November 26, 2015

Financial Results for the Six Months Ended September 30, 2015
Fukoku Mutual Life Insurance Company (President: Yoshiteru Yoneyama) announces financial results
for the six months ended September 30, 2015.

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

P. 1

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

P. 3

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

P. 10

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

P. 11

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

P .12

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

P. 21

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

P. 22

8. Risk-monitored Loans･････････････････････････

P. 23

9. Solvency Margin Ratio･････････････････････････

P. 24

10. Status of Separate Account･････････････････････････

P. 25

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

P. 32

Attached: Supplementary Materials for the Six Months Ended September 30, 2015

Fukoku Mutual Life Insurance Company

1. Business Highlights(1) Policies in Force, New Policies and Surrendered and Lapsed Policies(i) Policies in Force
As of March 31, 2015
Number of policies

As of September 30, 2015

Amount(Thousands)

Number of policies(Thousands)(100 millions of yen)AmountChanges(%, Pre-FYE)(100 millionsof yen)Changes(%, Pre-FYE)

99.5

Individual insurance

3,066

236,846

3,086

100.6

235,609

Individual annuities

739

28,718727

98.4

28,251

98.4

3,805

265,564

3,813

100.2

263,861

99.4

Group insurance－

166,780－－

167,487

100.4

Group annuities－

21,232－－

20,925

98.6

Subtotal

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

(ii) New Policies
Total
Six months ended
September 30, 2014

New business

Net increase by
conversion

Number of policies

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

Individual insurance

172

7,641

7,108

Individual annuities

9

334

343

(8)

182

7,976

7,451

524

Group insurance

－

35

35

－

Group annuities

－

0

0

－

Subtotal

Total
Six months ended
September 30, 2015

AmountChanges(%, YoY)

Net increase by
conversion

New business

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

Changes(%, YoY)

533

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

Individual insurance

177

102.8

8,145

106.6

7,477

105.2

668

125.4

Individual annuities

15

155.0

531

158.8

541

157.8

(9)

－

192

105.6

8,677

108.8

8,018

107.6

658

125.5

Group insurance

Subtotal

－

－

178

501.4

178

501.4

－

－

Group annuities－－

30 6,932,951.4

30 6,932,951.4－－

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

(iii) Surrendered and Lapsed Policies (Individual Insurance and Individual Annuities)
Six months ended
September 30, 2014

Six months ended
September 30, 2015
Changes(%, YoY)

Amount of surrender and lapse(100 millions of yen)

Surrender and lapse ratio (%)

7,360

6,725

91.4

2.71

2.53

(0.18)

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

1

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of September 30, 2015
Changes(%, Pre-FYE)

Individual insurance

2,736

2,741

100.2

Individual annuities

1,327

1,327

100.0

Total

4,064

4,068

100.1

1,066

1,070

100.4

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

Six months ended September 30, 2014 Six months ended September 30, 2015
Changes(%, Pre-FYE)

Individual insurance

89

99

111.3

Individual annuities

14

18

130.4

Total

103

118

113.9

34

34

100.9

Medical coverage and living benefits

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

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

Six months ended September 30, 2014 Six months ended September 30, 2015
Changes(%, Pre-FYE)

Premium and other income

3,027

3,131

103.4

945

888

93.9

Investment income
Claims and other payments

2,528

3,298

130.4

Investment expenses

184

231

125.0

Ordinary profits

507

496

97.7

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

As of March 31, 2015

As of September 30, 2015
Changes(%, Pre-FYE)

Total assets

66,1192

64,802

98.0

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

Cash, deposits, call loans

AmountPercentage

AmountPercentage

282,969

4.3

186,057

2.9

870

0.0

842

0.0

Monetary claims bought
Money held in trust
Securities
Domestic bonds

As of September 30, 2015

34,3190.5

33,7350.5

5,163,610

79.1

5,156,598

80.6

2,856,151

43.7

2,712,483

42.4

Domestic stocks

641,066

9.8

585,785

9.2

Foreign securities

1,583,778

24.3

1,773,049

27.7

Foreign bonds

1,287,302

19.7

1,511,692

23.6

296,475

4.5

261,356

4.1

Foreign stocks and other securities
Other securities

82,614

1.3

85,2791.3

763,900

11.7

734,203

11.5

Policy loans

63,3111.0

62,362

1.0

Ordinary loans

Loans

700,58810.7

671,841

10.5

Real estate

223,794

3.4

212,402

3.3

Others62,7501.0

79,213

1.2

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

6,530,267

100.0

6,401,104

100.0

1,572,701

24.1

1,884,313

29.4

Total
Foreign currency denominated assets(2) Changes (Increase/Decrease) in Assets(Millions of yen)Six months ended
September 30, 2014

Cash, deposits, call loans

Six months ended
September 30, 2015

(23,392)

Monetary claims bought(96,912)

(85)

(28)

1,324

(584)

209,520(7,011)

Domestic bonds

5,368(143,667)

Domestic stocks

68,156(55,280)

Foreign securities

136,998

189,270

Foreign bonds

121,655

224,390

Foreign stocks and other securities

15,342(35,119)(1,001)

2,665(58,608)(29,696)

Money held in trust
Securities

Other securities
Loans
Policy loans

(613)

(948)

(57,995)(28,747)

Real estate(2,594)(11,391)

Others

19,075

16,462

Ordinary loans

Allowance for possible loan losses
Total
Foreign currency denominated assets

3

215

(0)

145,455(129,162)

170,902311,612

Fukoku Mutual Life Insurance Company

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

Six months ended
September 30, 2014

Six months ended
September 30, 2015

66,4942
51,278
8,191
6,891
131
－
1,374
16,149
4,990
3,023
1,230
735
－
－
－
528
212
26
89,776

66,35913
52,625
6,893
6,705
121
－
－
－
22,29318,310
674
3,308
－
－
－
－
－
177
88,829(4) Investment Expenses(Millions of yen)Interest expenses
Losses on trading account securities
Losses from money held in trust, net
Losses from trading securities, net
Losses on sales of securities
Losses on sales of domestic bonds
Losses on sales of domestic stocks
Losses on sales of foreign securities
Others
Losses on valuation of securities
Losses on valuation of domestic bonds
Losses on valuation of domestic stocks
Losses on valuation of foreign securities
Other losses on valuation of securities
Losses on redemption of securities
Losses from derivative instruments, net
Foreign exchange losses, net
Provision for allowance for possible loan losses
Write-off of loans
Depreciation of real estate for rent and other assets
Other investment expenses
Total

Six months ended
September 30, 2014

Six months ended
September 30, 2015

2,160
－
－
－
167
0
63
103
－
111
－
－
111
－
－
11,014
－
－
－
2,413
2,607
18,474

2,389
－
556
2,064
3,343
－
845
2,497
－
－
－
－
－
－
－
4,803
2,322
19
－
2,148
2,851
20,498(5) Net Investment Income
Six months ended
September 30, 2014

Net investment income

71,301
4(Millions of yen)Six months ended
September 30, 2015

68,331

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of September 30, 2015

Carrying value on
the balance sheet

Net valuation gains/losses
included in the statementof operations

Carrying value on
the balance sheet

354,399

25,399344,064

Trading securities

Net valuation gains/losses
included in the statementof operations(9,185)

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

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

As of March 31, 2015

As of September 30, 2015

Gains/losses

Book value

Fair value

811,903

926,148

114,245

114,245

Fair value－

771,380

887,379

115,999

115,999

Domestic bonds

742,337

853,785

111,448－

111,448－

742,011855,870

113,859

113,859

Foreign bonds

69,56572,362

－

2,797

2,797

－

29,36931,508

2,139

2,139

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

－

1,215,695

1,346,650

130,954

131,00450

1,118,219

1,243,247

125,027

125,09466

1,174,597

1,305,280

130,683

130,73350

1,088,121

1,212,898

124,777

124,843

66

41,09841,369

270

270

－

30,09830,349

250

250

－

1,433

1,236

(196)

3

200

1,433

1,249

(184)

1

185
10,153Gains
Held-to-maturity debt securities

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

Gains/losses

Book value
Losses

Gains

Losses2,150,593

2,760,905

610,311611,672

1,360

2,399,099

2,903,752

504,652

514,805

Domestic bonds

807,550

892,795

85,24585,26924

755,124

827,400

72,276

72,476

199

Domestic stocks

279,549

597,167

317,617317,842225

287,924

543,915

255,990259,167

3,176

Foreign securities

1,010,329

1,197,021

186,692

187,788

1,096

1,291,864

1,455,769

163,905

168,404

4,499

Foreign bonds

784,142

901,979

117,837

118,593756

1,084,057

1,195,846

111,789

113,136

1,347

Foreign stocks and other securities

226,187

295,042

68,854

69,194340

207,807259,922

52,11555,2683,152

53,16473,92020,756

20,771

15

64,186

76,666

12,47914,757

2,277

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,179,626

5,034,941

855,314856,926

1,611

4,290,133

5,035,628

745,494755,900

10,405

Domestic bonds

2,724,485

3,051,862

327,377

327,45174

2,585,256

2,896,169

310,913311,179

266

Domestic stocks

279,549

597,167

317,617317,842225

287,924

543,915

255,990259,167

3,176

Foreign securities

1,122,427

1,311,990

189,563

190,859

1,296

1,352,765

1,518,876

166,110

170,796

4,685

Foreign bonds

894,806

1,015,712

120,906

121,662756

1,143,524

1,257,704

114,179

115,526

1,347

Foreign stocks and other securities

227,621296,278

68,657

69,197

540

209,240

261,172

51,931

55,2693,338

53,16473,92020,756

20,771

15

64,186

76,666

12,47914,757

2,277

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Other securities

Total

Other securities

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

As of March 31, 2015

As of September 30, 2015

Held-to-maturity debt securities－－

Unlisted foreign bonds－－

Others－－－－Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

17,031

14,922

8,338

6,309

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

Unlisted foreign bonds

－

－

8,693

8,613

52,59250,483

Policy-reserve-matching bonds

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

Others
Total

5

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015
Carrying valueonbalancesheetsMoney held in trust

34,319As of September 30, 2015
Carrying valueonbalancesheetsGains/losses
Fair value

Gains
－

34,319Losses－－33,735

Gains/losses
Fair value

Gains
－

33,735Losses－－* Money held in trust for trading purpose(Millions of yen)

As of March 31, 2015
Carrying value onbalance sheets
Money held in trust
for trading purpose

As of September 30, 2015

Net valuation gains/losses
included in the statementsof operations

33,319Net valuation gains/losses
included in the statementsof operations

Carrying value onbalance sheets(0)32,735(601)* Money held in trust classified as held-to-maturity, policy-reserve-matching and available-for-sale(Millions of yen)

As of March 31, 2015
Book value

As of September 30, 2015

Gains/losses

Fair value

Gains

LossesBook value

Gains/losses

Fair value

Gains

LossesMoney held in trust
for held-to-maturity

－

－

－

－

－

－

－

－

－

－

Money held in trust
for policy-reserve-matching

－

－

－

－

－

－

－

－

－

－

Money held in trust
for available-for-sale

－

－

－

－

－

－

－

－

－

－

6

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

Currencyrelated

Total

Total

Total

820

－

－

－

685

－

200

－

426

(459)

1,506

－

200

－

1,247

Currencyrelated

Stockrelated

Bondrelated

Others

821

Total

0

14,524

208

－

－

(707)

1,479

168

(801)

－

139

(707)

16,004

376

(801)

－

14,872Hedge accounting applied
Hedge accounting not applied

Others0

Interestrelated

As of September 30, 2015

Bondrelated(460)

Hedge accounting applied
Hedge accounting not applied

Stockrelated

14,733

Note: Gains and losses from applying fair value hedge accounting (currency- related, gains of ¥820 million as of March 31, 2015,
and currency-related gains of ¥14,524 million, stock-related gains of ¥208 million as of September 30, 2015) included in gains and losses
with hedge accounting applied, and gains and losses with hedge accounting not applied are reported in the statements of operations.

