

38,994

532,817556,689

23,872

634,014672,985

38,971

200

200

0

7,279

7,302

23

−

−

−

−

−

−

119,163

115,198(3,965)

43,621

41,980(1,640)

Domestic bonds

112,013108,069(3,944)35,97634,426(1,550)Foreign bonds

7,149

7,128

(21)

7,644

7,554

(90)

−

−

−

−

−

−

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

Others・ Available-for-sale Securities(Millions of yen)
As of March 31, 2011
Book value
Securities whose carrying value on the balance
1,288,501
sheet exceeds the book value

As of March 31, 2012

Carrying
Carrying
value on thevalue on the
Differences Book value
Differencesbalancebalance
sheet
sheet

1,364,988

76,486

1,763,736

1,899,734

135,997

Domestic bonds

878,177

902,546

24,3691,130,116

1,188,118

58,002

Domestic stocks

154,257

197,585

43,327

180,283

234,624

54,341

Foreign securities

238,266

245,848

7,582

428,491

450,488

21,996

Foreign bonds

173,763

178,335

4,572

357,504

375,845

18,340Foreign stocks

64,502

67,5133,010

70,986

74,642

3,656

17,80019,007

1,207

24,84526,503

1,658

Money held in trust

−

−

−

−

−

−

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−
(38,215)

Other securities

Securities whose carrying value on the balance
1,042,854
sheet does not exceed the book value

982,035(60,818)

438,741

400,525

Domestic bonds

511,346

505,113(6,232)

88,59985,810(2,788)Domestic stocks

145,960

120,093(25,867)

88,48374,567(13,916)

Foreign securities

354,855

329,678(25,177)

235,010

216,440(18,569)

Foreign bonds

238,072

224,843(13,228)

100,900

94,100(6,800)Foreign stocks

116,783

104,834(11,948)

134,109122,339(11,769)

Other securities

30,691

27,150(3,541)

26,64923,707(2,941)

Money held in trust

−

−

−

−

−

−

Money claims bought

−

−

−

−

−

−

Negotiable certificate of deposits

−

−

−

−

−

−

Others

−

−

−

−

−

−

* Book value of securities whose market value are deemed extremely difficult to obtain are as follows:(Millions of yen)
As of March 31, 2011

As of March 31, 2012−−

Unlisted foreign bonds−−

Others−−

Held-to-maturity bonds−−

Investments in subsidiaries and affiliates

26,61635,969Available-for-sale securities

Policy-reserve-matching bonds

17,047

15,816

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

8,345

8,086

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

500−

Unlisted foreign bonds
OthersTotal- 35 -

−

−

8,201

7,729

43,66451,785

Fukoku Mutual Life Insurance Company

(reference) Fair Value Information on Derivative Instruments (Total of General Account and Separate Account)(i) Gains and Losses on Derivatives(Millions of yen)Interestrelated
560
69
629
Interestrelated
249
(820)
(570)

As of March 31, 2011
Hedge accounting applied
Hedge accounting not applied
Total
As of March 31, 2012
Hedge accounting applied
Hedge accounting not applied
Total

Currencyrelated(2,290)(5,996)(8,287)
Currencyrelated(3,755)(755)(4,511)

Stockrelated

Bondrelated

−
(123)
(123)
Stockrelated
−
(32)
(32)

Others−−−

Bondrelated−−−
Others

−
172
172

−
−
−

Total
(1,730)(6,049)(7,780)Total(3,506)(1,435)(4,941)

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of ¥2,290 million as of March 31, 2011and losses of ¥3,755 million as of March 31, 2012) included in gains and losses with hedge accounting applied, and gains andlosses 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, 2011
Notional amount/contract value
Fair
Over
value
1 yearOver-the-counter transactions
Foreign interest rate swap contracts
Receipt fixed, payment floating
Payment fixed, receipt floating
US dollar
Yen interest rate swaption contracts
Sold
Receipt fixed, payment floating−
16,404
16,404[
Payment fixed, receipt floating[
BoughtReceipt fixed, payment floating[
Payment fixed, receipt floating[−
16,404
16,404

−
− ]
−
− ]

−

−
− ]
−
− ]

−

As of March 31, 2012
Notional amount/contract value
Fair
Over
value
1 yearGains(losses)

−
69
69

−
69
69

−

−[

−
−

−[

−

−[

−
−

Total

−[

−
−
−

−
−
−

−
− ]
−
− ]

−

−
− ]
500,000
1,376 ]−

Gains
(losses)

−
−
−

−
−
−

−

−

−

−

−

−

555

(820)

−

−

69

(820)

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

* Interest rate swap contracts by contractual maturity dates(Millions of yen)
As of March 31, 2012

As of March 31, 2011
Foreign interest rate swap contracts
1 year or
shorter
Notional amount (receipts fixed, payments floating)

Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)

Average floating rate (receipt)
US dollar
Average fixed rate (payment)
US dollar

−
−
−
−
−
−
−
−

Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years−−−
16,404
0.31%
0.31%
3.49%
3.49%

- 36 -

1 year or
shorter
−
−
−
−
−
−
−
−

Over
1 year to
3 years
−
−
−
−
−
−
−
−

Over
3 years
−
−
−
−
−
−
−
−

Fukoku Mutual Life Insurance Company

・ Currency-related Transactions
As of March 31, 2011
Notional amount/
Fair
contract value
value
Over
1 yearOver-the-counter transactions
Currency forward contracts
Sold
US dollar
Euro
Canadian dollar
Australian dollar
British pound
Svensk krona
Singapore dollar
Norwegian krone
Bought− 218,024− 94,762− 28,975− 40,168− 42,087− 12,030
−
−
0
−
−
−
−
−

212,028
93,51528,042
38,86139,79811,809−0−−

Currency Options
Sold
Calls
[
Puts
[
Bought
Calls
[
Puts
[
US dollar
[
Euro
[

−
−]
−
−]

−

−
−]
−
−]
−
−]
−
−]

−

−

Gains
(losses)(5,996)(1,247)(932)(1,306)(2,289)
(220)
−
(0)
−
−

− [

−
−

− [

−

− [

−
−

− [

−
−

− [

−
−

Total

− [

(Millions of yen)
As of March 31, 2012
Notional amount/
Fair
Gains
contract value
value(losses)Over
1 year

