ANNUALREPORT
2023Ⓒ2023 SANRIO CO., LTD.
APPROVAL NO. L644111

YEAR ENDED MARCH 31, 2023
FUKOKU MUTUAL LIFE
INSURANCE COMPANY

Management Philosophy of Fukoku LifeManagement Philosophy
Fukoku Life will continue adhering to its original management
philosophy of protecting the interests of policyholders andcontributing to society. In addition, we will continue to help our
employees achieve personal fulfillment.
Protecting theinterests of ourpolicyholders

Customercentered
ValuesContributing
to society

Helping our
employees
achievepersonal
fulﬁllment

ValuesCustomer-centered Values

Applying customer-centered values means that all executives
and employees of Fukoku Mutual Life Insurance Company
consistently adopt customer perspectives while creating andrendering distinctive services and experiences that provide
our customers with a true sense of security.
We will continue to view customer-centered values as
the springhead for all of our most critical corporate activities.

Code of Conduct

Business Policies

Our Customers

Further strengthen our managementbase and provide our customers withstability and security•Consistently apply customercentered values•Always act in an honorable
and upright manner
Our Communities•Continue to emphasize theimportance of life insurance•Facilitate the achievementof a brighter future
Our Employees•Remain willing to act
without fear of failure•Respect each other andpursue growth as a team

Fukoku Life will increase the size of its customer base andsecure a stable business foundation through enhancement of
its consulting capabilities while building a strong financial basethrough the establishment of a beneficial and self-perpetuating
cycle consisting of capital enhancement, appropriate
risk-taking, and improvement of returns.

Contribute to the realization of asustainable society as a mutual company
engaged in the life insurance businessA sustainable society is an essential cornerstone for thefulfillment of long-term promises associated with life
insurance. Together with its customers, its employees, and theregions and communities it serves, Fukoku Life remains
committed to facilitating the achievement of a sustainable
society.

Increase employee job satisfaction
through human resource development
based on customer-centered values

Fukoku Life is committed to enhancing the job satisfaction of
its employees by developing human resources capable ofapplying customer-centered values and establishingenvironments that encourage them to take on new challenges.

Contents
Message from the President������������������������������������������������������������������������������������������� 2
Fukoku Life’s Value Creation Process����������������������������������������������������������������������������� 6
Medium-term Management Plan (Fiscal 2022–2024)������������������������������������������������ 8
Management As a Mutual Company —Pursuing Ultra-Long-Term Sustainability—��� 10
Centenary Project —Our Centenary Project in Action!—������������������������������������������ 12
Review of Operations in Fiscal 2022
Business Performance������������������������������������������������������������������������������������������������ 14
Financial Soundness and Profitability (Non-consolidated)����������������������������������� 16
Investment Performance (General Account)���������������������������������������������������������� 18
Investment Policies for Fiscal 2023�������������������������������������������������������������������������� 19
ESG Investment and Financing�������������������������������������������������������������������������������������� 20
Environmental Protection Initiatives����������������������������������������������������������������������������� 21
Contribution to Society��������������������������������������������������������������������������������������������������� 22
Initiatives for the Respect of Human Rights����������������������������������������������������������������� 23
Business Management System�������������������������������������������������������������������������������������� 24
Non-consolidated Financial Statements���������������������������������������������������������������������� 26
Consolidated Financial Statements������������������������������������������������������������������������������� 50
Corporate Organization��������������������������������������������������������������������������������������������������� 81
Corporate Information����������������������������������������������������������������������������������������������������� 82

FUKOKU MUTUAL LIFE INSURANCE COMPANY

1

Message from the President

Fukoku Life’s policyholder-oriented founding principles inform its management
philosophy of protecting our policyholders’ interests, as well as customercentered values.
The Company’s mutual corporate management is applied in pursuit of a concept it calls
THE MUTUAL, the same mutual as is used in mutual companies and mutual aid, in reference tothe next generation of mutual assistance it provides.
Fukoku Life is the only company in Japan that has maintained a mutual company structuresince its establishment.

Approaching our centennial

viewed mutual companies as policyholder-centered enterprises,

Founded in 1923 as a mutual company based on policyholder-born from a spirit of mutual support.

oriented values, Fukoku Life will celebrate its 100th
anniversary on November 22.
Yoshiteru Yoshida, our second president and effectively

Fukoku Life is the only company in Japan that has
maintained a mutual company structure since its establishment,
and underlying this are our founder’s genuine feelings concerning

the Company founder, insisted on the mutual company format.

mutual companies. Our founding policyholder-oriented principles

He was committed to the belief that the ethos underlying

have been passed down through our management philosophy,

insurance is based on mutual support provided by policyholders,which requires that we protect the interests of our policyholders,

who form insurance organizations and help each other. He

and our customer-centered values.

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FUKOKU MUTUAL LIFE INSURANCE COMPANY

Mutual company insurance business

Because the business of life insurance touches on human

Yoshida insisted that the Company have a mutual structure,subtleties, we generally insist on face-to-face communication.

to ensure that management would be policyholder oriented.

However, during the COVID-19 pandemic, we responded flexibly

After all, business at a mutual insurance company—which

to customer requests. For those that did not require face-to-facehas no shareholders—is that of its policyholders, who aremeetings, we used IT and other digital solutions. In fact, thecompany members: both users (customers) and constituents

pandemic helped remind us of the value of face-to-face contactof the company (company members).

between people.

Since a company member is a colleague, or a member ofa cooperative, we can be said to do little more than run ourbusiness on behalf of our policyholders.
Life insurance is a highly public business that is closely

Unwavering core values
I believe that we are able to celebrate our centennial precisely

linked to people’s lives. Article 1 of the Insurance Business Act

because of our Company’s core values: our foundingrefers to the public nature of the insurance business, meaning

principles, management philosophy, commitment to thethat policyholders are to be protected.

mutual company format, and face-to-face interaction.

Given that our management philosophy stipulates the

Since 2018, we have been working on the centenary project,need to protect the interests of our policyholders, we see

based on our concept of THE MUTUAL, which will continue tothe mutual company structure as being the best format. Lifeevolve over the coming years based on empathy, connection,

insurance guarantees customers’ contracts for a very longand mutual support. The concept embodies our aim to become

time, while mutual company management concentrates onan enterprise representing true mutual aid, by deepening our

the interests of long-term policyholders.

connection to, and support for, all our stakeholders.

We believe that our most important responsibility as an

An easy-to-understand expression of THE MUTUAL is our

insurance company is to ensure the reliable payment of claims,

new corporate message, entitled “From Person to Person” thatno matter when. At the same time, being a mutual company, we

was released in January. It denotes our power of connection

consider our mission to be providing customers with reductions

to serve our customers and local communities. As a mutual

in insurance premiums by increasing dividend payouts.

company, we play a role in connecting people who help eachother. For people to connect, empathy is necessary, but it
requires face-to-face interaction. Empathy leads to trust,

Essence of life insurance

and trust to peace of mind, for which the sustainability of our

We distribute to all executives and employees a booklet we

Company is essential if it is to continue protecting our customers.

have compiled, titled “Our Founding Spirit,” that summarizes

We are committed to the soundness of our Company inYoshida’s thoughts and belief. It is used in training, and I

order to cause our customers no inconvenience, as wasmyself reread it from time to time. As we approach our 100th

said by our fourth president, Jiro Satake who, in 1951,

anniversary, we are working to ensure that the foundingemphasized the need to “Valuing quality over quantity.” Basedphilosophy of our starting point continues to be reflected inon sound management principles, he aimed at management

our business operations.

that emphasizes quality over scale. This is the essence of the life

Life insurance differs from other financial products inthat it involves not only money, but also life. For this reason,

insurance business, and it is the DNA that has been consistently
passed down through the core of our management.

I find that Yoshida’s words in the booklet—“Insurance gives

I believe that the execution of this management

policyholders and their families mental and financial well-philosophy has resulted in exceptional soundness andbeing and benefits”—resonate with me. By preparing policy

enhanced dividend payments. We will continue to work toholders for emergencies, insurance provides peace of mind,

further strengthen our capital, so as to maintain financial

which is the foundation of well-being. So when emergencies

soundness regardless of the operating environment.

do occur, financial hardship is not inflicted on top of tragedy.
In addition to delivering economic benefits through thepayment of insurance claims and benefits, customer advisors

Keeping promises to our customers

pay close attention to what customers say. It may soundLife insurance is a covenant that extends beyond a single

presumptuous, but I believe that by doing so, as a company,

lifetime to include subsequent generations, making it a never-

we can be a source of emotional support.

ending endeavor. Just as we have for the past 100 years, we

FUKOKU MUTUAL LIFE INSURANCE COMPANY

3

aim to maintain sound management for the next 100 years,

FY2022 Financial Results

while continuing to be a Company that fulfills its promises to

In spite of the severe business environment due to theits customers, even in the face of major disasters or economic

pandemic, combined annualized premiums from new policies

crises. To that end, we must maintain unwavering core values.

for Fukoku Life and Fukokushinrai Life Insurance Company

While we live in an era of upheaval, it is also important toexceeded the pre-COVID fiscal 2019 level. Premium income

adapt to changes by making fine-tuned adjustments.

(an insurance company’s sales) for the two companies
increased 20.3% year on year to ¥760.6 billion, also exceeding
pre-pandemic levels.

COVID-19 Response

With regard to asset management, the interest,

When it comes to sales activities, we have taken it as ourdividends, and other income generated through Fukoku Lifemission to stand by our customers and continue to provide life

increased again year on year,* reaching a record high for the

insurance during the COVID-19 pandemic. Sales have been

fifth consecutive year.

conducted using digital tools and, for the convenience of our

The total fundamental profit (the standard measure ofcustomers, we have been communicating via LINE WORKS

an insurance company’s profitability) for Fukoku Life and(the business version of the LINE app), sending insurance policy

Fukokushinrai Life fell 34.8% year on year to ¥48.8 billion,

illustrations electronically, and holding consultations online.

but our soundness remains intact. Our consolidated solvency

In addition, by combining this with mail-in paperwork, we

margin ratio, an indicator of soundness, remained high athave been handling procedures, from insurance proposals to

1,171.9%. Hence, in accordance with the expectations ofapplications, without face-to-face meetings. From now on, ourour policyholders, we raised dividends for policyholders ofsales activities will combine digital and conventional methods,

individual insurance policies, achieving an 11th consecutive

so that we can stand by our customers and respond flexibly toyear of dividend increase for holders of such policies

their requests.
In terms of customer service, we have been working toSince life insurance involves a spirit of mutual assistance,
insurance premiums received from policyholders are provided

alleviate customer concerns by providing detailed information

as insurance payouts to customers who need them. In fiscal

and guidance regarding initiatives related to COVID-19.

2022, along with Fukokushinrai Life, we paid out a total ofSpecifically, we have simplified procedures for insurance¥582.6 billion in insurance claims, annuities, and benefits.

claims, benefits, and policyholder loans.

* Based on comparable adjusted figures excluding the impact of a partial

Regarding the payment of insurance claims and benefitschange in the method of recording interest in FY2022.

for policies with additional disaster riders, we have expanded
eligibility for additional disaster insurance claims andaccidental death benefits, in the event of severe disability or

Medium-term management plan

death due to COVID-19.

To draw closer to our long-term management vision of generating

Further, we have paid hospital and other benefits when

greater customer satisfaction than any other life insurance

the deemed hospitalization arrangement applied to patientscompany, the key themes of our medium-term management

who, recuperating at home, were considered to have the sameplan (fiscal 2022–2024) are laying the groundwork for businessstatus as individuals who had been hospitalized and, thus,transformation and adopting initiatives aimed at resolving

were entitled to benefit payments.

increasingly diverse social issues.

Because of the significant increase in claims for benefits

By promoting these themes, we are striving to build afollowing the sixth wave of the pandemic, there were some

virtuous cycle for sustainable growth that links improvement

delays in payments. But, by December, the delays werein employee satisfaction with growth in customer satisfaction.

resolved once we had increased our payment department

Specifically, we are promoting action plans formulated

staff and augmented our payment systems.

across the organization for each initiative theme, and we

However, as of this writing, we have ended our handling of

have generally been making progress on schedule. Aiming tohospital benefits for those to whom the deemed hospitalization

boost customer satisfaction, each branch office is working toarrangement had applied. This we have done based on the

improve continuation rates as well as lapses and surrenders,

government’s May 8 decision, effective the same day, toand to enhance after-sales service.

change the status of COVID-19 under the Infectious Diseases
Act to a Category 5 Infectious Disease.

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FUKOKU MUTUAL LIFE INSURANCE COMPANY

We have adopted a plan to use our customers’ wordof-mouth recommendation of our services to others as anindicator of progress in building a virtuous cycle for sustainableofficers (including external officers). Reflecting the increase in

growth. In our policyholder survey, nearly all customers who

the number of participants, their posts about their impressions

responded that they were very satisfied with our company

have multiplied on our company’s social media sites.

indicated that they were willing to recommend Fukoku Life to

But since for meetings to be of benefit, the atmospherefamily and friends. Yet, although the fiscal 2022 indicator formust be open and relaxed, we have taken the stance of

having insurance coverage by us recommended to others did

acknowledging each other’s individuality, as well as believing

improve year on year, we nevertheless will continue striving toand trusting each other. We aim to attain a servant leadershipmake even more customers feel very satisfied.

style, in which leaders prioritize serving the greater good of
the Company. In this way they can encourage employees witha variety of abilities to step up and play an active role, as well

People: the bottom line

as to take independent action and support each employee’s

Given our strong financial base and exceptional soundness,

aspirations. I believe that it is only with such a foundation we

Fukoku Life tends to be perceived as being overly cautious.

can create new value. Looking ahead to the coming years,

But, in fact, we are an entity with a history of undertaking

we will continue to make company-wide efforts to createbold challenges. This is illustrated by our track record ofopportunities and cultivate human resources.

differentiation, including the development of a number ofindustry-first products.
As we look to reflect the changing times by creating newvalue, products, and services over the coming years, we ask
our employees to undertake their daily work while remaining
steadfast to our core policyholder-oriented and mutualcompany values.
I also head our Human Resources Development
Headquarters, and follow Fukoku Life’s approach to humanresource development by encouraging spontaneity, creativity,
and altruism among our employees.
Humans are more than just brains; the brain and the
body must work together. Information may be transmitted by
the brain alone, but genuine emotions cannot be transmitted
without the body. Therefore, true knowledge (comprisinginformation and emotions) cannot be transmitted remotely,
because there is no physical synchronization of emotions
from person to person. Synchronization between peoplemeans empathy. Physical synchronization of emotions occurs
only in real—rather than virtual—face-to-face interaction. In
other words, empathy is mutually generated. This has beenscientifically proven by measuring blood flow in the brain
during remote and face-to-face interactions.
Because face-to-face contact is essential in the life
insurance business, it is crucial to always try to create
opportunities for this. Since 2011, we have held roundtable
meetings for two-way dialogue with our staff and, as of the endof March 2023, we have held a total of 318 such meetings with
2,339 participants. It is a true joy to spend time with employees
from a range of workplaces, and of different ages and genders,
and to witness the birth of empathy through dialogue.

Yoshiteru Yoneyama
President

In fiscal 2022, in response to employee requests, we
introduced open application round-table meetings with

FUKOKU MUTUAL LIFE INSURANCE COMPANY

5

Fukoku Life’s Value Creation Process
Sources of Value
Creation

Our founding spirit
Commitment to apolicyholder-oriented
approach
The only company
that has maintained
a mutual company
structure since its
founding
Motto (company mottoand company DNA)
Valuing quality overquantity
Management
philosophy
Protecting the interestsof our policyholders
Contributing to society
Helping our employees
achieve personalfulfillment

ValuesCustomer-Centered
Value
Human resource
development
Spontaneity, creativity,
and altruism

6

FUKOKU MUTUAL LIFE INSURANCE COMPANYManagement BaseFinancial capital
Strong financial
base
Solvency margin
ratio: 1,133.8%*
Capital ratio:
13.80%*
Social capital
Stability andsecurity forcustomers
Number of policies
in force:
3.7 million*
Insurance claims,
annuities, andbenefits provided:¥429.9 billion**
Human capital
Human resources
who apply
customer-centeredvaluesNumber of sales
representatives:
9,573*
Number of
office-based
personnel: 2,863*
Intellectual capital
Distinctive,
quality-driven
management
Industry-leading
product
development
Dynamic asset
management thatdraws on uniqueperspectives

Management under a Mutual Company System:

Business Policies

Further strengthen our management baseand provide customers with stability andsecurity
Contribute to the realization of asustainable society as a mutual company
engaged in the life insurance businessLong-term Management Vision
Management
strategy

Target differentiation in
all business areas

Medium-term Management Plan
(Fiscal 2022–2024)
Initiatives targeting the resolution ofincreasingly diverse social issues

1. Strengthen capacity to provide self-help
consulting by integrating face-to-faceand digital approaches.
2. Bolster our ties with Generation Z,
which includes society’s future leaders.
3. Provide stability and security forworking women, senior citizens.
4. Promote Groupwide efforts to resolve
local issues.
5. Fulfill stakeholder expectations throughsustainability-oriented initiatives.

Further strengthen our management base* As of March 31, 2023** For the fiscal year ended March 31, 2023

Fukoku Life’s Value Creation Process

Pursuing Ultra-Long-Term Sustainability

Value Created Jointly with
Stakeholders
Partnerships withstakeholders

Increase employee job satisfaction
through human resource development
based on customer-centered values

Customers

Be the top life insurance company in terms ofcustomer satisfaction

Community and Society

Building a virtuous cycle for sustainablegrowthPromote ESG investment andfinancing
Address climate change andother environmental issues

Customersatisfaction
Improve product and service
quality, maintain financial
soundness, and enhance
dividend returns

Boost productivity
and profitability

Increase customer loyalty andgenerate a net increase incustomers

Heighten employee
motivation

Employees
Promote health management,
work style reforms

Achievement of Steadfast and Sustainable Societies

Sound management of our life
insurance business
Offer coverage through our life
insurance business

Address human rights anddiversity

Employeesatisfaction

FUKOKU MUTUAL LIFE INSURANCE COMPANY

7

Medium-term Management Plan (Fiscal 2022–2024)
Role of Plan in Management Philosophy
Our Medium-term Management Plan outlines initiatives we will implement over the next three years, as we aim to draw closer toour long-term management vision of being the top life insurance company in terms of customer satisfaction.
ValuesManagement Philosophy
Management Philosophy and Values

Protecting
the interestsof ourpolicyholders

Contributing
to society

Business Policies

Customercentered
ValuesHelping our
employees
achievepersonal
fulfillment

Business Policies■ Further strengthen our management base and provide our customers withstability and security

Long-term Management Vision■ Contribute to the realization of a sustainable society as a mutual company
engaged in the life insurance business

Management Strategy
Internal Management Policy
Medium-term Management Plan

■ Increase employee job satisfaction through human resource development
based on customer-centered values

Long-term Management Vision
Be the top life insurance company in terms of customer satisfaction

Category-specific Strategies

Management Strategy
Target differentiation in all business areas

Overview of Current Plan
Our medium-term management plan will focus on two priorities: setting up a solid foundation for business transformation, andresolving increasingly diverse social issues. Through related efforts, we will aim to achieve a perpetual, positive cycle of sustainablegrowth. As we pursue our vision, we hope to set in motion a cycle through which growth in employee satisfaction generates
improvement in customer satisfaction.

Long-term Management Vision

Medium-term Management Plan (Fiscal 2022–2024)

Management
Strategy
Target differentiation in
all business areas

Internal
Management
Policy8CategoryspecificStrategies

Be the top life insurance company in terms of customer satisfaction

Themes for priority initiatives
I. Develop solid foundation forbusiness transformation

1. Reform sales representative system to generatehigher customer satisfaction
2. Optimize agency channels associated with the Group
3. Improve efficiency of business expense and optimize
investment in systems
4. Put in place mechanisms to raise awareness of aneed for change

II. Initiatives targeting the resolutionof increasingly diverse social issues

1. Strengthen capacity to provide self-help consulting
by integrating face-to-face and digital approaches
2. Bolster our ties with Generation Z, which includes
society’s future leaders
3. Provide stability and security for working women,
senior citizens
4. Promote Groupwide efforts to resolve local issues
5. Fulfill stakeholder expectations throughsustainability-oriented initiatives

FUKOKU MUTUAL LIFE INSURANCE COMPANY

III. Building a virtuous cycle for sustainablegrowthCustomersatisfaction
Improve product and service
quality, maintain financial
soundness, and enhance
dividend returns

Increase customer loyalty andgenerate a net increase incustomers

Boost productivity
and profitability

Heighten employee
motivation

Employeesatisfaction

Framework for Plan’s Implementation
Medium-term Management Plan Promotion TeamWe have formed a cross-departmental project team that, under
the leadership of the general manager of the Priority Theme
Administration Division, will ensure the effective implementation
PDCA cycles when managing initiatives associated with thesepriority themes.

Board of Directors
Board of Directors (full-time)
Director responsible for the plan
Medium-term management plan promotion teamDivisions at our headquarters
We will implement the action plans established for each department.

Divisions at our headquarters, 62 branch offices in Japan, and all employees

Sixty-two branch offices in Japan (Branch Office Mediumterm Management Plan Committee)
Through monthly meetings of the Branch Office Medium-termManagement Plan Committee, we will seek to enhance the qualityof our services by attaining improved customer-centered indicators.

Executive office

Customer-Centered Action at Headquarters Departments and 62 Branches Nationwide
We implement customer-centered action aimed encouraging realization and awareness so that we can act with customer-oriented
values. These endeavors include training centered on discussions for all employees in each department.
We have carried these activities since fiscal 2013, and we will continue to implement them so as to improve employee
satisfaction through our business policy of increase employee job satisfaction through human resource development based on
customer-centered values, which in turn leads to improved customer satisfaction.
Indicators of Progress in Setting Up a Virtuous Cycle for Sustainable Growth
Indicator One: Customer Satisfaction*

37.4％

19.8％
11.0％

FY2019

Indicator Two: Plan to Recommend Coverage to
Others*

FY2020

13.0％

12.6％

FY2021

FY2022Start of ourcurrent plan

* Percentage of customers who responded “verysatisfied” (the highest level of satisfaction out ofa total of seven options) to the question, “Howsatisfied are you with Fukoku Life overall?” in ourpolicyholder survey

FY201932.0％

FY2020

29.2％

31.0％

FY2021

FY2022Start of ourcurrent plan

* Percentage of customers who answered “yes, I
would strongly recommend” or “yes, I would
recommend” (the top two choices out of a totalof seven) in response to the policyholder survey
question “Would you recommend insurance from
Fukoku Life to others?”

Indicator Three: Employee Satisfaction*

3.62

3.63

FY2019FY20203.63

3.56

FY2021

FY2022Start of ourcurrent plan

* Average point total generated by responses to thequestion “Are you satisfied with your work at Fukoku MutualLife Insurance Company?” in our staff attitude survey. The
possible responses were “yes, very satisfied” (fivepoints), “somewhat satisfied” (four points), “neither satisfied
nor dissatisfied” (three points), “somewhat dissatisfied” (twopoints), and “not at all satisfied” (one point).

Looking back on fiscal 2022
In the first year of the medium-term management plan (fiscal 2022–2024), we implemented initiatives such as action plans in eachdivision of our head office and improvement of service quality at our 62 nationwide branch offices.
When it comes to the status of indicators for confirming whether such efforts are leading to the building of a virtuous cycle forsustainable growth, compared to the start of the medium-term management plan, although confirmation indicator two: plan to recommend
Coverage to others has increased, indicators one: customer satisfaction, indicator three: employee satisfaction, have decreased.
We believed that the impacts of the seventh and eighth waves of the COVID-19 pandemic have affected our performance both
directly and indirectly. That said, we take these outcomes seriously, and we will consider effective measures by adding and modifies
action plans through the PDCA cycle of the medium-term management plan promotion team, such as discussing ways to respondgoing forward.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

9

Management As a Mutual Company —Pursuing Ultra-Long-Term Sustainability—
Approach to Sustainability
Fukoku Life is the only company in Japan that has maintained amutual company structure since its establishment.
Based on a desire to build a policyholder-oriented company,
Yoshiteru Yoshida, the second president and effectively thefounder of Fukoku Life, insisted on that structure. Yoshida wascommitted to the idea in the belief that the ethos underlying
insurance is based on mutual support provided by policyholders
who form insurance organizations and help each other.
Yoshida viewed mutual companies as policyholder-centeredorganizations, born from a spirit of mutual support.
Our life insurance business, which has a highly public
nature and is closely connected to people’s lives, is predicatedon ultra-long-term sustainability. We believe a mutual company
structure is optimal for life insurance companies, since it
involves no shareholders and allows such levels of growth to besought as will best benefit and protect customers.
Life insurance business, which involves lifelong andmultigenerational commitment to our customers, is a neverending endeavor. To ensure that we can fulfill our obligations
in perpetuity, we must achieve sustainable growth and ensureongoing viability.
Sustainable society being a necessary prerequisite forachieving our goals, we view corporate activities aimed atattaining such a society as indispensable. Accordingly, we strive
to help secure a sustainable society through each of our mutual
support-based corporate activities.

Yoshiteru Yoshida, Fukoku Life’s second
president

The Company’s flag at the time of its establishment. To indicate thecompany’s status as a mutual organization, a Japanese character meaning
mutual was embroidered in the center of the flag.

In 1968, we began donating to the Children’s Cancer Association of Japan, inorder to facilitate more effective treatment for pediatric cancer. By 1983, we
had donated ¥1.0 billion.

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FUKOKU MUTUAL LIFE INSURANCE COMPANY

In 2022, we donated boxes of THE MUTUAL Art for children Oyasai Crayons*(vegetable-based crayons) to nursery schools and other facilities nationwide.
* F or more information about Oyasai Crayons, please see the section“Centenary Project” on pages 13 of this report.

Management As a Mutual Company
Relationship between Fukoku Life and Its Stakeholders

Corporate activities in the spirit of mutual aid● Protect policyholder interests

Customers
Contributing to society ●・Offer coverage through our insurance business・Board of Representative Members of
Policyholders
・Initiatives to reflect the voice of customers in
our management (Conferences of Policyholders)・Environmental protection
・Initiatives through asset management(ESG)
・Stewardship activities● Personal fulfillment

CommunityandSociety

・Promote health management
initiatives and work style reform
・Address human rights and diversity
・Employee’s personal fulfilment

Fukoku Mutual Life
Insurance Company

Employees

Priority Initiatives
We have established seven priority initiatives, based on factors such as congruity with our business operations
and potential impact on stakeholders.

Initiatives

Customers

1. S
 ound management of our life
insurance business.
2. O
 ffer coverage through our life
insurance business.

CommunityandSociety

3. Promote ESG investment and financing.
4. Address climate change and otherenvironmental issues.

Employees

5. Promote health management, work
style reforms.
6. A
 ddress human right and diversity.

Relevant SDGs

7. Partnerships
withstakeholders

FUKOKU MUTUAL LIFE INSURANCE COMPANY

11

Centenary Project —Our Centenary Project in Action!—

Next generation of mutual aid
Fukoku Life will celebrate its 100th anniversary in November 2023 and accordingly is pushing forward with a centenary project, based on theconcept of THE MUTUAL, which embodies the Company’s aspirations as it approaches the conclusion of its first century of existence.
THE MUTUAL refers to the next generation of mutual aid that is expected to evolve over the coming century, as well as our aim tobecome an enterprise representing true mutual aid by deepening our connection to, and support for, all our stakeholders.
Through our centenary project, we hope to ensure that we share an affinity with a greatly expanded circle of individuals andorganizations by conveying the message of mutual aid associated with THE MUTUAL. These efforts will support our goal of becoming acompany that can empathize with all of its stakeholders.

