Note: This document has been translated from the Japanese original for reference purposes only. In the eventof any discrepancy between this translated document and the Japanese original, the original shall prevail.

Aioi Nissay Dowa Insurance Co., Ltd.

Formulation of Business Improvement Plan Related to Price Fixing

February 29, 2024

Aioi Nissay Dowa Insurance Co., Ltd. (Representative Director, President: Keisuke Niiro), a member of the
MS&AD Insurance Group, today submitted a business improvement plan to the Financial Services Agency
pursuant to an order for business improvement dated December 26, 2023.

We sincerely apologize for the inconvenience and concern we have caused our customers and other stakeholders.

We will take this business improvement order seriously and solemnly, and work to restore trust by implementing
improvement plans with the aim of becoming a truly customer-oriented non-life insurance company.

End1Appendix
1．Introduction (Development of Business Improvement Plan)
We take seriously the suggestions regarding the Business Improvement Order received from the Financial Services
Agency and deeply regrets them. In addition, we considered the problems and issues. Based on these, we reviewed
our company's vision and formulated measures to prevent recurrence and improve the situation.
We aim to return to its "Mission, Vision and Values" and "Reinvent Ourselves" including its corporate culture. In
addition, we will work together with our agents to promote "CSV x DX" in which we thoroughly implement activities
that meet the expectations of our customers and society.
Furthermore, in the "Stage 2 of the Medium-Term Management Plan (FY 2024 to FY 2025)" that began in April 2024,
we will make "CSV x DX" our basic strategy and all employees will work together to restore trust.
Reference: "Mission Vision and Values" Aioi Nissay Dowa Insurance Company's Vision
The Management Philosophy (Mission) is shared by all members of the MS&AD Insurance Group. In addition to the common action
guidelines for all Group employees "Customer First, Integrity, Teamwork, Innovation, Professionalism," we have added our company's
unique guidelines, "Community-based" and "Passion," and are making every effort to achieve our management vision.

Reference: CSV×DX aims to deliver new value that meets the needs of customers, communities, and society
by utilizing the most advanced and unique technologies and digital data and collaborating with distinctive
partners. It is an approach of working globally with customers, communities, and society to solve social andregional problems through all types of businesses in Japan and overseas.
Through CSV×DX, we are expanding the progressive, diverse and community-based efforts we have built todate.
Outline of the business improvement plan
✓ Total of 59 cases considered to be in conflict with the Antimonopoly Act and cases of inappropriate
conduct in light of the purpose of the Act (★ to be included ★) were confirmed (* Total numberof cases including those reported to the Financial Services Agency so far.)✓ In order to improve the environment for appropriate competition, we will review its relationships
with client companies and agents (Business practices: strategic equity holdings, core businesssupports, secondments), clarify the rules for bidding and underwriting for coinsurance
underwriting, and restructure the governance system in which management is actively andproactively involved.
✓ We will develop a system to promote customer-oriented business activities and underwrite
insurance contracts based on insurance premiums calculated based on appropriate profitability
management.
✓ We will build a system to take countermeasures without overlooking inappropriate actions at
each layer of 3-line management.
✓ We will build a system to provide sufficient education and appropriate supervision to all employees
and agents.
✓ We will review the system to ensure that sufficient checks and balances are in place to prevent
inappropriate information exchange.
✓ It is a climate in which customer focus and compliance are emphasized. We aim to ensure thateach employee correctly understands the "Mission Vision and Values" of our corporate vision, andact at all times based on it.

22.

Clarification of management responsibility with respect to this disciplinary action

We take the Financial Services Agency's Business Improvement Order seriously, and to clarify where theresponsibility lies as we take responsibility for preventing a recurrence, we will implement the following reductions
in executive compensation.
Position * ( ) :Division

Name

Representative Director, Chairman of
the Board
Representative Director, President
Representative Director, Executive
Vice President
Representative Director, Executive
Vice President

Reduction of remuneration

Yasuzo Kanasugi

50% of monthly remuneration×3 months

Keisuke Niiro

50% of monthly remuneration ×3 months

Masahiro Higuchi

30% of monthly remuneration ×3 months

Yutaka Ideguchi

30% of monthly remuneration ×3 months

Minoru Kaneda

10% of monthly remuneration ×3 months

Eiji Yamada

10% of monthly remuneration ×3 months

Osamu Yoshida

30% of monthly remuneration ×3 months

Yusuke Shirai

20% of monthly remuneration ×3 months

Yoshikazu Takahashi

30% of monthly remuneration ×3 months

Keizo Hasehira

20% of monthly remuneration ×3 months

Keiichi Miyata

10% of monthly remuneration ×3 months

Shuji Ajiki

10% of monthly remuneration ×3 months

Senior Managing Executive Officer(Professional

Sales

Development

Dept. and Motor Sales Development
Dept.)
Senior Managing Executive Officer(Dealer

Production

Development

Dept.)