171,638
64,26544,076
23,68922,587
17,0075
3
1−− 172,361− 64,400− 44,432− 23,941− 22,442− 17,134
5
−
3
−
1
−
−
−

−
−]
−
−]

−

−
−]
46,215109 ]
35,71593 ]
10,500
16 ]

−

(723)
(135)
(355)
(251)
145
(126)
0
0
0
−

−

−

−

−

−

−

77

(31)

59

(34)

18

2

−

−
−
−

(5,996)(755)

As of March 31, 2011
Notional amount/Gainscontract value
Fair value(losses)Over
1 year(Millions of yen)
As of March 31, 2012
Notional amount/Gainscontract value
Fair value(losses)Over
1 yearNotes: 1. Figures in [ ] are option premiums which are included in balance sheet.
2. Forward exchange rates are used for exchange rates as of the end of fiscal year.

・ Stock-related Transactions

Exchange-traded transactions
Yen stock index futures
Sold
Bought

−
−

9,636
−

9,760
−

Total

(123)
−

5,012
−

−
−

5,045
−

(32)
−

(123)

(32)

As of March 31, 2011
Notional amount/Gainscontract value
Fair value(losses)Over
1 year(Millions of yen)
As of March 31, 2012
Notional amount/Gainscontract value
Fair value(losses)Over
1 yearNote: Figures in [ ] are option premiums which are included in balance sheet.

・ Bond-related Transactions

Exchange-traded transactions
Yen bond futures
Sold
Bought

−
−

−
−

−
−

−
−

28,446−−−28,402−44−

Foreign bond futures
Sold
Bought

−
−

−
−

−
−

−
−

10,771−−−

10,642
−

128
−

−

Total

- 37 -

172

Fukoku Mutual Life Insurance Company

(iii) Hedge Accounting Applied・ Interest-related Transactions[As of March 31, 2011](Millions of yen)
Notional amount / contract valueOver 1 year

Method ofHedged items
Hedging instruments
hedge accounting
Deferral hedge
Yen interest rate swap contracts LoansmethodReceipt fixed, payment floating
Payment fixed, receipt floating
Total

39,863−

Fair value

17,905−560−

1 year or shorter
Over 1 year to 3 years
21,95817,000
1.35%
1.64%
0.45%
0.62%
−
−
−
−
−
−

(Millions of yen)Over 3 years
905
2.28%
1.25%
−
−
−

* Interest rate swap contracts by contractual maturity dates

Notional amount (receipts fixed, payments floating)
Average fixed rate (receipt)
Average floating rate (payment)
Notional amount (receipts floating, payments fixed)
Average floating rate (receipt)
Average fixed rate (payment)[As of March 31, 2012]
Method ofHedged items
Hedging instruments
hedge accounting
Deferral hedge
Yen interest rate swap contracts LoansmethodReceipt fixed, payment floating
Payment fixed, receipt floating
Total(Millions of yen)
Notional amount / contract valueOver 1 year
17,700Fair value

12,700249* Interest rate swap contracts by contractual maturity dates(Millions of yen)
1 year or shorter
Over 1 year to 3 years
Notional amount (receipts fixed, payments floating)
5,000
12,360
Average fixed rate (receipt)
1.64%
1.66%
Average floating rate (payment)
0.61%
0.61%
Notional amount (receipts floating, payments fixed)−−
Average floating rate (receipt)−−
Average fixed rate (payment)−−
Note: No ending balance of foreign interest rate swap contracts as of March 31, 2011 and 2012.

Over 3 years
340
2.47%
1.24%
−
−
−

・ Currency-related Transactions[As of March 31, 2011]
Method of
Hedging instruments
hedge accounting
Fair value hedge
Currency forward contracts
methodSold
US dollar
Euro
Australian dollar
Bought(Millions of yen)
Hedged items
Foreigncurrencydenominatedbonds

Notional amount / contract valueOver 1 year

Fair Value
−
−
−
−
−

130,705
94,58927,878
8,237−

132,995
95,09529,370
8,530
−

Total
[As of March 31, 2012]
Method of
Hedging instruments
hedge accounting
Fair value hedge
Currency forward contracts
methodSold
US dollar
Euro
Australian dollar
Bought(Millions of yen)
Hedged items
Foreigncurrencydenominatedbonds

Notional amount / contract valueOver 1 year
115,590
82,921
24,161
8,507−

Fair Value
−
−
−
−
−

119,345
84,525
26,346
8,473
−

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

・ Stock-related Transactions
No ending balance as of March 31, 2011 and 2012.

・ Bond-related Transactions
No ending balance as of March 31, 2011 and 2012.

- 38 -

Fukoku Mutual Life Insurance Company

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

(Millions of yen)
Year ended
March 31, 2011

Year ended
March 31, 2012

1,382,635
61,3181,137,810
53,832

42,19928,391

4,006

90,033As of March 31,
2011

As of March 31,
2012

6,670,346

7,033,729
763.4%

Ordinary revenues
Ordinary profits
Net surplus for the year
Comprehensive income

Total assets
Solvency Margin Ratio−(2) Scope of consolidation and application of equity method
Number of consolidated subsidiaries: 6
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0- 39 -

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of March
31, 2011
Assets:Cash and deposits
Call loans
Monetary claims bought
Money held in trust
Securities
Loans
Tangible fixed assets
Land
Buildings
Lease assets
Construction in progress
Other tangible fixed assets
Intangible fixed assets
Software
Goodwill
Lease assets
Other intangible fixed assets
Agency receivables
Reinsurance receivables
Other assets
Deferred tax assets
Allowance for possible loan losses

314,392−
1,424
33,1694,681,280
1,146,719
284,863
163,574
116,647
47
1,165
3,427
15,712
8,750
5,520
987
453
4
174
106,524
88,745(2,665)

