Insurance Business Act


Published: 2009

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´╗┐Insurance Business Act

Part I: General Provisions (Article 1 - Article 2-2)

Part II: Insurance Companies, etc.

Chapter I: General Rules (Article 3 - Article 8-2)

Chapter II: Stock Companies That Conduct Insurance Business and Mutual Companies

Section 1: Special Provisions on Stock Companies That Conduct Insurance Business (Article 9 - Article 17-7)

Section 2: Mutual Companies

Subsection 1: General Rules (Article 18 - Article 21)

Subsection 2: Incorporation (Article 22 - Article 30-15)

Subsection 3: Rights and Obligations of Members (Article 31 - Article 36)

Subsection 4: Administrative Organs

Division 1: General Members' Councils (Article 37 - Article 41)

Division 2: General Representative Members' Councils (Article 42 - Article 50)

Division 3: Establishment, etc. of Administrative Organs Other than General Members' Councils and General Representative Members' Councils (Article 51 - Article 53-12)

Division 4: Directors and Boards of Directors (Article 53-13 - Article 53-16)

Division 5: Accounting Advisors (Article 53-17)

Division 6: Company Auditors and Boards of Company Auditors (Article 53-18 - Article 53-21)

Division 7: Accounting Auditors (Article 53-22 and Article 53-23)

Division 8: Committees and Executive Officers (Article 53-24 - Article 53-32)

Division 9: Officer, etc. Liability for Damages (Article 53-33 - Article 53-37)

Subsection 5: Accounting, etc. in Mutual Companies

Division 1: Accounting Principles (Article 54)

Division 2: Financial Statements, etc. (Article 54-2 - Article 54-10)

Division 3: Payments of Interest on Funds, Redemption of Funds, and Distributions of Surplus (Article 55 - Article 55-4)

Division 4: Reserves for Redemption of Funds and Deficiency Reserves (Article 56 - Article 59)

Subsection 6: Solicitation of Additional Funds (Article 60 and Article 60-2)

Subsection 7: Solicitation of Subscribers for Bonds Issued by a Mutual Company (Article 61 - Article 61-10)

Subsection 8: Amendment of the Articles of Incorporation (Article 62)

Subsection 9: Transfer, etc. of Business. (Article 62-2)

Subsection 10: Miscellaneous Provisions (Article 63 - Article 67-2)

Section 3: Entity Conversion

Subsection 1: Entity Conversion from a Stock Company to a Mutual Company (Article 68 - Article 84-2)

Subsection 2: Entity Conversion from a Mutual Company to a Stock Company (Article 85 - Article 96-16)

Chapter III: Business (Article 97 - Article 105-3)

Chapter IV: Subsidiary Companies, etc. (Article 106 - Article 108)

Chapter V: Accounting (Article 109 - Article 122-2)

Chapter VI: Supervision (Article 123 - Article 134)

Chapter VII: Portfolio Transfers of Insurance Contracts, Transfer or Acquisition of Business, and Entrustment of Business and Property

Section 1: Portfolio Transfers of Insurance Contracts (Article 135 - Article 141)

Section 2: Transfer or Acquisition of Business (Article 142 and Article 143)

Section 3: Entrustment of Business and Property Management (Article 144 - Article 151)

Chapter VIII: Dissolution, Mergers, Company Splits, and Liquidation

Section 1: Dissolution (Article 152 - Article 158)

Section 2: Mergers

Subsection 1: General Rules (Article 159)

Subsection 2: Merger Agreements (Article 160 - Article 165)

Subsection 3: Merger Procedures

Division 1: Procedures for an Extinguished Stock Company (Article 165-2 - Article 165-8)

Division 2: Procedures for a Stock Company Surviving an Absorption-Type Merger (Article 165-9 - Article 165-13)

Division 3: Procedures for a Stock Company Established by Consolidation-Type Merger (Article 165-14)

Division 4: Procedures for an Extinguished Mutual Company (Article 165-15 - Article 165-18)

Division 5: Procedures for a Mutual Company Surviving an Absorption-Type Merger (Article 165-19 - Article 165-21)

Division 6: Procedures for a Mutual Company Established by a Consolidation-Type Merger (Article 165-22)

Division 7: Special Provisions on the Merger of Stock Companies (Article 165-23 and Article 165-24)

Division 8: Public Notice, etc. after a Merger (Article 166)

Subsection 4: Effectuation, etc. of a Merger (Article 167 - Article 173)

Section 3: Company Splits (Article 173-2 - Article 173-8)

Section 4: Liquidation (Article 174 - Article 184)

Chapter IX: Foreign Insurers

Section 1: General Rules (Article 185 - Article 193)

Section 2: Business, Accounting, etc. (Article 193-2 - Article 199)

Section 3: Supervision (Article 200 - Article 207)

Section 4: Abolition, etc. of Insurance Business (Article 208 - Article 213)

Section 5: Miscellaneous Provisions (Article 214 - Article 218)

Section 6: Special Provisions on Specified Juridical Persons (Article 219 - Article 240)

Chapter X: Special Measures, etc. for the Protection of Policyholders, etc.

Section 1: Modification of Contract Conditions (Article 240-2 - Article 240-13)

Section 2: Dispositions, etc. by the Prime Minister Related to Business and Property Management, etc.

Subsection 1: Suspension of Business, Order for Consultation on a Merger, etc., and Business and Property Management (Article 241)

Subsection 2: Business and Property Management (Article 242 - Article 249-3)

Subsection 3: Modification of the Contract Conditions in a Merger, etc. (Article 250 - Article 255-5)

Section 3: Order, etc. to Implement Procedures for a Merger, etc. (Article 256 - Article 258)

Section 4: Financial Assistance, etc. Provided by Policyholders Protection Corporations

Subsection 1: Policyholders Protection Corporations

Division 1: General Rules (Article 259 - Article 265)

Division 2: Members (Article 265-2 - Article 265-5)

Division 3: Establishment (Article 265-6 - Article 265-11)

Division 4: Management (Article 265-12 - Article 265-22)

Division 5: General Councils (Article 265-23 - Article 265-27-5)

Division 6: Business (Article 265-28 - Article 265-31)

Division 7: Obligatory Contributions (Article 265-32 - Article 265-35)

Division 8: Finances and Accounting (Article 265-36 - Article 265-44)

Division 9: Supervision (Article 265-45 - Article 265-47)

Division 10: Miscellaneous Provisions (Article 265-48)

Subsection 2: Financial Assistance, etc.

Division 1: Petitions, etc. for Financial Assistance (Article 266 - Article 270-3)

Division 2: Succession of Insurance Contracts (Article 270-3-2 - Article 270-3-14)

Division 3: Assumption of Insurance Contracts (Article 270-4 - Article 270-6-5)

Division 4: Financial Assistance for Covered Insurance Proceeds (Article 270-6-6 and Article 270-6-7)

Subsection 3: Purchase of Insurance Claims, etc. (Article 270-6-8 - Article 270-6-10)

Subsection 4: Miscellaneous Provisions (Article 270-7 - Article 270-9)

Section 5: Miscellaneous Provisions (Article 271 - Article 271-2-3)

Chapter XI: Shareholders

Section 1: General Rules (Article 271-3 - Article 271-9)

Section 2: Special Measures Pertaining to Insurance Companies' Major Shareholders

Subsection 1: General Rules (Article 271-10 and Article 271-11)

Subsection 2: Supervision (Article 271-12 - Article 271-16)

Subsection 3: Miscellaneous Provisions (Article 271-17)

Section 3: Special Provisions on Insurance Holding Companies

Subsection 1: General Rules (Article 271-18 - Article 271-20)

Subsection 2: Business and Subsidiary Companies (Article 271-21 - Article 271-22)

Subsection 3: Accounting (Article 271-23 - Article 271-26)

Subsection 4: Supervision (Article 271-27 - Article 271-30)

Subsection 5: Miscellaneous Provisions (Article 271-31)

Section 4: Miscellaneous Provisions (Article 271-32 and Article 271-33)

Chapter XII: Special Provisions on Low-Cost, Short-Term Insurers

Section 1: General Rules (Article 272 - Article 272-10)

Section 2: Business, etc. (Article 272-11 - Article 272-14)

Section 3: Accounting (Article 272-15 - Article 272-18)

Section 4: Supervision (Article 272-19 - Article 272-28)

Section 5: Portfolio Transfers, etc. of Insurance Contracts (Article 272-29 and Article 272-30)

Section 6: Shareholders

Subsection 1: Low-Cost, Short-Term Insurers' Major Shareholders (Article 272-31 - Article 272-34)

Subsection 2: Low-Cost, Short-Term Insurance Holding Companies (Article 272-35 - Article 272-40)

Subsection 3: Miscellaneous Provisions (Article 272-41 - Article 272-43)

Chapter XIII: Miscellaneous Provisions (Article 273 - Article 274-2)

Part III: The Offering of Insurance

Chapter I: General Rules (Article 275)

Chapter II: Insurance Agents and Affiliated Insurance Companies, etc.

Section 1: Insurance Agents (Article 276 - Article 282)

Section 2: Affiliated Insurance Companies, etc. (Article 283 - Article 285)

Chapter III: Insurance Brokers (Article 286 - Article 293)

Chapter IV: Business (Article 294 - Article 301-2)

Chapter V: Supervision (Article 302 - Article 308)

Part IV: Designated Dispute Resolution Organizations

Chapter I: General Rules (Article 308-2 - Article 308-4)

Chapter II: Business (Article 308-5 - Article 308-17)

Chapter III: Supervision (Article 308-18 - Article 308-24)

Part V: Miscellaneous Provisions (Article 309 - Article 314)

Part VI: Penal Provisions (Article 315 - Article 339)

Supplementary Provisions

Part I General Provisions

(Purpose)

Article 1 The purpose of this Act is, in view of the public nature of the Insurance Business, to protect Policyholders, etc. by ensuring the sound and appropriate business operation of persons conducting Insurance Business and by ensuring fairness in Insurance Solicitation, and thereby to contribute to the stability of the lives of the citizens and to the sound development of the national economy.

(Definitions)

Article 2 (1) The term "Insurance Business" as used in this Act means the business (except business listed in the following items) of underwriting the risks listed in the items of Article 3, paragraph (4) or the items of Article 3, paragraph (5) with insurance for which premiums are received under a contract for the payment of a fixed amount of insurance proceeds in connection with the life or death of an individual, with insurance for which premiums are received under a contract for compensation of damages caused by specific and accidental events, or with any other class of insurance.

(i) Those provided in other Acts.

(ii) The following business:

(a) That which a local government enters into with its residents as the other parties;

(b) That which a company, etc. (meaning a company (including a foreign company; hereinafter the same shall apply in this item) or any other enterprise (excluding any enterprise specified by Cabinet Order)) or an organization comprised of officers or employees (including former officers or employees; hereinafter the same shall apply in this item) enters into with its officers or employees, or their relatives (limited to those specified by Cabinet Order; hereinafter the same shall apply in this item) as the other parties;

(c) That which a labor union enters into with its union members (including former union members) or their relatives as the other parties;

(d) That which one company enters into with another company that belongs to the same group (meaning the group of a company and its Subsidiary Companies) as the other party;

(e) That which a school (meaning a school as prescribed in Article 1 of the School Education Act (Act No. 26 of 1947)) or an organization comprised of its students enters into with its students as the other parties;

(f) That which a regional organization (meaning a regional organization as prescribed in Article 260-2, paragraph (1) of the Local Autonomy Act (Act No. 67 of 1947) that falls under the requirements listed in the items of paragraph (2) of that Article) enters into with its members as the other party; and

(g) Business specified by Cabinet Order as being equivalent to those listed from (a) to (f) inclusive.