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

As of March 31, 2014
Notional amount/contract value

Fair
value

Over
1 yearAs of September 30, 2015
Notional amount/contract value

Gains(losses)

Fair
value

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

85

－

0

0

42

－

0

0

Payment fixed, receipt floating

－

－

－

－

－

－

－

－

－

－

－

－

－

－ [

－

－

－

－

－

－

581

(707)

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

－ ]
－

Payment fixed, receipt floating
[

－

－ ]
－

－ ]

－

－ [

－

－ [

－

－ ]

Bought－Receipt fixed, payment floating[
Payment fixed, receipt floating

300,000
[

－

－

－ ]
200,000－－ ]300,000

1,289 ]

828

Total

(460) [

200,000

1,289 ]

(459)

(707)

Notes: Figures in [ ] are option premiums which are included in balance sheet.
(reference) Interest rate swap contracts by contractual maturity dates(Millions of yen)

As of March 31, 2015

As of September 30, 2015

Yen interest rate swap contracts
1 year or
shorterOver
1 year to
3 yearsOver
3 years

1 year or
shorterOver
1 year to
3 yearsOver
3 years

85

－

－

42

－

－

Average fixed rate (receipt)

2.47%

－

－

2.47%

－

－

Average floating rate (payment)

1.06%

－

－

1.06%

－

－

－

－

－

－

－

－

Average floating rate (receipt)

－

－

－

－

－

－

Average fixed rate (payment)

－

－

－

－

－

－

Notional amount (receipts fixed, payments floating)

Notional amount (receipts floating, payments fixed)

7

Fukoku Mutual Life Insurance Company

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

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

Over-the-counter transactions
Currency forward contracts
Sold
U.S. dollar
Euro
British Pound
Australian dollar
Canadian dollar
BoughtU.S. dollar

－
－
－
－
－
－
－
－

724,640
458,741
78,873111,979
46,47728,568
59
59

Fair
value

As of September 30, 2015
Gains(losses)723,134
459,295
78,384
111,083
45,95428,415
60
60

Total

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

Notional amount/contract valueOver 1 year

Fair
value

Gains
(losses)－ 1,144,584－ 932,765
87,999－52,651－
46,159－25,008－－－－－1,160,588
945,585
88,83653,38147,36325,422－－

1,506

16,004
12,819
836
730
1,203
413
－
－
16,004

Notes: 1. Forward exchange rates are used for exchange rates as of September 30, 2015.
2. Regarding assets and liabilities which are denominated in foreign currencies but have fixed settlement in yen under currency forward contracts
and are reported in yen amounts in the balance sheet, those currency forward contracts are excluded from the table above.

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

As of March 31, 2015
Notional amount/contract value

Fair valueOver 1 year

As of September 30, 2015
Gains(losses)

Notional amount/contract value

Fair value

Gains(losses)Over 1 year

Exchange-traded transactions
Yen stock index options
Sold
Bought

－
－

－
－

－
－

－
－

4,820
－

－
－

4,652
－

168
－

Over-the-counter transactions
Yen stock forward contract
Sold
Bought

－
－

－
－

－
－

－
－

823
－

823
－

615
－

208
－

－

Total

376

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

As of March 31, 2015
Notional amount/contract value

Fair valueOver 1 year

As of September 30, 2015
Gains(losses)

Notional amount/contract value

Fair value

Gains(losses)Over 1 year

Exchange-traded transactions
Yen bond futures
Sold
Bought294,876－－－

294,440－

436－

257,174－－－

257,798－(623)－

Foreign bond futures
Sold
Bought40,083－－－40,318－(235)－

44,951－－－45,129
－

(177)
－

Total

200

8

(801)

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015
Carrying value on
the balance sheets
132,263

Fair value
235,337

As of September 30, 2015
Carrying value on
the balance sheets

Gains(losses)

125,723

103,073

Fair value
227,451

Gains(losses)
101,727

Notes: 1. As of September 30, 2015, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value forproperty tax as of January 1, 2015 and the road rate as of January 1, 2015.
2. As of March 31, 2015, fair value is based on the appraisal value by the real-estate appraiser, the appraisal value forproperty tax as of January 1, 2015 and the road rate as of January 1, 2014.

9

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of September 30, 2015

Assets:Cash and deposits

96,51530,300Call loans

186,500

155,800

Monetary claims bought
Money held in trust
Securities

870

842

34,31933,7355,240,955

5,234,933[2,061,294][1,950,912][ Local government bonds ][154,616][143,275][ Corporate bonds ][670,380][649,168][ Stocks ][664,735][609,772][1,607,208][1,796,460]

763,900

734,203[ Government bonds ][ Foreign securities ]Loans
Policy loans

63,31162,362

Ordinary loans

700,588671,841

Tangible fixed assets

227,591

217,161

Intangible fixed assets

11,017

10,638

Reinsurance accounts receivable
Other assets

105

33

52,12364,571

Lease investment assets

801

784

Rest of the other assets

51,322

63,787

Allowance for possible loan losses
Total assets

Liabilities:
Policy reserves
Reserve for outstanding claims
Policy reserve
Reserve for dividends to policyholders
Reinsurance payables(1,948)(1,948)6,611,952

6,480,272

As of March 31, 2015

As of September 30, 2015

5,545,647

5,514,804

21,305

19,317

5,475,030

5,427,842

49,311

67,643

110

127

Subordinated bonds

118,959

141,935

Other liabilities

55,98445,184

Corporate income tax payable

15,851

7,795

Asset retirement obligations

3,001

3,036

Rest of the other liabilities

37,13134,352

Reserve for employees' retirement benefits

46,393

26,974

Reserve for price fluctuation of securities

46,53447,945

Deferred tax liabilities

85,741

57,074

Deferred tax liabilities for revaluation reserve for land

14,787

14,764

5,914,159

5,848,810

Net assets:
Foundation funds

30,00030,000

Accumulated foundation funds redeemed

86,00086,000Total liabilities

Reserve for revaluation
Surplus
Legal reserve for future losses

112

112

143,548

152,453

2,582

2,742

140,966

149,711

Reserve for redemption of foundation funds

12,000Reserve for dividend allowances

3,895

18,00020,000

Accumulated fund for price fluctuation

31,00041,000Reserve for advanced depreciation of real estate for tax purpose

262

266

Other reserves

767

767

Other surplus

Unappropriated surplus
Total foundation funds, surplus and others

93,041

69,678259,660

268,565

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

434,236

359,060

0
3,894

0
3,836

Total valuation and translation adjustments

438,131362,896

Total net assets

697,792

631,462

6,611,952

6,480,272

Deferred valuation gains (losses) under hedge accounting, net of tax
Revaluation reserve for land, net of tax

Total liabilities and net assets

10

Fukoku Mutual Life Insurance Company

4. Non-consolidated Statements of Operations(Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

Ordinary revenues:
Premium and other income[Premium income]

302,779

313,128[302,736][313,014]

94,56988,829[Interest, dividends and other income][66,494][66,359][Gains from money held in trust, net]

[1,374][－][Gains from trading securities, net]

[16,149][－][Gains on sales of securities][4,990][22,293][Gains from separate accounts, net]

[4,792]

[－]

8,701

53,665[4,205][1,987]

Investment income

Other ordinary revenues[Reversal of reserve for outstanding claims][Reversal of policy reserve]
Total ordinary revenues[－][47,187]

406,049455,623

Ordinary expenses:

252,884

329,857[Claims][66,404][84,623][Annuities][76,452][104,847][Benefits][57,604][55,307][Surrenders][38,172][66,494][Other payments][14,044][18,355]

29,64924

Claims and other payments

Provision for policy reserve and others

29,619－30

24

Investment expenses

18,474

23,102[Interest expenses][2,160][2,389]

[－]

[556]

Provision for policy reserve
Provision for interest on reserve for dividends to policyholders[Losses from money held in trust, net][－]

[2,064][Losses on sales of securities][167][3,343][Losses on valuation of securities]

[111]

[－]

[Losses from trading securities, net]

[11,014][4,803][－][2,604]

Operating expenses

43,32442,874

Other ordinary expenses

10,935

10,148

Total ordinary expenses

355,269

406,006

Ordinary profits

50,78049,616

Gains on disposal of fixed assets

4

1,356

Gain on contribution of securities to retirement benefit trust

－

7,913

4

9,270

[Losses from derivative instruments, net]
[Losses from separate accounts, net]

Extraordinary gains:

Total extraordinary gains
Extraordinary losses:
Losses on disposal of fixed assets

26

138

Impairment losses

95

208

1,255

1,411

Total extraordinary losses

1,376

1,757

Surplus before income taxes

49,407

57,128

10,263

9,474

Provision for reserve for price fluctuation of securities

Income taxes：
Current

127

1,792

Total income taxes

10,39011,267

Net surplus for the period

39,01645,861

Deferred

11

Fukoku Mutual Life Insurance Company

5. Non-consolidated Statements of Changes in Net Assets[For the six months ended September 30, 2014](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of the current period

Foundation
funds

Accumulated
foundation
funds
redeemed

35,00071,000Reserve forLegal reserve redemption
Reserve forfor futureof foundation
revaluation
losses
funds

112

2,485

18,000Reserve foradvanceddepreciation
Reserve for Accumulated of real estate
dividend
fund for pricefor tax
allowances
fluctuation
purpose

3,895

21,000

3,969

Other
reserves

767

Cumulative effects of changes inaccounting policies
Restated balance

35,00071,000112

2,485

18,0003,895

21,0003,969

767

Unappropriat
ed surplus Total surplus

Total
foundation
funds,
surplus andothers74,662

124,780

230,892(3,297)(3,297)(3,297)71,365

121,482

227,595－

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

(97)

－

－

－

15,000Changes in the current period
Financing of additional foundation funds

10,000Additions to reserve for dividends
to policyholders

97

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

15,000

Payment of interest on foundation funds
Net surplus for the current period
Redemption of foundation funds

(621)

(621)

(621)

39,01639,01639,016－(15,000)－－(15,000)(15,000)(10,000)－－(15,000)

Additions to reserve for redemption offoundation funds

9,000

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

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

0

(0)

－

－

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

3,707

－

－

(21)

(21)

(21)

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current period(5,000)15,000－97(6,000)－10,000(3,707)－(8,612)(8,222)

1,777

Balance at the end of the current period

30,00086,000112

2,582

12,0003,895

31,000262

767

62,752

113,260

229,372Net
unrealized
Deferred
gains (losses) valuation
on available- gains (losses) Revaluation
Total
for-sale
under hedge reserve for valuation andsecurities, net accounting,land, net oftranslationof taxnet of tax
tax
adjustments

Total
net assets

Valuation and translation adjustments

Balance at the beginning of the current period

259,861

2

3,144

263,008

493,900

259,861

2

3,144

263,008

490,603

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

Changes in the current period
Financing of additional foundation funds

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

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

15,000(621)

Payment of interest on foundation funds
Net surplus for the current period

39,016

Redemption of foundation funds(15,000)

Additions to reserve for redemption offoundation funds－

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

Additions to accumulated fund forprice fluctuation－

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

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

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current peiod
Balance at the end of the current period(21)
68,504(1)

21

68,524

68,52468,504(1)

21

68,52470,302

328,366

1

3,165

331,533

560,906

12

Fukoku Mutual Life Insurance Company

[For the six months ended September 30, 2015](Millions of yen)Foundation funds, surplus and others
Surplus
Other surplus