Total assets

6,670,346

As of March
31, 2012

As of March As of March
31, 2011
31, 2012

Liabilities:
73,260 Policy reserves
Reserve for outstanding claims
65,600
Policy reserve
1,351
Reserve for dividends to policyholders
35,194
Reserve for dividends to policyholders (subsidiary)
5,422,669
1,042,359 Agency payables
276,828 Reinsurance payables
161,076 Subordinated bonds
110,051 Other liabilities
117 Reserve for employees' retirement benefits
2,234 Reserve for price fluctuation of securities
3,348 Deferred tax liabilities for revaluation reserve for land
14,529 Total liabilities
8,696 Net assets:
4,618 Foundation funds
761 Accumulated foundation funds redeemed
453 Reserve for revaluation
7 Consolidated surplus
123 Total foundation funds, surplus and others
56,062 Net unrealized gains (losses) on available-for-sale48,211 securities, net of tax(2,468) Deferred valuation gains (losses) under hedge accounting
Revaluation reserve for land, net of tax
Foreign currency translation adjustment
Total accumulated other comprehensive income
Minority interests
Total net assets
7,033,729 Total liabilities and net assets- 40 -

6,202,567
32,792
6,115,914
53,205
654
1,685
100
35,214
129,127
50,15333,865
19,9366,472,650

6,589,577
24,1496,510,809
53,969648
560
88
32,89650,593
46,38438,183
16,195
6,774,480

40,00046,000112
98,228184,340

35,00071,000112
77,183
183,295

10,00668,806

365
1,366
(761)
10,977
2,378

170
3,383
(828)
71,532
4,421

197,696259,249

6,670,346

7,033,729

Fukoku Mutual Life Insurance Company

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

Ordinary revenues:
Premium and other income
Investment income
Interest, dividends and other income
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Gains from redemption of securities
Gains from derivative instruments, net
Reversal of allowance for possible loan losses
Other investment income
Gains from separate accounts, net
Other ordinary revenues
Total ordinary revenues
Ordinary expenditures:
Claims and other payments
ClaimsAnnuities
Benefits
Surrenders
Other payments
Provision for policy reserve and others
Provision for reserve for outstanding claims
Provision for policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Investment expenses
Interest expenses
Losses from trading securities, net
Losses on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Depreciation of real estate for rent and other assets
Other investment expenses
Losses from separate accounts, net
Operating expenses
Other ordinary expenditures
Total ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Reversal of allowance for possible loan losses
Gain on change in equity
Other extraordinary gains
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Losses on reduction entry of real estate for tax purpose
Effect of applying the accounting standard for asset retirement obligations

Total extraordinary losses
Provision for reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes - current
Income taxes - deferred
Total income taxes
Net surplus before minority interests
Minority interests
Net surplus for the year

- 41 -

Year ended March
31, 2011(Millions of yen)
Year ended March
31, 2012

1,210,851
159,276
124,544361−
30,678
−
3,335
−
354
−
12,507
1,382,635

950,986
166,427
131,529162
12,872
19,630
338
−
57
156
1,679
20,396
1,137,810

627,832
178,21091,729189,273
138,695
29,923510,1136,385
503,609116
049,704
1,540
5,069
20,511
5,922
−
2,654
5,732
5,238
3,034
109,797
23,8691,321,317
61,318505,831
142,771
95,211
133,356
107,691
26,800394,979−
394,895
83
056,7401,423−
26,405
9,222
5,725
1,876
6,477
5,607
−
103,441
22,985
1,083,97853,832

16
957
−
6
980

4,645
−
55
−
4,700

111
318
7,167
−
967
8,564
456
53,277
14,719(3,809)10,90942,367
168
42,199

161
433
4,318
9
−
4,923
440
53,1689,859
14,823
24,68328,48593
28,391

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income(Continued)[Consolidated Statement of Comprehensive Income]Net surplus before minority interests
Other comprehensive income
Net unrealized gains (losses) on available-for-sale securities, net of tax

Deferred valuation gains (losses) under hedge accounting
Revaluation reserve for land, net of tax
Foreign currency translation adjustment
Comprehensive income
Comprehensive income attributable to parent company
Comprehensive income attributable to minority interests- 42 -

Year ended March
31, 2011
42,367(38,360)(38,009)
(173)
－
(177)
4,006
3,809
196

(Millions of yen)
Year ended March
31, 2012
28,48561,54858,955
(194)
2,854
(67)
90,03389,784248

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows(Millions of yen)

Year ended
March 31, 2011

Year ended
March 31, 2012

Cash flows from operating activities:
Surplus before income taxes
Depreciation of real estate for rent and other assets
Depreciation
Impairment losses
Amortization of goodwill
Increase (Decrease) in reserve for outstanding claims
Increase (Decrease) in policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Provision for reserve for dividends to policyholders (subsidiary)
Increase (Decrease) in allowance for possible loan losses
Increase (Decrease) in reserve for employees' retirement benefits
Increase (Decrease) in reserve for price fluctuation of securities
Interest, dividends and other income(Gains) Losses on securities
Interest expenses
Foreign exchange (gains) losses, net(Gains) Losses on tangible fixed assets(Increase) Decrease in agency receivables(Increase) Decrease in reinsurance receivables(Increase) Decrease in other assets except from investing and financing activities
Increase (Decrease) in agency payables
Increase (Decrease) in reinsurance payables
Increase (Decrease) in other liabilities except from investing and financing activities
OthersSubtotalInterest, dividends and other income received
Interest paid
Dividends to policyholders paid
Dividends to policyholders paid (subsidiary)Corporate income tax (paid) refunded
Net cash provided by (used in) operating activities (I)53,277
5,732
5,841
318
793
6,385
503,609
116
0
456
78
349
7,167
(124,544)
161
1,540
2,654
1,041
(2)
106
(929)
(187)
(39)
985
18,819483,734
129,665(1,556)(21,176)(388)(4,563)585,713

53,168
6,477
5,802
433
763
(8,643)394,895
83
0
440
(196)
(3,768)4,318(131,529)
6,670
1,423
1,876
(4,496)(2)
51(1,365)(1,124)(12)
2,364
18,780346,411140,383(1,439)(23,700)(446)(19,825)
441,382160
327(3,500)3,581(2,011,445)
1,505,910(124,767)
189,1147,271
5,654(427,690)
158,023(13,047)
116(2,737)(326)(443,686)

