Below is an edited summary of the Q&A session with institutional investors and securities analysts at the Conference Call for Investors: Financial Results for the Three Months Ended June 30, 2006 on August 11, 2006. Answers to questions were provided by Sonosuke Usui, Director and Managing Exective Officer of T&D Holdings, Inc.. The contents are partially modified for easy understanding of readers.

Q.	Gains on sales of securities for Taiyo brought net income for the quarter higher than in the full year forecast. If there is no substantial change in the asset management environment, and if an upturn for the full year is expected, will additional internal reserves (quasi-equity liabilities) be increased more than initially planned?
A.	We cannot say anything definitively now because 1Q has just ended. There is a concern, though, that unrealized losses on domestic bonds may increase if interest rates rise hereafter. If that is the case, one of the possible measures is to be posted the losses on sales of domestic bonds in order to improve the quality of bond portfolio.

Q.	If gains on sales of securities are from the group annuity category, such gains will be mostly outflowed as policyholder dividends of group annuities. What was the breakdown of gains on sales of individual insurance and group annuities in this quarter?
A.	Gains on sales of securities were mostly from other categories than group annuities.

Q.	As Taiyo’s marketing shift from saving products to protection products progresses, the amount of original policies in force, which were converted into another policies, should decrease, and, accordingly, I expected the amount of new policies from conversion to continue to decrease as well. But the new policy amount from conversion increased in this term. What is the outlook for the new policies from conversion?
A.	At present, there are 340,000 of Taiyo Life's “Hoken Kumikyoku” policies in force. We recognize that this number is small in comparison with the total number of policies, so we think there will be enough room for policies from conversion to increase. We also think that including old “Kenko” (medical insurance) policies in convertible policies since February 2006 may have affected the increase in policies from conversion in 1Q.

Q.	Losses from derivatives (net) improved. However, why net unrealized losses in Daido's foreign exchange forward contracts against the US $ increased at the end of 1Q?
A.	During 1Q, exchange forward contracts to sell dollars were rolled over when the yen turned stronger, from which there were realized gains. But after the rollover, the yen tended to weaken, and devaluation losses of foreign exchange forward contracts increased substantially at the end of 1Q. However, the “gains/ losses from derivatives, net” is total figures of realized / unrealized gains or l osses on derivatives, and in this quarter, the increased amount of realized gains exceeded that of the increase in unrealized losses.

Q.	I understand that T&D Financial plans to launch new products to recover the sales results. To what should the stagnant results of 1Q be attributed, salability of products or the sharper competition at all levels of commission fees and support services, especially from others who came lately into the over-the-counter sales business?
A.	In anticipation of needs, T&D Financial launched the product adding riders to shift whole life insurance in December 2005, but sales have not been good, because the regulation that prohibit those who are in charge of loan at banks from selling insurance products to loan customer makes tellers extremely reluctant to sell insurance products.. Also, as a result of a drop in stock prices, while customer demand has shifted to GMLB products, demand for non-GMLB product of T&D Financial has decreased. As a recovery measure, we are going to launch products matching customer needs at the end of August, and expect to increase the new policy amount after 2Q.

Q.	The decrease in new policy amount for Taiyo was mainly due to a decrease in “Kenko”. What effect does the decrease in new policy “Kenko” have on EV of new business?
A.	Because “Kenko” is a medical-oriented insurance product, there may be some effects on EV of new business. The new policy amount for “Kenko” decreased in 1Q, mainly due to a decrease in matured policies. However, in 2Q and thereafter, matured policies are expected to recover to the level of the same term in the previous fiscal year. Also, annualized premiums of new policies in the third sector in this 1Q remained the same level as that of the previous fiscal year. Accordingly, we are not particularly concerned at this stage.

Q.	Both Taiyo and Daido seem to decrease net exposures to domestic stocks. Does this indicate a change in investment policy?
A.	There is no change in that policy. We are maintaining an asset portfolio that is appropriate in light of the characteristics of its insurance liabilities and risk buffer. We will buy on dips, when stock prices fall temporarily, as before.

Q.	Daido's surrender and lapse amount increased, partly because of an increase in the number of policies with accumulated higher-cash value Is it correct to think that this tendency will continue?
A.	The tendency may continue. Surrenders increased mainly in policies with higher cash value accumulated over ten years or more. Increases in surrender and lapse amount are negative factors in the calculation of EV. At the same time, surrenders in policies with higher assumed interest rates reduce the burden of negative spread, and thus overall there will not be much effect on EV.