May 28, 2015

Financial Results for the Year Ended March 31, 2015
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the year ended March 31, 2015.

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

P.1

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

P.3

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

P.4

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

P.12

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

P.13

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

P.26

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

P.27

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

P.29

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

P.30

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

P.31

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

P.32

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

P.33

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

P.40

Attached: Supplementary Materials for the Year Ended March 31, 2015

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014
Number of policies

Number of policies

Amount(Thousands)

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

3,044

101.2

242,084

97.3

3,066

Individual insurance(Thousands)

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

100.7

236,846

97.8
97.4

758

96.8

29,487

97.2

739

97.5

28,718

3,802

100.3

271,572

97.3

3,805

100.1

265,56497.8

Group insurance－－

165,468

101.0

－

－

166,780100.8Group annuities－－

20,305

101.8

－

－

21,232

104.6

Individual annuities
Subtotal

Notes: 1. Policy amounts for individual annuities are equal to (a) the funds to be held at the time annuity payments are to commence foran annuity for which annuity payments have not yet commenced and (b) the amount of policy reserve for an annuity for which
payments have commenced.
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, 2014

Number of policies(Thousands)

Net increase by
conversion

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

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

Individual insurance

362

91.0

15,969118.8

15,897102.7

71

Individual annuities

17

40.1

565

37.2

583

37.7

(18)

－

379

86.0

16,534110.5

16,481

96.8

52

－

Group insurance

－

－

554

275.8

554

275.8

－

－

Group annuities

－

－

0

0.2

0

0.2

－

－

Subtotal

Total
Year ended
March 31, 2015

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

Net increase by
conversion

New business

Number of policies

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

Individual insurance

355

98.1

15,64998.0

14,513

91.3

1,136

1,590.2

Individual annuities

21

125.8

724

128.3

744

127.6

(19)

－

Subtotal

377

99.4

16,37499.0

15,257

92.6

1,116

2,110.4

Group insurance

－

－

132

24.0

132

24.0

－

－

Group annuities

－

－

0

145.2

0

145.2

－

－

Notes: 1. Number of new policies is the sum of new business and policies after conversion.
2. Amount of new policies for individual annuities, both new business and net increase by conversion, is equal to the funds to be heldat the time annuity payments are to commence.
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, 2014

Year ended
March 31, 2015
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

Surrender and lapse ratio (%)

Changes(%, YoY)

15,41495.9

14,39993.4

5.52(0.03)

5.30(0.22)

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, 2014

As of March 31, 2015

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

2,750

99.3

2,736

99.5

Individual annuities

1,326

99.3

1,327

100.0

Total

4,077

99.3

4,064

99.7

1,061

100.8

1,066

100.5

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

Year ended March 31, 2014

Year ended March 31, 2015

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Individual insurance

198

95.3

192

96.9

Individual annuities

24

41.5

31

128.1

Total

223

83.3

224

100.4

75

88.2

70

93.2

Medical coverage and living benefits

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

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

Year ended March 31, 2014

Year ended March 31, 2015

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Premium and other income

5,983

92.4

6,431

107.5

Investment income

1,930

108.0

2,137

110.7

Claims and other payments

5,037

96.8

4,903

97.3

Investment expenses

500

83.8

357

71.4

Ordinary profits

719

103.7

968

134.7

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

Year ended March 31, 2014

Year ended March 31, 2015

Changes(%, Pre-FYE)

Changes(%, Pre-FYE)

Unappropriated surplus

783

110.0

930

118.7

Reserve for dividends to policyholders

315

113.8

366

116.2

Net surplus

197

100.1

325

165.3

Unappropriated surplus carried forward

270

113.9

237

87.8

Note: Unappropriated surplus for the years ended March 31, 2014 and 2015 included reversal of voluntary surplus reserve of¥3,707 million and ¥3 million, respectively.

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

As of March 31, 2014

As of March 31, 2015

Changes(%, Pre-FYE)

Total assets

62,147

2

Changes(%, Pre-FYE)

103.5

66,119106.4

Fukoku Mutual Life Insurance Company

2. Policies in Force by Coverage Type[As of March 31, 2015](Thousands of number, 100 millions of yen)

Individual insurance Individual annuities

Group insurance

Total

NumberAmountNumberAmountNumberAmountNumberAmountIllness and accident

2,065

163,566－

748

17,641

166,755

19,706331,070

Accident

1,148

24,254

232

699

2,456

5,756

3,836

30,711

－

－

－

－

2

5

2

5

1,001

59,790739

27,961

7

25

1,747

87,776

Accident

1,450

84

－

－

1,025

3

2,475

88

Illness

1,448

84

－

－

－

－

1,448

84

Others

1,969

95

－

－

2

0

1,971

95

Injury coverage

1,301

－

3

－

1,219

－

2,524

－

Surgical coverage

3,349

－

－

－

－

－

3,349

－

Disability coverage

228

13,488

0

8

－

－

228

13,497

Death coverage

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

Survival coverage

Worker's asset formation
insurance and annuities

Total

NumberAmountNumberAmountNumberAmount9,682

21,232

16

349

9,699

21,581(Thousands of number, millions of yen)(Thousands of number, millions of yen)

Medical careinsurance

Hospitalization coverage

NumberAmount293

101

Group disability
insurance

Disability coverage

NumberAmount579

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

3

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014
AmountAs of March 31, 2015

Percentage

AmountPercentage

Cash, deposits, call loans

183,333

3.0

282,969

4.3

Monetary claims bought

1,011

0.0

870

0.0

Money held in trust

31,981

0.5

34,3190.5

4,798,502

78.2

5,163,610

79.1

Domestic bonds

2,876,176

46.9

2,856,151

43.7

Domestic stocks

482,308

7.9

641,066

9.8

Foreign securities

1,365,396

22.3

1,583,778

24.3

Foreign bonds

1,109,910

18.1

1,287,302

19.7

255,485

4.2

296,475

4.5

74,621

1.2

82,614

1.3

Securities

Foreign stocks and other securities
Other securities
Loans

835,860

13.6

763,900

11.7

Policy loans

65,206

1.1

63,311

1.0

Ordinary loans

770,65412.6

700,588

10.7

Real estate

228,183

3.7

223,794

3.4

Others56,9030.9

62,750

1.0

Allowance for possible loan losses(2,281)( 0.0)(1,948)( 0.0)

6,133,495

100.0

6,530,267

100.0

1,302,072

21.2

1,572,701

24.1

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

Year ended March 31, 2014

Year ended March 31, 2015

79,566

99,636

Cash, deposits, call loans
Monetary claims bought

(100)

(140)

Money held in trust

658

2,338

241,187

365,107

Securities
Domestic bonds(95,512)(20,025)

Domestic stocks

50,592

158,757

Foreign securities

278,173

218,382

Foreign bonds

254,500

177,391

Foreign stocks and other securities

23,67240,990

Other securities

7,934

7,993

(71,647)(71,960)

Policy loans(1,600)(1,895)

Ordinary loans

Loans(70,047)(70,065)

Real estate(39,370)(4,389)Others(6,404)

5,847

(80)

333

203,810

396,771342,259

270,628

Allowance for possible loan losses
Total
Foreign currency denominated assets

4

Fukoku Mutual Life Insurance Company

(3) Investment Income(Millions of yen)
Year ended March 31, 2014 Year ended March 31, 2015

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

126,564
7
94,534
17,317
14,469235－
669
19,40233,49917,36913,029
2,658
442
－
－
2,212
－
279
182,626

136,700
14
107,138
15,464
13,832251－
2,349
35,232
25,221
8,746
3,458
12,940
76
－
－
2,041
270
69
201,885(4) Investment Expenses(Millions of yen)
Year ended March 31, 2014 Year ended March 31, 2015

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

3,633
－
－
－
9,289
32
3,617
5,639
－
52
－
52
－
－
－
25,116
－
56
－
5,082
6,778
50,010

4,252
－
－
－
1,075
0
259
815
－
0
－
0
－
－
－
18,679
－
－
－
4,877
6,831
35,715(5) Net Investment Income(Millions of yen)
Year ended March 31, 2014 Year ended March 31, 2015

Net investment income

132,616

5

166,169

Fukoku Mutual Life Insurance Company

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

Year ended March 31, 2014

Year ended March 31, 2015

Cash, deposits, call loans

0.28(0.02)

Monetary claims bought

2.31

1.48

Money held in trust

2.14

7.35

Securities

2.77

3.27

Domestic bonds

2.44

2.45

Domestic stocks

4.24

3.31

Foreign securities

2.95

4.77

Foreign bonds

2.50

4.57

Foreign stocks and other securities

4.85

5.67

2.01

1.97

1.82

1.77

Real estate

1.99

2.28

Total

2.31

2.87

3.15

5.65

Loans
Ordinary loans

Overseas investments

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

(ii) Average Daily Balance(Millions of yen)

Year ended March 31, 2014

Year ended March 31, 2015

Cash, deposits, call loans

135,643

167,043

Monetary claims bought

1,051

936

Money held in trust

31,324

31,987

4,311,113

4,410,141

Domestic bonds

2,828,281

2,781,691

Domestic stocks

311,296

320,654

Foreign securities

1,107,697

1,244,991

Foreign bonds

895,775

1,022,805

Foreign stocks and other securities

211,922

222,186

866,490796,926

800,673

732,738

248,863

228,699

5,745,255

5,795,874

1,162,686

1,339,832

Securities

Loans
Ordinary loans
Real estate
Total
Overseas investments
6

Fukoku Mutual Life Insurance Company

(ⅲ) Net Valuation Gains/Losses on Trading Securities(Millions of yen)
As of March 31, 2014
Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet
Trading securities

As of March 31, 2015

7,200

302,041

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet
354,399

25,399Note: 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, 2014

As of March 31, 2015

Gains/losses

Book value

Fair value

843,433

922,909

79,476

Fair value

79,476－

811,903

926,148

114,245

114,245

Domestic bonds

768,744845,557

76,81376,813－742,337

853,785

111,448

111,448

Foreign bonds

74,68977,352

－

2,662

2,662

－

69,56572,362

2,797

2,797

－

Monetary claims bought－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

－

1,210,016

1,294,587

84,57084,798227

1,215,695

1,346,650

130,954

131,00450

1,190,715

1,275,012

84,29784,522224

1,174,597

1,305,280

130,683

130,73350

19,301

19,575

273

276

2

41,09841,369

270

270

－

1,393

1,096

(296)

－

296

1,433

1,236

(196)

3

200
1,360

Gains
Held-to-maturity debt securities

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

Gains/losses

Book value
Losses

Gains

Losses－

2,046,003

2,421,417

375,414379,801

4,387

2,150,593

2,760,905

610,311611,672

Domestic bonds

815,104

886,899

71,794

72,132337

807,550

892,795

85,24585,26924

Domestic stocks

269,792

439,094

169,301

171,7692,467

279,549

597,167

317,617317,842225

Foreign securities

905,773

1,028,769

122,996

124,501

1,505

1,010,329

1,197,021

186,692

187,788

1,096

Foreign bonds

690,428

774,677

84,24985,3981,149

784,142

901,979

117,837

118,593756

Foreign stocks and other securities

215,345

254,092

38,746

39,102355

226,187

295,042

68,854

69,194340

Other securities

55,332

66,653

11,321

11,39776

53,16473,92020,756

20,771

15

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,100,846

4,640,011

539,164544,075

4,911

4,179,626

5,034,941

855,314856,926

1,611

Domestic bonds

2,774,564

3,007,469

232,904

233,467562

2,724,485

3,051,862

327,377

327,451

74

Domestic stocks

269,792

439,094

169,301

171,7692,467

279,549

597,167

317,617317,842225

Foreign securities

1,001,157

1,126,794

125,636

127,440

1,804

1,122,427

1,311,990

189,563

190,859

1,296

Foreign bonds

784,419

871,604

87,18588,337

1,152

894,806

1,015,712

120,906

121,662756

Foreign stocks and other securities

216,738

255,189

38,45039,102652

227,621296,278

68,657

69,197

540

55,332

66,653

11,321

11,39776

53,16473,92020,756

20,771

15

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Total

Other securities

Note: The table above includes assets which are considered appropriate to deem as securities under the Financial Instruments
and Exchange Law.
* Book value of securities without fair value are as follows:(Millions of yen)
As ofMarch 31, 2015

As ofMarch 31, 2014
Held-to-maturity debt securities－－

Unlisted foreign bonds－－

Others－－

Policy-reserve-matching bonds－－

Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

15,62017,031

7,653

8,338

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

Unlisted foreign bonds

－

－

7,967

8,693

51,181

52,592Unlisted domestic stocks (except over-the-counter stocks)