(iii) That for which the other parties are persons whose number does not exceed the number specified by Cabinet Order (except those specified by Cabinet Order).

(2) The term "Insurance Company" as used in this Act means a person who conducts Insurance Business under the license from the Prime Minister prescribed in Article 3, paragraph (1).

(3) The term "Life Insurance Company" as used in this Act means an Insurance Company which has obtained the life insurance business license set forth in Article 3, paragraph (4).

(4) The term "Non-Life Insurance Company" as used in this Act means an Insurance Company which has obtained the non-life insurance business license set forth in Article 3, paragraph (5).

(5) The term "Mutual Company" as used in this Act means an association established pursuant to this Act for the purpose of conducting Insurance Business, whose policyholders are the members thereof.

(6) The term "Foreign Insurer" as used in this Act means a person conducting Insurance Business in a foreign state in accordance with the laws and regulations of the foreign state (excluding Insurance Companies).

(7) The term "Foreign Insurance Company, etc." as used in this Act means a Foreign Insurer which has obtained the license from the Prime Minister set forth in Article 185, paragraph (1).

(8) The term "Foreign Life Insurance Company, etc." as used in this Act means a Foreign Insurance Company, etc. which has obtained the foreign life insurance business license set forth in Article 185, paragraph (4).

(9) The term "Foreign Non-Life Insurance Company, etc." as used in this Act means a Foreign Insurance Company, etc. which has obtained the foreign non-life insurance business license set forth in Article 185, paragraph (5).

(10) The term "Foreign Mutual Company" as used in this Act means a foreign juridical person akin to a Mutual Company, or a similar foreign juridical person, which was established in accordance with the laws and regulations of a foreign state.

(11) The term "All Shareholders' Voting Rights, etc." as used in this Act means voting rights of all shareholders or investors (in the case of a Stock Company, excluding voting rights related to shares which do not allow exercising voting rights for any of the matters which may be resolved at a shareholders' meeting, but including voting rights related to shares for which holders are deemed to have voting rights pursuant to the provisions of Article 879, paragraph (3) (Jurisdiction Over a Special Liquidation Case) of the Companies Act (Act No. 86 of 2005); the same shall apply hereinafter in this Article, the following Article, Article 100-2-2, Article 106, Article 107, Article 127, Article 260, Part II, Chapters XI and XII and Article 333).

(12) The terms "Subsidiary Company" and "Subsidiary" as used in this Act mean a company in which another company holds voting rights exceeding 50 percent of All Shareholders' Voting Rights, etc. In such a case, if a first company and one or more of its Subsidiary Companies, or if one or more of the Subsidiary Companies of such first company, own voting rights exceeding 50 percent of All Shareholders' Voting Rights, etc. in a second company, said second company shall be deemed to be the Subsidiary Company of the first company.

(13) The term "Major Shareholder Threshold" as used in this Act means 20 percent (15 percent in the case where a person who satisfies the requirements specified by Cabinet Office Ordinance as one with regard to which a fact exists that is expected to have a material effect on the decisions on the financial and business policies of the company, holds voting rights in the company) of all shareholders' voting rights.

(14) The term "Insurance Company's Major Shareholder" as used in this Act means a person that holds a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold (including a person who holds such number of voting rights in the name of another person (or under a fictitious name); the same shall apply hereinafter), and is established under the authorization set forth in Article 271-10, paragraph (1) or has obtained the authorization prescribed in Article 271-10, paragraph (1) or the proviso to Article 271-10, paragraph (2).

(15) In the case prescribed in paragraph (12) and the preceding paragraph, the voting rights held by a company or a person who holds voting rights shall not include any voting rights from shares or equity interests held in the form of trust property pertaining to a monetary or securities trust (limited to cases where the settlor or the beneficiary may exercise the voting rights or may give instructions to the company or the holder of the voting rights on the exercise of such voting rights) or any of the voting rights specified by Cabinet Office Ordinance, but shall include voting rights from the Shares or equity interests which are held as trust property and whose voting rights the other company or the person holding voting rights in the Insurance Company may, as a settlor or beneficiary, exercise or give instructions on the exercise (excluding those specified by Cabinet Office Ordinance) and any voting rights from the shares which cannot be asserted against the issuer pursuant to the provisions of Article 147, paragraph (1) or Article 148, paragraph (1) of the Act on Transfer of Bonds, Shares, etc. (Act No. 75 of 2001).

(16) The term "Insurance Holding Company" as used in this Act means a Holding Company (meaning a Holding Company as prescribed in Article 9, paragraph (4), item (i) (Holding Company) of the Act on Prohibiting Private Monopolies and Ensuring Fair Trade (Act No. 54 of 1947); the same shall apply hereinafter) whose Subsidiary Companies are Insurance Companies, which has been established under the authorization set forth in Article 271-18, paragraph (1) or which obtains authorization prescribed in Article 271-18, paragraph (1) or the proviso to paragraph (3).

(17) The term "Low-Cost, Short-Term Insurance Business" as used in this Act means, within the Insurance Business, the business of underwriting only insurance that has a term of coverage of within the period of two years or less specified by Cabinet Order, and for which the insurance proceeds do not exceed the amount of ten million yen or less specified by Cabinet Order (except those specified by Cabinet Order).

(18) The term "Low-Cost, Short-Term Insurer" as used in this Act means a person who has obtained the registration set forth in Article 272, paragraph (1) and who conducts Low-Cost, Short-Term Insurance Business.

(19) The term "Life Insurance Agent" as used in this Act means an officer (excluding officers with the authority of representation and company auditors and members of audit committees (hereinafter referred to as "Audit Committee Members"); hereinafter the same shall apply in this Article) or employee of a Life Insurance Company (including Foreign Life Insurance Companies, etc.; hereinafter the same shall apply in this paragraph) or the employee of such a person, and any person delegated by a Life Insurance Company (including an association or foundation that is not a juridical person and has provisions on representative persons or administrators) or the officer or employee of such a person, who acts as an agent or intermediary for the conclusion of an insurance contract on behalf of the Life Insurance Company.

(20) The term "Non-Life Insurance Agent" as used in this Act means an officer or employee of a Non-Life Insurance Company (including Foreign Companies, etc.; the same shall apply in the following paragraph), Non-Life Insurance Representative, or the officer or employee of such a person.

(21) The term "Non-Life Insurance Representative" as used in this Act means a person delegated by a Non-Life Insurance Company, who acts as an agent or intermediary for the conclusion of insurance contracts on its behalf (including an association or foundation that is not a juridical person and has provisions on representative persons or administrators), and who is not an officer or employee of the Non-Life Insurance Company.

(22) The term "Low-Cost, Short-Term Insurance Agent" as used in this Act means an officer or employee of a Low-Cost, Short-Term Insurer, or a person delegated by a Low-Cost, Short-Term Insurer (including an association or foundation that is not a juridical person and has provisions on representative persons or administrators) or an officer or employee of such a person, who acts as an agent or intermediary for the conclusion of insurance contracts on behalf of the Low-Cost, Short-Term Insurer.

(23) The term "Insurance Agent" as used in this Act means a Life Insurance Agent, a Non-Life Insurance Agent, or a Low-Cost, Short-Term Insurance Agent.

(24) The term "Affiliated Insurance Company, etc." as used in this Act means the Insurance Company (including foreign insurance companies, etc.) or the Low-Cost, Short-Term Insurer, which is to be the insurer in the insurance contracts offered by Life Insurance Agents, Non-Life Insurance Agents, or Low-Cost, Short-Term Insurance Agents.

(25) The term "Insurance Broker" as used in this Act means a person who acts as an intermediary for the conclusion of an insurance contract other than the intermediation that Life Insurance Agents, Non-Life Insurance Representatives, and Low-Cost, Short-Term Insurance Agents (including an association or foundation that is not a juridical person and has provisions on representative persons or administrators) carry out on behalf of their Affiliated Insurance Companies, etc.

(26) The term "Insurance Solicitation" as used in this Act means acting as an agent or intermediary for conclusion of an insurance contract.

(27) The term "Method of Public Notice" as used in this Act means the Method of Public Notice prescribed in Article 2, item (xxxiii) (Definitions) of the Companies Act with regard to stock companies and foreign companies that are foreign insurance companies, etc. and the method by which mutual companies and foreign insurance companies, etc. (excluding foreign companies; hereinafter the same shall apply in this paragraph) give public notice with regard to mutual companies and foreign insurance companies, etc. (except cases where provisions of this Act or other Acts prescribe that a method of publication in the official gazette is to be used).

(28) The term "Designated Dispute Resolution Organization" as used in this Act means a person who has obtained the designation under Article 308-2, paragraph (1).

(29) The term "Life Insurance Services" as used in this Act means business conducted by a Life Insurance Company pursuant to the provisions of Article 97, Article 98 and Article 99; business conducted by a Life Insurance Company pursuant to the provisions of any other laws; and Insurance Solicitation in which a Life Insurance Agent engages for said Life Insurance Company.

(30) The term "Non-Life Insurance Services" as used in this Act means business conducted by a Non-Life Insurance Company pursuant to the provisions of Article 97, Article 98 and Article 99 (excluding business for paying Insurance Proceeds, etc. (meaning the Insurance Proceeds, etc. set forth in Article 16-2 (Limitations on Insurance Proceeds, etc. for Damages, etc. Caused by an Absence from Work) of the Automobile Liability Insurance Act (Act No. 97 of 1955)) from liability insurance as set forth in Article 5 (Compulsory Execution of Contracts for Liability Insurance or Mutual Aid Liability Insurance) of that Act (referred to as the "Automobile Damage Liability Insurance Business" in paragraphs (32) and (34))); business conducted by a Non-Life Insurance Company pursuant to the provisions of any other laws; and Insurance Solicitation in which a Non-Life Insurance Agent engages for said Non-Life Insurance Company.

(31) The term "Foreign Life Insurance Services" as used in this Act means business conducted by a Foreign Life Insurance Company, etc. pursuant to the provisions of Article 97, Article 98, Article 99 and Article 100 as applied mutatis mutandis pursuant to Article 199; and Insurance Solicitation in which a Life Insurance Agent engages for said Foreign Life Insurance Company, etc.

(32) The term "Foreign Non-Life Insurance Services" as used in this Act means business conducted by a Foreign Non-Life Insurance Company, etc. pursuant to the provisions of Article 97, Article 98, Article 99 and Article 100 as applied mutatis mutandis pursuant to Article 199 (excluding the Automobile Damage Liability Insurance Business); and Insurance Solicitation in which a Non-Life Insurance Agent engages for said Foreign Non-Life Insurance Company, etc.

