47

Management of Nippon LifePromoting Corporate Social Responsibility (CSR) 48

All Policyholders are Company Members (Mutual Company Framework) 48

The Internal Controls System 52

Promoting Compliance 52

Strengthening Risk Management 54

Efforts in System Development 59

Making Efforts to be Welcomed in Local Communities 60

Improving Disclosure 64

CHAPTER 3

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PROMOTING CORPORATE SOCIAL RESPONSIBILITY (CSR)As a good corporate citizen, Nippon Life has contributed to the stability and improvement of people’s lives.CSR is a basic business management principle based on a belief in the value of conviction, honesty and hardwork. Further, Nippon Life promotes CSR based on the following four points.

1)Fulfilling Our Responsibilities in the Life Insurance BusinessWe will fulfill our responsibilities to provide coverage to policyholders by improving our service and helpingmore people understand the importance of life insurance that is based on the spirit of cooperation.

2)Increasing Policyholder Advantages by Leveraging the Positive Aspects of MutualCompanies.In mutual companies, the policyholders are considered to be company members. We will reflect a widernumber of policyholder opinions back to management and promote the distribution of profits through divi-dend payments.

3)Promoting Social Contribution ActivitiesSupported by local communities, and as a company involved in a wide range of business activities, we willpromote stable and continuing social contribution efforts.

4)Rigorous ComplianceNot only will our actions be legally compliant, we will be compliant with all social norms and live up to cus-tomer and social trust by practicing honesty in management.

ALL POLICYHOLDERS ARE COMPANY MEMBERS (MUTUAL COMPANY FRAMEWORK)Mutual CompanyNippon Life is a mutual company, which is an incorporated association of insurance policyholders (excludingpolicyholders with nonparticipating insurance) defined as company members. Nippon Life believes that amutual company is the most appropriate kind of corporation for the life insurance business, for the followingtwo reasons.¡The framework for distributing surplus under a mutual company structure (through the return of a major

portion of retained earnings from business operations to policyholders, without the need to considershareholder dividends) corresponds with Nippon Life’s belief that policyholder interests come first.

¡To ensure that its promise to pay insurance benefits to policyholders is fulfilled, a life insurance companyis obligated to maintain a sound financial position and stably secure surplus over the long term. We believethat a mutual company format is the most appropriate for fulfilling these responsibilities and ensuringlong-term stable management.

Nippon Life also strives to achieve flexibility in capital procurement and to practice corporate manage-ment open to external scrutiny from investors by procuring capital through the public securitization of founda-tion funds (kikin), and by holding regular financial results meetings as part of its concerted efforts toenhance disclosure.

Meeting of RepresentativesEstablished to replace the General Meeting of Members, the Meeting of Representatives comprises policy-holders selected to act as representatives. The Meeting of Representatives is equivalent to the general share-holders’ meeting of a stock corporation, and deliberates and passes resolutions, such as those for amendingthe Articles of Incorporation, approving proposals for the disposal of retained earnings, and nominating direc-tors and auditors.

■ Attendance System for Meeting of RepresentativesPolicyholders may attend the Meeting of Representatives. Information on how to procure admission is avail-able at our offices and on our website in May and June.

Minutes and a summary of the Meeting of Representatives (Q&A summary) are available soon after the event from the head offices,the Tokyo Headquarters and all branches, as well as on the Nippon Life website (Japanese only).

The 59th Meeting of Representatives

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Representatives and Their Election■ RepresentativesAccording to the Articles of Incorporation, each representative’s term of office is generally four years and canextend to eight years if selected for a second term. The number of representatives currently stands at 160(the number will be 200 as of April 1, 2009).

Nippon Life selects policyholders as representatives, and, because they act as a check against manage-ment from a number of perspectives, they are chosen from among people in many occupations and ages andfrom many parts of the country. They participate in the Meeting of Representatives and deliberate with theCompany through direct question and answer sessions.

From this perspective, Nippon Life believes that the number of representatives is set at an appropriatelevel.

■ Election of RepresentativesRepresentatives are chosen to represent the interests of all policyholders, with no ties to the interests ofspecific policyholders among the approximately 10.39 million policyholders, based on the principle of fairlyreflecting the opinions of policyholders at the Meeting of Representatives. In this context, the RepresentativeNomination Committee recommends candidates, who are elected by all policyholders as a means to directlyreflect their opinions of the candidates.

In addition, representative candidates are selected from among policyholders that participated in NissayKonwakai (see p. 16, 50 and 51), a forum where management receives opinions and requests from policyhold-ers. Though we do not adhere to a system in which policyholders interested in becoming representatives canbe directly selected as representative candidates, Nippon Life will continue to promote this method of select-ing representative candidates from among policyholders who participate in the Nissay Konwakai and aims todiversify selection methods by exploring other ways of selecting representative candidates in the future.

Representative Nomination CommitteeThe Representative Nomination Committee is composed of members chosen from among policyholders by theMeeting of Representatives. The Representative Nomination Committee decides on selection standards forrepresentative candidates and selects representative candidates from a broad base of policyholders. In addi-tion, Nippon Life works to ensure the independence of the selection process by appointing an external personto the position of head of the secretariat of the Representative Nomination Committee, which also ensuresthe fairness and transparency of the representative nomination process.

Policyholder VotingAll policyholders cast votes for individual representative candidates selected by the Representative Nomina-tion Committee. If the total number of no-confidence votes is less than 10% of the total number of policyhold-ers, candidates are nominated as representatives.

Board of TrusteesNippon Life has a Board of Trustees that serves as a management advisory body to ensure the appropriate-ness of management. Trustees are elected at the Meeting of Representatives from among policyholders andacademic experts. Trustees give opinions on advisory matters and important management issues and deliber-ate on policyholder opinions regarding corporate management. The results of these opinions and delibera-tions are reported at the Meeting of Representatives.

Selection Standards for RepresentativeCandidates1. Required Qualifications

(1) Is a policyholder of Nippon Life(2) Is not a representative of another

life insurance company2. Eligibility Standards

(1) Has a strong interest in the lifeinsurance business and the manage-ment of Nippon Life and has ade-quate insight as a representative

(2) Can be expected to actively partici-pate as a representative in theMeeting of Representatives andother events

(3) Is able to check and advise on opera-tions and management as necessaryin addition to making fair decisionsat the Meeting of Representatives topromote the interests of all policy-holders

3. SelectionRepresentative candidates are selectedfrom a broad base of policyholders withan emphasis placed on ability to re-present policyholders and to inspectmanagement.(1) We select representative candidates

to ensure well-balanced policy-holder representation in terms ofgeographic region, occupation, ageand gender.