OthersTotal

7

Fukoku Mutual Life Insurance Company

(ⅴ) Fair Value Information on Money Held in Trust(Millions of yen)
As of March 31, 2014
Carrying
value onbalancesheetsMoney held in trust

31,981

As of March 31, 2015

Gains/losses
Fair value

31,981

Gains－

Losses－－Carrying
value onbalancesheetsFair value

34,31934,319Gains/losses
Gains

－

Losses－－* Money held in trust for trading purpose(Millions of yen)
As of March 31, 2014
Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets
Money held in trust
for trading purpose

As of March 31, 2015

30,981

Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets
33,319－(0)* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)
As of March 31, 2014
Book value Fair value

As of March 31, 2015

Gains/losses
Gains

LossesBook
value

Fair value

Gains/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

As of March 31, 2014
Hedge accounting applied
Hedge accounting not applied
Total
As of March 31, 2015
Hedge accounting applied
Hedge accounting not applied
Total

Currencyrelated

Stockrelated

Bondrelated

OthersTotal

3(2,427)－－－(2,423)(18)(2,119)

(152)

370

－

(1,920)(14)(4,546)

(152)

370

－

(4,343)

Interestrelated

Currencyrelated

Stockrelated

Bondrelated

Others

Total

0

820

－

－

－

(460)

685

－

200

－

426

(459)

1,506

－

200

－

1,247

821

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of ¥2,427 million as of March 31, 2014
and gains of ¥820 million as of March 31, 2015) 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, 2015

As of March 31, 2014
Notional amount/contract value

Fair
value

Over
1 yearNotional amount/contract value

Gains(losses)

Fair
value

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

290

170

3

3

85

－

0

0

Payment fixed, receipt floating

－

－

－

－

－

－

－

－

－

－

－

－

－

－[

－ ]

－

－

－

－

－

－

828

(460)

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

－ ]
－

[

－

－

－ ]

－

－[

－ ]

－

－[

－ ]

－

BoughtReceipt fixed, payment floating－[

Payment fixed, receipt floating

100,000
[

－

－

－ ]

300,000

－

89 ]

70

Total

(18) [－

200,000

1,289 ]

(14)

(459)

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

(reference) Interest rate swap contracts by contractual maturity dates(Millions of yen)
As of March 31, 2015

As of March 31, 2014
Yen interest rate swap contracts
1 year or
shorterOver
1 year to
3 yearsOver
3 years

1 year or
shorterOver
1 year to
3 yearsOver
3 years

120

170

－

85

－

－

Average fixed rate (receipt)

2.12%

2.47%

－

2.47%

－

－

Average floating rate (payment)

1.11%

1.11%

－

1.06%

－

－

－

－

－

－

－

－

Average floating rate (receipt)

－

－

－

－

－

－

Average fixed rate (payment)

－

－

－

－

－

－

Notional amount (receipts fixed, payments floating)

Notional amount (receipts floating, payments fixed)

9

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014
Notional amount/
Fair
Gains
contract value
value(losses)Over 1 year

Over-the-counter transactions
Currency forward contracts
Sold
US dollar
British PoundEuro
Australian dollar
Canadian dollar
BoughtUS dollar

575,950
354,098
33,915
101,850
51,14934,936－－

Currency Options
Sold
Calls
[
Puts
[
Bought
Calls
[
Puts
[
US dollar[－ 580,474－ 355,881－ 34,240－ 102,236－ 52,730－ 35,385
－
－
－
－

－
－]
－
－]

－

－
－]
9,800
23 ]
9,800
23 ]

－

－

(4,523)(1,782)(325)(386)(1,580)
(448)
－
－

－ [

－
－

－ [

－

－ [

－
0

(23) [－
0Total(23) [

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

724,640
458,741
111,979
78,873
46,47728,568
59
59

－
－]
－
－]
－
－]
－
－]
－
－]

－ 723,134－ 459,295－ 111,083－ 78,384－ 45,954－ 28,415
60
－
60
－

Gains
(losses)

1,505
(553)
896
488
522
153
0
0

－
－

－

－

－

－

－

－

－

－

－

－

－
－
－

(4,546)

1,506

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(Millions of yen)

As of March 31, 2014
Notional amount/Gainscontract value
Fair value(losses)

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

Exchange-traded transactions
Yen stock index options
Sold
Calls

－
－]
－
－]

－

－
－]
10,687
[
306 ]

－

[
Puts
[
Bought
Calls

－
－

[

Puts

－ [

－

－ [

－

－ [

－
153

Total

(152) [

Over 1 year

－
－]
－
－]

－

－
－]
－
－]

－

Gains
(losses)

－

－

－

－

－

－

－

－

－

－

(152)

－

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

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

As of March 31, 2014
Notional amount/Gainscontract value
Fair value(losses)

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

Over 1 year

Gains(losses)

Exchange-traded transactions
Yen bond futures
Sold
Bought144,825－－ 144,620
－
－

205
－

294,876－－ 294,440
－
－

436
－

Foreign bond futures
Sold
Bought27,492－－－

27,327－165－

40,083－－－40,318
－

(235)
－

Total

370

10

200

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014
Carrying value on
the balance sheets
132,914

Fair value
223,067

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

Gains(losses)
90,152132,263

Fair value
235,337

Gains(losses)
103,073

Notes: 1. As of March 31, 2015, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value forproperty tax as of January 1, 2015 and the road rate as of January 1, 2014.
2. As of March 31, 2014, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value forproperty tax as of January 1, 2014 and the road rate as of January 1, 2013.

11

Fukoku Mutual Life Insurance Company

4. Non-consolidated Balance Sheets(Millions of yen)
As ofMarch 31, 2014

As ofMarch 31, 2015

Assets:Cash and deposits
CashBank deposits
Call loans

96,515 Policy reserves
Reserve for outstanding claims

159

183

34,60996,332

Policy reserve

148,700

186,500

Reserve for dividends to policyholders

1,011

Money held in trust

31,981

870 Reinsurance payables
34,319 Subordinated bonds

4,877,141

5,240,955 Other liabilities

2,097,463

2,061,294

Local government bonds

157,102

Corporate bonds

654,161

Government bonds

StocksForeign securities
Other securities
Loans
Policy loans

As ofMarch 31, 2015

5,412,622

5,545,647

Liabilities:
34,768

Monetary claims bought

Securities

As ofMarch 31, 2014

23,067

21,3055,338,547

5,475,030

51,00749,31198

110

122,346

118,959

53,52455,984

Corporate income tax payable

11,94515,851

154,616

Accounts payable

2,350

2,911

670,380

Accrued expenses

11,112

10,587504,442664,735

Unearned income

341

357

1,389,208

1,607,208

Deposits received

5,355

5,355

12,83912,772

74,762

82,719

Guarantee deposits received

835,860

763,900

Differential account for futures trading

65,20663,311

Derivatives

216

－

5,223

3,886
3,001

Ordinary loans

770,654

700,588

Asset retirement obligations

2,951

Tangible fixed assets

232,115

227,591

Suspense receipts

1,188

1,259

Land

132,912132,261 Reserve for employees' retirement benefits

43,112

46,393

Buildings

94,99190,902 Reserve for price fluctuation of securities

Lease assets

1,159

44,016

46,534954 Deferred tax liabilities

29,24585,741630 Deferred tax liabilities for revaluation reserve for land

15,92914,7875,720,895

5,914,159

35,00030,00071,00086,000Construction in progress

280

Other tangible fixed assets

2,771

2,843 Total liabilities

10,827

11,017 Net assets:

10,554

10,744 Foundation funds

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

273

272 Accumulated foundation funds redeemed78

105 Reserve for revaluation

44,592

52,123 Surplus

Accounts receivable

6,297

9,037

Prepaid expenses

993

898

Accrued income

28,02828,136

Deposits

1,894

1,837

－

241

Differential account for futures trading
Derivatives
Suspense payments
Lease investment assets
Other assets
Allowance for possible loan losses

879

5,134

2,430

3,108

Legal reserve for future losses

112

124,780

143,548

2,485

2,582

122,294

140,966

Reserve for redemption of foundation funds

18,00012,000Reserve for dividend allowances

3,895

3,895

Accumulated fund for price fluctuation

21,00031,000Reserve for advanced depreciation of realestate for tax purpose

3,969

262

Other surplus

835

801

767

767

3,233

2,929

Other reserves
Unappropriated surplus

74,662

93,041(2,281)(1,948) Total foundation funds, surplus and others

230,892

259,660

259,861434,236

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 assets

112

6,214,796

2

0

3,144

3,894
438,131

Total valuation and translation adjustments

263,008

Total net assets

493,900

697,792

6,611,952 Total liabilities and net assets

6,214,796

6,611,952

12

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Operations(Millions of yen)
Year ended March 31, 2014

Ordinary revenues:
Premium and other income
Premium income
Reinsurance income
Investment income
Interest, dividends and other income
Interest on deposits
Interest and dividends on securities
Interest on loans
Income from real estate for rent
Other interest and dividends
Gains from money held in trust, net
Gains from trading securities, net
Gains on sales of securities
Foreign exchange gains, net
Reversal of allowance for possible loan losses

598,367598,227140
193,044
126,564
7
94,534
17,317
14,469235
669
19,40233,4992,212

Other investment income
Gains from separate accounts, net
Other ordinary revenues
Fund receipt from annuity rider
Fund receipt from deposit of claims paid
Reversal of reserve for outstanding claims
Reversal of reserve for employees' retirement benefits
OthersTotal ordinary revenues
Ordinary 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 on sales of securities
Losses on valuation of securities
Losses from derivative instruments, net
Provision for allowance for possible loan losses
Depreciation of real estate for rent and other assets
Other investment expenses
Operating expenses
Other ordinary expenditures
Claim deposit payments
Taxes
Depreciation
OthersTotal ordinary expenditures
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets
Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Total extraordinary losses
Surplus before income taxes
Income taxes：：
Current
Deferred
Total income taxes
Net surplus for the year

13

Year ended March 31, 2015－
279
10,417
10,914
1,271
5,083
－
1,849
2,710
802,326

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

503,718
135,639
134,935
122,255
77,82032,681
385
70,247393
69,77974
50,010
3,633
9,289
52
25,116
56
5,082
6,778
86,203
20,246
8,970
4,573
6,023
678
730,426
71,900490,362
112,311
155,577
118,484
75,59427,954
440
136,537－
136,48254
35,715
4,252
1,075
0
18,679
－
4,877
6,831
86,36521,877
8,900
6,069
6,205
701
770,858
96,877

2,005
2,005

6
6

7,314
1,775
2,388
11,47762,427

165
698
2,518
3,382
93,501

19,208(7,403)
11,80450,622

27,169(2,711)
24,45869,043

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 maintainedby Fukoku Mutual Life Insurance Company (the “Company”) in accordance with the provisions set forth in the
Insurance Business Law of Japan and its related rules and regulations and in conformity with accounting
principles generally accepted in Japan, which are different in certain respects from accounting principles
generally accepted 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 notnecessarily 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 tosecurities, and securities managed as trust assets in money held in trust, is as follows:i) Trading securities are stated at fair market value. Costs of their sales are determined by the moving
average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being
determined by the moving average method in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
iv) Investments in subsidiaries and affiliates are stated at cost, cost being determined by the moving
average method.
v) Available-for-sale securities with market value are stated at fair value based on the market prices atthe 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 of taxes, are recorded as aseparate component of net assets.
Available-for-sale securities whose market value are deemed extremely difficult to obtain arestated 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 isconsidered to be an adjustment of interest. Such bonds are stated at amortized cost under thestraight-line method, cost being determined by the moving average method.
(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting from therevaluation, net of related taxes, is recorded as revaluation reserve for land as a separate component of net
assets and the related tax is recorded as deferred tax liabilities for revaluation reserve for land.
• Date of revaluation: March 31, 2002
• Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
14

Fukoku Mutual Life Insurance Company

promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said Ordinancewith certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of tangible fixed assets is calculated by the following methods.
• Tangible fixed assets (excluding lease assets):Declining-balance method
However, buildings (excluding building attachments and structures) acquired on or after April 1, 1998 aredepreciated using Straight-line method.
• Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method
over the lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciatedequally over three years.
(5) Foreign Currency Translation
Foreign currency denominated assets and liabilities, except for investments in subsidiaries and affiliates, aretranslated into Japanese yen at the effective exchange rate prevailing at the balance sheet date. Investments
in subsidiaries and affiliates are translated into Japanese yen at the exchange rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
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 of bankruptcy or
civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who are substantially bankrupt(hereinafter called “substantially bankrupt borrowers”), the Company provides the remaining amount ofcredits after the direct write-off described below and the deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy(hereinafter called “not currently bankrupt borrowers”), the Company provides the amounts deemed asnecessary considering the borrowers’ ability to pay, within the amounts after deductions of the amount
expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying the borrowers’ balance by the actual ratio of bad debt losses on defaults during a certain
past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards of selfassessment 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 of guarantees
is written-off directly from the borrower’s balance as the estimated uncollectible amounts. The amountwritten-off as of March 31, 2015 was ¥247 million.
(7) Reserve for Employees’ Retirement Benefits and Method of Amortizing Retirement Benefit
Expenses
Reserve for employees' retirement benefits is presented for the employees' retirement benefits based on
projected benefit obligations and pension plan assets at the balance sheet date.
The Company uses the following methods for amortizing retirement benefit obligations and retirement
benefit expenses:• Method for allocation of projected retirement benefits ..................
• Amortization period of actuarial differences...................................
• Amortization period of prior service cost........................................

