February 14, 2017

Financial Results for the Nine Months Ended December 31, 2016
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the nine months ended December 31, 2016.

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

P.1

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

P.3

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

P.6

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

P.7

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

P.9

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

P.10

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

P.11

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

P.12

Fukoku Mutual Life Insurance Company

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

As of December 31, 2016
Amount(Thousands)

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

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

Individual insurance

3,109

234,174

3,148

101.2

232,267

99.2

Individual annuities

715

27,833704

98.5

27,336

98.2

3,825

262,008

3,853

100.7

259,603

99.1

Group insurance－

169,723－－

172,386

101.6

Group annuities－

21,189－－21,613102.0

Subtotal

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

(ii) New Policies
Total
Nine months ended
December 31, 2015

Net increase by
conversion

New business

Number of policies

AmountAmountAmount(Thousands)(100 millions of yen)(100 millions of yen)(100 millions of yen)

Individual insurance

273

12,675

11,518

1,157

Individual annuities

21

748

765

(16)

295

13,424

12,2831,140Group insurance

－

209

209

－

Group annuities

－

30

30

－

Subtotal

Total
Nine months ended
December 31, 2016

Number of policies(Thousands)

Individual insurance

AmountChanges(%, YoY)

298(100 millionsof yen)109.1

Net increase by
conversion

New businessAmountChanges(%, YoY)(100 millionsof yen)11,726

92.5

AmountChanges(%, YoY)

10,93895.0(100 millionsof yen)788

Changes(%, YoY)

68.1

17

81.2

657

87.8

670

87.7

(13)

－

315

107.1

12,384

92.3

11,609

94.5

774

67.9

Group insurance

－

－

752

359.3

752

359.3

－

－

Group annuities

－

－

16

52.7

16

52.7

－

－

Individual annuities
Subtotal

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

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Nine months ended
December 31, 2015

Nine months ended
December 31, 2016
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

10,089

9,725

96.4

Surrender and lapse ratio (%)

3.80

3.71

(0.09)

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

1

Fukoku Mutual Life Insurance Company

(2) Annualized Premiums(i) Policies in Force(100 millions of yen, %)As of March 31, 2016

As of December 31, 2016
Changes (%, Pre-FYE)

Individual insurance

2,748

2,761

100.5

Individual annuities

1,322

1,324

100.1

Total

4,071

4,085

100.4

1,075

1,089

101.3

Medical coverage and living benefits(ii) New Policies(100 millions of yen, %)Nine months ended December 31, 2015

Nine months ended December 31, 2016
Changes (%, YoY)

Individual insurance

149

149

99.6

Individual annuities

25

21

84.2

Total

175

171

97.4

54

59

110.3

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, %)Nine months ended December 31, 2015

Nine months ended December 31, 2016
Changes (%, YoY)

Premium and other income

4,634

4,441

95.8

Investment income

1,216

1,100

90.5

Claims and other payments

4,618

3,734

80.9

Investment expenses

289

267

92.7

Ordinary profits

621

516

83.1

(4) Total Assets(100 millions of yen, %)As of March 31, 2016

As of December 31, 2016
Changes(%, Pre-FYE)

Total assets

64,8982

66,415

102.3

Fukoku Mutual Life Insurance Company

2. Investment Results of General Account Assets(1) Asset Composition(Millions of yen, %)As of March 31, 2016

As of December 31, 2016

AmountAmount% of total% of total

Cash, deposits, call loans

312,405

4.9

298,495

4.5

Monetary claims bought

813

0.0

768

0.0

87,793

1.4

29,5830.5

5,017,719

78.3

5,317,448

81.0

Domestic bonds

2,659,186

41.5

2,796,632

42.6

Domestic stocks

570,3868.9

623,980

9.5

Foreign securities

1,700,012

26.5

1,802,032

27.4

Foreign bonds

1,505,637

23.5

1,575,185

24.0

194,374

3.0

226,847

3.5

88,134

1.4

94,802

1.4

693,680

10.8

637,054

9.7

Policy loans

61,4371.0

59,5630.9

Ordinary loans

632,2429.9

577,490

8.8

Real estate

212,879

3.3

213,244

3.2

Others87,3091.4

73,524

1.1

Allowance for possible loan losses(1,850)( 0.0)(1,739)(0.0)