84
73(9,800)7,929(1,758,975)
1,066,150(101,397)
193,911(9,825)(2,328)(614,177)(172,795)(3,226)
7,078(2,225)−(612,551)

Cash flows from investing activities:(Increase) Decrease in deposits
Proceeds from sales and redemption of monetary claims bought
Payments for increase in money held in trust
Proceeds from decrease in money held in trust
Payments for purchase of securities
Proceeds from sales and redemption of securities
Payments for additions to loans
Proceeds from collections of loans
Proceeds from settlement of derivatives
OthersSubtotal (IIa)(I+IIa)Payments for purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchase of intangible fixed assets
Payments for additional acquisition of shares of consolidated subsidiary
Net cash provided by (used in) investing activities- 43 -

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows (Continued)(Millions of yen)

Year ended
March 31, 2011

Year ended
March 31, 2012

Cash flows from financing activities:
Financing of additional foundation funds
Redemption of foundation funds
Interest payment for foundation funds
Proceeds from stock issuance to minority shareholders
Dividends paid to minority interests
Payments for lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year

- 44 -

−
−
(892)
−
(15)
(222)
(1,130)(842)
140,053
173,885
313,939

20,000(25,000)
(892)
1,999
(12)
(252)
(4,157)(108)(175,434)
313,939
138,504

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets(Millions of yen)

Year ended
March 31, 2011

Year ended
March 31, 20112

Foundation funds, surplus and others:
Foundation funds
Balance at the beginning of current fiscal year

40,00040,000−−−40,00020,000(25,000)(5,000)35,00046,00046,000−−46,00025,00025,00071,000

112

112

−
112

−
112

77,02098,228(19,505)(892)
42,199−(592)
21,20898,228(24,381)(892)
28,391(25,000)
837(21,045)
77,183

163,132

184,340−(19,505)−(892)
42,199−−(592)
21,208184,340

20,000(24,381)
25,000(892)
28,391(25,000)(25,000)
837(1,045)183,295

Changes in the current fiscal year
Financing of additional foundation funds
Redemption of foundation funds
Total changes in the current fiscal year
Balance at the end of current fiscal year
Accumulated foundation funds redeemed
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to accumulated foundation funds redeemed
Total changes in the current fiscal year
Balance at the end of current fiscal year
Reserve for revaluation
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Total changes in the current fiscal year
Balance at the end of current fiscal year
Consolidated surplus
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Additions to reserve for dividends to policyholders
Payment of interest on foundation funds
Net surplus for the year
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current fiscal year
Balance at the end of current fiscal year
Total foundation funds, surplus and others
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the year
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Total changes in the current fiscal year
Balance at the end of current fiscal year

- 45 -

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets (Continued)(Millions of yen)

Year ended
March 31, 2011

Year ended
March 31, 2012

Accumulated other comprehensive income:Net unrealized gains (losses) on available-for-sale securities, net of tax
Balance at the beginning of current fiscal year

48,045

10,006(38,038)(38,038)
10,006

58,79958,79968,806

538

365

(173)
(173)
365

(194)
(194)
170

773

1,366

592
592
1,366

2,016
2,016
3,383

(583)

(761)

(177)
(177)
(761)

(67)
(67)
(828)

48,774

10,977(37,796)(37,796)
10,97760,55560,55571,532

2,513

2,378

(134)
(134)
2,378

2,043
2,043
4,421

214,419

197,696−(19,505)−(892)
42,199−−(592)(37,931)(16,723)
197,696

20,000(24,381)
25,000(892)
28,391(25,000)(25,000)
837
62,59861,553
259,249

Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Deferred valuation gains (losses) under hedge accounting
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Revaluation reserve for land, net of tax
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Foreign currency translation adjustment
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Total accumulated other comprehensive income
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Minority interests:
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year
Total net assets:
Balance at the beginning of current fiscal year
Changes in the current fiscal year
Financing of additional foundation funds
Additions to reserve for dividends to policyholders
Additions to accumulated foundation funds redeemed
Payment of interest on foundation funds
Net surplus for the year
Redemption of foundation funds
Reversal of reserve for redemption of foundation funds
Reversal of revaluation reserve for land
Net changes, excluding foundation funds, surplus and others
Total changes in the current fiscal year
Balance at the end of current fiscal year

- 46 -

Fukoku Mutual Life Insurance Company

Notes to the Consolidated Financial Statements
I. Presentation of the Consolidated Financial Statements
1. Basis of Presentation
The accompanying consolidated financial statements have been prepared from the accounts
maintained by Fukoku Mutual Life Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the Insurance Business Law of Japan and its
related rules and regulations and in conformity with accounting principles generally accepted in Japan,
which are different in certain respects from accounting principles generally accepted in countries andjurisdictions other than Japan.
In addition, the notes to the consolidated financial statements include information which is not
required under accounting principles generally accepted in Japan but is presented herein as additional
information.
Amounts of less than one million yen have been eliminated. As a result, total in yen shown herein
do not necessarily agree with the sum of the individual amounts.
2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries for the year ended March 31, 2012 are listed below:
Fukoku Shinyo Hosho Company Limited
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Company
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Limited
Fukoku Life International (America) Inc.
Major unconsolidated subsidiary is Fukoku Seimei Building Company Limited.
Seven 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 year and surplus and is sufficiently insignificant toreasonable judgement on its impact on the financial position and results of operation of the Company's
group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Seimei building Company Limited, etc.) are insignificant
in their impact on net surplus and surplus, and also immaterial as a whole, therefore, application ofequity method is withheld.
There are no affiliates for the year ended March 31, 2012.
(3) Fiscal Year of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, fiscal year-end of overseas subsidiaries is December 31.
For the preparation of consolidated financial statements, financial statements as of that date are usedand concerning any important transaction taking place in between December 31 and the consolidated
closing date, necessary adjustments for consolidation are made.
(4) Amortization of Goodwill
Goodwill was amortized by the straight-line method over a period of 10 years and in case of theimmaterial amount of goodwill, such amount is fully charged to operating expenses when incurred.