Director, Senior Managing Executive
Officer(Compliance

Dept.

and

Internal Audit Dept.)
Director, Senior Managing Executive
Officer (Corporate Planning Dept.)
Director, Managing Executive Officer(Production Management Dept.)
Managing Executive Officer(Corporate and Financial Institutions
Production Dept.)
Managing Executive Officer(Risk Management Dept.)
Executive Officer (General Manager
of Production Management Dept.)33. Development and implementation of measures to improve environment for fair competition in thecorporate insurance area①

Recognition of problems
We believe that the following factors in the corporate insurance area created an environment that made antitrust
violations and other risks likely to emerge. The failure of management to adequately address this issue constituted
the problem.

・Due to the limited number of non-life insurance companies (hereinafter referred to as “other non-life insurers”)
there are many opportunities to interact with other non-life insurers, which makes it easy to contact them.
・Factors beyond policy terms, such as strategic equity holdings and support for the clients' core business, havemore than a minor influence on the relationship with the client companies.
・Ambiguous positioning of corporate agents affiliated with the clients' corporate groups (hereinafter referred toas "corporate agents")
・Coinsurance business practice of structuring insurance on the basis of the premiums of the leading insurer.
In addition, the Sales Promotion Departments of the head office did not have clear guidelines on how to interact
with customers and agents about the bidding process.
②

Recurrence prevention and improvement measures
We will implement the following measures and monitor their progress. Based on the results, we will consider

additional measures.
Recurrence prevention
and improvement
measures

Descriptions[ ]: Time of implementation

Rules regarding contact

We will formulate rules for contacts with other non-life insurers. Additionally, we willwith other non-life

provide training to all employees to ensure effective implementation of these rules.

insurers[April 2024]
・Review of strategic equity holdings [March 2024]
Listed strategic equity holdings will be reduced to zero by the end of the next

Review of businesspractices (strategic
equity holdings, support
for core business,secondments)

medium-term management plan (end of FY2029).
・Review of core business supports provided to clients and agents. [April 2024]
Insurance contracts and/or maintaining/increasing market share will not be a
condition for support. Rules and guidelines appropriate for each case will be
developed.
・Review of Secondments [March 2024]
We will establish and adhere to the guidelines that define the objectives of andrequirements for secondments.

Initiatives Related to

We will establish rules for obtaining contract-related information, including risk

Coinsurance

information, during the bidding and contract underwriting processes for both our4company and agents. Additionally, we will provide training to ensure effective
implementation of the rules. [February 2024]
Reference: Coinsurance is an insurance policy where multiple insurance companies jointly underwrite.

4. Establishment of appropriate sales promotion and underwriting management system①

Recognition of problems
The sales departments were required to maintain their shares of renewals and their position as the leading insurer,

which made it difficult to offer appropriate risk-based premiums. At the same time, the department was pressured to
improve its bottom line (e.g., to raise premiums and/or reduce coverage), which increased the need to engage ininappropriate conduct.
We also identified that in some cases, departmental and branch management focused on winning contracts, theevaluation of the operational process was unclear, and the sales strategy was top-line oriented.
②

Recurrence prevention and improvement measures
In addition to promoting customer-oriented sales activities, we will establish a system to underwrite insurance

policies with premiums calculated based on appropriate profitability management.
We will implement the following measures and monitor their progress. Based on the results, we will consider
additional measures.
Recurrence prevention
and improvement
measures

Descriptions[ ]: Time of implementation

Review of sales

We will transform our sales activities into "CSV × DX-type sales" centered on

department policies

providing value to customers and society. [Fiscal 2024]
・Review of sales office valuation method [April 2024]
We will redesign our evaluation system, which previously focused on contract wins

Review of thewith an emphasis on the top line, to one that is more process-oriented.

evaluation system for・Review of managements of branch managers [April 2024]

sales departments

The Department and Branch will formulate their department’s medium-term
management plan to clarify the activities, including processes and KPIs, necessary toachieve their vision in an annual plan.