(2) We select representative candidateswho are able to check on operationsand advise management from a man-agement perspective, consumerperspective and from a specialist’sviewpoint.

Qualifications for Selecting Representa-tive Nomination Committee Members(1) Has a strong interest in and a deep

understanding of the life insurancebusiness and mutual company man-agement and adequate insight as arepresentative

(2) Is able to fairly and impartially selectrepresentative candidates

(3) Is able to participate in the Represen-tative Nomination Committee

Time of Policyholder VotingVoting for representative candidates isheld once every two years from August toSeptember. The next election by policy-holders is scheduled for 2008. (Votingmaterials shall be sent to all Nippon Lifepolicyholders.)

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Nissay KonwakaiThe Nissay Konwakai are a series of roundtable conferences for policyholders that we hold every yearthroughout Japan. These conferences provide opportunities for Nippon Life to explain its business activitiesand for policyholders to voice their opinions and requests on overall management as well as products and ser-vices. Konwakai have been held since 1975.

From among the opinions and requests that we receive from participants, we identify and respond tothose that are most frequently expressed. These items are then reported to the Meeting of Representativesand Board of Trustees. The participants include several representatives and directors, and we continue towork to improve ties between the Nissay Konwakai and Meeting of Representatives.Nissay Konwakai Meeting

By age

By occupation

51-6036.9%

41-5019.6%

31-408.5%

20-301.3%

61 and over33.7%

Self-employed 53.9%

Company employees

20.0%

Housewives11.6%

Company directors7.2%

Other7.3%

Description of Participants(2,614 policyholders) Fiscal 2006

Products 26.9%

Marketing network22.6%

Informationfor customers

16.7%

Business improvement plan (Customer Service Innovation Project)19.5%

Soundness andprofitability

6.4%

Services, insurance underwriting

and payments6.3%

Asset management1.6%

Categories of Opinions and Requests(4,027 cases) Fiscal 2006

In addition to the above, we received 957 commentsfrom participants in the Nissay Konwakai.

Position of Nissay Konwakai

Policyholders

™Representative candidate selection committee

™Company member voting

Policyholderparticipation

Decisions on important matters

Opinions/requests

Nippon Life

Nissay Konwakai Meeting of Representatives

• Nissay Konwakai results reported at the Meeting of Representatives

• Participation of many representatives in Konwakai

Selection of Representatives

Information about when and where the Nissay Konwakai are held is available at our branches and sales offices,and is disclosed on our website. We promote broad participation in the Nissay Konwakai.

■ Status of the Nissay Konwakai Meeting in Fiscal 2006In January and February 2007, we held Nissay Konwakai in 110 locations around Japan, bringing together a totalof 98 representatives and 2,516 policyholders (total: 2,614) and receiving a total of 4,984 opinions andrequests. At the Nissay Konwakai, we showed easy-to-understand video presentations about our CustomerService Innovation Project, first-half fiscal 2006 performance and other topics. Opinions and questionsreceived at the Nissay Konwakai are thoroughly examined by the relevant departments and every effort ismade to reflect them in management. The following are some of the most important opinions and requeststhat we received during fiscal 2006.

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Main Opinions and Questions Received, and Our Responses to Them

¡Our sales representatives are always at your service and sincerely thankful to their customers.¡To further improve such after-sales service as the proposal of new insurance policies to customers and payment procedures for

claims and benefits, visiting customers is extremely important. (Life Plaza service counters and call centers are used for thosecustomers whom sales representatives are just not able to meet.)

¡With sales representatives receiving many inquiries about the insufficient payment of insurance claims and benefits during thecourse of their work, we realize the renewed importance of visiting many customers and delivering services to them.

¡In fiscal 2007, the basic job of sales representatives was to proactively render service to customers. In April, we began to seesuch results as the taking of an increasing number of after-sales service procedures. Moving forward, we would like to see morefrequent customer visits, person-to-person meetings and measures taken to regain customer trust.

Now that Nippon Life is facing such major challenges as the insufficient payment of insur-ance claims and benefits, I would like to see front-line sales representatives making aserious commitment to customer visitations and leveraging Nissay’s strength in person-to-person customer meetings.

QA

¡As a mutual company that embraces the ideal of maximizing customer profits, Nippon Life’s medium- to long-term objectivesare to become: — A company with improved dividend payouts — A company that delivers world-class levels of safety and security Furthermore, we believe in the importance of improving the current fiscal year’s dividend payout and in continually ensuringthat claims are paid and that shareholders’ equity, the basis of dividend payouts, is increased in a balanced manner.

¡In line with this concept, Nippon Life has established two indicators (dividend payout ratio and equity replacement ratio) thatindicate the status of dividend payouts and the state of financial soundness in ways that are easy for customers to understand.

¡The first, the dividend payout ratio shows the extent to which available funds, in real terms, are being used directly for thepayment of dividends. For the foreseeable future, we will ensure that more than 50% of funds are paid out and we would like tosteadily raise this ratio. In addition, the provision for reserve for policyholder dividends in fiscal 2006 was approximately ¥240.0billion, dividend increase funds were ¥58.0 billion and the dividend increase was the largest ever with a 69% dividend payoutratio.

¡The second indicator is the equity replacement ratio. At Nippon Life, while we accumulated ¥3.0 trillion in equity as of March 31,2006, our goal for fiscal 2005, we are now evaluating risk more rigorously and have recently set optimum equity at ¥4.8 trillion.Equity as of March 31, 2007 was ¥3.2 trillion, which represents 67% of ¥4.8 trillion. Thus, the equity replacement ratio was 67%.

¡Moving forward, while taking this indicator into account, we will place greater emphasis on improving dividend payouts to cus-tomers. We will also work to ensure the stable and continuous increase of dividends and the steady raising of the equityreplacement ratio.

I was relieved to hear the explanation about financial soundness. I would like to seehigher dividends returned to customers in the future.Q

A

Other Ideas and Requests

■ Issue of Insufficient Payment of Insurance Claimsand Benefits:

¡Although I would like to see Nippon Life maintain IT systems andother infrastructure, it must focus even more on the education ofsales representatives who are the customer interface.

¡The terms and conditions of policies are highly technical and diffi-cult to understand, I would like to see them improved.

¡I would like to see the Business Improvement Plan (CustomerService Innovation Project) shared throughout the company andrigorously implemented with the entire company getting behind it.

