Described here is the outline of questions and answers exchanged between institutional investors and security analysts and Tetsuhiro Kida, Director and Senior Executive Officer of T&D Holdings, Inc. at a telephone conference held on August 12, 2009. Some additions and corrections were made to make the contents easier for readers to understand.

Q.	Have you performed any EEV calculation premised on the economic environment at the end of June?
A.	We have performed sensitivity calculations that reflect economic assumptions at the end of June 2009 and based on the same assumptions for in-force business as of March 31, 2009. This calculation showed that the value of in-force business had risen by about 30% compared with March 31, 2009. In terms of the economic assumptions as of June 30, 2009, although short- and medium-term interest rates had dropped, long-term rates had risen. Furthermore, equity implied volatility declined, while bond volatility increased. The net result overall was a positive impact on the value of in-force business. Moreover, adjusted net worth, which we disclose every quarter, includes part of the increase in the value of in-force business as realized gains. And in the calculation of the value of in-force business, changes in in-force business such as new policies gained in the April-June are not reflected. For these reasons, please note that a simple sum of adjusted net worth and the estimated value of in-force business won’t equate to EEV at June 30, 2009.

Q.	The negative spread in the first quarter was more than one-quarter of your forecast for the full year. Based on this result, what is your outlook now?
A.	Changes in interest and dividend income have a large impact on achievement of the full-year negative spread forecast. In the fiscal 2009, the negative spread may be slightly more than we initially assumed due to a decrease in dividends on stocks.

Q.	T&D Financial Life recorded an ordinary profit of 0.8 billion yen in the first quarter, against an initial full-year projection of an ordinary loss of 14.0 billion yen. Will your performance still track the initial full-year projection?
A.	The first-quarter ordinary profit reflected a large reversal of the policy reserve for minimum guarantee risks of variable annuities due to the stock market recovery. At this point, the full-year forecast has not been revised.

Q.	Daido Life continues to experience difficulties in terms of new policy amount and surrender and lapse amount. What is the forecast for these items?
A.	The deterioration in sales results at Daido Life was largely affected by worsening business confidence at SMEs, the main market for this company. Daido Life, however, will continue to provide best services in line with customer needs because SMEs have protection needs related to business succession and other events regardless of business confidence. It is also proposing non-cash value products with low premiums to policyholders who have applied for surrender. Moreover, the pace of decrease in new policy amount has started to slow; new policy amount fell 25% year on year in 3Q2008 and by the same rate in 4Q2008, but was down 17% year on year in 1Q2009.

Q.	Why insurance claims and other payments halved at Daido Life? Also, what impact did this decline have on core profit?
A.	The decrease in insurance claims and other payments was mainly due to a decline in insurance claims for group annuities. There was no impact on core profit or net income because there was also a decrease in the amount of the reversal of policy reserves.

Q.	Aren’t you utilizing the policyholder’s loan to forestall policy surrenders?
A.	We have recommended that policyholders use the policyholder’s loan when we receive an application to surrender a policy.

Q.	Do you have any plans to increase the frequency of EEV reporting?
A.	We are looking into and making preparations toward enhancing disclosure, including a increase in the frequency of EEV reporting. However, we are not in a position yet to say definitely.

Q.	Foreign bonds have increased at Taiyo Life. Why an increase in unrealized losses on foreign bonds was relatively small in spite of the rise in overseas interest rates?
A.	Because Taiyo Life’s investing to foreign bonds was done after overseas interest rates had risen.

Q.	Was the poorer performance at Daido Life really the result of deteriorating business sentiment at SMEs? Or was it due to a decline in demand itself for protection products at SMEs?
A.	Daido Life maintains strong relationships with tie-up groups in the SME market. There has also been no change in Daido Life’s basic business model, with the number of tax accountant sales agents increasing. Moreover, there has been no change in the protection needs of SMEs; Daido Life has seen no decline in the number of sales proposals.