- 47 -

Fukoku Mutual Life Insurance Company

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent
to securities, and securities managed as trust assets in money held in trust, is as follows:i)

Trading securities are stated at fair market value. Costs of their sales are determined by themoving average method.

ii)

Held-to-maturity debt securities are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.

iii)

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

iv)

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

v)

Available-for-sale securities with fair market value are stated at fair market value based on
the market prices at the end of fiscal year. Costs of their sales are determined by the moving
average method. Net unrealized gains or losses on these available-for-sale securities, net oftaxes, are recorded as a separate component of net assets.
Available-for-sale securities whose fair market values are deemed extremely difficult toobtain are stated at cost, cost being determined by the moving average method, except for
public and corporate bonds including foreign bonds, of which the difference between
acquisition cost and face value is considered to be an adjustment of interest. Such bonds arestated at amortized cost under the straight-line method, cost being determined by the moving
average method.

(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land
(Law No.34 promulgated on March 31, 1998). The difference between fair value and book value
resulting from the revaluation, net of related taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax is recorded as deferred tax liabilities forrevaluation reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said
Ordinance with certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of the Company’s tangible fixed assets is calculated by the following methods.
 Buildings (excluding lease assets)i)

Acquired on or before March 31, 1998: Previous declining-balance methodii)

Acquired on or after April 1, 1998 but on or before March 31, 2007: Previous straight-line
method- 48 -

Fukoku Mutual Life Insurance Company

iii)

Acquired on or after April 1, 2007: Straight-line method

 Assets other than buildings (excluding lease assets)i)

Acquired on or before March 31, 2007: Previous declining-balance methodii)

Acquired on or after April 1, 2007: Declining-balance method Lease assets related to finance lease transactions that do not transfer ownership: Straight-line
method over the lease term
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities are translated into Japanese yen at the effective
exchange rate prevailing at the balance sheet date.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i)

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

ii)

For the credits of borrowers who are not currently bankrupt but have a high possibility ofbankruptcy, the Company provides the amounts deemed as necessary considering theborrowers’ ability to pay, within the amounts after deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.

iii)

For the credits of borrowers other than the above, the Company provides the amounts
calculated by multiplying the borrowers’ balance by the actual ratio of bad debt losses on
defaults during a certain past period.

All credits are assessed by the relevant departments in accordance with the Company’s standards ofself-assessment on credit quality. The results of the assessment are reviewed by the audit department,
which is independent of business-related divisions. Subsequently, the allowance for possible loan
losses are provided based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amount written-off as of March 31, 2012 was ¥332 million.
(7) Reserve for Employees’ Retirement Benefits
The Company and its consolidated subsidiaries adopt accounting standards for employees' retirement
benefits (Business Accounting Council dated June 16, 1998) and account for the reserve for
employees’ retirement benefits based on the projected benefit obligation and plan assets at thebalance sheet date.
The Company adopts “Guidance on Accounting for Transfers between Retirement Benefit Plans”(ASBJ Guidance No.1 issued by the Accounting Standards Board of Japan on January 31, 2002) as
the Company transferred qualified retirement pension plans to defined benefit corporate pension plans,
and part of lump sum benefit plans to defined contribution pension plans on July 1, 2011.
(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.

- 49 -

Fukoku Mutual Life Insurance Company

(9) Lease Transactions as a Lessee
Finance lease transactions that do not transfer ownership to the lessee whose commencement day
was on or before March 31, 2008 continued to be accounted for in a manner similar to accounting
treatment for ordinary rental transactions.
(10) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in“interest, dividends and other income” at the time of receiving lease fee. The corresponding cost of thelease transactions is recorded in “other investment expenses”, which is calculated by deducting anamount equivalent to the interest allocated over the lease term from the lease fee received.
(11) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement
No.10 issued by the Accounting Standards Board of Japan on August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of
foreign currency-denominated bonds classified as available-for-sale securities, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and thehedged items, valuation gains and losses on the foreign currency forward contracts are recorded in
the statements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify forhedge accounting because of high correlation and effectiveness between the hedging instruments andthe hedged items, valuation gains and losses on the interest rate swaps are deferred until the maturityof the hedged transactions.
Deposits denominated in foreign currencies for which forward foreign exchange contracts areused to hedge the foreign currency fluctuations are translated at the contract rates if the forward
contracts qualify for specific hedge accounting. In this case, exchange differences between theexchange rate on the trade date and the forward contract rate are allocated to each fiscal year fromthe date contracted to the date settled.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fairvalue or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Consumption Taxes
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 Law, are deferred as prepaid expenses and amortized equally over five
years. Consumption taxes other than deferred consumption taxes are recognized as an expense whenincurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at theend of fiscal year is calculated by the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
(14) Amortization Method for Intangible Fixed Assets
Intangible fixed assets are amortized as follows:i)
ii)

Software for internal use is amortized based on a straight-line method over the estimateduseful lives.
Lease assets are amortized based on a straight-line method over the lease terms.

- 50 -

Fukoku Mutual Life Insurance Company

(15) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This
amount is deducted from bonds.
(16) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
2. Changes in Presentation
Effective for the fiscal year ended March 31, 2012, in accordance with the amendment of the
Enforcement Regulation of the Insurance Business Law, the presentation of financial statements has
been changed as follows.
(a) As for the statement of operations, “reversal of allowance for possible loan losses” which waspresented in “extraordinary gains” until previous fiscal year is included in “investment income”.
(b) As for the statement of changes in net assets, the item which was presented as “balance at theend of previous fiscal year” until previous fiscal year is presented as “balance at the beginning ofcurrent period”.
3. Financial Instruments
Asset management of the Company’s general accounts other than the separate accounts stipulated in
Article 118 Paragraph 1 of the Insurance Business Law is conducted on the principle of prudent andprofitable investments, considering public and social responsibilities of the insurance business. Basedon this policy, the Company allocates the fund, securing its liquidity, from the medium-to-long term
viewpoints. The Company is diversifying investments in assets such as foreign securities and equity
securities within the acceptable range of risk in order to enhance the profitability, although yendenominated interest bearing assets including debt securities such as Japanese government bonds
and loans are the cores of the portfolios. Derivatives are mainly used to mitigate the market risk
regarding the securities and loans. Major financial instruments including securities, loans andderivatives 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 “Basic Policy for Risk Management” established by the Board of
Directors. Specifically, the Company eliminates excessive risk deviating from the basic principle andsecures the safety of the assets by utilizing control functions of the Financial and Investment Risk
Management Department towards the asset management sections, monitoring the status of market
risk and credit risk periodically on a daily or monthly basis. In addition, the Company quantifies themarket risk and credit risk using value-at-risk (VaR) method in order to control the possible maximum
losses which may arise from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets andliabilities as of March 31, 2012 were as follows:- 51 -

