Below is an edited summary of the Q&A session with institutional investors and securities analysts at the Merrill Lynch Japan Conference on September 7, 2006. Answers to questions were provided by Naoteru Miyato, President and Representative Director of T&D Holdings, Inc., and Sonosuke Usui, Director and Managing Exective Officer of the Company. The contents are partially modified for easy understanding of readers.

Q.	What effect is expected by revising the standard life table?
A.	The standard life (actuarial) table has not been revised since 1996. The Institute of Actuaries of Japan and others are working on a draft of a proposed revision of the table. The standard life table shows a regulatory mortality rate based on which insurance companies calculate their policy reserve. Each life insurance company calculates premiums according to the standard life table, taking into account as well the mortality, morbidity and other factors particular to that company. Accordingly, a revision of the standard life table does not have a direct effect of lowering premiums for death-protection products. Those decisions also depend on each company’s product portfolio. We should, however, pay attention to influences in the future, including the environment for competition.

Q.	When the interest rate goes up by 50 b.p., what is the effect on EV (Embedded Value)?
A.	Please refer to EV sensitivities. Assuming all other assumptions are the same, if the interest rate goes up 1%, there will be a positive effect of some 10% on total EV. If the interest rate goes up within 1%, total EV will change in keeping with EV sensitivities.

Q.	As for EV as of the end of March 2006, were the changes in assumptions a result of the rise in interest rates?
A.	Reflecting about 40 b.p. rise in interest rate from the end of previous fiscal year, investment yield on new assets rose, as well as the discount rate was changed from 6% to 6.5%. As for EV at the end of March 2006, however, the largest factor was that adjusted book value on EV significantly increased as a result of rise in stock prices. Changes in mortality and morbidity rate also affect EV, but this sensitivity is less than to changes in investment yield and discount rate.

Q.	Is 30% the highest rate of return to shareholders?
A.	The figure “30%” is not our emphasis. We aim to return about 30% of adjusted net income to shareholders in the medium and long term. Adjusted net income consists of consolidated net income and the excess amount of internal reserves as quasi-equity liabilities.

Q.	Has there been any effect on price competition as a result of the changing competitive climate, including full deregulation of OTC sales at banks and privatization of Postal Life Insurance?
A.	One recent pricing trend has been the lowering of premiums by the development of non-participating products and products with low surrender value. There is also competition in the level of surrender value rate of cash-value-type products. We are not focusing on price competition alone, however, but hope to provide good products and services by enhancing customer service and support to our agents.

Q.	EV of new business is an important element in increasing total EV. How is the situation of new business at T&D Financial Life?
A.	Profitability without taking into account risks is higher in “third-sector” products, death-protection products and variable annuities in this order. Since T&D Financial Life is focusing on variable annuity sales, the contribution to EV of new business is relatively low. Therefore, expanding new policy amount of Taiyo Life, about 30% of whose annualized premiums of new policies are for “third-sector” products, and of Daido Life, whose main products are death-protection products, will result in an increase in EV of new business. T&D Financial hopes to ensure a certain position in bank OTC market, which we believe as a promising area.

Q.	What were the trends in the net exposure to domestic stocks?
A.	Daido did buying on dips during a stage of declining stock prices, however, prices continued to fall, and the exposure declined slightly. Taiyo Life accounted gains on sale of domestic stocks for 1Q 2006, reflecting the adjustment of overweighted balance compared to the basic portfolio. As a result, its exposure declined.

Q.	What is the policy on investment in domestic bonds?
A.	IThe basic policy on asset management is to invest primarily in yen-denominated fixed assets, in light of the characteristics of its insurance liabilities and that is contained within a risk buffer. Taiyo Life is trying to gradually extend asset duration, while Daido Life has a relatively large risk buffer and has not turned to active buying at the current interest level. When interest rates rise further, Daido Life will try to extend the bond duration gradually.