■ Other:¡Could you explain what steps are being taken in asset management

to improve dividend payouts?¡I would like to see improved medical products, better disease pre-

vention services and more information provided to customers. ¡Please explain the medical and nursing care services that Nippon

Life provides.¡Tell us about Nippon Life stance on the legalization of insurance

sales at bank service counters. ¡What actions is Nippon Life taking in light of postal service

privatization?¡What countermeasures is Nippon Life taking with respect to the

rapid aging of society?¡What measures is Nippon Life taking in the area of corporate so-

cial responsibility?

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THE INTERNAL CONTROLS SYSTEM

Internal controls“Internal controls” are the integralsystems and management processes of acompany that ensure that its operationsare conducted appropriately and effi-ciently.

Nippon Life has constructed the internal controls system described below with the aim of increasing corpo-rate value in order to ensure the appropriateness of business operations.

Overview of Primary Initiatives

Business organization

Compliance

Risk managementIn

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• A system of checks-and-balances on management exercised through the Meeting of Representatives, Board of Trustees, and Operation Oversight Committee

• Internal controls exercised by the Auditing Department• Audits by auditors• Improved business execution function due to an executive officer system

• Improving the compliance system • Managing the compliance program • Teaching and entrenching compliance principles

• Risk management systems in each division according to risk characteristics • Comprehensive risk management system for the entire Nippon Life Group

Operations Oversight Committee (Established in January 2007)This committee is composed of outside directors, three Company members (policyholders) and directorswhose only duties are in the Auditing Department. The committee was commissioned by the Board ofDirectors to fulfill a supervisory function and, as a body directly connected to the Board of Directors, super-vises and oversees all of the business affairs of the corporation.

The director in charge of the Auditing Department monitors the discussions and decisions made by theOperations Oversight Committee and through his leadership and direction of the Auditing Department theeffectiveness of internal audits is improved.

Executive Officer System (Introduced in January 2007)Executive officers, who have authority over the individual businesses in their charge, are appointed by theBoard of Directors, and, by assigning an executive officer to each operating area, we are putting in place asystem that will enable swift decision making and business execution based on front-line sales and practicalbusiness affairs.

PROMOTING COMPLIANCEPromoting ComplianceCompliance at Nippon Life goes beyond the narrow sense of the word, and extends to complying with all socialnorms, earning the trust of customers and society, and performing our work with sincerity. All directors andemployees bear the responsibility of compliance and, considering compliance to be a fundamental operatingpremise, strive to promote compliance primarily in the following areas.

■ Improving the compliance system■ Managing the compliance program■ Teaching and entrenching compliance principles

Compliance System

Auditing Department

Internal Auditing Organization

Board of Directors

Compliance Committee(Committee Chair: President; Offices: Compliance Department, Corporate Planning Department)

Board of Managing Directors

President

Other compliance issuesInsurance solicitation management issues

Information AssetProtection SectionMeeting

Corporate ExtortionistCountermeasuresCommittee

Branches, Sales OfficesPerson responsible for compliance: General manager of each branchPerson in charge of compliance: Deputy general manager of each branch

(Management of the branch compliance meeting and liaison meeting)

Each Department at HeadquartersPerson responsible for compliance: General manager of each departmentPerson in charge of compliance: Appointed for each department

(Operation of each department’s compliance program)

Compliance CommitteeControls and manages the compliancesystem comprehensively by deliberatingon measures related to insurance solicita-tion management and other compliancerelated issues and by monitoring organiza-tional status

Information Asset Protection Section MeetingHandles numerous issues related to theprotection of information assets, center-ing on the protection of customer data

Corporate ExtortionistCountermeasures CommitteeInvestigates countermeasures to elimi-nate antisocial activities, including corpo-rate extortion; Confirms incidents thatarise and communicates with relateddivisions

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■ Improving the Compliance SystemNippon Life established a Compliance Committee as an advisory body to the Board of Managing Directors. TheCompliance Committee comprehensively controls and manages the compliance system, including insurancesolicitation management, by deliberating on measures related to compliance issues and by monitoring organi-zational efforts.

To further strengthen the compliance system and develop a checks-and-balances function or system thatprovides an outside perspective, the Compliance Committee has appointed the Company president as com-mittee chairperson, and invited attorneys from outside the Company to serve as committee members.

At each branch and headquarters department, general managers are responsible for compliance. Deputygeneral managers and managers appointed to each branch and department are in charge of compliance.Together, they form a system that rigorously implements compliance programs as part of operational manage-ment.

Moreover, a compliance officer who is responsible for leading compliance programs at branch offices andmonitoring their compliance status has been appointed to the Company’s Compliance Department. In addi-tion, another officer devoted exclusively to compliance has been placed to oversee compliance in the head-quarters organization in such areas as administrative work.

Also, we are strengthening our information gathering capabilities by maintaining an integrated reportingsystem for scandalous or suspicious behavior as reported by branches to the Compliance Department or byheadquarters departments and are working to more strongly instill a consultation and reporting system forcompliance. We are increasing our Compliance Department workforce and strengthening its investigativecapability.

■ Managing the Compliance ProgramThe Board of Directors formulates compliance programs every year as concrete measures for the promotionof compliance.

Each branch and headquarters department also formulates its own branch or divisional compliance pro-grams in response to specific issues arising from its diverse operations and works to implement these pro-grams in daily operations.

With respect to the management of compliance programs at branches and at headquarters departments,the content and progress of programs is monitored and confirmed by the Compliance Department andthrough internal audits.

■ Teaching and Entrenching Compliance PrinciplesNippon Life’s Code of Conduct identifies the principles and standards that all directors and employees mustabide by in the course of daily business. We have also created a Code of Conduct and Compliance Manual thatexplains the Code of Conduct and the operations of each division from a compliance perspective.

The Code of Conduct is set out in a small booklet entitled An Employee Booklet that all directors andemployees are required to carry. Compliance manual are posted on Nippon Life’s intranet, and can easily bereferred to at any time.

Educational programs for sales representatives are provided regularly through internal satellite broad-casts. In fiscal 2006, we upgraded the program to include compliance-related broadcasts and improved compli-ance education. Quizzes about compliance matters are given regarding the content of the broadcastcompliance programs to ensure that employees have understood the material.

Non-sales personnel undergo group training according to job category and receive training based uponthe compliance programs of their departments in order to enhance their knowledge of compliance as itrelates to their work.

An Employee BookletAll directors and employees are given copiesof An Employee Booklet, which they arerequired to carry with them. They can easilyrefer to the booklet any time they are indoubt about decisions related to carrying outtheir daily work, including whether or nottheir actions are in line with the Code ofConduct, benefit the customer, are properfrom a legal and common sense perspective,or infringe upon human rights.