Balance at the beginning of the current period

Foundation
funds

Accumulated
foundation
funds
redeemed

30,00086,000Reserve forLegal reserve redemption
Reserve forfor futureof foundation
revaluation
losses
funds

112

2,582

12,000Reserve foradvanceddepreciation
Reserve for Accumulated of real estate
dividend
fund for pricefor tax
allowances
fluctuation
purpose

3,895

31,000262

Otherreserves

767

Unappropriat
ed surplus Total surplus

Total
foundation
funds,
surplus andothers

93,041

143,548259,660(36,698)(36,698)(36,698)

(160)

－

－

(316)

(316)

(316)

45,86145,86145,861(6,000)－－(16,104)－－(10,000)

Changes in the current period
Additions to reserve for dividends
to policyholders

160

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

6,000
16,104

Additions to reserve for dividend allowances
Additions to accumulated fund forprice fluctuation－－

Addition to reserve for advanced
depreciation of real estate for tax purpose

7

(7)

－

－

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

(3)

3

－

－

58

58

58

10,000

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current period
Balance at the end of the current period

－

－

－

160

6,000

16,10410,0003－(23,362)

8,904

8,904

30,00086,000112

2,742

18,00020,00041,000266

767

69,678152,453

268,565

Net
unrealized
Deferred
gains (losses) valuation
on available- gains (losses) Revaluation
Total
for-sale
under hedge reserve for valuation andsecurities, net accounting,land, net oftranslationof taxnet of tax
tax
adjustments

Total
net assets

Valuation and translation adjustments

Balance at the beginning of the current period

434,2360

3,894

438,131

697,792

Changes in the current period
Additions to reserve for dividends
to policyholders(36,698)－

Additions to legal reserve for future losses(316)

Payment of interest on foundation funds

45,861

Net surplus for the current period
Additons to reserve for redemption offoundation funds－

Additions to reserve for dividend allowances－

Additions to accumulated fund forprice fluctuation－

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

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

Reversal of revaluation reserve
for land, net of tax

58

Net changes, excluding foundation funds,
surplus and others(75,176)

(0)

(57)

(75,234)

Total changes in the current period(75,176)

(0)

(57)

(75,234)(75,234)(66,329)

Balance at the end of the current period

359,060

03,836

362,896

631,462

13

Fukoku Mutual Life Insurance Company

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

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent tosecurities, and securities managed as trust assets in money held in trust, is as follows:i) Trading securities are stated at fair market value. Costs of their sales are determined by the moving
average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being
determined by the moving average method in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit
Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).
iv) Investments in subsidiaries and affiliates are stated at cost, cost being determined by the moving
average method.
v) Available-for-sale securities with fair market values are stated at fair market values based on themarket prices at the balance sheet date. Costs of their sales are determined by the moving averagemethod. Net unrealized gains or losses on these available-for-sale securities, net of taxes, arerecorded as a separate component of net assets.
Available-for-sale securities whose market value are deemed extremely difficult to obtain are stated atcost, cost being determined by the moving average method, except for public and corporate bonds
including foreign bonds, of which the difference between acquisition cost and face value is considered
to be an adjustment of interest. Such bonds are stated at amortized cost under the straight-line
method, cost being determined by the moving average method.
(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalues the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting from therevaluation, net of related taxes, is recorded as revaluation reserve for land as a separate component of net
assets and the related tax is recorded as deferred tax liabilities for revaluation reserve for land.
 Date of revaluation: March 31, 2002
 Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
14

Fukoku Mutual Life Insurance Company

promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said Ordinancewith certain reasonable adjustments.
(4) Depreciation of Tangible Fixed Assets
Depreciation of tangible fixed assets is calculated by the following methods.
 Tangible fixed assets (excluding lease assets):Declining-balance method
However, buildings (excluding building attachments and structures) acquired on or after April 1, 1998 aredepreciated using Straight-line methods.
 Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method
over the lease term without residual value
Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciated equally
over three years.
(5) Foreign Currency Translation
Foreign currency denominated assets and liabilities, except for investments in subsidiaries and affiliates, aretranslated into Japanese yen at the effective exchange rate prevailing at the balance sheet date. Investments
in subsidiaries and affiliates are translated into Japanese yen at the exchange rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company’s standards of selfassessment and write-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt such as being in the proceedings of bankruptcy or
civil rehabilitation (hereinafter called “legally bankrupt borrowers”) and who are substantially bankrupt(hereinafter called “substantially bankrupt borrowers”), the Company provides the remaining amount ofcredits after the direct write-off described below and the deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy(hereinafter called “not currently bankrupt borrowers”), the Company provides the amounts deemed asnecessary considering the borrowers’ ability to pay, within the amounts after deductions of the amount
expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying the borrowers’ balance by the actual ratio of bad debt losses on defaults during a certain
past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards of selfassessment on credit quality. The results of the assessment are reviewed by the audit department, which is
independent of business-related divisions. Subsequently, the allowance for possible loan losses are provided
based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral values or the amounts collectible through the executions ofguarantees are written-off directly from the borrowers’ balances as the estimated uncollectible amounts. The
amount written-off as of September 30, 2015 was ¥247 million.
(7) Reserve for Employees’ Retirement Benefits and Method of Amortizing Retirement Benefit
Expenses
Reserve for employees' retirement benefits is presented for the employees' retirement benefits based on
projected benefit obligations and pension plan assets at the balance sheet date.
The Company uses the following methods for amortizing retirement benefit obligations and retirement
benefit expenses:
 Method for allocation of projected retirement benefits ..................
 Amortization period of actuarial gains or losses............................
 Amortization period of prior service cost........................................

15

Benefit formula basis
10 years
10 years

Fukoku Mutual Life Insurance Company

In the current period ended September 30, 2015, the Company contributed a portion of its stock holdings toestablish a trust account for retirement benefits amounting to ¥18,666 million and recognized a gain on
contribution of securities to retirement benefit trust amounting to ¥7,913 million as an extraordinary gain.
(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.
(9) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in “interest,
dividends and other income” at the time of receiving the lease fee. The corresponding cost of the leasetransactions is recorded in “investment expenses”, which is calculated by deducting an amount equivalent
to the interest allocated over the lease term from the lease fee received.
(10) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement No. 10,
August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of foreign
currency-denominated bonds classified as available-for-sale securities, which qualify for hedge accounting
because of high correlation and effectiveness between the hedging instruments and the hedged items,
valuation gains and losses on the foreign currency forward contracts are recorded in the statements ofoperations.
For the stock forward transactions against the price fluctuations in the value of domestic stocks
classified as available-for-sale securities, which qualify for hedge accounting because of high correlation andeffectiveness between the hedging instruments and the hedged items, valuation gains and losses on thestock forward transactions are recorded in the statements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, valuation gains and losses on the interest rate swaps are deferred until the maturity of the hedgedtransactions.
The Company applies foreign currency swap appropriated treatment as a hedge for the foreignexchange fluctuation risk associated with foreign currency denominated bonds issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value
or cash flows of hedged items and hedging instruments is mostly applied.
(11) Accounting for Employees’ Retirement Benefits
Accounting of unrecognized actuarial gains or losses and unrecognized prior service costs related to
employees’ retirement benefits is different from the methods used for these items in the consolidated
financial statements.
(12) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense when incurred.
(13) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve is calculatedby the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method
is applied.
Based on the provision of paragraph 5, Article 69 of the Enforcement Regulation of the Insurance
Business Law, certain individual annuity insurance policies and certain hospitalization riders with surgery
benefits and long-term hospitalization benefits have funded policy reserves included.
(14) Software
The software for internal use is amortized based on straight-line method over the estimated useful lives.
16

Fukoku Mutual Life Insurance Company

(15) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified as policy-reserve-matching bonds in accordance with “Temporary Treatment of Accounting and
Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit Committee Report
No. 21 issued by the Japanese Institute of Certified Public Accountants on November 16, 2000).

2. Financial Instruments
The carrying amounts, fair values and their related differences of major financial assets and liabilities as of
September 30, 2015 were as follows:
Carrying
amountFair value

Difference(Millions of yen)

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

¥

30,25730,257
155,800¥

30,25730,257
155,800

―

¥

―
―

842
842

893
893

50
50

32,73532,73532,73532,735――

311,329
771,380
1,118,219
1,433
2,903,752
5,106,115

311,329
887,379
1,243,247
1,249
2,903,752
5,346,957―
115,999
125,027(184 )―
240,842

62,362
671,841734,2036,059,953
141,935
141,935

62,362
694,740
757,1026,323,746
143,184
143,184(0 )
22,89922,899263,792
1,249
1,249

139
14,733
14,872

139
14,733
14,872

―
―
―

¥

¥

¥

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

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards for
Financial Instruments” (ASBJ Statement No.10)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values
approximate book values due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities managed astrust assets in money held in trust:17

Fukoku Mutual Life Insurance Company

The fair values of marketable securities are measured at the quoted market prices at the balance sheet
date. The fair values of other securities without the quoted market prices are based on the prices
reasonably calculated such as the prices offered by the information vendors or counterparty financial
institutions.
Investments in subsidiaries and affiliates, unlisted stocks and investments in partnerships whereby
partnership assets consist of unlisted stocks whose fair values are deemed extremely difficult to obtain,
are excluded from above securities. The carrying amounts of investments in subsidiaries and affiliates,
unlisted stocks and investments in partnerships were ¥35,560 million, ¥6,309 million, and ¥8,613 million
as of September 30, 2015, respectively.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimatedrepayment period and interest rate conditions since their repayment deadlines have not been set up dueto the characteristics that the loans are limited to the amount of cash surrender values. Therefore, thebook values are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claims bought
treated as loans approximate the book values because the market interest rates are reflected in future
cash flows in a short period. Therefore, the fair values of floating interest rate loans and monetary claimsbought treated as loans are based on their book values. The fair values of fixed interest rate loans aremeasured by discounting the future cash flows to the present values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt
borrowers and not currently bankrupt borrowers and monetary claims bought treated as loans arecomputed by deducting the amount of the allowance for doubtful accounts from the book values before
direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market values.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement priceof the exchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on thequoted prices offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate
and forward contract rate.
3. Investment and Rental Property
Notes related to the fair value of investment and rental properties are omitted as no significant change has
occurred since the previous fiscal year-end.
4. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥54,612 million as of September 30, 2015.
5. Loans Receivable
The total amount of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months or more
and restructured loans, which were included in loans, was ¥1,603 million as of September 30, 2015:i)

The balance of credits to bankrupt borrowers was ¥206 million as of September 30, 2015.

ii) The balance of delinquent loans was ¥1,221 million as of September 30, 2015.
iii) The balance of restructured loans was ¥174 million as of September 30, 2015.
iv) There was no balance of delinquent loans past 3 months or more as of September 30, 2015.
The direct write-offs related to loans decreased the credits to bankrupt borrowers described above by ¥247
million as of September 30, 2015.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meetthe conditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the
Corporate Tax Law. Moreover, accrued interest on these loans is not recorded as income after determiningthat principal of or interest on these loans is unlikely to be collected due to the significant delay in repaymentof principal or interest payment or for some other reasons.
18

Fukoku Mutual Life Insurance Company

Delinquent loans are credits whose accrued interest is not recorded as income due to the same reasons
as described above, and exclude credits to bankrupt borrowers and loans for which interest payments havebeen suspended and rescheduled to assist and support the borrowers in the restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payment or repayment of principal
are delinquent for 3 months or more from the due date under the terms of the related loan agreements,
excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim or otherterms, have been negotiated for the purpose of assisting and supporting the borrowers in the restructuring of
their business. This category excludes loans classified as credits to bankrupt borrowers, delinquent loans
and delinquent loans past 3 months or more.
6. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totalled to ¥151,052 million as of September 30, 2015.
7. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were ¥80,813
million as of September 30, 2015. The amounts of separate account liabilities were the same as separate
account assets.
8. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the six months ended September 30, 2015 were as
follows:(Millions of yen)

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

¥ 49,311
36,698(18,390)24¥ 67,643

9. Stocks of Subsidiaries
The amount of stocks of subsidiaries the Company held was ¥36,994 million as of September 30, 2015.
10. Pledged Assets and Secured Debts
Assets pledged as collateral as of September 30, 2015 were ¥27,983 million of securities and ¥1,704 millionof bank deposits. Secured debts as of September 30, 2015 were ¥4,863 million.
11. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called “reserve foroutstanding claims for ceded reinsurance”) was ¥16 million as of September 30, 2015.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve for ceded
reinsurance”) was ¥29 million as of September 30, 2015.
12. Commitment Line
There were unused commitment line agreements under which the Company is the lender of ¥12,172 million
as of September 30, 2015.
13. Subordinated Bonds
Repayments of subordinated bonds are subordinated to other obligations.