6,410,750

100.0

6,568,379

100.0

1,875,134

29.2

2,105,322

32.1

Money held in trust
Securities

Foreign stocks and other securities
Other securities
Loans

Total
Foreign currency denominated assets

3

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016

As of December 31, 2016

Gains/losses

Book value

Fair value

768,786

936,313

167,526

167,526

Domestic bonds

740,989

906,313

165,323

Foreign bonds

27,79730,000

Monetary claims bought－

Negotiable certificate of deposits
OthersGains/losses

Book value

Fair value－

766,309916,605150,295

150,295－

165,323－

740,404

889,503

149,099

149,099

－

2,202

2,202

－

25,904

27,101

1,196

1,196

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

1,074,535

1,280,612

206,077

206,077－

1,016,205

1,191,758

175,553

177,515

1,962

Domestic bonds

1,044,436

1,250,268

205,832

205,832－

1,010,405

1,185,823

175,417

177,379

1,962

Foreign bonds

30,09830,343

244

244

－

5,799

5,935

135

135

－

1,433

1,140

(293)

1

294

1,557

1,199

(358)

－

358

Gains
Held-to-maturity debt securities

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

Losses

Gains

Losses2,419,858

2,889,888

470,029487,293

17,2632,801,340

3,277,213

475,872

498,400

22,527

Domestic bonds

735,758

822,51386,75487,055300

920,585995,02174,436

79,723

5,286

Domestic stocks

291,475

528,697

237,221244,234

7,012

301,549

582,374

280,825

283,488

2,662

Foreign securities

1,326,814

1,458,914

132,099

139,958

7,858

1,509,262

1,612,405

103,143

116,554

13,411

Foreign bonds

1,157,841

1,265,973

108,131

111,8813,750

1,315,219

1,387,115

71,89582,402

10,506

168,972

192,941

23,96828,077

4,108

194,042

225,290

31,24734,152

2,904

65,80979,763

13,953

16,044

2,091

69,94387,411

17,467

18,634

1,166

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,264,614

5,107,954

843,340

860,898

17,5584,585,412

5,386,776

801,363826,21124,847

Domestic bonds

2,521,184

2,979,095

457,910458,211300

2,671,395

3,070,348

398,952

406,201

7,248

Domestic stocks

291,475

528,697

237,221244,234

7,012

301,549

582,374

280,825

283,488

2,662

Foreign securities

1,386,144

1,520,398

134,254

142,407

8,153

1,542,524

1,646,641

104,117

117,886

13,769Foreign bonds

1,215,738

1,326,317

110,578

114,328

3,750

1,346,924

1,420,151

73,227

83,734

10,506

170,406

194,081

23,67528,078

4,403

195,599

226,489

30,88934,152

3,262

65,80979,763

13,953

16,044

2,091

69,94387,411

17,467

18,634

1,166

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Foreign stocks and other securities
Other securities

Total

Foreign stocks and other securities
Other securities

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

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

As of March 31, 2016

As of December 31, 2016

Held-to-maturity debt securities－－

Unlisted foreign bonds－－

Others－－－－Investments in subsidiaries and affiliates

35,56035,495

Available-for-sale securities

14,49913,501

6,127

6,109

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

Unlisted foreign bonds

－

－

8,371

7,391

50,06048,997

Policy-reserve-matching bonds

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

OthersTotal

4

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016
Carrying
value onthe balance
sheet
Money held in trust

As of December 31, 2016
Carrying
value onthe balance
sheet

Gains/losses
Fair value
Gains87,79387,793－Losses－－29,583

Gains/losses
Fair value
Gains－29,583Losses－－* Money held in trust for trading purpose(Millions of yen)

