financial results for the first quarter ended june 30, 2009 · 2010-03-05 · 7. status of separate...

August 10, 2009

[Contents]

1. Business Highlights ･･････ P.1

(1) Amount of Policies in Force and New Policies

(2) Annualized Net Premium of Individual Insurance and Individual Annuities

2. Investment Management Performance (General Account) ･･････ P.2

(1) Asset Structure

(2) Market Value Information of Securities

(3) Market Value Information of Assets Held In Trust

3. Balance Sheets ･･････ P.5

4. Statements of Income ･･････ P.10

5. Details of Operating Income (Ordinary Income) ･･････ P.13

6. Solvency Margin Ratio ･･････ P.14

7. Status of Separate Accounts for the First Quarter Ended June 30, 2009 ･･････ P.15

(1) Balance of Separate Account Assets

(2) Policies in Force

8. Status of the Company and Affiliates ･･････ P.16

(1) Selected Financial Data for Major Operations

(2) Scope of Consolidation and Application of the Equity Method

(3) Preparation policy for the consolidated financial statements in the First Quarter

(4) Consolidated Balance Sheets for the First Quarter

(5) Consolidated Statements of Income for the First Quarter

(6) Consolidated Statements of Cash Flowｓ for the First Quarter

(7) Segment Information

Financial Results for the First Quarter Ended June 30, 2009

Nippon Life Insurance Company (President: Kunie Okamoto) announces financial results for the firstquarter (From April 1, 2009 to June 30, 2009).

Nippon Life Insurance Company

(1) Amount of Policies in Force and New Policies ・Policies in Force

Number of policies Amount of policies

(thousands)Change from

March 31,2009(%)

(100 million yen)Change from

March 31,2009(%)

(thousands) (100 million yen)

11,962 99.3 1,887,818 98.1 12,047 1,923,738

2,850 100.8 175,753 100.6 2,827 174,703

―　　 ―　 889,537 101.7 ―　　 874,304

―　　 ―　 92,940 101.6 ―　　 91,517

・New Policies

(100 million yen) New policiesNet increase by

conversion (100 million yen) New policiesNet increase by

conversion

264 11,957 15,209 -3,252 250 11,015 15,632 -4,617

54 2,917 2,987 -69 50 2,883 2,939 -56

―　　 3,680 3,680 ―　　 4,531 4,531

―　　 22 22 ―　　 5 5

(2) Annualized Net Premium of Individual Insurance and Individual Annuities ・Policies in Force (100 Million Yen, %)

Change fromMarch 31, 2009

24,324 98.9 24,585

7,238 102.0 7,098

31,562 99.6 31,684

5,774 100.4 5,752

(100 Million Yen, %)

Change fromJune 30, 2008

342 96.4 355

217 120.7 180

559 104.6 535

112 102.1 109

Notes:

Individual annuities

ItemFor the periodApril 1 to June

30, 2009

Individual insurance

Total


1. Business Highlights

As of June 30,2009


Group insurance

Notes:

Group insurance

Group annuities

For the period April 1 to June 30, 2009 For the period April 1 to June 30, 2008


As of March 31,2009

Notes:

Item


Amount of policies

Item

Number of policiesAs of March 31, 2009As of June 30, 2009

Number ofpolicies

(thousands)

Amount of policies Number ofpolicies

(thousands)

Amount of policies

Group annuities



Item

Medical coverages and living benefits

Medical coverages and living benefits

Total

For the periodApril 1 to June

30, 2008

・New Policies

1. The amount of individual annuities is the total of (a) annuity underlyings at the beginning of the annuity payments for policies bound prior to the start of the annuity payments, and (b) policy reserves for policies bound after the start of annuity payments.2. The amount of group annuities is the amount of the policy reserves.

1. The number of policies includes policies that were converted into new policies. General medical rider launched from October 2008 accepted enrollment by new policies, converted policies, and change of riders (258,000 policies were from change of riders this period). Applications were received for other change of riders this period, resulting in 159,000 policies that are awaiting start of coverage after change of riders.2. The amount of new policies and net increase in policies by conversion for individual annuity represents annuity underlyings at the beginning of the annuity payments.3. The amount of new policies for group annuities represents the first premium.

1. The amount of annualized net premium is the annual premium amount calculated by multiplying factors according to the premium payment method to a single premium payment amount (for single payment: amount is premium divided by the insured period).2. The medical coverages and living benefits represent annualized premium related to medical benefits (hospitalization benefits and surgical benefits), living benefits (specified illness benefits and nursing care benefits) and payer benefits (excluding disability benefits but including specified illness and nursing care benefits).3. New policy figures include the net increase due to conversion.

1 Nippon Life Insurance Company

（１）Asset Structure(100 Million Yen, %)

Amount % Amount %

Cash equivalents and call loans 6,359 1.4 7,070 1.6

Securities repurchased under resale agreements ----- --- ----- ---

Deposit paid for securities borrowing transactions ----- --- ----- ---

Monetary receivables purchased 11,660 2.5 11,603 2.6

Proprietary trading securities ----- --- ----- ---

Assets held in trust 1,349 0.3 1,146 0.3

Securities: 317,011 69.3 300,996 67.7

Domestic bonds 171,000 37.4 169,185 38.1

Domestic stocks 64,931 14.2 55,307 12.4

Foreign securities: 77,926 17.0 73,483 16.5

Foreign bonds 60,614 13.2 56,727 12.8

Foreign stocks and other securities 17,311 3.8 16,755 3.8

3,153 0.7 3,019 0.7

Loan receivables: 90,007 19.7 91,334 20.5

Policy loans 10,696 2.3 10,874 2.4

Industrial and consumer loans 79,311 17.3 80,459 18.1

Real estate: 17,726 3.9 16,512 3.7

Investment property 11,405 2.5 10,195 2.3

Deferred tax assets 5,767 1.3 9,268 2.1

Other assets 7,976 1.7 6,821 1.5

Allowance for doubtful accounts - 191 - 0.0 - 211 - 0.0

Total assets (General account) 457,668 100.0 444,543 100.0

Foreign currency denominated assets 66,255 14.5 61,684 13.9

Notes:

2. Real estate is the sum of land, buidlings, and construction in progress.

1. The above assets include cash received as collateral under securities lending contracts. Cash collateral received through these transactions are recorded in other liabilities. (As of the first quarter ended June 30, 2009, ¥854.9 billion; as of March 31, 2009, ¥450.4 billion)

Other securities

2. Investment Management Performance (General Account)

As of June 30, 2009 As of March 31, 2009


（2）Market Value Information of Securities (Excluding Trading securities)(100 Million Yen)

Gain Loss Policy-reserve-matching bonds 166,332 172,350 6,018 6,282 -263 Held-to-maturity debt securities 282 285 2 2 ---- Investments in subsidaries and affiliates 544 643 98 98 ---- Available-for-sale securities: 137,167 151,581 14,413 18,935 -4,521

Domestic bonds 15,809 16,084 275 278 -3 Domestic stocks 46,088 61,282 15,194 17,000 -1,805 Foreign securities: 68,586 67,802 -784 1,607 -2,391

Foreign bonds 59,708 59,644 -64 1,141 -1,205 Foreign stocks and other securities 8,878 8,158 -720 465 -1,185

Other securities 3,180 2,909 -270 48 -319 Monetary receivables purchased 932 931 -0 1 -1 Negotiable certificates of deposit 2,570 2,569 -0 0 -0

Total 304,326 324,860 20,533 25,319 -4,785 Domestic bonds 170,725 176,766 6,041 6,197 -156 Domestic stocks 46,632 61,926 15,293 17,098 -1,805 Foreign securities: 69,557 68,693 -863 1,615 -2,478

Foreign bonds 60,678 60,535 -143 1,149 -1,293 Foreign stocks and other securities 8,878 8,158 -720 465 -1,185

Other securities 3,180 2,909 -270 48 -319 Monetary receivables purchased 11,660 11,994 333 358 -25 Negotiable certificates of deposit 2,570 2,569 -0 0 -0

Gain Loss

Policy-reserve-matching bonds 167,042 173,145 6,103 6,436 -333 Held-to-maturity debt securities 282 283 1 1 -0 Investments in subsidaries and affiliates 544 518 -25 ---- -25 Available-for-sale securities: 130,977 135,385 4,408 12,382 -7,973

Domestic bonds 13,584 13,751 167 187 -20 Domestic stocks 45,944 51,650 5,706 10,543 -4,837 Foreign securities: 64,072 63,028 -1,044 1,649 -2,693

Foreign bonds 55,274 55,687 413 1,583 -1,170 Foreign stocks and other securities 8,797 7,340 -1,457 66 -1,523

Other securities 3,182 2,762 -420 1 -421 Monetary receivables purachased 753 752 -0 0 -1 Negotiable certificates of deposit 3,440 3,440 0 0 -0

Total 298,846 309,333 10,486 18,819 -8,332 Domestic bonds 169,018 175,169 6,150 6,354 -203 Domestic stocks 46,488 52,169 5,680 10,543 -4,862 Foreign securities: 65,111 63,959 -1,152 1,657 -2,810

Foreign bonds 56,314 56,619 305 1,591 -1,286 Foreign stocks and other securities 8,797 7,340 -1,457 66 -1,523

Other securities 3,182 2,762 -420 1 -421 Monetary receivables purachased 11,604 11,832 228 262 -34 Negotiable certificates of deposit 3,440 3,440 0 0 -0

○Book Value of Securities Without Market Value(100 Million Yen)

Policy-reserve-matching bonds

Held-to-maturity debt securities:

Unlisted foreign bonds

Other

Investments in subsidaries and affiliates

Available-for-sale securities:

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

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

Unlisted foreign bonds

Other

----- -----

1,698

1,813

6,373

-----

----- -----

Total 12,568

1,812

12,863

----- -----

1,662

6,623

2,719 2,727

Net Gain/loss

As of June 30, 2009


Net Gain/loss

Book value

Book value Market value

Market value

Note: The above table includes CDs (negotiable certificates of deposit) and other securities deemed appropriate as securities under the Financial Instruments and Exchange Law in Japan.

Note: Of securities without market value, net gain/loss on foreign exchange valuation of assets denominated in foreign currencies were as follows: As of the first quarter ended June 30, 2009, ¥-31.4 billion; as of March 31, 2009, ¥-30.3 billion.

As of March 31, 2009

10,756 11,049

-----

----- -----


（３） Market Value Information of Assets Held In Trust(100 Million Yen)

Net unrealized gain/lossGain Loss

Assets held in trust 1,349 1,349 ----- ----- -----

Net unrealized gain/lossGain Loss

Assets held in trust 1,146 1,146 ----- ----- -----

Notes: 1. Market value calculations are based on prices rationally calculated by the trustee of assets held in trust.

・Assets held in trust for investment (100 Million Yen)

Assets held in trust for investment

Assets held in trust for investment

・Assets held in trust classified as held-to-maturity, policy-reserve-matching, and others

　　 No data as there were no ending balances as of June 30, 2009 or as of March 31, 2009.

Note: Assets held in trust on the balance sheets and net valuation gain/loss included in current period include net gain/loss on derivative transactions.