(33) The term "Specified Life Insurance Services" as used in this Act means business that the Underwriting Member referred to in Article 219, paragraph (1), of a Specified Juridical Person referred to in said paragraph, which has obtained a specified life insurance business license under paragraph (4) of that Article, conducts pursuant to the provisions of Article 97, Article 98, Article 99 and Article 100 as applied mutatis mutandis pursuant to Article 199; and Insurance Solicitation in which a Life Insurance Agent engages for said Underwriting Member.

(34) The term "Specified Non-Life Insurance Services" as used in this Act means business that the Underwriting Member referred to in Article 219, paragraph (1), of a Specified Juridical Person as set forth in said paragraph, which has obtained a specified non-life insurance business license under paragraph (5) of that Article, conducts pursuant to the provisions of Article 97, Article 98, Article 99 and Article 100 as applied mutatis mutandis pursuant to Article 199 (excluding the Automobile Damage Liability Insurance Business); and Insurance Solicitation in which a Non-Life Insurance Agent engages for said Underwriting Member.

(35) The term "Low-Cost, Short-Term Insurance Services" as used in this Act means business that a Low-Cost, Short-Term Insurer conducts pursuant to the provisions of Article 272-11, paragraph (1); and Insurance Solicitation in which a Low-Cost, Short-Term Insurance Agent engages for said Low-Cost, Short-Term Insurer.

(36) The term "Insurance Solicitation by Insurance Brokers" as used in this Act means the intermediation that Insurance Brokers performs for the conclusion of insurance contracts.

(37) The term "Insurance Services, etc." as used in this Act means Life Insurance Services, Non-Life Insurance Services, Foreign Life Insurance Services, Foreign Non-Life Insurance Services, Specified Life Insurance Services, Specified Non-Life Insurance Services, Low-Cost, Short-Term Insurance Services, and Insurance Solicitation by Insurance Brokers.

(38) The term "Complaint Processing Procedures" as used in this Act means procedures for processing the Complaints Related to Insurance Services, etc. (meaning complaints related to Insurance Services, etc; the same shall apply in Article 308-7, Article 308-8 and Article 308-12).

(39) The term "Dispute Resolution Procedures" as used in this Act means procedures to resolve Disputes Related to Insurance Services, etc. (meaning disputes related to Insurance Services, etc. that can be settled between the parties; the same shall apply in Article 308-7, Article 308-8 and Articles 308-13 to 308-15 inclusive) without using court proceedings.

(40) The term "Dispute Resolution Services, etc." as used in this Act means business for Complaint Processing Procedures and Dispute Resolution Procedures as well as business incidental thereto.

(41) The term "Category of Dispute Resolution Services, etc." as used in this Act means categorization of Dispute Resolution Services, etc. as being for Life Insurance Services, Non-Life Insurance Services, Foreign Life Insurance Services, Foreign Non-Life Insurance Services, Specified Life Insurance Services, Specified Non-Life Insurance Services, Low-Cost, Short-Term Insurance Services, or for Insurance Solicitation by Insurance Brokers.

(42) The term "Basic Contract for the Implementation of Dispute Resolution Procedures" as used in this Act means a contract concluded between a Designated Dispute Resolution Organization and an Insurance Service Provider (meaning an Insurance Company, Foreign Life Insurance Company, etc., Licensed Specified Juridical Person as defined in Article 223, paragraph (1), Low-Cost, Short-Term Insurer, or Insurance Broker; the same shall apply hereinafter) with regard to the implementation of Dispute Resolution Services, etc.

Article 2-2 (1) Any person listed in the following items shall be deemed to be a holder of voting rights in an Insurance Company, etc. (meaning Insurance Companies or Low-Cost, Short-Term Insurers; the same shall apply hereinafter) amounting to the number specified in those items, and the provisions of Part II, Chapter XI, Sections 1 and 2, Chapters XII and XIII, and Parts V and VI shall apply to such person:

(i) An organization that is not a juridical person (limited to an organization specified by Cabinet Office Ordinance as those equivalent to a juridical person): the number of voting rights in the Insurance Company, etc. that the organization holds in its own name;

(ii) A company required to prepare its financial statements and other documents on a consolidated basis pursuant to the provisions of Cabinet Office Ordinance (referred to as "Company Subject to Standards for Consolidation" in the following item), for which the companies and other juridical persons to be consolidated (including organizations that are not juridical persons as listed in the preceding item; and hereinafter referred to as "Companies, etc." in this paragraph) include an Insurance Company, etc. , and that is not consolidated in any other company's financial statements or other documents: the number calculated pursuant to the provisions of Cabinet Office Ordinance as representing the company's substantial influence on the Insurance Company, etc. ;

(iii) Where a Company, etc. (excluding one that is consolidated in the financial statements and other documents of a company that falls under the type of company listed in the preceding item, limited to one that holds voting rights in an Insurance Company, etc.) that is not a Company Subject to Standards for Consolidation belongs to a Group of Companies, etc. (meaning the group of the relevant Company, etc., the group of another Company, etc. in which the relevant Company, etc. holds majority voting rights, or the group of a Company, etc. specified by Cabinet Office Ordinance as a Company, etc. to which the relevant Company, etc. is otherwise closely related; hereinafter the same shall apply in this paragraph), and where the total number of voting rights held in an Insurance Company, etc. by all of the Companies etc. belonging to the Group of Companies, etc (hereinafter referred to as the "Number of Voting Rights Held by the Group of Companies, etc." in this item and the next item) is equal to or exceeds the Major Shareholder Threshold (such Group of Companies, etc. are hereinafter referred to as "Specified Group of Companies, etc." in this item and the next item), a Company, etc. in the Specified Group of Companies, etc. , in which no other Company, etc. holds majority voting rights: the Number of Voting Rights Held by the Group of Companies, etc. in the Specified Group of Companies, etc. ;

(iv) Where no Company, etc. in a Specified Group of Companies, etc. falls under the type of Company, etc. listed in the preceding item, a Company, etc. whose assets in the balance sheet are the largest among the Companies, etc. belonging to the Specified Group of Companies, etc. : the Number of Voting Rights Held by the Group of Companies, etc. in the Specified Group of Companies, etc.

(v) An individual who, by virtue of holding majority voting rights in Companies, etc. that hold voting rights in an Insurance Company, etc. (including any of the persons listed from item (ii) to the preceding item inclusive; hereinafter the same shall apply in this item), is deemed to hold at least 20 percent of all shareholders' voting rights in the Insurance Company, etc. , in terms of the number of voting rights held in the Insurance Company, etc. by such Companies, etc. (for those falling under any of the categories listed in the preceding items, the number specified in the relevant item), taken together (counting in any voting rights held by said individual in the Insurance Company, etc.; the number thus calculated is hereinafter referred to as the "Grand Total Number of Voting Rights" in this item): the Grand Total Number of Voting Rights for the individual.

(vi) A person who holds voting rights in an Insurance Company, etc. (including a person falling under any of the categories listed in the preceding items; hereinafter the same shall apply in this item) who is deemed to hold at least 20 percent of all shareholders' voting rights in the Insurance Company, etc. , in terms of the number of voting rights held by said person in the Insurance Company, etc. (for a person falling under any of the categories listed in the preceding items, the number specified in the relevant item) and the number of voting rights held in the same Insurance Company, etc. by his/her Joint Holder(s) (meaning any other holder(s) of voting rights in the Insurance Company, etc. (including those falling under any of the categories listed in the preceding times) who has (have) agreed with said person on concerted action in acquiring or transferring the shares pertaining to the voting rights, or in exercising the voting and other rights as shareholders of that Insurance Company, etc. (excluding, where the person who holds the voting rights is a company falling under the category listed in item (ii), any Company, etc. to be consolidated in the financial statements and other documents of said company; excluding, where the person who holds the voting rights is a Company, etc. falling under the category prescribed in item (iii) or (iv), any other Company, etc. in the Group of Companies, etc. to which said Company, etc. belongs; and excluding, where the person who holds the voting rights is an individual falling under the category listed in the preceding item, any Company, etc. in which the individual holds majority voting rights; but including any person who has a special relationship as specified by Cabinet Order with the person who holds the voting rights)) (for a Joint Holder falling under any of the categories listed in the preceding items, the number prescribed in the relevant item), taken together (the total number thus calculated is hereinafter referred to as the "Number of Voting Rights Jointly Held" in this item): the Number of Voting Rights Jointly Held.

(vii) A person specified by Cabinet Office Ordinance as being equivalent to a person listed in any of the preceding items: the number calculated pursuant to the provisions of Cabinet Office Ordinance as representing the person's substantive influence on the Insurance Companies, etc.

(2) In the case referred to in the items of the preceding paragraph, the provisions of paragraph (15) of the preceding Article, shall apply mutatis mutandis to voting rights deemed to be held by a person listed in any of items of that paragraph and voting rights held by the holder of the voting rights.

Part II Insurance Company, etc.

Chapter I General Rules

(Licenses)

Article 3 (1) No person may conduct Insurance Business without having first obtained a license from the Prime Minister.

(2) The license set forth in the preceding paragraph consists of two types: a life insurance business license and the non-life insurance business license.

(3) The same person may not obtain both a life insurance business license and the non-life insurance business license.

(4) A life insurance business license shall be a license for business undertakings for underwriting classes of insurance as listed in item (i) or for underwriting classes of insurance as listed in item (ii) or (iii) in addition to the classes listed in item (i).

(i) Insurance for which premiums are received under a contract to pay fixed insurance proceeds in connection with the survival or death of individuals (including the physical state of an individual whom a doctor has diagnosed as having no longer than a certain period of time left to live; hereinafter the same shall apply in this paragraph and the following paragraph) (excluding that pertaining only to death, as under the following sub-item (c)).

(ii) Insurance for which insurance premiums are received under a contract to pay fixed insurance proceeds in connection with the following events or to compensate for damages to the individual caused by such events:

(a) That an individual has contracted a disease;

(b) An individual's condition that was caused by an injury or disease;

(c) An individual's death that was directly caused by an injury;

(d) Cases specified by Cabinet Office Ordinance as those similar to what is listed in (a) or (b) (excluding the death of an individual); and

(e) Treatment (including those specified by Cabinet Office Ordinance as procedures similar to treatment) concerning those listed in (a), (b), or (d).

(iii) Under the classes of insurance listed in item (i) of the following paragraph, reinsurance pertaining to the classes of insurance listed in the preceding two items.

(5) A non-life insurance business license shall be a license for business undertakings for underwriting the classes of insurance as listed in item (i) or for underwriting the classes of insurance as listed in item (ii) or (iii) in addition to the classes listed in item (i).

(i) Insurance for which premiums are received under a contract to compensate for damages caused by specific accidental events (excluding the classes of insurance listed in the following item).

(ii) Classes of insurance listed in item (ii) of the preceding paragraph.

(iii) Among the classes of insurance listed in item (i) of the preceding paragraph, insurance related to the death of an individual between the time he/she leaves his/her residence for overseas travel and the time he/she returns to his/her residence (hereinafter referred to in this item as "Overseas Travel Period") or the death of an individual directly caused by a disease contracted during the Overseas Travel Period.

