Below is an edited summary of the Q&A session with institutional investors and securities analysts at the Merill Lynch Japan Conference 2008 on September 17, 2008. Answers to questions were provided by Naoteru Miyato, President and Representative Director of T&D Holdings, Inc., and Tetsuhiro Kida, Director and Senior Executive Officer of the Company. The contents are partially modified for easy understanding of readers.

Q.	Do you intend to reduce stock exposure if international accounting standards are introduced?
A.	The details of the planned introduction of international accounting standards to Japan are not yet finalized, and the impact on the T&D Life Group is not clear, so we do not assume to reduce stock exposure at this point. We continue to invest mainly in yen fixed income assets (60–70% target), and allocation to market assets such as stocks will be made within tolerable risk levels of each individual life insurance company. Along with international accounting standards, preparation for introduction of economic capital and ERM (Enterprise Risk Management) is ongoing, and we plan to show you our ideas about new capital policies, etc., after organizing them when preparations have been completed.

Q.	What is your basis for 30% of dividend payout ratio?
A.	We have researched about the dividend payout level expected by shareholders. We consider returning about 30% of profit to shareholders as dividends appropriate in the medium-term, because our group is in a growth process, and net income plus excess amount of internal reserves (after-tax) is added to “adjusted net income”, and returned 30% of “adjusted net income” to shareholders. If our growth is slow in the future, we intend to consider raising the return rate.

Q.	Do you consider AIG’s life insurance subsidiaries targets for M&A?
A.	At this point we have no particular policies to that effect. We will watch the developments of future reorganizations.

Q.	In the even the demutualization and listing of major life insurance companies develops, what impact will this have on T&D’s stock price?
A.	We feel that it will be favorable for us to have a situation in which the life insurance industry is open to the market as the demutualization and listings continue. Stock holdings may be changed from T&D stock to other life insurance stocks in the short-term, but more listed companies mean more attention to the life insurance industry in the medium to long-term, which will work favorably for T&D’s stock price.

Q.	What are the President’s ideas for business management? Are those ideas understood by the group’s employees?
A.	“Soundness”, “Disclosure”, and “Management for stakeholders” are our important considerations. We have learned how a listed company should be through the processes of demutualization and listing. And in that process, the above ideas have been made clear to our employees, and human resources have been developed accordingly. Human resources management is stimulated by strengthening the hiring of mid-carrier employees, and this also gives the employees a broader view.

Q.	What are your policies for your front line staff?
A.	Requirements for the front line staff are different by company. For instance Daido’s front line staff must respond to the executives of SMEs, Taiyo’s must respond to homemakers and T&D Financial to the sales personnel of banks and securities companies. However, the common thread among all staff is thinking of the needs of the customer first and foremost. We recognize the importance of education and training in fostering human resources to respond to customer needs, and we particularly stress the importance of compliance.

Q.	EEV (European Embedded Value) can be affected greatly by external factors, but in what way do you use it as a management indicator?
A.	The former indicator TEV (Traditional Embedded Value) was significantly affected by asset management, but EEV has the character of receiving larger impact from insurance business performance relative to TEV, which shows it is the better indicator in reflecting actual life insurance business. Furthermore, EEV is affected by various factors such as the reduction of operating expenses, and product development (developing products that the customers want while raising EEV at the same time). Therefore it is our policy to use EEV as a growth indicator of “how we increase our corporate value”.

Q.	What is the impact of worsening business sentiment among SMEs on Daido’s business performance?
A.	Sales were strong for the first quarter of previous fiscal year, mainly of term life insurance with high-cash-value, due partly to the revision of premium rates, etc. For this term, because there are no special factors as enjoyed in the previous term, a 7-8% decline is projected compared to the previous fiscal year, and current performance is slightly lower than the projection. Based on our experience, new policy amount of individual term life insurance will fluctuate by about \30 million depending on business sentiment, and new policy amounts have been generally in the range of \4 trillion to \4.5 trillion per year for the past 10 years. We respond to some extent by changing the sales composition of products. For instance, when business sentiment worsens, we respond by reducing sales of insurance with high-cash-value with larger premiums, while increasing shares of protection-oriented products, premiums of which are lower. We feel that we may be affected by worsening business sentiment to some extent for this term, but that sales will not substantially decline.

Q.	What is the impact of the privatization of Postal Life?
A.	We understand that Taiyo Life established branches in large and mid-sized cities where population is in high concentration. On the other hand we are aware that Japan Post Insurance is strong in regional cities and rural areas. Because the main market is different, certain segregation has been maintained, and we feel that this situation will not change after Japan Post Insurance’s establishment.

Q.	How do you compete with Japan Post Insurance in the SME market?
A.	Japan Post Insurance’s maximum coverage limit is \10 million now, but SMEs require higher coverage limits. Also, based on Daido’s experience, channels to customer base are necessary to solicit SMEs, and it will be difficult for in-house sales representatives to solicit new potential customers independently. We will keep a careful eye on Japan Post Insurance’s future movements.