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

Carrying value on
the balance sheet
Money held in trust
for trading purpose

As of December 31, 2016

86,793

Net valuation gains/losses
included in the statementsof operations

Carrying value on
the balance sheet(0)28,583184* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2016
Book value

As of December 31, 2016

Gains/losses

Fair value

Gains

Book value

Gains/losses

Fair value

Losses

Gains

LossesMoney held in trust
for held-to-maturity

－

－

－

－

－

－

－

－

－

－

Money held in trust forpolicy-reserve-matching

－

－

－

－

－

－

－

－

－

－

Money held in trust
for available-for-sale

－

－

－

－

－

－

－

－

－

－

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

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

As of December 31, 2016
Carrying valueon the balance sheet

Gains / losses
108,535

125,289

Fair value
234,066

Gains/ losses
108,777

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

5

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016

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

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

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

6

As of December 31, 2016

99,654200,000
768
29,583
5,388,371[1,910,982][140,608][772,388][646,980][1,822,580]
637,054
59,563
577,490
218,497
20,46834
48,859(1,739)6,641,551
As of December 31, 2016

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

5,596,225
18,2795,515,846
62,09876
191,935
112,886
1,677
3,399
107,81025,88370,66931,482
14,2686,043,427

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

10,000106,000
112
135,268
2,849
132,419
4,000
20,00041,000257
100
767
66,294
251,380
342,628
4,115
346,743598,124
6,641,551－
767
65,509264,397
338,4214,128
342,549
606,947
6,489,815

Fukoku Mutual Life Insurance Company

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

Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

Ordinary revenues:
Premium and other income

463,443444,117[Premium income][463,239][444,015]

121,697

110,084[Interest, dividends and other income][97,439][95,287][Gains on money held in trust, net]

[140]

[－]
[8,353]

Investment income[22,906][Gains on sales of securities]

[－]
[994]

[Gains on derivative instruments, net]
[Gains on separate accounts, net]
Other ordinary revenues[Reversal of reserve for outstanding claims][Reversal of policy reserve]
Total ordinary revenues[2,309][3,923]

46,687

7,797[3,091][2,439][37,059][－]

631,828

561,998

461,805

373,425

Ordinary expenses:
Claims and other payments[Claims][105,062][83,368][Annuities][156,679][132,441][Benefits][85,301][79,391][Surrenders][89,967][54,845][Other payments][24,433][23,054]36

31,501－
36

31,483

Investment expenses

28,901

26,779[Interest expenses][3,350][2,972][Losses on money held in trust, net]

[1,390][Losses on trading securities, net]－
[2,962][Losses on sales of securities][3,625][2,862]

[149]

[－]

[6,985][－]64,510

Provision for policy reserve and others
Provision for policy reserve
Provision for interest on reserve for dividends to policyholders[Losses on valuation of securities][Losses on derivative instruments, net]

64,037

Operating expenses

18[3,358]Other ordinary expenses

14,933

14,177

Total ordinary expenses

569,714510,394

Ordinary profits

62,11351,604

Gains on disposal of fixed assets

1,473

2

Gain on contribution of securities to retirement benefit trust

7,913

Other extraordinary gains

－
9,386

－
42

Extraordinary gains:

Total extraordinary gains

45

Extraordinary losses:
Losses on disposal of fixed assets

173

Impairment losses

231

51

2,160

2,381

Total extraordinary losses

2,565

2,514

Surplus before income taxes

68,934

49,134

Provision for reserve for price fluctuation of securities

82

Income taxes：
Current

10,344

9,820

Deferred

1,779(3,209)Total income taxes

12,123

6,611

Net surplus for the period

56,811

42,522

7

Fukoku Mutual Life Insurance Company

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

II. Notes to Balance Sheets
1. In line with a revision to the Corporation Tax Act, the Company adopted the “Practical Solution on a Change inDepreciation Method Due to Tax Reform 2016” (PITF No. 32, June 17, 2016) from the first quarter under review.
Accordingly, the method of depreciation was changed from the declining-balance method to the straight-line method
for facilities attached to buildings and structures acquired on or after April 1, 2016.
As a result, both ordinary profits and the surplus before income taxes increased by ¥42 million.
2. The amount of securities lent under lending agreements was ¥14,575 million as of December 31, 2016.
3. Changes in reserve for dividends to policyholders for the nine months ended December 31, 2016 were as follows:(Millions of yen)