Benefit formula basis
10 years
10 years(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.
15

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 onor before March 31, 2008 continued to be accounted for in a manner similar to accounting treatment forordinary 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 (other interest and dividends)” at the time of receiving lease fee. The
corresponding cost of the lease transactions is recorded in “ other investment expenses ” , which is
calculated by deducting an amount equivalent to the interest allocated over the 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,
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 the hedged items,
valuation gains and losses on the foreign currency forward contracts are recorded in the statements ofoperations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, valuation gains and losses on the interest rate swaps are deferred until the maturity of the hedgedtransactions.
The Company applies foreign currency swap appropriated treatment as a hedge for the foreignexchange fluctuation risk associated with foreign currency denominated bonds issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value
or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Employees’ Retirement Benefits
Accounting of unrecognized actuarial differences and unrecognized prior service costs related to employees’
retirement benefits is different to the methods used for these items in the consolidated financial statements.
(13) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense when incurred.
(14) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at the end 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.
Based on the provision of paragraph 5, Article 69 of the Enforcement Regulation of the Insurance
Business Law, certain individual annuity insurance policies, certain hospitalization riders with surgery benefits
and long-term hospitalization benefits have funded policy reserves included.
(15) Software
The software for internal use is amortized based on straight-line method over the estimated useful lives.
(16) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This amount isdeducted from bonds.

16

Fukoku Mutual Life Insurance Company

(17) 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).
The amounts of policy-reserve-matching bonds recorded on the balance sheets and the market value ofthese bonds as of March 31, 2015, were written in Notes No. 4 “Financial Instruments.”

2. Accounting changes and corrections of past errors
From the year ended March 31, 2015, in accordance with the Accounting Standard for Retirement Benefits(ASBJ Statement No. 26, May 17, 2012) and the Guidance on Accounting Standard for Retirement Benefits(ASBJ Guidance No. 25, May 17, 2012), the Company changed from a straight-line basis to a benefit formula
as the method for allocation of projected retirement benefits. The Company also changed the method used
for determining the discount rate from a discount rate based on the estimated average period until the
payment of retirement benefits to a single weighted average discount rate reflecting the estimated payment
period and the amount for each estimated period.
As a result, compared with the previous method, unappropriated surplus at the start of the period ended
March 31, 2015, decreased by ¥3,297 million. In addition, in the year ended March 31, 2015, ordinary profitsand surplus before income taxes increased by ¥39 million.

3. Financial Instruments
Asset management of the general accounts other than the separate accounts stipulated in Article 118
Paragraph 1 of the Insurance Business Law is conducted on the principle of prudent and profitable
investments, considering public and social responsibilities of the insurance business. Based on this policy,
the Company allocates the fund, securing its liquidity, from the medium-to-long term viewpoints. The
Company is diversifying investments in assets such as foreign securities and equity securities within theacceptable range of risk in order to enhance the profitability, although yen-denominated interest bearing
assets including debt securities such as Japanese government bonds and loans are the cores of theportfolios. Derivatives are mainly used to hedge the market risk regarding spot-priced assets. Major financial
instruments including securities, loans and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by establishing internal control systems including
various rules pursuant to the “Three Basic Rules related to Enterprise Risk Management” established by the
Board of Directors. Specifically, the Company eliminates excessive risk deviating from the basic principle 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 andcredit risk periodically on a daily or monthly basis. In addition, the Company quantifies the market risk andcredit risk using value-at-risk (VaR) method in order to control the possible maximum losses which may arise
from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets and liabilities asof March 31, 2015 were as follows:

17

Fukoku Mutual Life Insurance Company

CarryingamountFair value

Difference(Millions of yen)

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

¥

96,46996,469186,500¥

96,46996,469186,500

¥

―
―
―

870
870

918
918

47
47

33,31933,31933,31933,319――321,079
811,903
1,215,695
1,433
2,760,905
5,111,017

321,079
926,148
1,346,650
1,236
2,760,905
5,356,020―
114,245
130,954(196 )―
245,003

63,311
700,588763,900
6,192,077
118,959
118,959

63,311
724,679
787,990
6,461,219
122,282
122,282(0 )24,09024,090269,141
3,322
3,322

426
821
1,247

426
821
1,247

―
―
―

¥

¥

¥

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

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for
Financial Instruments” (ASBJ Statement No.10)) and call loans: The fair values of cash, deposits and callloans are based on their book values since fair values approximate book values due to their shortmaturities.
Carrying amounts, fair values and related differences of cash and deposits have been disclosed asof March 31, 2014.
(2) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities managed astrust assets in money held in trust: The fair values of marketable securities are measured at the quoted
market price at the end of fiscal year. The fair values of other securities without the quoted market priceare based on the prices reasonably calculated such as the prices offered by the information vendors or
counterparty financial institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby
partnership assets consist of unlisted stocks whose fair values are deemed extremely difficult to obtain,
are excluded from above securities. The carrying amounts of investments in subsidiaries and affiliates,
unlisted stocks and investments in partnerships were ¥35,560 million, ¥8,338 million, and ¥8,693 million
as of March 31, 2015.
18

Fukoku Mutual Life Insurance Company

(3) Loans and monetary claims bought treated as loans: The fair values of policy loans are deemed toapproximate book values, considering estimated repayment period and interest rate conditions since
their repayment deadline have not been set up due to the characteristics that the loan is limited to theamount of cash surrender values. Therefore, the book values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claims bought
treated as loans approximate the book values because the market interest rates are reflected in future
cash flows in a short period. Therefore, the fair values of floating interest rate loans and monetary claimsbought treated as loans are based on their book values. The fair values of fixed interest rate loans aremeasured by discounting the future cash flows to the present values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and not currently bankrupt borrowers and monetary claims bought treated as loans arecomputed by deducting the amount of the allowance for doubtful accounts from the book values before
direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market value.
Carrying amounts, fair values and related differences of subordinated bonds have been disclosed
as of March 31, 2014.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement priceof the exchange.
ii) The fair values of options and swaps traded over the counter are based on the quoted prices offered bycounterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate
and forward contract rate.

4. Investment and Rental Property
The Company holds investment and rental properties such as office buildings in Tokyo and other areas. The
carrying amounts and the fair values of investment and rental properties were ¥177,598 million and ¥274,268
million as of March 31, 2015, respectively. The fair value is mainly based on the value calculated by theCompany in accordance with real estate appraisal standards which includes some adjustments using thereference prices.
The amount corresponding to asset retirement obligations included in the carrying amount of investment
and rental properties was ¥1,105 million as of March 31, 2015.

5. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥50,418 million as of March 31, 2015.

6. Loans Receivable
The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months ormore and restructured loans, which were included in loans, was ¥1,409 million as of March 31, 2015,
respectively.
i)

The balance of credits to bankrupt borrowers was ¥194 million as of March 31, 2015.

ii) The balance of delinquent loans was ¥844 million as of March 31, 2015.
iii) There was no balance of delinquent loans past 3 months or more as of March 31, 2015.
iv) The balance of restructured loans was ¥370 million as of March 31, 2015.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meet theconditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the
Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after determiningthat principal of or interest on these loans is unlikely to be collected due to the significant delay in repaymentof 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 havebeen 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 of principal
are delinquent for 3 months or more from the due date under the terms of the related loan agreements,
excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
19

Fukoku Mutual Life Insurance Company

Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim or otherterms, have been negotiated for the purpose of assisting and supporting the borrowers in the restructuring of
their business. This category excludes loans classified as credits to bankrupt borrowers, delinquent loans
and delinquent loans past 3 months or more.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥247
million as of March 31, 2015.

7. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥149,879 million as of March 31, 2015.

8. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were
¥83,004million as of March 31, 2015. The amounts of separate account liabilities were the same as separate
account assets.

9. Receivables from/Payables to Subsidiaries
The total amounts of receivables from/payables to subsidiaries were ¥3,200 million and ¥1,870 million as ofMarch 31, 2015.

10. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2015 were ¥95,962 million and ¥178,133
million, respectively. Valuation allowance for deferred tax assets was ¥3,570 million.
Major components of deferred tax assets were ¥60,473 million of policy reserves, ¥13,425 million ofreserve for price fluctuation of securities and ¥13,384 million of reserve for employees' retirement benefits asof March 31, 2015.
Major component of deferred tax liabilities was ¥176,074 million of net unrealized gains on available forsale securities as of March 31, 2015.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2015 were 30.8%
and 26.2%, respectively. The difference between the statutory tax rate and the actual effective tax rate wasmainly attributable to -11.0% adjustment relating to reserve for dividends to the policyholders, and +6.5%
adjustment relating to the write-down of deferred tax assets at end of period.
Accompanying the promulgation of the “Act for Partial Revision to the Income Tax Act, etc.” (Act No. 9,2015), the effective statutory tax rate used to calculate deferred tax assets and deferred tax liabilities waschanged. The Company had previously used an effective statutory tax rate of 30.8% for items expected to becollected or paid on or after April 1, 2015. However, owing to the aforementioned law change, the rateapplied was changed to 28.9%. As a result of this change in statutory tax rate, deferred tax liabilities
decreased by ¥5,735 million , and deferred tax liabilities for revaluation reserve for land decreased by ¥989
million.
Deferred income taxes increased by ¥6,043 million.

11. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2015 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.... .............................................

¥ 51,007
31,595(33,346)54¥ 49,311

12. Stocks of Subsidiaries
The amounts of stocks of subsidiaries the Company held was ¥36,994 million as of March 31, 2015.
20

Fukoku Mutual Life Insurance Company

13. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2015 were ¥33,691 million of securities and ¥1,542 million ofbank deposits. Secured debts as of March 31, 2015 were ¥4,807 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 “reserve foroutstanding claims for ceded reinsurance”) was ¥50 million as of March 31, 2015.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve for ceded
reinsurance”) was ¥30 million as of March 31, 2015.

15. Adjustment Items for Redemption of Foundation Funds and Appropriation of Net Surplus
The total amounts of adjustment items for redemption of foundation funds and appropriation of net surplus
defined in Article 30 Paragraph 2 of the Enforcement Regulation of the Insurance Business Law was¥438,243 million as of March 31, 2015.

16. Additional Foundation Funds
In accordance with Article 60 of the Insurance Business Law, the Company carried out financing of additionalfoundation funds totaling ¥10,000 million.

17. Accumulated foundation funds redeemed
Accompanying the redemption of foundation funds totaling ¥15,000 million, in accordance with Article 56 of
the Insurance Business Law, the Company transferred the same amount from reserve for redemption offoundation funds to additions to accumulated foundation funds redeemed.

18. Commitment Line
There were unused commitment line agreements under which the Company is the lender of ¥12,372 million
as of March 31, 2015.

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 259of the Insurance Business Law was estimated at ¥10,372 million as of March 31, 2015. The contribution was
charged as operating expenses in the year in which it was paid.

21. Matters Related to Employees’ Retirement Benefits as of March 31, 2015
(1) Overview of employees’ retirement benefit system
As a defined benefit plan for office-based employees, the Company has a defined benefit corporate
pension plan and retirement lump-sum grants. As a defined contribution plan for these employees, theCompany also has a defined contribution pension plan.
As a defined benefit plan for sales employees, the Company has retirement lump-sum grants.

21

Fukoku Mutual Life Insurance Company

(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)

Retirement benefit obligation at the beginning of current fiscal year...........
Cumulative effects of changes in accounting policies.................................
Balance at the beginning of the current fiscal year after reflectingchanges in accounting.................................................................................
Service cost.................................................................................................
Interest cost.................................................................................................
Actuarial difference occurred during the fiscal year.....................................
Retirement benefits payments.....................................................................
Retirement benefit obligation at the end of current fiscal year....................

¥ 71,618
4,763
76,381
3,088
1,068
788
(4,601)¥ 76,725ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)

Pension plan assets at the beginning of current fiscal year......................
Expected return on pension plan assets...................................................
Actuarial difference occurred during the fiscal year..................................
Contributions by the employer...................................................................
Retirement benefits payments...................................................................
Pension plan assets at the end of current fiscal year................................