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STRENGTHENING RISK MANAGEMENTRisk Management SystemUnderwriting the long-term collective risk of our customers is the essence of the insurance business, and thecorrect identification and appropriate management of each aspect of risk are of utmost importance to NipponLife’s management. Moreover, as life insurance companies operate in an environment of abrupt fluctuationsin share prices and interest rates, along with rapid progress in medical technology, the importance of riskmanagement is growing increasingly pronounced for them.

For this reason, Nippon Life is building a comprehensive risk management system certain to meet ourobligations to customers over the long-term.

Based on the areas and types of risk to which life insurance companies are exposed, our approach to riskmanagement involves a variety of initiatives to create and enhance risk management systems as well as rulesand regulations. We have established a risk management department to manage risks in an integrated fashionthat takes into account their overall impact on operations.

In addition, we have built a system of mutual checks and balances involving the establishment of risk man-agement units that are independent of profit centers while establishing secondary checks and balances,including examinations of the effectiveness of risk management conducted by the Auditing Department.

Risk Management System

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Risk Classification DescriptionRisk Management System

Liquidity Risk

Insurance Underwriting Risk p. 55

p. 56

p. 56

p. 57

p. 57

p. 57

p. 58

p. 58

Risk Management Committee

Dedicated Management Committeefor Operational Risk

Dedicated Management Committeefor Computer System Risk

Operational Risk

Computer System Risk

Investment Risk

Market risk

Credit risk

Real estate investment risk

Insurance underwriting risk can give rise to losses when factors such as economic conditions, the incidence rate of insured events, asset management results and operational expenses do not correspond with the assumptions made when premiums were set.

Liquidity risk refers to the risk of incurring losses from a rapid outflow of funds or being forced to make transactions at extremely unfavorable prices due to market confusion and other factors.

Investment risk refers to fluctuations in asset prices, asset management difficulties arising from insurance policy characteristics that result in unavoidable liquidations at unfavorable prices, or losses occurring from unforeseen interest rate increases.

Market risk refers to the risk of losses incurred when the market value in assets declines due to such factors as fluctuations in interest rates, stock prices, exchange rates and other market factors.

Credit risk refers to the risk of incurring losses when the value of financial assets declines or is eliminated due to deterioration in the financial condition of the party to whom the credit has been extended.

Real estate investment risk refers to the risk of reduced returns caused by such factors as rent fluctuation as well as losses when real estate values decline due to market deterioration.

Operational risk refers to the risk of incurring losses from not being careful in one‘s work, accidents or fraud.

Computer system risk refers to the risk of losses from computer system failure, incorrect or defective operation and illicit use.

Stress TestsNippon Life implements “stress tests,” which assume the worst-case scenarios based on increases in claims payments, past per-formance and other factors caused by significant deteriorations inthe operating environment or major earthquakes. We then analyze

the effects of these scenarios on the financial soundness of theCompany. The results of the stress tests are reported to the RiskManagement Committee and, where appropriate, are useful aidswhen studying such items as financial soundness.

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Integrated Risk ManagementNippon Life takes an integrated management approach to the various risks facing the entire Company. In addi-tion to allocating funds as a buffer against all manner of risks, we closely monitor the magnitude of risk andreport such conditions regularly to the Risk Management Committee.

Insurance Underwriting Risk ManagementInsurance underwriting risk can give rise to losses when such factors as economic conditions, the incidenceof insured events, asset management results and operational expenses do not match the predictions madewhen premiums were set.

A life insurance company must fulfill its responsibility to bear the risk it assumes on behalf of customersfor long periods extending over many decades. This requires the setting of reasonable premium rates thatenable the stable payment of claims and an appropriate level of policy selection in order to control risk whileupholding our coverage responsibilities. In addition, we employ an asset liability management (ALM) system,conduct appropriate benefit settlement assessments and adhere to rigorous cost management principles withthe aim of responding flexibly to changes in the business environment and other conditions.

■ Dealing with Risks in Setting PremiumsNippon Life sets insurance premiums after expert staff, who hold qualifications as doctors or actuaries, haveanalyzed reliable statistical data indicating the frequency ratios of the incidence of insured events. We alsoconduct numerous simulations to discover whether or not we will be able to meet future coverage obligationsat the established level of premiums.

■ Responding to Risk Related to Policy Selection and Benefit Settlement Examinations

When Nippon Life considers underwriting a new policy, staff with medical qualifications conduct a medicalexamination and assessment while other expert staff perform a more intensive assessment from the per-spective of moral risk. Depending on the results of this process, we may choose to impose special conditions,such as increased premiums, that will allow us to offer a wide variety of fairly priced insurance products to asmany customers as possible.

We are also diligent about managing risks related to paying out claims and benefits. Staff with medicaldoctor qualifications and medical expertise are used in the assessment of payments.

These staff professionals undertake rigorous risk management, using outside organizations for verifica-tion and through other measures.

Policy SelectionLife insurance is a system of mutualdependence involving customers payingpremiums that are calculated on the basisof the rate of incidence of insured events.The insured party pays premiums basedon his or her state of health, and, whenthe insurance is underwritten, a medicalexamination and assessment are made inorder to ensure that all insured partiesare treated fairly.

ActuaryA professional occupation that involvesthe application of mathematical methods,including probability theory and statistics,to establish insurance premiums and toassess the financial soundness of insur-ance companies.

Moral RiskAs a system in which payments from manypolicyholders are used to provide insur-ance against the unexpected, life insur-ance is inherently subject to the dangerthat some parties might make smallpremium payments and then attempt toillegitimately gain a large payout, an actthat denies the very essence of thesystem. This is what is generally referredto as moral risk.

Reinsurance PoliciesAs one strategy for diversifying risk, Nippon Life reinsures. In suchcases, Nippon Life determines the cede/assume transactiondetails by means of a review conducted by the Risk ManagementCommittee after considering the types and characteristics of risks.Moreover, in reinsurance transactions, we evaluate the credit-worthiness of each reinsurer based on rankings provided by majorranking agencies and other factors and manage accounts so thattransactions do not focus excessively on specific reinsurers.

*Reinsurance is the diversifying and leveling of risk through the transference ofa portion of an insurance policy obligation assumed by an insurance company toanother domestic or foreign insurance company. The transference of a portionof an insurance obligation is referred to as “cede” and the assumption of anobligation is referred to as “assume.”

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Liquidity Risk ManagementLiquidity risk, which consists of cash flow risk and market liquidity risk, refers to the risk of incurring lossesfrom a rapid outflow of funds due to an unexpected event, such as a major natural catastrophe, or beingforced to make transactions at extremely unfavorable prices due to market confusion.