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

¥ 50,368
35,236(23,524)
18¥ 62,098

4. In line with the redemption of ¥20,000 million in foundation funds, the same amount of reserve for redemption offoundation funds is transferred to accumulated foundation funds redeemed in accordance with Article 56 of the
Insurance Business Law.
5. The “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28,2016) has been applied from the first quarter under review.

8

Fukoku Mutual Life Insurance Company

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

Fundamental profit
Capital gains
Gains on money held in trust, net

Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

63,877

61,95922,906

10,663－－－－22,906

8,353

Gains on derivative instruments, net

－

2,309

Foreign exchange gains, net－－

Other capital gains－－

25,137

21,14043

1,486

Losses on trading securities, net

10,1608,320

Losses on sales of securities

3,625

2,862

149

－

Gains on trading securities, net
Gains on sales of securities

Capital losses
Losses on money held in trust, net

Losses on valuation of securities
Losses on derivative instruments, net

6,985

－

Foreign exchange losses, net

4,172

8,470

－

－

B

(2,231)(10,477)

A+B

61,64651,481

522

122

－

－

522

91

－

31

Other capital losses
Net capital gains (losses)
Fundamental profit plus net capital gains (losses)
Non-recurring gains
Reinsurance income
Reversal of contingency reserve
Reversal for specific allowance for possible loan losses

－

－

56

－

Reinsurance premiums－－

Provision for contingency reserve－－

Provision for specific allowance for possible loan losses

56－

Allowance for specified overseas loans－－

Write-off of loans－－

Others
Non-recurring losses

－

－

C

466

122

A+B+C

62,11351,604

Others
Non-recurring gains (losses)
Ordinary profits

Notes: 1. The following amounts in respect of gains / losses from money held in trust have been excluded from capitalgains / losses and included in fundamental profit due to their income nature (being interest and dividend income):¥184 million in respect of the nine months ended December 31, 2015 and ¥95 million in respect of the nine months
ended December 31, 2016.
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 and dividend income):¥7,198 million in respect of the nine months ended December 31, 2015 and ¥4,962 million in respect of
the nine months ended December 31, 2016.

9

Fukoku Mutual Life Insurance Company

6. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2016

Total solvency margin

(A)

As of
December 31, 2016

1,374,588

1,438,552

Foundation funds and surplus

226,683

222,551

Reserve for price fluctuation of securities

68,28870,669Contingency reserve

150,573

150,481

1,251

1,149

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

423,026

428,285

Net unrealized gains on real estate × 85%

105,577

107,487

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

236,087

238,060

Qualifying subordinated debt

141,935

191,935－－

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

Others40,16546,932

207,983

230,388

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( R1  R8 )2  R2  R3  R7   R4
2

Total amount of risk

(B)

Insurance risk

R1

24,61624,160

3rd sector insurance risk

R8

9,577

9,731

Assumed investment yield risk

R2

33,481

32,965

Minimum guarantee risk

R7

0

0

Investment risk

R3

166,913

189,726

Business risk

R4

4,691

5,131

1,321.8%

1,248.8%

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

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

10

Fukoku Mutual Life Insurance Company

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

As of March 31, 2016

As of December 31, 2016

AmountAmountIndividual variable insurance－－

Individual variable annuities

67

41

Group annuities

78,997

73,130Total

79,06573,172(2) Policies in Force(i) Individual Variable Insurance
The Company has not sold the individual variable insurance.