(6) Sureties from surety bond services (meaning business for guaranteeing the performance of contractual obligations or legal and regulatory obligations and receiving consideration therefor, which is conducted out by setting the amount of consideration, establishing a reserve, and distributing the risks through reinsurance, based on actuarial science, or by using any other methods inherent to insurance) shall be deemed to be the underwriting of the classes of insurance listed in item (i) of the preceding paragraph, and the consideration pertaining to the surety shall be deemed to be the insurance premium pertaining to the classes of insurance set forth in that item.

(License Application Procedures)

Article 4 (1) A person who seeks to obtain a license set forth in paragraph (1) of the preceding Article shall submit to the Prime Minister a written application for the license detailing the following particulars:

(i) Trade name or company name;

(ii) Amount of capital or total amount of funds;

(iii) Name of the director and company auditor (director and executive officer in the case of a company with committees (meaning a Stock Company or Mutual Company with a nominating committee, audit committee, and compensation committee (hereinafter referred to as "Committees" except for Chapter X); the same shall apply hereinafter)).

(iv) Type of license desired; and

(v) Location of the head office or principal office.

(2) The following documents and other documents specified by Cabinet Office Ordinance shall be attached to the written application for a license set forth in the preceding paragraph:

(i) Articles of incorporation;

(ii) Statement of business procedures;

(iii) General policy conditions; and

(iv) Statement of calculation procedures for insurance premiums and policy reserves.

(3) In the case referred to in the preceding paragraph, if the articles of incorporation under item (i) of that paragraph have been created as electromagnetic records (meaning a record that is created by an electronic method, magnetic method or any other method which does not allow recognition by human sensory perception and is specified by Cabinet Office Ordinance as suitable for use in information processing by a computer; the same shall apply hereinafter), the electromagnetic records may be attached in place of the documents.

(4) The documents listed in paragraph (2), items (ii) to (iv) inclusive must detail the particulars specified by Cabinet Office Ordinance.

(Licensing Examination Standards)

Article 5 (1) Whenever an application has been filed for a license set forth in Article 3, paragraph (1), the Prime Minister shall examine whether it conforms to the following standards:

(i) the person who filed the application (hereinafter referred to as the "Applicant" in this paragraph) has a sufficient financial basis to perform the business of an Insurance Company soundly and efficiently, and that said Applicant has favorable prospects for income and expenditures pertaining to said business;

(ii) in light of such particulars as personnel structure, etc. , the Applicant has the knowledge and experience necessary to perform the business of an Insurance Company appropriately, fairly, and efficiently, and that said Applicant sufficient social credibility; and

(iii) the particulars detailed in the documents listed in paragraph (2), items (ii) and (iii) of the preceding Article conform to the following standards:

(a) the contents of the insurance contracts have no risk of lacking in protection for the policyholders, the persons to be insured, beneficiaries of insurance proceeds, and other relevant persons (hereinafter referred to as "Policyholders, etc.");

(b) no specific persons are subject to unfair or discriminatory treatment under the contents of the insurance contracts;

(c) the contents of the insurance contracts pose no risk of encouraging or inducing conduct that is harmful to public policy and good morals;

(d) the rights and obligations of the Policyholders, etc. and other contents of the insurance contracts are specified clearly and simply for the Policyholders, etc. ; and

(e) any other standards specified by Cabinet Office Ordinance.

(iv) the particulars detailed in the documents listed in paragraph (2), item (iv) of the preceding Article conform to the following standards:

(a) the calculation procedures for insurance premiums and policy reserves are reasonable and proper, based on actuarial science;

(b) no specific persons are subject to unfair or discriminatory treatment with regard to insurance premiums; and

(c) any other standards specified by Cabinet Office Ordinance.

(2) If and to the extent that the Prime Minister finds it necessary for the public interest in light of examination standards prescribed in the preceding paragraph, he/she may impose conditions on the license referred to in Article 3, paragraph (1) or change such conditions.

(Administrative Organs)

Article 5-2 An Insurance Company shall be a Stock Company or a Mutual Company and shall have in place the following administrative organs:

(i) Board of directors;

(ii) Board of company auditors or committees; and

(iii) Accounting auditor.

(Amount of Capital or Total Amount of Funds)

Article 6 (1) The amount of capital or total amount of funds (including the reserves for redemption of funds set forth in Article 56) of an Insurance Company shall be equal to or greater than the amount specified by Cabinet Order.

(2) The amount specified by Cabinet Order under the preceding paragraph shall not be less than one billion yen.

(Trade Names and Names)

Article 7 (1) An Insurance Company shall, in its trade name or name, use terms specified by Cabinet Office Ordinance for indicating that it is a Life Insurance Company or a Non-Life Insurance Company.

(2) No person other than an Insurance Company shall use, in its trade name or name, any term which would indicate that the person is an Insurance Company.

(Prohibition on Name Lending)

Article 7-2 An Insurance Company shall not cause another person to conduct Insurance Business in the name of the Insurance Company.

(Prohibition on the Concurrent Holding of Positions by Directors, etc.)

Article 8 (1) Directors engaging in the day-to-day business of an Insurance Company (in the case of a company with committees, executive officer) shall not conduct the day-to-day business of any other company, except for the cases authorized by the Prime Minister.

(2) Whenever an application has been filed for the authorization referred to in the preceding paragraph, the Prime Minister may only grant the authorization if he/she finds that the particulars given in the application are unlikely to interfere with the sound and appropriate business operation of the Insurance Company.

(Eligibility of Directors, etc.)

Article 8-2 (1) Directors engaging in the day-to-day business of an Insurance Company (in the case of a company with committees, executive officer) shall have the knowledge and experience to carry out business management of an Insurance Company appropriately, fairly and efficiently, and shall have sufficient social credibility.

(2) No person who has become subject to the ruling for the commencement of bankruptcy proceedings and who has not been restored his/her rights, or a person who is treated the same as such a person under the laws and regulations of a foreign state, shall be appointed as a director, executive officer or auditor of an Insurance Company.

Chapter II Stock Companies That Conduct Insurance Business and Mutual Companies

Section 1 Special Provisions on Stock Companies That Conduct Insurance Business

(Methods of Public Notice)

Article 9 (1) A Stock Company that conducts Insurance Business (hereinafter referred to as a "Stock Company" in this Section) shall specify any of the following methods as the Method of Public Notice in its articles of incorporation:

(i) Publication in a daily newspaper that publishes the particulars of current events; or

(ii) Electronic Public Notice (for Stock Companies and Foreign Insurance Companies, etc. that are foreign companies, meaning the Electronic Public Notice provided for in Article 2, item (xxxiv) (Definitions) of the Companies Act, and for Mutual Companies and a Foreign Insurance Companies, etc. (that are other than foreign companies), any of those Method of Public Notice meeting the definition provided in that item which allow many and unspecified persons to access the information that is published by electromagnetic means (meaning the electromagnetic means defined in that item); the same shall apply hereinafter).

(2) The provisions of Article 940, paragraph (1) (excluding item (ii)) and paragraph (3) (Period of Public Notice, etc. by Electronic Public Notice) of the Companies Act shall apply mutatis mutandis to the cases where a Stock Company gives public notice under this Act in the form of an electronic public notice. In this case, any other necessary technical changes in interpretation shall be specified by Cabinet Order.

(Offer for Offered Shares, etc.)

Article 10 A Stock Company shall, whenever it gives notice pursuant to the provisions of Article 59, paragraph (1) (Subscription for Shares Solicited at Incorporation), Article 203, paragraph (1) (Applications for Offered Shares) or Article 242, paragraph (1) (Subscription for Offered Share Options) of the Companies Act, give notice of the particulars listed in the items of Article 59, paragraph (1), the items of Article 203, paragraph (1) or the items of Article 242, paragraph (1), respectively, as well as any provisions in its articles of incorporation as set forth in the second sentence of Article 113 (including the cases where it is applied mutatis mutandis pursuant to Article 272-18).

(Reference Date)

Article 11 For the purpose of applying to a Stock Company the provisions of Article 124, paragraph (2) (Record Date) of the Companies Act, the term "three months" in that paragraph shall be deemed to be replaced with "three months (or four months for the right to exercise a voting right at an annual shareholders' meeting and any other right specified by Cabinet Office Ordinance."

(Qualifications, etc. of Directors, etc.)

Article 12 (1) For the purpose of applying the provisions of Article 331, paragraph (1), item (iii) (Qualifications of Directors) of the Companies Act (including the cases where it is applied mutatis mutandis pursuant to Article 335, paragraph (1) (Qualifications of Company Auditors) and Article 402, paragraph (4) (Election of Executive Officers) of that Act) to a Stock Company, the term "this Act" in that item shall be deemed to be replaced with "the Insurance Business Act, this Act."

(2) The provisions of the proviso to Article 331, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 335, paragraph (1) of the Companies Act), Article 332, paragraph (2) (Directors' Terms of Office) (including the cases where it is applied mutatis mutandis pursuant to Article 334, paragraph (1) (Accounting advisors' terms of office), Article 336, paragraph (2) (Company Auditors' Terms of Office), Article 389, paragraph (1) (Limitation of Scope of Audit by Provisions of Articles of Incorporation), and the proviso to Article 402, paragraph (5) of the Companies Act shall not apply to a Stock Company.

(Voting Forms, etc. and Reference Documents for Shareholders' Meetings)

Article 13 For the purpose of applying the provisions of Article 301, paragraph (1) (Delivery of Voting Forms and Reference Documents for a Shareholders' Meeting), Article 432, paragraph (1) (Preparation and Retention of Account Books), Article 435, paragraphs (1) and (2) (Preparation and Retention of Financial Statements, etc.), Article 436, paragraphs (1) and (2) (Audit of Financial Statements, etc.), Article 439 (Special Provisions on Companies with Accounting Auditors), and Article 440, paragraph (1) (Public Notice of Financial Statements) of the Companies Act to a Stock Company, the term "Ordinance of the Ministry of Justice" in said provisions shall be deemed to be replaced with "Cabinet Office Ordinance."

(Exclusion from Application, etc. of Provisions Regarding Requests to Inspect, etc. Account Books)

Article 14 (1) The provisions of Article 433 (Request to Inspect Account Books) of the Companies Act shall not apply to account books of a Stock Company and materials relating thereto.

(2) For the purpose of applying the provisions of Article 442, paragraph (3) (Retention and Inspection of Financial Statements, etc.) of the Companies Act to a Stock Company, the term "and creditors" in that paragraph shall be deemed to be replaced with ", Policyholders, beneficiaries of insurance proceeds, and other creditors and insurers."

(Reserves)

Article 15 Notwithstanding the provisions of Article 445, paragraph (4) (Amounts of Capital and Amounts of Reserves) of the Companies Act, in the case where a Stock Company pays dividends of surplus, it shall record the amount equivalent to one-fifth of the amount of the deduction from surplus as a result of the payments of such dividends of surplus as capital reserves or retained earnings reserves (hereinafter referred to as "Reserves"), pursuant to the provisions of Cabinet Office Ordinance.

(Retention and Inspection, etc. of Documents, etc. Related to a Reduction of Capital, etc.)