Fukoku Mutual Life Insurance Company

CarryingamountFair value

Difference(Millions of yen)

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 .........................................................
Derivative instruments:
Hedge accounting not applied ..........................
Hedge accounting applied ................................
Total derivative instruments ..............................

1,351
1,351

1,374
1,374

23
23

34,19434,19434,19434,194――

214,053
1,179,852
1,461,155
2,479,204
5,334,265

214,053
1,218,634
1,522,287
2,479,204
5,434,179―
38,781
61,132―
99,91473,176969,182
1,042,359

73,176995,689
1,068,865(0 )26,506
26,506(1,442 )(3,506 )(4,948 )(1,442 )(3,506 )(4,948 )―――(1) Securities including deposits and monetary claims bought which are treated as securities basedon “Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities
managed as trust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the end of
fiscal year. The fair values of other securities without the quoted market price are based on theprices reasonably calculated such as the prices offered by the information vendors or
counterparty financial institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships whereby partnership assets consist of unlisted stocks whose fair values are deemed
extremely difficult to obtain, are excluded from above securities. The carrying amounts ofinvestments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships as of March 31, 2012 were ¥398 million, ¥8,086 million and ¥7,729 million,
respectively.
(2) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadline have not been set
up due to the characteristics that the loan is limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claimsbought treated as loans approximate the book values because the market interest rates arereflected in future cash flows in a short period. Therefore, the fair values of floating interest rateloans and monetary claims bought treated as loans are based on their book values. The fairvalues of fixed interest rate loans are measured by discounting the future cash flows to thepresent values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and borrowers who are not currently bankrupt but have a high possibility of bankruptcy- 52 -

Fukoku Mutual Life Insurance Company

and monetary claims bought treated as loans are computed by deducting the amount of theallowance for doubtful accounts from the book values before direct write-offs.
(3) Derivative instruments:i)

The fair values of the futures and options traded at the exchange are measured at thesettlement price of the exchange.
ii) The fair values of 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.
4. Investment and Rental Property
The Company holds investment and rental properties such as office buildings in Tokyo and otherareas. The carrying amount and the fair value of these investment and rental properties as of March
31, 2012 were ¥223,191 million and ¥271,525 million, respectively. The fair value is mainly based on
the value calculated by the Company in accordance with real estate appraisal standards which
includes some adjustments using the reference prices.
The amount corresponding to asset retirement obligations included in the carrying amount ofinvestment and rental properties was ¥1,334 million as of March 31, 2012.
5. Loans Receivable
The amounts of credits to bankrupt borrowers, delinquent loans and restructured loans, which were
included in loans, were ¥270 million, ¥683 million and ¥2,064 million, respectively and their total
amounts were ¥3,019 million as of March 31, 2012. There was no balance of delinquent loans past 3
months or more as of March 31, 2012
The direct write-offs related to loans decreased credits to bankrupt borrowers by ¥12 million anddelinquent loans by ¥291 million as of March 31, 2012.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, whichmeet the conditions prescribed in Article 96 Paragraph 1 Item 3 and 4 of the Enforcement Regulationsof the Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after
determining that principal of or interest on these loans is unlikely to be collected due to the significant
delay in repayment of principal or interest payment or for some other reasons.
Delinquent loans are credits whose accruing 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 payment or repayment ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as
interest reduction or exemptions, rescheduling of due date of principal or interest payment, waiver ofclaim or other terms, have been negotiated for the purpose of assisting and supporting the borrowers
in the restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past 3 months or more.
6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥137,618 million as of March 31, 2012.
7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were¥82,053 million as of March 31, 2012. The amount of separate account liabilities was the same as
separate account assets.

- 53 -

Fukoku Mutual Life Insurance Company

8. Receivables from/Payables to Unconsolidated Subsidiaries
The total amounts of receivables from/payables to unconsolidated subsidiaries were ¥2,432 millionand ¥177 million as of March 31, 2012, respectively.
9. Monetary Claims to Directors
Monetary claims to directors of the Company as of March 31, 2012 were ¥5 million.
10. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2012 were ¥85,897 million and ¥34,529
million, respectively. Valuation allowance for deferred tax assets was ¥3,155 million.
Major components of deferred tax assets were ¥49,440 million of policy reserves, ¥14,279 millionof reserve for employees’ retirement benefits and ¥11,752 million of reserve for price fluctuation of
securities as of March 31, 2012. Major component of deferred tax liabilities was ¥30,806 million of net
unrealized gains on available-for-sale securities as of March 31, 2012.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2012 were 36.2%
and 46.4%, respectively. The major differences between the statutory tax rate and the actual effective
tax rate were 24.9% of the reduction of deferred tax assets due to the changes in tax rates and(16.3%) of reserve for dividends to the policyholders.
Following the promulgation of the “Act for Partial Amendment of the Income Tax Act, etc. for the
Purpose of Creating a Taxation System Responding to Changes in Economic and Social Structures”(Act No.114, 2011) and the “Act on Special Measures for Securing Financial Resources Necessary to
Implement Measures for Reconstruction following the Great East Japan Earthquake” (Act No.117,
2011) on December 2 ,2011 , the corporate income tax rate will be lowered from the fiscal year
beginning on April 1 ,2012 and a special restoration surtax will be imposed from the fiscal year
beginning on April 1 ,2012 through the fiscal year beginning on April 1 , 2014. The effective statutory
tax rate used by the Company for the calculation of deferred tax assets and deferred tax liabilities willconsequently be changed from the current rate of 36.2% to 33.3% for a temporary difference which is
expected to be reversed in the period from April 1, 2012 to March 31,2015, and to 30.8% for a
temporary difference which is expected to be reversed after April 1,2015. As a result of these changes,
deferred tax assets as for March 31,2012 decreased by ¥676 million and ¥7,118 million , respectively
and deferred tax liabilities for revaluation reserve for land as of March 31,2012 decreased by ¥1 millionand ¥2,853 million, respectively. Income taxes deferred for the fiscal year ended March 31, 2012
increased by ¥13,236 million.