19

Fukoku Mutual Life Insurance Company

14. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259of the Insurance Business Law was estimated at ¥10,356 million as of September 30, 2015.
The contribution was charged as operating expenses in the year in which it was paid.

III. Notes to Statements of Operations
1. Gains on Sales of Securities
Major items of gains on sales of securities for the six months ended September 30, 2015 were as follows:(Millions of yen)Domestic bonds..........................................................................................

¥ 18,310

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

674

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

3,308

2. Losses on Sales of Securities
Major items of losses on sales of securities for the six months ended September 30, 2015 were as follows:(Millions of yen)Domestic stocks and others......................................................................

¥

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

845
2,497

3. Policy Reserves for the Reinsurance Contracts
For the six months ended September 30, 2015, reversal of reserve for outstanding claims for ceded
reinsurance considered in calculation of reversal for reserve for outstanding claims was ¥34 million, andreversal of policy reserve for ceded reinsurance considered in calculation of reversal of policy reserve was¥1 million.

4. Interest, Dividends and Other Income
Breakdown of interest, dividends and other income for the six months ended September 30, 2015 was asfollows:(Millions of yen)Interest on deposits.....................................................................

¥

13

Interest and dividends on securities ...........................................

52,625Interest on loans .........................................................................

6,893

Income from real estate for rent ..................................................

6,705

Other interest and dividends .......................................................

121

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

¥ 66,359

20

Fukoku Mutual Life Insurance Company

6. Breakdown of Ordinary Profits (Fundamental Profit)(Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

A

43,63445,019

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

18,536
1,261
11,755
4,990
－
528
－
11,293－－167
111
11,014－－
7,242
50,877
7
－
－
7
－
104
－
104
－
－
－
－
(97)
50,78022,293－－22,293－－－18,008
657
6,882
3,343
－
4,803
2,322
－
4,284
49,304
366
－
366
－
－
54
－
－
54
－
－
－
312
49,616

Fundamental profit

Notes: 1. The following amounts in respect of gains / losses from money held in trust have been excluded from
capital gains / losses and included in fundamental profit due to their income nature (being interest anddividend income): ¥112 million in respect of the six months ended September 30, 2014 and ¥100 million
in respect of the six month ended September 30, 2015.
2. The following amounts in respect of gains / losses from trading securities have been excluded from
capital gains / losses and included in fundamental profit due to their income nature (being interest anddividend income): ¥4,394 million in respect of the six months ended September 30, 2014 and ¥4,818 million
in respect of the six months ended September 30, 2015.

21

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of September 30, 2015

Claims against bankrupt and quasi-bankrupt obligors

207

219

Claims with collection risk

837

1,215

Claims for special attention

370

174

1,415

1,609

[0.17%][0.20%]

816,618

790,822

818,034

792,432

Subtotal[Percentage of total]
Claims against normal obligors
Total

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

22

Fukoku Mutual Life Insurance Company

8. Risk-monitored Loans(Millions of yen)

As of March 31, 2015

As of September 30, 2015

Credits to bankrupt borrowers

194

206

Delinquent loans

844

1,221

Delinquent loans past three months or more－－

Restructured loans

370

174

1,409

1,603

[0.18%][0.22%]

Total[Percentage of total loans]

Notes: 1. For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral value or the amounts collectible through the execution ofguarantees is written-off directly from the borrower’s balance as the estimated uncollectible amounts.
The amounts written-off related to credits to bankrupt borrowers were ¥247 million as of March 31, 2015and ¥247 million as of September 30, 2015.
2. Credits to bankrupt borrowers represent loans which are subject to bankruptcy, corporate
reorganization or rehabilitation or other similar, including but not limited to foreign, proceedings.
Accruing interest of these loans is not recorded as income after determining that principal of or intereston these loans is unlikely to be collected due to the significant delay in repayment of principal orinterest payment or for some other reasons.
3. Delinquent loans are credits whose accruing interest is not recorded as income due to the same
reasons as described in note 2 above, and exclude credits to bankrupt borrowers and loans for whichinterest payments have been suspended and rescheduled to assist and support the borrowers in the
restructuring of their business.
4. Delinquent loans past three months or more are loans for which interest payment or repayment ofprincipal are delinquent for three months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
5. Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim orother terms, have been negotiated for the purpose of assisting and supporting the borrowers in the
restructuring of their business. This category excludes loans classified as credits to bankrupt
borrowers, delinquent loans and delinquent loans past three months or more.

23

Fukoku Mutual Life Insurance Company

9. Solvency Margin Ratio(Millions of yen)

As ofMarch 31, 2015

Total solvency margin

(A)

As of
September 30, 2015

1,397,205

1,366,719

Foundation funds and surplus

220,996247,791

Reserve for price fluctuation of securities

46,53447,945

Contingency reserve

142,523

142,156

1,403

1,367

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

549,280

454,187

Net unrealized gains on real estate x 85%

99,173

98,597

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

197,683

200,235

Qualifying subordinated debt

118,959

141,935－－

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

Others39,65251,503238,962

223,306

Allowance for possible loan losses

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

Total amount of risk

( R1  R8 )2  R2  R3  R7   R4

(B)

2

Insurance risk

R1

25,49424,887

3rd sector insurance risk

R8

9,575

9,574

Assumed investment yield risk

R2

35,85135,844

Minimum guarantee risk

R7

0

0

Investment risk

R3

195,142

179,723

Business risk

R4

5,321

5,000

1,169.3%

1,224.0%

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

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

24

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015

As of September 30, 2015

AmountAmountIndividual variable insurance－－

Individual variable annuities

149

107

Group annuities

82,85580,706

Total

83,00480,813(2) Individual Variable Insurance (Separate Account)
The Company has not sold the individual variable insurance.

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

As of March 31, 2015

As of September 30, 2015

NumberAmountNumberAmountIndividual variable annuities

43

136

36

102

Total

43

136

36

102

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

As of March 31, 2015

As of September 30, 2015

AmountAmountPercentage

Percentage

Cash, deposits, call loans

44

30.0

43

40.3

Securities

104

70.0

63

59.7

Domestic bonds

－

－

－

－

Domestic stocks

－

－

－

－

Foreign securities

－

－

－

－

Foreign bonds

－

－

－

－

Foreign stocks and other securities

－

－

－

－

104

70.0

63

59.7

Loans

－

－

－

－

Others－－－－Allowance for possible loan losses

－

－

－

－

149

100.0

107

100.0

Other securities

Total

25

Fukoku Mutual Life Insurance Company

(iii) Investment Income and Expenses of Separate Account for Individual Variable Annuities(Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

AmountAmountInterest, dividends and other income

1114

Gains on sales of securities－－

Gains on valuation of securities

23

17

Gains on redemption of securities－－

Gains from derivative instruments－－

Foreign exchange gains, net－－

Other investment income－

0

Losses on sales of securities－－

Losses on valuation of securities

27

32

Losses on redemption of securities－－

Losses from derivative instruments－－

Foreign exchange losses, net－－

Other investment expenses－－

Net investment income

7(0)(iv) Fair Value Information on Securities in Separate Account for Individual Variable Annuities* Net Valuation Gains/Losses on Trading Securities(Millions of yen)

As of March 31, 2015
Carrying value onbalance sheet

Trading securities

104

As of September 30, 2015

Net valuation
gains/losses
included in thestatementsof operations

Carrying valueonbalance sheet

Net valuation
gains/losses
included in thestatementsof operations

63

(15)

5

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

26

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015
Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet

Trading securities

As of September 30, 2015

431,744

Net valuation gains/losses
included in the statementof operations

Carrying value onbalance sheet

29,449422,399(14,928)

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

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

As of March 31, 2015
Book value

As of September 30, 2015

Gains/losses

Fair value

Gains

Held-to-maturity debt securities

Book value

Fair value

Gains/losses

Losses

Gains

Losses811,903

926,148

114,245

114,245－771,380

887,379

115,999

115,999－

Domestic bonds

742,337

853,785

111,448

111,448－

742,011855,870

113,859

113,859－

Foreign bonds

69,56572,362

2,797

2,797

－

29,36931,508

2,139

2,139

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

1,215,695

1,346,650

130,954

131,00450

1,118,219

1,243,247

125,027

125,094

66

Domestic bonds

1,174,597

1,305,280

130,683

130,73350

1,088,121

1,212,898

124,777

124,843

66

Foreign bonds

41,09841,369

270

270

－

30,09830,349

250

250

－

1,433

1,236

(196)

3

200

1,433

1,249

(184)

1

185
10,153

Policy-reserve-matching bonds

Investments in subsidiaries and affiliates
Available-for-sale securities

2,150,593

2,760,905

610,311611,672

1,360

2,399,099

2,903,752

504,652

514,805

Domestic bonds

807,550

892,795

85,24585,26924

755,124

827,400

72,276

72,476

199

Domestic stocks

279,549

597,167

317,617317,842225

287,924

543,915

255,990259,167

3,176

Foreign securities

1,010,329

1,197,021

186,692

187,788

1,096

1,291,864

1,455,769

163,905

168,404

4,499

Foreign bonds

784,142

901,979

117,837

118,593756

1,084,057

1,195,846

111,789

113,136

1,347

Foreign stocks and other securities

226,187

295,042

68,854

69,194340

207,807259,922

52,11555,2683,152

53,16473,92020,756

20,771

15

64,186

76,666

12,47914,757

2,277

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

4,179,626

5,034,941

855,314856,926

1,611

4,290,133

5,035,628

745,494755,900

10,405

Domestic bonds

2,724,485

3,051,862

327,377

327,45174

2,585,256

2,896,169

310,913311,179

266

Domestic stocks

279,549

597,167

317,617317,842225

287,924

543,915

255,990259,167

3,176

Foreign securities

1,122,427

1,311,990

189,563

190,859

1,296

1,352,765

1,518,876

166,110

170,796

4,685

Foreign bonds

894,806

1,015,712

120,906

121,662756

1,143,524

1,257,704

114,179

115,526

1,347

Foreign stocks and other securities

227,621296,278

68,657

69,197

540

209,240

261,172

51,931

55,2693,338

53,16473,92020,756

20,771

15

64,186

76,666

12,47914,757

2,277

Money held in trust

－

－

－

－

－

－

－

－

－

－

Monetary claims bought

－

－

－

－

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

－

－

－

－

Others

－

－

－

－

－

－

－

－

－

－

Other securities

Total

Other securities

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

・ Held-to-maturity Debt Securities(Millions of yen)