Founding

Launch of Centenary Project

The Company was founded as a mutualcompany, based on the idea that the only
path ahead for the insurance business lay incustomer-centered values
It is the only company that has maintained amutual company structure since its founding

Our centenary project aims to reaffirm
our philosophy and ideas as we approachthe conclusion of our first 100 years
The actor Takumi Saitoh was selected tobe the ambassador for THE MUTUAL

2018
The 95th
Anniversary

1923
Founding

2019
The 96th
Anniversary

Find the MUTUALThe FIND THE MUTUAL program, which involves exploring what the next generation of mutual
aid might be, collects related personal narratives concerning community-based connections andmutual support. These stories it disseminates through newspaper ads and on its websites.
Intended to convey to the public Fukoku Life’s approach and philosophy, from the start of
the activities to March 2023 we had disclosed initiatives implemented by 27 of our branch offices.
Participating branches in fiscal 2022
The branches that took part in disclosing their initiatives were those in Akita, Fukuoka, Machida, Matsuyama, Niigata, Okayama,
Shinjuku, Shonan, Tokushima, and Yamagata.

Members of our Okayama Branch Office,12

Members of our Shinjuku Branch Office andMeiken Lamwood Corporation and

the Green Ribbon Running Festival

Okayama Technical High School

Members of our Yamagata Branch Office andMembers of our Fukuoka Branch Office andSugawara Logistics Co., Ltd.

support hero Gamba Lee α and support ninja Guy

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Primary Initiatives in 2022
As an easily understood expression of our core values, we have adopted a new corporate
message: From Person to Person. This encapsulates the fact that, at the root of THE MUTUAL
are our policyholder-oriented founding principles, our original management philosophy ofprotecting the interests of our policyholders, and our customer-centered values.
In addition, we have revamped our code of conduct to better convey our judgment criteria
to all our stakeholders, namely, our customers, communities, society at large, and our employees.
Given that our role as a mutual company is to connect people who assist each other, we
will continue to safeguard that spirit through mutual empathy.

We have produced a company song—THE MUTUAL
SONG—to express the concept of THE MUTUAL, whichrefers to the next generation of mutual aid. The video
featuring the song serves to unite the entire company
through its more than 700 performers.

2020
The 97th
Anniversary

2021
The 98th
Anniversary

100th Anniversary
Become an embodiment of THE MUTUAL as a concept
Evolve into a company that empathizes with all people
associated with Fukoku Life2022
The 99th
Anniversary

2023
The 100th
Anniversary

The MUTUAL Art for children

Art for children

Through THE MUTUAL Art for children, a project dating back to fiscal 2012, artwork is displayed at
our Smile Gallery. Some of those works of art are used in designs crafted to communicate themessages with which the artists imbue their compositions. And it is through this art that we help
connect children with society.

Driven by the hope that as many children as possible will experience the joy of drawing, we have donated approximately
77,000 vegetable-based crayons to nursery schools, preschools, and other local facilities.
Our donations of the crayons, which are made primarily from the parts of vegetables destined for disposal, are just one of theways in which we help reduce food waste to facilitate the achievement of Sustainable Development Goals.

Vegetable-based crayons

Some of the children who have received ourcrayon donations.

Letters from some of the children

FUKOKU MUTUAL LIFE INSURANCE COMPANY

13

Review of Operations in Fiscal 2022
Business Performance
Note. Consolidated: total for both Fukoku Mutual Life Insurance Company and Fukokushinrai Life Insurance Company;
non-consolidated: total for Fukoku Mutual Life Insurance Company

New Policies (Individual Insurance and Individual Annuities, Consolidated)
Annualized Premiums¥29.5 billion (¥14.1 billion, non-consolidated)
Annualized premiums for new policies increased 28.6% year on year,to ¥29.5 billion, exceeding their pre-COVID-19 level in fiscal 2019 andshowing substantial growth for a second consecutive year.
▪ What are annualized premiums?
Annualized premiums are a indicator that demonstrates how much revenue a life
insurance company earns from its policies in one year. They are calculated byadjusting for differences in payment methods and payment periods among various
policies (monthly payments, yearly payments, single-premium payments, etc.)
and determining the average amount of premiums paid over the entire durations ofthese policies.

Policy Amounts¥1,667.3 billion (¥1,409.7 billion, non-consolidated)
Policy amounts for new policies fell 6.4% year on year, amounting to¥1,667.3 billion. This is primarily attributable to the shift in sales to
medical insurance due to the launch of new medical insurance and thegrowing preference for medical coverage during the COVID-19 crisis.
▪ What are policy amounts?
Policies amounts indicate the total monetary guarantees for which a life
insurance company is responsible.

(¥ billions)Individual insurance
Individual annuities
Fukokushinrai
Annualized premiums corresponding to medical benefits, living benefits, etc.

29.5
22.9

20.6

18.1

5.8
0.8
14.0
7.7
FY2019

15.4

9.4

6.1
0.5
11.4

0.6

0.5

12.8

13.6

Non-consolidated

6.2

7.2

7.1

FY2020

FY2021

FY2022

Individual insurance(¥ billions)Individual annuities

1,780.5

1,668.8

1,610.5

111.0
28.9

110.6
20.5

1,528.8

1,479.3

1,600.1

FY2019FY2020

FY2021

14.1

Fukokushinrai

1,667.3

158.0

257.5

22.3

19.8
1,389.9

Non-consolidated

1,409.7

FY2022

Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities, Consolidated)
Annualized Premiums¥12.8 billion (¥11.0 billion, non-consolidated)
Surrendered and Lapsed Ratio (based on annualized premiums)
2.35 % (2.97 %, non-consolidated)
Annualized premiums for surrendered and lapsed policies declined 2.8%
year on year, to ¥12.8 billion. The surrendered and lapsed ratio improved
year on year, to 2.35%, and remains at a favorable level compared with
its pre-COVID-19 level.
Annualized premiums for
surrendered and lapsed policies
Surrendered and lapsed policy ratio=(based on annualized premiums)
Policies in force at the beginningof the fiscal year

Policy Amounts¥1,153.2 billion (¥1,106.4 billion, non-consolidated)
Surrendered and Lapsed Ratio (based on amounts insured)4.30 % (4.49 %, non-consolidated)
Policy amounts for surrendered and lapsed policies fell 1.6% year on
year, to ¥1,153.2 billion. The surrendered and lapsed ratio improved year
on year to 4.30%, and remains at a favorable level compared with its
pre-COVID-19 level.
Policy amounts for surrendered
and lapsed policies
Surrendered and lapsed policy ratio=(based on amounts insured)
Policies in force at the beginningof the fiscal year

14

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Fukoku Life

Fukokushinrai

Ratio(¥ billions)

2.72%
2.41%

2.35%

13.2

12.8

1.9

1.8

10.3

11.2

11.0

FY2019FY2020

FY2021

FY2022

Fukoku Life

Fukokushinrai

15.2
2.7

2.25%
12.3
2.0

12.4

(¥ billions)

4.63%
1,278.4
56.1

1,222.3

FY2019

Ratio

4.34%

4.30%

1,172.3

1,153.2

46.6

46.7

1,019.5

1,125.6

1,106.4

FY2020

FY2021

FY2022

3.91%
1,067.1
47.6

Policies in Force (Individual Insurance and Individual Annuities, Consolidated)
Annualized Premiums(¥ billions)Individual insurance
Individual annuities
Fukokushinrai
Annualized premiums corresponding to medical benefits, living benefits, etc.

¥549.8 billion (¥369.5 billion, non-consolidated)
Annualized premiums for policies in force increased by 0.2% from the endof the previous fiscal year to ¥549.8 billion, marking the first increase in six
years. Medical coverage and living benefits included in this amount havecontinued to grow since the Company began disclosing statistics regardingthese benefits in FY2003 and have increased for 19 years running.

549.6

548.8

548.8

549.8

164.4

170.3

175.6

180.2

115.8

112.0

109.3

106.6

266.5
116.2

263.8
117.3

262.9
369.5
118.4

FY2021

FY2022269.2
115.3
FY2019FY2020

Policy Amounts

Individual insurance¥26,563.0 billion (¥24,345.6 billion, non-consolidated)
Policy amounts in force declined 0.9% at fiscal year-end, to ¥26,563.0 billion.

Individual annuities

Non-consolidated(¥ billions)

Fukokushinrai

27,286.8

27,001.7

26,816.6

26,563.0

2,401.3
2,456.0

2,237.4
2,362.4

2,166.4
2,269.2

2,217.3
2,172.2

22,429.5

22,401.8

22,380.9

22,173.4

FY2019FY2020

FY2021

FY2022

Non-consolidated

24,345.6

Corporate Insurance (Group Insurance and Group Annuities, Non-consolidated)
We provide comprehensive support to our corporate insurance customers by proposing various products and plans geared toward
corporations. Policy amounts in force for group insurance fell 0.4% compared with the end of FY2021, to ¥17,430.7 billion. Meanwhile,
policy amounts in force for group annuities increased 0.7% at fiscal year-end, to ¥2,304.8 billion.

Policy Amounts for Group Insurance(¥ billions)

Fukoku Life

Fukokushinrai

17,795.5

17,695.2

17,496.7

17,430.7

190.3

159.0

156.0

151.6

17,605.2

17,536.2

17,340.7

17,279.0

FY2019FY2020

FY2021

FY2022

Policy Amounts for Group Annuities(Policy reserve)(¥ billions)

Fukoku Life

2,233.4

2,261.0

2,289.8

2,304.8

FY2019FY2020

FY2021

FY2022Premiums and Other Income (Consolidated)¥760.6 billion (¥526.0 billion, non-consolidated)
Premiums and other income increased to ¥760.6 billion, up
20.3% year on year.
Premiums and Other Income
Individual insuranceGroup annuities

Individual annuities
Other(¥ billions)Group insurance
Fukokushinrai

760.6
629.9
96.4

584.7

632.0

234.5

99.7

145.5

131.3
47.0
44.0

135.2
46.7
42.5

178.1

47.6
45.6
260.5

258.6

257.9

256.3

FY2019FY2020

FY2021

FY2022

175.5

47.2
40.7

Non-consolidated

526.0

FUKOKU MUTUAL LIFE INSURANCE COMPANY

15

Financial Soundness and Profitability (Non-consolidated)
Fundamental Profit¥47.2 billion

Fundamental Profit*

Fundamental profit fell to ¥47.2 billion, down 38.1% year on year.
Insurance-related profit decreased significantly with the surge in
COVID-related hospitalization payouts.
▪ What is fundamental profit?
Fundamental profit is a indicator that demonstrates the periodic fundamental
profit or loss of a life insurance company. It includes impact from both
insurance-related income and expenses (insurance premiums, payment of
insurance claims, operating expenses, etc.) and investment income andexpenses (primarily interest, dividends, and other income). It is similar tooperating profit reported by general industrial companies and net operating profit
recorded by banks.
▪ What is expense gain/loss?
Expense gain/loss is the difference between projected operating expenditures
based on the expenditure rate assumed when calculating insurance premiums
and actual operating expense.
▪ What is mortality and morbidity gain/loss?
Mortality and morbidity gain/loss is the difference between projected paymentsof claims and benefits based on the insured event occurrence rate assumed
when calculating insurance premiums and actual payments of claims and benefits.
▪ What is interest gain/loss?
Interest gain/loss is the difference between investment profit expected fromassumed interest rates and actual investment profit net of expense.

67.5

FY201868.4

76.3

FY2020

FY202155.4
FY2019(¥ billions)

47.2
FY2022

Breakdown of Fundamental Profit(¥ billions)

FY2021 FY2022
Fundamental profit*

76.3

47.2

Insurance-related profit/loss

37.4

5.4

Expense gains/losses(23.0)(23.6)

Mortality and morbidity gains/losses

60.4

29.0

Interest gains/losses

38.9

41.8

* Figures for fundamental profits prior to FY 2022 were recalculated based on the same calculation method as FY2022

Solvency Margin Ratio
1,133.8%
The solvency margin ratio declined to 1,133.8%, down 100.4 percentage
points year on year due to factors such as a decrease in unrealized gains
on securities due to rising interest rates in Japan and overseas. However,this ratio greatly exceeds the level of 200%, which is widely considered
to be a standard indicating financial soundness.
Solvency margin ratio (%) =Total solvency margin
Solvency margin ratio

1,189.7%

1,290.8%

Total solvency margin# 100(1/2) # Total amount of risk

▪ What is solvency margin ratio?
Solvency margin ratio is an indicator used by regulatory authorities thatmeasures an insurance company’s ability to respond to unexpected events suchas major disasters or stock market crashes.

1,550.1
260.5
FY20181,537.8
238.2
FY2019(¥ billions)

Total amount of risk

1,261.6%

1,847.2

292.8
FY20201,234.2%

1,917.8

310.7
FY2021

1,133.8%

1,836.5

323.9
FY2022

Capital¥997.3 billion
On-balance capital increased to ¥997.3 billion, up ¥14.2 billion year on
year. Our capital ratio (capital ÷ total assets) was 13.80%. The capitalalone accounted for 615.7% of the total solvency margin.
▪ What Is On-balance capital?
We place a great deal of importance on the portion of our total solvency margin
that constitutes capital base (excluding unrealized gains on securities and realestate, etc.). Accordingly, we routinely strive to strengthen our capital base,enhancing our internal reserves and obtaining external financing.

16

FUKOKU MUTUAL LIFE INSURANCE COMPANY(¥ billions)Foundation funds, Accumulated foundation funds redeemed
Voluntary surplus reserve
Subordinated bonds
Reserve for price fluctuation
Contingency reserve and additional policy reserve
Other
Capital ratio

12.20%

815.2

12.63%
857.6

13.22%

13.31%

13.80%

946.6

983.1

997.3

304.8

335.2

346.2

172.7

176.6

177.1

291.6

318.6

111.2

122.7

191.9

191.9

241.9

241.9

241.9

96.5
116.0

89.3
128.0

91.4
128.0

93.3
128.0

96.1
128.0

FY2018FY2019FY2020

FY2021

FY2022

Real Net Assets¥1,777.0 billion
Real net assets decreased to ¥1,777.0 billion, down 5.8% year on year.
Meanwhile, our real net assets ratio (real net assets ÷ general accountassets) came to 25.0%.

27.6%

26.9%

▪ What are real net assets?
In addition to solvency margin ratio, real net assets is an indicator used bysupervisory authorities to measure the financial soundness of life insurancecompanies. It is calculated by subtracting liabilities (excluding liabilities withhighly capitalistic characteristics, such as reserve for price fluctuation andcontingency reserve) from the current market value of total assets. Negative real
net assets values sometimes lead to judgments of effective insolvency, as wellas business-suspension orders and other restrictions.

(¥ billions)

Real net assets ratio

Real net assets

25.9%

25.5%

1,779.5

1,709.4

FY2018FY201925.0%

1,949.2

1,887.1

1,777.0

FY2020

FY2021

FY2022

Unrealized Gains on Securities and Real Estate¥766.1 billion(¥ billions)

As of March As of March
31, 2022
31, 2023

Unrealized gains on securities and real estate decreased to ¥766.1 billion,
down ¥130.9 billion year on year. Unrealized gains on securities decreased
to ¥601.8 billion, down ¥147.9 billion, and unrealized gains on real estateincreased to ¥164.3 billion, up ¥16.9 billion year on year, respectively.

Securities▪ What are unrealized gains/losses?
Unrealized gains/losses are calculated by subtracting the book values of assets fromtheir corresponding market values. A positive value indicates an unrealized gain,
while a negative value indicates an unrealized loss.

749.8

601.8

Domestic bonds

195.0

88.2

Domestic stocks

351.9

387.3

Foreign secutities

173.1

101.3

Real estate(land, leasehold right)

147.3

164.3

Total

897.1

766.1

Ratings
To help our customers objectively determine how capable we are of paying claims, Fukoku Life obtain ratings from three neutral andunbiased rating organizations. Our current ratings can be found below.
▪ What are life insurance company ratings?
Ratings of life insurance companies are determined by independent third-party rating agencies and demonstrate the degree of reliability at whichlife insurance companies are capable of paying insurance claims and benefits in accordance with policies (insurance claims paying ability).
Rating and Investment
Information, Inc.
(Insurance Claims
Paying Ability)

Japan Credit Rating
Agency, Ltd.
(Insurance Claims
Paying Ability)

S&P Global Ratings(Insurer Financial
Strength Rating)

Very high claims paying
ability supported by some
excellent factors.

A very high level of certainty tohonor the financial obligations.

The Company has a highcapacity for fulfilling its
insurance policy obligations,but is slightly too susceptible topotential impact from businessenvironment deterioration toachieve either of our highest
two ratings (AAA and AA).

AA-

AAA

AA

AA

A

BBB

A+

BB

Moody’s(Insurance Financial
Strength Rating)

A2

The Company is in theupper-middle range of ratedorganizations and has low
credit risk.

B

CCC

Fitch Ratings, Inc.
(Insurance company
financial rating)A+

Suspension or stoppage of
payments is unlikely, and theability to meet policyholder
and other contractual
obligations without delay isstrong. However, the impact
of changes in the businessand economic environment
can be greater compared withhigher rated entities.

CC

C

…

Notes:
1. The ratings indicated are current as of August, 2023.
2. T he ratings indicated are the opinions of their respective rating agencies and do not indicate guarantees regarding the payment of insurance claims. These
ratings are also continuously monitored by their respective agencies and are subject to change.
3. Rating and Investment Information, Inc., Japan Credit Rating Agency, Standard & Poor’s, Moody’s, and Fitch Ratings are credit rating agencies stipulated by the
Financial Instruments and Exchange Act.
4. A “+” or “-” sign may be added after the rating to indicate its relative position within the same grade. (Moody’s assigns the numbers 1, 2, and 3 to the rating, with
“1” being the highest and “3” being the lowest.)
FUKOKU MUTUAL LIFE INSURANCE COMPANY

17

Investment Performance (General Account)
Overview
In fiscal 2022, the global economy grew at a slower pace overall.
The root cause was worsening inflation, which has reduced
household purchasing power as well as caused a downturn inhousing investment as the world’s major central banks scramble
to raise policy rates, thus driving up loan interest rates.
The US economy lost steam as personal consumption
slowed down largely due to high inflation, and housing
investment declined as a result of higher loan interest rates.
The European economy slowed down due to sluggish consumer
spending caused by high inflation, including a sharp rise inelectricity prices, as well as slumping capital investment stemmingfrom factors such as rising loan interest rates. The pace of growthin the Chinese economy slowed due to persistently sluggish
housing demand and a decline in consumer spending due to therapid increase in the number of COVID-19 infections following
the lifting of the zero-Covid policy. The Japanese economy saw
a moderate pick up. Although household real purchasing power
declined due to rising prices on daily necessities, demand that
had been postponed due to the pandemic began to recover,particularly in the service sector, following the lifting of restrictions
related to the COVID-19 infections, while inbound demand
gradually recovered as well.
As for monetary policy, world’s major central banks
aggressively tightened their monetary policies as inflation
intensified around the world. The Federal Reserve Board (FRB)
has continued to raise the policy rates from 0.5% to 5.0% andbegan quantitative tightening in June. The European Central
Bank (ECB) continued to raise its main policy rate from 0.0% to3.5% and started quantitative tightening in March. Meanwhile,
the Bank of Japan (BOJ) kept its monetary easing in place.
Although it revised its yield curve control (YCC) in December toexpand the upper limit of 0.50% from 0.25%, it kept its policy
rate unchanged at minus 0.1%.
Given the aggressive monetary tightening by major central
banks in response to rising inflation worldwide, the outlook forfinancial markets were highly uncertain, and we therefore allocatedfunds mainly to yen-denominated bonds as low-risk investments.
In addition, we significantly reduced FX-hedged foreign
currency- denominated bonds that were performing poorly

due to elevated hedging costs by global monetary tightening.
Since the BOJ expanded the range of YCC, we refrained frominvesting in super-long JGBs in preparation for further change of
YCC, and we also sold unhedged foreign currency-denominatedbonds to reduce FX risk.
Along with these measures, we also conducted efforts aimed
at executing our Management Philosophy of contributing tosociety through asset management while performing our fiduciary
duty of ensuring profitability. In terms of specific initiatives, weinvested in bonds that support biodiversity conservation andbonds that increase electricity access rates in Africa.
Through our stewardship activities, we sharedrecommendations for improving corporate value and facilitating
sustainable growth through constructive “purpose-driven
dialogue” rooted in a deep understanding of both the companies
in which we invest and their business environments, as well as
careful consideration of factors related to medium- to long-termsustainability (ESG-related factors, etc)
Additionally, to further differentiate our asset management
activities, we strove to enhance our investment diversification
on a global scale by reinforcing investment capabilities of ouroverseas asset management subsidiaries and by strengthening
our relationships with overseas asset management companies
with which we have business relationships regarding the asset
management of regions and asset classes that we deemed were
not sufficiently covered by our corporate group. By acquiring asset
management expertise through methods such as dispatching
trainees to these asset management companies and regularly
exchanging investment ideas, we are endeavoring to enhance
our asset management capabilities and develop globally mindedpersonnel capable of adopting more sophisticated approaches toasset management.
Investment income increased by ¥44.5 billion (up 23.7%)
year on year to ¥232.5 billion due to an increase in gains onsales and redemption of securities, while a decrease in interest,
dividends, and other income.
Investment expenses increased by ¥47.7 billion (up110.2%) year on year to ¥91.0 billion, due to the accounting of
foreign exchange losses stemming from increased FX hedging
costs and an increase in losses on sales of securities.
Consequently, net investment income amounted to ¥141.4
billion, down ¥3.1 billion (2.2%) year on year.

General account assets

Breakdown of general account assets (as of March 31, 2023)(¥ billions)(¥ billions)

6,612.9

6,706.2

7,052.9

7,276.8

7,107.4

Others 96.9 (1.4%)
Real estate 242.9 (3.4%)
Cash and deposits, and others*
550.9 (7.8%)

Loans
524.1
(7.4%)

Industrial andconsumer loans 477.1 (6.7%)
Policy loans 47.0 (0.7%)

Securities
5,692.4 (80.1%)

Other securities 175.4 (2.5%)
Foreign securities 1,705.0 (24.0%)
Domestic stocks 808.8 (11.4%)
FY2018

'19

'20

'21

'22

Total: ¥ 7,107.4 billion

Domestic bonds 3,003.1(42.3%)* This total includes cash and deposits, call loans and money held in trust.

18

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Domestic Bonds
Domestic bonds amounted to ¥3,003.1 billion, up ¥118.6 billion(4.1%) year on year, as the funds from the sale of FX-hedged
foreign currency-denominated bonds and the redemption offoreign currency-denominated bonds were allocated to superlong JGBs.

Foreign Securities
Foreign securities amounted to ¥1,705.0 billion, down ¥630.9
billion (27.0%) year on year mainly due to our significant
reduction in FX-hedged foreign currency-denominated bonds,
whose profitability had declined due to higher FX hedging
costs by global monetary tightening.

Domestic Stocks
Domestic stocks amounted to ¥808.8 billion, up ¥39.8 billion(5.2%) year on year, mainly due to an increase in unrealized
gains resulting from rising stock prices.

Industrial and Consumer Loans
Loans amounted to ¥477.1 billion, down ¥27.5 billion (5.5%) year
on year, because repayments outpaced new loans as we carefully
selected deals expected to generate superior profitability.
Real Estate
Real estate amounted to ¥242.9 billion, up ¥1.8 billion (0.8%)
year on year mainly due to progress on properties underdevelopment.

Domestic bonds

Domestic stocks(¥ billions)

2,782.0

2,677.6

2,779.4

2,884.4

Foreign securities(¥ billions)

3,003.1

786.8

768.9

808.8

(¥ billions)
2,335.9

Industrial andconsumer loans

Real estate(¥ billions)(¥ billions)

2,128.0
1,930.6

1,857.9

1,705.0

672.5

212.5

239.5

241.1

242.9

'20

'21

'22

215.3

612.0
510.1

517.2

504.6

FY2018 '19

'20

'21

504.8

FY2018 '19

'20

'21

'22

FY2018 '19

'20

'21

'22

FY2018 '19

'20

'21

'22

477.1

'22

FY2018 '19

Investment Policies for Fiscal 2023
Investment Environment
Although the global economy is likely to be sluggish throughthe middle of fiscal 2023 due to high inflation and higher loaninterest rates resulting from interest rate hikes by major central
banks, the economy is expected to recover in the latter half ofthe fiscal year thanks to factors including expansion of capital
investment and growth of real wages underpinned by peaking out
inflation. Under these economic conditions, long-term interest
rates in the United States are likely to remain flat against the
backdrop of concerns about an economic slowdown, and thengradually decline as inflation slows down, although the FRB will
likely maintain its monetary tightening. Japan’s long-term interest
rates may rise to around 1% due to moves toward monetary
policy normalization, such as modifying the BOJ’s yield curve
control. Stock prices in Japan and overseas are likely to remainrobust as corporate earnings generally pick up overseas andcontinue to rise in Japan. In forex, the yen will likely appreciate
against the dollar due to the BOJ’s moves toward normalizationof its monetary policy. However, the yen is unlikely to appreciateunilaterally given Japan’s persistent trade deficit.

Domestic Bonds
From the perspective of promoting ALM, we plan to accumulate
super-long JGBs while utilizing the purpose of holding policyreserve-matching bonds, and to increase corporate bonds toenhance investment yield.
Domestic Stocks
By switching individual stocks, we aim to improve the profitabilityof our portfolio while realizing capital gains.
Foreign Securities
In foreign currency-denominated bonds, we will dispose FX
hedged foreign currency-denominated bonds as deteriorationof profitability due to high FX hedging cost. In foreign equities,
we will accumulate alternatives (e.g. PE funds, Hedge funds).
Industrial and Consumer Loans
We will make loans while carefully selecting investment
projects expected to generate superior profitability.
Real Estate
We will invest in select properties projected to generate stable
rent income over the medium to long term.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

19

ESG Investment and Financing
Basic Approach to ESG Investment and Financing
Based on our management philosophy of protecting theinterests of our policyholders, we practice asset managementthat ensures a high level of investment returns in accordancewith the principle of safety and profitability while taking into
account the public nature of the life insurance business.
Concurrently, in line with our business policy of contributing to
the realization of a sustainable society as a mutual company
engaged in the life insurance business, we are working on
investments that incorporate ESG (environmental, social,and governance) factors. It is our belief that ESG investment
contributes to profitability enhancement of the precious funds
entrusted to us by our customers, while at the same timefurther fulfilling our responsibilities as an institutional investor
whose management philosophy is to contribute to society.
Based on this belief, since becoming a PRI signatory inMarch 2016, we have incorporated ESG factors into ourinvestment decision. In addition, in our stewardship activities,
we focus on dialogue with investee companies with ESG factors
as one of the main themes. We also became a supporter of
TCFD recommendations in June 2020.
Going forward, while maintaining our awareness of various
issues that affect the sustainability of society, including climatechange, we aim to contribute to a more sustainable society bypromoting ESG investments and stewardship activities whileassuming to secure profitability.
Signing of the Principles for Responsible Investment (PRI)
We endorse the aims of the United Nations Principles for
Responsible Investment (PRI) and became a signatory on
March 21, 2016. The principles affirm the need to integrate
ESG factors into the investment decision so as to support therealization of a sustainable society.