■ Dealing with Cash Flow RiskNippon Life deals with cash flow risk via asset management plans and daily cash flow management that ensurethat highly liquid assets exceed a given threshold. In the event that cash flows were actually to deteriorate, wewould take countermeasures such as establishing maximum holding ceilings for less liquid assets.

■ Dealing with Market Liquidity RiskNippon Life deals with market liquidity risks by establishing appropriate transaction limits, then reviewingthem as necessary in the context of changes in market environment.

Investment Risk ManagementInvestment risk, which can be categorized into market risk, credit risk and real estate investment risk, refersto a variety of risks associated with investment and finance activities.

The long-term nature of life insurance policies requires a long-term approach to managing risks associ-ated with investment. Nippon Life has therefore established an Investment Risk Management Office withinthe Companywide Risk Management Department as part of a rigorous system for managing risks and seekingto limit losses to acceptable levels while also pursuing stable returns.

Cash Flow RiskThis refers to the risk that an unexpectedfund outflow could cause cash flow todeteriorate to the extent that we would beforced to dispose of assets at extremelylow prices.

Market Liquidity RiskThis refers to the risk of losses when con-fusion in the market prevents transactionsfrom taking place or forces transactions tobe made under conditions substantiallyless favorable than normal.

System of Managing Investment Risk

Reports

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Investment Departments

Audits

• Mutual checks and balances

• Monitoring

Administrative Departments

Risk Management Department (Investment Risk Management Office)

• Individual transaction assessments for financing and real estate• Internal rating management

• Portfolio management• Measuring magnitude of risk• Establishing maximum holdings ceilings and rules• Performance analysis

Market risk management

Credit risk management

Real estate investment risk management

Risk Management Committee

Assessmentreports

Credit Department

Internal Auditing Units

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■ Market Risk ManagementMarket risk refers to the risk of losses incurred when the market value of invested assets declines due tosuch factors as fluctuations in interest rates, stock prices or exchange rates. In addition to preventing theoccurrence of large-scale losses on individual investment and finance transactions, it is important to keeprisks to the overall portfolio within pre-established boundaries.

Establishing Maximum Holdings Ceilings and Loss-Cut RulesTo prevent the occurrence of large-scale losses on individual investment and finance transactions, NipponLife establishes maximum holdings ceilings and loss-cut rules based on the nature of the assets, reportingthe state of compliance regularly to the Risk Management Committee. Nippon Life is also developing systemsto contain risk within acceptable limits when rules are in conflict.

Measuring and Managing Market Value-at-RiskTo control the market risk of our overall portfolio, we use statistical analysis to reasonably calculate marketvalue-at-risk for our entire portfolio and conduct appropriate asset allocation within the level of allowed risk.

■ Credit Risk ManagementCredit risk refers to the risk of incurring losses when the value of assets, primarily loans and bonds, declinesor is entirely eliminated due to the deterioration of the financial condition of the party to whom credit hasbeen extended. We believe that in managing credit risk it is important to examine each transaction rigorously,set terms appropriate to the level of credit risk involved and conduct thorough analyses to accurately evaluateevery facet of overall portfolio risk.

Credit Risk Management in Individual TransactionsWe have built systems for rigorous examinations that involve a Credit Department independent of the depart-ments handling investment and finance activities. We are working to construct a sound portfolio, includingloan interest rate guidelines to ensure that the returns we obtain are commensurate with the risk, a system ofinternal ratings for classifying the creditworthiness of borrowers and credit ceilings to ensure that credit riskis not excessively concentrated in a particular company or group.

Managing Credit Risk in the Portfolio as a WholeThe Company calculates the magnitude of credit risk as credit value at risk using Monte Carlo simulations. Weincorporate the results into our management strategy for the credit portfolio to maintain the magnitude ofrisk within acceptable limits.

■ Real Estate Investment Risk ManagementReal estate investment risk refers to the risk of reduced returns caused by such factors as rent fluctuation aswell as losses when real estate values decline due to market deterioration. Our approach to managing realestate investment risk involves the rigorous examination of each investment by the Credit Department, whichis independent of the department actually handling the investment. We also adhere to a system involvingwarning levels for investment return and price levels. This enables us to appropriately focus managementefforts on those properties with low profitability.

PortfolioHoldings of various investment assetsunder management, including stocks,bonds and loans.

Loss-Cut RulesA measure for limiting losses to a prede-termined level by disposing of an assetwhen losses on that asset exceed a speci-fied level.

Market Value-at-RiskThe assumed maximum amount of poten-tial risk due to changes in the externalenvironment, calculated from historicaldata.

Loan Interest GuidelinesLoan interest levels are set on the basis of such factors as the potential loss thatNippon Life could incur in the event of a borrower bankruptcy.

Internal Rating SystemThis system classifies the creditworthi-ness of a borrower based upon an objec-tive statistical analysis of its financial dataand other attributes. This system is usedin conjunction with our self-assessmentsystem.

Credit Limit SystemThis system is used to prevent the exces-sive concentration of credit risk related toa particular borrower by limiting loans toamounts commensurate with the credit-worthiness of individual borrowers.

Monte Carlo SimulationThis is a comprehensive calculationmethod used to estimate the magnitude ofpossible portfolio losses by running simu-lations based on random numbers, yield-ing a calculation of value at risk.

Credit Value at RiskCalculated from historical data, this is themaximum loss amount that the portfoliocould incur due to the deterioration of thefinancial position of a borrower and otherfactors.

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Operational Risk ManagementOperational risk refers to the risk of incurring losses as a result of administrative error, other untowardaction or malfeasance on the part of directors or employees.

To control operational risk, we have set in place an integrated system that affords a clear understandingof operational risk across the Company by gathering and analyzing opinions from customers and informationabout instances of administrative error. Based upon this analysis, we formulate measures to avoid the recur-rence of similar issues and errors.

Headquarters’ auditing departments and branches carry out multitiered inspections to ensure the accu-racy of administrative processes and to guide the implementation of improvement measures. The inspectionsalso provide insights that are used in designing educational programs and administrative guidelines for main-taining proper awareness and the execution of administrative tasks.

Across Nippon Life, we are working to verify the administrative process, focusing on the appropriatepayment of claims and benefits from the perspective of designing administrative guidelines and policyclauses, the appropriate handling of administrative tasks, the expediency of system programs and the causesof complaints and administrative errors. Through these efforts, we are reinforcing administrative systemsfrom a customer-oriented perspective, aiming to provide customers with easily understood procedures andexplanations as well as the appropriate payment of insurance claims and benefits.