As of March 31, 2015
Carrying
value on the
Fair valuebalancesheet

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

As of September 30, 2015

Differences

Carrying
value on the
Fair valuebalancesheet

Differences

811,903

926,148

114,245771,380

887,379

115,999

Domestic bonds

742,337

853,785

111,448

742,011855,870

113,859

Foreign bonds

69,56572,362

2,797

29,36931,5082,139

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

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

－

－

－

－

－

－

Domestic bonds

－

－

－

－

－

－

Foreign bonds

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

27

Fukoku Mutual Life Insurance Company

・ Policy-reserve-matching Bonds(Millions of yen)

As of March 31, 2015
Carrying
value on the
Fair valuebalancesheet

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

As of September 30, 2015

Differences

Carrying
value on the
Fair valuebalancesheet

Differences

1,194,892

1,325,896

131,004

1,103,006

1,228,101

125,094

Domestic bonds

1,163,793

1,294,527

130,733

1,082,908

1,207,752

124,843

Foreign bonds

31,09831,369270

20,09820,349

250

－

－

－

－

－

－

20,80320,753(50)

15,212

15,146(66)

Domestic bonds

10,803

10,753

(50)

5,212

5,146

(66)

Foreign bonds

10,00010,000－10,00010,000

－

－

－

－

－

－

－

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

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

As of March 31, 2015

As of September 30, 2015

Book value

Carrying
value on the
DifferencesbalancesheetBook value

Carrying
value on the
Differencesbalancesheet

2,087,739

2,699,411

611,672

2,196,050

2,710,855

Domestic bonds

800,549

885,818

85,269724,309796,786

72,476

Domestic stocks

270,078

587,921317,842

247,194506,361

259,167

Foreign securities

964,096

1,151,884

187,788

1,184,161

1,352,566

168,404

Foreign bonds

756,771875,365

118,593

1,017,000

1,130,137

113,136

Foreign stocks

207,324

276,519

69,194

167,160

222,429

55,26853,01573,787

20,771

40,384

55,141

14,757

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

62,854

61,493(1,360)203,049

192,896(10,153)

Domestic bonds

7,001

6,977

(24)

30,81430,614(199)

Domestic stocks

9,470

9,245

(225)

40,73037,554(3,176)

Foreign securities

46,23345,137(1,096)

107,702103,203(4,499)Foreign bonds

27,37026,614(756)

67,05665,709(1,347)

Foreign stocks

18,862

18,522(340)

40,64637,493(3,152)

148

133

(15)

23,802

21,524(2,277)

Money held in trust

－

－

－

－

－

－

Money claims bought

－

－

－

－

－

－

Negotiable certificate of deposits

－

－

－

－

－

－

Others

－

－

－

－

－

－

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

Other securities

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

Other securities

514,805* Book value of securities without fair value are as follows:(Millions of yen)

As of March 31, 2015

As of September 30, 2015－－

Unlisted foreign bonds－－

Others－－

Held-to-maturity bonds－－

Investments in subsidiaries and affiliates

35,56035,560Available-for-sale securities

17,031

14,922

8,338

6,309

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

Unlisted foreign bonds

－

－

8,693

8,613

52,59250,483

Policy-reserve-matching bonds

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

Others
Total

28

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015
Hedge accounting applied
Hedge accounting not applied
Total
As of September 30, 2015

Hedge accounting applied
Hedge accounting not applied
Total

Currencyrelated

Stockrelated

Bondrelated

Others

Total

0

820

－

－

－

(460)

685

－

200

－

426

(459)

1,506

－

200

－

1,247

Interestrelated

Currencyrelated

Stockrelated

Bondrelated

821

OthersTotal

014,524

208

－

－

(707)

1,480

168

(801)

－

139

(707)

16,004

376

(801)

－

14,872

14,733

Note: Gains and losses from applying fair value hedge accounting (currency- related, gains of ¥820 million as of March 31, 2014,
and currency-related gains of ¥14,524 million, stock-related gains of ¥208 million as of March 31, 2015) included in gains and losses
with hedge accounting not applied are reported in the statements of operations.

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

As of March 31, 2015
Notional amount/contract value

As of September 30, 2015

Fair
value

Gains
(losses)

Notional amount/contract valueOver 1 year

Fair
value

Gains
(losses)Over 1 year

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

Receipt fixed, payment floating
[

－
－

－

Payment fixed, receipt floating
[

－

－ ]

－ [

－

－

－ ]
－

－ ]

－

－

－

－

－

－

581

(707)

－

－

－ [

－ ]

－

－ [

－ ]

Bought－Receipt fixed, payment floating[
Payment fixed, receipt floating

300,000
[

－

－

－ ]
200,000

1,289 ]－

300,000
828

Total(460) [

200,000

1,289 ]

(460)

(707)

Note: Figures in [ ] are option premium which are included in balance sheet.
・ Currency-related Transactions(Millions of yen)

As of March 31, 2015

Notional amount/contract valueOver 1 year

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

Fair
value

As of September 30, 2015

Gains(losses)

Notional amount/contract valueOver 1 year

Fair
value

Gains
(losses)

200,640
35,21542,19034,77428,568－59,875
9
6

－
－
－
－
－
－
－
－
－

199,955
34,88742,58534,47928,415－59,571
9
6

685
327
(394)
295
153
－
303
0
0

176,174
73,51541,03936,192
25,422
4
－
－
－

－
－
－
－
－
－
－
－
－

174,694
73,23940,75935,681
25,008
4
－
－
－

1,480
275
279
510
413
0
－
－
－

193
154
1
19
7
6
2

－
－
－
－
－
－
－

193
155
1
19
7
6
2

0
0
0
(0)
(0)
(0)
(0)

13
8
4
－
－
－
－

－
－
－
－
－
－
－

13
8
4
－
－
－
－

(0)
(0)
(0)
－
－
－
－

Total

685

1,480

Notes: 1. Forward exchange rates are used for exchange rates as of September 30, 2015.

29

Fukoku Mutual Life Insurance Company

・ Stock-related Transactions(Millions of yen)

As of March 31, 2015

As of September 30, 2015

Notional amount/contract value
Fair valueOver 1 year

Exchange-traded transactions
Yen stock index options
Sold
Bought－－－－Notional amount/contract value

Gains(losses)

－
－

－
－

Gains
(losses)

Fair valueOver 1 year

－
－

4,820
－

4,652
－

－

Total

168
－
168

Notes: Figures in [ ] are option premiums which are included in balance sheet.
・ Bond-related Transactions(Millions of yen)
As of March 31, 2015
Notional amount/contract value

Fair value

As of September 30, 2015
Gains(losses)

Notional amount/contract valueOver 1 year

Fair value

Gains(losses)Over 1 year

Exchange-traded transactions
Yen bond futures
Sold
Bought294,876－－－

294,440－

436－

257,174－－－

257,798－(623)－

Foreign bond futures
Sold
Bought40,083－－－40,318－(235)－

44,951－－－45,129
－

(177)
－

Total

200

30

(801)

Fukoku Mutual Life Insurance Company

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

As of March 31, 2015
Notional amount /contract value

Method ofhedge
accounting

Deferralhedge
methodAs of September 30, 2015

Hedging instruments

Notional amount /contract value

Fair
value

Hedged items

Fair
value

Hedged items

Over 1 year

Over 1 year

Yen interest rate swap contracts Loans

Loans

Receipt fixed, payment floating

85

－

0

42

－

0

Payment fixed, receipt floating

－

－

－

－

－

－

Total

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

As of March 31, 2015
Yen interest rate swap contracts

Over 1 year
to 3 years

Over 3 years

85

－

－

42

－

－

Average fixed rate (receipt)

2.47%

－

－

2.47%

－

－

Average floating rate (payment)

1.06%

－

－

1.06%

－

－

Notional amount(receipts floating, payments fixed)

－

－

－

－

－

－

Average floating rate (receipt)

－

－

－

－

－

－

Average fixed rate (payment)

－

－

－

－

－

－

Notional amount(receipts fixed, payments floating)

1 yearor shorter

As of September 30, 2015
1 yearor shorter

Over 1 year
to 3 years

Over 3 years

・ Currency-related Transactions(Millions of yen)

As of March 31, 2015
Method ofhedge
accounting

Hedging instruments

Notional amount /contract value

Fair
value

Hedged items

Notional amount /contract valueOver 1 year

Over 1 year

524,133－

423,638－(British Pound)

52,110－51,51853,381－

52,651(Euro)

36,682－35,79947,796－47,239(Australian dollar)

11,702－

11,475

11,170－10,477

－

－

－

－

－

－

Sold
(US dollar)

Foreigncurrencydenominated
bonds

Fair
value

Foreigncurrency523,313 denominated424,519 bonds

Currency forward contracts

Fair value
hedge
methodHedged items

As of September 30, 2015

Bought984,427－

969,903

872,078－859,534

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

・ Stock-related Transactions
As of March 31, 2015
Method ofhedge
accounting

Fair value
hedge
methodHedging instruments

Hedged items

As of September 30, 2015

Notional amount /contract value

Fair
value

Hedged items

Notional amount /contract valueOver 1 year

Fair
value

Over 1 year

Domestic
stocksStock forward contracts
Sold

－

－

－

823

823

615

Bought

－

－

－

－

－

－

Total

・ Bond-related Transactions
No ending balance as of March 31, 2015 and September 30, 2015.

31

Fukoku Mutual Life Insurance Company

11. Status of the Company, Subsidiaries and Affiliates(1) Selected Financial Data
(Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

Ordinary revenues

493,244505,474

Ordinary profits

52,12350,662

Net surplus attributable to the parent company

39,402

46,050Comprehensive income

109,450(28,612)

Notes: From the six months ended September 30, 2015, “Net surplus” is presented as
Notes: “Net surplus attributable to the parent company.”

As ofMarch 31, 2015

As of
September 30, 2015

Total assets

8,326,588

8,253,926

Solvency margin ratio

1,195.7%

1,250.9%(2) Scope of Consolidation and Application of Equity Method
Number of consolidated subsidiaries: 5
Number of unconsolidated subsidiaries accounted for under the equity method: 0
Number of affiliates accounted for under the equity method: 0

32

Fukoku Mutual Life Insurance Company

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

As of September 30, 2015

Assets:Cash and deposits

154,319

91,821

Call loans

186,500

155,800

Monetary claims bought
Money held in trust
Securities

870

842

34,31933,735

6,881,578

6,931,251

Loans

767,293

737,539

Tangible fixed assets

227,919

217,491

Intangible fixed assets

15,32314,364

Agency receivables
Reinsurance receivables
Other assets
Deferred tax assets
Allowance for possible loan losses
Total assets

4

1

107

35

59,65972,322640

669(1,948)(1,948)8,326,588

8,253,926

As of March 31, 2015

As of September 30, 2015

Liabilities:
Policy reserves

7,234,120

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

7,261,245

23,501

21,886

7,160,599

7,171,149

49,311

67,643

707

565

377

349

125

163

Subordinated bonds

118,959

141,935

Other liabilities

59,24048,922

Net defined benefit liabilities

50,69130,862

Reserve for price fluctuation of securities

55,17756,761

Deferred tax liabilities

84,52455,979Deferred tax liabilities for revaluation reserve for land

14,787

14,764

7,618,005

7,610,984

Foundation funds

30,00030,000

Accumulated foundation funds redeemed

86,00086,000Total liabilities
Net assets:

Reserve for revaluation

112

112

Consolidated surplus

145,942

155,036

Total foundation funds, surplus and others

262,054271,148

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

440,109

365,006

0

0

3,894

3,836

Deferred valuation gains (losses) under hedge accounting, net of tax
Revaluation reserve for land, net of tax
Foreign currency translation adjustments
Accumulated remeasurements of defined benefit plans
Total accumulated other comprehensive income
Non-controlling interests
Total net assets
Total liabilities and net assets

(52)

5

(3,000)(2,699)440,951

366,148

5,576

5,644

708,582642,941

8,326,588

8,253,926

Notes: From the six months ended September 30, 2015, “Minority interests” are presented as “Non-controlling interests.”