• Initiatives to support biodiversity conservation
In September 2022, we invested in sustainable development
bonds issued by the World Bank. These are the first bonds issued
by the World Bank to raise awareness of the importance ofconserving biodiversity. Investments in this bond will support
development projects in a wide range of fields, including
biodiversity, by the World Bank, one of the world’s largest
financial institutions that provide funds for natural capital.
* Funds procured by the World Bank through the issuance of sustainable
development bonds support financing for development projects in all areasthat the World Bank is engaged in for developing countries.

© World Bank

• Initiatives to support the proliferation of electric power
In March 2023, we invested in the Light Up and Power Africa
Bond issued by the African Development Bank. The bond isintended to support the proliferation of electricity on the African
continent. To this end, in one example of projects the African
Development Bank is working on, it is engaged in a project toimprove access to electricity in the Republic of Rwanda.

Photo credits: AfDBESG Investment and Financing Initiative
In accordance with the business policy of “contributing to therealization of a sustainable society as a mutual company
operating life insurance business,” we are committed to investing
assets with themes that help solve social issues, including
environmental problems.

• Incorporating ESG in research
When picking domestic stocks, we conduct screenings basedon ESG scores provided by a subsidiary, Fukoku CapitalManagement, Inc., a PRI signatory with extensive expertise
concerning ESG research. In addition, when making
investment decisions we take into account ESG-related
information obtained through our stewardship activities. We
also screen some bonds based on ESG-related data.

20

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Environmental Protection Initiatives
Fukoku Life Implements Environment-friendly Activities.
We believe that the issue of climate change, including measures to deal with global warming, presents tremendous impacts for a sustainable
society. We pursue environment-friendly activities through initiatives for environmental protection (energy and resource conservation
initiatives, forest protection activities) and initiatives channeled through asset management (ESG investment and financing).
Environment-friendly Real Estate Development
Fukoku Life conducts real estate development that takes energy conservation and protection of the into consideration when constructing
new buildings. Opened in 2010, the Osaka Fukoku Seimei Building received a commendation during the Fifth Award Ceremony for
Buildings in Osaka, receiving the year’s highest Comprehensive Assessment System for Built Environment Efficiency evaluation.
Meanwhile, the Sapporo Fukoku Seimei Koshiyama Building opened in 2017 is the first building in Sapporo to be certified gold
under the Leadership in Energy and Environmental Design rating system managed by the US Green Building Council.
The structure also received praise as an energy-saving and environment-friendly office building, obtaining a four-star rating
according to the Development Bank of Japan’s Green Building Certification System.
Due primarily to its green walls and highly efficient facilities, the Koiwa Fukoku Seimei Building (completed in fiscal 2019) became
the first building maintained by Fukoku Life to receive a top ranking and ZEB Ready certification under the Building-Housing Energyefficiency Labeling System promoted by the Japanese government. In fiscal 2022, PARK AXIS Chitose-Funabashi, which was completed
as a rental condominium, acquired ZEH-M Oriented certification.
Conserving Energy, Reducing CO2 Emissions
Our goal for fiscal 2030 is to reduce our business-related (that is,
generated by our owned real estate and leased offices) CO2 emissions
to 46% of our fiscal 2013 figure. To this end, we are striving to
implement a variety of systems, including high-efficiency air
conditioning, LED lighting, as well as daylight and motion sensors.
At our Chiba New Town headquarters, we thus have installed 12
hybrid outdoor lights that use solar and wind power.
As a result, our CO2 emissions in fiscal 2021 dropped 31.2%
from the fiscal 2013 level.

● CO2 Emissions* (t-CO2)

Down 31.2%
from FY2013

54,88542,927FY2013(Base year)

FY201939,04337,781

FY2020

FY2021* Accounts for the CO2 emission coefficients associated with individual energy suppliers

Initiatives for Recommendations from the Task Force on Climate-related Financial Disclosures (TCFD)
In June 2020, Fukoku Life officially endorsed recommendations issued by the Task Force on Climate-related
Financial Disclosures. Our endorsement of the TCFD recommendations reflects our recognition of theimportance of climate change and our commitment to helping attain a secure and sustainable society.
Governance

Our Sustainability Working Group monitors the status of SDG-related initiatives, including those associated with climate change,
and reports its findings to the Board of Directors.
By managing climate change-related risks, we endeavor to limit downward slides in earnings and use climate change-related
issues as opportunities to generate revenue.

Strategy

Risks• Increase in payments of insurance claims and other benefits following natural disasters, such as floods caused by global
warming, and typhoons; growth in morbidity and mortality rates stemming from outbreaks of mosquito-borne tropical diseases
and other infectious contagions caused by rising average temperatures (physical risk)• Negative impact on the value of invested and financed assets, resulting from policy changes in, and technological innovations
associated with, the transition to a low-carbon and decarbonized society (transition risk)• Reputational damage, resulting from a passive approach toward reducing greenhouse gas emissions, the main cause of climatechange (reputational risk)
Opportunities• Growth in coverage requirements, stemming from risks posed by climate change• Growth in opportunities to earn returns through investment in, and financing of, companies and projects that contribute to theresolution of climate change issues• Improvement in reputation of stakeholders, reflecting disaster mitigation and other initiatives
We consider risks associated with global warming and large-scale flooding to be emerging risks. We manage them from an
integrated risk perspective, while assessing the likelihood and potential impact of their occurrence.

Risk
Management

Physical risks• Scenario-based testing concerning tropical infectious disease outbreaks caused by rising average temperatures; quantitative
assessments regarding the financial impact of resultant increases in the payment of insurance claims and benefits• A ssignment of a major flood (storm surges, flooding) risk rating to all operating locations on a five-point scale
Transition risk
• Appropriate execution and improvement of the management of credit and market risks arising from policy changes andtechnological innovations associated with the transition to a low-carbon and decarbonized society

Metrics andTargets

Life insurance providers
Indicator: CO2 emissions generated by business activities
Targets: 46% reduction in CO2 emissions compared with fiscal 2013 by fiscal 2030; net-zero emissions by fiscal 2050
Institutional investors
Indicator: CO2 emissions generated by our investment portfolio (covering stocks and bonds from, and financing provided to,listed companies in Japan)
Target: Net-zero emissions by fiscal 2050
FUKOKU MUTUAL LIFE INSURANCE COMPANY

21

Contribution to Society
Fukoku Life makes a number of social contributions
to help build a better society.
Building Connections through Art and Culture
Art and culture have the power to connect people from allwalks of life. Through its classical music concerts, Fukoku Life
uses music to connect with customers, local residents, andchildren with disabilities. Not limited to concerts, however, ourefforts are expanding and include a variety of other activities.
• Fukoku Life visiting and charity concerts
These concerts have evolved since the initial Fukoku Salon
Concert, held in the lobby of our Uchisaiwaicho headquarters infiscal 1989.
Communities benefit from the concerts we organize. Thesecomprise visiting concerts, featuring professional musicians
performing classical music for schools and institutions forindividuals with disabilities, as well as charity concerts at whichaudiences are asked to donate to local charities that support
community welfare efforts. A total of 301 charity concerts
were held by the end of fiscal 2022, with a total donation of
approximately ¥64.7 million.
• Smile Concert
In order to deliver the gift of music to as many special-needs
schools and facilities for persons with disabilities as possible,
starting in fiscal 2022, we spun off our visiting concerts as a
new Smile Concert program held across the country.

Other Social Contributions•R econstruction support for disaster-stricken areas (sale oflocal products)
At our headquarters in Uchisaiwaicho and Chiba New Town, we
have been selling, since fiscal 2011, local products from the Tohoku
region’s Fukushima, Miyagi, and Iwate Prefectures that wereaffected by the Great East Japan Earthquake and Tsunami of 2011.
In fiscal 2022, we took measures to prevent the spread of
COVID-19 and resumed face-to-face sales.
During the events held for each prefecture, the basement
cafeteria of our Chiba New Town headquarters offered menus
featuring specialties and local bento boxed lunches from eachof the prefectures. Fukoku Life donated a portion of theseproceeds to areas that had been affected by the disaster.

Sales event featuring specialty products from Iwate Prefecture

Miyagi Izunuma loin pork cutlet, a
special menu item at the undergroundcafeteria of our Chiba New Town
headquarters

Fukushima Shirakawa Ramen, aspecial menu item at the undergroundcafeteria of our Chiba New Town
headquarters

Charity Concert

Local bento lunch package

Smile Concert

22

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Communication• Brand mascot
We feature Sanrio Co., Ltd.’s popular Hello Kitty
character as a brand mascot on posters,
pamphlets, flyers, and merchandise.

Initiatives for the Respect of Human Rights
Each and every employee will deepen their understanding of human rights issues and respect the humanrights of stakeholders.
• Promoting human rights awareness
Given their social and public nature, life insurance companies are required to respond to customers based on a correct understanding
and recognition of human rights issues. These include issues surrounding burakumin—a social minority descended from outcastecommunities of feudal times—ethnicity, women, and persons with disabilities.
The need to tackle the issue of discrimination as part of company training sessions has also been taken up by government
administrations. They have called for staff at companies in Japan to adopt a spirit of respect for human rights.
Fukoku Life promotes in-house awareness activities for head office staff in charge of internal affairs education at our humanresources development department, and for deputy general managers of internal affairs at our branch offices. These members of staff
are charged with promoting fair recruitment, selection, and human rights awareness.
We see harassment as a human rights issue that adversely affects the dignity of individual victims, and consider it a work
environment issue that hinders workplace order and business performance.
Besides setting up a contact point for harassment reporting and consultation, we provide training to ensure that all our employees
are thoroughly aware of the issues involved and the appropriate responses.
1. Understanding
We promote in-house awareness primarily through staff who
are responsible for fair recruitment and selection, as well as
instilling human rights awareness.
2. External training
A representative of our branch offices acquires necessary
knowledge by participating in off-site training sessionsorganized on our behalf by activist organizations andgovernment agencies.
3. Internal training
Instructional sessions are held at our office once a year, under
the auspices of the Human Resources Development Division. In
addition, branch offices collaborate with the Human Resources
Development department to hold training sessions tailored to
the needs of actual circumstances.

Outstanding organization recognition
On March 8, 2023, Fukoku Life was selected—for the sixth
consecutive year—under the Ministry of Economy, Trade andIndustry’s Certified Health & Productivity Management
Outstanding Organizations Recognition Program. Thisacknowledged our role in promoting health and productivity
management.
Reflecting the management philosophy that we havecultivated since our founding, we will continue both to workwith our executives, employees, and their respective families totake care of their health; and to promote health management,
to better contribute to the community and society at large.

Main points covered• Priority goals of human rights and human rights awareness• Japan’s Act for the Elimination of Discrimination against
Persons with Disabilities• The COVID-19 pandemic and human rights• Online human rights violations

Training materials

FUKOKU MUTUAL LIFE INSURANCE COMPANY

23

Business Management System
Corporate Governance Enhancement Initiatives
We have formulated a Basic Policy on Corporate Governanceto foster an understanding of our perspective to enhance
corporate governance. We publicize this policy, along with our
Corporate Governance Report.
Basic Approach to Corporate GovernanceOur mutual company’s insurance business is a business of
our policyholders that have entrusted the management of
this business to us. No matter the circumstances, we must
survive as a life insurance company to continue fulfilling our
responsibility of reliably paying insurance claims and benefits.
To this end, we will establish a corporate governance system
based on this fundamental policy in an effort to stabilize andensure the stability our business while providing policyholders
with peace of mind.
Establishment of Management Control Measures
The Board of Directors makes important business decisions andmonitors business execution. The two external directors bringan outside perspective to the deliberations of the board. In
April 2009, Fukoku Life introduced an executive officer system.
Under this system, we have separated and strengthened
decision-making and business execution functions, with theBoard of Directors fulfilling decision-making and supervisory
functions. The Board of Full-Time Directors, comprising thepresident and executive officer and other titled executive
officers, deliberates important business execution policy
for the Company. Meanwhile, various committees havebeen established beneath the Board of Directors in an effort
to strengthen internal controls.
Members of the Audit & Supervisory Board attend
meetings of the Board of Directors, the Board of Full-Time
Directors and other important boards, auditing the executionof operations by directors. The internal audit department
performs internal audits, verifies the appropriateness ofcorporate operations and strives to ensure the soundness ofbusiness operations.
Enhancement of Internal Control System
We are a mutual company that operates a highly public life
insurance business with the goal of protecting the livelihoods ofpolicyholders. As such, we have established a “Basic Internal
Control System Policy” aimed at ensuring the suitability of
our operations, with the ultimate goal of achieving sound andappropriate management. Based on this policy, we are working
to enhance our internal control systems, which include our risk
management and compliance systems.

24

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Compliance Enhancement Initiatives
As members of the community, all executives and employees
are expected to be fully aware of the need to respect thespirit of compliance, not only from the perspective of laws
and regulations, but also from that of protocols and social
conventions. To this end, as well as to improve and reinforce
the system of compliance, we conduct ongoing hands-on
compliance training.
That said, we recognize that even the most robustof systems cannot guarantee the complete elimination of
improper conduct. We thus believe it important to detect any
improper conduct early, deal with it swiftly and appropriately,
and make constant improvements to rectify such behavior andprevent a recurrence.
• Compliance framework
The Compliance Committee—comprising full-time directors
and other executives, and chaired by the president—ismandated by the Board of Directors to deliberate mattersrelated to compliance, while promoting it using means such as
the formulation of relevant programs. The Compliance Control
Department serves as the committee’s secretariat.
An officer responsible for compliance promotion (thehead of compliance promotion) and officers in charge ofpractical compliance-related matters (compliance promotion
officers) in each department at Head Office and branch
offices are involved in ensuring adherence to the stricturesof, and in promoting, compliance under the direction of theCompliance Control Department. It is the duty of the chiefcompliance officer and compliance officers at Head Office tocarry out regular compliance checks.
• Protection of personal information
Fukoku Life believes that proper handling of personal
information is vital if it is to maintain its status amongcustomers as a trusted insurance company. Thus we haveformulated a privacy policy and a basic policy on the handlingof specific personal information, both to ensure appropriate
treatment and safeguarding of personal data.
We will continue to comply with Japan’s Act on theProtection of Personal Information and other related laws andordinances, while continuing to properly handle and protect
personal data.

Enterprise Risk Management• Risk management based on customer-centered valuesLife insurance is a “promise” to pay insurance claims andbenefits in the event of an unforeseen emergency. It involves
a lifetime commitment to customers that even can span
generations. Events may occur, such as drastic changes inthe economic environment or other catastrophes, during themany months and years in which we accompany customers on
their life journey. When this happens, the role of life insurancecompanies becomes even more important. Only after fulfilling
this promise with unwavering reliability regardless of thecircumstances can customers enjoy peace of mind.
To maintain this reliability in the future, Fukoku Life
promotes enterprise risk management (ERM) for overallmanagement of a diverse range of complicated risks froma strategic perspective, based on the recognition that each
executive officer and employee is responsible for risk
management commensurate with their position.
• Integrated management of capital, risk, and return
As a mutual company, we look ahead several decades and,based on management that prioritizes the interests of ourcustomers, we are working hard to strengthen our capital inorder to adequately respond to risks, as well as secure stableprofits (return), which are the source of that capital.
Profit and risk are two sides of the same coin, andappropriate risk-taking is necessary to ensure stable profits.
Integrated management of capital, risk, and return means
securing profits through appropriate risk-taking, based on
capital adequacy. This results in the improvement of capital
adequacy and promotion of appropriate risk-taking. It is anadvanced ERM concept that aims to attain a virtuous cycle.
By utilizing important risk management indicators, such as
the economic solvency ratio, return on required capital, and theeconomic internal rate of return in management, we implement
integrated management of capital, risk, and return.

CapitalEnhancementof capital

Appropriate
risk-taking

ReturnRisk
Stable profit• Comprehensive risk management policies and regulations
Fukoku Life’s Risk-Taking Statement lays out its management
policy-based risk tolerance. Meanwhile, the Company conducts
integrated risk management in conjunction with management
strategies based on the risk management rules set by the
Board of Directors.
We have formulated a set of risk management regulations
that define our basic concept of comprehensive risk
management, our broad risk management system, and theroles and authorities related to managing risk. Based on these,
we have devised practical directives for the implementation of
the rules for each type of risk.
Risk-Taking Statement
I. Risk-taking strategic goals• Make insurance underwriting the main source of revenue• Make sound and profitable asset management our principle• Provide the highest level of service in the industry throughdifferentiation by applying customer-centered values• Aim to strengthen capital in preparation for the future
II. Risk tolerance•R etain sufficient capital to act as a buffer, to ensurebusiness continuity• Use capital after deducting management reserve to coverlosses that may occur in the course of business operations• Risk management system
At Fukoku Life, the Board of Directors established the
Risk Management Committee to perform ERM. Several
subcommittees have been established under this committee
to manage the various risks that arise in business operations,and to conduct asset and liability management. The committee
consolidates and evaluates risks at the corporate level, before
considering the appropriate level of acceptable risk andrisk response. In addition, the committee has establisheda specialized risk management committee to help enhanceenterprise risk management.
Full-time directors are members of the Risk Management
Committee, which is chaired by the president. Other directors
chair subcommittees, creating a risk management structure
led by top management.
The specialized risk management committee is central tounderstanding the Group’s overall risk management situation.
At Fukokushinrai Life, the Company’s Risk Management
Committee secretariat and the secretariats of various
subcommittees directly monitor the management status of risks
under their jurisdiction.
Furthermore, the audit department veriﬁes that the risk
management system is functioning effectively.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

25

Non-consolidated Financial Statements
Non-consolidated Balance Sheets
Fukoku Mutual Life Insurance Company
As of March 31, 2022 and 2023

As of March 31,

2023

2022
Millions of yen

Assets:Cash and deposits:
Cash ………………………………………………………………………………
Bank deposits ……………………………………………………………………
Call loans ……………………………………………………………………………
Monetary claims bought …………………………………………………………
Money held in trust …………………………………………………………………
Securities:
Government bonds ………………………………………………………………
Local government bonds ………………………………………………………
Corporate bonds …………………………………………………………………
Stocks ……………………………………………………………………………
Foreign securities ………………………………………………………………
Other securities …………………………………………………………………
Loans:
Policy loans ………………………………………………………………………
Ordinary loans ……………………………………………………………………
Tangible fixed assets:
Land ………………………………………………………………………………
Buildings …………………………………………………………………………
Lease assets ………………………………………………………………………
Construction in progress ………………………………………………………
Other tangible fixed assets ……………………………………………………
Intangible fixed assets:
Software …………………………………………………………………………
Lease assets ………………………………………………………………………
Other intangible fixed assets …………………………………………………
Agency receivables …………………………………………………………………
Reinsurance receivables …………………………………………………………
Other assets:
Accounts receivable ……………………………………………………………
Prepaid expenses ………………………………………………………………
Accrued income …………………………………………………………………
Deposits …………………………………………………………………………
Differential account for futures trading ………………………………………
Derivatives ………………………………………………………………………
Cash collateral paid for financial instruments ………………………………
Suspense payments ……………………………………………………………
Rest of the other asset …………………………………………………………
Prepaid pension cost ………………………………………………………………
Deferred tax assets …………………………………………………………………
Allowance for possible loan losses ………………………………………………
Total assets…………………………………………………………………………
26

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2023
Millions of
U.S. dollars¥166
159,983
160,149
48,00080
26,070¥156
402,315
402,472130,000—
25,897

$1
3,012
3,014
973
—
193

2,102,521
102,771704,056
795,801
2,388,284
184,163
6,277,599

2,395,965
92,958542,134
836,501
1,756,176
175,4455,799,182

17,943
696
4,060
6,264
13,151
1,313
43,42948,629504,675
553,305

47,088477,104
524,193

352
3,573
3,925

150,195
89,202
265
1,767
3,974
245,405

149,747
89,583
928
3,649
3,412
247,321

1,121
670
6
27
25
1,852

19,914498
7,407
27,82115
135

24,148311
2,456
26,917
100
62

180
2
18
201
0
0

5,392
3,202
31,840
1,834
—
35
4,499
1,871
3,653
52,328912—(2,515)¥7,389,308

13,9404,281
29,089
1,801
147
1,481
—
1,621
3,153
55,516
1,614
13,829(826)¥7,226,280

104
32
217
13
1
11
—
12
23
415
12
103
(6)
$54,117

As of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Liabilities:

Policy reserves:
Reserve for outstanding claims ……………………………………………
Policy reserve ……………………………………………………………………
Reserve for dividends to policyholders ……………………………………
Reinsurance payables ……………………………………………………………
Subordinated bonds ……………………………………………………………
Other liabilities:
Cash received as collateral under securities lending transactions……
Corporate income tax payable ………………………………………………
Accounts payable ………………………………………………………………
Accrued expenses ………………………………………………………………
Unearned income ………………………………………………………………
Deposits received ………………………………………………………………
Guarantee deposits received …………………………………………………
Derivatives ………………………………………………………………………
Cash collateral received for financial instruments ………………………
Lease obligations ………………………………………………………………
Asset retirement obligations …………………………………………………
Suspense receipts ………………………………………………………………
Reserve for claims and other payments
Reserve for employees’ retirement benefits …………………………………
Reserve for price fluctuation ……………………………………………………
Deferred tax liabilities ……………………………………………………………
Deferred tax liabilities for land revaluation …………………………………
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 ofreal 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……………………………………………………

¥22,985
5,800,015
63,4115,886,412
87
241,935¥21,523
5,830,565
64,4205,916,509
46
241,935$161
43,664482
44,3080
1,811

160,9282,767
7,282
11,438419
6,523
13,97068,377
—
553
2,355
1,711
276,3283,400
24,850176,670
25,061
14,183
6,648,929

155,483
101
6,324
10,580437
6,592
13,700
3,005
3,822
345
2,328
1,319
204,041—
25,951
177,188—
14,164
6,579,836

1,164
0
47
79
3
49
102
22
28
2
17
9
1,528
—
194
1,326
—
106
49,276

12,000116,000
112

12,000116,000
112

89
868
0

3,370

3,463

25

4,800
20,00041,000

7,200
20,00041,000

53
149
307

206
767
57,078123,852
127,222
255,334

205
767
54,346
123,518
126,981
255,093

1
5
406
925
950
1,910

480,860
4,184
485,044740,379¥7,389,308

386,882
4,468
391,350
646,444¥7,226,280

2,897
33
2,930
4,841
$54,117

See notes to the non-consolidated financial statements.
FUKOKU MUTUAL LIFE INSURANCE COMPANY

27

Non-consolidated Statements of Operations
Fukoku Mutual Life Insurance Company
For the years ended March 31, 2022 and 2023

Year ended March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Ordinary revenues:
Premium and other income:Premium income …………………………………………………………………

¥486,302¥525,871$3,938

158

166

1

486,461

526,0373,939Interest on deposits …………………………………………………………

2

3

0

Interest and dividends on securities ………………………………………

140,247

136,8931,025Interest on loans ………………………………………………………………

8,048

8,237

61

Income from real estate for rent ……………………………………………

19,074

19,292

144

Reinsurance income ……………………………………………………………
Investment income:Interest, dividends and other income:

Other interest and dividends ………………………………………………
Gains on money held in trust, net ……………………………………………

237

343

2

167,609

164,768

1,233

817

—

—

Gains on trading securities, net…………………………………………………

1,664

348

2

Gains on sales of securities ……………………………………………………

13,92054,756410

Gains on redemption of securities, net………………………………………

65

11,70287

Foreign exchange gains, net……………………………………………………

1,617

—

—

Reversal of allowance for possible loan losses ………………………………

1,867

624

4

Other investment income ………………………………………………………

381

322

2

Gains on separate accounts, net ………………………………………………

6,391

2,174

16

194,336

234,698

1,757

Fund receipt from annuity rider ………………………………………………

2,704

1,270

9

Other ordinary revenues:
Proceeds from deferred insurance ……………………………………………

2,938

3,122

23

Reversal of reserve for outstanding claims ……………………………………

—

1,461

10

Reversal of reserve for claims and other payments …………………………

—

3,400

25

Others ……………………………………………………………………………

3,279

3,817

28

8,922

13,072

97689,719

773,808

5,795

Claims ……………………………………………………………………………

81,426

131,371983

Annuities …………………………………………………………………………

152,290

153,869

1,152

Benefits ……………………………………………………………………………

109,711

144,757

1,084

Surrenders ………………………………………………………………………

48,261

49,579371

Other payments …………………………………………………………………

24,15225,008

187

Reinsurance premiums …………………………………………………………

218

204

1

416,061

504,790

3,780

Total ordinary revenues …………………………………………………………
Ordinary expenses:
Claims and other payments:

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

3,434

—

—

Provision of policy reserves ……………………………………………………

70,50430,549228

Provision of interest portion of reserve for dividends to policyholders ……

13

13

0

¥73,952¥30,563$228

28

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Year ended March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Investment expenses:
Interest expenses ………………………………………………………………

¥4,402¥4,469$33

Losses on money held in trust, net ……………………………………………

—

161

1

Losses on sales of securities ……………………………………………………

15,06046,169345

Losses on valuation of securities ………………………………………………

344

3,608

27

Losses on redemption of securities, net ………………………………………

—

185

1

Losses on derivative instruments, net …………………………………………

7,746

11,22184

Foreign exchange losses, net …………………………………………………

—

8,231

61

Depreciation of real estate for rent and other assets ………………………

4,788

4,850

36

Other investment expenses ……………………………………………………

10,985

12,18591

43,32891,083682

90,77990,478

677

3,353

3,618

27

Operating expenses…………………………………………………………………
Other ordinary expenses:
Deferred annuity payments ……………………………………………………
Taxes ………………………………………………………………………………

7,472

7,546

56

Depreciation ……………………………………………………………………

10,657

11,38885

Provision of reserve for claims and other payments…………………………

3,400

—

—

Provision of reserve for employees’ retirement benefits……………………

750

399

2

Others ……………………………………………………………………………

1,212

1,426

10

26,84524,380182

Total ordinary expenses …………………………………………………………

650,967

741,296

5,551

Ordinary profits ……………………………………………………………………

38,75232,512

243

Gains on disposal of fixed assets………………………………………………

10

393

2

Total extraordinary gains…………………………………………………………

10

393

2

Losses on disposal of fixed assets ……………………………………………

430

178

1

Impairment losses ………………………………………………………………

46

32

0

Provision of reserve for price fluctuation ……………………………………

3,873

518

3

Extraordinary gains:

Extraordinary losses:

Total extraordinary losses…………………………………………………………

4,349

730

5

Surplus before income taxes ……………………………………………………

34,412

32,175240

Current ……………………………………………………………………………

11,069

3,096

23
(13)