Article 16 (1) A Stock Company shall keep at each of its business offices the documents or electromagnetic records in which any proposal for a reduction (excluding the cases where the whole of the amount by which the Reserves are reduced is appropriated to the capital) of the capital or Reserves (hereinafter referred to as "capital, etc." in this Section) and any other particulars specified by Cabinet Office Ordinance are detailed or recorded, for a period ranging from two weeks before the date of the shareholders' meeting related to the resolution on the reduction (or, the date of the board of directors meeting where Article 447, paragraph (3) (Reductions in Amount of Capital) or Article 448, paragraph (3) (Reductions in Amount of Reserves) of the Companies Act Applies) to six months from the Effective Date of the reduction of the capital, etc.; provided, however, that this shall not apply to the cases where only the amount of the Reserves is reduced and all of the following are met:

(i) An annual shareholders' meeting has decided on the particulars listed in the items of Article 448, paragraph (1) inclusive of the Companies Act; and

(ii) The amount set forth in Article 448, paragraph (1), item (i) of the Companies Act does not exceed the amount calculated in the manner specified by Cabinet Office Ordinance as the amount of the deficit as of the date of the annual shareholders' meeting referred to in the preceding item (or, in the cases provided for in the first sentence of Article 439 (Special Provisions on Companies with Accounting Auditors) of that Act, the date of authorization under Article 436, paragraph (3) (Audit of Financial Statements, etc.).

(2) Shareholders, Policyholders and other creditors of a Stock Company may make the following requests at any time during the operating hours of the company; provided, however, that they pay the fees determined by the Stock Company if making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means (meaning any of the methods using an electronic data processing system or any other information and communication technology and specified by Cabinet Office Ordinance; the same shall apply hereinafter) designated by the Stock Company, or to be issued a document detailing such particulars.

(3) For the purpose of applying the provisions of paragraph (1), item (i) to the cases where the articles of incorporation include provisions as set forth in Article 459, paragraph (1) (Provisions in the Articles of Incorporation for the Board of Directors to Determine Dividends of Surplus) of the Companies Act, the term "annual shareholders' meeting" in that item shall be deemed to be replaced with "annual shareholders' meeting or the board of directors under Article 436, paragraph (3) of the Companies Act."

(Objections by the Creditors)

Article 17 (1) Where a Stock Company reduces the amount of its capital, etc. (excluding the cases where the whole of the amount by which the Reserves are reduced is appropriated to the capital), Policyholders or other creditors of such Stock Company may raise their objections to the reduction in the amount of the capital, etc. to the Stock Company; provided, however, that this shall not apply to the cases where only the amount of the Reserves is reduced and all items of paragraph (1) of the preceding Article are met.

(2) Where Policyholders or other creditors of a Stock Company may raise their objections pursuant to the provisions of the preceding paragraph, said Stock Company shall give public notice of the following particulars below in the official gazette and by the Method of Public Notice stipulated in the company's articles of incorporation; provided, however, that the period under item (iii) may not be less than one month:

(i) The details of such reduction in the amount of the capital, etc. ;

(ii) The particulars specified by Cabinet Office Ordinance regarding the financial statements of such Stock Company;

(iii) That Policyholders or other creditors may raise their objections within a certain period of time; and

(iv) In addition to what is listed in the preceding three items, any particulars specified by Cabinet Office Ordinance.

(3) Where Policyholders or other creditors do not raise any objections within the period under item (iii) of the preceding paragraph, such Policyholders or other creditors shall be deemed to have approved such reduction in the amount of the capital, etc.

(4) Where Policyholders or other creditors raise objections within the period under paragraph (2), item (iii), the Stock Company in paragraph (1) shall make payment or provide equivalent security to such policyholders or other creditors, or entrust equivalent property to a trust company, etc. (meaning a trust company as defined in Article 2, paragraph (2) (Definitions) of the Trust Business Act (Act No. 154 of 2004); the same shall apply hereinafter) or financial institution conducting Trust Business (meaning a financial institution approved under Article 1, paragraph (1) (Authorization for Trust Business) of the Act on Provision, etc. of Trust Business by Financial Institutions (Act No. 43 of 1943)); the same shall apply hereinafter) for the purpose of ensuring that such Policyholders or other creditors receive the payment; provided, however, that this shall not apply to the cases where the reduction of the capital, etc. poses no risk of harming the interest of such Policyholders or other creditors.

(5) The provisions of the preceding paragraph shall not apply to the Policyholders or to any rights held by other persons pertaining to insurance contracts (excluding insurance claims that have already arisen at the time of public notice under paragraph (2) due to the occurrence of insured events or for other reasons, and any other right specified by Cabinet Order (referred to as "Insurance Claims, etc." hereinafter in this Section, as well as in Section 3 and Chapter VIII, Sections 2 and 3)).

(6) Any resolution pertaining to the reduction of the capital, etc. under Article 447, paragraph (1) (Reductions in Amount of Capital) or Article 448, paragraph (1) (Reductions in Amount of Reserves) of the Companies Act shall be invalid if the number of Policyholders who have raised their objections within the period set forth in paragraph (2), item (iii) (excluding the holders of policies under which Insurance Claims, etc. had already arisen at the time of public notice under that paragraph (but limited to those policies that would be terminated with the payment of the Insurance Claims, etc.); hereinafter the same shall apply in this paragraph, as well as in paragraph (4) of the following Article) exceeds one fifth of the total number of Policyholders, and the amount specified by Cabinet Office Ordinance as the credits (excluding Insurance Claims, etc.) belonging to the insurance contracts of the Policyholders who have stated such objections exceeds one fifth of the total amount of credits belonging to the Policyholders.

(7) In addition to what is provided for in the preceding paragraphs, any necessary particulars for the application of those provisions shall be specified by Cabinet Order.

(Effectuation)

Article 17-2 (1) The reduction of the amounts listed in the following items takes effect on the dates specified by the items, respectively; provided, however, that this shall not apply to the cases where the procedure under the preceding Article has not been completed, or if a resolution pertaining to the reduction of the capital, etc. under Article 447, paragraph (1) (Reductions in Amount of Capital) or Article 448, paragraph (1) (Reductions in Amount of Reserves) of the Companies Act becomes null or void pursuant to the provisions of Article 17, paragraph (6):

(i) Reduction of the capital: the date specified in Article 447, paragraph (1), item (iii) of the Companies Act; and

(ii) Reduction of Reserves: the date specified in Article 448, paragraph (1), item (iii) of the Companies Act.

(2) A Stock Company may change the dates specified in items (i) and (ii) of the preceding paragraph at any time before the relevant dates.

(3) Notwithstanding the provisions of paragraph (1), any reduction of the capital of a Stock Company shall not be effective unless it is approved by the Prime Minister.

(4) Any reduction of the capital, etc. pursuant to the provisions of the preceding Article (or, pursuant to the provisions of that Article and the preceding paragraph for any reduction of the capital) shall also be effective against the Policyholders who have stated their objections under that Article, paragraph (6) and other persons who hold any right (other than Insurance Claims, etc.) pertaining to insurance contracts involving the Policyholders.

(Special Provisions on Registration)

Article 17-3 (1) The following documents shall be attached to a written application for a registration of change due to a reduction of the capital of a Stock Company, in addition to the documents specified in Articles 18, Article 19 (Documents Attached to Written Applications) and Article 46 (General Rules on Attached Documents) of the Commercial Registration Act (Act No. 125 of 1963):

(i) A document certifying that the public notice under Article 17, paragraph (2) has been given;

(ii) Where any Policyholder or other creditor has stated objection under Article 17, paragraph (4), a document certifying that the company has made payment or provided equivalent security to such Policyholder or other creditor, or has entrusted equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment, or that the reduction of the capital poses no risk of harming the interest of such Policyholder or other creditor; and

(iii) A document certifying that the number of Policyholders who stated their objections under Article 17, paragraph (6) has not exceeded one fifth of the total number of Policyholders as indicated in that paragraph, or a document certifying that the amount specified by Cabinet Office Ordinance as belonging to such Policyholders as indicated in that paragraph has not exceeded one fifth of the total amount as indicated in that paragraph.

(2) The provisions of Article 70 (Registration of Changes Due to a Reduction of Capital) of the Commercial Registration Act shall not apply to a registration of change due to a reduction of the capital of a Stock Company.

(Retention and Inspection, etc. of Documents, etc. Related to a Reduction of Capital, etc.)

Article 17-4 (1) A Stock Company shall keep at each of its business offices the documents or electromagnetic records in which the progress of the procedures provided for in Article 17 and any other particulars specified by Cabinet Office Ordinance as related to the reduction of the capital, etc. are detailed or recorded, for six months from the Effective Date of the reduction of the capital, etc.

(2) Shareholders, Policyholders and other creditors of a Stock Company may make the following requests at any time during the operating hours of the company; provided, however, that they pay the fees determined by the Stock Company if making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means designated by the Stock Company, or to be issued a document detailing such particulars.

(Exclusions from Application, etc.)

Article 17-5 (1) The provisions of Article 449 (Objections by the Creditors) of the Companies Act shall not apply to the reduction of the capital, etc. of a stock company.

(2) For the purpose of applying to a Stock Company the provisions of Article 740, paragraph (1) (Special Provisions on Objection Procedures for Creditors) of the Companies Act, the following text shall be inserted after the term "Article 810" in that paragraph: ", or Article 17, Article 70, Article 165-7 (including the cases where it is applied mutatis mutandis pursuant to Article 165-12 of the Insurance Business Act), Article 165-24 or Article 173-4 of the Insurance Business Act."

(Restrictions, etc. on Dividends of Surplus to Shareholders, etc.)

Article 17-6 (1) Where any amount is credited to assets in the balance sheet pursuant to the provisions of the first sentence of Article 113 (including the cases where it is applied mutatis mutandis pursuant to Article 272-18), a Stock Company shall not take any of the following actions unless such amount has been fully amortized.

(i) Purchase of any share of the Stock Company at a request made under sub-item (c) of item (i) or sub-item (c) of item (ii) of Article 138 (Method for Requests for Authorization of Transfer) of the Companies Act;

(ii) Acquisition of any share of the Stock Company based on a decision under Article 156, paragraph (1) (Determination of Matters Regarding Acquisition of Shares) of the Companies Act (but limited to acquisition of any share of the Stock Company where Article 163 (Acquisition of Shares from Subsidiaries) or Article 165, paragraph (1) (Acquisition of Shares by Market Transactions) of that Act applies);

(iii) Acquisition of any share of the Stock Company based on a decision under Article 157, paragraph (1) (Determination of Acquisition Price) of the Companies Act;

(iv) Acquisition of any share of the Stock Company under Article 173, paragraph (1) (Effectuation) of the Companies Act (excluding the cases where no money or other property is delivered);

(v) Purchase of any share of the Stock Company at a request made under Article 176, paragraph (1) (Demand for Sale) of the Companies Act;

(vi) Purchase of any share of the Stock Company under Article 197, paragraph (3) (Auction of Shares) of the Companies Act;

(vii) Purchase of any share of the Stock Company under Article 234, paragraph (4) (Treatment of Fractions) of the Companies Act (including the cases where it is applied mutatis mutandis pursuant to Article 235, paragraph (2) (Treatment of Fractions) of that Act); and

(viii) Dividend of surplus.