- 54 -

Fukoku Mutual Life Insurance Company

11. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2012 were as follows:(Millions of yen)
Balance at the beginning of current fiscal year..........................
Transfer from surplus in previous fiscal year .............................
Dividends paid in the current fiscal year ....................................
Increase in interest ....................................................................
Balance at the end of current fiscal year ...................................

¥ 53,205
24,381(23,700)
83¥ 53,969

12. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Company)
Changes in reserve for dividends to policyholders for the year ended March 31, 2012 were as follows:(Millions of yen)
Balance at the beginning of current fiscal year..........................
Dividends paid in the current fiscal year .....................
Increase in interest .....................................................
Provision for reserve for dividends to policyholders ...
Balance at the end of current fiscal year ....................

¥ 654
(446)
0
440
¥ 648

13. Stocks of Unconsolidated Subsidiaries
The amount of stocks of unconsolidated subsidiaries the Company held as of March 31, 2012 was¥398 million.
14. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2012 were ¥24,300 million of securities and ￥397 million
of deposits. Secured debts as of March 31, 2012 were ¥4,608 million.
15. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called“reserve for outstanding claims for ceded reinsurance”) was ¥5 million as of March 31, 2012.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of
the Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve forceded reinsurance”) was ¥53 million as of March 31, 2012.
16. Additional Foundation Funds
The Company raised additional foundation funds of ¥20,000 million during the fiscal year ended March
31, 2012 in accordance with Article 60 of the Insurance Business Law.
17. Redemption of Foundation Funds
In the fiscal year ended March 31, 2012, in connection with the redemption of foundation funds of¥25,000 million, the Company reversed the reserve for redemption of foundation funds and provided
the equivalent amount for accumulated foundation funds redeemed in accordance with Article 56 of
the Insurance Business Law.
18. Commitment LineAs of March 31, 2012, there were unused commitment line agreements under which the Company is
the lender of ¥1,023 million.

- 55 -

Fukoku Mutual Life Insurance Company

19. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.
20. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under
Article 259 of the Insurance Business Law was estimated at ¥11,754 million as of March 31, 2012. The
contribution was charged as operating expenses in the year in which it was paid.
21. Reserve for Employees’ Retirement Benefits(1) The reserve for employees’ retirement benefits as of March 31, 2012 was calculated as follows:(Millions of yen)a. Projected benefit obligation ...................................................................
b. Fair value of pension plan assets ..........................................................
c. Unfunded benefit obligation (a+b) .........................................................
d. Unrecognized actuarial differences .......................................................
e. Unrecognized prior service cost ............................................................
f. Reserve for employees’ retirement benefits (c+d+e) ..............................

¥ (72,936)
17,167(55,768)
10,021(636)¥ (46,384)(2) Gross amount of retirement benefit expenses for the year ended March 31, 2012 was as follows:(Millions of yen)
Service cost ...............................................................................................
Interest cost ...............................................................................................
Expected return on pension plan assets ...................................................
Amortization of actuarial differences ..........................................................
Amortization of prior service cost ...............................................................

¥ 2,965
1,451
(471)
1,218
20
¥ 5,143(3) The Company’s assumptions used in calculation of the above information were as follows: Method of attributing the projected benefits to periods of service ........
 Discount rate ........................................................................................
 Expected rate of return on pension plan assets ...................................
 Amortization period of actuarial differences .........................................
 Amortization period of prior service cost ..............................................

- 56 -

Straight-line basis
2.0%
3.0%
10 years
10 years

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Transactions with Unconsolidated Subsidiaries
The total amounts of revenues and expenditures in connection with unconsolidated subsidiaries were
¥96 million and ¥2,884 million for the year ended March 31, 2012.
2. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2012, provision for reserve for outstanding claims for ceded reinsurance
considered in calculation of provision for reserve for outstanding claims was ¥36 million and reversalof policy reserve for ceded reinsurance considered in calculation of provision for policy reserve was ¥1
million.

IV. Notes to Statement of Comprehensive Income
1.Other Comprehensive Income
The amounts recycled and tax effect amounts related to other comprehensive income were as
follows:(Millions of yen)
Net unrealized gains (losses) on available-for-sale securities, net of tax
Amount incurred during the fiscal year ended March 31,2012 ...............................
Amount recycled ...........................................................................................
Before tax adjustment .................................................................................
Tax effects ................................................................................................
Net unrealized gains (losses) on available-for-sale securities, net of tax ..............

¥69,198
14,702
83,901(24,946 )
58,955

Deferred valuation gains (losses) under hedge accounting,net of tax
Amount incurred during the fiscal year ended March 31,2012 ...............................
Amount recycled ...........................................................................................
Before tax adjustment .................................................................................
Tax effects ................................................................................................
Deferred valuation gains (losses) under hedge accounting, net of tax ..................

14(330 )(316 )
122(194 )

Revaluation reserve for land, net of tax
Amount incurred during the fiscal year ended March 31,2012 ...............................
Amount recycled ...........................................................................................
Before tax adjustment .................................................................................
Tax effects ................................................................................................
Revaluation reserve for land, net of tax ..........................................................

―
―
―
2,854
2,854

Foreign currency translation adjustment
Amount incurred during the fiscal year ended March 31,2012 ...............................
Amount recycled ...........................................................................................
Before tax adjustment .................................................................................
Tax effects ................................................................................................
Foreign currency translation adjustment .........................................................
Total other comprehensive income ......................................................................