Income taxes:
Deferred …………………………………………………………………………

(9,975)(1,793)

Total income taxes …………………………………………………………………

1,093

1,303

9

Net surplus for the year …………………………………………………………

¥33,319¥30,872$231

See notes to the non-consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

29

Non-consolidated Statements of Changes in Net Assets
Fukoku Mutual Life Insurance Company
For the years ended March 31, 2022 and 2023

Millions of yen
Foundation funds, surplus and others
Surplus
Other surplus

Reserve forrevaluation

Legal
reservefor future
lossesReserve forredemptionoffoundation
funds

Reserve fordividend
allowances

Reserve foradvanced
Accumulated depreciation offund for price real estate forfluctuation
tax purpose

Other
reserves

UnappropriatedsurplusTotal
surplusTotal
foundation
funds, surplus
and others¥112¥3,271¥2,400¥20,000¥41,000¥767¥59,102¥126,748¥254,860(32,744)(32,744)(32,744)

(99)

—

—

Payment of interest on foundation
funds�����������

(102)

(102)

(102)

Net surplus for the fiscal year��

33,31933,31933,319(2,400)

—

—

1

—

—

1

1

1

Foundation
funds

Accumulated
foundation
funds
redeemed

Balance at the beginning of the fiscal
year������������������������������������������������������ ¥12,000¥116,000

For the year ended March 31, 2022

¥207

Changes in the fiscal year
Additions to reserve for dividends
to policyholders�������
Additions to legal reserve for
future losses��������

99

Additions to reserve for redemptionof foundation funds�����

2,400

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

(1)

Reversal of revaluation reserve forland, net of tax�������
Net changes, excluding foundation
funds, surplus and others���

—

—

—

99

2,400

—

—

(1)

—

(2,024)473

473

Balance at the end of the fiscal year���� ¥12,000¥116,000¥112¥3,370¥4,800¥20,000¥41,000

¥206

¥767

¥57,078¥127,222¥255,334

Total changes in the fiscal year��

Millions of yen
Valuation and translation adjustments

For the year ended March 31, 2022

Balance at the beginning of the fiscal year��������������

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

Revaluation reserve forland, net of tax

Total valuation andtranslation adjustments

Total
net assets¥458,287¥4,185¥462,473¥717,333

Changes in the fiscal year
Additions to reserve for dividends to policyholders���������

(32,744)

Additions to legal reserve for future losses�������������

—Payment of interest on foundation funds�������������

(102)

Net surplus for the fiscal year������������������

33,319Additions to reserve for redemption of foundation funds������

—

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

—

Reversal of revaluation reserve for land, net of tax���������

1

Net changes, excluding foundation funds, surplus and others����

22,572(1)

22,571

22,571

Total changes in the fiscal year�������������������

22,572(1)

22,571

23,045

Balance at the end of the fiscal year����������������

¥480,860¥4,184¥485,044¥740,379

30

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Millions of yen
Foundation funds, surplus and others
Surplus
Other surplus

Reserve forrevaluation

Legal
reservefor future
lossesReserve forredemptionoffoundation
funds

Reserve fordividend
allowances

Reserve foradvanced
Accumulated depreciation offund for price real estate forfluctuation
tax purpose

Other
reserves

UnappropriatedsurplusTotal
surplusTotal
foundation
funds, surplus
and others¥112¥3,370¥4,800¥20,000¥41,000¥767¥57,078¥127,222¥255,334(30,726)(30,726)(30,726)

(93)

—

—

Payment of interest on foundation
funds�����������

(102)

(102)

(102)

Net surplus for the fiscal year��

30,87230,87230,872(2,400)

—

—

1

—

—

(284)

(284)

(284)

Foundation
funds

Accumulated
foundation
funds
redeemed

Balance at the beginning of the fiscal
year������������������������������������������������������ ¥12,000¥116,000

For the year ended March 31, 2023

¥206

Changes in the fiscal year
Additions to reserve for dividends
to policyholders�������
Additions to legal reserve for
future losses��������

93

Additions to reserve for redemptionof foundation funds�����

2,400

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

(1)

Reversal of revaluation reserve forland, net of tax�������
Net changes, excluding foundation
funds, surplus and others���

—

—

—

93

2,400

—

—

(1)

—

(2,732)

(240)

(240)

Balance at the end of the fiscal year���� ¥12,000¥116,000¥112¥3,463¥7,200¥20,000¥41,000

¥205

¥767

¥54,346¥126,981¥255,093

Total changes in the fiscal year��

Millions of yen
Valuation and translation adjustments

For the year ended March 31, 2023

Balance at the beginning of the fiscal year��������������

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

Revaluation reserve forland, net of tax

Total valuation andtranslation adjustments

Total
net assets¥480,860¥4,184¥485,044¥740,379

Changes in the fiscal year
Additions to reserve for dividends to policyholders���������

(30,726)

Additions to legal reserve for future losses�������������

—Payment of interest on foundation funds�������������

(102)

Net surplus for the fiscal year������������������

30,872

Additions to reserve for redemption of foundation funds������

—

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

—

Reversal of revaluation reserve for land, net of tax���������

(284)

Net changes, excluding foundation funds, surplus and others����

(93,978)284(93,694)(93,694)

Total changes in the fiscal year�������������������

(93,978)284(93,694)(93,935)

Balance at the end of the fiscal year����������������

¥386,882¥4,468¥391,350¥646,444

FUKOKU MUTUAL LIFE INSURANCE COMPANY

31

Millions of U.S. dollars
Foundation funds, surplus and others
Surplus
Other surplus

For the year ended March 31, 2023

Foundation
funds

Accumulated
foundation
funds
redeemed

Balance at the beginning of the fiscal
year������������������������������������������������������

$89

$868

Reserve forrevaluation

Legal
reservefor future
lossesReserve forredemptionoffoundation
funds

Reserve fordividend
allowances

$0

$25

$35

$149

Reserve foradvanced
Accumulated depreciation offund for price real estate forfluctuation
tax purpose

Other
reserves

UnappropriatedsurplusTotal
surplusTotal
foundation
funds, surplus
and others

$5

$427

$952

$1,912

(230)

(230)

(230)

(0)

—

—

Payment of interest on foundation
funds�����������

(0)

(0)

(0)

Net surplus for the fiscal year��

231

231

231

(17)

—

—

0

—

—

(2)

(2)

(2)

$307

$1

Changes in the fiscal year
Additions to reserve for dividends
to policyholders�������
Additions to legal reserve for
future losses��������

0

Additions to reserve for redemptionof foundation funds�����

17

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

(0)

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

—

—

—

0

17

—

—

(0)

—

(20)

(1)

(1)

Balance at the end of the fiscal year����

$89

$868

$0

$25

$53

$149

$307

$1

$5

$406

$950

$1,910Millions of U.S. dollars
Valuation and translation adjustments

For the year ended March 31, 2023

Balance at the beginning of the fiscal year��������������

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

Revaluation reserve forland, net of tax

Total valuation andtranslation adjustments

Total
net assets$3,601$31$3,632$5,544

Changes in the fiscal year
Additions to reserve for dividends to policyholders���������

(230)

Additions to legal reserve for future losses�������������

—Payment of interest on foundation funds�������������

(0)

Net surplus for the fiscal year������������������

231

Additions to reserve for redemption of foundation funds������

—

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

—

Reversal of revaluation reserve for land, net of tax���������

(2)

Net changes, excluding foundation funds, surplus and others����

(703)

2

(701)

(701)

Total changes in the fiscal year�������������������

(703)

2

(701)

(703)

Balance at the end of the fiscal year����������������

$2,897$33$2,930$4,84132

FUKOKU MUTUAL LIFE INSURANCE COMPANYNon-consolidated Statements of Surplus
Fukoku Mutual Life Insurance Company
For the years ended March 31, 2022 and 2023

Year ended March 31,

2023

2022
Millions of yen

Unappropriated surplus

2023
Millions of
U.S. dollars¥57,078¥54,346

$406

1

1

0

1

1

0

57,07954,347407

30,72628,002

209

Legal reserve for future losses ………………………………………………

93

85

0

Interest payment for foundation funds ………………………………………

102

102

0

2,400

2,400

17

2,400

2,400

17

2,595

2,587

19

Total of appropriation of surplus…………………………………………………

33,32130,589229

Unappropriated surplus carried forward………………………………………

¥23,758¥23,758$177

Reversal of voluntary surplus reserve:
Reversal of reserve for advanced depreciationof real estate for tax purpose………………………………………………… 

Total…………………………………………………………………………………
Appropriation of surplus
Reserve for dividends to policyholders…………………………………………
Net surplus:

Voluntary surplus reserve:
Reserve for redemption of foundation funds………………………………

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

FUKOKU MUTUAL LIFE INSURANCE COMPANY

33

Notes to the Non-consolidated Financial Statements
I. P
 resentation of the Non-consolidated Financial
Statements

1. Basis of presentation
The accompanying non-consolidated financial statements havebeen prepared from the accounts maintained by Fukoku MutualLife Insurance Company (the “Company”) in accordance withthe provisions set forth in the Insurance Business Act of Japanand its related rules and regulations and in conformity withaccounting principles generally accepted in Japan, which are
different in certain respects from accounting principles generally
accepted in countries and jurisdictions other than Japan.
In addition, the notes to the non-consolidated financial
statements include information which is not required underaccounting principles generally accepted in Japan but ispresented herein as additional information.
Amounts of less than one million yen have been rounded
down. As a result, the totals do not add up.
The translations of yen amounts into U.S. dollar amounts
are included solely for the convenience of the reader and havebeen made, as a matter of arithmetical computation only, at therate of ¥133.53 = US$1.00, the effective rate of exchange at thebalance sheet date of March 31, 2023. The translations should
not be construed as representations that such yen amounts
have been or could in the future be, converted into U.S. dollars
at that or any other rates.

II. Notes to the Non-consolidated Balance Sheets

1. (1) T he valuation of securities, including cash and deposits
and monetary claims bought which are equivalent tosecurities, and securities managed as trust assets inmoney held in trust, is as follows:i) Trading securities are stated at fair market value. Costsof their sales are determined by the moving averagemethod.
ii) Held-to-maturity debt securities are stated at amortizedcost under the straight-line method, cost being
determined by the moving average method.
iii) Investments in subsidiaries and affiliates are stated atcost, cost being determined by the moving averagemethod.
iv) Available-for-sale securities are stated at fair market
value based on the market prices at the end of the
fiscal year. Costs of their sales are determined by
the moving average method. Public and corporate
bonds (including foreign bonds) with differences
between their acquisition costs and fair values that areconsidered as adjustments of interest are stated atamortized cost (straight-line method) determined by themoving average method. However, stocks and othersecurities without quoted market prices are stated atcost, as determined using the moving average method.
Net unrealized gains or losses on these available-forsale securities, net of taxes, are recorded as a separate
component of net assets.
(2) Derivative instruments are stated at fair market value.

34

FUKOKU MUTUAL LIFE INSURANCE COMPANY(3) The Company revalued the land used in the operations basedon the Act for Revaluation of Land (Act No.34 promulgatedon March 31, 1998). The difference between fair value andbook value resulting from the revaluation, net of related
taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax isrecorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002
• Method of revaluation as prescribed for in Article 3
Paragraph 3 of the said Act:
Calculation is based on the appraisal value for property tax
set forth in Article 2 item 3 of the Enforcement Ordinanceof the Act for Revaluation of Land (Government OrdinanceNo.119 promulgated on March 31, 1998) and the roadrate set forth in Article 2 item 4 of the said Ordinance withcertain reasonable adjustments.
(4) Depreciation of tangible fixed assets is calculated by thefollowing methods.
• Tangible fixed assets (excluding lease assets): Decliningbalance method
However, buildings (excluding building attachments andstructures acquired on or before March 31, 2016) acquiredon or after April 1, 1998 are depreciated using Straight-line
method.
• Lease assets related to finance lease transactions that
do not transfer ownership: Straight-line method over thelease term with no residual value.
Other tangible fixed assets acquired for ¥100,000 or more
but less than ¥200,000 are depreciated equally over three
years.
(5) Assets and liabilities denominated in foreign currencies,
except for investments in subsidiaries and affiliates, aretranslated into Japanese yen at the effective exchange
rate prevailing at the balance sheet date. Investments in
subsidiaries and affiliates are translated into Japanese yen at
the exchange rate on the date of acquisition.
(6) Allowance for possible loan losses is provided in accordancewith the Company’s standards of self-assessment and writeoffs 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”), theCompany provides the remaining amounts of credits after
the direct write-off described below and the deductions of
the amount expected to be collected through the disposalof collateral or the execution of guarantees.
ii) F or 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 amounts

expected to be collected through the disposal ofcollateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, theCompany provides the amounts calculated by multiplying
the borrowers’ balance by the actual ratio of bad debt
losses on defaults during a certain past period.
All credits are assessed by the relevant departmentsin accordance with the Company’s standards of selfassessment on credit quality. The results of the assessment
are reviewed by the audit department, which is independentof business-related divisions. Subsequently, the allowancefor possible loan losses is provided based on the results ofthese assessments.
For the credits of legally bankrupt borrowers andsubstantially bankrupt borrowers, the amounts remaining
after deductions of collateral value or the amounts collectible
through the execution of guarantees are written-off directlyfrom the borrowers’ balances as the estimated uncollectible
amounts. The amount written-off as of March 31, 2022 and2023 were ¥0 million and ¥0 million (US$5 thousand).
(7) Reserve for employees’ retirement benefits and prepaid
pension cost are presented based on projected benefit
obligations and pension plan assets at the balance sheet
date.
The Company uses the following methods foramortizing retirement benefit obligations and retirement
benefit expenses:• Method for allocation of projected retirement benefits.................Benefit formula basis• Amortization period of actuarial gains and losses��10 years• Amortization period of prior service cost�����������������10 years(8) Reserve for price fluctuation is calculated in accordance with
Article 115 of the Insurance Business Act.
(9) Hedge accounting is based on “Accounting Standards for
Financial Instruments” (ASBJ Statement No. 10, July 4,2019). The Company applies a fair value hedge accounting
as a hedge against the risk of foreign exchange fluctuationin relation to bonds and others denominated in foreign
currencies, and a designated hedge accounting (“Furiate
shori”) for foreign currency swaps as a hedge against therisk of foreign exchange fluctuation in relation to bonds
denominated in foreign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio
analysis of comparing the fluctuations in the fair value orcash flows of hedged items and hedging instruments ismainly applied.
(10) Accounting of unrecognized actuarial differences andunrecognized prior service costs related to employees’
retirement benefits is different to the methods used forthese items in the consolidated financial statements.
(11) The Company accounts for consumption taxes by the
tax-exclusion method. The consumption taxes on certain
assets, which are not deductible from consumption taxes
withheld and that are stipulated to be deferred under the
Tax Act, are deferred as prepaid expenses and amortized

equally over five years. Consumption taxes other thandeferred consumption taxes are recognized as an expense
when incurred.
(12) Initial premium incomes are recorded by the relevant
amounts received when the premium incomes have been
received and the responsibilities on the insurance contract
have been commenced, in principal.
Subsequent premium incomes are also recorded as
the amount of payments that have been received.
Of premium incomes that have been received, theportion corresponding to the period that has yet to passas of the end of the fiscal year is accumulated as policy
reserve in accordance with Article 116 of the Insurance
Business Act and Article 69 Paragraph 1 Item 2 of the
Enforcement Regulation of the Insurance Business Act.
Premium incomes associated with the acceptance ofgroup annuities are recorded as amounts equivalent to thepolicy reserve received when accepting the transfers ofthese group annuities.
(13) Claims and other payments (excluding reinsurance
premiums) are recorded by the relevant amounts paid
when the cause for payment under the policy conditions is
occurred and the calculated amounts are paid based on thepolicy conditions.
In accordance with Article 117 of the Insurance
Business Act and Article 72 of the Enforcement Regulationof the Insurance Business Act, reserve for outstanding
claims are accumulated as for claims for which the Company
has a payment due but has not paid, or for which theoccurrence of cause for payment has not been reported but
the Company recognizes that insured payment has alreadyoccurred as of the end of the fiscal year.
Regarding claims for which the occurrence of cause forpayment has not been reported but the Company recognizes
that insured payment has already occurred (“IBNR reserves”),
the scope of payment of hospitalization benefits was changedin the fiscal year ended March 31, 2023, with respect tothose diagnosed with COVID-19 and were under the care ofa doctor or the like at an lodging facility or at home (“deemedhospitalization”). As a result of this change, an appropriate
amount of reserves cannot be obtained with the calculation
method set forth in the main rules in Article 1, Paragraph 1of the Notification of the Minister of Finance No.234, 1998(“IBNR Notification”). The Company therefore records theamount that was calculated using the following method,
pursuant to provisions in the proviso of Article 1, Paragraph 1of IBNR Notification (the “Proviso”).
(Overview of the calculation method)
The Company first deducts an amount pertaining todeemed hospitalization of policy holders other thanthose with high risk of severity (“4 categories”) from arequired amount of IBNR reserves and the amount of claim
payments for all the fiscal years, as set forth in the main
rules in Article 1, Paragraph 1 of IBNR Notification, andthen calculates in the same manner as in the main rules in
Article 1, Paragraph 1 of IBNR Notification.

FUKOKU MUTUAL LIFE INSURANCE COMPANY35

In addition, the amount pertaining to deemedhospitalization of the 4 categories which date of diagnosis
required for the above calculation is before September 25,
2022 is estimated by multiplying the amount for deemedhospitalization for those 65 years of age or older whose
diagnosis date is before September 25, 2022 by the ratio of
the amount for the four categories whose diagnosis date is on
or after September 26, 2022 and the amount for the deemedhospitalization for persons 65 years of age or older. However,
the amount related to 4 categories deemed hospitalizations
for co-insurance follower policies is estimated based on theamount of payments for leader policies.
Claims and other payments associated with theoutgoing transfer of group annuities are recorded as
amounts equivalent to the policy reserve transferred whenrecognizing the transfers of these group annuities.
(14) Policy reserve of the Company is accumulated in accordancewith the methods stated in the statement of calculation
procedures for Insurance Premiums and Policy Reserves(Article 4 Paragraph 2 Item 4 of the Insurance Business Act)
pursuant to Article 116 Paragraph 1 of the Insurance Business
Act to prepare for the future performance of obligations under
the insurance contracts for which the insurer’s responsibilities
have started as of the end of the fiscal year.
Premium reserves, one of the components of policy
reserve, are calculated by the following method.
i) In regard to the policies subject to the standard policy
reserve, the method as prescribed by the Commissionerof Financial Services Agency (Ministry of FinanceOrdinance No.48, 1996) is applied.
ii) In regard to the policies not subject to the standard policy
reserve, the net level premium method is applied.
In regard to the policy reserve accumulated pursuant
to Article 69 Paragraphs 1,2, and 4 of the Enforcement
Regulation of the Insurance Business Act, when the actualassumptions for long-term future cash flows (such asassumed incidence rate and assumed interest rate) deviate
from those assumptions set in the “statement of calculation
procedures for Insurance Premiums and Policy Reserves”
and policy reserve is considered to be possibly insufficient
to cover the future performance of obligations, additional
policy reserve is required to accumulate in accordance with
Article 69 Paragraph 5 of the Enforcement Regulation of the
Insurance Business Act. The following reserves have been
established in compliance with this regulation.
• Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies
that have begun paying annuities (excluding wife’s
annuity insurance additional rider), the Company has
reduced the assumed interest rate to 1.00% and funded
additional policy reserves. As of March 31, 2022, thebalance of these policy reserves was ¥72,419 million.
• Among whole life insurance policies with assumed
interest rates of 5.00% or higher following the fiscal
year ended March 31, 2022, the Company has reduced
assumed interest rates for policies with premiums that36

FUKOKU MUTUAL LIFE INSURANCE COMPANY

have been paid in full (excluding policies that have been
converted into paid-up or extended policies, single
premium policies, and policies for which premiums
have been waived) to 1.00% and funded additional
policy reserves of ¥107,284 million. The establishmentof these reserves rendered ¥1,589 million of additional
policy reserves set aside at the conclusion of the fiscal
year ended March 31, 2021 unnecessary. Accordingly,
the Company reversed this amount and transferred¥105,695 million (a higher amount) from contingency
reserves to additional policy reserves. Consequently, theestablishment of these policy reserves has had no impact
on provision of policy reserves, ordinary profits, andsurplus before income taxes.
•T he Company has also funded additional policy reserves
for certain whole life insurance policies that include
distribution of surplus every five years, new cancer riders,highly advanced medical riders and advanced medical
riders. As of March 31, 2022, the balance of these policy
reserves was ¥77 million.
•A mong individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies
that have begun paying annuities (excluding wife’s
annuity insurance additional rider), the Company has
reduced the assumed interest rate to 1.00% and funded
additional policy reserves. As of March 31, 2023, thebalance of these policy reserves was ¥71,649 million(US$536 million).
•A mong whole life insurance policies with assumed
interest rates of 5.00% or higher following the fiscal
year ended March 31, 2023, the Company has reduced
assumed interest rates for policies with premiums thathave been paid in full (excluding policies that have been
converted into paid-up or extended policies, single
premium policies, and policies for which premiums havebeen waived) to 1.00% and funded additional policy
reserves. As of March 31, 2023, the balance of thesepolicy reserves was ¥106,590 million (US$798 million).
•T he Company has also funded additional policy reserves
for certain whole life insurance policies that include
distribution of surplus every five years, new cancer riders,highly advanced medical riders and transplant medical
riders. As of March 31, 2023, the balance of these policy
reserves was ¥105 million (US$786 thousand).
Appointed actuary, for each fiscal year, verify whether
policy reserves have been reasonably accumulated inaccordance with Article 121 Paragraph 1 of the Insurance
Business Act and Article 80 of the Enforcement Regulationof the Insurance Business Act.
Contingency reserves, one of the components of policy
reserve, are accumulated pursuant to Article 116 of the
Insurance Business Act and Article 69 Paragraph 1 Item 3 ofthe Enforcement Regulation of the Insurance Business Act tocover risks that may accrue in the future in order to ensure
performing future obligations under the insurance contracts.

(15) Depreciation of intangible fixed assets is calculated by thefollowing methods.
•S oftware: Straight-line method over the estimated useful
lives.
•L ease assets related to finance lease transactions that
do not transfer ownership: Straight-line method over thelease term with no residual value.
2. The Company began applying the “Implementation
Guidance on Accounting Standard for Fair Value
Measurement” (ASBJ Statement No. 31, June 17,2021; hereinafter called “Implementation Guidance on
Accounting Standard for Fair Value Measurement”) fromthe beginning of the fiscal year. In accordance with thetransitional treatments prescribed in Paragraph 27-2 ofthe Implementation Guidance on Accounting Standard for
Fair Value Measurement, new accounting policies set forth
by the Implementation Guidance on Accounting Standard
for Fair Value Measurement will be applied prospectively.
As a result, certain investment trusts that had previously
been carried on the balance sheet at acquisition cost
are stated at fair value on the balance sheet from thefiscal year ended March 31, 2023. The Company has
observed no material impact from this application of the
Implementation Guidance on Accounting Standard for Fair
Value Measurement.
3. Asset management of the general accounts other than theseparate accounts stipulated in Article 118 Paragraph 1 ofthe Insurance Business Act is conducted on the principle
of prudent and profitable investments, considering public
and social responsibilities of the insurance business. Basedon this policy, the Company allocates the fund, securing
its liquidity, from the medium-to-long term viewpoints.
The Company is diversifying investments in assets suchas foreign securities, stocks and real estates within
the acceptable range of risks in order to enhance theprofitability, although yen-denominated interest bearing
assets including debt securities such as Japanese
government bonds and loans are the cores of the portfolios
under the asset liability management. Derivatives are mainly
used to hedge the market risk regarding spot-priced assets
and liabilities.
Major financial instruments including securities, loans
and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by
establishing internal control systems including various rules
pursuant to the “Three Basic Rules related to Enterprise
Risk Management” established by the Board of Directors.
Specifically, the Company eliminates excessive risk deviatingfrom the basic principle and secures the safety of theassets by utilizing control functions of the Financial andInvestment Risk Management Department towards the asset
management sections, monitoring the status of market risk
and credit risk periodically on a daily or monthly basis. In
addition, the Company quantifies the market risk and credit
risk using value-at-risk (VaR) method in order to control thepossible maximum losses which may arise from the holding
assets within a certain range of risk buffers.
The carrying amounts, fair values and their relateddifferences of major financial assets and liabilities in thegeneral account were as follows:

As of March 31,

2022

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�����������������������������������������
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�������������������������������������������������

Millions of yen
Carrying amount Fair value

Difference

¥80
80

¥81
81

¥0
0

25,07025,07025,07025,070——18,493760,097
5,288,571
6,067,162

18,493
847,316
5,288,571
6,154,381—
87,218—87,21848,629504,675
553,305
6,645,619
241,935
241,935

48,629521,484
570,114
6,749,647
245,074
245,074(0)16,80916,809104,028
3,139
3,139

(4,814)(63,528)¥(68,342)(4,814)(63,528)¥(68,342)——¥—*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair value ofsubordinated 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 inparentheses.
Notes: 1. Stocks without market prices, such as unlisted stocks, are not included in Securities of the above table. The amount ofthese stocks on the balance sheet as of March 31, 2022 was ¥73,986 million.
2. In accordance with the transitional treatments prescribed in Paragraph 27 of the “Implementation Guidance on AccountingStandard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019), investments in partnerships have not been
included in Securities of the above table. As of March 31, 2022, the amount of investments in partnerships included on thebalance sheet was ¥32,380 million.

FUKOKU MUTUAL LIFE INSURANCE COMPANY37

As of March 31,

2023

Money held in trust:
Trading securities��������������������������������������������������������������������
Total money held in trust�������������������������������������������������������
Securities:
Trading securities��������������������������������������������������������������������
Held-to-maturity debt securities�����������������������������������������
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�������������������������������������������������

Millions of yen
Carrying amount Fair value

Difference

2023

Millions of U.S. dollars
Carrying amount Fair value
Difference¥24,897
24,897¥24,897
24,897

¥—
—

$186
186

$186
186

$—
—

10,232
738,300
4,839,472
5,588,005

10,232808,660
4,839,472
5,658,365—
70,360—70,36076
5,529
36,242
41,84876
6,056
36,242
42,375

—
526
—
526

47,088477,104
524,193
6,137,096
241,935
241,935

47,088487,443534,532
6,217,795
238,498
238,498(0)
10,33910,33980,699(3,436)(3,436)

352
3,573
3,925
45,960
1,811
1,811

352
3,650
4,003
46,564
1,786
1,786

(0)
77
77
604
(25)
(25)

(683)
(840)
¥(1,524)

(683)
(840)
¥(1,524)

—
—
¥—

(5)
(6)
$(11)

(5)
(6)
$(11)

—
—
$—

*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair value of subordinated bonds because it is accounted for as an integral
part of the subordinated bonds that are the hedge items.
*2 A
 ssets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.
Notes: 1. Stocks without market prices, such as unlisted stocks, are not included in Securities of the above table.
The amount of these stocks on the balance sheet as of March 31, 2023 was ¥73,497 million (US$550 million).
2. In accordance with Paragraph 24-16 of the Implementation Guidance on Accounting Standard for Fair Value Measurement, investments in partnerships are not included in Securities of
the above table.
The amount of investments in partnerships included on the balance sheet as of March 31, 2023, was ¥30,957 million (US$231 million).
3. Investment trusts with real estate as investment trust properties which have applied Paragraph 24-9 of the Implementation Guidance on Accounting Standard for Fair Value Measurement
are included in Securities.