¥ 22,844
685
1,530
2,339
(1,285 )¥ 26,114iii) Reconciliation of end of balance of retirement benefit obligation and pension plan assets withreserve for employees’ retirement benefits presented on the balance sheets(Millions of yen)a. Funded plan retirement benefit obligation............................................
b. Pension plan assets.............................................................................
c. (a+b) ....................................................................................................
d. Unfunded plan retirement benefit obligation........................................
e. Unrecognized actuarial differences......................................................
f. Unrecognized prior service cost...........................................................
g. Reserve for employees’ retirement benefits (c+d+e+f)........................

¥ 32,625(26,114 )
6,510
44,100(4,692 )475¥ 46,393

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

Service cost...............................................................................................
Interest cost...............................................................................................
Expected return on pension plan assets...................................................
Amortization of actuarial differences.........................................................
Amortization of prior service cost..............................................................
Retirement benefit expenses related to defined benefit plan...................

¥ 3,0881,068(685 )
778(76 )¥ 4,173v) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of total pension plan assets is as follows:
Life insurance general account.................................................................
Domestic stocks........................................................................................
Domestic bonds.......................................................................................
Foreign stocks..........................................................................................
Foreign bonds..........................................................................................
Others......................................................................................................
Total.........................................................................................................

22

49.1%
18.3%
13.5%
13.1%
5.3%
0.6%
100.0%

Fukoku Mutual Life Insurance Company

vi) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into account thepresent and future allocation of pension plan assets, and the present and expected future long-term rateof return on the diverse range of assets that makes up the pension assets.
vii) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2015, were as follows:
Discount rate............................................................................................
Expected long-term rate of return on pension plan assets......................

1.4%
3.0%

(3) Defined contribution plan
The required contribution amount by the Company to the defined contribution plan was ¥185 million.

23

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 ¥856 million and¥8,453 million for the year ended March 31, 2015.

2. Gains on Sales of Securities
Major items of gains on sales of securities for the year ended March 31, 2015 were as follows:(Millions of yen)Domestic bonds..........................................................................................
Domestic stocks and others.......................................................................
Foreign securities.......................................................................................

¥ 8,7463,458
12,9403. Losses on Sales of Securities
Major items of losses on sales of securities for the year ended March 31, 2015 were as follows:(Millions of yen)Domestic bonds........................................................................................
Domestic stocks and others......................................................................
Foreign securities......................................................................................

¥

0
259
815

4. Losses on Valuation of Securities
Major items of losses on valuation of securities for the year ended March 31, 2015 were as follows:(Millions of yen)Domestic stocks and others....................................................................

¥0

5. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2015, provision for reserve for outstanding claims for ceded reinsurance
considered in calculation of reversal for reserve for outstanding claims was ¥46 million, and provision forpolicy reserve for ceded reinsurance considered in calculation of provision of policy reserve was ¥0 million.

6. Gains (Losses) from Trading Securities
Major items of gains (losses) from trading securities for the year ended March 31, 2015 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......................................

¥ 9,075
2
25,3997. Gains (Losses) from Money Held in Trust
Gains (Losses) from money held in trust for the years ended March 31, 2015 included valuation losses of ¥0
million.

8. Gain from Derivative Instruments
Gains (Losses) from derivative instruments for the year ended March 31, 2015 included valuation gains of¥2,346 million.

24

Fukoku Mutual Life Insurance Company

9. Impairment Losses of Fixed Assets
For the year ended March 31, 2015, impairment losses of fixed assets were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one asset group as awhole. Other assets such as real estate for rent and unused real estate are classified as one groupindividually.

(2) Background of recognizing the impairment losses
Profitability of certain real estate for rent dropped down significantly due to a decrease in the level of rental
income and a declining trend of market prices of land. The Company reduced its book values of such realestate for rent and unused real estate to their recoverable amounts. The amounts reduced were recognized
as impairment losses and included in the extraordinary losses.

(3) Asset groups recognized impairment losses and losses by fixed assets(Millions of yen)

Real estate for rent:
Land....................................................................................................
Buildings and others……….…………………………………………………
Total real estate for rent (i)....................................................................
Unused real estate:Land....................................................................................................
Buildings and others.…………………………………………………………
Total unused real estate (ii)...................................................................
Total:
Land....................................................................................................
Buildings and others………………………………………………………….
Total (i) + (ii)........................................................................................

¥ 296
136
432
235
30
266
531
167
¥ 698

(4) Calculation method of recoverable amount
Recoverable amount is based on net sales value. Net sales value is determined based on appraisal value,posted price or road rate.

25

Fukoku Mutual Life Insurance Company

6. Breakdown of Ordinary Profits (Fundamental Profit)
Year ended
March 31, 2014

(Millions of yen)
Year ended
March 31, 2015

A

86,517

93,183

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

46,945484
10,74933,499－2,212

55,601
2,181
26,15725,221－
2,041－
34,458－19,754

－
－
9,289
52
25,116－－
12,48699,004－－－－－
27,104－
26,845258－－－(27,104)
71,900－－1,075
018,679－－35,846129,030
78－－
78－
32,232－
32,231－－－
1(32,153)
96,877

Fundamental 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): ¥184 million in respect of the year ended March 31, 2014 and ¥168 million in respectof the year ended March 31, 2015.
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): ¥8,652 million in respect of the year ended March 31, 2014 and ¥9,075 million in respectof the year ended March 31, 2015.
3. For the year ended March 31, 2015, other non-recurring losses represent the losses relating to provision of theadditional policy reserves in accordance with Article 69, Paragraph 5 of the Enforcement Regulations of the
Insurance Business Act.

26

Fukoku Mutual Life Insurance Company

7. Non-consolidated Statements of Changes in Net Assets[For the year ended March 31, 2014](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of current fiscal year

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

35,00071,000112

Legal reserve Reserve forfor future redemption of Reserve fordividend
lossesfoundation
allowances
funds

2,399

9,000

3,895

Reserve foradvanced
Accumulated
depreciation
fund for priceof real estatefluctuation
for tax
purpose11,000

4,114

Other
reserves

767

Total
foundation
funds,
surplus
Unappropriat Total surplus
and othersed surplus

71,084102,260

208,372(27,762)(27,762)(27,762)

Changes in the current fiscal year
Additions to reserve for dividends topolicyholders

86

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

9,000

Additions to accumulated
fund for price fluctuation

10,000

Reversal of reserve for advanced
depreciation of real estate for tax purpose(144)

Reversal of revaluation reserve for land

(86)

－

－

(621)

(621)

(621)

50,622

50,622

50,622(9,000)－－(10,000)

－

－

144

－

－

281

281

281

Net changes, excluding foundation funds,
surplus and others
Total changes in the current fiscal year

－

－

－

86

9,000

－

10,000

(144)

－

3,578

22,51922,519Balance at the end of current fiscal year

35,00071,000112

2,485

18,0003,895

21,0003,969

767

74,662

124,780

230,892

Total
valuation andtranslation
adjustments

Total
net assets

219,370

427,742

Valuation and translation adjustments
Net
unrealized
Deferred
Revaluation
gains (losses)
valuation
reserve foron available- gains (losses)
land, net offor-sale
under hedge
tax
securities, net accountingof taxBalance at the beginning of current fiscal year

215,88562

3,421

Changes in the current fiscal year
Additions to reserve for dividends topolicyholders(27,762)

Additions to legal reserve for future losses

－
(621)

Payment of interest on foundation funds

50,622

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

Additions to accumulated
fund for price fluctuation－

Reversal of reserve for advanced
depreciation of real estate for tax purpose－
281

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

43,976

(60)

(277)

43,63843,638

Total changes in the current fiscal year

43,976

(60)

(277)

43,63866,157

Balance at the end of current fiscal year

259,861

2

3,144

263,008

493,900

27

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2015](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of current fiscal year

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

35,00071,000112

Legal reserve Reserve forfor future redemption of Reserve fordividend
lossesfoundation
allowances
funds

2,485

18,0003,895

Reserve foradvanced
Accumulated
depreciation
fund for priceof real estatefluctuation
for tax
purpose21,000

3,969

Other
reserves

767

Cumulative effects of changes inaccounting policies
Restated balance

35,00071,000112

2,485

18,0003,895

21,000

3,969

767

Total
foundation
funds, surplus
Unappropriat Total surplus
and othersed surplus

74,662

124,780(3,297)(3,297)

230,892(3,297)71,365

121,482

227,595－

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

(97)

－

－

－

15,000Changes in the current fiscal year
Issuance of foundation funds

10,000Additions to reserve for dividends topolicyholders

97

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

15,000

Payment of interest on foundation funds
Net surplus for the year
Redemption of foundation funds

(621)

(621)

(621)

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

－

－

－

－

(15,000)

Additions to reserve for redemption offoundation funds

9,000

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

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

0(0)Reversal of reserve for advanced
depreciation of real estate for tax purpose(3,707)

3,707

－

－

239

239

239

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

(5,000)15,000－97(6,000)－10,000(3,707)－

21,67522,06532,065

Balance at the end of current fiscal year

30,00086,000112

2,582

12,0003,895

31,000262

767

93,041

143,548259,660

Total
valuation andtranslation
adjustments

Total
net assets

Valuation and translation adjustments
Net
unrealized
Deferred
Revaluation
gains (losses)
valuation
reserve foron available- gains (losses)
land, net offor-sale
under hedge
tax
securities, net accountingof taxBalance at the beginning of current fiscal year

259,861

2

3,144

263,008

493,900

259,861

2

3,144

263,008

490,603

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

Changes in the current fiscal year
Issuance of foundation funds

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

Additions to legal reserve for future losses－

Additions to accumulated foundation funds
redeemed

15,000(621)

Payment of interest on foundation funds
Net surplus for the year

69,043

Redemption of foundation funds(15,000)

Additions to reserve for redemption offoundation funds－

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

Additions to accumulated fund for pricefluctuation－

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

Reversal of reserve for advanced
depreciation of real estate for tax purpose－
239

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

174,375(2)

750

175,123

175,123

Total changes in the current fiscal year

174,375

Balance at the end of current fiscal year

434,236(2)

750

175,123

207,1880

3,894

438,131

697,792

28

Fukoku Mutual Life Insurance Company

8. Non-consolidated Statements of Surplus(Millions of Yen)
Year ended March 31, 2014

Year ended March 31, 2015

Unappropriated surplus

74,662

93,041

Reversal of voluntary surplus reserve

3,707

3

3,707

3

Total

78,36993,044

Appropriation of surplus

51,314

69,286

Reserve for dividends to policyholders

31,59536,698Net surplus

19,71832,588Legal reserve for future losses

97

160

Interest payment for foundation funds

621

316

19,00032,111

9,000

6,000

―

16,10410,00010,0000

7

27,05523,758

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

Voluntary surplus reserve
Reserve for redemption of foundation funds
Equalized reserve for dividends to policyholders
Accumulated fund for price fluctuation
Reserve for advanced depreciation of real estate for tax purpose
Unappropriated surplus carried forward

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

29

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014 As of March 31, 2015
Claims against bankrupt and quasi-bankrupt obligors

216

207

Claims with collection risk

732

837

Claims for special attention

660

370

1,609

1,415

[0.18%][0.17%]

910,205

816,618

911,815

818,034

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.

30

Fukoku Mutual Life Insurance Company

10. Risk-monitored Loans(Millions of yen)
As of March 31, 2014

As of March 31, 2015

Credits to bankrupt borrowers

195

194

Delinquent loans

747

844

Delinquent loans past three months or more－－

Restructured loans

660

370

1,602

1,409

[0.19%][0.18%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥251 million as of March 31, 2014and ¥247 million as of March 31, 2015.
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.

31

Fukoku Mutual Life Insurance Company

11. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2014
Total solvency margin

(A)

As of
March 31, 2015

1,109,068

1,397,205

Foundation funds and surplus

196,835

220,996

Reserve for price fluctuation of securities

44,016

46,534

Contingency reserve

110,291

142,523

1,594

1,403

Net unrealized gains on available-for-sale securities x 90%

337,872

549,280

Net unrealized gains on real estate x 85%

90,71999,173

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

193,088

197,683

Qualifying subordinated debt

122,346

118,959－－

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

Others31,30339,652201,663

238,962

Allowance for possible loan losses

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

Total amount of risk

( R1 + R8 ) 2 + (R2 + R3 + R7 ) + R4
2

(B)

Insurance risk

R1

26,371

25,494

3rd sector insurance risk

R8

9,631

9,575

Assumed investment yield risk

R2

35,88435,851Minimum guarantee risk

R7

0

0

Investment risk

R3

157,866

195,142

Business risk

R4

4,595

5,321

1,099.9%

1,169.3%

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

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

32

Fukoku Mutual Life Insurance Company

12. Status of Separate Account(1) Separate Account Assets by Products
As of March 31, 2014

(Millions of yen)
As of March 31, 2015

AmountAmountIndividual variable insurance－－

Individual variable annuities

272

149

Group annuities

82,40882,855

Total

82,68083,004(2) Individual Variable Insurance (Separate Account)
The Company has not sold the individual variable insurance.