-445 1,146

Market value


Carrying value on balance sheet Net valuation gain/loss

Net valuation gain/loss

2. Amounts on the balance sheet include net gain/loss on derivative transactions within assets held in trust.

As of June 30, 2009

232

Carrying value onbalance sheet

Market value

Carrying value onbalance sheet


Carrying value on balance sheet

1,349

As of June 30, 2009


3．Balance Sheets(Million Yen)


Amount Amount

406,680 558,365

267,300 203,800

1,166,032 1,160,387

134,999 114,637

33,027,260 31,334,883

National government bonds 12,290,062 12,170,897

Local government bonds 1,703,501 1,608,674

Corporate bonds 3,586,158 3,575,038

Domestic stocks 6,846,376 5,855,101

Foreign securities 8,137,293 7,688,044

9,000,768 9,133,432

Policy loans 1,069,601 1,087,489

Industrial and consumer loans 7,931,166 8,045,943

Tangible fixed assets 1,792,799 1,672,097

Intangible fixed assets 170,128 169,716

Reinsurance receivables 134 275

Other assets 628,002 558,898

Deferred tax assets 576,739 926,890

14,582 13,668

-19,157 -21,178

47,166,270 45,825,874

42,712,166 42,317,607

211,204 222,094

41,209,355 40,880,121

1,291,606 1,215,391

182 340

1,449,581 1,080,942

854,957 450,495

116 116

594,507 630,330

75 71

443,788 438,948

5,923 5,968

485 485

377,013 372,013

174,919 176,020

14,582 13,668

Total liabilities 45,178,718 44,406,066

200,000 200,000

800,000 750,000

651 651

166,141 300,520

10,425 9,867

155,716 290,653

Contingency reserve 71,917 71,917

Reserve for assisting social public welfare 2,744 1,244

Reserve for condensed booking of fixed assets for tax purpose 32,140 32,281

Other reserves 170 170

Unappropriated surplus 48,744 185,040

1,166,792 1,251,171

913,631 259,636

35 6

-92,907 -91,006

820,759 168,636

1,987,552 1,419,807

47,166,270 45,825,874

(Note) *1 Unappropriated surplus as of March 31, 2009 uncondensed balance sheet is shown as unappropriated surplus for the current period.

Lease obligation

Other liabilities

Total valuations, conversions and others

Total net assets

Surplus:

Legal reserve for deficiency

Voluntary surplus reserve:

Net assets:

Foundation funds

Total liabilities and net assets

Total equity

Net unrealized gain on available-for-sale securities, net of tax

Deferred gain on derivatives under hedge accounting

Land revaluation difference

Reserve for redemption of foundation funds

Reserve for revaluation

Reserve for price fluctuations in security investments

Deferred tax liabilities for revaluation reserve

Acceptances and guarantees

Accrued bonuses for directors and corporate auditors

Accrued severance indemnities

Accrued retirement benefits for directors and corporate auditors

Accrued loss from supporting closely related companies

Reserve for dividends to policyholders

Reinsurance payables

Other liabilities:

Cash received as collateral under security lending contracts

Liabilities:

Policy reserves and others:

Reserve for outstanding claims

Policy reserves

Investments in securities:

Loan receivables:

Assets held in trust

Customers' liability for acceptances and guarantees

Assets:Cash and deposits

Total assets

Call loans

Allowance for doubtful accounts

Monetary receivables purchased

*１


Basis of Presenting the Non-Consolidated Balance Sheet

1. The fiscal year ended March 31, 2009 appropriation plan for retained earnings in the

previous period was approved at the Meeting of Representatives on July 2, 2009,

and was reflected in the preparation of the first quarter balance sheet.

Million Yen

A. Unappropriated surplus for the current period ¥185,040

B. Reversal from voluntary reserve 710

C. Appropriations 185,750

Reserve for dividends to policyholders 130,634

Transfer to legal reserve for deficiency 558

Transfer to reserve for redemption of foundation funds 50,000

Interest on foundation funds 2,489

Transfer to voluntary reserve 2,069

D. Surplus carried forward (A+B-C) －

2. The corporate tax, inhabitant tax and income tax adjustments for the period April 1

to June 30, 2009, are calculated based on the assumption of accumulation and

reversal of the reserve for condensed booking of fixed assets for tax purpose and

reserve for dividends to policyholders due to appropriation of retained earnings in

the period.

3. Securities that are held for the purpose of matching periods outstanding of the

liabilities within the sub-groups (insurance type, remaining period, and investment

policy) of insurance products, such as individual insurance and annuities, workers'

asset-formation insurance and annuities, and group insurance and annuities are

classified as policy-reserve-matching bonds in accordance with the Industry Audit

Committee Report No. 21, “Treatment of Accounting and Auditing for

Policy-Reserve-Matching Bonds Within Insurance Industry,” issued by the JICPA.

The book value and market value of policy-reserve-matching bonds as of June 30,

2009 amounted to ¥16,633,246 million and ¥17,235,084 million, respectively.


4. Assets and liabilities denominated in foreign currencies are translated into Japanese

yen using “Accounting Standards of the Business Accounting Council” (Business

Accounting Council). Exchange rates fluctuate significantly. Available-for-sale

securities denominated in foreign currencies, for which recovery is not expected, are

converted to yen using either the rate at the end of the first quarter or the average 1

month rate prior to the end of the first quarter, whichever indicates a weaker yen.

This exchange is recorded under "Loss on valuation of securities."

5. Among policy reserves, ¥51,116 million was additionally accumulated for a portion

of individual annuity policies for the period April 1 to June 30, 2009.

6. The amount of accumulated depreciation for tangible fixed assets was ￥1,074,230

million as of June 30, 2009.