4. Matters concerning the breakdown of financial instruments by fair value level are as follows.
The fair values of financial instruments are classified into the following three levels according to the observability and materiality of
inputs used to measure fair value.
Fair Value Level 1: Fair values measured using (unadjusted) quoted prices in active markets for identical assets or liabilities
Fair Value Level 2: Fair values measured using directly or indirectly observable inputs other than Level 1 inputs
Fair Value Level 3: Fair values measured using material unobservable inputs
When multiple inputs with material impact are used to measure fair value, the resulting fair value is classified into the lowest fairvalue level into which any of these inputs can be categorized.
(1) Financial assets and liabilities with fair values recorded on the balance sheet were as follows:
As of March 31,

2022

Millions of yen
Fair value
Level 2
Level 3

Total

¥—
—

¥25,070
25,070¥——¥25,070
25,070

7,859
7,859

10,634
10,634——

18,493
18,493

1,374,059——
699,525
744,8123,372
2,821,770
2,829,629
2,829,629—
96,671
675,954—
1,129,151—
1,901,778
1,912,412
1,937,482————
28,139—28,13928,13928,1391,374,059
96,671
675,954699,525
1,902,104
3,372
4,751,688
4,770,181
4,795,251

—
—
(202)
¥(202)(68,160)
20—¥(68,140)

—
—
—
¥—

(68,160)20(202)¥(68,342)

Classification
Money held in trust:
Trading securities��������������������������
Total money held in trust�������������
Securities:
Trading securities:
Foreign securities����������������������
Total trading securities�������������
Available-for-sale securities:
Government bonds�������������������
Local government bonds���������
Corporate bonds�����������������������
Stocks������������������������������������������
Foreign securities����������������������
Other securities�������������������������
Total available-for-sale securities
Total securities�������������������������������
Assets total��������������������������������������������
Derivative instruments*:
Currency-related���������������������������
Interest-related�����������������������������
Stock-related���������������������������������
Total derivative instruments�������

Level 1* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented in parentheses.
Note: In accordance with the transitional treatments prescribed in Paragraph 26 of the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31, July 4, 2019), investment trusts have notbeen included in the figures above.
As of March 31, 2022, the amount of investment trusts included on the balance sheet was ¥536,883 million.

38

FUKOKU MUTUAL LIFE INSURANCE COMPANYAs of March 31,

2023

Total

¥—
—

¥24,897
24,897¥——¥24,897
24,897

$—
—

$186
186

$—
—

$186
186

—
—

10,232
10,232——

10,232
10,232

—
—

76
76

—
—

76
76

1,665,641——
739,891595,331
40,683
3,041,547
3,041,547
3,041,547—
86,960512,254—
1,053,931
112,692
1,765,839
1,776,071
1,800,969————
26,490—26,49026,49026,4901,665,641
86,960512,254739,891
1,675,753
153,375
4,833,876
4,844,109
4,869,007

12,473
—
—
5,541
4,458
304
22,77822,77822,778

—
651
3,836
—
7,892
843
13,224
13,30013,487

—
—
—
—
198
—
198
198
198

12,473
651
3,836
5,541
12,5491,148
36,20036,27736,463

—
—
(31)
(137)
¥(169)(1,402)47——¥(1,355)

—
—
—
—
¥—

(1,402)
47
(31)
(137)
¥(1,524)

—
—
(0)
(1)
$(1)

(10)
0
—
—
$(10)

—
—
—
—
$—

(10)
0
(0)
(1)
$(11)

Level 1

Money held in trust:
Trading securities��������������������������
Total money held in trust�������������
Securities:
Trading securities:
Foreign securities����������������������
Total trading securities�������������
Available-for-sale securities:
Government bonds�������������������
Local government bonds���������
Corporate bonds�����������������������
Stocks������������������������������������������
Foreign securities����������������������
Other securities�������������������������
Total available-for-sale securities
Total securities�������������������������������
Assets total��������������������������������������������
Derivative instruments*:
Currency-related���������������������������
Interest-related�����������������������������
Stock-related���������������������������������
Bond-related���������������������������������
Total derivative instruments�������

2023

Millions of yen
Fair value
Level 2
Level 3

Classification

Level 1Millions of U.S. dollars
Fair value
Level 2
Level 3Total

* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.
Note: Investment trusts with real estate as investment trust properties that have applied Paragraph 24-9 of the Implementation Guidance on Accounting Standard for Fair Value Measurement are notincluded in the figures above. The amount of the investment trusts on the balance sheet as of March 31, 2023 was ¥5,596 million (US$41 million). Reconciliation of balances from the beginningof the current fiscal year to balances as of March 31, 2023 for the investment trusts were as follows:2023

As of March 31,

Millions of yen¥3,654
441
1,500
1,500
¥5,596

Balance at the beginning of the fiscal year����������������������������������������������������������������������������
Changes in net unrealized gains or losses�������������������������������������������������������������������������
Purchase, sales, and redemption����������������������������������������������������������������������������������������
Purchase������������������������������������������������������������������������������������������������������������������������������
Balance at the end of the fiscal year��������������������������������������������������������������������������������������

2023

Millions of U.S. dollars
$27
3
11
11
$41

(2) Financial assets and liabilities with fair values not recorded on the balance sheet were as follows:
As of March 31,

2022

Classification
Level 1

Monetary claims bought:
Claims treated as loans.����������������������
Total monetary claims bought�����������
Securities:
Held-to-maturity debt securities:
Government bonds��������������������������
Local government bonds����������������
Corporate bonds������������������������������
Foreign securities�����������������������������
Total held-to-maturity debt securities
Total securities �������������������������������������
Loans:
Policy loans�������������������������������������������
Ordinary loans��������������������������������������
Total loans���������������������������������������������
Assets total���������������������������������������������������
Subordinated bonds��������������������������������
Liabilities total����������������������������������������������

Millions of yen
Fair value
Level 2
Level 3

Total

¥—
—

¥—
—

¥81
81

¥81
81

796,339——
20,878817,218
817,218—
7,824
20,6101,663
30,09830,098

—
—
—
—
—
—

796,339
7,824
20,61022,541
847,316
847,316———
817,218—¥————
30,098245,074¥245,074

48,629521,484
570,114570,196—¥—

48,629521,484
570,114
1,417,512
245,074¥245,074

FUKOKU MUTUAL LIFE INSURANCE COMPANY39

As of March 31,

2023

Level 1Millions of yen
Fair value
Level 2
Level 3¥780,191——
780,191
780,191¥—
7,357
21,11028,46828,468———780,191—¥————
28,468238,498¥238,498

Classification
Securities:
Held-to-maturity debt securities:
Government bonds��������������������������
Local government bonds����������������
Corporate bonds������������������������������
Total held-to-maturity debt securities
Total securities �������������������������������������
Loans:
Policy loans�������������������������������������������
Ordinary loans��������������������������������������
Total loans���������������������������������������������
Assets total���������������������������������������������������
Subordinated bonds��������������������������������
Liabilities total����������������������������������������������

(3) Explanation of valuation techniques and inputs used tomeasure fair valuei) Securities (including deposits and monetary claims bought
which are treated as securities based on “AccountingStandards for Financial Instruments” [ASBJ Statement
No.10, July 4, 2019])
The fair values of securities for which unadjusted quoted
market prices in active markets are available (primarily
listed stocks and government bonds [including someforeign securities]) are classified as Fair Value Level 1.
Meanwhile, the fair values of securities for which quoted
market prices are available, but are not available in active
markets, are classified as Fair Value Level 2 (This category
primarily includes local government bonds and corporate
bonds [including some foreign securities]). When quoted
market prices are not available for securities, prices
obtained from third parties (mainly from information
vendors and financial institutions with which the Company
conducts business) and determined to have beenmeasured in accordance with prescribed accounting
standards are used to measure the fair values of thesesecurities. If the inputs used to measure the fair value of agiven security are material but unobservable, the resulting
fair value is classified as Fair Value Level 3.
ii) Money held in trust
In principle, the fair values of securities managed as trust
assets and classifed as money held in trust are measured
using the Company's prescribed method for determining
the value of securities. These fair values are categorized
as Fair Value Level 2.
iii) Loans
The fair values of policy loans are deemed to approximatebook values, considering estimated repayment period andinterest rate conditions since their repayment deadlines
have not been set up due to the characteristics that theloans are limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values ofpolicy loans.
The fair values of floating interest rate loans among
the ordinary loans approximate the book values because

40

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2023

Millions of U.S. dollars
Fair value
Level 2
Level 3

Total

Level 1

Total

¥—
—
—
—
—

¥780,191
7,357
21,110808,660
808,660$5,842
—
—
5,842
5,842

$—
55
158
213
213

$—
—
—
—
—

$5,842
55
158
6,056
6,056

47,088487,443534,532
534,532—¥—

47,088487,443534,532
1,343,192
238,498¥238,498

—
—
—
5,842
—
$—

—
—
—
213
1,786
$1,786

352
3,650
4,003
4,003
—
$—

352
3,650
4,003
10,0591,786$1,786the market interest rates are reflected in future cash
flows in a short period. Therefore, the fair values offloating interest rate loans are based on their book values.
The fair values of fixed interest rate loans are primarily
measured by discounting the future cash flows to thepresent values.
The fair values of loans from legally bankrupt
borrowers, substantially bankrupt borrowers and not
currently bankrupt borrowers are computed by deducting
the amount of the allowance for possible loan losses fromthe book values before direct write-offs.
If the impact of unobservable inputs used to measure
the fair values of loans is determined to be material, theresulting fair values are classified as Fair Value Level 3.
Otherwise, they are categorized as Fair Value Level 2.
iv) Subordinated bonds
The fair values of corporate bonds issued by the Company
are classified as Fair Value Level 2 and are measured
using the same method applied to securities.
v) Derivative instruments
The fair values of derivative instruments for which
unadjusted quoted market prices in active markets
are available (primarily exchange-traded futures andoptions) are classified as Fair Value Level 1. However,most derivative instruments are traded over the counterand have no quoted market prices. Accordingly, prices
obtained from third parties (mainly from information
vendors and financial institutions with which theCompany conducts business) and determined tohave been measured in accordance with prescribedaccounting standards are used to measure the fairvalues of these derivative instruments. Fair values ofderivative instruments that were measured using only
observable inputs or with unobservable inputs considered
to be immaterial are classified as Fair Value Level 2.
Meanwhile, fair values of derivative instruments that havebeen measured using material unobservable inputs are
categorized as Fair Value Level 3.

(4) Information concerning fair values of financial assets and liabilities that have been recorded on the balance sheet and classified as
Fair Value Level 3i) Quantitative information regarding material unobservable inputs
When measuring fair value, the Company does not adjust quoted prices obtained from third parties and does not make estimates
related to inputs that it cannot observe. Accordingly, quantitative information regarding material unobservable inputs have been
omitted.
ii) Reconciliation of beginning to end of balance as of March 31, 2022 and 2023, and the valuation gains or losses recognized in
the statements of operations for the respective fiscal years were as follows:Year ended March 31,

2022

Balance at the beginning of the current fiscal year����������
Gains or losses during the fiscal year�����������������������������
Values recognized as gains or loses*��������������������������
Changes in net unrealized gains or losses���������������������
Balance at the end of the current fiscal year��������������������

Millions of yen
Securities,
Available-for-saleTotal
securities,
Foreign securities¥29,312(10)(10)(1,162)¥28,139¥29,312(10)(10)(1,162)¥28,139* These amounts are included in investment income and investment expenses in the non-consolidated statements of operations for the
fiscal year ended March 31, 2022.

2023

Balance at the beginning of the current fiscal year����������
Gains or losses during the fiscal year�����������������������������
Values recognized as gains or loses*��������������������������
Changes in net unrealized gains or losses���������������������
Balance at the end of the current fiscal year��������������������

Year ended March 31,

Millions of yen
Securities,
Available-for-saleTotal
securities,
Foreign securities¥28,139(10)(10)(1,638)¥26,490¥28,139(10)(10)(1,638)¥26,490

2023

Millions of U.S. dollars
Securities,
Available-for-saleTotal
securities,
Foreign securities

$210
(0)
(0)
(12)
$198

$210
(0)
(0)
(12)
$198

* These amounts are included in investment income and investment expenses in the non-consolidated statements of operations for the fiscal year ended March 31, 2023.

iii) Explanation of the valuation process for fair value
The Company's asset management division is
responsible for the formulation of policies and procedures
related to the measurement of fair value and theactual measurement of fair value. These fair values
are subsequently checked by the risk management
department to ensure their appropriateness andcompliance with relevant policies and procedures.
The Company verifies the appropriateness of the fairvalues it measures using a variety of suitable methods,
which include comparing quoted market prices obtained
from different third parties; confirming techniques andinputs utilized for calculation; and further comparing
measured fair values with the fair values of similar
financial instruments.
iv) Explanation of the impact on fair value in case of change
in material unobservable inputs
When measuring fair value, the Company does not adjust
quoted prices obtained from third parties and does notmake estimates related to inputs that it cannot observe.
Accordingly, it has omitted information concerning
impact on fair value stemming from changes in material
unobservable inputs.

5. The Company holds investment and rental properties suchas office buildings in Tokyo and other areas. The carrying
amounts and the fair values of investment and rental
properties were ¥196,610 million and ¥328,744 million as ofMarch 31, 2022, and ¥199,666 million (US$1,495 million)and ¥351,564 million (US$2,632 million) as of March 31,
2023, respectively. The fair value is mainly based on the value
calculated by the Company in accordance with real estateappraisal standards which includes some adjustments using
the reference prices.
The amount corresponding to asset retirement
obligations included in the carrying amount of investment andrental properties were ¥372 million as of March 31, 2022, and¥327 million (US$2 million) as of March 31, 2023, respectively.
6. The amount of securities lent under lending agreements were¥621,280 million and ¥504,760 million (US$3,780 million) as
of March 31, 2022 and 2023, respectively.
7. The total amount of claims against bankrupt and quasibankrupt obligors, claims with collection risk, delinquent loans
past three months or more, and restructured loans were
¥3,759 million and ¥1,236 million (US$9 million) as March
31, 2022 and 2023, respectively. The details are as follows.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

41i) The balance of claims against bankrupt and quasi-bankrupt
obligors were ¥143 million and ¥130 million (US$975
thousand) as of March 31, 2022 and 2023, respectively.
Of which, the estimated uncollectible amountwritten-off were ¥0 million and ¥0 million (US$5
thousand) as of March 31, 2022 and 2023, respectively.
Claims against bankrupt and quasi-bankrupt
obligors are loans to borrowers who are subject tobankruptcy, corporate reorganization or rehabilitation orother similar proceedings and other borrowers in serious
financial difficulties.
ii) The balance of claims with collection risk were ¥1,999
million and ¥544 million (US$4 million) as of March 31,
2022 and 2023, respectively.
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 intereston the loans will be recovered.
iii) There was no balance of delinquent loans past three months
or more as of March 31, 2022 and 2023, respectively.
Delinquent loans past three months or more areloans for which interest payments or repayments ofprincipal are delinquent for three months or morefrom the due date under the terms of the related loan
agreements, excluding those loans classified as claims
against bankrupt and quasi-bankrupt obligors, claims
with collection risk.
iv) The balance of restructured loans were ¥1,616 millionand ¥561 million (US$4 million) as of March 31, 2022
and 2023, respectively.
Restructured loans are loans for which certain
concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date forrepayments of principal or interest payment, waiverof claim or other terms, have been negotiated for the
purpose of assisting and supporting the borrowers
in the restructuring of their business. This category
excludes loans classified as claims against bankrupt andquasi-bankrupt obligors, claims with collection risk, anddelinquent loans past three months or more.
8. Accumulated depreciation of tangible fixed assets were¥178,381 million and ¥182,618 million (US$1,367 million)
as of March 31, 2022 and 2023, respectively.

42

FUKOKU MUTUAL LIFE INSURANCE COMPANY

9. Total assets in separate accounts provided for in Article 118of the Insurance Business Act were ¥112,487 million and¥118,783 million (US$889 million) as of March 31, 2022
and 2023, respectively. The amounts of separate accountliabilities were the same as separate account assets.
10. The total amounts of receivables from/payables tosubsidiaries were ¥2,334 million and ¥2,714 million asof March 31, 2022, and ¥2,405 million (US$18 million)and ¥1,891 million (US$14 million) as of March 31, 2023,
respectively.
11. Deferred tax assets and deferred tax liabilities as of March
31, 2022 were ¥170,333 million and ¥190,417 million,
respectively. Valuation allowance for deferred tax assets
was ¥4,976 million.
Major components of deferred tax assets were¥98,854 million of policy reserves, ¥49,467 million ofreserve for price fluctuation and ¥12,184 million of reservefor employees’ retirement benefits as of March 31, 2022.
Major component of deferred tax liabilities was¥185,335 million of net unrealized gains on available-forsale securities as of March 31, 2022.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2022 were 28.0% and 3.2%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-25.0% of reserve for dividends to policyholders.
Deferred tax assets and deferred tax liabilities as ofMarch 31, 2023 were ¥172,319 million (US$1,290 million)and ¥153,674 million (US$1,150 million), respectively.
Valuation allowance for deferred tax assets was ¥4,815
million (US$36 million).
Major components of deferred tax assets were
¥101,887 million (US$763 million) of policy reserves,¥49,612 million (US$371 million) of reserve for pricefluctuation and ¥12,959 million (US$97 million) of reservefor employees’ retirement benefits as of March 31, 2023.
Major component of deferred tax liabilities was¥148,218 million (US$1,110 million) of net unrealized gains
on available-for-sale securities as of March 31, 2023.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2023 were 28.0% and 4.1%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-24.4% of reserve for dividends to policyholders.

12. Changes in reserve for dividends to policyholders were as follows:Year ended March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Balance at the beginning of the fiscal year����������������������������������������������������������������

¥63,232¥63,411$474

Transfer from surplus in the previous fiscal year�������������������������������������������������������

32,74430,726230

Dividend payments to policyholders during the fiscal year��������������������������������������

(32,580)(29,731)(222)

Increase in interest���������������������������������������������������������������������������������������������������������

13

13

0

Balance at the end of the fiscal year���������������������������������������������������������������������������

¥63,411¥64,420$482

13. The amount of stocks of subsidiaries were ¥64,787 millionand ¥64,787 million (US$485 million) as of March 31, 2022
and 2023, respectively.

“policy reserve for ceded reinsurance”) were ¥23 millionand ¥21 million (US$160 thousand) as of March 31, 2022
and 2023, respectively.

14. Assets pledged as collateral as of March 31, 2022 were¥225,740 million of securities.
Secured debts as of March 31, 2022, were ¥166,881
million.
These amounts include ¥150,826 million of investments
in securities deposited and ¥160,928 million of cash received
as collateral under securities lending transactions secured
by cash as of March 31, 2022.
Assets pledged as collateral as of March 31, 2023 were
¥175,557 million (US$1,314 million) of securities.
Secured debts as of March 31, 2023, were ¥161,480
million (US$1,209 million).
These amounts include ¥147,552 million (US$1,105
million) of investments in securities deposited and ¥155,483
million (US$1,164 million)of cash received as collateral
under securities lending transactions secured by cash as ofMarch 31, 2023.

16. The total amounts of adjustment items for redemption offoundation funds and appropriation of net surplus defined in
Article 30 Paragraph 2 of the Enforcement Regulation of the
Insurance Business Act were ¥485,157 million and ¥391,462
million (US$2,931 million) as of March 31, 2022 and 2023,
respectively.

15. Reserve for outstanding claims for the reinsurance contracts
provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act(hereinafter called “reserve for outstanding claims forceded reinsurance”) were ¥0 million and ¥0 million (US$2
thousand) as of March 31, 2022 and 2023, respectively.
Policy reserve for the reinsurance contracts provided inaccordance with Article 71 Paragraph 1 of the Enforcement
Regulation of the Insurance Business Act (hereinafter called

17. There were unused commitment line agreements underwhich the Company is the lender of ¥11,492 million and¥8,604 million (US$64 million) as of March 31, 2022 and2023, respectively.
18. Repayments of subordinated bonds are subordinated toother obligations.
At the Board of Directors meeting held on June 29,2023, the Company resolved to issue subordinated bonds
up to US$500 million by the end of March 2024 as wellas to redeem US$500 million in subordinated bonds on
September 19, 2023 prior to the maturity date.
19. The future contribution to the Life Insurance Policyholders
Protection Corporation of Japan under Article 259 of the
Insurance Business Act was estimated at ¥8,181 million asof March 31, 2022.
The contribution is recognized as operating expenses
when contributed.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

43

20. Matters Related to Employees’ Retirement Benefits(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, the Company has a defined benefit corporate pension plan and retirement
lump-sum payments. As for a defined contribution plan for these employees, the Company also has a defined contribution pension
plan.
As for a defined benefit plan for sales employees, the Company has retirement lump-sum payments.
The Company places a retirement benefit trust in relation to the retirement lump-sum grant plan for sales employees.
The simplified method for calculating retirement benefit obligation is applied to a portion of the Company’s retirement lump-sum
grant plans.
(2) Defined Benefit Plani) Reconciliation of beginning and end of balance of retirement benefit obligation

As of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Retirement benefit obligation at the beginning of the fiscal year��������������������������

¥90,576¥90,644$678

Service cost����������������������������������������������������������������������������������������������������������������������

3,657

3,639

27

Interest cost���������������������������������������������������������������������������������������������������������������������

541

542

4

Actuarial differences occurred during the fiscal year�����������������������������������������������

47

(12)

(0)

Retirement benefit payments���������������������������������������������������������������������������������������

(4,178)(4,386)(32)

Retirement benefit obligation at the end of the fiscal year�������������������������������������

¥90,644¥90,426$677ii) Reconciliation of beginning and end of balance of pension plan assets

As of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Pension plan assets at the beginning of the fiscal year�������������������������������������������

¥62,244¥63,886$478

Expected return on pension plan assets���������������������������������������������������������������������

1,202

1,232

9

Actuarial differences occurred during the fiscal year�����������������������������������������������

956

2,410

18

Contributions by the employer�������������������������������������������������������������������������������������

1,088

1,075

8

Retirement benefit payments���������������������������������������������������������������������������������������

(1,605)(2,134)(15)

Pension plan assets at the end of the fiscal year������������������������������������������������������

¥63,886¥66,470$497iii) Reconciliation of retirement benefit obligation and pension plan assets with reserve for employees’ retirement benefits andprepaid pension cost presented on the non-consolidated balance sheet
As of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

a. Funded plan retirement benefit obligation������������������������������������������������������������

¥78,793¥78,820$590

b. Pension plan assets����������������������������������������������������������������������������������������������������

(63,886)(66,470)(497)

c. (a + b)����������������������������������������������������������������������������������������������������������������������������

14,906

12,34992d. Unfunded plan retirement benefit obligation��������������������������������������������������������

11,85011,60686e. Unrecognized actuarial differences����������������������������������������������������������������������

(2,774)421

3

f. Unrecognized prior service cost�����������������������������������������������������������������������������

(45)

(40)

(0)

h. Reserve for employees’ retirement benefits����������������������������������������������������������

23,937
24,85024,33725,951

182
194

i. Prepaid pension cost��������������������������������������������������������������������������������������������������

(912)(1,614)(12)

j. Net amount of liabilities and assets presented
on the non-consolidated balance sheet���������������������������������������������������������������

¥23,937¥24,337$182

g. Net amount of liabilities and assets presented
on the non-consolidated balance sheet���������������������������������������������������������������

44

FUKOKU MUTUAL LIFE INSURANCE COMPANY

iv) Breakdown of retirement benefit gains and losses

As of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Service cost.....................................................................................................................

¥3,657¥3,639$27

Interest cost....................................................................................................................

541

542

4

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

(1,202)(1,232)(9)

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

1,428

772

5

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

(13)

5

0

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

¥4,410¥3,726$27v) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:

As of March 31,

2022

2023

Domestic stocks.............................................................................................................

42.2%

45.1%

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

31.1%

30.0%

Domestic bonds.............................................................................................................

9.6%

9.4%

Foreign stocks.................................................................................................................

10.3%

8.3%

Assets under joint management.................................................................................

3.7%

3.7%

Foreign bonds.................................................................................................................

3.1%

3.5%

Total..................................................................................................................................

100.0%

100.0%

Within the total of pension assets as of March 31, 2022 and 2023, 35.7% and 38.3% of these amounts are accounted for by theretirement benefit trust established in relation to the retirement lump-sum payments plan for sales employees, respectively.
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 the present and future
allocation of pension plan assets, and the present and expected future long-term rate of return on a variety of assets that makes
up the pension assets.
vii) Underlying actuarial assumptions
Main underlying actuarial assumptions were as follows:

As of March 31,

2022

2023

0.6%

0.6%

Defined Benefit Plan..................................................................................................

3.0%

3.0%

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

0.0%

0.0%

Discount rate..................................................................................................................
Expected long-term rate of return on pension plan assets(3) Defined Contribution Plan
The required contribution amount by the Company to the defined contribution plan were ¥222 million and ¥219 million (US$1 million)
as of March 31, 2022 and 2023, respectively.

III. N otes to the Non-consolidated Statements of Operations

1. The total amounts of revenues and expenses in connection with subsidiaries were ¥1,326 million and ¥8,687 million for the year
ended March 31, 2022, and ¥1,804 million (US$13 million) and ¥9,116 million (US$68 million) for the year ended March 31,
2023, respectively.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

45

2. The details of gains on sales of securities were as follows:Year ended March 31,

2023

2022

2023
Millions ofMillions of yen

U.S. dollars

Domestic bonds.............................................................................................................

¥6,543¥7,576$56

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

3,932

16,946126

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

3,444

30,203

226

Others..............................................................................................................................

¥—

¥29

$0

3. The details of losses on sales of securities were as follows:Year ended March 31,

2023

2022

2023
Millions ofMillions of yen

U.S. dollars¥10,732$80

Domestic bonds.............................................................................................................

¥5,343

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

7,414

339

2

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

2,302

34,777260

Others..............................................................................................................................

¥—

¥319

$2

4. The details of losses on valuation of securities were as follows:Year ended March 31,

2023

2022

2023
Millions ofMillions of yen

U.S. dollars

Domestic bonds.............................................................................................................

¥—

¥593

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

302

610

4

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

¥42¥2,403$18$4

5. For the year ended March 31, 2022, in calculating the provision of reserve for outstanding claims, a reversal of reserves foroutstanding claims reinsured of ¥3 million was added. In calculating the provision of policy reserves, a reversal of reserves for policy
reserves reinsured of ¥7 million was added.
For the year ended March 31, 2023, in calculating the reversal of reserve for outstanding claims, a reversal of reserve foroutstanding claims for ceded reinsurance of ¥0 million (US$2 thousand) was deducted. In calculating the provision of policy
reserves, a reversal of policy reserve for ceded reinsurance of ¥1 million (US$13 thousand) was added.
6. The details of gains on trading securities were as follows:Year ended March 31,

2023

2022

2023
Millions ofMillions of yen

U.S. dollars

Interest, dividends and other income........................................................................

