Described here is the outline of questions and answers exchanged between institutional investors and security analysts and Tetsuhiro Kida, Director and Managing Executive Officer of T&D Holdings, Inc. at a telephone conference held on August 10, 2007. Some additions and corrections were made to make the contents easier for readers to understand.

Q.	While the new policy amount for Daido Life’s individual term life insurance has been growing, “annualized premiums of new policies/new policy amount” is down by approximately 18% on a year-on-year basis. This is due to the decline in annualized premiums of new policies, and that decline appears to be substantial, even taking into account the premium table revision. Would you comment.
A.	There are two factors in annualized premiums for new individual term life insurance being down approximately 5%. One is the premium rate reduction and the other is stopping sales of increasing term life insurance. Increasing term life insurance accounted for roughly 7% of the new policy amount last fiscal year. Its impact on annualized premiums of new policies was more significant than that on new policy amount, due to the higher premium rates.

Q.	How would you characterize the impact of halting sales of increasing term life insurance on the EV of new business?
A.	The need for increasing term life insurance is currently being met by ultra-long term life insurance. Although it is hard to make general comments because of age group differences and etc., we see the profitability of these two products as roughly the same.

Q.	We understand that Daido Life’s hedge fund investments performed well in the first quarter. What about July?
A.	Slightly positive.

Q.	We would like to know about monthly trends in new policy amount for Daido in the first quarter. In addition, please tell us about the July performance.
A.	Year-to-year changes were positive each month during the April-June quarter. The trend continued in July.

Q.	We understand that Taiyo Life’s new policy amount declined sharply in the first quarter from a year earlier, and that this was because Taiyo didn’t have the usual sales campaign in April and May. Can we expect that the rate of decline in the second quarter will not be as great as in the first quarter?
A.	We expect the new policy amount to continue to be slightly lower than the previous year’s level in this fiscal year.

Q.	Do you plan to have a sales campaign during the second half of this fiscal year?
A.	We hope to conduct a campaign after concluding the insurance payment issue. We have not yet decided whether it will be in the same style as in the past

Q.	Dividends from private equities and investment trusts for Daido Life and from domestic and foreign investment trusts for Taiyo Life are cited as factors behind increased interest and dividend income. Are these dividends constant or temporary?
A.	They are not guaranteed and will fluctuate based on the market environment, but we expect them to be paid regularly at a certain level.

Q.	We understand that you have some exposure to subprime loans indirectly in our FoHFs. What is the amount?
A.	The exposure (estimated amount based on maximum losses, i.e., if the value falls to zero) for Daido Life is limited. It accounts for about 3% of the total hedge fund investment (approximately 6 billion yen). For Taiyo Life, the figure is several hundred million yen.

Q.	The sales results for the first quarter were below the FY forecasts. Looking ahead now, what is the outlook for the fiscal year?
A.	Viewing sales performance of the three life insurance companies, it may be a bit difficult to meet the FY forecasts.

Q.	What will be the P/L effect if the sales target is missed? Can we still expect higher profit based on decreased operating costs?
A.	It is true that decreased operating costs associated with declined new businesses will be a positive factor in P/L.