(i) We will comply with laws and regulations, etc., and if we discover any behavior with thepotential to violate laws and regulations, etc., we will have the courage to point out the behaviorand correct it in cooperation with related persons.(ii) When considering an action, we will ask ourselves if the action is ethical, if we can explainthe action to our friends and family with confidence, and if the action will preserve confidence inthe MS&AD Insurance Group and its brand.(iii) We treat every person faithfully, fairly, and appropriately in every situation.(2) Conduct to ensure that corporate activities are appropriate(i) We will not engage in unfair trade, such as restricting competition through collusion oracquiring unfair benefits by abusing our position.(ii) We will protect our intellectual property rights and will not infringe on the intellectualproperty rights of others.(iii) We will diligently manage customer information we obtain in the course of our work and usesuch information only for specified purposes.(iv) We will be resolute in dealing with antisocial forces and will not accept any unjust, unlawfuldemands.(v) We will appropriately manage conflicts of interests to ensure that our customers’ interests arenot compromised unfairly.(vi) We will ensure that transactions are fair, for instance when we do business within the Groupor form a business alliance.(vii) We will ensure that our management is transparent, by disclosing information appropriately ona timely basis.(viii) We will not engage in insider trading (trading in stocks, etc. using important undisclosedinformation).(ix) We will appropriately manage assets, important information, and trade secrets, etc. of theGroup companies.(x) We will not seek personal benefits by making use of our position in business.(3) Respect for Human Rights and Creating a Positive Working Environment(i) We respect human rights and will not discriminate or harass people based on race, nationality,gender, age, profession, region, faith, disability, or other elements.(ii) We will create a safe and comfortable working environment.
 

 
**MS&AD Insurance Group Basic Policy Regarding Internal Control System**The system stipulated in this policy was established to be in alignment with the Corporation Law inaddition to holding “securing trust on financial reporting” as its top priority. The summary of thebasic policy is as follows.1. System to ensure appropriate operations of corporate group comprised of MS&AD and itssubsidiaries(1) From the perspective of maximizing the corporate value of the whole group, the Company shallcontrol business affairs of the whole group and shall exercise its shareholder’s right accordinglyto its direct subsidiary (“direct investment subsidiary”).(2) The Company shall conclude a management agreement with its direct investment subsidiary. Basedon that contract, the Company shall call for the direct investment subsidiary to comply with theGroup Basic Policy as well as to seek approval from and report to the Company on any importantmatters related to direct investment subsidiary. Additionally, in relation to sub-subsidiary, thedirect investment subsidiary shall, in principle, manage its own subsidiaries accordingly as agreedin the contract.2. System to ensure the assignments of the Directors are carried out efficiently(1) As well as formulating the Group management plan, the Company shall set the task-specificnumerical targets and appropriately distributes the managerial resources needed to realize thatplan. In addition, the Company and its subsidiary’s execution of business operations shall bereported to the Board of Directors.(2) To realize rapid decision-making and appropriate monitoring, the Company shall introduce anexecutive officer system, appoint outside directors and set the number of Directors at 15 or less.(3) To ensure assignments of Directors and Executive Officers are carried out appropriately andefficiently, the Company shall establish rules of organizational and administrative authority andclarify the assignments to be implemented and the relevant authority.3. System to ensure that the assignments of the Directors and the employees adhere to laws and thearticle of incorporation(1) In accordance with the MS&AD Insurance Group Basic Policy on Compliance set out by the HoldingCompany’s Board of Directors, the Company and its Group companies shall make sure that each andevery director and employee is aware of the
 

 
importance of compliance, ensure compliance with all applicable legislation and internalregulations, etc. and maintain high ethical standards as part of all business activities.(2) To promote and complete compliance program in the Company and the Group companies, MS&AD shallmaintain organizational structure of Compliance Department and report regularly on overallcompliance promotion situations of the Group to the Board of Directors. To monitor compliancepromotion, it shall set Risk Compliance Committee and take necessary measures on issues identifiedby it.(3) The Company and the Group companies shall set up an internal report system so that alldirectors and employees may directly report to in-house contacts or outside lawyers on individualor group behaviors that are unjust, illegal, or unethical.4. Regulation and System Related to Managing Risks of Losses (Integrated Risk Management System)(1) In addition to establishing a shared basic understanding in accordance with the MS&AD BasicPolicy on Risk Management set out by the Company’s Board of Directors, the Company and its Groupcompanies shall formulate company-specific risk management policies and take appropriate riskmanagement measures in line with circumstances at each company.(2) The Company’s Board of Directors shall establish a risk management department and put in placethe necessary organizational framework to identify the full range of risks inherent in the Group’sactivities and effectively implement integrated risk management. To monitor risks and riskmanagement activities, the Company shall also establish a Risk Compliance Committee and take allnecessary measures to avoid and minimize risks, based on the results of consultations held by theCommittee (including the results of integrated risk management evaluation (quantitative analysis)).(3) The Company shall evaluate risk management and business contingency plans at Group companiesand establish a risk management and business contingency plan for the Group as a whole.5. System to ensure credibility of Financial Report(1) Out of the Corporate Auditors, the Company shall nominate at least one person who is equippedwith sufficient knowledge of accounting or finance.(2) In accordance with the MS&AD Insurance Group Basic Policy on Disclosure Regulation set out bythe Company’s Board of Directors, the Company and its Group companies shall put in place thenecessary framework to ensure the timely and adequate disclosure of financial information and otherinformation relating to the Group.
 

 
(3) To secure fair disclosure of information, the Company shall set Information DisclosureCommittee to maintain internal control regarding financial reports of the Company and the Group, aswell as to examine the effectiveness of disclosure system.6. System to ensure effective Internal AuditingIn line with the “MS&AD Insurance Group Basic Policy on Internal Audit”, the Company and its directinvestment subsidiary shall maintain internal audit systems tailored to all the business activitiesof MS&AD in order to ensure efficiency and effectiveness of internal audit. The Internal AuditDepartment shall report all important items from the internal auditing results of the Company andits direct investment subsidiaries, as well as improvement progress in the audited departments, tothe Board of Directors.7. System to manage and store information related to Directors’ dutiesThe Company shall establish regulations for document management to appropriately store and manageinformation as well as documents that are related to Directors’ and Executive Officers’ duties.Directors and Corporate Auditors shall be able to browse the information at all times.8. System to ensure that audits by the Auditors are carried out effectively(1) System related to an employee hired to assist the duties of the Corporate AuditorsTo accommodate the duties of Corporate Auditors, the Company shall set a Corporate Auditor Roomwith an assisting employee. Respecting the independence of the Corporate Auditor Room,organizational change of the Room as well as transfer or discharge of the hired employee shall onlytake effect upon reaching a consensus at the Board of Auditors. Employee evaluation shall also takeplace upon consultation with an Auditor assigned by the Board of Auditors.(2) Systems of report to the Auditors**•** Directors and ExecutiveOfficers shall report to the Board of Auditors without delay about mattersgoverned by law, decisions that greatly influence business operations and organizations, and theresults of internal audits and the internal reporting system. **•** Employees shall be able to directly report to the Board of Auditors about managerial acts thatare seriously fraudulent or illegal, and about facts that may have extremely negative impact on theCompany.(3) Other systems**•** Auditors shall attend important meetings including the Group Management Committee Meetings. **•** Chairman of the Board, President, and Representative Director shall convene regular consultationswith the Board of Auditors. Additionally, Internal Audit Department is to cooperate with the audit upon request from the Auditors.