¥753

¥455

Gains on sales of trading securities............................................................................

0

—

$3
—

Losses on sales of trading securities..........................................................................

—

(2)

(0)

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

—

549

4

Losses on redemption of trading securities..............................................................

(1,671)——

Gains on valuation of trading securities.....................................................................

2,581

—

—

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

¥—¥(653)$(4)

7. Gains on money held in trust for the year ended March 31, 2022 included valuation gains of ¥0 million.
Losses on money held in trust for the year ended March 31, 2023 included valuation losses of ¥0 million (US$0 thousand).
8. Losses on derivative instruments for the year ended March 31, 2022 included valuation losses of ¥1,419 million.
Losses on derivative instruments for the year ended March 31, 2023 included valuation gains of ¥4,130 million (US$30 million).

46

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Report of Independent Auditors

FUKOKU MUTUAL LIFE INSURANCE COMPANY

47

48

FUKOKU MUTUAL LIFE INSURANCE COMPANY

FUKOKU MUTUAL LIFE INSURANCE COMPANY

49

Consolidated Financial Statements
Consolidated Balance Sheets
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
As of March 31, 2022 and 2023

As of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Assets:Cash and deposits.....................................................................................................

¥323,128¥524,841$3,930Call loans.....................................................................................................................

48,000130,000

973

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

80

—

—

Money held in trust....................................................................................................

26,07025,897

193

Securities.....................................................................................................................

7,697,988

7,321,344

54,829Loans............................................................................................................................

556,577

527,561

3,950

Land........................................................................................................................

150,195

149,747

1,121

Buildings.................................................................................................................

89,37989,751

672

Lease assets..........................................................................................................

298

991

7

Construction in progress.....................................................................................

1,767

3,649

27

Other tangible fixed assets.................................................................................

4,125

3,583

26

245,765

247,723

1,855

Software.................................................................................................................

19,65723,558176

Lease assets..........................................................................................................

3,486

2,635

19

Tangible fixed assets:

Intangible fixed assets:

7,466

2,497

18

30,60928,690214

Agency receivables....................................................................................................

0

0

0

Reinsurance receivables...........................................................................................

175

83

0

Other assets................................................................................................................

58,39761,085457

Net defined benefit assets.......................................................................................

822

1,184

8

Deferred tax assets....................................................................................................

1,831

16,131

120

Allowance for possible loan losses.........................................................................

(2,516)

(826)

(6)

Total assets.................................................................................................................

¥8,986,931¥8,883,718$66,529

Other intangible fixed assets..............................................................................

50

FUKOKU MUTUAL LIFE INSURANCE COMPANYAs of March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Liabilities:
Policy reserves:
Reserve for outstanding claims.........................................................................

¥27,719¥26,326$197

Policy reserve........................................................................................................

7,356,399

7,449,355

55,787

Reserve for dividends to policyholders.............................................................

63,41164,420482

Reserve for dividends to policyholders (subsidiary)......................................

322

304

2

7,447,853

7,540,406

56,469Agency payables........................................................................................................

165

461

3

Reinsurance payables...............................................................................................

104

60

0

Subordinated bonds..................................................................................................

241,935

241,935

1,811

Other liabilities...........................................................................................................

281,058

208,704

1,562

Reserve for claims and other payments................................................................

3,432

—

—

Net defined benefit liabilities...................................................................................

27,67725,220188

Reserve for price fluctuation....................................................................................

187,692

188,538

1,411

Deferred tax liabilities...............................................................................................

25,1880

0

Deferred tax liabilities for land revaluation...........................................................

14,183

14,164106

Total liabilities............................................................................................................

8,229,290

8,219,491

61,555

Foundation funds.......................................................................................................

12,00012,00089

Net assets:
Accumulated foundation funds redeemed...........................................................

116,000

116,000

868

Reserve for revaluation.............................................................................................

112

112

0

Consolidated surplus.................................................................................................

132,765

133,303

998

Total foundation funds, surplus and others.....................................................

260,877

261,415

1,957

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

486,644

390,148

2,921

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

4,184

4,468

33

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

(312)

(58)

(0)

Accumulated remeasurements of defined benefit plans...................................

(2,030)274

2Total accumulated other comprehensive income..........................................

488,486

394,833

2,956

Non-controlling interests.........................................................................................

8,276

7,977

59

Total net assets.........................................................................................................

757,640664,226

4,974

Total liabilities and net assets................................................................................

¥8,986,931¥8,883,718$66,529

See notes to the consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

51

Consolidated Statements of Operations
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the year ended March 31, 2022 and 2023

Year ended March 31,

2023

2022
Millions of yen

Ordinary revenues:
Premium and other income.....................................................................................
Investment income:Interest, dividends and other income...............................................................
Gains on money held in trust, net.....................................................................
Gains on trading securities, net.........................................................................
Gains on sales of securities.................................................................................
Gains on redemption of securities, net............................................................
Foreign exchange gains, net...............................................................................
Reversal of allowance for possible loan losses................................................
Other investment income...................................................................................
Gains on separate accounts, net.......................................................................
Other ordinary revenues...........................................................................................
Total ordinary revenues...........................................................................................
Ordinary expenses:
Claims and other payments:
Claims.....................................................................................................................
Annuities................................................................................................................
Benefits..................................................................................................................
Surrenders.............................................................................................................
Other payments....................................................................................................
Provision of policy reserve and others:
Provision of reserve for outstanding claims.....................................................
Provision of policy reserves................................................................................
Provision of interest portion of reserve for dividends to policyholders......
Provision of interest portion of reserve for dividends to policyholders(subsidiary)..........................................................................................................
Investment expenses:
Interest expenses.................................................................................................
Losses on money held in trust, net...................................................................
Losses on sales of securities...............................................................................
Losses on valuation of securities.......................................................................
Losses on redemption of securities, net...........................................................
Losses on derivative instruments, net..............................................................
Foreign exchange losses, net..............................................................................
Depreciation of real estate for rent and other assets....................................
Other investment expenses................................................................................
Operating expenses...................................................................................................
Other ordinary expenses..........................................................................................
Total ordinary expenses..........................................................................................
Ordinary profits.........................................................................................................

52

FUKOKU MUTUAL LIFE INSURANCE COMPANY

2023
Millions of
U.S. dollars¥632,055¥760,603$5,696

185,514817
1,664
16,760
65
1,616
1,867
381
6,391
215,080
10,762857,898

182,754—348
55,764
11,702
—
624
322
2,174
253,691
14,327
1,028,622

1,368
—
2
417
87
—
4
2
16
1,899
107
7,703

91,523309,762
116,426
71,221
24,648613,582

144,133
288,512150,00271,84525,473679,967

1,079
2,160
1,123
538
190
5,092

4,006
25,127
13—
92,956
13

—
696
0

0
29,147

0
92,970

0
696

4,417
—
15,060
344
—
7,746
—
4,788
9,553
41,91099,60733,132
817,379¥40,519

4,479
161
46,995
3,608
185
11,2218,235
4,850
10,86890,607101,175
29,486994,207¥34,415

33
1
351
27
1
84
61
36
81
678
757
220
7,445
$257

Year ended March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen

Extraordinary gains:
Gains on disposal of fixed assets.......................................................................

¥11

¥393

$2

Total extraordinary gains........................................................................................

11

393

2

Losses on disposal of fixed assets.....................................................................

431

182

1

Impairment losses................................................................................................

46

32

0

Provision of reserve for price fluctuation.........................................................

4,171

845

6

Total extraordinary losses.......................................................................................

4,650

1,060

7

Provision of reserve for dividends to policyholders (subsidiary)..................

195

173

1

Surplus before income taxes..................................................................................

35,68533,574251

Current...................................................................................................................

11,945

4,008

30

Deferred.................................................................................................................

(10,247)(2,191)(16)

Total income taxes....................................................................................................

1,698

1,816

13

Net surplus.................................................................................................................

33,98631,757237

Net surplus attributable to non-controlling interests......................................

74

106

0

Net surplus attributable to the parent company..............................................

¥33,911¥31,650$237

Extraordinary losses:

Income taxes:

See notes to the consolidated financial statements.

Consolidated Statements of Comprehensive Income
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the year ended March 31, 2022 and 2023

Year ended March 31,

2023

2022

2023
Millions of
U.S. dollars

Millions of yen¥33,986¥31,757$237

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

20,581(96,789)(724)

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

259

254

1

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

1,673

2,305

17

22,514(94,229)(705)

Comprehensive income attributable to the parent company......................

56,633(62,286)(466)

Comprehensive income attributable to non-controlling interests..............

(132)

(186)

(1)

¥56,500¥(62,472)$(467)Net surplus..................................................................................................................
Other comprehensive income:Comprehensive income:See notes to the consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

53

Consolidated Statements of Cash Flow
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the year ended March 31, 2022 and 2023

Year ended March 31,

2023

2022
Cash flows from operating activities:
Surplus before income taxes..............................................................................
Depreciation of real estate for rent and other assets ...................................
Depreciation..........................................................................................................
Impairment losses................................................................................................
Increase (decrease) in reserve for outstanding claims..................................
Increase (decrease) in policy reserve...............................................................
Provision of interest portion of reserve for dividends to policyholders......
Provision of interest portion of reserve for dividends
to policyholders (subsidiary)...........................................................................
Provision of reserve for dividends to policyholders (subsidiary).................
Increase (decrease) in allowance for possible loan losses............................
Increase (decrease) in reserve for claims and other payments...................
Increase (decrease) in net defined benefit liabilities.....................................
Increase (decrease) in reserve for price fluctuation.......................................
Interest, dividends and other income...............................................................
Losses (gains) on securities, net .......................................................................
Interest expenses.................................................................................................
Foreign exchange losses (gains), net ...............................................................
Losses (gains) on tangible fixed assets, net....................................................
Decrease (increase) in agency receivable........................................................
Decrease (increase) in reinsurance receivable................................................
Decrease (increase) in other assets except frominvesting and financing activities.....................................................................
Increase (decrease) in agency payable............................................................
Increase (decrease) in reinsurance payable....................................................
Increase (decrease) in other liabilities except frominvesting and financing activities.....................................................................
Others.....................................................................................................................
Subtotal............................................................................................................
Interest, dividends and other income received...............................................
Interest expenses paid........................................................................................
Dividends to policyholders paid.........................................................................
Dividends to policyholders paid (subsidiary)..................................................
Corporate income tax (paid) refunded............................................................
Net cash provided by (used in) operating activities (a)...........................
Cash flows from investing activities:
Net decrease (increase) in deposits.................................................................
Proceeds from sales and redemption of monetary claims bought ............
Increase in money held in trust..........................................................................
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 and payments for settlements of derivatives, net...............
Increase (decrease) in cash received as collateral under
securities lending transactions.......................................................................
Others.....................................................................................................................
Subtotal (b)......................................................................................................
(a + b)................................................................................................................
54

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Millions of yen

2023

Millions of
U.S. dollars¥35,685
4,788
14,52946
4,006
25,127
13¥33,574
4,850
13,72032(1,392)
92,956
13

$251
36
102
0
(10)
696
0

0
195
(1,870)
3,432
755
4,171
(185,514)(2,548)4,417(1,616)
386
0
(5)

0
173
(1,689)(3,432)382
845(182,754)(7,817)
4,479
8,235
(218)
(0)
92

0
1
(12)
(25)
2
6
(1,368)
(58)
33
61
(1)
(0)
0

2,589
53
0

(5,974)
295
(43)

(44)
2
(0)

2,185
17,933(71,236)
182,614(4,388)(32,580)(181)(11,931)
62,296(1,548)20,590(24,627)
185,806(4,450)(29,731)(192)(6,640)120,164

(11)
154
(184)
1,391
(33)
(222)
(1)
(49)
899

2,003
158
(2,310)2,310(768,599)
618,119(78,096)
86,729(76,466)(9,767)77——(983,240)
1,307,916(75,769)
96,953(146,423)

(73)
0
—
—
(7,363)
9,794
(567)
726
(1,096)

99,108(8,672)(125,716)¥(63,420)(5,445)(9,853)
174,447¥294,611

(40)
(73)
1,306
$2,206

Year ended March 31,

2023

2022
Millions of yen

2023

Millions of
U.S. dollars

Payments for purchase of tangible fixed assets.............................................

¥(9,512)¥(8,976)$(67)

Proceeds from sales of tangible fixed assets..................................................

109

1,036

7

Payments for purchase of intangible fixed assets..........................................

(11,808)(8,863)(66)

Net cash provided by (used in) investing activities..................................

(146,928)

157,643

1,180

(102)

(102)

(0)

Cash flows from financing activities:
Payment of interest on foundation funds........................................................
Dividends paid to non-controlling interests....................................................

(159)

(112)

(0)

Payments for lease obligations..........................................................................

(3,710)(2,467)(18)

Net cash provided by (used in) financing activities..................................

(3,972)(2,681)(20)

Effect of exchange rate changes on cash and cash equivalents....................

(219)(1,226)(9)

Net increase (decrease) in cash and cash equivalents....................................

(88,823)

273,899

2,051

Cash and cash equivalents at the beginning of the fiscal year......................

455,823

366,999

2,748

Cash and cash equivalents at the end of the fiscal year..................................

¥366,999¥640,899$4,799See notes to the consolidated financial statements.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

55

Consolidated Statements of Changes in Net Assets
Fukoku Mutual Life Insurance Company and consolidated subsidiaries
For the year ended March 31, 2022 and 2023

Millions of yen
Foundation funds, surplus and others

Foundation funds

Accumulated
foundation funds
redeemed¥12,000¥116,000

Consolidated
surplus

Total foundation funds,
surplus and others¥131,699¥259,811

Additions to reserve for dividends to policyholders�������������

(32,744)(32,744)

Payment of interest on foundation funds�������������������������������

(102)

(102)

Net surplus attributable to the parent company
for the fiscal year����������������������������������������������������������������������

33,911

33,911

Reversal of revaluation reserve for land, net of tax��������������

1

1

For the year ended March 31, 2022
Balance at the beginning of the fiscal year��������������������������������

Reserve for revaluation¥112

Changes in the fiscal year

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

—

—

—

1,066

1,066

Balance at the end of the fiscal year�������������������������������������������

¥12,000¥116,000¥112¥132,765¥260,877

Millions of yen
Accumulated other comprehensive income

For the year ended March 31, 2022
Balance at the beginning of the fiscal year�������

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

Revaluation
reserve for land,
net of tax¥465,855¥4,185

Foreign currencytranslation
adjustments¥ (571)

Accumulated
remeasurementsof defined
benefit plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets¥ (3,703)¥465,765¥8,568¥734,145

Changes in the fiscal year
Additions to reserve for dividends topolicyholders����������������������������������������������������

(32,744)

Payment of interest on foundation funds������

(102)

Net surplus attributable to the parent
company for the fiscal year���������������������������

33,911

Reversal of revaluation reserve for land,
net of tax�����������������������������������������������������������

1

Net changes, excluding foundation funds,
surplus and others�������������������������������������������

20,789

(1)

259

1,673

22,720(292)

22,428

Total changes in the fiscal year����������������������������

20,789

(1)

259

1,673

22,720(292)

23,494

Balance at the end of the fiscal year������������������

¥486,644¥4,184¥ (312)¥ (2,030)¥488,486¥8,276¥757,640

56

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Millions of yen
Foundation funds, surplus and others

Foundation funds

Accumulated
foundation funds
redeemed¥12,000¥116,000

Consolidated
surplus

Total foundation funds,
surplus and others¥132,765¥260,877

Additions to reserve for dividends to policyholders�������������

(30,726)(30,726)

Payment of interest on foundation funds�������������������������������

(102)

(102)

Net surplus attributable to the parent company
for the fiscal year����������������������������������������������������������������������

31,65031,650

Reversal of revaluation reserve for land, net of tax��������������

(284)

(284)

For the year ended March 31, 2023
Balance at the beginning of the fiscal year��������������������������������

Reserve for revaluation¥112

Changes in the fiscal year

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

—

—

—

537

537

Balance at the end of the fiscal year�������������������������������������������

¥12,000¥116,000¥112¥133,303¥261,415

Millions of yen
Accumulated other comprehensive income

For the year ended March 31, 2023
Balance at the beginning of the fiscal year�������

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

Revaluation
reserve for land,
net of tax¥486,644¥4,184Foreign currencytranslation
adjustments¥ (312)

Accumulated
remeasurementsof defined
benefit plans

Total accumulated
othercomprehensive
incomeNon-controllinginterests

Total net assets¥ (2,030)¥488,486¥8,276¥757,640

Changes in the fiscal year
Additions to reserve for dividends topolicyholders����������������������������������������������������

(30,726)

Payment of interest on foundation funds������

(102)

Net surplus attributable to the parent
company for the fiscal year���������������������������

31,650

Reversal of revaluation reserve for land,
net of tax�����������������������������������������������������������

(284)

Net changes, excluding foundation funds,
surplus and others�������������������������������������������

(96,496)

284

254

2,305

(93,652)(298)(93,951)

Total changes in the fiscal year����������������������������

(96,496)

284

254

2,305

(93,652)(298)(93,413)

Balance at the end of the fiscal year������������������

¥390,148¥4,468¥ (58)¥274¥394,833¥7,977¥664,226

FUKOKU MUTUAL LIFE INSURANCE COMPANY

57

Millions of U.S. dollars
Foundation funds, surplus and others

For the year ended March 31, 2023

Foundation funds

Accumulated
foundation funds
redeemedReserve for revaluation

$89

$868

$0

Consolidated
surplus

Total foundation funds,
surplus and others$994$1,953

Additions to reserve for dividends to policyholders�������������

(230)

(230)

Payment of interest on foundation funds�������������������������������

(0)

(0)

Net surplus attributable to the parent company
for the fiscal year����������������������������������������������������������������������

237

237

Reversal of revaluation reserve for land, net of tax��������������

(2)

(2)

Balance at the beginning of the fiscal year��������������������������������
Changes in the fiscal year

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

—

—

—

4

4

Balance at the end of the fiscal year�������������������������������������������

$89

$868

$0

$998

$1,957

Millions of U.S. dollars
Accumulated other comprehensive income

For the year ended March 31, 2023
Balance at the beginning of the fiscal year�������

Net unrealized
gains (losses) on
available- for-salesecurities,
net of tax$3,644

Revaluation
reserve for land,
net of tax$31

Foreign currencytranslation
adjustments$ (2)Accumulated
remeasurementsof defined
benefit plans$ (15)

Total accumulated
othercomprehensive
income$3,658Non-controllinginterests$61

Total net assets$5,673

Changes in the fiscal year
Additions to reserve for dividends topolicyholders����������������������������������������������������

(230)

Payment of interest on foundation funds������

(0)

Net surplus attributable to the parent
company for the fiscal year���������������������������

237

Reversal of revaluation reserve for land,
net of tax�����������������������������������������������������������

(2)

Net changes, excluding foundation funds,
surplus and others�������������������������������������������

(722)

2

1

17

(701)

(2)

(703)

Total changes in the fiscal year����������������������������

(722)

2

1

17

(701)

(2)

(699)

Balance at the end of the fiscal year������������������

$2,921

$33

$0

$2

$2,956$59$4,97458

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Notes to the Consolidated Financial Statements
I. P
 resentation of the Consolidated Financial
Statements

1. Basis of Presentation
The accompanying consolidated financial statements havebeen prepared from the accounts maintained by Fukoku MutualLife Insurance Company (the “Company”) and its consolidated
subsidiaries in accordance with the provisions set forth in the
Insurance Business Act of Japan and its related rules andregulations 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 consolidated financial
statements include information which is not required underaccounting principles generally accepted in Japan but ispresented herein as additional information.
Amounts of less than one million yen have been rounded
down. As a result, the totals do not add up.
The translations of yen amounts into U.S. dollar amounts
are included solely for the convenience of the reader and havebeen made, as a matter of arithmetical computation only, at therate of ¥133.53 = US$1.00, the effective rate of exchange at thebalance sheet date of March 31, 2023. The translations should
not be construed as representations that such yen amounts
have been or could in the future be, converted into U.S. dollars
at that or any other rates.
2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of March 31, 2022 and 2023 arelisted below:
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Co., Ltd.
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Ltd.
Fukoku Life International (America) Inc.
Fukoku Life Investments Singapore Pte. Ltd.
Major unconsolidated subsidiary is Fukoku Business Service
Company Limited.
Four subsidiaries are excluded from the scope of
consolidation, as each one of them is small in its total assets,
amount of sales, net surplus for the period and surplus andare sufficiently insignificant to reasonable judgement on theirimpact on the financial position and results of operation of
the Company’s group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Business
Service Company Limited, etc.) are insignificant in theirimpact on net surplus attributable to the parent company
and consolidated surplus, and also immaterial as a whole,
therefore, application of equity method is not applied.
There are no affiliates for the year ended March 31, 2022
and 2023.

(3) Fiscal Year of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, fiscal year-endof overseas subsidiaries is December 31. For the preparationof consolidated financial statements, financial statements
as of that date are used and concerning any importanttransaction taking place in between December 31 andthe consolidated closing date, necessary adjustments forconsolidation are made.

II. Notes to the Consolidated Balance Sheets

1. (1) The valuation of securities, including cash and deposits
and monetary claims bought which are equivalent tosecurities, and securities managed as trust assets inmoney held in trust, is as follows:i) Trading securities are stated at fair market value. Costsof their sales are determined by the moving averagemethod.
ii) Held-to-maturity debt securities are stated at amortizedcost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated at amortizedcost under the straight-line method, cost being determinedby the moving average method in accordance with
“Temporary Treatment of Accounting and Auditing
Concerning Policy-reserve-matching Bonds in the
Insurance Industry” (Industry Audit Committee Report
No.21 issued by the Japanese Institute of Certified Public
Accountants on November 16, 2000).
iv) Investments in unconsolidated subsidiaries andaffiliates 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 are stated at fair market
value based on the market prices at the end of the
fiscal year. Costs of their sales are determined by
the moving average method. Public and corporate
bonds (including foreign bonds) with differences
between their acquisition costs and fair values that areconsidered as adjustments of interest are stated atamortized cost (straight-line method) determined by themoving average method. However, stocks and othersecurities without quoted market prices are stated atcost, as determined using the moving average method.
Net unrealized gains or losses on these available-for-salesecurities, net of taxes, are recorded as a separate
component of net assets.
(2) Derivative instruments are stated at fair market value.
(3) The Company revalued the land used in the operations basedon the Act for Revaluation of Land (Act No.34 promulgatedon March 31, 1998). The difference between fair value andbook value resulting from the revaluation, net of related
taxes, is recorded as revaluation reserve for land as aseparate component of net assets and the related tax isrecorded as deferred tax liabilities for land revaluation.
• Date of revaluation: March 31, 2002

FUKOKU MUTUAL LIFE INSURANCE COMPANY59

• Method of revaluation as prescribed for in Article 3
Paragraph 3 of the said Act:
Calculation is based on the appraisal value for property tax
set forth in Article 2 item 3 of the Enforcement Ordinanceof the Act for Revaluation of Land (Government OrdinanceNo.119 promulgated on March 31, 1998) and the roadrate set forth in Article 2 item 4 of the said Ordinance withcertain reasonable adjustments.
(4) Depreciation of the Company’s tangible fixed assets is
calculated by the following methods.
• Tangible fixed assets (excluding lease assets): Decliningbalance method
However, buildings (excluding building attachments andstructures acquired on or before March 31, 2016) acquiredon or after April 1, 1998 are depreciated using Straight-line
method.
• Lease assets related to finance lease transactions that
do not transfer ownership: Straight-line method over thelease term with no residual value.
Other tangible fixed assets acquired for ¥100,000 or more but
less than ¥200,000 are depreciated equally over three years.
(5) Assets and liabilities denominated in foreign currencies,
except for investments in unconsolidated subsidiaries
and affiliates, are translated into Japanese yen at theeffective exchange rate prevailing at the balance sheet
date. Investments in unconsolidated subsidiaries andaffiliates are translated into Japanese yen at the exchange
rate on the date of acquisition.
(6) Allowance for possible loan losses for the Company
is provided in accordance with the 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 amounts of credits after the direct write-off
described below and the deductions of the amount expected
to be collected through the disposal of collateral or the
execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt
but have a high possibility of bankruptcy (hereinafter
called “not currently bankrupt borrowers”), the Company
provides the amounts deemed as necessary considering
the borrowers’ ability to pay, within the amounts after
deductions of the amounts expected to be collected throughthe disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, theCompany provides the amounts calculated by multiplying
the borrowers’ balance by the actual ratio of bad debt
losses on defaults during a certain past period.
All credits are assessed by the relevant departments inaccordance with the Company’s standards of selfassessment on credit quality. The results of the assessment

60

FUKOKU MUTUAL LIFE INSURANCE COMPANY

are reviewed by the audit department, which is independentof business-related divisions. Subsequently, the allowancefor possible loan losses is provided based on the results ofthese assessments.
For the credits of legally bankrupt borrowers andsubstantially bankrupt borrowers, the amounts remaining
after deductions of collateral value or the amounts collectible
through the execution of guarantees are written-off directlyfrom the borrowers’ balances as the estimated uncollectible
amounts. The amount written-off as of March 31, 2022
and 2023 were ¥0 million and ¥0 million (US$5 thousand).
(7) Net defined benefit liabilities and assets, which are provided
for employees’ retirement benefits, are calculated bydeducting the amount of pension assets from the amountof retirement benefit obligations incurred as of the balance
sheet date based on the projected retirement benefits as of
the current fiscal year end.
The Company uses the following methods of accounting
in relation to retirement benefits:• Method for allocation of projected retirement benefits�����������������������������������������������������������������������Benefit formula basis• Amortization period of actuarial gains and losses�...10 years• Amortization period of prior service cost�����...............10 years(8) Reserve for price fluctuation is calculated in accordancewith Article 115 of the Insurance Business Act.
(9) Hedge accounting is based on "Accounting Standards for
Financial Instruments" (ASBJ Statement No. 10, July 4,2019). The Company applies a fair value hedge accounting
as a hedge against the risk of foreign exchange fluctuationin relation to bonds and others denominated in foreign
currencies, and a designated hedge accounting (“Furiate
shori”) for foreign currency swaps as a hedge against therisk of foreign exchange fluctuation in relation to bonds
denominated in foreign currencies issued by the Company.
For assessing the effectiveness of hedge used, ratio
analysis of comparing the fluctuations in the fair value orcash flows of hedged items and hedging instruments ismainly applied.
(10) The Company accounts for consumption taxes by the taxexclusion method. The consumption taxes on certain assets,
which are not deductible from consumption taxes withheld
and that are stipulated to be deferred under the Tax Act, aredeferred as prepaid expenses and amortized equally over five
years. Consumption taxes other than deferred consumption
taxes are recognized as an expense when incurred.
(11) Initial premium incomes are recorded by the relevant
amounts received when the premium incomes have been
received and the responsibilities on the insurance contract
have been commenced, in principal.
Subsequent premium incomes are also recorded as theamount of payments that have been received.