Computer System Risk ManagementComputer system risk refers to the risk of losses from computer system defects, faulty computer systemoperation and illicit use.

To deal with the risk of computer system failure, we have developed Companywide contingency plans toenable quick emergency response. In addition, we have prepared for area-wide disasters by establishing ourmain computer center in Kansai (western Japan) and a backup center in Kanto (eastern Japan).

We have also implemented a wide variety of security measures to deal with potential defects, faulty com-puter system operation, illicit use and data leaks.

We are committed to reducing risks Companywide through strict compliance with our own safety stan-dards for the planning, development and appropriate operation of computer systems.

Special Handling after Natural DisastersWhen natural disasters occur and the Natural Disaster Act isapplied, in principle, Nippon Life extends the deadline by whichinsurance premiums must be paid and implements other specialhandling conditions applying to policyholders in affected areas.Nippon Life provides notice of such adjustments through its

branch offices in affected areas. To ensure that administrative pro-cedures run smoothly, customers are kindly requested to alwayskeep separate records of their certificate numbers and call centernumbers in a safe place.

Nippon Life is working to build a structure that provides customerswith uninterrupted service even after large-scale natural disasters

through the development of countermeasures, including regulardisaster-response training.

Nippon Life Natural Disaster Countermeasures

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Milestones in Nippon Life System Development1988 Introduced integrated in-house computer network system to

2,000 sales offices throughout Japan

1995 Introduced satellite communication network to 2,000 salesoffices throughout Japan

1997 Created Nissay website (http://www.nissay.co.jp) and intro-duced online services

1999 Introduced the Nx · 2000 System, which uses a client serversystem infrastructure, to 2,000 sales offices throughout Japan.

Provided approximately 60,000 sales representatives withmobile terminals for consulting (FPer)

Started the Nissay Insurance Accounts service

Established a strategic IT subsidiary, Nissay InformationTechnology Co., Ltd.

2000 Constructed new TS system (life and non-life insurance totalservice)

2001 Constructed an intranet system

Constructed a call center system

2002 Established a new real estate system

Established a new securities management system (NIT X-NET)

2004 Created a Web version of the agency system

2005 Updated a client server system of 1,800 sales offices through-out Japan to a Web-based network (e-system)

Provided approximately 50,000 sales representatives with Duomobile terminals for consulting

2006 Constructed the First Underwriting System

EFFORTS IN SYSTEM DEVELOPMENTInvesting in the Development of Systems to Improve Customer ServiceNippon Life is working to strengthen its system support for the full sequence of administrative proceduresfrom the time a person enrolls in a policy to the payment of claims and benefits. We plan to invest approxi-mately ¥150.0 billion in improving the administrative system infrastructure related to the payment of claimsand benefits, which is the top management issue the Company is facing.

■ First Underwriting SystemNippon Life got its new First Underwriting System up and running in September 2006. The new system wasdesigned to provide more accurate and rapid response to customer requests and inquiries about the paymentof insurance claims and benefits. We expect the new system to facilitate a smoother workflow with regard toprocedures for assessing claims and benefits settlements, which were heretofore completed through a docu-ment-based system, and to strengthen third-party checks and progress management in the processing ofadministrative tasks.

■ Next Generation Underwriting SystemNippon Life is moving forward with the development of a Next Generation Underwriting System aimed atfurther enhancing administrative quality, with completion scheduled for fiscal 2009. The new system isdesigned to ensure the consistency of all administrative controls related to the payment process, from thereceipt of a request for payment until the actual payout. In addition, the system will enable the thorough andeasily comprehensible explanation of payment details while aiding decision-making when specialized medicalknowledge is required.

■ New Integrated SystemAiming to enhance customer convenience, we are also working to construct a New Integrated System. This willbe an overhaul of our current core system and will provide the necessary infrastructure for the managementof customer information and administrative procedures as well as policies and products. Our goal is to com-plete the new system in fiscal 2011.

In line with these developments, we will continue to reinforce and improve our systems that support cus-tomers in making payment requests and the processing of administrative procedures.

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MAKING EFFORTS TO BE WELCOMED IN LOCAL COMMUNITIESNippon Life’s Social and Public ActivitiesThe insurance business has a strong public nature that is based on a spirit of providing mutual assistance.Grounded in this spirit, Nippon Life works to fulfill its corporate social responsibilities and, ever since itsfounding, has been actively involved in social and public activities.

We are constantly implementing high-profile public initiatives that require extensive know-how in a widerange of fields, driven by a desire to contribute to the improvement of the environment, create stronger com-munities and provide abundant lifelong support to customers as partners.

Nissay Takaono-no-mori (Kagoshima Prefecture):tree-planting activities (fiscal 2006)

Nissay Yashiro-no-mori (Hyogo Prefecture):tree-planting activities (fiscal 2006)

Nissay Forests Environmental Contribution (Fiscal 2006) (As evaluated by the Forestry Agency)

Effect Evaluation Economic Value(Thousands of Yen)

Prevention ofCO2 1,708 tons per year, equivalent to the annual emissions

Global Warmingabsorption,

of about 5,330 people¥21,710

stabilization

Waterreservoir 134,332 cubic meters per year, equivalent to the

7,290

Nurturing of Water annual consumption of about 122,700 people

Water Resources purification9,240

Flood57,910 cubic meters per second 23,090

prevention

Preservation of Landslide2,433 cubic meters per year 13,810

Mountains prevention

Total 75,140Cooperation extended to Nagoya Nishi-no-mori(Nagoya City)

The Friends of Nissay Forests AssociationThis is a voluntary organization composed mainlyof Nippon Life directors and employees. It raisesfunds within the Company for planting andnurturing Nissay forests and provides informa-tion on environmental protection, among otheractivities.

Contributions to the Environment and Communities

Abundant Lifelong Customer Support

Protection of

the Natural

Environment

p. 60

For the Healthy

Development

of Children and

Young People

p. 62

Abundant Cultural

Development

p. 62

Contributions to

the Fields of Aging

and Medicine

p. 63

Regional

Contributions and

Volunteer Activities

p. 63

Protection of the Natural Environment■ Planting Forests for Future GenerationsIn order to replenish the earth’s forests, which serve as the source of paper that Nippon Life uses, theFriends of Nissay Forests Association started working with the Nissay Green Foundation on forestry projectsin 1991. In the fifteen years to 2006, Nissay forests were planted at 170 locations in 42 cities and prefectures,covering a total of approximately 385 hectares. More than 1,160,000 trees have been planted. Nippon Lifeemployees also voluntarily participate in the annual tree planting activities as well as in the clearing of vinesand cutting back of undergrowth so that trees planted in previous years can grow.