33

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income[Consolidated Statements of Operations](Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

378,115
106,261[78,048][1,374][16,149][5,133][4,792]
8,867[4,088]493,244398,230
100,634[78,141][－][－][22,320][－]
6,610[1,615]505,474

282,511[68,473][76,800][62,534][60,323][14,094]
79,78779,75630
017,934[2,169]
[－]
[－]
[167]
[111]
[11,014][－]
48,691
12,194441,120
52,123361,682[86,859][105,386][60,468][90,262][18,396]
10,574
10,54924
022,486[2,394][556][2,064][3,343][－][4,803][2,604]
48,61011,457454,81150,662Gain on contribution of securities to retirement benefit trust

4
－

1,356
7,913

Total extraordinary gains

4

9,270

26
95
1,416
1,538
267
50,322

138
208
1,583
1,930
239
57,762

10,855(28)
10,82639,496
94
39,402

9,920
1,719
11,64046,122
71
46,050Ordinary revenues:
Premium and other income
Investment income[Interest, dividends and other income][Gains from money held in trust, net]
[Gains from trading securities, net]
[Gains on sales of securities][Gains from separate accounts, net]
Other ordinary revenues[Reversal of reserve for outstanding claims]
Total ordinary revenues
Ordinary expenses:
Claims and other payments[Claims][Annuities][Benefits][Surrenders][Other payments]
Provision for policy reserve and others
Provision for policy reserve
Provision for interest on reserve for dividends to policyholders
Provision for interest on reserve for dividends to policyholders (subsidiary)
Investment expenses[Interest expenses][Losses from money held in trust, net]
[Losses from trading securities, net]
[Losess on sales of securities][Losses on valuation of securities][Losses from derivative instruments, net]
[Losses from separate accounts, net]
Operating expenses
Other ordinary expenses
Total ordinary expenses
Ordinary profits
Extraordinary gains:
Gains on disposal of fixed assets

Extraordinary losses:
Losses on disposal of fixed assets
Impairment losses
Provision for reserve for price fluctuation of securities
Total extraordinary losses
Provision for reserve for dividends to policyholders (subsidiary)
Surplus before income taxes
Income taxes:
Current
Deferred
Total income taxes
Net surplus
Net surplus attributable to non-controlling interests
Net surplus attributable to the parent company

Notes: From the six months ended September 30, 2015, “Net surplus before minority interests,” “Minority interests”
Notes: and “Net surplus” are presented as “Net surplus,” “Net surplus attributable to non-controlling interests” andNotes: “Net surplus attributable to the parent company,” respectively.

34

Fukoku Mutual Life Insurance Company

(4) Consolidated Statements of Operations and Comprehensive Income(Continued)[Consolidated Statement of Comprehensive Income](Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

Net surplus

39,496

46,122Other comprehensive income

69,954(74,734)

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

69,750(75,093)

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

(1)

(0)

Revaluation reserve for land, net of tax－

0Foreign currency translation adjustments

(38)

57

Remeasurements of defined benefit plan, net of tax

243

300

Comprehensive income

109,450(28,612)Comprehensive income attributable to the parent company

109,203(28,694)

246

82

Comprehensive income attributable to non-controlling interests

Notes: From the six months ended September 30, 2015, “Net surplus before minority interests,” and “Comprehensive income
Notes: attributable to minority interests” are presented as “Net surplus,” and “Comprehensive income attributable to non-controlling
Notes: interests,” respectively.

35

Fukoku Mutual Life Insurance Company

(5) Consolidated Statements of Cash Flows(Millions of yen)Six months ended
September 30, 2014

Six months ended
September 30, 2015

Cash flows from operating activities:
Surplus before income taxes
Depreciation of real estate for rent and other assets
Depreciation
Impairment losses
Amortization of goodwill(Gains) Losses on contribution of securities to retirement benefit trust
Increase (Decrease) in reserve for outstanding claims
Increase (Decrease) in policy reserve
Interest on accumulated dividends to policyholders
Interest on accumulated dividends to policyholders (subsidiary)
Provision for reserve for dividends to policyholders (subsidiary)
Increase (Decrease) in allowance for possible loan losses
Increase (Decrease) in net defined benefit liabilities
Increase (Decrease) in reserve for price fluctuation of securities
Interest, dividends and other income(Gains) Losses on securities, net
Interest expenses
Foreign exchange (gains) losses, net(Gains) Losses on tangible fixed assets, net
OthersSubtotalInterest, dividends and other income received
Interest paid
Dividends to policyholders paid
Dividends to policyholders paid (subsidiary)Corporate income tax (paid) refunded
Net cash provided by (used in) operating activities (I)50,322
2,413
3,455
95
381
－
(4,088)79,756
30
0
267
(215)
(860)
1,416
(78,048)(16,156)
2,169
(528)
10
(1,676)38,74485,402(3,100)(16,617)(399)(14,280)
89,74957,762
2,148
3,690
208
381
(7,913)(1,615)
10,549
24
0
239
0
(739)
1,583
(78,141)(8,948)2,394
2,324(1,222)
4,591(12,681)
85,707(3,022)(18,390)(381)(18,334)
32,896(110)
85(388,484)
254,290(15,272)
69,758(21,956)(2,474)(104,163)(14,414) ] [
(717)
58
(900)
(105,723)(13)
28(624,289)
462,730(32,306)
57,356(15,516)(1,974)(153,985)(121,088) ](2,552)
10,784(1,376)(147,129)－－
10,000(15,000)
(621)
(12)
(366)
(6,000)(125)(22,110)238,373
216,263

62,065(40,326)
－
－
(316)
(13)
(271)
21,137(155)(93,251)
339,246
245,995

Cash flows from investing activities:(Increase) Decrease in deposits
Proceeds from sales and redemption of monetary claims bought
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 payment for settlements of derivatives, net
OthersSubtotal (IIa)[(I+IIa)Payments for purchase of tangible fixed assets
Proceeds from sales of tangible fixed assets
Payments for purchase of intangible fixed assets
Net cash provided by (used in) investing activities
Cash flows from financing activities:
Financing of subordinated bonds
Redemption of subordinated bonds
Financing of additional foundation funds
Redemption of foundation funds
Interest payment for foundation funds
Dividends paid to non-controlling interests
Payments for lease obligations
Net cash provided by (used in) financing activities
Effect of exchange rate changes on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period

Notes: From the six months ended September 30, 2015, “Dividends paid to minority interests” is presented as
Notes: “Dividends paid to non-controlling interests.”

36

Fukoku Mutual Life Insurance Company

(6) Consolidated Statements of Changes in Net Assets[For the six months ended September 30, 2014](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of
the current period

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

Consolidated
surplus

Total foundation
funds, surplus
and others

35,00071,000112

126,584

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

123,286

229,399

Cumulative effects of changes inaccounting policies
Restated balance

35,00071,000112

Changes in the current period
Financing of additional foundation funds

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

Addtions to accumulated foundation
funds redeemed

15,00015,000

Payment of interest on foundation funds
Net surplus attributable to owners ofparent for the current period
Redemption of foundation funds(31,595)

(621)

(621)

39,40239,402(15,000)(15,000)

Reversal of reserve for redemption offoundation funds
Reversal of revaluation reserve
for land, net of tax(15,000)(15,000)

(21)

(21)

Net changes, excluding foundation funds,
surplus and others
Total changes in the current period(5,000)15,000－(7,836)

2,163

Balance at the end of the current period

30,00086,000

112

115,450

231,562

Accumulated other comprehensive income
Net unrealized
Deferred
gains (losses) valuation gains
on available- (losses) under Revaluation
for-salehedge
reserve forsecurities, net accounting, net land, net ofof taxof taxtax
Balance at the beginning of
the current period

263,161

2

3,144

Total
Foreign
Accumulated
accumulated
Noncurrency
remeasurements
othertranslation of defined benefit comprehensive controllinginterests
adjustments
plansincome(261)(3,918)262,127

5,066 499,890

Cumulative effects of changes inaccounting policies
Restated balance

Total net
assets(3,297)263,161

2

3,144

(261)

(3,918)262,127

5,066 496,593

Changes in the current period
Financing of additional foundation funds

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

Addtions to accumulated foundation
funds redeemed

15,000(621)

Payment of interest on foundation funds
Net surplus attributable to owners ofparent for the current period

39,402

Redemption of foundation funds(15,000)

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

Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others(21)
69,597

(1)

21

(38)

243

69,822

234

70,057

Total changes in the current period

69,597

(1)

21

(38)

243

69,822234

72,220

Balance at the end of the current period

332,758

1

3,165

(299)

(3,675)331,950375,300 568,814

Fukoku Mutual Life Insurance Company

[For the six months ended September 30, 2015](Millions of yen)Foundation funds, surplus and others

Balance at the beginning of
the current period

Foundation
funds

Accumulated
foundation
funds
redeemedReserve forrevaluation

Consolidated
surplus

Total foundation
funds, surplus
and others

30,00086,000112

145,942

262,054(36,698)(36,698)

(316)

(316)

46,05046,05058

58

Changes in the current period
Additions to reserve for dividends
to policyholders
Payment of interest on foundation funds
Net surplus attributable to owners ofparent for the current period
Reversal of revaluation reserve
for land, net of tax
Net changes, excluding foundation funds,
surplus and others
Total changes in the current period
Balance at the end of the current period

－

－

－

9,093

9,093

35,00086,000112

155,036

271,148

Accumulated other comprehensive income
Net unrealized
Deferred
gains (losses) valuation gains
on available- (losses) under Revaluation
for-salehedge
reserve forsecurities, net accounting, net land, net ofof taxof taxtax
Balance at the beginning of
the current period

440,109

0

3,894

Total
Foreign
Accumulated
accumulated
currency
remeasurements
otherNontranslation of defined benefit comprehensive controlling
adjustments
plansincomeinterests(52)(3,000)440,951

Total net
assets5,576 708,582

Changes in the current period
Additions to reserve for dividends
to policyholders(36,698)(316)

Payment of interest on foundation funds
Net surplus attributable to owners ofparent for the current period

46,050

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

58(75,103)

(0)

(57)

57

300

(74,802)68 (74,734)

Total changes in the current period(75,103)

(0)

(57)

57

300

(74,802)68 (65,640)

Balance at the end of the current period

365,006

0

3,836

5

(2,699)366,148

5,644 642,941

Notes: From the six months ended September 30, 2015, “Net surplus,” and “Minority interests”
Notes: are presented as “Net surplus attributable to owners of parent,” and “Non-controlling interests,” respectively.

38

Fukoku Mutual Life Insurance Company

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

2. Principles of Consolidation(1) Scope of Consolidation
Consolidated subsidiaries as of September 30, 2015 are listed below:
Fukoku Capital Management, Inc.
Fukokushinrai Life Insurance Co., Ltd.
Fukoku Information Systems Co., Ltd.
Fukoku Life International (U.K.) Ltd.
Fukoku Life International (America) Inc.
Major unconsolidated subsidiary is Fukoku Seimei Building Company Limited.
Eight subsidiaries are excluded from the scope of consolidation, as each one of them is small in its total
assets, amount of sales, net surplus for the period and surplus and is sufficiently insignificant to reasonablejudgement on its impact on the financial position and results of operation of the Company's group.
(2) Application of Equity Method
Unconsolidated subsidiaries (such as Fukoku Seimei Building Company Limited, etc.) are insignificant intheir impact on net surplus and surplus, and also immaterial as a whole, therefore, application of equity
method is withheld.
There are no affiliates for the six months ended September 30, 2015.
(3) Interim Closing Date of Consolidated Subsidiaries
Among the subsidiaries to be consolidated, interim closing date of overseas subsidiaries is June 30. For the
preparation of consolidated financial statements, financial statements as of that date are used andconcerning any important transaction taking place in between June 30 and September 30, necessary
adjustments for consolidation are made.