7. (1)The total amount of loans to bankrupt borrowers, delinquent loans, loans that

are delinquent for over 3 months and loans for restructuring, which were included

in loan receivables, was ¥44,845 million as of June 30, 2009.

① The balances of loans to bankrupt borrowers and delinquent loans were ¥3,402

million and ¥40,139 million as of June 30, 2009. Loans to bankrupt borrowers

are loans, except for a portion of loans written-down, where the borrowers

satisfy conditions prescribed in Article 96 Paragraph 1 Item 3 or Item 4 of the

Enforcement Regulations of the Corporation Tax Law and are recorded net of

the portion of the losses written down. Interest is not accrued as income since

the recovery of principal or interest on the loans is unlikely due to the fact that

the payments are long overdue or for other reasons.

Delinquent loans are loans with interest not accrued, and exclude the loans to

bankrupt borrowers and the loans to which postponement of interest payments

is made with the objective of restructuring these loans and supporting the

borrowers.

② There were no loans that were delinquent for over 3 months as of June 30,

2009. Loans that are delinquent for over 3 months are loans with

principal or interest unpaid for over 3 months beginning one day after the due date based on the loan agreement. These loans exclude loans classified as loans to bankrupt borrowers and delinquent loans.


③ The balance of loans for restructuring was ¥1,302 million as of June 30, 2009.

Loans for restructuring are loans that provide certain concessions favorable to

borrowers with the intent of supporting the borrowers restructuring, such as

by reducing or exempting interest, postponing principal or interest payments,

releasing credits, and providing other benefits to the borrowers. These loans

exclude loans classified as loans to bankrupt borrowers, delinquent loans, and

loans delinquent for over 3 months.

(2) The amount of collateral value or the amount collectible through the execution

of guarantees or other methods, subtraced directly from the balance of loan

receivables is the estimated uncollectible amount of loans (including loans with

credits secured and/or guaranteed) made to legally or substantially bankrupt

borrowers. The amounts recognized in the financial statement was ¥7,636

million (including ¥6,432 million of credits secured and/or guaranteed), as of

June 30, 2009. As a result, the amounts of loans to bankrupt borrowers and

delinquent loans decreased by ¥6,167 million and ¥1,468 million, respectively.

8. Separate Accounts as provided for in Article 118 paragraph 1 of the Insurance

Business Law were ¥1,399,401 million as of June 30, 2009 and are presented with

in other assets with a corresponding liability recorded for the same amount.

9. Changes in the reserve for dividends to policyholders included in policy reserves for

the period ended June 30, 2009 were as follows:

Million Yen

A. Balance at the end of previous fiscal year ¥1,215,391

B. Transfer to reserve from surplus in previous fiscal year 130,634

C. Policyholders dividends paid out in the current period (62,383)

D. Increase in interest 7,963

E. Balance as of June 30, 2009 (A+B-C+D) ¥1,291,606


10. The amount of assets pledged as collateral by securities, land, and buildings as of

June 30, 2009 were ¥1,156,284 million, ¥2,952 million, and ¥320 million,

respectively. The total amount of loans covered by the aforementioned assets as of

June 30, 2009 was ¥906,341 million.

These amounts included ¥1,090,296 million of securities deposited and ¥906,278

million of cash received as collateral, under the securities lending contracts secured

by cash, as of June 30, 2009.

11. Following the amendment of the Articles of Incorporation that were approved at the

Meeting of Representatives on July 2, 2009, based on Article 60 of Insurance

Business Law, Nippon Life offered the following foundation fund (kikin), and

payment was completed on August 7.

A. Amount offered: ¥100,000 million

B. Rate: August 8, 2009 to August 7, 2013

1.65% per year

August 8, 2013 to August 7, 2014

1.70% per year

C. Redemption dates: Redeem ¥50,000 million 3 business days

prior to August 7, 2013

Redeem ¥50,000 million 3 business days


D. Use of funds: Mutual company foundation fund

12. Based on the appropriation plan for retained earnings from the previous period, we

accumulated ¥50,000 million in the reserve for redemption of foundation funds in

accordance with Article 56 of the Insurance Business Law, and amortized the same

amount of foundation funds on August 4, 2009.

13. The amount of securities loaned for consumption was ¥1,902,791 million as of June

30, 2009.


4．Statements of Income(Million Yen)

For the period April 1 toJune 30, 2009


Amount Amount

Revenues: 1,709,020 1,627,370

1,193,199 1,187,829

1,193,043 1,187,578

453,585 376,956

239,804 263,057

20,436 14,017

74,811 26,923

117,993 65,689

62,234 62,584

Expenditures: 1,652,759 1,615,981

975,178 958,690

297,296 313,435

131,276 118,806

215,469 197,149

269,522 270,024

61,463 59,109

337,197 302,736

329,233 294,262

7,963 8,474

97,673 104,829

516 956

18,752 29,135

12,857 3,347

44,635 55,606

140,621 136,371

102,088 113,354

56,260 11,389

1,605 134

Gain on disposal of fixed assets 39 134

Reversal of allowance for doubtful accounts 1,565 -----

9,481 3,810

Loss on disposal of fixed assets 624 1,681

Impairment loss 3,856 2,128

5,000 -----

Surplus before income taxes in the first quarter 48,384 7,713

Income tax - current 210 57,528

Income tax - deferred 1,331 -52,945

Income tax - total 1,541 4,582

Surplus in the first quarter 46,842 3,130

Interest expenses

Operating income

Operating expenses

Other expenditures

Income from insurance and reinsurance premiums :

Insurance premiums

Insurance claims and other payments:

Gain from separate accounts, net

Other revenues

Gain on sales of securities

Investment income :

Interest, dividends, and other income

Provision for reserve for price fluctuations of security investments

Loss on sales of securities

Loss on valuation of securities

Loss from derivative financial instruments, net

Extraordinary profits :

Extraordinary losses :

Death and other claims

Annuity payments

Gain from assets held in trust

Investment Expenses :

Health and other benefits

Surrender benefits

Other refunds

Provision for policy reserves :

Provision for policy reserves

Interest on reserve for dividends to policyholders


Notes to the Non-Consolidated Statement of Income

1. Gain on sales of securities includes gains on sale of domestic bonds, domestic

stocks and foreign securities of ¥2,537 million, ¥33,573 million and ¥38,701 million,

respectively, for the first quarter ended June 30, 2009.