Strengthening theWe will create and distribute a manual for employees responsible for corporate

explanatory skills ofcontracts. The manual will describe standard activities and enhance their explanatory

sales departments

skills by improving their knowledge. [May 2024]

Insurance products

We will identify, evaluate, and analyze trends in profitability in specific risk groups.

profitability

We will confirm profitability and take risk control measures as necessary.

Management[August annually]55. Establishment of appropriate legal compliance system to ensure compliance with Antimonopoly Law andother regulations①

Recognition of problems

We believe that one of the problems was a lack of risk awareness, which resulted in our failure to adequately train
and supervise our sales representatives and other internal personnel and agents with respect to the Antimonopoly Law
and other relevant regulations.
In addition, we recognize that our three-line management system was inadequate in some respects and that we had abusiness management system that overlooked the occurrence of inappropriate conducts.
Reference: The following describes the three-line management system. "The risk management functions ofoperations, administration, and internal audit are sometimes referred to as the three lines of defense. It is aconcept that helps financial institutions build an optimal system by deliberately assigning functions to be
performed by departments and divisions in each line." (Excerpt from the Financial Services Agency's "Approachand methods of inspection and supervision regarding compliance and risk management " issued in October 2018)②

Recurrence prevention and improvement measures
We will implement the following measures and monitor their progress. Based on the results, we will consider
additional measures.
A. Management's recognition of the risk of non-compliance in response to changes in the external environment(Awareness-raising among management)
Recurrence Prevention

Descriptions

and Improvement[ ]: Time of implementation

Measures
Strengthening of ERM
Committee functions(risk detection)

In order to raise management's awareness of compliance risks, the ERM Committee
will discuss a broad range of risks, including conduct risks, and ensure that these risks
are promptly reported to management through the Executive Committee and othermeans. [April 2024]

Reference: The ERM Committee performs the following tasks:・Discussion, review and recommendation on agenda items related to the advancement of ERM through thecontrol of risk, return and capital.
・Discussion, review, and recommendation on agenda items related to important issues for the purpose of thefollowing: raising awareness of significant risks within our company, our subsidiaries, and affiliates (“Group
companies") to ensure soundness, safety, and stable management; organizing responses to such risks; andensuring the effectiveness of the risk management system.

6

B. Establishment of three-line management system
Recurrence Prevention

Descriptions

and Improvement[ ]: Time of implementation

Measures・We will define the Sales Promotion Division as the first line of defense at the head
Review of three line
management system

office. The division will take the initiative to address compliance risks in sales
branches. We will define the Compliance Department as the second line of defense.
It will take the initiative in monitoring the sales branches as well as the Sales
Promotion Division. [FY2024]

Enhancement of firstline functions

We will make it a rule to register all bids (competitive quotations) to the sales activity
support system to visualize sales activities. [June 2024 (Partially implemented inadvance)]・With respect to agenda items to be submitted to the Board of Directors and theManagement Committee regarding new business models and management
strategies, etc., the director or general manager of each second line department will
review the issues and problems from the perspective of risk management andcompliance with laws and regulations, etc. They will also include opinions
representing the second line in the agenda. [April 2024]
・The Compliance Department will proactively monitor the actual status of the first

Enhancement of secondline by attending various meetings within the sales branches. The department willline functions

also review employees' psychological safety and ensure that their communication
with supervisors, subordinates and co-workers is effective. [April 2024]
・The Risk Management Department will evaluate the information provided by theSales Promotion Division and the Compliance Department and provides regularfeedback to the Compliance Department. It will also share the information with thethird line. [April 2024]
・Legal and conduct risks are quantified and appropriately reflected in risk categories.
[April 2024]
・In addition to the issues already identified, we will enhance the collection andEnhancement of thirdline functions

analysis of concerns from a forward-looking perspective. [April 2024]
・We will undergo verification and evaluation by an external evaluation organizationand take necessary improvement actions based on the results. [April 2024]

Establishment ofsystem that enables
second and third lines
to function properly(including HR reform)

・In order to ensure the high quality and diversity of our human assets, we will
implement personnel rotations and secondments, and recruit external humanresources. [April 2024]
・Continuation and strengthening of career paths, such as the promotion of employees
to department and branch managers after they have gained experience in secondand third-line positions. [Continued Implementation]