Of premium incomes that have been received, theportion corresponding to the period that has yet to pass asof the end of the fiscal year is accumulated as policy reservein accordance with Article 116 of the Insurance BusinessAct and Article 69 Paragraph 1 Item 2 of the Enforcement
Regulation of the Insurance Business Act.
Premium incomes associated with the acceptance ofgroup annuities are recorded as amounts equivalent to thepolicy reserve received when accepting the transfers ofthese group annuities.
(12) Claims and other payments (excluding reinsurance premiums)
are recorded by the relevant amounts paid when the cause
for payment under the policy conditions is occurred and thecalculated amounts are paid based on the policy conditions.
In accordance with Article 117 of the Insurance
Business Act and Article 72 of the Enforcement Regulationof the Insurance Business Act, reserve for outstanding
claims are accumulated as for claims for which the Company
has a payment due but has not paid, or for which theoccurrence of cause for payment has not been reported but
the Company recognizes that insured payment has alreadyoccurred as of the end of the fiscal year.
Regarding claims for which the occurrence of cause
for payment has not been reported but the Company
recognizes that insured payment has already occurred(“IBNR reserves”), the scope of payment of hospitalization
benefits was changed in the fiscal year ended March 31,
2023, with respect to those diagnosed with COVID-19 andwere under the care of a doctor or the like at an lodging
facility or at home (“deemed hospitalization”). As a resultof this change, an appropriate amount of reserves cannot
be obtained with the calculation method set forth in themain rules in Article 1, Paragraph 1 of the Notification of
the Minister of Finance No.234, 1998 (“IBNR Notification”).
The Company therefore records the amount that wascalculated using the following method, pursuant toprovisions in the proviso of Article 1, Paragraph 1 of IBNR
Notification (the “Proviso”).
(Overview of the calculation method)
The Company first deducts an amount pertaining to deemedhospitalization of policy holders other than those with high riskof severity (“4 categories”) from a required amount of IBNR
reserves and the amount of claim payments for all the fiscal
years, as set forth in the main rules in Article 1, Paragraph 1 of
IBNR Notification, and then calculates in the same manner asin the main rules in Article 1, Paragraph 1 of IBNR Notification.
In addition, the amount pertaining to deemedhospitalization of the 4 categories which date of diagnosis
required for the above calculation is before September 25,
2022 is estimated by multiplying the amount for deemedhospitalization for those 65 years of age or older whose
diagnosis date is before September 25, 2022 by the ratio of
the amount for the four categories whose diagnosis date is on
or after September 26, 2022 and the amount for the deemedhospitalization for persons 65 years of age or older. However,

the amount related to 4 categories deemed hospitalizations
for co-insurance follower policies is estimated based on theamount of payments for leader policies.
Claims and other payments associated with theoutgoing transfer of group annuities are recorded as
amounts equivalent to the policy reserve transferred whenrecognizing the transfers of these group annuities.
(13) Policy reserve of the Company is accumulated in accordancewith the methods stated in the statement of calculation
procedures for Insurance Premiums and Policy Reserves(Article 4 Paragraph 2 Item 4 of the Insurance BusinessAct) pursuant to Article 116 Paragraph 1 of the Insurance
Business Act to prepare for the future performance ofobligations under the insurance contracts for which theinsurer’s responsibilities have started as of the end of theconsolidated fiscal year.
Premium reserves, one of the components of policy
reserve, are calculated by the following method.
i) In regard to the policies subject to the standard policy
reserve, the method as prescribed by the Commissioner ofFinancial Services Agency (Ministry of Finance OrdinanceNo.48, 1996) is applied.
ii) In regard to the policies not subject to the standard policy
reserve, the net level premium method is applied.
In regard to the policy reserve accumulated pursuant
to Article 69 Paragraphs 1,2, and 4 of the Enforcement
Regulation of the Insurance Business Act, when the actualassumptions for long-term future cash flows (such asassumed incidence rate and assumed interest rate) deviate
from those assumptions set in the “statement of calculation
procedures for Insurance Premiums and Policy Reserves”
and policy reserve is considered to be possibly insufficient
to cover the future performance of obligations, additional
policy reserve is required to accumulate in accordance with
Article 69 Paragraph 5 of the Enforcement Regulation of the
Insurance Business Act. The following reserves have been
established in compliance with this regulation.
• Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity
insurance additional rider), the Company has reduced theassumed interest rate to 1.00% and funded additional
policy reserves. As of March 31, 2022, the balance of thesepolicy reserves was ¥72,419 million.
• Among whole life insurance policies with assumed interest
rates of 5.00% or higher following the fiscal year ended
March 31, 2022, the Company has reduced assumed
interest rates for policies with premiums that have been
paid in full (excluding policies that have been converted
into paid-up or extended policies, single premium policies,
and policies for which premiums have been waived) to
1.00% and funded additional policy reserves of ¥107,284
million. The establishment of these reserves rendered¥1,589 million of additional policy reserves set aside at
the conclusion of the fiscal year ended March 31, 2021
unnecessary. Accordingly, the Company reversed this

FUKOKU MUTUAL LIFE INSURANCE COMPANY

61

amount and transferred ¥105,695 million (a higher
amount) from contingency reserves to additional policy
reserves. Consequently, the establishment of these policy
reserves has had no impact on provision of policy reserves,
ordinary profits, and surplus before income taxes.
• The Company has also funded additional policy reserves
for certain whole life insurance policies that include
distribution of surplus every five years, new cancer riders,highly advanced medical riders and advanced medical
riders. As of March 31, 2022, the balance of these policy
reserves was ¥77 million.
• Among individual annuity insurance policies with anassumed interest rate of 5.00% or higher, for policies thathave begun paying annuities (excluding wife’s annuity
insurance additional rider), the Company has reduced theassumed interest rate to 1.00% and funded additional
policy reserves. As of March 31, 2023, the balance of thesepolicy reserves was ¥71,649 million (US$536 million).
• Among whole life insurance policies with assumed
interest rates of 5.00% or higher following the fiscal
year ended March 31, 2023, the Company has reduced
assumed interest rates for policies with premiums thathave been paid in full (excluding policies that have been
converted into paid-up or extended policies, single
premium policies, and policies for which premiums havebeen waived) to 1.00% and funded additional policy
reserves. As of March 31, 2023, the balance of thesepolicy reserves was ¥106,590 million (US$798 million).
• The Company has also funded additional policy reserves
for certain whole life insurance policies that include
distribution of surplus every five years, new cancer riders,highly advanced medical riders and transplant medical
riders. As of March 31, 2023, the balance of these policy
reserves was ¥105 million (US$786 thousand).
Appointed actuary, for each fiscal year, verify whether
policy reserves have been reasonably accumulated inaccordance with Article 121 Paragraph 1 of the Insurance
Business Act and Article 80 of the Enforcement Regulationof the Insurance Business Act.
Contingency reserves, one of the components of policy
reserve, are accumulated pursuant to Article 116 of the
Insurance Business Act and Article 69 Paragraph 1 Item 3 ofthe Enforcement Regulation of the Insurance Business Act tocover risks that may accrue in the future in order to ensure
performing future obligations under the insurance contracts.
(14) Depreciation of intangible fixed assets is calculated by thefollowing methods.
• Software: Straight-line method over the estimated useful
lives.
• Lease assets related to finance lease transactions that do
not transfer ownership: Straight-line method over the leaseterm with no residual value.
(15) Of the bonds of consolidated subsidiaries corresponding to
the sub-groups of individual insurance and annuities which
are set by insurance types and investment policies, thebonds that are held to match the duration of liabilities are
62

FUKOKU MUTUAL LIFE INSURANCE COMPANY

classified as policy-reserve-matching bonds in accordancewith “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 Accountantson November 16, 2000).
2.	The Company began applying the “Implementation Guidanceon Accounting Standard for Fair Value Measurement”(ASBJ Statement No. 31, June 17, 2021; hereinafter
called “Implementation Guidance on Accounting Standard
for Fair Value Measurement”) from the beginning of
the consolidated fiscal year. In accordance with thetransitional treatments prescribed in Paragraph 27-2 of the
Implementation Guidance on Accounting Standard for Fair
Value Measurement, new accounting policies set forth by
the Implementation Guidance on Accounting Standard for
Fair Value Measurement will be applied prospectively. As aresult, certain investment trusts that had previously been
carried on the consolidated balance sheet at acquisition
cost are stated at fair value on the consolidated balance
sheet from the consolidated fiscal year ended March 31,
2023. The Company has observed no material impact
from this application of the Implementation Guidance on
Accounting Standard for Fair Value Measurement.
3.	Asset management of the general accounts other than theseparate accounts stipulated in Article 118 Paragraph 1 of the
Insurance Business Act is conducted on the principle of prudent
and profitable investments by the Company, considering public
and social responsibilities of the insurance business. Based on thispolicy, the Company allocates the fund, securing its liquidity, fromthe medium-to-long term viewpoints. The Company is diversifying
investments in assets such as foreign securities, stocks and realestates within the acceptable range of risk in order to enhance theprofitability, although yen-denominated interest bearing assets
including debt securities such as Japanese government bonds andloans are the cores of the portfolios under the asset liability
management. Derivatives are mainly used to hedge the market
risk regarding spot-priced assets and liabilities.
Major financial instruments including securities, loans
and derivatives are exposed to market risk and credit risk.
The Company manages its asset management risk by
establishing internal control systems including various rules
pursuant to the “Three Basic Rules related to Enterprise Risk
Management” established by the Board of Directors. Specifically,
the Company eliminates excessive risk deviating from the basic
principle and secures the safety of the assets by utilizing control
functions of the Financial and Investment Risk Management
Department towards the asset management sections,monitoring the status of market risk and credit risk periodicallyon a daily or monthly basis. In addition, the Company quantifies
the market risk and credit risk using value-at-risk (VaR) method
in order to control the possible maximum losses which may arise
from the holding assets within a certain range of risk buffers.
The carrying amounts, fair values and their relateddifferences of major financial assets and liabilities in thegeneral account were as follows:As of March 31,

2022

Millions of yen

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

Carrying amount

Fair value

Difference

¥80
80

¥81
81

¥0
0

25,07025,07025,07025,070——18,493
1,277,683
704,016
5,551,740
7,551,934

18,493
1,434,476
734,2445,551,740
7,738,954—
156,792
30,227—
187,020

51,901
504,675
556,577
8,133,662
241,935
241,935

51,901
521,484
573,386
8,337,492
245,074
245,074(0)16,80916,809203,830
3,139
3,139

(4,814)(63,528)¥(68,342)(4,814)(63,528)¥(68,342)——¥—*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair valueof 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 in parentheses.
Notes: 1. Stocks without market prices, such as unlisted stocks, are not included in Securities of the above table. The amount ofthese stocks on the balance sheet as of March 31, 2022 was ¥9,603 million.
2. In accordance with the transitional treatments prescribed in Paragraph 27 of the “Implementation Guidance on AccountingStandard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019), investments in partnerships have not been
included in Securities of the above table. As of March 31, 2022, the amount of investments in partnerships included on thebalance sheet was ¥32,380 million.

As of March 31,

2023

2023

Millions of yen

Money held in trust:
Trading securities�������������������������������������������������������������������
Total money held in trust������������������������������������������������������
Securities:
Trading securities�������������������������������������������������������������������
Held-to-maturity debt securities����������������������������������������
Policy-reserve-matching bonds������������������������������������������
Available-for-sale securities������������������������������������������������
Total securities������������������������������������������������������������������������
Loans:
Policy loans�����������������������������������������������������������������������������
Ordinary loans������������������������������������������������������������������������
Total loans�������������������������������������������������������������������������������
Assets total�������������������������������������������������������������������������������������
Subordinated bonds*1 ��������������������������������������������������������������
Liabilities total��������������������������������������������������������������������������������
Derivative instruments*2 :Hedge accounting not applied��������������������������������������������
Hedge accounting applied���������������������������������������������������
Total derivative instruments������������������������������������������������

Millions of U.S. dollars

Carrying amount

Fair value

Difference¥24,897
24,897¥24,897
24,897¥——

10,232
1,252,237
835,657
5,076,422
7,174,550

10,232
1,368,169
844,467
5,076,422
7,299,292

50,456477,104
527,561
7,727,009
241,935
241,935(683)(840)¥(1,524)

Carrying amount

Fair value

Difference

$186
186

$186
186

$—
—

—
115,9318,810—
124,741

76
9,377
6,258
38,01753,72976
10,246
6,324
38,01754,664

—
868
65
—
934

50,456
487,443
537,900
7,862,089
238,498
238,498(0)
10,33910,339135,080(3,436)(3,436)

377
3,573
3,950
57,867
1,811
1,811

377
3,650
4,028
58,878
1,786
1,786

(0)
77
77
1,011
(25)
(25)

(683)
(840)
¥(1,524)

—
—
¥—

(5)
(6)
$(11)

(5)
(6)
$(11)

—
—
$—

*1 The fair value of derivative instruments that are currency swaps under designated hedge accounting is included in the fair value 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 in parentheses.
Notes: 1. Stocks without market prices, such as unlisted stocks, are not included in Securities of the above table.
The amount of these stocks on the balance sheet as of March 31, 2023 was ¥9,114 million (US$68 million).
2. In accordance with Paragraph 24-16 of the Implementation Guidance on Accounting Standard for Fair Value Measurement, investments in partnerships are not included in Securities of theabove table.
The amount of investments in partnerships included on the balance sheet as of March 31, 2023, was ¥30,957 million (US$231 million).
3. Investment trusts with real estate as investment trust properties which have applied Paragraph 24-9 of the Implementation Guidance on Accounting Standard for Fair Value Measurement
are included in Securities.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

63

4.	Matters concerning the breakdown of financial instruments by fair value level are as follows.
The fair values of financial instruments are classified into the following three levels according to the observability and materiality of
inputs used to measure fair value.
Fair Value Level 1: Fair values measured using (unadjusted) quoted prices in active markets for identical assets or liabilities
Fair Value Level 2: Fair values measured using directly or indirectly observable inputs other than Level 1 inputs
Fair Value Level 3: Fair values measured using material unobservable inputs
When multiple inputs with material impact are used to measure fair value, the resulting fair value is classified into the lowest fairvalue level into which any of these inputs can be categorized.
(1) Financial assets and liabilities with fair values recorded on the balance sheet were as follows:
As of March 31,

2022

Millions of yen
Fair value
Level 2
Level 3

Classification
Money held in trust:
Trading securities����������������������������������������
Total money held in trust�����������������������������
Securities:
Trading securities:
Foreign securities������������������������������������
Total trading securities�����������������������������
Available-for-sale securities:
Government bonds���������������������������������
Local government bonds�����������������������
Corporate bonds�������������������������������������
Stocks��������������������������������������������������������
Foreign securities������������������������������������
Other securities���������������������������������������
Total available-for-sale securities��������
Total securities.��������������������������������������������
Assets total����������������������������������������������������������
Derivative instruments*:
Currency-related�����������������������������������������
Interest-related�������������������������������������������
Stock-related�����������������������������������������������
Total derivative instruments���������������������

Level 1

Total

¥—
—

¥25,070
25,070¥——¥25,070
25,070

7,859
7,859

10,634
10,634——

18,493
18,493

1,436,730——
699,672
744,8123,667
2,884,883
2,892,742
2,892,742—
156,768
812,361—
1,129,151—
2,098,282
2,108,916
2,133,986————
28,139—28,13928,13928,1391,436,730
156,768
812,361
699,672
1,902,104
3,667
5,011,305
5,029,798
5,054,868

—
—
(202)
¥(202)(68,160)
20—¥(68,140)

—
—
—
¥—

(68,160)20(202)¥(68,342)* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total arepresented in parentheses.
Note: In accordance with the transitional treatments prescribed in Paragraph 26 of the “Implementation Guidance on
Accounting Standard for Fair Value Measurement” (ASBJ Guidance No.31, July 4, 2019), investment trusts have notbeen included in the figures above.
As of March 31, 2022, the amount of investment trusts included on the balance sheet was ¥540,435 million.
As of March 31,

2023

Millions of yen
Fair value
Level 2
Level 3

Classification
Money held in trust:
Trading securities����������������������������������������
Total money held in trust�����������������������������
Securities:
Trading securities:
Foreign securities������������������������������������
Total trading securities�����������������������������
Available-for-sale securities:
Government bonds���������������������������������
Local government bonds�����������������������
Corporate bonds�������������������������������������
Stocks��������������������������������������������������������
Foreign securities������������������������������������
Other securities���������������������������������������
Total available-for-sale securities��������
Total securities.��������������������������������������������
Assets total����������������������������������������������������������
Derivative instruments*:
Currency-related�����������������������������������������
Interest-related�������������������������������������������
Stock-related�����������������������������������������������
Bond-related�����������������������������������������������
Total derivative instruments���������������������

Level 1

Total

2023

Level 1Millions of U.S. dollars
Fair value
Level 2

Level 3

Total

¥—
—

¥24,897
24,897¥——¥24,897
24,897

$—
—

$186
186

$—
—

$186
186

—
—

10,232
10,232——

10,232
10,232

—
—

76
76

—
—

76
76

1,724,721——
740,041595,331
47,246
3,107,340
3,107,340
3,107,340—
124,909642,457—
1,053,931
115,697
1,936,996
1,947,228
1,972,126————
26,490—26,49026,49026,4901,724,721
124,909642,457
740,041
1,675,753
162,943
5,070,826
5,081,059
5,105,957

12,916
—
—
5,542
4,458
353
23,27023,27023,270

—
935
4,811
—
7,892
866
14,506
14,582
14,769

—
—
—
—
198
—
198
198
198

12,916
935
4,811
5,542
12,5491,220
37,97538,051
38,238

—
—
(31)
(137)
¥(169)(1,402)47——¥(1,355)

—
—
—
—
¥—

(1,402)
47
(31)
(137)
¥(1,524)

—
—
(0)
(1)
$(1)

(10)
0
—
—
$(10)

—
—
—
—
$—

(10)
0
(0)
(1)
$(11)

* Assets and liabilities generated by derivative instruments are offset and presented net. Net liabilities in total are presented in parentheses.

Note: Investment trusts with real estate as investment trust properties that have applied Paragraph 24-9 of the Implementation Guidance on Accounting Standard for Fair Value Measurement are notincluded in the figures above. The amount of the investment trusts on the balance sheet as of March 31, 2023 was ¥5,596 million (US$41 million). Reconciliation of balances from the beginningof the current fiscal year to balances as of March 31, 2023 for the investment trusts were as follows:

64

FUKOKU MUTUAL LIFE INSURANCE COMPANYAs of March 31,

2023

Millions of yen¥3,654
441
441
1,500
1,500
¥5,596

Balance at the beginning of the fiscal year��������������������������������������������������������������������������
Gains or losses and other comprehensive income during the fiscal year�������������������
Values recognized as other comprehensive income*������������������������������������������������
Purchase, sales, and redemption��������������������������������������������������������������������������������������������
Purchase����������������������������������������������������������������������������������������������������������������������������������
Balance at the end of the fiscal year�������������������������������������������������������������������������������������

2023

Millions of U.S. dollars

$27
3
3
11
11
$41

* These amounts are included in net unrealized gains (losses) on available-for-sale securities, net of tax under other comprehensive income in the consolidated statements of comprehensive
income for the fiscal year ended March 31, 2023.

(2) Financial assets and liabilities with fair values not recorded on the balance sheet were as follows:
As of March 31,

2022

Classification
Monetary claims bought:
Claims treated as loans������������������������������
Total monetary claims bought������������������
Securities:
Held-to-maturity debt securities:
Government bonds���������������������������������
Local government bonds�����������������������
Corporate bonds�������������������������������������
Foreign securities������������������������������������
Total held-to-maturity debt securities���Policy-reserve-matching bonds:
Government bonds���������������������������������
Local government bonds�����������������������
Corporate bonds�������������������������������������
Total policy-reserve-matching bonds���Total securities���������������������������������������������
Loans:
Policy loans��������������������������������������������������
Ordinary loans���������������������������������������������
Total loans����������������������������������������������������
Assets total����������������������������������������������������������
Subordinated bonds���������������������������������������
Liabilities total�����������������������������������������������������

Level 1Millions of yen
Fair value
Level 2
Level 3

Total

¥—
—

¥—
—

¥ 81
81

¥81
81

1,205,133——
20,8781,226,012—
98,778108,022
1,663
208,463—————

1,205,133
98,778108,022
22,541
1,434,476

290,940——
290,940
1,516,953—
137,159
306,143
443,303651,767—————

290,940
137,159
306,143734,244
2,168,720———
1,516,953
—
¥—

—
—
—
651,767
245,074¥245,074

51,901
521,484
573,386
573,467—¥—

51,901
521,484
573,386
2,742,188
245,074¥245,074

As of March 31,

2023

Classification
Level 1

Securities:
Held-to-maturity debt securities:
Government bonds��������������������������������� ¥1,171,314
Local government bonds�����������������������
—Corporate bonds�������������������������������������
—Total held-to-maturity debt securities��� 1,171,314Policy-reserve-matching bonds:
Government bonds���������������������������������
404,527
Local government bonds�����������������������
—Corporate bonds�������������������������������������
—Total policy-reserve- matching bonds����
404,527
Total securities��������������������������������������������� 1,575,842
Loans:
Policy loans��������������������������������������������������
—Ordinary loans���������������������������������������������
—Total loans����������������������������������������������������
—Assets total���������������������������������������������������������� 1,575,842
Subordinated bonds���������������������������������������
—Liabilities total�����������������������������������������������������
¥—Millions of yen
Fair value
Level 2
Level 3

2023

Total

Level 1Millions of U.S. dollars
Fair value
Level 2
Level 3

Total¥—
93,825103,028
196,854¥————¥1,171,314
93,825103,028
1,368,169$8,771
—
—
8,771

$—
702
771
1,474

$—
—
—
—

$8,771
702
771
10,246—
126,664
313,275
439,940
636,794—————

404,527
126,664
313,275
844,467
2,212,636

3,029
—
—
3,029
11,801

—
948
2,346
3,294
4,768

—
—
—
—
—

3,029
948
2,346
6,324
16,570———636,794
238,498¥238,498

50,456
487,443
537,900
537,900—¥—

50,456
487,443
537,900
2,750,536
238,498¥238,498———
11,801
—
$—

—
—
—
4,768
1,786
$1,786

377
3,650
4,028
4,028
—
$—

377
3,650
4,028
20,598
1,786$1,786

FUKOKU MUTUAL LIFE INSURANCE COMPANY

65

(3) Explanation of valuation techniques and inputs used tomeasure fair valuei) Securities (including deposits and monetary claimsbought which are treated as securities based on“Accounting Standards for Financial Instruments” [ASBJ
Statement No.10, July 4, 2019])
The fair values of securities for which unadjusted quoted
market prices in active markets are available (primarily
listed stocks and government bonds [including someforeign securities]) are classified as Fair Value Level 1.
Meanwhile, the fair values of securities for which quoted
market prices are available, but are not available in active
markets, are classified as Fair Value Level 2 (This category
primarily includes local government bonds and corporate
bonds [including some foreign securities]). When quoted
market prices are not available for securities, prices
obtained from third parties (mainly from information
vendors and financial institutions with which the Company
conducts business) and determined to have beenmeasured in accordance with prescribed accounting
standards are used to measure the fair values of thesesecurities. If the inputs used to measure the fair value of agiven security are material but unobservable, the resulting
fair value is classified as Fair Value Level 3.
ii) Money held in trust
In principle, the fair values of securities managed as trust
assets and classifed as money held in trust are measured
using the Company's prescribed method for determining
the value of securities. These fair values are categorized as
Fair Value Level 2.
iii) Loans
The fair values of policy loans are deemed to approximatebook values, considering estimated repayment period andinterest rate conditions since their repayment deadlines
have not been set up due to the characteristics that theloans are limited to the amount of cash surrender values.
Therefore, the book values are used as the fair values ofpolicy loans.
The fair values of floating interest rate loans among
the ordinary 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 floatinginterest rate loans are based on their book values. The fairvalues of fixed interest rate loans are primarily measured
by discounting the future cash flows to the present values.

66

FUKOKU MUTUAL LIFE INSURANCE COMPANY

The fair values of loans from legally bankrupt
borrowers, substantially bankrupt borrowers and not
currently bankrupt borrowers are computed by deducting
the amount of the allowance for possible loan losses fromthe book values before direct write-offs.
If the impact of unobservable inputs used to measure
the fair values of loans is determined to be material, theresulting fair values are classified as Fair Value Level 3.
Otherwise, they are categorized as Fair Value Level 2.
iv) Subordinated bonds
The fair values of corporate bonds issued by the Company
are classified as Fair Value Level 2 and are measured using
the same method applied to securities.
v) Derivative instruments
The fair values of derivative instruments for which
unadjusted quoted market prices in active markets areavailable (primarily exchange-traded futures and options)are classified as Fair Value Level 1. However, mostderivative instruments are traded over the counter andhave no quoted market prices. Accordingly, prices obtained
from third parties (mainly from information vendors andfinancial institutions with which the Company conducts
business) and determined to have been measured inaccordance with prescribed accounting standards are used
to measure the fair values of these derivative instruments.
Fair values of derivative instruments that were measured
using only observable inputs or with unobservable inputs
considered to be immaterial are classified as Fair Value
Level 2. Meanwhile, fair values of derivative instrumentsthat have been measured using material unobservable
inputs are categorized as Fair Value Level 3.
(4) Information concerning fair values of financial assets andliabilities that have been recorded on the balance sheet
and classified as Fair Value Level 3i) Quantitative information regarding material unobservable
inputsWhen measuring fair value, the Company does not adjust
quoted prices obtained from third parties and does notmake estimates related to inputs that it cannot observe.
Accordingly, quantitative information regarding material
unobservable inputs have been omitted.
ii) R econciliation of beginning to end of balance as ofMarch 31, 2022 and 2023, and the valuation gains orlosses recognized in the statements of operations for therespective consolidated fiscal years were as follows:

2022

2023

2023

Millions of yen
Securities,
Available-for-salesecurities,
Foreign securities

Balance at the beginning of the fiscal year���Gains or losses and other comprehensive
income during the fiscal year��������������������
Values recognized as gains or losses*1������

Millions of U.S. dollars

Total

Securities,
Available-for-salesecurities,
Foreign securities

Total

Securities,
Available-for-salesecurities,
Foreign securities

Total¥29,312¥29,312¥28,139¥28,139

$210

$210

(1,172)(10)(1,172)(1,648)(1,648)

(12)

(12)

(10)

(10)

(10)

(0)

(0)

Values recognized as othercomprehensive income*2������������������������������

(1,162)(1,162)(1,638)(1,638)

(12)

(12)

Balance at the end of the fiscal year��������������

¥28,139¥28,139¥26,490¥26,490

$198

$198

*1 These amounts are included in investment income and investment expenses in the consolidated statements of operations.
*2 These amounts are included in net unrealized gains (losses) on available-for-sale securities, net of tax under other comprehensive income in the consolidated statements of comprehensive income.

iii) Explanation of the valuation process for fair value
The Company's asset management division is responsible
for the formulation of policies and procedures related to themeasurement of fair value and the actual measurement offair value. These fair values are subsequently checked by therisk management department to ensure their appropriatenessand compliance with relevant policies and procedures.
The Company verifies the appropriateness of the fairvalues it measures using a variety of suitable methods, which
include comparing quoted market prices obtained fromdifferent third parties; confirming techniques and inputs
utilized for calculation; and further comparing measured fairvalues with the fair values of similar financial instruments.
iv) Explanation of the impact on fair value in case of change inmaterial unobservable inputs
When measuring fair value, the Company does not adjust
quoted prices obtained from third parties and does not makeestimates related to inputs that it cannot observe. Accordingly,
it has omitted information concerning impact on fair value
stemming from changes in material unobservable inputs.
5. The Company holds investment and rental properties suchas office buildings in Tokyo and other areas. The carrying
amounts and the fair values of investment and rental
properties were ¥194,813 million and ¥326,189 million
as of March 31, 2022, and ¥197,979 million (US$1,482
million) and ¥349,089 million (US$2,614 million) as ofMarch 31, 2023, respectively. The fair value is mainly basedon the value calculated by the Company in accordancewith real estate appraisal standards which includes someadjustments using the reference prices.
The amount corresponding to asset retirement
obligations included in the carrying amount of investment
and rental properties were ¥367 million and ¥321 million(US$2 million) as of March 31, 2022 and 2023, respectively.
6. The amount of securities lent under lending agreements were¥621,280 million and ¥504,760 million (US$3,780 million) as
of March 31, 2022 and 2023, respectively.