2. Loss on sales of securities includes losses on sale of domestic bonds, domestic

stocks and foreign securities of ¥583 million, ¥261 million and ¥17,907 million,

respectively, for the first quarter ended June 30, 2009.

3. Loss on valuation of securities includes losses on valuation of domestic stocks and

foreign securities of ¥4,936 million, ¥7,032 million, respectively, for the first

quarter ended June 30, 2009.

4. Breakdown of income from interest, dividends, and other for the period from April 1

to June 30, 2009, is as follows.

Million Yen

Interest on deposits ¥ 148

Interest and dividends on securities 158,384

Interest on loan receivables 48,824

Rent on real estate 25,541

Other interest and dividends 6,905

Total ¥239,804

5. Loss on Impairment of Assets

① Method for grouping the assets

Leased property and idle property are classified as one group per structure.

Assets utilized for insurance business operations are classified into one group.


② Circumstances causing impairment losses

The Nippon Life observed a marked decrease of profitability or fair value in

some of the fixed asset groups. The book value of fixed assets was reduced to

the recoverable amount and an impairment loss was recognized as an

extraordinary loss.

③ Breakdown of asset groups that recognized impairment losses

(Million Yen)

Purpose of use Land Buildings Total

Leased Property ¥1,789 ¥405 ¥2,195

Idle Property 1,318 342 1,661

Total ¥3,108 ¥748 ¥3,856

④ Calculation method of recoverable amount

The recoverable amount used for the measurement of impairment loss on leased

property is based on the net realizable value upon sales of the asset or the future

cash flows. The recoverable amount for idle property is based on the net

realizable value upon sales of the asset. The discount rate used for calculation of

future cash flows is 4.0%. Net realizable values are determined based on the real

estate appraisal or posted land price.


5．Details of Operating Income (Ordinary Income)

(Million Yen)For the period April 1 to

June 30, 2009For the period April 1 to

June 30, 2008 Ordinary income (A) 95,723 119,347

Capital gain 95,248 40,941

Gain from proprietary trading securities ---- ----

Gain from assets held in trust 20,436 14,017

Gain from trading securities ---- ----

Gain on sales of securities 74,811 26,923

Gain from derivative financial instruments ---- ----

Foreign exchange gain ---- ----

Other capital gain ---- ----

Capital loss 83,593 92,231

Loss from proprietary trading securities ---- ----

Loss from assets held in trust ---- ----

Loss from trading securities ---- ----

Loss on sales of securities 18,752 29,135

Loss on valuation of securities 12,857 3,347

Loss from derivative financial instruments 44,635 55,606

Foreign exchange loss 7,348 4,142

Other capital loss ---- ----

Net capital gain/loss (B) 11,654 -51,290

Ordinary income including net capital gain/loss (A+B) 107,377 68,057

Non-recurring income ---- 603

Income from reinsurance premiums ---- ----

Reversal of contingency reserve ---- ----

Other non-recurring income ---- 603

Non-recurring loss 51,116 57,271

Reinsurance premium fee ---- ----

Provision for contingency reserve ---- ----

Provision for individual allowance for doubtful accounts ---- ----

Provision of allowance for specific overseas debts ---- ----

Write-off of loans ---- ----

Other non-recurring loss 51,116 57,271

Non-recurring income / loss (C) -51,116 -56,668

Operating income (A+B+C) 56,260 11,389

(Million Yen)



Other non-recurring income ---- 603

Reversal of individual allowance for doutful accounts ---- 603

Other non-recurring loss 51,116 57,271

Policy reserve based on Article 69, section 5 of the Ordinancefor Enforcement of Insurance Business Law

51,116 57,271

( Reference) Details of other gain and loss


6. Solvency Margin Ratio(Million Yen)


5,728,004 4,800,915

2,705,723 2,653,864

Total Net Assets 1,166,792 1,118,048

Reserve for price fluctuations of security investments 377,013 372,013

Contingency reserve 864,445 864,445

General allowance for doubtful accounts 14,365 16,250

Other 283,107 283,107

1,291,252 389,725

205,233 225,883

1,454,773 1,424,104

---- ----

-272 -272

71,294 107,609

1,105,624 1,061,664

153,480 154,192

75,877 75,916

187,434 189,925

856,961 810,106

25,693 24,821

10,898 10,952

(A)

( 1 / 2 ) × (B)

1,036.1% 904.4%

Solvency margin ratio

Business management risk R4

Qualifying subordinated debt

Deduction clause

Other

Total amount of risk (B)

Underwriting risk R1

Underwriting risk of third market insurance R8

Anticipated yield risk R2

Minimum guarantee risk R7

Net unrealized gain/loss on real estate × 85%

Investment risk R3

Excess of continued Zillmerized reserve

Solvency margin gross amount (A)

Foundation funds(kikin ) and reserves,etc.

