Below is an edited summary of the Q&A session with institutional investors and securities analysts at the Deutsche Bank Group Japan Conference 2007 on June 7, 2007. Answers to questions were provided by Naoteru Miyato, President and Representative Director of T&D Holdings, Inc., and Tetsuhiro Kida, Director and Managing Executive Officer of the Company. The contents are partially modified for easy understanding of readers.

Q.	As for EV assumptions as of March 2007, what are the reasons behind an increase in assumed investment yields and the reduced discount rate?
A.	The increase in investment yields is due to an increase in yields on existing assets. The discount rate is determined in increments of 0.5% by adding a 4.5% risk premium to the assumed 10-year JGB yield. Since those JGB yields declined from 1.77% in March 2006 to 1.66% in March 2007, the discount rate was lowered as well, from 6.5% to 6.0%.

Q.	After privatization of Japan Post, Postal Life will be selling third sector products, and competition is expected to intensify. How do you view the situation?
A.	Among the three life insurance companies, it is Taiyo Life that will be in direct competition with Postal Life. Taiyo Life’s sales activities are, however, focused primarily on large metropolitan areas and major regional cities, while Postal Life has the competitive edge in rural areas. With the compartmentalization of sales into specific areas, the impact on the T&D Life Group would be relatively small.

Q.	Is it correct to assume that full deregulation of OTC sales at banks will lead to more solid alliances with megabanks?
A.	There are now 61 financial-institution agents for T&D Financial Life (including some still in the preparatory stage). Among them are three megabanks, and we note that they have sold the largest portion of new policies for T&D Financial’s variable annuities. Looking ahead, we intend to promote partnerships with regional banks, in order to reduce fluctuations in sales stemming from changes in selling practices at individual financial institutions. To this end, close cooperation must be facilitated by, for example, jointly developing products and establishing a joint sales structure, consistent with compliance requirements.

Q.	Why don’t you use EV as the basis for shareholder dividends? In the casualty insurance industry, some companies use the EV of a life insurance subsidiary as the basis for dividends, and other companies calculate dividend payout ratios based on EV.
A.	Our aim is to pay dividends to shareholders over the medium to long term equal to about 30% of adjusted net income (net income + excess reserves for contingencies and price fluctuations, after-tax). While we plan to respond to the EEV Principles, we find it difficult to use EV or EEV as the basis for dividends because both are calculated under so many assumptions.

Q.	T&D Asset Management is now a direct subsidiary of T&D Holdings, we understand, to strengthen the asset management business. What can you say specifically about that?
A.	We aim to increase managed assets from clients outside our group by promoting retail investment trust sales. We would also like to consider collaboration with T&D Financial Life, a group entity specialized in OTC sales at banks.

Q.	What effect on EV if 10-year JGB yields increase by 0.1%?
A.	EV will increase due to a rise in yields of new investments, while the discount rate will increase, since it is based on the 10-year JGB yield. You can derive a rough estimate by netting out those positive and negative impacts. This is, of course, based on calculations wherein other assumptions are the same. We have disclosed EV-sensitivity, and you might wish to refer to that information.