(3) Individual Variable Annuities (Separate Account)(i) Policies in Force(Millions of yen)
As of March 31, 2014

As of March 31, 2015

NumberNumberAmountAmountIndividual variable annuities

81

265

43

136

Total

81

265

43

136

(ii) Breakdown of Separate Account Assets for Individual Variable Annuities(Millions of yen)
As of March 31, 2014

As of March 31, 2015

AmountAmountPercentage

Percentage

Cash, deposits, call loans

131

48.2

44

30.0

Securities

141

51.8

104

70.0

Domestic bonds

－

－

－

－

Domestic stocks

－

－

－

－

Foreign securities

－

－

－

－

Foreign bonds

－

－

－

－

Foreign stocks and other securities

－

－

－

－

141

51.8

104

70.0

Loans

－

－

－

－

Others－－－－Allowance for possible loan losses

－

－

－

－

272

100.0

149

100.0

Other securities

Total

33

Fukoku Mutual Life Insurance Company

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

Year ended
March 31, 2014

Year ended
March 31, 2015

AmountAmountInterest, dividends and other income

49

13

Gains on sales of securities－－

Gains on redemption of securities－－

Gains on valuation of securities

30

32

Foreign exchange gains, net－－

Gains from derivative instruments－－

Other investment income

0－

Losses on sales of securities－－

Losses on redemption of securities－－

Losses on valuation of securities

41

27

Foreign exchange losses, net－－

Losses from derivative instruments－－

Other investment expenses

0－

Net investment income

3818(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, 2014

Trading securities

As of March 31, 2015

Carrying value onbalance sheet

Net valuation
gains/losses
included in thestatementsof operations

Carrying valueonbalance sheet

141

(11)

104

Net valuation
gains/losses
included in thestatementsof operations

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

34

Fukoku Mutual Life Insurance Company

5

(reference) Fair Value Information on Securities (Total of General Account and Separate Account)
Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2014
Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet
Trading securities

As of March 31, 2015

380,680

Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet

10,324

431,744

29,449Note: 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, 2014
Book value

As of March 31, 2015

Gains/losses

Fair value

843,433

922,909

79,476

Gains
79,476

Domestic bonds

768,744845,557

76,81376,813Foreign bonds

Held-to-maturity debt securities

Gains/losses

Book value

Fair value－

811,903

926,148

114,245

Gains
114,245－742,337

853,785

111,448

111,448

Losses

Losses－－

74,68977,352

2,662

2,662

－

69,56572,362

2,797

2,797

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

1,210,016

1,294,587

84,57084,798227

1,215,695

1,346,650

130,954

131,004

50

Domestic bonds

1,190,715

1,275,012

84,29784,522224

1,174,597

1,305,280

130,683

130,73350

Foreign bonds

19,301

19,575

273

276

2

41,09841,369

270

270

－

1,393

1,096

(296)

－

296

1,433

1,236

(196)

3

200
1,360

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

2,046,003

2,421,417

375,414379,801

4,387

2,150,593

2,760,905

610,311611,672

Domestic bonds

815,104

886,899

71,794

72,132337

807,550

892,795

85,24585,26924

Domestic stocks

269,792

439,094

169,301

171,7692,467

279,549

597,167

317,617317,842225

Foreign securities

905,773

1,028,769

122,996

124,501

1,505

1,010,329

1,197,021

186,692

187,788

1,096

Foreign bonds

690,428

774,677

84,24985,3981,149

784,142

901,979

117,837

118,593756

Foreign stocks and other securities

215,345

254,092

38,746

39,102355

226,187

295,042

68,854

69,194340

Other securities

55,332

66,653

11,321

11,39776

53,16473,92020,756

20,771

15

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,100,846

4,640,011

539,164544,075

4,911

4,179,626

5,034,941

855,314856,926

1,611

Domestic bonds

2,774,564

3,007,469

232,904

233,467562

2,724,485

3,051,862

327,377

327,451

74

Domestic stocks

269,792

439,094

169,301

171,7692,467

279,549

597,167

317,617317,842225

Foreign securities

1,001,157

1,126,794

125,636

127,440

1,804

1,122,427

1,311,990

189,563

190,859

1,296

Foreign bonds

784,419

871,604

87,18588,337

1,152

894,806

1,015,712

120,906

121,662756

Foreign stocks and other securities

216,738

255,189

38,45039,102652

227,621296,278

68,657

69,197540

Total

Other securities

55,332

66,653

11,321

11,39776

53,16473,92020,756

20,771

15

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, 2014

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

As of March 31, 2015

Carrying
value on thebalance
sheet

Fair value

Differences

Carrying
value on thebalance
sheet

Fair value

Differences

843,433

922,909

79,476

811,903

926,148

114,245

Domestic bonds

768,744845,557

76,813742,337

853,785

111,448

Foreign bonds

74,68977,352

2,662

69,56572,362

2,797

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

－

－

Domestic bonds

－

－

－

－

－

－

Foreign bonds

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

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

35

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)
As of March 31, 2015

As of March 31, 2014

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

Carrying
value on thebalance
sheet

Fair value

Differences

Carrying
value on thebalance
sheet

Fair value

Differences

1,205,007

1,289,805

84,7981,194,892

1,325,896

131,004

Domestic bonds

1,186,005

1,270,527

84,522

1,163,793

1,294,527

130,733

Foreign bonds

19,001

19,277276

31,09831,369

270

－

－

－

－

－

－

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

5,009

4,782

(227)

20,80320,753(50)

Domestic bonds

4,709

4,484

(224)

10,803

10,753(50)

Foreign bonds

300

297

(2)

10,00010,000

－

－

－

－

－

－

－

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

As of March 31, 2014

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

As of March 31, 2015

Book value

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

1,859,060

2,238,861

379,801

2,087,739

2,699,411

Domestic bonds

796,157

868,289

72,132

800,549

885,818

85,269Domestic stocks

232,850

404,620

171,769

270,078

587,921317,842

Foreign securities

780,763905,265

124,501

964,096

1,151,884

187,788

Foreign bonds

581,574

666,973

85,398756,771875,365

118,593

Foreign stocks

199,188

238,291

39,102

207,324

276,519

69,19449,28860,686

11,39753,01573,787

20,771

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－
(1,360)

Other securities

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

611,672

186,942

182,555(4,387)62,854

61,493

Domestic bonds

18,947

18,609

(337)

7,001

6,977

(24)

Domestic stocks

36,941

34,474(2,467)

9,470

9,245

(225)
(1,096)

Foreign securities

125,009

123,504(1,505)

46,23345,137

Foreign bonds

108,853

107,703(1,149)27,37026,614(756)

Foreign stocks

16,15615,800(355)

18,862

18,522(340)

Other securities

6,043

5,967

(76)

148

133

(15)

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

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

As of March 31, 2014
Held-to-maturity bonds－

As of March 31, 2015－

Unlisted foreign bonds－－

Others－－

Policy-reserve-matching bonds－－

Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

15,62017,031

7,653

8,338

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

Unlisted foreign bonds－－

Others
Total

36

7,967

8,693

51,181

52,592

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
As of March 31, 2014
Hedge accounting applied
Hedge accounting not applied
Total
As of March 31, 2015
Hedge accounting applied
Hedge accounting not applied
Total(Millions of yen)Interestrelated

Currencyrelated

Stockrelated

Bondrelated

OthersTotal

3(2,427)－－－(2,423)(18)(2,119)

(152)

370

－

(1,920)(14)(4,546)

(152)

370

－

(4,343)

Interestrelated

Currencyrelated

Stockrelated

Bondrelated

Others

Total

0

820

－

－

－

(460)

685

－

200

－

821
426

(459)

1,506

－

200

－

1,247

Note: Gains and losses from applying fair value hedge accounting (currency- related, losses of ¥2,427 million as of March 31, 2014 andgains of ¥820 million as of March 31, 2015) included in gains and losses with hedge accounting applied, and gains and losses
with hedge accounting not applied are reported in the statements of operations.

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

As of March 31, 2014
Notional amount/contract valueOver 1 year

Fair
value

As of March 31, 2015
Gains(losses)

Notional amount/contract valueOver 1 year

Fair
value

Gains
(losses)Over-the-counter transactions
Yen interest rate swaption contracts
Sold
Receipt fixed, payment floating－[

Payment fixed, receipt floating

－

－

－ ]
－

[

－ ]

[

－ ]

－

－[

－

－
－

－[

－

－[

－

－ ]

－

－

－

－

－

－

828

(460)

－

－ ]

BoughtReceipt fixed, payment floating－

Payment fixed, receipt floating

100,000[－－

300,000

－

89 ]

70

Total

(18) [(18)－－ ]1,289 ]

200,000(460)

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

37

Fukoku Mutual Life Insurance Company

・ Currency-related Transactions(Millions of yen)

As of March 31, 2014
Notional amount/contract value

Fair
value

Gains
(losses)－ 213,264－ 18,838－ 61,883－ 58,658－ 38,449－ 35,385
－
－
－
－
9
－
－
－
9
－
－
－
－
－
－
－
－
－

(2,096)
(130)
(8)
(333)
(1,175)
(448)
－
－
0
－
0
－
－
－
－

Over 1 year

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

211,168
18,70861,87458,32537,32434,936
－
－
9
－
9
－
－
－
－

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

－
－]
－
－]
－
－]
9,800
23 ]
9,800
23 ]

As of March 31, 2015

－
－

－ [

－
－

－ [

－

－ [

－
－
0

(23) [－
0Total(23) [

Notional amount/contract value

Fair
value

Gains
(losses)－ 199,955－ 59,571－ 42,585－ 34,887－ 34,479－ 28,415
9
－
6
－
193
－
155
－
19
－
7
－
6
－
2
－
1
－

685
303
(394)
327
295
153
0
0
0
0
(0)
(0)
(0)
(0)
0

Over 1 year

200,640
59,87542,19035,21534,77428,568
9
6
193
154
19
7
6
2
1

－
－]
－
－]
－
－]
－
－]
－
－]

－
－

－

－

－

－

－

－

－

－

－

－

－
－
－

(2,119)685

Notes: 1. Figures in [ ] are option premiums which are included in balance sheet.
Notes: 2. Forward exchange rates are used for exchange rates as of the end of fiscal year.

・ Stock-related Transactions(Millions of yen)

As of March 31, 2014
Notional amount/contract value
Fair valueOver 1 year

Exchange-traded transactions
Yen stock index options
Sold
Calls
[
Puts
[
Bought
Calls
[
Puts
[

－
－]
－
－]
－
－]
10,687306 ]Gains(losses)

－
－

－ [

－
－

－ [

－

－ [

－
－
153

Total

(152) [

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

－
－]
－
－]
－
－]
－
－]

Gains
(losses)

－
－

－

－

－

－

－

－

－

－

－
－

(152)

－

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

・ Bond-related Transactions(Millions of yen)

As of March 31, 2014
Notional amount/contract value
Fair valueOver 1 year

Gains(losses)

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

Gains(losses)

Exchange-traded transactions
Yen bond futures
Sold
Bought144,825－－ 144,620
－
－

205
－

294,876－－ 294,440
－
－

436
－

Foreign bond futures
Sold
Bought27,492－－－

27,327－165－

40,083－－－40,318
－

(235)
－

Total

370

38

200

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014
Method ofhedge
accounting

Deferralhedge
methodHedging instruments

As of March 31, 2015

Notional amount /contract value

Hedged
items

Fair
value

Notional amount /contract value

Hedgeditems

Over 1 year

Fair
value

Over 1 year

Yen interest rate swap contracts Loans

Loans

Receipt fixed, payment floating

290

170

3

85

－

0

Payment fixed, receipt floating

－

－

－

－

－

－

Total

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

As of March 31, 2014
Yen interest rate swap contracts

1 yearor shorter

As of March 31, 2015

Over 1 year
Over 3 years
to 3 years

1 yearor shorter

Over 1 year
to 3 years

Over 3 years

Notional amount(receipts fixed, payments floating)

120

170

－

85

－

－

Average fixed rate (receipt)

2.12%

2.47%

－

2.47%

－

－

Average floating rate (payment)

1.11%

1.11%

－

1.06%

－

－

Notional amount(receipts floating, payments fixed)

－

－

－

－

－

－

Average floating rate (receipt)

－

－

－

－

－

－

Average fixed rate (payment)

－

－

－

－

－

－

・ Currency-related Transactions(Millions of yen)

As of March 31, 2014
Method ofhedge
accounting

Hedging instruments

Notional amount /contract value

Fair
value

Hedgeditems

Notional amount /contract valueOver 1 year

Currency forward contracts
Sold
Fair value
hedge
methodHedgeditems

As of March 31, 2015

(US dollar)

Foreigncurrencydenominatedbonds

364,791－

295,783

－

Fair
value

Over 1 year

Foreigncurrency367,218 denominatedbonds
297,232

524,133－

523,313423,638－

424,519(British Pound)

15,206－

15,401

52,110－51,518(Euro)

39,976－40,35336,682－35,799(Australian dollar)

13,825－

14,231

11,702－

11,475

－

－

－

－

－

－

BoughtTotal

Notes 1. Forward exchange rates are used for exchange rates as of the end of fiscal year.
Notes 2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward contracts and are reported
Notes 2. 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, 2014 and March 31, 2015.