(2) The provisions of Article 463, paragraph (2) (Restrictions on Remedy Over Against Shareholders) of the Companies Act shall apply mutatis mutandis to the cases where a Stock Company, in violation of the provisions of the preceding paragraph, has taken any of the actions listed in the items of that Article. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) For the purpose of applying to a Stock Company the provisions of Article 446, item (vii) (Amounts of Surplus), Article 461, paragraph (2), item (ii), sub-item (a) and item (vi) of that paragraph (Restriction on Dividends) of the Companies Act, the term "Ordinance of the Ministry of Justice" in these items shall be deemed to be replaced with "Cabinet Office Ordinance."

(Particulars Registered in Registering Incorporation)

Article 17-7 (1) In registering the incorporation of a Stock Company, the particulars listed in the items of Article 911, paragraph (3) (Registration of a Stock Company's Incorporation) of the Companies Act shall be registered, along with any provisions in its articles of incorporation in the second sentence of Article 113 (including the cases where it is applied mutatis mutandis pursuant to Article 272-18).

(2) Where any change has occurred in the particulars prescribed in the preceding paragraph, the Stock Company shall complete the registration of such a change within two weeks at the location of its head office.

Section 2 Mutual Companies

Subsection 1 General Rules

(Juridical Personality)

Article 18 A Mutual Company shall be a juridical person.

(Address)

Article 19 The address of a Mutual Company shall be at the location of its principal office.

(Name)

Article 20 A Mutual Company shall use the term "Sogo-Kaisha" (which means "Mutual Company") in its name.

(Mutatis Mutandis Application of the Companies Act)

Article 21 (1) The provisions of Article 8 (Prohibition on the Use of a Name, etc. That is Likely to Be Mistaken for That of a Company) of the Companies Act shall apply mutatis mutandis to the use of a misleading trade name or any other name that might evoke a Mutual Company; the provisions of Article 9 (Liability of a Company That Permits Others to Use Its Trade Name) of that Act shall apply mutatis mutandis to a Mutual Company; the provisions of Part I, Chapter III, Section 1 (Employees of a Company) of that Act shall apply mutatis mutandis to the employees of a Mutual Company; the provisions of Section 2 of said Chapter (excluding Article 18) (Commercial Agents of a Company) shall apply mutatis mutandis to a person acting as an agent or intermediary in transactions for a Mutual Company; and the provisions of Chapter IV of said Part (excluding Article 24) (Non Competition after Assignment of Business) shall apply mutatis mutandis to the cases where a Mutual Company either assigns its business, or takes over any business or operations, respectively. In this case, the term "Company (including a Foreign Company, hereinafter the same shall apply in this Part)" in Article 10 (Managers) of that Act shall be deemed to be replaced with "Mutual Company"; any other necessary technical changes in interpretation shall be specified by Cabinet Order.

(2) The provisions of Part II, Chapter I (excluding Article 501 to 503 inclusive and Article 523) (General Provisions) of the Commercial Code (Act No. 48 of 1899) shall apply mutatis mutandis to the actions taken by a Mutual Company; the provisions of Chapter II of said Part (Buying and Selling) shall apply mutatis mutandis to the buying and selling carried out by a Mutual Company with a merchant or another Mutual Company (including any Foreign Mutual Company); the provisions of Chapter III of said Part (Current Account) shall apply mutatis mutandis to the contracts pertaining to set-offs carried out by a Mutual Company with its usual counter Parties; the provisions of Chapter V of said Part (excluding Article 545) (Brokerage Services) shall apply mutatis mutandis a Mutual Company's actions as an intermediary with regard to commercial transactions between third Parties; and the provisions of Chapter VI of said Part (excluding Article 558) (Commission Agent Services) and Article 593 (Deposits)) of said Code shall apply mutatis mutandis to a Mutual Company, respectively. In this case, any other necessary technical changes in interpretation shall be specified by Cabinet Order.

(3) For the purpose of applying mutatis mutandis the provisions of the Companies Act to the provisions of this Part (excluding the preceding Section, paragraph (1), Article 67-2 and Article 217, paragraph (3)) and Part VI (excluding Article 332-2), the term "electromagnetic record" in the provisions of that Act (including other provisions of that Act as applied mutatis mutandis pursuant to the relevant provisions) shall be deemed to be replaced with "electromagnetic record (meaning the electromagnetic record prescribed in Article 4, paragraph (3) of the Insurance Business Act)"; the term "electromagnetic means" in that Act shall be deemed to be replaced with "electromagnetic means (meaning the electromagnetic means defined in Article 16, paragraph (2), item (iv) of the Insurance Business Act)"; and the term "Ordinance of the Ministry of Justice" in that Act shall be deemed to be replaced with "Cabinet Office Ordinance," respectively.

(4) For the purpose of applying mutatis mutandis the provisions of the Companies Act to the provisions of this Section (excluding paragraph (1), Divisions 1 and 2 of Subsection 4, and Article 67-2) and Chapter VIII, Section 4, the terms "Stock Company" and "Company with a Board of Directors" in the provisions of that Act (including other provisions of that Act as applied mutatis mutandis pursuant to the relevant provisions) shall be deemed to be replaced with "Mutual Company"; the term "shareholder" in that Act shall be deemed to be replaced with "member"; the term "Subsidiary Company" in that Act shall be deemed to be replaced with "de facto Subsidiary Company (meaning a de facto Subsidiary Company as defined in Article 33-2, paragraph (1) of the Insurance Business Act)"; the term "head office" in that Act shall be deemed to be replaced with "principal office"; the term "branch office" in that Act shall be deemed to be replaced with "secondary office"; the term "operating hours" in that Act shall be deemed to be replaced with "business hours"; the term "shareholders' meeting" in that Act shall be deemed to be replaced with "general members' council meeting (or, General Representative Members' Council Meeting, where the company has such a council)"; and the term "annual shareholders' meeting" in that Act shall be deemed to be replaced with "annual general members' council meeting (or the annual General Representative Members' Council Meeting, where the company has such a council)," respectively, unless provided otherwise.

Subsection 2 Incorporation

(Articles of Incorporation)

Article 22 (1) In order to incorporate a Mutual Company, the incorporators shall prepare its articles of incorporation, and all incorporators shall sign or affix the names and seals to it.

(2) The articles of incorporation set forth in the preceding paragraph may be prepared in the form of electromagnetic record. In this case, actions specified by Cabinet Office Ordinance shall be taken in lieu of the signing or the affixing of the names and seals, with respect to the data recorded on such electromagnetic record.

(Particulars Detailed or Recorded in the Articles of Incorporation)

Article 23 (1) The following particulars must be detailed or recorded in the articles of incorporation of a Mutual Company:

(i) Purpose(s);

(ii) Name;

(iii) Location of the principal office;

(iv) Total amount of funds (including the reserves for redemption of funds under Article 56);

(v) Provisions on the rights of fund contributors;

(vi) Method of redemption of funds;

(vii) Method of distributing dividends of surplus;

(viii) Method of Public Notice; and

(ix) Name and address of the incorporator.

(2) The Method of the Public Notice listed in item (viii) of the preceding paragraph shall be either:

(i) Publication in a daily newspaper that publishes the particulars of current events; or

(ii) Electronic public notice.

(3) Provisions in the articles of incorporation to the effect that electronic public notice is to be the Method of Public Notice shall suffice for a Mutual Company to designate the method listed in item (ii) of the preceding paragraph as its Method of Public Notice in its articles of incorporation. In this case, the company may designate the method listed in item (i) of the preceding paragraph as the Method of Public Notice in case the electronic means is not available for public notice due to an accident or for any other compelling reason.

(4) The provisions of Article 30 (Certification of the Articles of Incorporation) of the Companies Act shall apply mutatis mutandis to certification of the articles of incorporation set forth in paragraph (1) of the preceding Article. In this case, the term "Article 33, paragraph (7) or (9), or Article 37, paragraph (1) or (2)" in Article 30, paragraph (2) of that Act shall be deemed to be replaced with "Article 33, paragraph (7) or (9) as applied mutatis mutandis pursuant to Article 24, paragraph (2) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Article 24 (1) Where a Mutual Company is to be incorporated, the following particulars shall not become effective unless they are detailed or recorded in the articles of incorporation referred to in Article 22, paragraph (1):

(i) Property that it is agreed will be assigned to the Mutual Company after the establishment thereof, the value thereof, and the name of the assignor;

(ii) Compensation or any other special benefit which the incorporators are to obtain by establishing the Mutual Company, and the names of such incorporators; and

(iii) Expenses for the incorporation that are borne by the Mutual Company (excluding the fees for the certification of the articles of incorporation and the other expenses specified by Cabinet Office Ordinance as posing no risk of harming the interest of the Mutual Company).

(2) The provisions of Article 33 (Election of an Inspector of Matters Specified or Recorded in the Articles of Incorporation), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to items (ii) and (v)) (Hearing of Statements), Article 871 (Appending of Reasons), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeals), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to investigations by an inspector of any of the particulars listed in the items of the preceding paragraph where the Article of incorporation of a Mutual Company include any entry or record of that particular. In this case, the term "rescind the manifestation of his/her intention to subscribe for the relevant Shares Issued at Incorporation" in Article 33, paragraph (8) of that Act shall be deemed to be replaced with "resign from his/her office"; the term "Article 28, items (i) and (ii)" in paragraph (10), item (i) and the term "Article 28, item (i) or (ii)" in items (ii) and (iii) of that Article shall be deemed to be replaced with "Article 24, paragraph (1), item (i) of the Insurance Business Act," the term "items (i) and (ii) of that Article" in Article 33, paragraph (10), item (i) of that Act shall be deemed to be replaced with "that item," and the terms "Article 38, paragraph (1)" and "item (ii) of paragraph (2) of the same Article" in Article 33, paragraph (11), item (iii) of that Act shall be deemed to be replaced with "Article 30-10, paragraph (1) of the Insurance Business Act" and "that paragraph," respectively; any other necessary technical changes in interpretation shall be specified by Cabinet Order.

Article 25 In addition to the particulars listed in the items of Article 23, paragraph (1) and the items of paragraph (1) of the preceding Article, any other particulars may be detailed or recorded in the articles of incorporation of a Mutual Company, including those which, pursuant to the provisions of this Act, do not take effect unless prescribed in the articles of incorporation, so long as they do not violate the provisions of this Act.

(Retention and Inspection, etc. of the Articles of Incorporation)

Article 26 (1) The incorporators (or the Mutual Company after the establishment of such Mutual Company) shall keep the articles of incorporation at the place designated by the incorporators (or each office of the Mutual Company after the establishment of such Mutual Company).

(2) The incorporators (after the establishment of the Mutual Company, the members and creditors of such Mutual Company) may make the following requests at any time during the hours designated by the incorporators (after the establishment of such Mutual Company, during its business hours); provided, however, that they pay the fees determined by the incorporators (after the establishment of the Mutual Company, such Mutual Company) if making a request falling under item (ii) or (iv):

(i) Where the articles of incorporation have been prepared in writing, a request to inspect them;

(ii) A request for a certified copy or extract of the articles of incorporation referred to in the preceding item;

(iii) Where the articles of incorporation are prepared in the form of electromagnetic record, a request to inspect anything that shows the particulars recorded in such electromagnetic records in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding item by the electromagnetic means designated by the incorporators (after the establishment of the Mutual Company, such Mutual Company), or to be issued a document detailing such particulars.