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

As of March 31, 2016

As of December 31, 2016

Number ofpolicies

AmountNumber ofpolicies

AmountIndividual variable annuities

23

64

14

35

Total

23

64

14

35

11

Fukoku Mutual Life Insurance Company

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

Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

Ordinary revenues

7,354

6,495

Ordinary profits

648

541

Net surplus attributable to the parent company

578

433

Comprehensive income

118

463

As of
March 31, 2016

Total assets
Solvency margin ratio

As ofDecember 31, 2016

83,306

85,116

1,341.5%

1,267.5%(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 6*
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0* Added Fukoku Life Investments Singapore Pte. Ltd.

12

Fukoku Mutual Life Insurance Company

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

As of December 31, 2016

Cash and deposits

172,049

158,015

Call loans

200,000

200,000

Assets:Monetary claims bought
Money held in trust
Securities

813

768

87,79329,5836,859,234

7,184,637

Loans

697,056

640,438

Tangible fixed assets

218,974

218,873

Intangible fixed assets

20,941

24,844

Agency receivables
Reinsurance receivables
Other assets
Net defined benefit asset
Deferred tax assets

2

1

144

34

75,30856,079

–

28

137

104

(1,851)(1,739)8,330,606

8,511,670

As of March 31, 2016

As of December 31, 2016

7,361,627

7,435,697

23,003

20,576

7,287,604

7,352,467

50,36862,098650

554

Agency payables

480

103

Reinsurance payables

146

90

Subordinated bonds

141,935

191,935

Other liabilities

45,940113,717

Net defined benefit liabilities

40,64938,734

Reserve for price fluctuation of securities

77,28979,943

Deferred tax liabilities

30,83728,986

Deferred tax liabilities for revaluation reserve for land

14,274

14,268

7,713,180

7,903,478

Foundation funds

30,00010,000

Accumulated foundation funds redeemed

86,000106,000

Allowance for possible loan losses
Total assets

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

Total liabilities
Net assets:

Reserve for revaluation

112

112

Consolidated surplus

151,251

139,124

Total foundation funds, surplus and others

267,363

255,237

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

349,884

352,263

Revaluation reserve for land, net of tax

4,128

4,115

Foreign currency translation adjustments

(115)

(665)

Accumulated remeasurements of defined benefit plans(10,414)(9,210)Total accumulated other comprehensive income

343,482

346,503

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

13

6,578

6,451

617,425

608,192

8,330,606

8,511,670

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)
Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

Ordinary revenues:

584,416

Premium and other income

512,255

Investment income

140,403

128,883[Interest, dividends and other income][115,265][113,410]

[140]

[－]

[23,795][9,037][Gains on derivative instruments, net][－]

[2,309][Gains on separate accounts, net]

[994]

[3,923][Gains on money held in trust, net]
[Gains on sales of securities]

Other ordinary revenues

10,597

8,448[Reversal of reserve for outstanding claims][3,277][2,426]735,418

649,588

Claims and other payments

509,790416,825[Claims][108,546][87,164][Annuities][157,546][133,448][Benefits][93,195][87,971][Surrenders][125,530][84,649][Other payments][24,493][23,144]

Provision for policy reserve and others

43,56464,881

Provision for policy reserve

43,52764,863

Provision for interest on reserve for dividends to policyholders

36

18

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

27,98225,891[Interest expenses][3,357][2,976][Losses on money held in trust, net][－]

[1,390][Losses on trading securities, net]

[2,962][3,358][Losess on sales of securities][3,625][2,862]

[149]

[－]

Total ordinary revenues
Ordinary expenses:[Losses on valuation of securities][Losses on derivative instruments, net]

[6,985][－]

Operating expenses

72,36072,065

Other ordinary expenses

16,861

15,794

Total ordinary expenses

670,559

595,458

Ordinary profits

64,85854,129Gains on disposal of fixed assets

1,473

2

Gain on contribution of securities to retirement benefit trust

Extraordinary gains:

7,913

－

Others extraordinary gains－

42

Total extraordinary gains

9,386

45

Losses on disposal of fixed assets

177

84

Impairment losses

231

51

Provision for reserve for price fluctuation of securities

2,422

2,653

Total extraordinary losses

2,831

2,789

Extraordinary losses:

338

315

71,07551,069Current

11,22910,587

Deferred

1,787(3,113)