Also, in recent years, we have been cooperating with the cities of Osaka, Nagoya and other local govern-ments in tree planting in parks and other locations and in preserving forests.

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■ Support for Environment-Related ResearchSince 1979, the Nissay Life Foundation has supported Research on the Harmonization of Human Activity andEnvironmental Protection. The Foundation is also cooperating with college researchers and such organ-izations as NPOs with the goal of contributing to the understanding of environmental problems and theirresolutions.

The foundation is passing on a better society through the workshops that it sponsors each year and the publication of research results and other benefits (co-sponsored by the Nissay Green Foundation).

21st Environmental Issue Research GrantWorkshop

Reducing the Environmental BurdenSince 1991, Nippon Life has promoted a reduction in the volume ofpaper it uses and the recycling of used paper. In 2001, Nissay estab-lished its Environmental Charter, implemented additional measuresto conserve energy and resources, including the reduction of elec-tricity and water usage, and took proactive steps to thoroughly sepa-rate waste, promote green procurement and provide environmentaleducation to employees. Thanks to these efforts, we received ISO14001 certification for our Osaka head office and Tokyo headquarters

for the construction of a recycling system whereby used paper istaken from buildings and transported to paper mills.

In addition, we promote the construction of buildings that takethe environment into account, focusing primarily on the approxi-mately 400 buildings we hold as investments throughout Japan, by introducing energy conserving construction materials andequipment.

II. Action Guidelines1. Environmental protection through the life insurance businessWe strive to contribute to environmental protection while devel-oping the life insurance business.2. Efficient use of energy and resourcesIn order to reduce the environmental burden resulting from busi-ness activities, we are contributing to the creation of a recyclingsociety by implementing green purchasing while promotingenergy and resource conservation as well as resource recycling.3. Pollution prevention and compliance with environmental lawsWe are working to prevent pollution and comply with the environ-mental agreements and policies we have agreed to in addition toenvironmental laws and regulations.

4. Promotion of environmental education and social contributionsWe are contributing to society and promoting environmental pro-tection through programs such as reforestation. Simultaneously,we are working to raise awareness of our directors and employ-ees through environmental education.5. Continuous improvement of environmental effortsWe strive to continuously improve our efforts by setting environ-mental goals and targets, implementing them and periodicallyreviewing them.

This Environmental Charter is well known within the Company and is also pub-lished outside the Company.

Formulated May 7, 2001Nippon Life Insurance CompanyKunie Okamoto, President

Environmental CharterI. Basic IdealAs a citizen of the earth, we recognize that protecting the environment is the most important issue for all people and corporations andstrive to take the environment into account in all of our business activities, with the goal of passing on our irreplaceable environment tothe next generation.

Amount of Paper Used and Percentage of Recycled Paper Used

2,000

4,000

6,000

8,000

10,000

12,000

0 0

20

40

60

80

100

91 92 93 94 95 96 97 98 99 00 030201 04 05 06

4,185

80.5%

usage (tons) recycled paper (%)

Fiscal Year

(tons) (%)

Nissay Shin-Osaka Building•Recipient of the Environment and Energy

Conservation Construction Award from theInstitute for Building Environment andEnergy Conservation

•Recipient of the Society Award from theSociety of Heating, Air-Conditioning andSanitary Engineers of Japan

JQA EM2002Head Office andTokyo Headquarters

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For the Healthy Development of Children and Young People■ Nissay Masterpiece TheaterCreated in 1964, the Nissay Masterpiece Theater offers free musical performances for entire schools with thehope of fostering an abundant aesthetic sense and new sensitivity in children, the torchbearers of the nextgeneration. The Nissay Culture Foundation, with our support, sponsors the performances. The shows arecreated and performed by the Shiki Theatre Company and, over the past 43 years, they have nurtured thedreams of and given inspiration to over 6.65 million children.

■ Nissay Theater Opera ClassesTo provide middle and high school students with the opportunity to view real opera, the Nissay Culture Foun-dation has held Nissay Theater Opera classes since 1979. A total of approximately 300,000 spectators havewatched the performances over the past 28 years.

■ Supporting the Healthy Development of Children and TeenagersTo promote the passing on of local traditions, friendship building and the experience of nature and life, theNippon Life Foundation has since 1979 helped support governor-recommended private organizations thatconduct local childrearing activities and child-focused activities in cooperation with local residents possess-ing the know-how and materials to conduct such activities. As of fiscal 2006, the Foundation had contributed to9,899 organizations over 28 years.

Abundant Cultural Development■ Nissay TheaterThe Nissay Theater was created in 1963 to aid in the development of a fulfilling and enriching society throughthe promotion and expansion of performing arts. Through the performances of the abovementioned NissayMasterpiece Theater and a rich variety of other stage performances, the Nissay Culture Foundation providesfamilies with the opportunity to experience true theater at an affordable price. In addition to the NissayTheater International Family Festival, the theater serves as the venue for the NISSAY OPERA, which featuresprofessional opera singers and other theatrical performances.

■ Nissay Backstage AwardsIn 1995, the Nissay Culture Foundation created the Nissay Backstage Awards, given in recognition of outstand-ing backstage work related to lighting, sets and other behind-the-scenes support for the performing arts.

Yuta and Enchanting Friends, presented dur-ing the 44th season of the Nissay MasterpieceTheater (Photo by Atsutoshi Shimosaka)

The 27th Nissay Theater Opera Classes: presented “The Cunning Little Vixen.”

Camping equipment for Nakashibetsu adventureclub

Woodworking tool sets (Nippon Active Life activ-ity base at West Biwa Lake)

Nissay Theater (Hibiya)

Nissay Masterpiece Theater Recent Shows

YearSeason

Show NameNumber of

PerformancesNumber Children

2007 44 Yuta and Enchanting Friends 204,000(forecast)

2006 43 The Dream of John Manjiro 204,087

2005 42 The Witch that Gave Up Magic 204,043

Sapporo, Sendai, Tokyo, Yokohama,Nagoya, Kyoto, Osaka, Kobe,Hiroshima, Fukuoka, Kitakyushu(11 cities)

Examples of Organizations Supported in Fiscal 2006

Organization Name Activities Type of Support

Ogawara LakeNature School (Misawa City,Aomori Prefecture)

Sangosha SukoreSpecial NPO(Naha City,Okinawa Prefecture)

Nature and recreational activities such as bird watching,canoeing, boating and rafting in the verdant natural sur-roundings of Lake Ogawara and work to foster interest inenvironmental preservation and local culture

Snowshoes and tentsfor winter camping

Focusing on young people who have stopped going toschool or have become reclusive, this organization supportsthem in taking steps toward independence. Students whocome to this free school learn to work with their hands andwith equipment in land development and building on theschool’s vast acreage covering 2,000 tsubo of mountainforests and fields

Power equipment forland development

Nissay Backstage Awards ceremony 2006

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Contributions to the Fields of Aging and Medicine■ Nissay Eden-no-SonoOperated by Nissay Seirei Health & Welfare Foundation, Nissay Eden-no-Sono are comprehensive health andwelfare facilities (in Nara and Matsudo) for senior citizens that include such provisions as retirement homes(fee-based), illness prevention centers and home nursing service centers. Both facilities have been recog-nized as exemplifying the Ministry of Health, Labour and Welfare’s policy of “Promoting health and longevity in21st century hometowns.” Through activities firmly rooted in communities, the facilities aim to promote thehealth and vitality of senior citizens.

