ＤＤNEWSRELEASE

April 19, 2017
Daisuke Iwase, President
LIFENET INSURANCE COMPANY(Securities Code: 7157, TSE Mothers)

One-time Amortization of Deferred Assets under Article 113of the Insurance Business Act, and Associated Effecton Financial Results for Fiscal 2016TOKYO, April 19, 2017 - LIFENET INSURANCE COMPANY (TSE Mothers 7157, President
Daisuke Iwase, URL: http://ir.lifenet-seimei.co.jp/en/) announces that the Board of Directors has
resolved at its meeting today to one-time amortize certain deferred assets under Article 113 ofthe Insurance Business Act in the financial results for fiscal 2016, ended March 31, 2017. Lifenet
also hereby announces that its financial results for fiscal 2016 are expected to change beyond acertain degree from results of fiscal 2015, as a consequence of the decision to one-time amortize
the deferred assets.
1. Purpose of the one-time amortization of deferred assets under Article 113 of the Insurance
Business Act
Article 113, paragraph (1) of the Insurance Business Act allows deferral of all or part ofoperating expenses for the first five years after business commencement because the initialacquisition costs are significant in the insurance business. The deferred assets are allowed to beamortized within ten years.
Accordingly, Lifenet recorded a part of operating expenses incurred from fiscal 2008, its
business commencement, until fiscal 2012 as the deferred assets, and had intended to amortize
the deferred assets until fiscal 2017, the tenth year after business commencement. Lifenet has
been recording on a straight-line method amortization amounting to 1,060 million yen each fiscal
year since fiscal 2013, and has recorded 2,120 million yen of the deferred assets, which hadbeen slated to amortize using straight-line method across both fiscal 2016 and fiscal 2017, on its
balance sheet as of March 31, 2016. However, the company has now decided to one-time
amortize that entire deferred assets in fiscal 2016, for the following reasons:(1) A stable financial base of Lifenet has been established because positive results ofordinary profit before amortization of deferred assets under Article 113 of the Insurance
Business Act, which is the effective ordinary profit, is anticipated for the second
consecutive year following on fiscal 2015.
(2) The one-time amortization of deferred assets places Lifenet in a more robust financial
position than Lifenet will record the deferred assets as future expense.

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2. Effect on financial results for fiscal 2016 by the one-time amortization of deferred assets
under Article 113 of the Insurance Business Act
Lifenet now expects that ordinary profit (loss) and net income (loss) for fiscal 2016 will change
beyond a certain degree from results of fiscal 2015, as a result of one-time amortizing the 2,120
million yen of deferred assets.
(In millions of yen)

9,387

Ordinary profit(loss) before
amortization ofdeferred assets
under Article 113of the Insurance
Business Act584

10,096

Ordinaryincome

FY2015 results (A)FY2016 forecast at present(B)
Difference (B) – (A)Change (%)(Ref.) Business forecasts
for FY 2016
(November 10, 2016)

Ordinary profit(loss)Net income(loss)

(475)

(429)

88

(2,031)(1,890)709
7.6(496)(84.9)(1,556)-(1,461)-

10,000(300)--

Ordinary income and ordinary profit (loss) before amortization of deferred assets under Article
113 of the Insurance Business Act are disclosed as Lifenet’s business forecasts.
3. Associated effect on financial results for fiscal 2016 and the Mid-term Business PlanOn May 12, 2017, Lifenet will disclose its financial results for fiscal 2016 and its business
forecasts for fiscal 2017. Lifenet expects to record positive ordinary profit before amortization ofdeferred assets under Article 113 of the Insurance Business Act in fiscal 2016 for the second
consecutive year following on fiscal 2015 because of less insurance claims than it expected andothers. At this moment, however, Lifenet will record ordinary loss for fiscal 2017 due to ongoingplans promoting investment in marketing expenses following fiscal 2016.
As stated in Article 17-6 of the Insurance Business Act, the company is not permitted to
distribute retained earnings as dividends while deferred assets under Article 113 of the Insurance
Business Act are held on its balance sheet. Though the one-time amortization of the deferredassets will lift such restrictions under the Insurance Business Act with respect to distributing
retained earnings as dividends, it does not affect a date for the start of dividend payments
directly and at the moment Lifenet has yet to determine specific policies and dates for the start of
distributing retained earnings as dividends. Lifenet will consider implementing a shareholder
return policy in the future, including the distribution of retained earnings as dividends upon
having taken into account amounts of cumulative loss and others.
In addition, Lifenet disclosed its Mid-term Business Plan in May 2016, calling for the company
to achieve 13.5 billion yen in ordinary income and positive profitability of ordinary profit (loss) as
the Management Goal in fiscal 2018. The Management Goal remains unchanged, even withplans for the one-time amortization of deferred assets under Article 113 of the Insurance
Business Act.
Fiscal 2017 marks Lifenet’s tenth year since business commencement. As Lifenet accelerates
the transition to a new phase of business which includes changes in our Directors, it will persist
with initiatives geared to enabling its steady growth going forward.

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Note: The financial results forecasts for fiscal 2016 and other figures mentioned are based on theinformation available as of the date of this release and certain assumptions deemed rational. The
actual results to be disclosed in the future may differ from the forecasted figures due to variousfactors.
About LIFENET (URL： http://ir.lifenet-seimei.co.jp/en/)
Returning to the original purpose of life insurance - mutual support - LIFENET INSURANCE
was founded with the goal of offering simple, convenient and competitively priced products andservices based on the highest levels of business integrity. We sell these products and services
directly to customers over the Internet. By using the Internet, we are able to offer highly
cost-competitive products and accept applications from customers at any given time.
Contact:
Investor Relations, Corporate Planning DepartmentTel:+81-3-5216-7900
e-mail: ir@lifenet-seimei.co.jp
Disclaimer: This is a summarized translation of the original Japanese document, prepared and provided
solely for readers' convenience. In case of any discrepancy or dispute, the Japanese document prevails.

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