II. Notes to Balance Sheets
1. Significant Accounting Policies(1) Valuation Methods of Securities
The valuation of securities, including bank deposits and monetary claims bought which are equivalent tosecurities, and securities managed as trust assets in money held in trust, is as follows:i) Trading securities are stated at fair market value. Costs of their sales are determined by the moving
average method.
ii) Held-to-maturity debt securities are stated at amortized cost under the straight-line method, cost being
determined by the moving average method.
iii) Policy-reserve-matching bonds are stated at amortized cost under the straight-line method, cost being
determined by the moving average method in accordance with “Temporary Treatment of Accounting
and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry Audit

39

Fukoku Mutual Life Insurance Company

Committee Report No.21 issued by the Japanese Institute of Certified Public Accountants on November
16, 2000).
iv) Investments in unconsolidated subsidiaries and affiliates which are not accounted for under the equity
method are stated at cost, cost being determined by the moving average method.
v) Available-for-sale securities with fair market value are stated at fair market value based on the market
prices at the end of the balance sheet date. Costs of their sales are determined by the moving averagemethod. Net unrealized gains or losses on these available-for-sale securities, net of taxes, are recorded
as a separate component of net assets.
Available-for-sale securities whose fair values are deemed extremely difficult to obtain are stated atcost, cost being determined by the moving average method, except for public and corporate bonds
including foreign bonds, of which the difference between acquisition cost and face value is considered
to be an adjustment of interest. Such bonds are stated at amortized cost under the straight-line method,
cost being determined by the moving average method.
(2) Valuation Methods of Derivative Instruments
Derivative instruments are stated at fair market value.
(3) Revaluation of Land
The Company revalued the land for business purposes based on the Law for Revaluation of Land (Law
No.34 promulgated on March 31, 1998). The difference between fair value and book value resulting from therevaluation, net of related taxes, is recorded as revaluation reserve for land as a separate component of net
assets and the related tax is recorded as deferred tax liabilities for revaluation reserve for land.


Date of revaluation: March 31, 2002

Method of revaluation as prescribed for in Article 3 Paragraph 3 of the said Law:
Calculation is based on the appraisal value for property tax set forth in Article 2 item 3 of the
Enforcement Ordinance of the Law for Revaluation of Land (Government Ordinance No.119
promulgated on March 31, 1998) and the road rate set forth in Article 2 item 4 of the said Ordinance withcertain reasonable adjustments.

(4) Depreciation of Tangible Fixed Assets
Depreciation of the Company's tangible fixed assets is calculated by the following methods.
Tangible fixed assets (excluding lease assets):Declining-balance method
However, buildings (excluding building attachments and structures) acquired on or after April 1, 1998
are depreciated using Straight-line methods.

Lease assets related to finance lease transactions that do not transfer ownership: Straight-line method
over the lease term without residual value

Other tangible fixed assets acquired for ¥100,000 or more but less than ¥200,000 are depreciated equally
over three years.
(5) Foreign Currency Translation
Foreign currency-denominated assets and liabilities except for the shares of unconsolidated subsidiaries andaffiliates are translated into Japanese yen at the effective exchange rate prevailing at the balance sheet date.
The shares of unconsolidated subsidiaries and affiliates are translated into Japanese yen at the effective
exchange rate on the date of acquisition.
(6) Allowance for Possible Loan Losses
Allowance for possible loan losses is provided in accordance with the Company's standards of selfassessment and write-offs and reserves on credit quality:i) For the credits of borrowers who are legally bankrupt such as being in the proceedings of bankruptcy or
civil rehabilitation (hereinafter called "legally bankrupt borrowers") and who are substantially bankrupt(hereinafter called "substantially bankrupt borrowers"), the Company provides the remaining amount ofcredits after the direct write-off described below and the deductions of the amount expected to becollected through the disposal of collateral or the execution of guarantees.
ii) For the credits of borrowers who are not currently bankrupt but have a high possibility of bankruptcy(hereinafter called “not currently bankrupt borrowers”), the Company provides the amounts deemed40

Fukoku Mutual Life Insurance Company

as necessary considering the borrowers' ability to pay, within the amounts after deductions of theamount expected to be collected through the disposal of collateral or the execution of guarantees.
iii) For the credits of borrowers other than the above, the Company provides the amounts calculated bymultiplying the borrowers' balance by the actual ratio of bad debt losses on defaults during a certain
past period.
All credits are assessed by the relevant departments in accordance with the Company’s standards of selfassessment on credit quality. The results of the assessment are reviewed by the audit department, which is
independent of business-related divisions. Subsequently, the allowance for possible loan losses is provided
based on the results of these assessments.
For the credits of legally bankrupt borrowers and substantially bankrupt borrowers, the amounts
remaining after deductions of collateral values or the amounts collectible through the executions ofguarantees are written-off directly from the borrowers’ balances as the estimated uncollectible amounts. The
amount written-off as of September 30, 2015 was ¥247 million.
(7) Accounting of Employees’ Retirement Benefits
Net defined benefit liabilities are presented for the employees’ retirement benefits after deducting pension
plan assets from retirement benefit obligations, based on estimated amounts as of the balance sheet date.
The Company uses the following methods of accounting in relation to retirement benefits.
 Method for allocation of projected retirement benefits.............................
 Amortization period of actuarial gains or losses.......................................

Benefit formula basis
10 years

 Amortization period of prior service cost..................................................

10 years

In the current period ended September 30, 2015, the Company contributed a portion of its stock holdings toestablish a trust account for retirement benefits amounting to ¥18,666 million and recognized a gain on
contribution of securities to retirement benefit trust amounting to ¥7,913 million as an extraordinary gain.

(8) Reserve for Price Fluctuation of Securities
Reserve for price fluctuation of securities is calculated in accordance with Article 115 of the Insurance
Business Law.

(9) Lease Transactions as a Lessor
As for the finance lease transactions where the Company is a lessor, the lease fee is recorded in “interest,
dividends and other income” at the time of receiving the lease fee. The corresponding cost of the leasetransactions is recorded in “investment expenses,” which is calculated by deducting an amount equivalent to
the interest allocated over the lease term from the lease fee received.
(10) Accounting for Hedge Activities
Hedge accounting is based on “Accounting Standards for Financial Instruments” (ASBJ Statement No. 10,
August 11, 2006).
For the foreign currency forward contracts against the exchange rate fluctuations in the value of foreign
currency-denominated bonds classified as available-for-sale securities, which qualify for hedge accounting
because of high correlation and effectiveness between the hedging instruments and the hedged items,
valuation gains and losses on the foreign currency forward contracts are recorded in the statements ofoperations.
For the stock forward transactions against the price fluctuations in the value of domestic stocks
classified as available-for-sale securities, which qualify for hedge accounting because of high correlation andeffectiveness between the hedging instruments and the hedged items, valuation gains and losses on thestock forward transactions are recorded in the statements of operations.
For the interest rate swaps against the interest rate fluctuations regarding loans, which qualify for hedge
accounting because of high correlation and effectiveness between the hedging instruments and the hedged
items, valuation gains and losses on the interest rate swaps are deferred until the maturity of the hedgedtransactions.
The Company applies foreign currency swap appropriated treatment as a hedge for the foreignexchange fluctuation risk associated with foreign currency denominated bonds issued by the Company.
For judging the effectiveness of hedge used, ratio analysis of comparing the fluctuations in the fair value
or cash flows of hedged items and hedging instruments is mostly applied.
41

Fukoku Mutual Life Insurance Company

(11) Accounting for Consumption Taxes
The Company accounts for consumption taxes by the tax-exclusion method. The consumption taxes oncertain assets, which are not deductible from consumption taxes withheld and that are stipulated to bedeferred under the Tax Law, are deferred as prepaid expenses and amortized equally over five years.
Consumption taxes other than deferred consumption taxes are recognized as an expense
when incurred.
(12) Policy Reserve
Policy reserve is based on Article 116 of the Insurance Business Law, and the premium reserve is calculatedby the following method:
In regard to the policies subject to the standard policy reserve, the method as prescribed by theCommissioner of Financial Services Agency (Ministry of Finance Ordinance No. 48, 1996) is applied.
In regard to the policies not subject to the standard policy reserve, the net level premium method isapplied.
Based on the provision of paragraph 5, Article 69 of the Enforcement Regulation of the Insurance
Business Law, the Company’s certain individual annuity insurance policies and certain hospitalization riders
with surgery benefits and long-term hospitalization benefits have funded policy reserves included.
(13) Amortization Method for Intangible Fixed Assets
Intangible fixed assets are amortized as follows:i) Software
Software for internal use is amortized based on a straight-line method over the estimated useful lives.
ii) Lease assets
Lease assets are amortized based on a straight-line method over the lease term.
(14) Policy-reserve-matching Bonds
Of the bonds corresponding to the sub-groups of individual insurance and annuities which are set by
insurance types and investment policies, the bonds that are held to match the duration of liabilities areclassified by the Company as policy-reserve-matching bonds in accordance with “Temporary Treatment of
Accounting and Auditing Concerning Policy-reserve-matching Bonds in Insurance Industry” (Industry
Audit Committee Report No. 21 issued by the Japanese Institute of Certified Public Accountants on
November 16, 2000).

2. Accounting Changes and Corrections of Past Errors
From April 1, 2015, the Company applied the “Revised Accounting Standard for Business Combinations”(ASBJ Statement No. 21, September 13, 2013), “Revised Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No. 22, September 13, 2013), “Revised Accounting Standard for Business
Divestitures” (ASBJ Statement No. 7, September 13, 2013), and related guidance. As a result, the changes
in the Company’s ownership interest in a subsidiary is accounted for as consolidated surplus, as long as theCompany retains control over the subsidiary, and the acquisition-related costs are accounted for as
expenses in the period when the costs are incurred. With regard to business combinations executed on orafter April 1, 2015, the Company has changed the accounting method to reflect adjustments to theallocation of acquisition cost under provisional accounting treatment on the consolidated financial
statements of the period in which the relevant business combinations became or will become effective. In
addition, the Company has changed the presentation of interim net surplus and the presentation of minority
interests has been changed to non-controlling interests.
In the Consolidated Statements of Cash Flows for the six months ended September 30, 2015, withregard to cash flows relating to the acquisition and sale of stocks of subsidiaries and affiliates that do notaffect the scope of consolidation, these are classified within cash flows from financing activities. With regard
to cash flows relating to acquisition-related expenses of subsidiaries and affiliates for which a change in thescope of consolidation occurs, or expenses stemming from the acquisition or sale of stocks of subsidiaries
and affiliates that do not affect the scope of consolidation, the Company has changed the presentation ofsuch expenses to be classified within cash flows from operating activities.
42

Fukoku Mutual Life Insurance Company

The Company has applied these revised accounting standards prospectively in accordance withtransitional provisions in paragraph 58-2 (4) of the Accounting Standard for Business Combinations,paragraph 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and paragraph 57-4
(4) of the Accounting Standard for Business Divestitures.
These accounting changes have no impact on ordinary profits or surplus before income taxes for the six
months ended September 30, 2015. These accounting changes have no impact on consolidated surplus asof September 30, 2015.

3. Financial Instruments
The carrying amounts, fair values and their related differences of major financial assets and liabilities as of
September 30, 2015, were as follows:
Carrying
amountFair value

Difference(Millions of yen)

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

¥

91,777¥

91,777¥―

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

91,777

91,777―

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

155,800

155,800―

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

842

893

50

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

842

893

50

Trading securities...........................................