- 57 -

(67 )
―
(67 )
―
(67 )
¥61,548

Fukoku Mutual Life Insurance Company

V. Notes to Statements of Cash Flows
1. Scope of Cash and Cash Equivalents
Cash and cash equivalents as of March 31, 2012 consist of "Cash", "Deposits in transfer account","Current deposits", "Ordinary deposits", "Notice deposits", "Time deposits maturing within 3 months ofthe date of acquisition", "Foreign currency deposits maturing within 3 months of the date ofacquisition", "Negotiable certificate of deposits maturing within 3 months of the date of acquisition","Call loans" and "Monetary claims bought maturing within 3 months of the date of acquisition".
2. Reconciliations of Cash and Cash Equivalents
Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to theconsolidated balance sheets accounts as of March 31, 2012 were as follows:(Millions of yen)
Cash and deposits ..............................................................................................
Call loans ............................................................................................................
Monetary claims bought......................................................................................
Time deposits maturing over 3 months of the date of acquisition ......................
Foreign currency deposits maturing over 3 months of the date of acquisition ...
Monetary claims bought maturing over 3 months of the date of acquisition ......
Cash and cash equivalents.................................................................................

- 58 -¥73,260
65,600
1,351
(200)
(155)
(1,351)¥ 138,504

Fukoku Mutual Life Insurance Company

(7) Risk-monitored Loans(Millions of yen)
As of March 31, 2011 As of March 31, 2012
Credits to bankrupt borrowers

280

270

Delinquent loans

770

683

Delinquent loans past three months or more−−

Restructured loans

2,237

2,064

Total

3,288

3,019

[0.29%][0.29%][Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥19 million as of March 31, 2011and ¥12 million as of March 31, 2012. The amounts written-off related to delinquent loans were ¥262
million as of March 31, 2011 and ¥291 million as of March 31, 2012.
2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate
reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest of these loans is not recorded as income after determining that principal of or intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described in note 2 above, and exclude credits to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim orother terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past three months or more.

- 59 -

Fukoku Mutual Life Insurance Company

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

Fukokushinrai Life Insurance Company

As ofMarch 31, 2012
Total solvency margin(A)

671,498

Common stock and others

157,889

Reserve for price fluctuation of securities

38,183

Contingency reserve

147,687−

Catastrophe loss reserve
Allowance for possible loan losses

1,874

Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)

90,058Net unrealized gains on real estate x 85%

67,494

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

115,308

Qualifying subordinated debt

32,896

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

Deductible items−

Others

20,105

Total amount of risk[{ ( R 1 2  R 5 2 ) 1 / 2  R 8  R 9 } 2  ( R 2  R 3  R 7 ) 2 ]1/ 2  R 4  R 6(B)

175,909

Insurance risk

R1

28,229General insurance risk

R5−

Catastrophe risk

R6−

3rd sector insurance risk

R8

9,689

Small amount and short-term insurance risk

R9−Assumed investment yield risk

R7

Minimum guarantee risk

R3

Investment risk

R4

Business risk

Solvency margin ratio(A)(1/2) x (B)R2

42,618
5
124,9394,109763.4%

x 100

Notes: 1. Above figures are calculated based on Articles 86 and 87 of the Enforcement Regulation of the Insurance Business Law and
Ministry of Finance Ordinance No. 50, 1996.
2. "Minimum guarantee risk" is calculated by standard method.

- 60 -

Fukoku Mutual Life Insurance Company

(9) Status of Insurance Claims Paying Ability of Insurance Subsidiaries(Solvency Margin Ratio)(Millions of yen)

Fukokushinrai Life Insurance Company

As of
As of
March 31, 2011 March 31, 2012
Total solvency margin(A)

24,64440,153

19,91531,481

433

2,695

1,218

1,499

0

0

463

2,072

−

−

2,571

2,150

Qualifying subordinated debt−−

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

Deductible items−−

Others

42

253

9,905

14,226

Common stock and others
Reserve for price fluctuation of securities
Contingency reserve
Allowance for possible loan losses
Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)
Net unrealized gains on real estate x 85%
Excess amount of policy reserve based on full-time Zillmer method

Total amount of risk

( R1  R8 ) 2  R2  R3  R7   R4
2

(B)

Insurance risk

R1

609

620

3rd sector insurance risk

R8

123

121

Assumed investment yield risk

R2

310

352

Minimum guarantee risk

R7

−

−

Investment risk

R3

9,258

13,560Business risk

R4

309

293

497.5%

564.4%

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

Notes: 1. The figures at the end of fiscal year ending March 31are calculated based on Articles 86 and 87
of the Enforcement Regulation of the Insurance Business Law and Ministry of Finance Ordinance No. 50, 1996.
In accordance with Cabinet Office Ordinance No.23, 2010 and Financial Services Agency OrdinanceNo.48, 2010, the standards for the calculation of total solvency margin and total amount of risk areplanned to be revised to tighten margin calculation and tighten and refine risk measurements. The
revised standards will be officially applied at the end of fiscal year ending March 31, 2012. The figures
at the end of fiscal year ending March 31,2011are calculated by applying the revised standards
to the financial results as of March 31, 2012.

- 61 -

Fukoku Mutual Life Insurance Company

(reference) Solvency Margin Ratio under the Old Standards(Millions of yen)

Fukokushinrai Life Insurance Company

As ofMarch 31, 2011
Total solvency margin(A)

24,872

Common stock and others

19,915Reserve for price fluctuation of securities

433

Contingency reserve

1,218

Allowance for possible loan losses

0

Net unrealized gains on available - for - sale securities x 90%(multiplied by 100% if losses)463−

Net unrealized gains on real estate x 85%
Excess amount of policy reserve based on full-time Zillmer method

2,571

Qualifying subordinated debt−

Deductible items−

Others270

Total amount of risk

( R1  R8 ) 2  R2  R3  R7   R4
2

(B)

7,199

Insurance risk

R1

609

3rd sector insurance risk

R8

123

Assumed investment yield risk

R2

171

Minimum guarantee risk

R7−

Investment risk

R3

6,759

Business risk

R4

229

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

690.9%

x 100

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

- 62 -

Fukoku Mutual Life Insurance Company