Total income taxes

13,016

7,473

Net surplus

58,05943,595

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

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

14

213

214

57,84643,381

Fukoku Mutual Life Insurance Company

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

Nine months ended
December 31, 2015

Nine months ended
December 31, 2016

Net surplus

58,05943,595

Other comprehensive income(46,241)2,778

Net unrealized gains (losses) on available-for-sale securities, net of tax(46,647)

2,124

Deferred valuation gains (losses) under hedge accounting, net of tax(0)－

Revaluation reserve for land, net of tax

0－Foreign currency translation adjustments

(44)

(550)

Remeasurements of defined benefit plan, net of tax

451

1,204

Comprehensive income

11,817

46,374Comprehensive income attributable to the parent company

11,464

46,415353(41)

Comprehensive income attributable to non-controlling interests

15

Fukoku Mutual Life Insurance Company

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

II. Notes to Balance Sheets
1. In line with a revision to the Corporation Tax Act, the Company adopted the “Practical Solution on a Change inDepreciation Method Due to Tax Reform 2016” (PITF No. 32, June 17, 2016) from the first quarter under review.
Accordingly, the method of depreciation was changed from the declining-balance method to the straight-line method
for facilities attached to buildings and structures acquired on or after April 1, 2016.
As a result, both ordinary profits and the surplus before income taxes increased by ¥42 million.
2. The amount of securities lent under lending agreements was ¥14,575 million as of December 31, 2016.
3. Changes in reserve for dividends to policyholders for the nine months ended December 31, 2016 were as follows:(Millions of yen)

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

¥ 50,368
35,236(23,524)
18¥ 62,098

4. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) for the nine months
ended December 31, 2016 were as follows:(Millions of yen)

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

¥ 650

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

(411)

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

0

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

315

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

¥ 554

5. In line with the redemption of ¥20,000 million in foundation funds, the same amount of reserve for redemption offoundation funds is transferred to accumulated foundation funds redeemed in accordance with Article 56 of the
Insurance Business Law.
6. The “Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ Guidance No. 26, March 28,2016) has been applied from the first quarter under review.

III. Notes to Statements of Operations
1. For the nine months ended December 31, 2016, the total amount of depreciation and depreciation of real estate forrent and other assets was ¥8,795 million and the amount of amortization of goodwill was ¥572 million.

16

Fukoku Mutual Life Insurance Company

R6

R
R
R89573142(5) Status of Insurance Claims Paying Ability of the Company and Insurance Subsidiaries(Millions of yen)

As ofMarch 31, 2016
Total solvency margin

(A)

As of
December 31, 2016

1,417,685

1,483,386

Foundation funds and surplus

234,905

232,024

Reserve for price fluctuation of securities

77,28979,943

Contingency reserve

152,554

152,549

－

－

1,251

1,149

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

437,678440,667

Net unrealized gains on real estate × 85%

105,577

107,487

Sum of unrecognized actuarial differences and unrecognized prior service cost

(14,465)(12,792)

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

238,473240,584

Qualifying subordinated debt

141,935

191,935

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

Deductible items－－

42,48549,838211,354

234,062

Catastrophe loss reserve
Allowance for possible loan losses

OthersTotal amount of risk

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

2

2

2

Insurance risk

R1

25,164

24,711

General insurance risk

R5

－

－

Catastrophe risk

R6

－

－

3rd sector insurance risk

R8

9,690

9,841

Small amount and short-term insurance risk

R9

－

－

Assumed investment yield risk

R2

33,87233,356

Minimum guarantee risk

R7

0

0

Investment risk

R3

169,750

192,866

Business risk

R4

4,769

5,215

1,341.5%

1,267.5%

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

Notes: 1. Above figures are calculated based on Articles 86-2 and 88 of the Enforcement Regulation of the Insurance Business Law
Notes: 1. and Notification of the Financial Services Agency No.23,2011.
Notes: 2. "Minimum guarantee risk" is calculated by standard method.

17

Fukoku Mutual Life Insurance Company