・ Bond-related Transactions
No ending balance as of March 31, 2014 and March 31, 2015.

39

Fukoku Mutual Life Insurance Company

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

(Millions of yen)
Year ended
March 31, 2014

Year ended
March 31, 2015

Ordinary revenues

935,620

1,047,224

Ordinary profits

76,441

101,606

Net surplus for the period

51,782

69,633Comprehensive income

95,703249,218

As ofMarch 31, 2014

As ofMarch 31, 2015

Total assets

7,817,668

8,326,588

Solvency margin ratio

1,120.0%

1,195.7%(2) Scope of consolidation and application of equity method
Number of consolidated subsidiaries: 5
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 040

Fukoku Mutual Life Insurance Company

(3) Consolidated Balance Sheets(Millions of yen)
As of
As of
March 31, 2014 March 31, 2015

Assets:

As of
As of
March 31, 2014 March 31, 2015

Liabilities:

Cash and deposits

91,021

154,319 Policy reserves

Call loans

148,700

186,500

Monetary claims bought

1,011

870

Money held in trust

31,981

34,319Securities
Loans

6,406,927
839,2446,881,578

6,995,343

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

767,293 Agency payables

7,234,120

25,17023,501

6,918,429

7,160,599

51,00749,311

735

707

339

377

232,492

227,919 Reinsurance payables

113

125

Land

132,912132,261 Subordinated bonds

122,346

118,959

Buildings

95,14891,048 Other liabilities

57,03659,240

Lease assets

1,159

954 Net defined benefit liabilities

48,84050,691630 Reserve for price fluctuation of securities

50,32555,17784,524

Tangible fixed assets

Construction in progress

280

Other tangible fixed assets

2,992

3,025 Deferred tax liabilities

27,502

16,36915,323 Deferred tax liabilities for revaluation reserve for land

15,92914,787

Software11,33911,613 Total liabilities

7,317,778

7,618,005

Goodwill

3,091

2,328 Net assets:

Lease assets

1,659

1,102 Foundation funds

35,00030,00071,00086,000112

112

Intangible fixed assets

Other intangible fixed assets
Agency receivables
Reinsurance receivables

279
1
94

279 Accumulated foundation funds redeemed
4 Reserve for revaluation
107 Consolidated surplus

126,584

145,942

Other assets

51,06559,659 Total foundation funds, surplus and others

232,696

262,054

Deferred tax assets

1,041

263,161

440,109

Allowance for possible loan losses(2,281)640 Net unrealized gains (losses) on available-for-sale(1,948) securities, net of tax
Deferred valuation gains (losses) under hedge accounting

20

Revaluation reserve for land, net of tax

3,144

3,894

Foreign currency translation adjustment

(261)

(52)

(3,918)(3,000)262,127

440,951

5,066

5,576

Accumulated remeasurements of defined benefit plans
Total accumulated other comprehensive income
Minority interests
Total net assets
Total assets

7,817,668

8,326,588 Total liabilities and net assets

41

499,890

708,582

7,817,668

8,326,588

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)
Year ended March 31, 2014

Year ended March 31, 2015
796,458

Ordinary revenues:
Premium and other income

707,044

Investment income

216,832

239,037

Interest, dividends and other income

149,176

159,905

Gains from money held in trust, net

669

2,349

Gains from trading securities, net

19,40235,232

Gains on sales of securities

34,672

27,310Foreign exchange gains, net

2,214

2,041

－

270

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

279

59

10,417

11,869Other ordinary revenues

11,743

11,728

Total ordinary revenues

935,620

1,047,224

Ordinary expenditures:
Claims and other payments

552,830

546,964

Claims138,689

116,788

Annuities

135,437

156,377

Benefits

131,069

128,295
116,806

Surrenders

114,188

Other payments

33,444

28,694

Provision for policy reserve and others

139,752

242,225

Provision for reserve for outstanding claims

507－

139,169

242,170

Interest on accumulated dividends to policyholders

74

54

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

49,00534,572

Interest expenses

3,655

4,267

Losses on sales of securities

9,289

1,075

Provision for policy reserve

Losses on valuation of securities
Losses from derivative instruments, net
Provision for allowance for possible loan losses
Depreciation of real estate for rent and other assets

52

025,116

18,679

56

－

5,082

4,877

Other investment expenses

5,751

5,673

Operating expenses

95,27897,209Other ordinary expenditures

22,31324,646

Total ordinary expenditures

859,179

945,618

Ordinary profits

76,441

101,606

Extraordinary gains:
Gains on disposal of fixed assets

2,005

6

Total extraordinary gains

2,005

6

Extraordinary losses:
Losses on disposal of fixed assets

7,314

167

Impairment losses

1,775

698

Provision for reserve for price fluctuation of securities

3,700

4,851

Total extraordinary losses

12,791

5,718

Provision for reserve for dividends to policyholders (subsidiary)

542

483

65,112

95,411

Current

20,86728,933

Deferred
Total income taxes(7,773)(3,318)13,09325,614

Net surplus before minority interests

52,01969,796

Surplus before income taxes
Income taxes：：

Minority interests
Net surplus for the year

42

236

163

51,782

69,633

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income(Continued)[Consolidated Statement of Comprehensive Income](Millions of yen)
Year ended March 31, 2014

Year ended March 31, 2015

Net surplus before minority interests

52,01969,796

Other comprehensive income

43,684

179,422

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

43,367

177,308

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

(60)

(2)

Revaluation reserve for land, net of tax

3

989

Foreign currency translation adjustment

373

208

－

918

Comprehensive income

Remeasurements of defined benefit plan, net of tax

95,703249,218

Parent company

95,541

248,696

Minority interests

162

522

43

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows
Year ended March 31, 2014

(Millions of yen)
Year ended March 31, 2015

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 net defined benefit liabilities
Increase (Decrease) in reserve for price fluctuation of securities
Interest, dividends and other income(Gains) Losses on securities
Interest expenses
Foreign exchange (gains) losses, net(Gains) Losses on tangible fixed assets(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)65,112
5,082
7,109
1,775
763
507
139,16974
0542
80(1,973)3,700(149,176)(30,702)
3,655(2,214)
5,130
5
(37)
(880)
(36)
(0)
(2,568)17,015
62,135
159,741(3,430)(29,137)(504)(17,291)
171,511

95,411
4,877
7,323
698
763
(1,669)242,170
54
0
483
(333)
(1,467)
4,851(159,905)(57,006)
4,267(2,041)
144
(3)
(12)
(2,196)37
12(76)
15,712
152,096
171,494(4,308)(33,346)(511)(25,145)
260,278(684)
98(2,000)1,999(867,499)
700,791(86,787)
148,350(21,671)(20,399)(147,800)
23,710 ] [(4,607)30,441(2,777)(124,744)

(146)
141
－
－
(673,696)
546,073(58,621)
121,587(21,481)(60,284)(146,427)
113,851 ](3,357)147(3,343)(152,980)

49,870
－
－
(621)
(12)
(752)
48,483526
95,777
142,596
238,373－
10,000(15,000)
(621)
(12)
(740)
(6,374)(50)
100,872
238,373
339,246

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
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Financing of subordinated bonds
Financing of additional foundation funds
Redemption of foundation funds
Interest payment for foundation funds
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

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the year ended March 31, 2014](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of current fiscal year

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

35,00071,000112

Total foundation
Consolidated
funds, surplus
surplusand others

102,904

209,016(27,762)(27,762)

(621)

(621)

51,782

51,782281

281

Changes in the current fiscal year
Additions to reserve for dividends topolicyholders
Payment of interest on foundation funds

Net surplus for the year

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

－

－

－

23,67923,679Balance at the end of current fiscal year

35,00071,000112

126,584

232,696

Accumulated other comprehensive income
Net unrealized
Deferred
gains (losses)
valuation
on availablegains (losses)
for-sale
under hedge
securities, net
accountingof taxBalance at the beginning of current fiscal year

219,719

62

Revaluation
reserve forland, net of
tax

3,421

Total
Foreign
Accumulated
accumulated
currency remeasurement
other
translations of definedcomprehensiv
adjustment
benefit planse income(635)－

222,569

Minority
interests

Total net
assets

4,916

436,502

Changes in the current fiscal year
Additions to reserve for dividends topolicyholders(27,762)(621)

Payment of interest on foundation funds

51,782

Net surplus for the year

281

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

43,441

(60)

(277)

373

(3,918)39,558149

39,708

Total changes in the current fiscal year

43,441

(60)

(277)

373

(3,918)39,558

149

63,388

Balance at the end of current fiscal year

263,161

2

3,144

(261)

(3,918)262,127

5,066

499,890

45

Fukoku Mutual Life Insurance Company

[For the year ended March 31, 2015](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of current fiscal year

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

35,00071,000112

Cumulative effects of changes in accounting
policies
Restated balance

35,00071,000112

Total foundation
Consolidated
funds, surplus
surplusand others

126,584

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

123,286

229,399

Changes in the current fiscal year
Issuance of foundation funds

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

Addtions to accumulated foundation funds
redeemed

15,00015,000

Payment of interest on foundation funds
Net surplus for the year
Redemption of foundation funds(31,595)

(621)

(621)

69,633

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

Reversal of reserve for redemption offoundation funds
Reversal of revaluation reserve for land

(15,000)(15,000)

239

239

Net changes, excluding foundation funds,
surplus and others
Total changes in the current fiscal year

(5,000)15,000－22,65532,655

Balance at the end of current fiscal year

30,00086,000112

145,942

262,054

Accumulated other comprehensive income
Net unrealized
Deferred
gains (losses)
valuation
on availablegains (losses)
for-sale
under hedge
securities, net
accountingof taxBalance at the beginning of current fiscal year

263,161

2

Revaluation
reserve forland, net of
tax

3,144

Total
Accumulated
Foreignaccumulated
currency remeasurement
other
translations of definedcomprehensiv
adjustment
benefit planse income(261)(3,918)262,127

Minority
interests

Total net
assets5,066

499,890

Cumulative effects of changes in accounting
policies
Restated balance(3,297)263,161

2

3,144

(261)

(3,918)262,127

5,066

496,593

Changes in the current fiscal year
Issuance of foundation funds

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

Addtions to accumulated foundation funds
redeemed

15,000(621)

Payment of interest on foundation funds
Net surplus for the year

69,633

Redemption of foundation funds(15,000)

Reversal of reserve for redemption offoundation funds(15,000)
239

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

176,948

(2)

750

208

Total changes in the current fiscal year

176,948

Balance at the end of current fiscal year

440,109

(2)

750

0

3,894

46

918

178,823510

179,333

208

918

178,823510

211,989(52)(3,000)440,951

5,576

708,582

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 accordancewith the provisions set forth in the Insurance Business Law of Japan and its related rules and regulations andin conformity with accounting principles generally accepted in Japan, which are different in certain respects
from accounting principles generally accepted in countries and jurisdictions other than Japan.
In addition, the notes to the consolidated financial statements include information which is not required
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 notnecessarily agree with the sum of the individual amounts.

2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of March 31, 2015 are listed below:
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Co., Ltd.
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Ltd.
Fukoku Life International (America) Inc.
Effective for the fiscal year ended March 31, 2013, owing to the sale of all shares of Fukoku Shinyo
Hosho Company Limited, on the October 31, 2012, the Company excluded it from scope of consolidation.
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 intheir impact on net surplus and surplus, and also immaterial as a whole, therefore, application of equity
method is withheld.
There are no affiliates for the years ended March 31, 2015.
(3) Fiscal year of consolidated subsidiaries
Among the subsidiaries to be consolidated, fiscal year-end of overseas subsidiaries is December 31. For the
preparation of consolidated financial statements, financial statements as of that date are used andconcerning any important transaction taking place in between December 31 and the consolidated closing
date, necessary adjustments for consolidation are made.
(4) Amortization of goodwill
Goodwill is amortized by the straight-line method over a period of 10 years and in case of the immaterial
amount of goodwill, such amount is fully charged to operating expenses when incurred.
(5) Valuation of subsidiary's assets and liabilities on acquisition
On acquisition of a subsidiary, all of the subsidiary’s assets and liabilities that exist at the date of acquisition
are recorded at their fair value.