Mutual Evaluation

A cross-evaluation will be performed between the first line (sales branches and firstamong first, second,line departments at head office), the second line (Compliance Department and Risk
7

third lines

Management Department) and the third line (Internal Audit Department). [September
2024]

Reference: Risk Register (Our "Detailed Regulations on Risk Management by Risk Register")・The purpose of the Risk Register is to recognize major risk events that our company should monitor, by
capturing the presence or absence of changes in risks facing our company and the occurrence of new risk
events in light of recent environmental changes.
・We implement quantitative and qualitative risk management for the risks identified in the Risk Register, andperiodically examine the status of risks and the status of risk management to improve our efforts.
C. Establishment of a system for appropriate training and supervision of employees and agents
Recurrence prevention

Descriptions

and improvement[ ]: Time of implementation

measures
We will include an antimonopoly compliance agenda (including education andtraining) in the corporate compliance program for FY 2024. [April 2024]
Enhancement of・In formulating the corporate compliance program, we will increase the involvement

compliance programof Risk Management Department to align the subjects more closely with actual risk

and improvement of itsconditions. [April 2025]

effectiveness・Sales branches develop their own individual compliance programs based on thecorporate program, review progress at monthly meetings, and take necessary action
accordingly. [Implemented]
・To ensure strict compliance with the Antimonopoly Law and other regulations,

Training, etc.

training is conducted using materials based on actual cases. [Continuously
implemented since June 2023]

Establishment of
mechanisms to prevent
inappropriate
information sharing

・Emails addressed to other non-life insurers require approval by management at thetime of transmission, and system checks will be implemented. [Implemented
sequentially since January 2024]
・Emails from our sales department to other non-life insurers will be inspected using
keywords. [October 2024]

Reference: Corporate Compliance Program
Our Corporate Compliance Program (hereafter referred to as "Corporate Program") is a practical compliancerelated program that gives specific assignments to our employees.
Each organization has its own approach to addressing the assignments stipulated in the Corporate Program. In
addition, since compliance issues vary across branches, we have decided to formulate divisional and branchcompliance programs tailored to the specific conditions of each division and branch.

86. Fostering healthy organizational culture that emphasizes compliance and customer protection①

Recognition of problems
We believe that one of the problems was the culture of disregard for compliance and customer protection that was

fostered by the sales division, which prioritized its own convenience and engaged in inappropriate conduct eventhough it was aware that such conduct was illegal or inappropriate, and by the compliance, risk management andinternal audit divisions, which failed to detect such conduct. In addition, we recognize that we have failed to practice"Positive Compliance," an initiative to not only comply with laws and regulations, but also to think autonomously
and practice what should be done and what is right.
Reference: What is “Positive Compliance”?
We define “Positive Compliance” as an initiative to not only comply with laws and regulations, but also to think
autonomously and practice what we should do and what is right.
②

Recurrence prevention measures and improvement measures
Our goal is to ensure that each employee has a correct understanding of our Mission, Vision, and Values(hereinafter, referred as “MVV” ) and is able to act accordingly at all times.
We will implement the following measures and monitor their progress. Based on the results, we will consider
additional measures.
Recurrence prevention

Descriptions

and improvement[ ]: Time of implementation

measures
ExtendingVideo messages (for all employees) on compliance, meetings for all employees, andmanagement's

the President's message at the beginning of the year. [Has been conducted as needed

commitment tosince June 2023].

corporate culture

The management communicates messages to employees regarding corporate culture

reform to employees

reform. [Conducted as needed from April 2024]

Designation of

October 10 will be designated a "Day of Reflection and Learning from Past Misconduct

October 10 as a day to(tentative name)" to reflect not only on this price fixing issue, but also on past mistakes

reflect and learn fromto ensure that the lessons learned do not fade away. [Scheduled to be implemented

past misconduct

annually from FY2024]
Through the Department and Branch Business Quality Improvement and Compliance

Promotion of Positive
Compliance

Committee, we aim to cultivate a corporate culture wherein employees autonomously
consider aligning their actions with our MVV and doing what is right and what we canbe proud of.
The personnel evaluation system will be reviewed as follows.