(3) Where the articles of incorporation are prepared in the form of electromagnetic record, for the purpose of applying the provisions of paragraph (1) to a Mutual Company that adopts the measures specified by Cabinet Office Ordinance as the measures that enable its secondary offices to respond to the requests listed in items (iii) and (iv) of the preceding paragraph, the term "each office" shall be deemed to be replaced with "principal office."

(Solicitation of Funds at Incorporation by a Mutual Company)

Article 27 The incorporators shall solicit contributions to the total amount of funds in incorporating a Mutual Company pursuant to the provisions of this Subsection.

(Offers to Contribute Funds)

Article 28 (1) The incorporators shall notify those who seek to offer contributions of funds in response to the solicitation under the preceding Article of the following particulars:

(i) Date of the articles of incorporation and the name of the notary who certified them;

(ii) Particulars listed in the items of Article 23, paragraph (1) and the items of Article 24, paragraph (1);

(iii) Location of the bank(s), etc. (meaning any bank (meaning a bank as set forth in Article 2, paragraph (1) (Definitions, etc) of the Banking Act (Act No. 59 of 1981), trust company, or any other institution specified by Cabinet Office Ordinance as equivalent to a bank or trust company; hereinafter the same shall apply in this Part) where the payment of contribution of funds is handled; and

(iv) In addition to what is listed in the preceding three items, any other particulars specified by Cabinet Office Ordinance.

(2) A person who offers to contribute funds in response to the solicitation under the preceding Article shall submit to the incorporators a document detailing the following particulars:

(i) Name and address of the person making the offer; and

(ii) Planned amount of funds to contribute.

(3) A person who makes an offer under the preceding paragraph may, in lieu of submitting the document prescribed in that paragraph, and pursuant to the provisions of Cabinet Order, provide the particulars that are required to be included in such document by electromagnetic means, with the consent of the incorporators. In this case, the person who has made the offer shall be deemed to have submitted the document prescribed in that paragraph.

(4) The incorporators shall immediately notify a person who has made an offer under paragraph (2) (hereinafter referred to as "Offeror" in this Subsection) of any changes in the particulars listed in the items of paragraph (1) and of the particulars affected by the changes.

(5) It shall be sufficient for a notice or demand to be sent by the incorporators to an Offeror at the address specified under paragraph (2), item (i) (where the Offeror has notified the incorporators of a different place or contact address for the receipt of notices or demands, to such place or contact address).

(6) The notice or demand under the preceding paragraph shall be deemed to have arrived at the time such notice or demand would normally have arrived.

(Allocation of Funds)

Article 29 (1) The incorporators shall select among the Offerors the persons who must contribute funds, and shall determine the amount of contribution to be allocated to each of them. In this case, the incorporators may reduce the amounts of the contributions of funds to be made by such Offerors from the amount prescribed in paragraph (2), item (ii) of the preceding Article.

(2) The incorporators shall, without delay following any decision under the preceding paragraph, notify the Offerors of the amount of contributions of funds to be made by each of them.

(Special Provisions on Offers to Contribute Funds as Solicited at Incorporation and the Allocation Thereof)

Article 30 The provisions of the preceding two Articles shall not apply to the cases where a person who seeks to contribute funds as solicited at incorporation concludes a contract stipulating the contribution of the total amount of such funds.

(Fund Subscription)

Article 30-2 The persons listed in the following items shall be fund subscribers solicited at incorporation in the amounts specified in the items:

(i) Offerors: the amount of their contributions of funds as allocated thereto by the incorporators; and

(ii) A person who, under a contract as set forth in the previous Article, has subscribed for the total amount of funds solicited at incorporation: the amount of funds subscribed for.

(Payment of Funds)

Article 30-3 (1) Each fund subscriber solicited at incorporation shall, without delay following the receipt of the notice under Article 29, paragraph (2), pay the full amount of money pertaining to his/her contribution of funds solicited at incorporation, at the place of payment listed in Article 28, paragraph (1), item (iii).

(2) The incorporators shall notify any fund subscriber solicited at incorporation who has not made the payment set forth in the preceding paragraph to the effect that such payment is to be made by a date designated thereby.

(3) The notice under the preceding paragraph shall be given no later than two weeks before the date prescribed in that paragraph.

(4) No assignment of the right to become a fund subscriber of a Mutual Company at its incorporation by making a payment pursuant to the provisions of paragraph (1) may be duly asserted against the Mutual Company thus established.

(5) A fund subscriber solicited at incorporation who has received the notice under paragraph (2) shall, if he/she fails to make the payment by the date prescribed in that paragraph, lose his/her right to become a fund contributor of a Mutual Company at incorporation by making such payment.

(Certificate of Deposit for Monies Paid)

Article 30-4 (1) The incorporators may request the bank, etc. that handled the payment pursuant to the provisions of paragraph (1) of the preceding Article to issue a certificate of deposit for monies equivalent to the amount paid in pursuant to the provisions of that paragraph.

(2) The bank, etc. that issued the certificate referred to in the preceding paragraph may not assert against the Mutual Company after its establishment anything detailed on such certificate which differs from the truth or the existence of restrictions regarding the return of money paid in pursuant to the provisions of paragraph (1) of the preceding Article.

(Restrictions, etc. on the Invalidation or Recession of Subscription)

Article 30-5 (1) Fund subscribers solicited at incorporation may make the requests listed in the items of Article 26, paragraph (2) at any time during the hours designated by the incorporators; provided, however, that they shall pay the fees determined by the incorporators if making a request that falls under item (ii) or (iv) of that paragraph.

(2) The proviso to Article 93 (Concealment of True Intent) and the provisions of Article 94, paragraph (1) (Fictitious Manifestation of Intention) of the Civil Code (Act No. 89 of 1896) shall not apply to the manifestation of an intention to offer or allocate contributions of funds solicited at incorporation, and a contract under Article 30.

(3) After the establishment of the Mutual Company, a fund subscriber solicited at incorporation may neither assert the invalidity of his/her contribution of funds solicited at incorporation on the grounds of a mistake, nor may he/she cancel his/her contribution of funds solicited at incorporation on the grounds of fraud or duress.

(Solicitation of Members)

Article 30-6 (1) The incorporators shall, pursuant to the provisions of this Subsection, solicit members in incorporating a Mutual Company.

(2) One hundred or more members shall be required for incorporating a Mutual Company.

(Application for Membership)

Article 30-7 (1) The incorporators shall notify those who are willing to apply for membership in response to the solicitation under paragraph (1) of the preceding Article of the following particulars:

(i) Date of the articles of incorporation and the name(s) of the notary (or notaries) who certified them;

(ii) Particulars listed in the items of Article 23, paragraph (1) and the items of Article 24, paragraph (1);

(iii) Names and addresses of the fund contributors (including the fund subscribers), and the amount of contribution (including the amount to be contributed) by each of the contributors;

(iv) Number of the members to be solicited at incorporation;

(v) Any provisions in the articles of incorporation under the second sentence of Article 113 (including the cases where it is applied mutatis mutandis pursuant to Article 272-18); and

(vi) In addition to what is listed in the preceding five items, any other particular specified by Cabinet Office Ordinance.

(2) A person who applies for membership in response to the solicitation under paragraph (1) of the preceding Article shall prepare and submit to the incorporators two copies of a signed document detailing the following particulars:

(i) Name and address of the person applying for membership; and

(ii) Kind of insurance to which belongs the insurance contract that the person is willing to conclude with the Mutual Company.

(3) A person who files an application under the preceding paragraph may, in lieu of submitting the document prescribed in that paragraph, and pursuant to the provisions of Cabinet Order, provide the particulars that are required to be included in such document by electromagnetic means, with the consent of the incorporators. In this case, the person who has filed the application shall be deemed to have submitted the document prescribed in that paragraph.

(4) The provisions of Article 30-5, paragraph (2) shall apply mutatis mutandis to the manifestation of an intention to apply for membership prior to the establishment of a Mutual Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Organizational Meetings)

Article 30-8 (1) If all payments have been completed for contributions comprising the total amount of funds, and the number of persons who have submitted to the incorporators the documents set forth in paragraph (2) of the preceding Article has reached the number set forth in paragraph (1), item (iv) of the same Article (referred to as "Completion of Payments, etc." in the following paragraph), the incorporators shall, without delay, convene a meeting of prospective members of the Mutual Company (hereinafter referred to as an "Organizational Meeting" in this Section).

(2) After the Completion of Payments, etc. , the incorporators may convene an Organizational Meeting whenever they find it necessary.

(3) An Organizational Meeting may adopt resolutions only on the particulars provided for in this Section, the discontinuation of the incorporation of the Mutual Company, the conclusion of Organizational Meetings, and other particulars regarding the incorporation of the Mutual Company.

(4) Each prospective member shall be entitled to one vote at an Organizational Meeting.

(5) Resolutions at an Organizational Meeting are adopted by a three-quarters majority of the votes, provided that at least half of the prospective members are present.

(6) The provisions of Article 67 (Determination to Convene an Organizational Meeting), Article 68 (excluding items in paragraph (2)) (Notices of Convocation for Organizational Meetings), Articles 70 and Article 71 (Delivery of Voting Forms and Reference Documents for an Organizational Meeting), Article 73, paragraph (4) (Resolutions at Organizational Meetings), Article 74 to 76 inclusive (Proxy Voting, Voting in Writing, and Voting by Electromagnetic Means), Article 78 to 80 inclusive (Accountability of Incorporators, Authority of the Chairperson, and Resolutions for Postponement or Adjournment), and Article 81 (excluding paragraph (4)) (Minutes) of the Companies Act shall apply mutatis mutandis to Organizational Meetings of a Mutual Company; and the provisions of Article 830 (Action for a Declaratory Judgment as to the Absence or Invalidity of a Resolution of a Shareholders' Meeting, etc.), Article 831 (Action to Revoke a Resolution of a Shareholders' Meeting, etc.), Article 834 (limited to the segment pertaining to items (xvi) and (xvii)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836, paragraphs (1) and (3) (Order to Provide Security), Article 837 (Mandatory Consolidation of Oral Arguments, etc.), Article 838 (Persons Affected by a Judgment Being Upheld), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (g)) (Commissioning of Registration by Judicial Decision) of that Act shall apply mutatis mutandis to an action for a declaratory judgment as to the absence or invalidity of a resolution of a Mutual Company's Organizational Meeting and to an action to rescind a resolution of a Mutual Company's Organizational Meeting, respectively. In this case, the terms "Shareholders at Incorporation" in those provisions (excluding Article 67, paragraph (2) and Article 831, paragraph (1) of that Act), and "Shareholders at Incorporation (excluding Shareholders at Incorporation who may not exercise their voting rights on all matters which may be resolved at Organizational Meetings. The same shall apply in the following Article to Article 71 inclusive)" in Article 67, paragraph (2) of that Act shall be deemed to be replaced with "prospective members"; the term "two weeks (or one week if the Stock Company to be incorporated is not a Public Company, except in cases where the particulars listed in item (iii) or item (iv) of paragraph (1) of the preceding Article are decided, (or if a shorter period of time is provided for in the articles of incorporation in cases where the Stock Company to be incorporated is a Stock Company other than a Company with Board of Directors, such shorter period of time))" in Article 68, paragraph (1) of that Act shall be deemed to be replaced with "two weeks"; the term "shall be in writing in the following cases" in Article 68, paragraph (2) shall be deemed to be replaced with "shall be in writing"; the term "Article 27, item (v), or Article 59, paragraph (3), item (i)" in Article 68, paragraph (5) shall be deemed to be replaced with "Article 30-7, paragraph (2), item (i) of the Insurance Business Act"; the term "a Shareholder, etc. (or, in cases where the Shareholders' Meeting, etc. set forth in each such item is an Organizational Meeting or a Class Organizational Meeting, a Shareholder, etc., a Shareholder at Incorporation, a Director at Incorporation, or a Company Auditor at Incorporation" in Article 831, paragraph (1) shall be deemed to be replaced with "members, directors, auditors, or liquidators (or, members, directors, executive officers, or liquidators in a company with Committees), or prospective members, directors at incorporation (meaning directors at incorporation as set forth in Article 30-10, paragraph (1) of the Insurance Business Act; hereinafter the same shall apply in this paragraph) or company auditors at incorporation (meaning the company auditors at incorporation set forth in paragraph (1) of that Article; hereinafter the same shall apply in this paragraph) of a Mutual Company"; and the term "a director, company auditor or liquidator pursuant to the provisions of Article 346(1) (including cases where it is applied mutatis mutandis pursuant to Article 479(4)), and in cases where such resolution is a resolution at an Organizational Meeting or Class Organizational Meeting, this shall include a Director at Incorporation or a Company Auditor at Incorporation" in the same paragraph of the Companies Act shall be deemed to be replaced with "directors, company auditors, liquidators, directors at incorporation or company auditors at incorporation"; and any other necessary technical changes in interpretation shall be specified by Cabinet Order.