32,73532,735―

Total money held in trust.................................

32,73532,735―

Trading securities............................................

311,329

311,329―

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

1,238,529

1,415,773

177,244

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

2,079,747

2,280,016

200,268

Investments in subsidiaries and affiliates......

40

42

1

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

3,207,827

3,207,827―

Total securities................................................

6,837,474

7,214,988

377,514

Policy loans....................................................

65,69865,698(0 )Ordinary loans................................................

671,841

694,740

22,899Total loans......................................................

737,539

760,438

22,899Assets total........................................................

7,856,168

8,256,632

400,464

Subordinated bonds* ........................................

141,935

143,184

1,249

Liabilities total.....................................................

141,935

143,184

1,249

Hedge accounting not applied........................

139

139

―

Hedge accounting applied.............................

14,733

14,733―

Total derivative instruments............................

¥ 14,872¥ 14,872

Monetary claims bought:

Money held in trust:

Securities:

Loans:

1

2

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

43

Fukoku Mutual Life Insurance Company

(1) Cash, deposits (excluding financial instruments treated as securities based on “Accounting Standards
for Financial Instruments” (ASBJ Statement No.10)) and call loans:
The fair values of cash, deposits and call loans are based on their book values since fair values
approximate book values due to their short maturities.
(2) Securities including deposits and monetary claims bought which are treated as securities based on“Accounting Standards for Financial Instruments” (ASBJ Statement No.10) and securities managed astrust assets in money held in trust:
The fair values of marketable securities are measured at the quoted market prices at the balance sheet
date. The fair values of other securities without the quoted market prices are based on the prices
reasonably calculated such as the prices offered by the information vendors or counterparty financial
institutions.
Investments in unconsolidated subsidiaries and affiliates, unlisted stocks and investments inpartnerships whereby partnership assets consist of unlisted stocks whose fair values are deemed
extremely difficult to obtain, are excluded from above securities. The carrying amounts of investments inunconsolidated subsidiaries and affiliates, unlisted stocks and investments in partnerships were ¥519
million, ¥6,309 million and ¥8,613 million as of September 30, 2015.
(3) Loans and monetary claims bought treated as loans:
The fair values of policy loans are deemed to approximate book values, considering estimated repayment
period and interest rate conditions since their repayment deadlines have not been set up due to thecharacteristics that the loans are limited to the amount of cash surrender values. Therefore, the bookvalues are used as the fair values of policy loans.
The fair values of floating interest rate loans among the ordinary loans and monetary claims bought
treated as loans approximate the book values because the market interest rates are reflected in future
cash flows in a short period. Therefore, the fair values of floating interest rate loans and monetary claimsbought treated as loans are based on their book values. The fair values of fixed interest rate loans aremeasured by discounting the future cash flows to the present values.
The fair values of loans receivable from legally bankrupt borrowers, substantially bankrupt borrowers
and not currently bankrupt borrowers and monetary claims bought treated as loans are computed bydeducting the amount of the allowance for doubtful accounts from the book values before direct write-offs.
(4) Subordinated bonds:
Subordinated bonds issued by the Company are stated at fair market values.
(5) Derivative instruments:i) The fair values of the futures and options traded at the exchange are measured at the settlement
price of the exchange.
ii) The fair values of forward contracts, options and swaps traded over the counter are based on thequoted prices offered by counterparty financial institutions.
iii) The fair values of foreign currency forward contracts are determined based on the spot exchange rate
and forward contract rate.

4. Investment and Rental Property
Notes related to the fair value of investment and rental properties are omitted as no significant change has
occurred since the previous fiscal year-end.

5. Securities Lent under Lending Agreements
The amount of securities lent under lending agreements was ¥54,612 million as of September 30, 2015.

6. Loans Receivable
The total amount of credits to bankrupt borrowers, delinquent loans, delinquent loans past 3 months or more
and restructured loans, which were included in loans was ¥1,609 million as of September 30, 2015.
i) The balance of credits to bankrupt borrowers was ¥212 million as of September 30, 2015.
44

Fukoku Mutual Life Insurance Company

ii) The balance of delinquent loans was ¥1,221 million as of September 30, 2015.
iii) The balance of restructured loans was ¥174 million as of September 30, 2015.
iv) There was no balance of delinquent loans past 3 months or more as of September 30, 2015.
The direct write-offs related to loans decreased the credits to bankrupt borrowers described above by ¥247
million as of September 30, 2015.
Credits to bankrupt borrowers represent loans, excluding the balances already written-off, which meetthe conditions prescribed in Article 96 Paragraph 1 item 3 and 4 of the Enforcement Regulations of the
Corporate Tax Law. Moreover, accrued interest on these loans is not recorded as income after determiningthat principal of or interest on these loans is unlikely to be collected due to the significant delay in repaymentof principal or interest payment or for some other reasons.
Delinquent loans are credits which accrued interest is not recorded as income due to the same reasons
as described above, and exclude credits to bankrupt borrowers and loans for which interest payments havebeen suspended and rescheduled to assist and support the borrowers in the restructuring of their business.
Delinquent loans past 3 months or more are loans for which interest payments or repayments ofprincipal are delinquent for 3 months or more from the due date under the terms of the related loan
agreements, excluding those loans classified as credits to bankrupt borrowers and delinquent loans.
Restructured loans are loans for which certain concessions favorable to borrowers, such as interest
reduction or exemptions, rescheduling of due date of principal or interest payment, waiver of claim or otherterms, have been negotiated for the purpose of assisting and supporting the borrowers in the restructuring of
their business. This category excludes loans classified as credits to bankrupt borrowers, delinquent loans
and delinquent loans past 3 months or more.

7. Accumulated Depreciation of Tangible Fixed Assets
Accumulated depreciation of tangible fixed assets totaled to ¥151,480 million as of September 30, 2015.

8. Separate Accounts
Total assets in separate accounts provided for in Article 118 of the Insurance Business Law were ¥80,813
million as of September 30, 2015. The amounts of separate account liabilities were the same as separate
account assets.

9. Reserve for Dividends to Policyholders
Changes in reserve for dividends to policyholders for the six months ended September 30, 2015 were as
follows:(Millions of yen)

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

¥ 49,311

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

36,698Dividends paid in the current period.........................................................

(18,390)

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

24

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

¥ 67,643

45

Fukoku Mutual Life Insurance Company

10. Reserve for Dividends to Policyholders (Fukokushinrai Life Insurance Company)
Changes in reserve for dividends to policyholders for the six months ended September 30, 2015 were as
follows:(Millions of yen)

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

¥ 707

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

(381)

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

0

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

239

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

¥ 565

11. Stocks of Unconsolidated Subsidiaries
The amounts of stocks of unconsolidated subsidiaries the Company held as of September 30, 2015 was¥560 million.

12. Pledged Assets and Secured Debts
Assets pledged as collateral as of September 30, 2015 were ¥27,983 million of securities and ¥1,704 millionof bank deposits.
Secured debts as of September 30, 2015 were ¥4,863 million.

13. Policy Reserves for the Reinsurance Contracts
Reserve for outstanding claims for the reinsurance contracts provided in accordance with Article 71
Paragraph 1 of the Enforcement Regulation of the Insurance Business Law (hereinafter called “reserve foroutstanding claims for ceded reinsurance”) was ¥16 million as of September 30, 2015.
Policy reserve for the reinsurance contracts provided in accordance with Article 71 Paragraph 1 of the
Enforcement Regulation of the Insurance Business Law (hereinafter called “policy reserve for ceded
reinsurance”) was ¥48 million as of September 30, 2015.

14. Commitment LineAs of September 30, 2015, there were unused commitment line agreements under which the Company is thelender of ¥12,172 million.

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

16. Contribution to Policyholders Protection Corporation
The future contribution to the Life Insurance Policyholders Protection Corporation of Japan under Article 259of the Insurance Business Law was estimated at ¥12,450 million as of September 30, 2015. The contribution
was charged as operating expenses in the year in which it was paid.

46

Fukoku Mutual Life Insurance Company

III. Notes to Statements of Operations
1. Policy Reserves for the Reinsurance Contracts
For the six months ended September 30, 2015, reversal of reserve for outstanding claims for ceded
reinsurance considered in calculation of reversal of reserve for outstanding claims was ¥34 million andreversal of policy reserve for ceded reinsurance considered in calculation of provision for policy reserve was¥3 million.

IV. Notes to Statements of Cash Flows
1. Scope of Cash and Cash Equivalents
Cash and cash equivalents as of September 30, 2015 consist of "Cash," "Deposits in transfer account,""Current deposits," "Ordinary deposits," "Notice deposits," "Time deposits maturing within 3 months of thedate of acquisition," "Foreign currency deposits maturing within 3 months of the date of acquisition,""Negotiable certificate of deposits maturing within 3 months of the date of acquisition," "Call loans" and"Monetary claims bought maturing within 3 months of the date of acquisition."

2. Reconciliations of Cash and Cash Equivalents
Reconciliations of cash and cash equivalents in the consolidated statements of cash flows to theconsolidated balance sheet accounts as of September 30, 2015 were as follows:(Millions of yen)

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

¥ 91,821

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

155,800

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

842

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

(300 )

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

(1,325 )Monetary claims bought maturing over 3 months of the date of acquisition…....

(842 )Cash and cash equivalents...................................................................................

¥ 245,995

3. Reclassification
Previosly, foreign exchange gains and losses accompanying sales and redemption of securities and foreignexchange gains and losses accompanying settlements of derivatives were included in others within cash
flows from investing activities. However, owing to an increase in materiality of these items in the six months
ended September 30, 2015, these items are presented as part of proceeds from sales and redemption of
securities and proceeds from and payments for settlement of derivatives, respectively.
In the six months ended September 30, 2014, as components of others within cash flows frominvesting activities, foreign exchange gains accompanying sales and redemption of securities amounted to¥1,192 million, and foreign exchange losses accompanying settlement of derivatives amounted to ¥11,269
million.

47

Fukoku Mutual Life Insurance Company

(7) Consolidated Solvency Margin Ratio(Millions of yen)
As ofMarch 31, 2015

Total solvency margin

(A)

As of
September 30, 2015

1,441,649

1,412,546

227,256

254,378

Reserve for price fluctuation of securities

55,17756,761

Contingency reserve

144,417

144,115

－

－

1,403

1,367

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

558,124

463,138

Net unrealized gains on real estate x 85%

99,173

98,597

Sum of unrecognized actuarial differences and unrecognized prior service cost

(4,217)(3,794)

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

199,957

202,572

Qualifying subordinated debt

118,959

141,935

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

Deductible items－－

41,39753,473

241,122

225,843

26,07425,473General insurance risk－－

Catastrophe risk

－

－

9,689

9,687

－

－

36,23636,23300Investment risk

196,781

181,729

Business risk

5,375

5,062

1,195.7%

1,250.9%

R1

R5

R6
R8

Foundation funds and surplus
R9

R2
R7

R3
R4

Catastrophe loss reserve
Allowance for possible loan losses

OthersTotal amount of risk

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

2

Insurance risk

3rd sector insurance risk
Small amount and short-term insurance risk
Assumed investment yield risk
Minimum guarantee risk

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

x 100

(B)

Notes: 1. The figures above as of March 31, 2015, are calculated based on Articles 86-2 and 88 of the Enforcement Regulation of the Insurance
Notes: 1. Business Law and Notification of the Financial Services Agency No.23,2011. Fugures as of June 30, 2015, are calculated pursuant toNotes: 1. these standards.
Notes: 2. "Minimum guarantee risk" is calculated by standard method.

48

Fukoku Mutual Life Insurance Company