Review of the
Evaluation System

・We will eliminate traditional performance elements from the evaluation system andinstead, prioritize behavior based on our MVV. [April 2024]
・Actions that contribute to the promotion of products and services aimed at solving
9regional and social problems (CSV×DX) will serve as the basis for evaluation.
[April 2024]
・ In order to assess whether senior management and managers demonstrate an
appropriate sense of ethics, risk sensitivity and compliance awareness, whether theytake appropriate action, and whether they properly evaluate their subordinates, wewill establish a system whereby senior management is evaluated by managers andother employees, and managers are evaluated by their subordinates. [October 2024]
Review of the evaluation system for head office executives and regional executives andassociate directors [FY2023]
・Promotion of products and services that contribute to solving regional and social
issues (CSV×DX), diversity, equity and inclusion, and engagement have been
newly added to the evaluation criteria to encourage executives to demonstrate theprocess-oriented activities and corporate culture reform efforts.
Questionnaire survey

Questionnaires on the fostering of corporate culture will be conducted. Surveys ofof officers andmanagers and employees regarding the appropriateness of sales targets andemployees

performance reviews will be conducted. [October 2024]

Reference: About Quality Improvement and Compliance Committee at Sales Departments and Branch Office
The purpose of this committee is to improve business quality, improve customer satisfaction, and promotecompliance with laws and regulations in order to protect customers and improve convenience at the sales
departments and branches. The committee is established at each sales department or branch and chaired by thegeneral manager of each.
7.

Fundamental reinforcement of the management control (governance) system to effectively implement

the above measures and to ensure that they are firmly in place.
①

Recognition of problems

Management was not sufficiently aware of the need to formulate specific rules and the risk of violating the
Antimonopoly Law, etc., given the nature of coinsurance, where contact with other companies prior to the conclusionof a contract is highly probable.
We believe that it is necessary to recognize that significant compliance risk events are often inextricably linked tobusiness models and management strategies, and that compliance risk is fundamentally inherent in these.
② Recurrence prevention and improvement measures
We will establish a system to ensure that all preventive and corrective measures are proactively and positively
implemented with clear accountability at the management level, and that continuous progress is ensured by sharing
and discussing progress updates at the management level.

10Recurrence Prevention

Descriptions

and Improvement[ ]: Time of implementation

Measures・We will conduct an external evaluation by an outside institution and, through the
Checks and balances on

use of professional evaluation, improve the checks and balances on the Board ofmanagement led by the

Directors. [April 2024]

Board of Directors andcorporate auditors

・ Outside directors will visit sales departments and branches to obtain a better
understanding of the actual situation through increased opportunities for dialogue
with employees. [April 2024]
Establishment of the Corporate Innovation Promotion Committee (tentative name)[FY2024]

Establishment of・ As directly under the president, this committee will promote initiatives bycommittees to promotereviewing reports from the committees and executives in charge of each initiative

initiatives

in the Business Improvement Plan and the status of business execution in eachrelevant department, confirming the progress of reoccurrence prevention andimprovement measures, and discussing common issues.
Launch of new customer-centric sales reform project [FY2024]
・This cross-divisional project at the head office will plan, promote and monitor
measures for the sales branches to focus on sales activities based on "CSV×DX"
by facing customers together with agents.
・ This project is responsible for reviewing business practices (strategic equity
holdings, business support, secondments) and process-oriented evaluation of sales
branches as part of efforts to comply with the recent Business Improvement Order.
Reorganization into the Customer-Oriented Business Operation Promotion

Strengthening thefunctions of committees
and other bodies
responsible for eachmandateCommittee (tentative name) [FY 2024]
・This committee will reorganize the current Quality Improvement and Compliance
Committee. The head office department, sales department and claims department
will address business quality and compliance issues from a customer-oriented
business perspective.
・This committee is in charge of reforming corporate culture and strengthening thethree-line management system as part of efforts to respond to the recent Business
Improvement Order.
Establishment of Risk Detection Subcommittee [FY2024]
・This subcommittee will consolidate and analyze risks (including conduit risks)
identified by each department at the head office and issue instructions forcountermeasures, with the aim of achieving comprehensive risk management.
・This subcommittee is in charge of risk identification as part of efforts to respond to
the recent Business Improvement Order.
11

The progress of the business improvement plan will be reported to the holding
Improvement ofmanagement
supervision system byholding company

company on a regular basis. The holding company will strive to establish a frameworkfor proper business supervision of all Group companies, including the Group's
domestic insurance companies, in order to strengthen the governance of the entire
Group, and will oversee and guide the steady implementation of the business
improvement plans formulated by our Company and Mitsui Sumitomo Insurance Co.,
Ltd. [April 2024]

Reference: Structure of the organization and committee responsible for the business improvement planEnd12