Net unrealized gain/loss on available-for-sale securities × 90%

× 100

(R1 + R8) + (R2 + R3 + R7) + R42 2

Notes: 1. The amounts above are calculated based on Article 86, Article 87 of the Ordinance for Enforcement of Insurance Business Law, as well as the Ordinance No. 50 issued by the Ministry of Finance in 1996. (Excess of continuous Zillmerized reserve is calculated based on the Ordinance No. 50 1-3-1.) Nippon Life uses a rational approach that adheres to regulations in order to calculate the accounting figures　　　　　　 as of the end of the fiscal year 2009 first quarter. 2. The standard method is used for calculation of the amount equivalent to minimum guarantee risk.


7. Status of Separate Accounts for the First Quarter Ended June 30, 2009

(1) Balance of Separate Account Assets (Million Yen)


Individual variable insurance 117,035 110,159

Individual variable annuities 174,641 163,119

Group annuities 1,107,723 1,098,269

Separate account total 1,399,401 1,371,549

(2) Policies in Force

Individual Variable Insurance

Number of policiesAmount of policies

(million yen)Number of policies

Amount of policies(million yen)

Variable insurance (term life) 2,717 14,273 2,770 14,611

Variable insurance (whole life) 38,667 618,826 38,824 622,997

41,384 633,099 41,594 637,609

Individual Variable Annuities

Number of policiesAmount of policies

(million yen)Number of policies

Amount of policies(million yen)

Individual variable annuities 29,265 174,638 29,519 163,100

As of March 31, 2009As of June 30, 2009


Total


8. Status of the Company and the Affiliates

(100 Million yen)

For the period April 1to June 30, 2009


17,234 16,423

565 99

471 0


473,610 459,974

(2) Scope of Consolidation and Application of the Equity Method

As of June 30, 2009

10

0

4

(3) Preparation policy for the consolidated financial statements in the First Quarter

There were no significant changes.

(1) Selected Financial Data for Major Operations

Total revenues

Operating income

Number of non-consolidated subsidiaries accounted for under the equity method Number of affiliates accounted for under the equity method

Surplus for the period April 1 to June 30

Total assets

Number of consolidated subsidiaries


(4) Consolidated Balance Sheets for the First Quarter(Million Yen)


Amount Amount

441,078 616,728

267,300 203,800

1,166,032 1,160,387

134,999 114,637

33,007,444 31,283,156

8,935,514 9,050,468

1,806,399 1,685,176

167,829 167,541

134 275

850,378 781,863

592,040 944,425

15,118 14,204

- 23,216 - 25,220

47,361,053 45,997,446


Amount Amount

42,716,176 42,321,180

Reserve for outstanding claims 213,652 224,277

Policy reserves 41,210,917 40,881,510

Reserve for dividends to policyholders 1,291,606 1,215,391

182 340

1,607,804 1,239,459

75 71

445,711 440,804

6,042 6,123

485 485

377,013 372,013

64 ----

174,919 176,020

15,118 14,204

45,343,592 44,570,702


Amount Amount

Foundation funds 200,000 200,000

Reserve for redemption of foundation funds 800,000 750,000

Reserve for revaluation 651 651

Surplus 215,283 349,344

Total equity 1,215,934 1,299,995

Net unrealized gain on available-for-sale securities, net of tax 917,287 253,693

Deferred gain on derivatives under hedge accounting 35 6

Land revaluation difference - 92,907 - 91,006

Cumulative translation adjustments - 32,968 - 46,148

Total valuations, conversions and others 791,446 116,544

Minority interests 10,079 10,203

Total net assets 2,017,461 1,426,743

47,361,053 45,997,446

Accrued severance indemnities

Reinsurance receivables

Net assets:

Other liabilities

Policy reserves and others:

Accrued loss from supporting closely related companies

Other assets

Deferred tax assets

Allowance for doubtful accounts

Total assets

Assets held in trust

Accrued bonus for directors and corporate auditors

Cash and deposits

Total liabilities and net assets

Intangible fixed assets

Accrued retirement benefits for directors and corporate auditors

Total liabilities

Deferred tax liabilities

Deferred tax liabilities for revaluation reserve

Acceptances and guarantees

Reserve for price fluctuations of security investments

Reinsurance payables

Assets:

Liabilities:

Tangible fixed assets

Monetary receivables purchased

Loan receivables

Call loans

Customers’ liability for acceptances and guarantees

Investments in securities


Basis of Presenting the Consolidated Balance Sheet

1. The fiscal year ended March 31, 2009 appropriation plan for retained earnings of

Nippon Life (the “Parent Company”)in the previous period was approved at the

Meeting of Representatives on July 2 , 2009, and was reflected in the preparation of

the first quarter balance sheet.

Million Yen

A. Unappropriated surplus for the current period ¥185,040

B. Reversal from voluntary reserve 710

C. Appropriations 185,750

Reserve for dividends to policyholders 130,634

Transfer to legal reserve for deficiency 558

Transfer to reserve for redemption of foundation funds 50,000

Interest on foundation funds 2,489

Transfer to voluntary reserve 2,069

D. Surplus carried forward (A+B-C) －

2. The corporate tax, inhabitant tax and income tax adjustments of the Parent Company

for the period April 1 to June 30, 2009, are calculated based on the assumption of

accumulation and reversal of the reserve for condensed booking of fixed assets for

tax purpose and reserve for dividends to policyholders due to appropriation of

retained earnings in the period.

3. Securities that are held for the purpose of matching periods outstanding of the

liabilities within the sub-groups (insurance type, remaining period, and investment

policy) of insurance products, such as individual insurance and annuities, workers'

asset-formation insurance and annuities, and group insurance and annuities are

classified as policy-reserve-matching bonds in accordance with the Industry Audit

Committee Report No. 21, “Treatment of Accounting and Auditing for

Policy-Reserve-Matching Bonds Within Insurance Industry,” issued by the JICPA.