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 tosecurities, and securities managed as trust assets in money held in trust, is as follows:i) Trading securities are stated at fair market value. Costs of their sales are determined by the moving
average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being
determined by the moving average method in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on November
16, 2000).
iv) Investments in unconsolidated subsidiaries and affiliates which are not accounted for under the equity
method are stated at cost, cost being determined by the moving average method.
v) Available-for-sale securities with fair market value are stated at fair market value based on the market
prices at the end of fiscal year. Costs of their sales are determined by the moving average method. Net
unrealized gains or losses on these available-for-sale securities, net of taxes, are recorded as aseparate component of net assets.
Available-for-sale securities whose fair values are deemed extremely difficult to obtain are stated at cost,
cost being determined by the moving average method, except for public and corporate bonds including
foreign bonds, of which the difference between acquisition cost and face value is considered to be an
adjustment of interest. Such bonds are stated at amortized cost under the straight-line method, cost being
determined by the moving average method.
(2) 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 therevaluation, 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 withcertain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of the Company's tangible fixed assets is calculated by the following methods.
Tangible fixed assets (excluding lease assets):Declining-balance method
However, buildings (excluding building attachments and structures) acquired on or after April 1, 1998
are depreciated using Straight-line method.
Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method
over the lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciated equally
over three years.

48

Fukoku Mutual Life Insurance Company

(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities (excluding the shares of unconsolidated subsidiaries andaffiliates) are translated into Japanese yen at the effective exchange rate prevailing at the balance sheet
date. The shares of unconsolidated subsidiaries and affiliates are translated into Japanese yen at theeffective exchange rate prevailing on the day the shares were acquired.
(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 of bankruptcy or
civil rehabilitation (hereinafter called "legally bankrupt borrowers") and who are substantially bankrupt(hereinafter called "substantially bankrupt borrowers"), the Company provides the remaining amount ofcredits after the direct write-off described below and the deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy(hereinafter called “not currently bankrupt borrowers”), the Company provides the amounts deemed
as necessary considering the borrowers' ability to pay, within the amounts after deductions of theamount expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying the borrowers' balance by the actual ratio of bad debt losses on defaults during a certain
past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards of selfassessment 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 of guarantees
is written-off directly from the borrower’s balance as the estimated uncollectible amounts. The amountwritten-off as of March 31, 2015 was ¥247 million.
(7) Accounting of Employees’ Retirement Benefits
Net defined benefit liabilities are presented for the employees’ retirement benefits after deducting pension
plan assets from retirement benefit obligations, based on estimated amounts as of the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.

• Method for allocation of projected retirement benefits...................
• Amortization period of actuarial differences...................................
• Amortization period of prior service cost........................................

Benefit formula basis
10 years
10 years(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 onor before March 31, 2008 continued to be accounted for in a manner similar to accounting treatment forordinary 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 (other interest and dividends)” at the time of receiving lease fee. The
corresponding cost of the lease transactions is recorded in “other investment expenses,” which is calculated
by deducting an amount equivalent to the interest allocated over the lease term from the lease fee received.

49

Fukoku Mutual Life Insurance Company

(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 the hedged items,
valuation gains and losses on the foreign currency forward contracts are recorded in the statements ofoperations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, valuation gains and losses on the interest rate swaps are deferred until the maturity of the hedgedtransactions.
The Company applies foreign currency swap appropriated treatment as a hedge for the foreignexchange fluctuation risk associated with foreign currency denominated bonds issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value
or cash flows of hedged items and hedging instruments is mostly applied.
(12) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense when incurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve at the end 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.
Based on the provision of paragraph 5, Article 69 of the Enforcement Regulation of the Insurance
Business Law, the Company’s certain individual annuity insurance policies, certain hospitalization riders withsurgery benefits and long-term hospitalization benefits have funded policy reserves included.
(14) Amortization Method for Intangible Fixed Assets
Intangible fixed assets are amortized as follows:i) Software
Software for internal use is amortized based on a straight-line method over the estimated useful lives.
ii) Lease assets
Lease assets are amortized based on a straight-line method over the lease term.
(15) Deferred Assets
Discount on bonds is amortized equally over the period for which interest on bonds is fixed. This amount isdeducted 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 by the Company 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).
The amounts of policy-reserve-matching bonds recorded on the balance sheets and the market value ofthese bonds as of March 31, 2015 were written in Notes No. 4 “Financial Instruments.”

50

Fukoku Mutual Life Insurance Company

2. Accounting changes and corrections of past errors
Effective from the fiscal year ended March 31, 2015, in accordance with “Accounting Standard for Retirement
Benefits” (Accounting Standards Board of Japan (ASBJ) Statement No. 26, May 17, 2012, and “Guidance on
Accounting Standard for Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012), the Company and its
consolidated subsidiaries changed from a straight-line basis to a benefit formula as the method for allocationof projected retirement benefits. The Company and its consolidated subsidiaries also changed the method
used for determining the discount rate from a discount rate based on the estimated average period until the
payment of retirement benefits to a single weighted average discount rate reflecting the estimated payment
period and the amount for each estimated period.
As a result, compared with the previous method, unappropriated surplus at the start of the period ended
March 31, 2015, decreased by ¥3,297 million. In addition, in the year ended March 31, 2015, ordinary profitsand surplus before income taxes increased by ¥39 million.

3. The Principal Accounting Standards Published before March 31, 2014 and 2015 but not Applied
are as follows.
With the publication of “Accounting Standard for Business Combinations” (Accounting Standards Board ofJapan (ASBJ) Statement No. 21, September 13, 2013), “Guidance on Accounting Standard for Business
Combinations and Accounting Standard for Business Divestitures” (ASBJ Guidance No.10, September 13,2013), and “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22,
September 13, 2013), the accounting treatment for handling amount differences stemming from changes in aparent company’s ownership interest in a subsidiary when the parent company retains control over thesubsidiary as well as the treatment of acquisition-related costs in a business combination were revised. In
addition, the names of items presented in the consolidated financial statements were revised.
Compulsory application of these standards is from the commencement of fiscal years beginning on orafter April 1, 2015.The Company plans to apply this standard from the start of the fiscal year ending March
31, 2016.
The Company is currently evaluating the impact in the consolidated fiscal years after the application ofthese standards.

4. 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. 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 theacceptable range of risk in order to enhance the profitability, although yen-denominated interest bearing
assets including debt securities such as Japanese government bonds and loans are the cores of theportfolios. Derivatives are mainly used to hedge the market risk regarding spot-priced assets. Major financial
instruments including securities, loans and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by establishing internal control systems including
various rules pursuant to the “Three Basic Rules related to Enterprise Risk Management” established by the
Board of Directors. Specifically, the Company eliminates excessive risk deviating from the basic principle 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 andcredit risk periodically on a daily or monthly basis. In addition, the Company quantifies the market risk andcredit risk using value-at-risk (VaR) method in order to control the possible maximum losses which may arise
from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their related differences of major financial assets and liabilities asof March 31, 2015, were as follows:

51

Fukoku Mutual Life Insurance Company

CarryingamountFair value

Difference(Millions of yen)

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

¥¥

154,273
154,273
186,500¥

154,273
154,273
186,500

¥

―
―
―

870
870

918
918

47
47

33,31933,31933,31933,319――321,079
1,278,101
2,124,231
40
3,063,228
6,786,681

321,079
1,453,799
2,330,260
43
3,063,228
7,168,411―
175,697
206,0293―
381,730

66,704
700,588
767,2937,928,939
118,959
118,959

66,704
724,679
791,383
8,334,807
122,282
122,282(0 )24,09024,090405,868
3,322
3,322

426
821
1,247

426
821
1,247

―
―
―

¥

¥

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

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards
for Financial Instruments” (ASBJ Statement No.10)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values
approximate book values due to their short maturities.
Carrying amounts, fair values and related differences of cash, deposits and call loans have been
disclosed as of March 31, 2014.
(2) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities managed astrust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market price at the end of fiscal
year. The fair values of other securities without the quoted market price are based on the prices
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 of investments inunconsolidated subsidiaries and affiliates, unlisted stocks and investments in partnerships were ¥519
million, ¥8,338 million and ¥8,693 million as of March 31, 2015.
52

Fukoku Mutual Life Insurance Company

(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimated repayment
period and interest rate conditions since their repayment deadline have not been set up due to thecharacteristics 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 claims bought
treated as loans approximate the book values because the market interest rates are reflected in future
cash flows in a short period. Therefore, the fair values of floating interest rate loans and monetary claimsbought treated as loans are based on their book values. The fair values of fixed interest rate loans aremeasured by discounting the future cash flows to the present values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt borrowers
and not currently bankrupt borrowers and monetary claims bought treated as loans are computed bydeducting the amount of the allowance for doubtful accounts from the book values before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market value. Carrying amounts, for values
and related differences of subordinated bonds have been disclosed as of March 31, 2014.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement
price of the exchange.
ii) The fair values of options and swaps traded over the counter are based on the quoted prices offeredby counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate
and forward contract rate.

5. Investment and Rental Property
The Company holds investment and rental properties such as office buildings in Tokyo and other areas. The
carrying amounts and the fair values of investment and rental properties were ¥175,807 million and ¥271,909
million as of March 31, 2015, respectively. The fair value is mainly based on the value calculated by theCompany in accordance with real estate appraisal standards which includes some adjustments using thereference prices.
The amount corresponding to asset retirement obligations included in the carrying amount of investment
and rental properties was ¥1,090 million as of March 31, 2015.

6. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥50,418 million as of March 31, 2015.

7. Loans Receivable
The total amounts of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months ormore and restructured loans, which were included in loans was ¥1,414 million as of March 31, 2015.
i) The balance of credits to bankrupt borrowers was ¥199 million as of March 31, 2015.
ii) The balance of delinquent loans was ¥844 million as of March 31, 2015.
iii) There was no balance of delinquent loans past 3 months or more as of March 31, 2015.
iv) The balance of restructured loans was ¥370 million as of March 31, 2015.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meetthe conditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the
Corporate Tax Law. Moreover, accruing interest on these loans is not recorded as income after determiningthat principal of or interest on these loans is unlikely to be collected due to the significant delay in repaymentof 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
53

Fukoku Mutual Life Insurance Company

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 of principal
are delinquent for 3 months or more from the due date under the terms of the related loan agreements,
excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim or otherterms, have been negotiated for the purpose of assisting and supporting the borrowers in the restructuring of
their business. This category excludes loans classified as credits to bankrupt borrowers, delinquent loans
and delinquent loans past 3 months or more.
The direct write-offs related to loans decreased credits to bankrupt borrowers described above by ¥247
million as of March 31, 2015.

8. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥150,284 million as of March 31, 2015.

9. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were ¥83,004
million as of March 31, 2015. The amounts of separate account liabilities were the same as separate accountassets.

10. Receivables from/Payables to Unconsolidated Subsidiaries
The total amounts of receivables from/payables to unconsolidated subsidiaries were ¥3,045 million and ¥185
million as of March 31, 2015, respectively.

11. Income Taxes
Deferred tax assets and deferred tax liabilities as of March 31, 2015 were ¥100,730 million and ¥180,921
million , respectively. Valuation allowance for deferred tax assets was ¥3,693 million.
Major components of deferred tax assets were ¥61,093 million of policy reserves, ¥15,918 million ofreserve for price fluctuation of securities and ¥14,627 million of net defined benefit liabilities as of March 31,
2015.
Major component of deferred tax liabilities was ¥178,857 million of net unrealized gains on available forsale securities as of March 31, 2015.
The statutory tax rate and the actual effective tax rate for the year ended March 31, 2015 were 30.8%
and 26.8%, respectively. The major differences between the statutory tax rate and the actual effective tax
rate was (10.8%) of reserve for dividends to the policyholders and +6.6% of the write-down of deferred tax
assets at end of period.
Accompanying the promulgation of the “Act for Partial Revision to the Income Tax Act, etc” (Act No. 9,2015), the effective statutory tax rate used to calculate deferred tax assets and deferred tax liabilities waschanged. The Company had previously used an effective statutory tax rate of 30.8% for items expected to becollected or paid on or after April 1, 2015. However, owing to the aforementioned law change, the rate of
28.9% is used. As a result of this change in statutory tax rate, deferred tax assets decreased ¥44 million,
deferred tax liabilities decreased by ¥5,735 million, and deferred tax liabilities for revaluation reserve for landdecreased by ¥989 million . Deferred income taxes increased by ¥6,274 million.

12. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the year ended March 31, 2015 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..................................................
54¥ 51,007
31,595(33,346)54¥ 49,311

Fukoku Mutual Life Insurance Company

13. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Company)
Changes in reserve for dividends to policyholders for the year ended March 31, 2015 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..................................................

¥ 735
(511)
0
483
¥ 707

14. Stocks of Unconsolidated Subsidiaries
The amounts of stocks of unconsolidated subsidiaries the Company held as of March 31, 2015 was ¥560
million.

15. Pledged Assets and Secured Debts
Assets pledged as collateral as of March 31, 2015 were ¥33,691 million of securities and ¥1,542 million ofbank deposits. Secured debts as of March 31, 2015 were ¥4,807 million.

16. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called "reserve foroutstanding claims for ceded reinsurance") was ¥50 million as of March 31, 2015.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Law (hereinafter called "policy reserve for ceded
reinsurance") was ¥51 million as of March 31, 2015.

17. Additional Foundation Funds
In accordance with Article 60 of the Insurance Business Law, the Company carried out financing of additionalfoundation funds totaling ¥10,000 million.

18. Accumulated foundation funds redeemed
Accompanying the redemption of foundation funds totaling ¥15,000 million, in accordance with Article 56 of
the Insurance Business Law, the Company transferred the same amount from reserve for redemption offoundation funds to accumulated foundation funds redeemed.

19. Commitment LineAs of March 31, 2015, there were unused commitment line agreements under which the Company is thelender of ¥2,372 million.

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

21. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259of the Insurance Business Law was estimated at ¥12,395 million as of March 31, 2015. The contribution was
charged as operating expenses in the year in which it was paid.

55

Fukoku Mutual Life Insurance Company

22. Matters Related to Employees’ Retirement Benefits as of March 31, 2015
(1) Overview of employees’ retirement benefit system
As a defined benefit plan for office-based employees, the Company and its consolidated subsidiaries have adefined benefit corporate pension plan and retirement lump-sum grants. As a defined contribution plan forthese employees, the Company also has a defined contribution pension plan.
As a defined benefit plan for sales employees, the Company has retirement lump-sum grants.
(2) Defined benefit plani) Reconciliation of beginning and end of balance of retirement benefit obligation(Millions of yen)

Retirement benefit obligation at the beginning of current fiscal year...........
Cumulative effects of changes in accounting policies.................................
Balance at the beginning of the current fiscal year after reflectingchanges in accounting.................................................................................
Service cost.................................................................................................
Interest cost.................................................................................................
Actuarial difference occurred during the fiscal year.....................................
Retirement benefits payments.....................................................................
Retirement benefit obligation at the end of current fiscal year....................

¥ 71,685
4,763
76,448
3,106
1,068
788
(4,605)¥ 76,806ii) Reconciliation of beginning and end of balance of pension plan assets(Millions of yen)

Pension plan assets at the beginning of current fiscal year......................
Expected return on pension plan assets...................................................
Actuarial difference occurred during the fiscal year..................................
Contributions by the employer...................................................................
Retirement benefits payments...................................................................
Pension plan assets at the end of current fiscal year................................

¥ 22,844
685
1,530
2,339
(1,285 )¥ 26,114iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit liabilities
presented on the consolidated balance sheet(Millions of yen)a. Funded plan retirement benefit obligation............................................
b. Pension plan assets.............................................................................
c. (a+b) ....................................................................................................
d. Unfunded plan retirement benefit obligation........................................
e. Net amount of liabilities and assets presented on the consolidatedbalance sheet......................................................................................

¥ 32,625(26,114 )
6,510
44,181

f. Net defined benefit liabilities................................................................
g. Net defined benefit assets....................................................................

50,691
50,691―h. Net amount of liabilities and assets presented on the consolidatedbalance sheet.......................................................................................

¥ 50,691

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

Service cost...............................................................................................
Interest cost...............................................................................................
Expected return on pension plan assets...................................................
Amortization of actuarial differences.........................................................
Amortization of prior service cost..............................................................
Retirement benefit expenses related to defined benefit plan...................

56¥ 3,106
1,068(685 )
778(76 )¥ 4,192

Fukoku Mutual Life Insurance Companyv) Accumulated adjustments of defined benefit plan
Accumulated adjustments of defined benefit plan (before tax effects) comprised the following:(Millions of yen)Amortization of actuarial differences.........................................................
Amortization of prior service cost..............................................................
Total...........................................................................................................

¥1,520(76 )1,444vi) Accumulated remeasurements of defined benefit plan
Accumulated remeasurements of defined benefit plan (before tax effects) comprised the following:(Millions of yen)

Unrecognized actuarial differences...........................................................
Unrecognized prior service cost................................................................
Total...........................................................................................................

¥(4,692 )475(4,217 )vii) Breakdown of main pension plan assets
The breakdown of main asset categories as a percentage of total pension plan assets is as follows:
Life insurance general account................................................................
49.1%
Domestic stocks.......................................................................................
18.3%
Domestic bonds.......................................................................................
13.5%
Foreign stocks..........................................................................................
13.1%
Foreign bonds..........................................................................................
5.3%
Others......................................................................................................
0.6%
Total.........................................................................................................
100.0%
viii) Method for setting the expected long-term rate of return
To set the expected long-term rate of return on pension plan assets, the Company takes into account thepresent and future allocation of pension plan assets, and the present and expected future long-term rate of
return on the diverse range of assets that makes up the pension assets.
ix) Underlying actuarial assumptions
Main underlying actuarial assumptions as of March 31, 2015 were as follows:• Discount rate............................................................................................
• Expected long-term rate of return on pension plan assets......................

1.4%
3.0%

(3) Defined contribution plan
The required contribution amount by the Company and its subsidiaries to the defined contribution plan was¥267million.

57

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 ¥112
million and ¥2,962 million for the year ended March 31, 2015.

2. Policy Reserves for the Reinsurance Contracts
For the year ended March 31, 2015, provision for reserve for outstanding claims for ceded reinsurance
considered in calculation of reversal of reserve for outstanding claims was ¥46 million, and provision forpolicy reserve for ceded reinsurance considered in calculation of provision for policy reserve was ¥1 million.

3. Impairment Losses of Fixed Assets
For the year ended March 31, 2015, impairment losses of fixed assets by the Company were as follows:(1) Method of grouping
Real estate and other assets used for insurance business operations are classified as one asset group as awhole. Other assets such as real estate for rent and unused real estate are classified as one groupindividually.
(2) Background of recognizing the impairment losses
Profitability of certain real estate for rent dropped down significantly due to a decrease in the level of rental
income and a declining trend of market prices of land. The Company reduced its book values of such realestate for rent and unused real estate to their recoverable amounts. The amounts reduced were recognized
as impairment losses and included in the extraordinary losses.
(3) Asset groups recognized impairment losses and losses by fixed assets(Millions of yen)

Real estate for rent:
Land....................................................................................................
Buildings and others……….…………………………………………………
Total real estate for rent (i)....................................................................
Unused real estate:Land....................................................................................................
Buildings and others.…………………………………………………………
Total unused real estate (ii)...................................................................
Total:
Land....................................................................................................
Buildings and others………………………………………………………….
Total (i) + (ii)........................................................................................

¥ 296
136
432
235
30
266
531
167
¥ 698

(4) Calculation method of recoverable amount
Recoverable amount is based on net sales value. Net sales value is determined based on appraisal value,posted price or road rate.

58

Fukoku Mutual Life Insurance Company

IV. Notes to Statement of Comprehensive Income
1. Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income forthe year ended March 31, 2015 were as follows:(Millions of yen)

Net unrealized gains (losses) on available-for-sale securities, net of tax
Amount incurred during the fiscal year................................................................

¥259,364

Reclassification adjustment................................................................................

(20,525 )Before tax adjustment.......................................................................................

238,838

Tax effects.........................................................................................................

(61,530 )Net unrealized gains (losses) on available-for-sale securities, net of tax.........

177,308

Deferred valuation gains (losses) under hedge accounting, net of tax
Amount incurred during the fiscal year................................................................

(0 )Reclassification adjustment...............................................................................

(2 )Before tax adjustment.......................................................................................

(2 )Tax effects.........................................................................................................

0

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

(2 )

Revaluation reserve for land, net of tax
Amount incurred during the fiscal year................................................................

―

Reclassification adjustment ...............................................................................

―

Before tax adjustment.......................................................................................

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

989

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

989

Foreign currency translation adjustment
Amount incurred during the fiscal year................................................................

208

Reclassification adjustment ...............................................................................

―

Before tax adjustment.......................................................................................

208

Tax effects........................................................................................................

―

Foreign currency translation adjustment..........................................................

208

Remeasurements of defined benefit plans, net of tax
Amount incurred during the fiscal year................................................................

741

Reclassification adjustment................................................................................

702

Before tax adjustment.......................................................................................

1,444

Tax effects.........................................................................................................

(525 )

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

918

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

¥179,422

59

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, 2015 consist of "Cash," "Deposits in transfer account," "Current
deposits," "Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months of the date ofacquisition," "Foreign currency deposits maturing within 3 months of the date of acquisition," "Negotiablecertificate of deposits maturing within 3 months of the date of acquisition," "Call loans" and "Monetary claimsbought maturing within 3 months of the date of acquisition."

2. Reconciliations of Cash and Cash Equivalents
Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to theconsolidated balance sheet accounts as of March 31, 2015 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...................................................................................

60¥ 154,319
186,500
870(300 )(1,273 )(870 )¥ 339,246

Fukoku Mutual Life Insurance Company

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

As of March 31, 2014 As of March 31, 2015
Credits to bankrupt borrowers

195

199

Delinquent loans

747

844

Delinquent loans past three months or more－－

Restructured loans

660

370

1,603

1,414

[0.19%][0.18%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥251million as of March 31, 2014.
and ¥247 million as of March 31, 2015.
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.

61

Fukoku Mutual Life Insurance Company

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

As ofMarch 31, 2014

As ofMarch 31, 2015

1,143,749

1,441,649

Foundation funds and surplus

201,167

227,256

Reserve for price fluctuation of securities

50,32555,177

Contingency reserve

112,094

144,417

－

－

1,594

1,403

Net unrealized gains on available - for - sale securities x 90%

343,140

558,124

Net unrealized gains on real estate x 85%

90,71999,173Sum of unrecognized actuarial differences and unrecognized prior service cost

(5,661)(4,217)

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

195,290

199,957

Qualifying subordinated debt

122,346

118,959

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－－

32,732

41,397204,232

241,122

Total solvency margin(A)

Catastrophe loss reserve
Allowance for possible loan losses

OthersTotal amount of risk

( ( R1 + R5 + R8 + R9 ) 2 + ( R 2 + R 3 + R 7 ) 2 + R 4 + R 6
2

2

(B)

Insurance risk

R1

26,98326,074General insurance risk

R5

－

－

Catastrophe risk

R6

－

－

3rd sector insurance risk

R8

9,748

9,689

Small amount and short-term insurance risk

R9

－

－

Assumed investment yield risk

R236,26036,236

Minimum guarantee risk

R7

0

0

Investment risk

R3

159,903

196,781Business risk

R4

4,657

5,375

1,120.0%

1,195.7%

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

Notes: 1. Above figures are calculated based on Articles 86-2 and 88 of the Enforcement Regulation of the Insurance Business Law andNotes: 1. Notification of the Financial Services Agency No.23,2011.
Notes: 2. Above figures are calculated, including the sum of unrecognized actuarial differences and unrecognized prior service cost
Notes: 3. "Minimum guarantee risk" is calculated by standard method.

62

Fukoku Mutual Life Insurance Company

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

As of
As of
March 31, 2014 March 31, 2015
Total solvency margin(A)

51,14658,593

Common stock and others

34,13735,223

Reserve for price fluctuation of securities

6,309

8,643

Contingency reserve

1,802

1,893

0

0

5,265

8,812

－

－

2,202

2,274

Qualifying subordinated debt－－

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

Deductible items

－

－

1,429

1,745

17,70018,984

Allowance for possible loan losses
Net unrealized gains on available - for - sale securities x 90%
Net unrealized gains on real estate x 85%
Excess amount of policy reserve based on full-time Zillmer method

OthersTotal amount of risk

( R1 + R8 ) 2 + (R2 + R3 + R7 ) + R4
2

(B)

Insurance risk

R1

640

606

3rd sector insurance risk

R8

117

114

Assumed investment yield risk

R2

375

384

Minimum guarantee risk

R7

－

－

Investment risk

R316,94618,199Business risk

R4

361

386

577.9%

617.2%

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

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

63

Fukoku Mutual Life Insurance Company