7. The total amount of claims against bankrupt and quasibankrupt obligors, claims with collection risk, delinquent loans
past three months or more, and restructured loans were
¥3,776 million and ¥1,246 million (US$9 million) as March
31, 2022 and 2023, respectively. The details are as follows.
i) The balance of claims against bankrupt and quasi-bankrupt
obligors were ¥160 million and ¥140 million (US$1 million)
as of March 31, 2022 and 2023, respectively.
Of which, the estimated uncollectible amountwritten-off were ¥0 million and ¥0 million (US$5 thousand)as of March 31, 2022 and 2023, respectively.
Claims against bankrupt and quasi-bankrupt
obligors are loans to borrowers who are subject tobankruptcy, corporate reorganization or rehabilitation orother similar proceedings and other borrowers in serious
financial difficulties.
ii) The balance of claims with collection risk were ¥1,999
million and ¥544 million (US$4 million) as of March 31,
2022 and 2023, respectively.
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 intereston the loans will be recovered.
iii) There was no balance of delinquent loans past three months
or more as of March 31, 2022 and 2023, respectively.
Delinquent loans past three months or more areloans for which interest payments or repayments ofprincipal are delinquent for three months or morefrom the due date under the terms of the related loan
agreements, excluding those loans classified as claims
against bankrupt and quasi-bankrupt obligors, claims
with collection risk.
iv) T he balance of restructured loans were ¥1,616 millionand ¥561 million (US$4 million) as of March 31, 2022
and 2023, respectively.
Restructured loans are loans for which certain
concessions favorable to borrowers, such as interest
reduction or exemption, rescheduling of due date for

FUKOKU MUTUAL LIFE INSURANCE COMPANY

67

repayments of principal or interest payment, waiverof claim or other terms, have been negotiated for the
purpose of assisting and supporting the borrowers
in the restructuring of their business. This category
excludes loans classified as claims against bankrupt andquasi-bankrupt obligors, claims with collection risk, anddelinquent loans past three months or more.
8. Accumulated depreciation of tangible fixed assets were¥179,324 million and ¥183,559 million (US$1,374 million)
as of March 31, 2022 and 2023, respectively.
9. Total assets in separate accounts provided for in Article 118of the Insurance Business Act were ¥112,487 million and¥118,783 million (US$889 million) as of March 31, 2022
and 2023, respectively. The amounts of separate accountliabilities were the same as separate account assets.
10. The total amounts of receivables from/payables tounconsolidated subsidiaries were ¥2,245 million and ¥39
million as of March 31, 2022, and ¥2,229 million (US$16
million) and ¥42 million (US$317 thousand) as of March
31, 2023, respectively.
11. Deferred tax assets and deferred tax liabilities as of March
31, 2022 were ¥175,093 million and ¥193,317 million,
respectively. Valuation allowance for deferred tax assets
was ¥5,133 million.
Major components of deferred tax assets were ¥99,652

68

FUKOKU MUTUAL LIFE INSURANCE COMPANY

million of policy reserves, ¥52,554 million of reserve for pricefluctuation and ¥13,115 million of net defined benefit liabilities
as of March 31, 2022.
Major component of deferred tax liabilities was ¥187,990
million of net unrealized gains on available-for-sale securities
as of March 31, 2022.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2022 were 28.0% and 4.8%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-24.1% of reserve for dividends to policyholders.
Deferred tax assets and deferred tax liabilities as ofMarch 31, 2023 were ¥177,047 million (US$1,325 million)and ¥156,019 million (US$1,168 million), respectively.
Valuation allowance for deferred tax assets was ¥4,896
million (US$36 million).
Major components of deferred tax assets were ¥102,788
million (US$769 million) of policy reserves, ¥52,790 million(US$395 million) of reserve for price fluctuation and ¥12,766
million (US$95 million) of net defined benefit liabilities as ofMarch 31, 2023.
Major component of deferred tax liabilities was ¥149,777
million (US$1,121 million) of net unrealized gains on availablefor-sale securities as of March 31, 2023.
The statutory tax rate and the actual effective tax rate
for the year ended March 31, 2023 were 28.0% and 5.4%,
respectively. The difference between the statutory tax rate
and the actual effective tax rate was attributable mainly to-23.4% of reserve for dividends to policyholders.

12. Changes in reserve for dividends to policyholders were as follows:

2022
Balance at the beginning of the fiscal year��������������������������������������������������������������
Transfer from surplus in the previous fiscal year�����������������������������������������������������
Dividend payments to policyholders during the fiscal year����������������������������������
Increase in interest�������������������������������������������������������������������������������������������������������
Balance at the end of the fiscal year�������������������������������������������������������������������������

Year ended March 31,

2023

Millions of yen¥63,232
32,744(32,580)
13¥63,411¥63,41130,726(29,731)13¥64,420

2023

Millions of
U.S. dollars

$474
230
(222)
0
$482

13. Changes in reserve for dividends to policyholders (Fukokushinrai Life Insurance Co., Ltd.) were as follows:

2022
Balance at the beginning of the fiscal year��������������������������������������������������������������
Dividend payments to policyholders during the fiscal year����������������������������������
Increase in interest�������������������������������������������������������������������������������������������������������
Provision of reserve for dividends to policyholders������������������������������������������������
Balance at the end of the fiscal year�������������������������������������������������������������������������
14. The amount of stocks of unconsolidated subsidiaries were¥404 million and ¥404 million (US$3 million) as of March 31,
2022 and 2023, respectively.
15. Assets pledged as collateral as of March 31, 2022 were¥225,740 million of securities.
Secured debts as of March 31, 2022, were ¥166,881
million.
These amounts include ¥150,826 million of
investments in securities deposited and ¥160,928 millionof cash received as collateral under securities lendingtransactions secured by cash as of March 31, 2022.
Assets pledged as collateral as of March 31, 2023
were ¥175,557 million (US$1,314 million) of securities.
Secured debts as of March 31, 2023, were ¥161,480
million (US$1,209 million).
These amounts include ¥147,552 million (US$1,105
million) of investments in securities deposited and ¥155,483
million (US$1,164 million) of cash received as collateral
under securities lending transactions secured by cash as ofMarch 31, 2023.
16. Reserve for outstanding claims for the reinsurance contracts
provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Act(hereinafter called “reserve for outstanding claims forceded reinsurance”) were ¥2 million and ¥0 million (US$2
thousand) as of March 31, 2022 and 2023, respectively.
Policy reserve for the reinsurance contracts provided inaccordance with Article 71 Paragraph 1 of the Enforcement
Regulation of the Insurance Business Act (hereinafter called“policy reserve for ceded reinsurance”) were ¥42 millionand ¥40 million (US$305 thousand) as of March 31, 2022
and 2023, respectively.

Year ended March 31,

2023

Millions of yen

¥308
(181)
0
195
¥322

¥322
(192)
0
173
¥304

2023

Millions of
U.S. dollars

$2
(1)
0
1
$2

17. There were unused commitment line agreements underwhich the Company is the lender of ¥11,492 million and¥8,604 million (US$64 million) as of March 31, 2022 and2023, respectively.
18. Repayments of subordinated bonds are subordinated toother obligations.
At the Board of Directors meeting held on June 29,2023, the Company resolved to issue subordinated bonds
up to US$500 million by the end of March 2024 as wellas to redeem US$500 million in subordinated bonds on
September 19, 2023 prior to the maturity date.
19. The future contribution to the Life Insurance Policyholders
Protection Corporation of Japan under Article 259 of the
Insurance Business Act was estimated at ¥9,995 million asof March 31, 2022.
The contribution is recognized as operating expenses
when contributed.
20. Matters Related to Employees’ Retirement Benefits(1) Overview of Employees’ Retirement Benefit Plan
As for a defined benefit plan for office-based employees, theCompany and its consolidated subsidiaries have a defined
benefit corporate pension plan and retirement lump-sum
payments. As for a defined contribution plan for these
employees, the Company also has a defined contribution
pension plan.
As for a defined benefit plan for sales employees, theCompany has retirement lump-sum payments.
The Company places a retirement benefit trust in
relation to the retirement lump-sum grant plan for sales
employees.
The simplified method for calculating retirement benefit
obligation is applied to a portion of the Company and someconsolidated subsidiaries’ retirement lump-sum grant plans.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

69

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

2022
Retirement benefit obligation at the beginning of the fiscal year������������������������
Service cost��������������������������������������������������������������������������������������������������������������������
Interest cost�������������������������������������������������������������������������������������������������������������������
Actuarial differences occurred during the fiscal year���������������������������������������������
Retirement benefit payments�������������������������������������������������������������������������������������
Retirement benefit obligation at the end of the fiscal year�����������������������������������

2023

Millions of yen¥91,051
3,701
541
47
(4,185)¥91,156ii) Reconciliation of beginning and end of balance of pension plan assets

2022
Pension plan assets at the beginning of the fiscal year�����������������������������������������
Expected return on pension plan assets�������������������������������������������������������������������
Actuarial differences occurred during the fiscal year���������������������������������������������
Contributions by the employer�����������������������������������������������������������������������������������
Retirement benefit payments�������������������������������������������������������������������������������������
Others�����������������������������������������������������������������������������������������������������������������������������
Pension plan assets at the end of the fiscal year����������������������������������������������������

As of March 31,¥91,156
3,718
542
(12)
(4,450)¥90,953

As of March 31,

2023

Millions of yen¥62,627
1,202
956
1,117
(1,608)4¥64,301¥64,301
1,232
2,410
1,105
(2,135)
3¥66,918

2023

Millions of
U.S. dollars

$682
27
4
(0)
(33)
$681

2023

Millions of
U.S. dollars

$481
9
18
8
(15)
0
$501

iii) Reconciliation of retirement benefit obligation and pension plan assets with net defined benefit liabilities and assets presented on
the consolidated balance sheet

2022
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��������������������������������������������������������������������������������������������������������
f. Net defined benefit liabilities����������������������������������������������������������������������������������
g. Net defined benefit assets��������������������������������������������������������������������������������������
h. Net amount of liabilities and assets presented on the consolidatedbalance sheet��������������������������������������������������������������������������������������������������������

Millions of yen

26,85527,677(822)

24,03525,220(1,184)

180
188
(8)

¥26,855¥24,035

$180

2022

FUKOKU MUTUAL LIFE INSURANCE COMPANY

As of March 31,

2023

Millions of yen¥3,701541(1,202)
1,428
(13)
(4)
¥4,450v) Remeasurements of defined benefit plan
Remeasurements of defined benefit plan (before tax effects) comprised the following:

70

2023

Millions of
U.S. dollars¥78,877(66,918)
11,95912,0762022

Amortization of actuarial differences������������������������������������������������������������������������
Amortization of prior service cost������������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������������������������

2023¥78,843(64,301)
14,542
12,312iv) Breakdown of retirement benefit gains and losses

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

As of March 31,¥3,718542(1,232)772
5(3)¥3,802As of March 31,

2023

Millions of yen¥2,337(13)¥2,323¥3,196
5¥3,201

$590
(501)
89
90

2023

Millions of
U.S. dollars

$27
4
(9)
5
0
(0)
$28

2023

Millions of
U.S. dollars

$23
0
$23

vi) Accumulated remeasurements of defined benefit plan
Accumulated remeasurements of defined benefit plan (before tax effects) comprised the following:2022
Unrecognized actuarial differences���������������������������������������������������������������������������
Unrecognized prior service cost���������������������������������������������������������������������������������
Total���������������������������������������������������������������������������������������������������������������������������������

As of March 31,

2023

Millions of yen¥(2,774)(45)¥(2,819)vii) Breakdown of pension plan assets
The breakdown of asset categories as a percentage of total pension plan assets were as follows:
Domestic stocks���������������������������������������������������������������������������������������������������������������������������������
Life insurance general account��������������������������������������������������������������������������������������������������������
Domestic bonds���������������������������������������������������������������������������������������������������������������������������������
Foreign stocks�������������������������������������������������������������������������������������������������������������������������������������
Assets under joint management�����������������������������������������������������������������������������������������������������
Foreign bonds�������������������������������������������������������������������������������������������������������������������������������������
Total������������������������������������������������������������������������������������������������������������������������������������������������������

¥421
(40)
¥381

As of March 31,

2022
41.9%
31.6%
9.5%
10.2%
3.6%
3.1%
100.0%

2023

Millions of
U.S. dollars

$3
(0)
$2

2023
44.8%
30.4%
9.3%
8.2%
3.7%
3.5%
100.0%

Within the total of pension assets as of March 31, 2022 and 2023, 35.5% and 38.1% of these amounts are accounted for by theretirement benefit trust established in relation to the retirement lump-sum payments plan for sales employees, respectively.
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 the present and future
allocation of pension plan assets, and the present and expected future long-term rate of return on a variety of assets that makes
up the pension assets.
ix) Underlying actuarial assumptions
Main underlying actuarial assumptions were as follows:
Discount rate��������������������������������������������������������������������������������������������������������������������������������������
Expected long-term rate of return on pension plan assets
Defined benefit plan��������������������������������������������������������������������������������������������������������������������
Retirement benefit trust�������������������������������������������������������������������������������������������������������������

2022
0.6%
3.0%
0.0%

As of March 31,

2023
0.6%
3.0%
0.0%

(3) Defined contribution plan
The required contribution amount by the Company and its consolidated subsidiaries to the defined contribution plan were ¥339
million and ¥339 million (US$2 million) as of March 31, 2022 and 2023, respectively.

III. Notes to the Consolidated Statements of Operations

1. The total amounts of revenues and expenses in connection with unconsolidated subsidiaries were ¥128 million and ¥1,197 million forthe year ended March 31, 2022 and ¥120 million (US$904 thousand) and ¥1,184 million (US$8 million) for the year ended March
31, 2023, respectively.
2. For the year ended March 31, 2022, in calculating the provision of reserve for outstanding claims, a reversal of reserves foroutstanding claims reinsured of ¥24 million was added. In calculating the provision of policy reserves, a reversal of reserves forpolicy reserves reinsured of ¥6 million was added.
For the year ended March 31, 2023, in calculating the provision of reserve for outstanding claims, a reversal of reserve foroutstanding claims for ceded reinsurance of ¥1 million (US$12 thousand) was deducted. In calculating the provision of policy
reserves, a reversal of policy reserve for ceded reinsurance of ¥2 million (US$15 thousand) was added.

FUKOKU MUTUAL LIFE INSURANCE COMPANY

71

IV. Notes to the Consolidated Statements of Comprehensive Income

1. Other Comprehensive Income
The reclassification adjustments and tax effect amounts related to other comprehensive income were as follows:i) Net unrealized gains (losses) on available-for-sale securities, net of tax

2022
Amount incurred during the fiscal year��������������������������������������������������������������������������
Reclassification adjustments��������������������������������������������������������������������������������������������
Before tax adjustments��������������������������������������������������������������������������������������������������
Tax effects������������������������������������������������������������������������������������������������������������������������
Net unrealized gains (losses) on available-for-sale securities, net of tax������������

2022
¥259
—
259
—
¥259

¥(117,506)(17,496)(135,002)
38,212¥(96,789)

Year ended March 31,

2023

Millions of yen

¥254
—
254
—
¥254

iii) Remeasurements of defined benefit plans, net of tax

2022
Amount incurred during the fiscal year��������������������������������������������������������������������������
Reclassification adjustments��������������������������������������������������������������������������������������������
Before tax adjustments��������������������������������������������������������������������������������������������������
Tax effects������������������������������������������������������������������������������������������������������������������������
Remeasurements of defined benefit plans, net of tax���������������������������������������������
Total other comprehensive income���������������������������������������������������������������������������������

2023

Millions of yen¥27,373
1,036
28,409(7,827)¥20,581ii) Foreign currency translation adjustments

Amount incurred during the fiscal year��������������������������������������������������������������������������
Reclassification adjustments��������������������������������������������������������������������������������������������
Before tax adjustments��������������������������������������������������������������������������������������������������
Tax effects������������������������������������������������������������������������������������������������������������������������
Foreign currency translation adjustments������������������������������������������������������������������

Year ended March 31,

Year ended March 31,

2023

Millions of yen

¥909
1,414
2,323
(650)
1,673
¥22,514¥2,423
777
3,201
(896)
2,305
¥(94,229)

2023

Millions of
U.S. dollars$(879)(131)(1,011)286$(724)

2023

Millions of
U.S. dollars

$1
—
1
—
$1

2023

Millions of
U.S. dollars

$18
5
23
(6)
17
$(705)V. N
 otes to the Consolidated Statements of Cash Flows

1. Cash and cash equivalents as of March 31, 2022 and 2023 consist of "Cash," "Deposits in transfer account," "Current deposits,""Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months of the date of acquisition," "Foreign currency
deposits maturing within three months of the date of acquisition," "Negotiable certificate of deposits maturing within three monthsof the date of acquisition," "Call loans" and "Monetary claims bought maturing within three months of the date of acquisition."
2. Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to the consolidated balance sheet accounts
were as follows:

2022
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 ofacquisition��������������������������������������������������������������������������������������������������������������������������
Monetary claims bought maturing over 3 months of the date ofacquisition��������������������������������������������������������������������������������������������������������������������������Cash and cash equivalents������������������������������������������������������������������������������������������������

72

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Year ended March 31,

2023

Millions of yen

2023

Millions of
U.S. dollars¥323,128
48,00080(3,100)¥524,841
130,000—(13,100)$3,930973—(98)(1,029)

(842)

(6)

(80)
¥366,999—¥640,899—$4,799Management’s Report on Internal Control over Financial Reporting

1. Matters relating to the basic framework of internal control over financial reporting
Yoshiteru Yoneyama, President of Fukoku Mutual Life Insurance Company (the Company), is responsible for the designand operation of internal control over financial reporting for the Company’s financial statements, namely, consolidatedbalance sheet and the related consolidated statements of operations, comprehensive income, cash flows, changes
in net assets and a summary of significant accounting policies and other explanatory information for the year ended
March 31, 2023, prepared in accordance with Article 110 Paragraph 2 of the Insurance Business Act. The Company
designs and operates its internal control over financial reporting in accordance with the basic framework for internal
control set forth in the Revision of Standards and Practice Standards for Management Assessment and Audit
Concerning Internal Control Over Financial Reporting (Council Opinions) issued by the Business Accounting Council of
the Financial Service Agency of Japan.
Internal control aims at achieving the objectives to a reasonable extent with the organized and integrated functionof individual components of internal control as a whole. Therefore, internal control over financial reporting cannot
always ensure the prevention or detection of misstatements in the presentation of financial reporting.
2. Matters relating to the scope of assessment, the basis date of assessment and the assessment procedures
The Company performed an assessment of internal control over financial reporting for its consolidated financial
statements as of the end of the fiscal year, March 31, 2023 in accordance with generally accepted assessment
standards in Japan for internal control over financial reporting.
In the assessment of internal control over financial reporting, the Company first assessed internal controls thathave a material impact on overall consolidated financial reporting (company-level controls) and, based on the results,
the Company selected the business processes to be assessed. In assessing those business processes, the Company
analyzed selected business processes, identified a key control that would have a material impact on the reliabilityof financial reporting, and assessed the establishment and operation with regard to the key control. The Company
assessed the effectiveness of internal control by the aforementioned procedures.
For the Company and its consolidated subsidiaries, the Company determined the scope of assessment of internal
control over financial reporting from the perspective of their materiality to the reliability of financial reporting. The
materiality to the reliability of financial reporting is determined in light of their degree of quantitative and qualitative
impact. The Company rationally determined the scope of assessment of internal controls incorporated into businessprocesses (process-level controls) based on the results of assessment of company-level controls regarding theCompany and one consolidated subsidiary. Other than those indicated above, five consolidated subsidiaries were
determined to be immaterial from quantitative and qualitative perspectives. Consequently, they are excluded from thescope of assessment of company-level controls.
With respect to the scope of assessment of process-level controls, the locations or business units were selected
in descending order of ordinary revenues (after elimination of inter-company transactions) in the previous fiscal year
until their combined amount reached about two-thirds of consolidated ordinary revenues. As a result, two companies(the Company and its consolidated subsidiary) were selected as significant locations or business units. At selectedsignificant locations and business units, business processes related to accounting items that were closely associatedwith the company's business objectives, including securities, ordinary loans and policy reserves, as well as premiumand other income and claims and other payments, which have a material impact on the calculation of policy reserves,
were determined to be within the scope of assessment. Furthermore, at selected significant locations and business
units and any other locations and business units, added to the scope of assessment were business processes relating
to important accounting items that have a high possibility of material misstatements and involve estimates andjudgments, and business processes relating to businesses or operations dealing with high-risk transactions.
3. Matters relating to the results of the assessment
As a result of performing the assessment, the Company concluded that the design and operation of internal control
over financial reporting for the Company were effective as of March 31, 2023.
4. Supplementary information
Not applicable
5. Other special information
Not applicable

			
			
			
			

May 19, 2023
Yoshiteru Yoneyama
President

Fukoku Mutual Life Insurance Company

FUKOKU MUTUAL LIFE INSURANCE COMPANY73

Report of Independent Auditors

74

FUKOKU MUTUAL LIFE INSURANCE COMPANY

FUKOKU MUTUAL LIFE INSURANCE COMPANY

75

76

FUKOKU MUTUAL LIFE INSURANCE COMPANY

FUKOKU MUTUAL LIFE INSURANCE COMPANY

77

78

FUKOKU MUTUAL LIFE INSURANCE COMPANY

FUKOKU MUTUAL LIFE INSURANCE COMPANY

79

80

FUKOKU MUTUAL LIFE INSURANCE COMPANY

Corporate Organization

Employees (As of March 31, 2023)
Office Staff
2,863
Sales Representatives

Secretarial Div.

9,573

Strategic Planning Dept.
Compliance Control Dept.
Corporate Risk Management Dept.
Credit Analysis Div.
General Affairs Dept.
Independent Auditors

Audit & Supervisory
Board

Audit & Supervisory
Board Members' Office

Chiba Newtown Office Administrative Div.
Personnel Dept.
Market Planning Dept.
Retail Management Dept.
Sales Administration Dept.
Market Developing Dept.
Strategic Shinkin Bank Promotion Dept.

Board of Representative
Members of Policyholders

Strategic Market Promotion Dept.
Board of Directors

Pension Consulting Dept.
Customer Service Headquarters
Corporate Customer Service Dept.

Nomination Committee of
Candidates for
Representative Members

Secretariat for Nomination
Committee of Candidates for
Representative Members

Chief Actuary

Individual Customer Service Dept.
Underwriting and Medical Dept.

Human Resource
Development
Headquarters

Claims Dept.
Policy Administration Dept.
Operation and System Planning Dept.

Board of Full-time Directors

Claim Inspection Div.
Securities Investment Dept.
Derivatives and Alternative Investment Dept.

Council

Credit Investment and Loans Dept.
Separate Accounts Management Div.
Securities Administrative Dept.
Investment Planning Dept.
Real Estate Dept.
Accounting Dept.
Actuarial Dept.
Internal Auditing Dept.
Affiliated Business Dept.
Committee for Editing History of the Company(As of July 4, 2023)

62 Branch Offices

FUKOKU MUTUAL LIFE INSURANCE COMPANY

81

Corporate Information

Directors, Audit & Supervisory
Board Members, and Executive
Officers

President and Chief Executive Officer

Audit & Supervisory Board Member

Yoshiteru Yoneyama*

Kunio Otani***

Deputy President and Executive Officer

Audit & Supervisory Board Member (Standing)Yuuki Sakurai

Keiichi Kurota

Director and Senior Managing Executive Officer

Audit & Supervisory Board Member (Standing)Toshikatsu Hayashi

Hideaki Shigematsu

Director and Managing Executive Officer

Managing Executive Officer

Takehiko Watabe

Takeshi Oomori

Director and Managing Executive Officer

Managing Executive Officer

Yasuyuki Kitamura

Ichiro Yamada

Director

Executive Officer

Masanori Yanagi**

Mitsuhiro Hoshino

Director

Executive Officer

Hiroshi Sato**

Kenichi Yoshioka

Director

Executive Officer

Aya Komaki**

Yoshiyuki Suzuki

Director and Executive Officer

Executive Officer

Naoyuki Torii

Hirotaka Kurihara

Director and Executive Officer

Executive Officer

Naoki Sunamoto

Hideki Matsushiro

Director and Executive Officer

Executive Officer

Takeshi Kondou

Osamu Eguchi

Director and Executive Officer

Executive Officer

Yuuji Yoshida

Hitoshi Yazaki

Audit & Supervisory Board Member*Representative Director

Yoshizumi Nezu*****External Directors***External Audit & Supervisory Board Member

Audit & Supervisory Board Member

Kyohei Takahashi***82

FUKOKU MUTUAL LIFE INSURANCE COMPANY(As of July 4, 2023)

Directory

Fukoku Mutual Life Insurance Company(Uchisaiwaicho head office)2-2, Uchisaiwaicho 2-chome, Chiyoda-ku, Tokyo 100-0011, Japan
Phone: +81-3-3508-1101(Chiba Newtown head office)10, Otsuka 2-chome, Inzai City, Chiba 270-1352, Japan
Phone: +81-476-47-5111
Fukoku Life International (U.K.) Ltd.
1st Floor, 19 Great Winchester Street, London, EC2N 2JA, U.K.
Phone: +44-20-7283-1331(From left: J.Doran, Y.Suzuki, T.Taguchi, K.Sato and T.Keevil)

Fukoku Life International (America) Inc.
Times Square Tower, 7 Times Square, 35th Floor, New York,NY 10036, U.S.A.
Phone: +1-212-221-7760(From left: A.Chang, M.Xu, T.Naka, A.Hashimoto, S.Lester
and T.Takano)

Fukoku Life Investments Singapore Pte. Ltd.
80 Robinson Road #16-04 Singapore 068898
Phone: +65-6220-8308(From left: K.Matsumoto, Y.Takubo, I.Chan, J.Morizane,
M.Wan and Q.Wei Ren)

FUKOKU MUTUAL LIFE INSURANCE COMPANY

83

This report is made of LIMEX, a new material mainly made from limestone.