The book value and market value of policy-reserve-matching bonds as of June 30,

2009 amounted to ¥16,633,246 million and ¥17,235,084 million, respectively.

4. Assets and liabilities denominated in foreign currencies are translated into Japanese

yen using “Accounting Standards of the Business Accounting Council”(Business

Accounting Council). Exchange rates fluctuate significantly. Available-for-sale

securities denominated in foreign currencies of the Parent Company, for which

recovery is not expected, are converted to yen using either the rate at the end of the

first quarter or the average 1 month rate prior to the end of the first quarter,

whichever indicates a weaker yen. This exchange is recorded under "Loss on

valuation of securities."

5. Among policy reserves of the Parent Company, ¥51,116 million was additionally

accumulated for a portion of individual annuity policies for the period April 1 to

June 30, 2009.

6. The amount of accumulated depreciation for tangible fixed assets was ￥1,123,844

million as of June 30, 2009.

7. (1) The total amount of loans to bankrupt borrowers, delinquent loans, loans that

are delinquent for over 3 months and loans for restructuring, which were

included in loan receivables, was ¥55,342 million as of June 30, 2009.

① The balances of loans to bankrupt borrowers and delinquent loans were

¥3,443 million and ¥41,658 million as of June 30, 2009. Loans to bankrupt

borrowers are loans, except for a portion of loans written-down, where the

borrowers satisfy conditions prescribed in Article 96 Paragraph 1 Item 3 or

Item 4 of the Enforcement Regulations of the Corporation Tax Law and are

recorded net of the portion of the losses written down. Interest is not

accrued as income since the recovery of principal or interest on the loans is

unlikely due to the fact that the payments are long overdue or for other

reasons.

Delinquent loans are loans with interest not accrued, and exclude the loans

to bankrupt borrowers and the loans to which postponement of interest

payments is made with the objective of restructuring these loans and


supporting the borrowers.

② There were no loans that were delinquent for over 3 months as of June 30,

2009. Loans that are delinquent for over 3 months are loans with principal or

interest unpaid for over 3 months beginning one day after the due date based

on the loan agreement. These loans exclude loans classified as loans to

bankrupt borrowers and delinquent loans.

③ The balance of loans for restructuring, was ¥10,240 million as of

June 30, 2009. Loans for restructuring are loans that provide certain concessions favorable to borrowers with the intent of supporting the borrowers restructuring, such as by reducing or exempting interest, postponing principal or interest payments, releasing credits, and providing other benefits to the borrowers. These loans exclude loans classified as loans to bankrupt borrowers, delinquent loans, and loans delinquent for over 3 months.

(2) The amount of collateral value or the amount collectible through the execution

of guarantees or other methods, subtraced directly from the balance of loan

receivables is the estimated uncollectible amount of loans (including loans with

credits secured and/or guaranteed) made to legally or substantially bankrupt

borrowers. The amounts recognized in the financial statement was ¥8,682

million (including ¥7,130 million of credits secured and/or guaranteed), as of

June 30, 2009. As a result, the amounts of loans to bankrupt borrowers and

delinquent loans decreased by ¥6,267 million and ¥2,415 million, respectively.

8. Separate Accounts as provided for in Article 118 paragraph 1 of the Insurance

Business Law were ¥1,399,401 million as of June 30, 2009 and are presented with

in other assets with a corresponding liability recorded for the same amount.


9. Changes in the reserve for dividends to policyholders included in policy reserves for

the period ended June 30, 2009 were as follows:

Million Yen

A. Balance at the end of previous fiscal year ¥1,215,391

B. Transfer to reserve from surplus in previous fiscal year 130,634

C. Policyholders dividends paid out in the current period (62,383)

D. Increase in interest 7,963

E. Balance as of June 30,2009 (A+B-C+D) ¥1,291,606

10. The amount of assets pledged as collateral by securities, lease, land, and buildings

as of June 30, 2009 were ¥1,156,284 million, ¥34,044 million, ¥2,952 million, and

¥320 million, respectively. The total amount of loans covered by the aforementioned

assets as of June 30, 2009 was ¥938,416 million. These amounts included

¥1,090,296 million of securities deposited and ¥906,278 million of cash received as

collateral, under the securities lending contracts secured by cash, as of June 30,

2009.

11. Following the amendment of the Articles of Incorporation that were approved at the

Meeting of Representatives on July 2, 2009 based on Article 60 of Insurance

Business Law, Nippon Life offered the following foundation fund (kikin), and

payment was completed on August 7.

A. Amount offered: ¥100,000 million

B. Rate: August 8, 2009 to August 7, 2013

1.65% per year

August 8, 2013 to August 7, 2014

1.70% per year


C. Redemption dates: Redeem ¥50,000 million 3 business days


Redeem ¥50,000 million 3 business days


D. Use of funds: Mutual company foundation fund

12. Based on the appropriation plan for earnings from the previous period, we

accumulated ¥50,000 million in the reserve for redemption of foundation funds in

accordance with Article 56 of the Insurance Business Law, and amortized the same

amount of foundation funds on August 4, 2009.

13. The amount of securities loaned for consumption was ¥1,902,791 million as of June

30, 2009.