■ Nissay HospitalThe Nissay Hospital in Osaka was founded by the Nippon Life Saiseikai Foundation. This general hospital of 17departments and 350 beds provides high-quality medical care (recognized by the Japan Council for QualityHealth Care), and trains medical staff as a clinical research hospital designated by the Ministry of Health,Labour and Welfare.

■ Supporting an Aging SocietyThe Nippon Life Foundation has been working to support senior citizens since 1983. In fiscal 2006, theFoundation provided support to local welfare cooperative organizations and individuals that conduct practicalresearch or cutting-edge work related to the creation of systems to promote the participation of senior citi-zens in society, the construction of cities and regional benefit plans for Japan’s aging society and the preven-tion of senility in and care of senior citizens. Furthermore, the Foundation holds symposiums and workshopsin order to spread information of achievements in these areas.

Regional Contributions and Volunteer ActivitiesNippon Life employees around Japan take part in volunteer activities to support communities and contributeto society.

We Are Working Together with Five Foundations in Joint Social Contribution Activities (As of March 31, 2007)

Name of Foundation Established Location Main Activities Web Address

Nippon Life July Osaka http://www.nissay-hp.or.jp/Saiseikai Foundation 1924 index.html

Nissay Culture November Tokyo http://www.nissaytheatre.or.jpFoundation 1973

Nissay Life Foundation July Osaka http://www.nihonseimei-(Nippon Life Foundation) 1979 zaidan.or.jp

Nissay Seirei Health & July Osaka http://www.nissay-seirei.orgWelfare Foundation 1989

Nissay Green July Tokyo http://www.mmjp.or.jp/Foundation 1993 nissay-green

Nara Nissay Eden-no-Sono (opened in 1992)

Matsudo Nissay Eden-no-Sono (opened in 1997)

Nissay Hospital (opened in 1931)

Symposium on supporting senior citizens

Interaction with communities through sports

Examples of Social Contribution Activities in Fiscal 2006

Department Activity Type of Activity

Tokyo Headquarters, Ashinaga P-Walk 10Osaka Head Office,21 other branches

Sendai Branch, Interaction withWest Kyoto Nishi Branch, communityAomori Branch, through sportsYamaguchi Branch

Tokyo Headquarters, CommunityOsaka Head Office and beautificationseven other branches activities

Niigata Branch Interaction withwelfare facility

A total of 1,145 employees from around Japan took partin the Ashinaga P-Walk (a walk-a-thon to assist orphans)

Collaboration with local baseball and ping-pong clubs tohold sports clinics

Cleanup activities in areas near business sites, as well asin towns, streets and locations where sales activities takeplace

Invited people with disabilities to the branch to safelyview fireworks

Social welfare work, management of Nissay Hospital

Hosting theatrical performances for children and general audi-ences, management and operation of the Nissay Theater

Support for businesses and research that contribute to the buildingof a truly prosperous society filled with humanity and culture

Surveys, research and services related to the aging of the popu-lation and support for the education of qualified nursing careworkers

Protection of forests through tree-planting and nurturing activitiesin Japan and abroad

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IMPROVING DISCLOSURE

Information Provided on the WebsiteNippon Life utilizes its website to issue timely information. In addition to press releases, minutes and out-lines of resolutions presented at the Meeting of Representatives, customers can view and download otherinformation, such as our Nissay Disclosure (written in Japanese) and Annual Report (written in English) overthe Internet.

Financial Results MeetingsWe hold financial results meetings for analysts and institutional investors twice a year. Also during thesemeetings, we report on management policies as well as the medium- and long-term strategies of each divisionin order to promote the greater understanding of our operations. Materials from meetings are posted andavailable on the Nippon Life website after the meetings are held.

Disclosure Materials Produced in Fiscal 2006

Nippon Life website, disclosure materials

Nippon Life is working to enhance its various disclosure initiatives in order to better help customers gain aclear and timely understanding of its business information.

Disclosure Materials Available at Service Counters and by PostSo that a broad range of customers may view them, Nippon Life disclosure reports are available at the servicecounters of branches, sales divisions and agencies nationwide. In addition, Nippon Life sends various disclo-sure materials by post in response to customer needs.

With an increasingly diverse range of products and services, we aim to create easy-to-understand disclo-sure materials and are working to improve content by receiving opinions through Customer Monitor Meetingsand other avenues. (See p. 16).

Nissay Disclosure Disclosure report producedin accordance with Article111 of the Insurance Busi-ness Law. Available at allservice counters through-out Japan (in Japanese)

NISSAY NOWNissay disclosure, digestversion (in Japanese)

Nissay Disclosure Disclosure report for semi-annual version (in Japanese)

Annual Report (in English)

NISSAY 2006Business information pam-phlet for all policyholders(in Japanese)

Variable Annuities(Separate Account)Result NotificationResult report for variableannuities policyholders*2

(in Japanese)

Variable AmountInsurance(Separate Account) ResultNotificationResult report for variableamount insurance policy-holders*1 (in Japanese)

Result Report forGroup AnnuitiesResult report material forpolicyholders of group an-nuities (employees’ pen-sion fund insurance, newinsured pension plans,etc)*3 (in Japanese)

Nippon Life, a Finan-cial OrganizationMaterial related to assetmanagement business andresults for corporate cus-tomers (in Japanese)

*1 I Information on variable amount insurance investments can be obtained at the headquarters and branch service counters.*2 For the latest performance summary of the variable annuities separate account, please see the Nippon Life investment annuity page of the Nippon Life website.*3 A quarterly disclosure magazine is issued to all separate account policyholders. Furthermore, information on annuity investments is provided in a timely manner on the Nippon Life website.