(5) Consolidated Statements of Income for the First Quarter(Million Yen)



Amount Amount

1,723,404 1,642,383

1,198,399 1,193,967

454,378 376,626

Interest, dividends, and other income 240,326 262,267

Gain from assets held in trust, net 20,591 14,207

Gain on sales of securities 74,808 26,970

Gain from separate accounts, net 118,112 65,847

70,627 71,789

1,666,882 1,632,403

979,225 963,770

Death and other claims 297,442 313,568

Annuity payments 131,276 118,806

Health and other benefits 219,276 202,028

Surrender benefits 269,522 270,024

Other refunds 61,463 59,109

337,236 302,884

Provision for policy reserves 329,272 294,410

Interest on reserve for dividends to policyholders 7,963 8,474

99,213 106,524

Interest expenses 736 939

Loss on sales of securities 18,851 29,192

Loss on valuation of securities 13,369 3,999

Loss from derivative financial instruments, net 45,030 56,197

146,032 141,077

105,175 118,145

56,522 9,980

1,588 134

Gain on disposal of fixed assets 39 134

Reversal of allowance for doubtful accounts 1,549 ----

9,484 3,816

Loss on disposal of fixed assets 627 1,687


Provision for reserve for price fluctuations of security investments 5,000 ----

48,626 6,299

545 58,972

1,098 -52,349

1,644 6,623

-178 -364

47,160 40

Operating income

Extraordinary profits:

Income from insurance and reinsurance premiums

Investment income:

Revenues:

Insurance claims and other payments:

Provision for policy reserves:

Other expenditures

Operating expenses

Investment expenses:

Expenditures:

Other revenues

Extraordinary losses:

Surplus before income taxes in the first quarter

Income tax -current

Income tax -deferred

Loss of Minority interests

Surplus in the first quarter

Income tax -total


Notes to the Consolidated Statement of Income

1. Loss on Impairment of Assets

① Method for grouping the assets

Leased property and idle property are classified as one group per structure.

Assets utilized for insurance business operations are classified into one group.

② Circumstances causing impairment losses

The Parent Company observed a marked decrease of profitability or fair value in

some of the fixed asset groups. The book value of fixed assets was reduced to

the recoverable amount and an impairment loss was recognized as an

extraordinary loss.

③ Breakdown of asset groups that recognized impairment losses

(Million Yen)

Purpose of use Land Buildings Total

Leased Property ¥1,789 ¥405 ¥2,195

Idle Property 1,318 342 1,661

Total ¥3,108 ¥748 ¥3,856

④ Calculation method of recoverable amount

The recoverable amount used for the measurement of impairment loss on leased

property is based on net realizable value upon sales of the asset or the future

cash flows. The recoverable amount for idle property is based on the net

realizable value upon sales of the asset. The discount rate used for calculation of

future cash flows is 4.0%. Net realizable values are determined based on the

real estate appraisal or posted land price.


(6)Consolidated Statements of Cash Flows for the First Quarter(Million Yen)



Ⅰ. Cash flows from operating activities:

Surplus before income taxes in the first quarter 48,626 6,299

Depreciation for rental real estate and other assets 6,382 6,596

Depreciation 10,523 10,523


Net increase(decrease) in reserve for outstanding claims -10,802 -12,477

Net increase(decrease) in policy reserve 329,294 294,307

Interst on reserve for dividends to policyholders 7,963 8,474

Net increase(decrease) in allowance for doubtful accounts -1,549 86

Net increase(decrease) in reserve for bonuses for directors and corporate auditors 3 31

Net increase(decrease) in accrued severance indemnities 4,906 2,577

Net increase(decrease) in reserve for retirement benefit for directors -81 96

Net increase(decrease) in reserve for price flutuations in security investments 5,000 ----

Interest, devidends and other income -240,326 -262,267

Net losses(gains) on securities investment -39,968 3,296

Interest expense 736 939

Net losses(gains) on tangible fixed asset investments 588 1,552

Losses(gains) from separate accounts, net -118,112 -65,847

Other, net -28,003 -43,479

Subtotal -20,960 -47,161

Interest, devidends and other income received 284,743 331,184

Interest paid -579 -871

Dividends to policyholders paid -59,244 -62,429

Other, net 1,197 6,944

Income taxes paid -6,948 -37,425

Net cash provided by operating activities 198,209 190,241

Ⅱ. Cash flows from investing activities:

Purchases of monetary receivables purchased -700 -45,950

Proceeds from sales and redemption of monetary receivables purchased 13,066 28,082

Purchases of assets held in trust ---- -99

Proceeds from sales of assets held in trust ---- 328

Purchases of securities -3,147,589 -3,034,905

Proceeds from sales and redemption of securities 2,590,562 2,895,518

Investments in loans -283,984 -276,635

Collections of loan 352,014 313,226

Other, net 277,461 -363,138

Investment Management Activity Total -199,168 -483,573

(Operating activities and Investment Management activities total) (-959) (-293,332)

Purchases of tangible fixed assets -136,343 -18,762

Proceeds from sales of tangible fixed assets 366 763

Other, net -6,562 -7,412

Net cash used in investing activities -341,707 -508,984

Ⅲ. Cash flows from financing activities:

Proceeds from debt issuance 5,397 5,598

Repayments of debt -2,515 -1,499

Other, net -49 -31

Net cash used in financing activities 2,831 4,067

Ⅳ. Effect of exchange rate changes on cash and cash equivalents -4,891 4,500

Ⅴ. Net increase(decrease) in cash and cash equivalents -145,557 -310,175

Ⅵ. Cash and cash equivalents at the beginning of the year 952,759 1,294,607

Ⅶ. Decrease in cash and cash equivalents due to the exclusion of subsidaries from consolidation ---- -2,537

Ⅷ. Cash and cash equivalents at the end of the first quarter 807,201 981,893


（7）Segment InformationFor the first quarter of the fiscal year ended March 31, 2010 (From April 1, 2009 to June 30, 2009 ), NipponLife, its consolidated subsidiaries and its subsidiaries have engaged in businesses including the acquisition,management, sale, and mortgaging of real estate for lease other than life insurance business. Segmentinformation is omitted due to its immaterial impact relative to all business segments.


financial results for the first quarter ended june 30, 2009 · 2010-03-05 · 7. status of separate...

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