(Reporting of the Particulars of Incorporation)

Article 30-9 (1) The incorporators shall report the particulars of the incorporation of a Mutual Company at the Organizational Meeting.

(2) In the cases listed in the following items, the incorporators shall submit or provide at the Organizational Meeting the documents or electromagnetic record in which the particulars specified in the relevant item are detailed or recorded:

(i) Where the articles of incorporation provide for the particulars listed in the items of Article 24, paragraph (1) (excluding the particulars specified in the items of Article 33, paragraph (10) of the Companies Act in the cases listed in such items as applied mutatis mutandis pursuant to Article 24, paragraph (2)): the content of the report set forth in Article 33, paragraph (4) as applied mutatis mutandis pursuant to Article 24, paragraph (2) that is to be submitted by the inspector under Article 33, paragraph (2) as applied mutatis mutandis pursuant to Article 24, paragraph (2); and

(ii) In the case listed in Article 33, paragraph (10), item (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 24, paragraph (2): the content of the verification provided in Article 33, paragraph (10), item (iii) of that Act as applied mutatis mutandis pursuant to Article 24, paragraph (2).

(Election, etc. of Directors at Incorporation, etc.)

Article 30-10 (1) The election of the directors at incorporation (meaning the persons who become directors at the incorporation of a Mutual Company; the same shall apply hereinafter), accounting advisors at incorporation (meaning the persons who become accounting advisors at the incorporation of a Mutual Company; the same shall apply hereinafter), auditors at incorporation (meaning the persons who become company auditors at the incorporation of a Mutual Company; the same shall apply hereinafter) and accounting auditors at incorporation (meaning the persons who become accounting auditors at the incorporation of a Mutual Company; the same shall apply hereinafter) shall be made by a resolution of the Organizational Meeting.

(2) Three or more persons shall be elected as directors at incorporation.

(3) Three or more persons shall be elected as auditors at incorporation where the Mutual Company to be incorporated is a company with a board of company auditors (meaning a Stock Company or Mutual Company which has a board of company auditors; the same shall apply hereinafter).

(4) A person who is precluded from being a director, accounting advisor, company auditor or accounting auditor of the Mutual Company after its establishment, pursuant to the provisions of Article 8-2, paragraph (2), Article 53-2, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 53-5, paragraph (1)), Article 333, paragraph (1) or (3) of the Companies Act as applied mutatis mutandis pursuant to Article 53-4, or Article 337, paragraph (1) or (3) of that Act as applied mutatis mutandis pursuant to Article 53-7 may not be elected as director at incorporation, accounting advisor at incorporation, auditor at incorporation or accounting auditor at incorporation, respectively.

(5) Directors at incorporation, accounting advisors at incorporation, auditors at incorporation or accounting auditors at incorporation who are elected pursuant to the provisions of paragraph (1) may be dismissed by a resolution of the Organizational Meeting at any time prior to the establishment of the Mutual Company.

(6) The provisions of Article 47 (Appointment, etc. of Representative Directors at Incorporation) of the Companies Act shall apply mutatis mutandis to the appointment and removal of the representative director at incorporation (meaning the person who becomes representative director at the incorporation of a Mutual Company; the same shall apply hereinafter) of a Mutual Company (other than a company with Committees); and the provisions of Article 48 (Appointment of Committee Members at Incorporation) of that Act shall apply mutatis mutandis to the appointment of committee members at incorporation (meaning the persons who become committee members at the incorporation of a Mutual Company; the same shall apply hereinafter) of a Mutual Company (limited to a company with Committees), the election of its executive officers at incorporation (meaning the persons who become executive officers at the incorporation of a Mutual Company; the same shall apply hereinafter) and the appointment of its representative executive officer at incorporation (meaning the person who becomes representative executive officer at the incorporation of a Mutual Company; the same shall apply hereinafter), and the removal and dismissal of those persons, respectively. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Investigations by Directors at Incorporation, etc.)

Article 30-11 (1) The directors at incorporation (meaning the directors at incorporation and auditors at incorporation where the Mutual Company to be incorporated is a company with auditors (meaning a Stock Company or Mutual Company that has company auditors; the same shall apply hereinafter)) shall investigate the following particulars without delay after their election:

(i) That, with respect to the properties contributed in kind, etc. in the cases listed in Article 33, paragraph (10), item (i) or (ii) of the Companies Act as applied mutatis mutandis pursuant to Article 24, paragraph (2) (if listed in Article 33, paragraph (10), item (ii) as applied mutatis mutandis pursuant to Article 24, paragraph (2), limited to the securities under such item), the value indicated or recorded in the articles of incorporation is reasonable;

(ii) That the verification provided for in Article 33, paragraph (10), item (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 24, paragraph (2) is appropriate;

(iii) That the funds solicited at the incorporation of the Mutual Company have been fully subscribed for;

(iv) That the payments pursuant to the provisions of Article 30-3, paragraph (1) have been completed;

(v) That the number of prospective members is no less than one hundred (100); and

(vi) That, in addition to the particulars listed in the preceding five items, the procedures for the incorporation of the Mutual Company do not violate applicable laws and regulations or the articles of incorporation.

(2) The provisions of Article 93, paragraphs (2) and (3) (Investigation by Directors at Incorporation), and Article 94 (Special Provisions in Case Directors at Incorporation are Incorporators) of the Companies Act shall apply mutatis mutandis to the investigation under the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Amendments, etc. to the Articles of Incorporation at Incorporation)

Article 30-12 (1) The incorporators may not effect any amendment to the articles of incorporation once the notice under Article 29, paragraph (2) has been given, notwithstanding the provisions of Article 33, paragraph (9) of the Companies Act as applied mutatis mutandis pursuant to Article 24, paragraph (2).

(2) Notwithstanding the provisions of Article 30, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to Article 23, paragraph (4), the articles of incorporation may be amended by a resolution at an Organizational Meeting.

(3) Where an Organizational Meeting has adopted a resolution to amend the articles of incorporation in a manner that modifies any of the particulars listed in the items of Article 24, paragraph (1), the incorporators may resign from their offices, provided that they do so within two weeks of the adoption of the resolution.

(Timing of Establishment)

Article 30-13 (1) A Mutual Company shall be established by registering its incorporation at the location of its principal office.

(2) A person who has submitted the document set forth in Article 30-7, paragraph (2) shall, without delay following the establishment of the Mutual Company and after the Mutual Company has received the license prescribed in Article 3, paragraph (1) or made a registration under Article 272, paragraph (1), apply for an insurance contract with the Mutual Company.

(Mutatis Mutandis Application of the Companies Act)

Article 30-14 The provisions of Part II, Chapter I, Section 8 (excluding Article 52, paragraph (2), item (ii)) (Liability of the Incorporators) and Article 103, paragraph (2) (Liability of the Incorporators) of the Companies Act shall apply mutatis mutandis to the liabilities of incorporators, directors at incorporation or auditors at incorporation of a Mutual Company. In this case, the term "(in this paragraph and in item (ii) excluding those who contributed in kind under Article 28, item (i) or the assignor of the properties under item (ii) of the same Article)" in Article 52, paragraph (2) (Liability for Insufficiency of Value of Properties Contributed) of that Act shall be deemed to be replaced with "(excluding the assignor of the properties under Article 24, paragraph (1), item (i) of the Insurance Business Act)"; the term "Article 28, item (i) or (ii)" in Article 52, paragraph (2), item (i) shall be deemed to be replaced with "Article 24, paragraph (1), item (i) of the Insurance Business Act"; the term "Article 33, paragraph (10), item (iii)" in Article 52, paragraph (3) shall be deemed to be replaced with "Article 33, paragraph (10), item (iii) as applied mutatis mutandis pursuant to Article 24, paragraph (2) of the Insurance Business Act"; and in Article 103, paragraph (2) of that Act, the term "In cases where the solicitation under Article 57, paragraph (1) is carried out," shall be deemed to be deleted, and the terms "such solicitation" and "the preceding paragraph" shall be deemed to be replaced with "solicitation under Article 27 or Article 30-6, paragraph (1) of the Insurance Business Act" and "Article 52, paragraph (2) (excluding item (ii))," respectively; any technical change in interpretation shall be specified by Cabinet Order.

(Actions to Invalidate Incorporation)

Article 30-15 The provisions of Article 828, paragraph (1) (limited to the segment pertaining to item (i)) and paragraph (2) (limited to the segment pertaining to item (i) (Actions to Invalidate Acts Concerning the Organization of a Company), Article 834 (limited to the segment pertaining to item (i)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836, paragraphs (1) and (3) (Order to Provide Security), Articles 837 to 839 inclusive (Mandatory Consolidation of Oral Arguments, etc., Persons Affected by a Judgment Being Upheld, Effects of a Judgment of Invalidity, Revocation or Rescission), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (a)) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action to invalidate the incorporation of a Mutual Company. In this case, the term "a Shareholder, etc. (meaning a shareholder, director or liquidator (or, for a Company with Company Auditors, it means a shareholder, director, company auditor or liquidator, and for a Company with Committees, it means a shareholder, director, executive officer or liquidator); hereinafter the same shall apply in this Section)" in Article 828, paragraph (2), item (i) of that Act shall be deemed to be replaced with "members, directors, company auditors or liquidators (or members, directors, executive officers, or liquidators in a company with Committees)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Subsection 3 Rights and Obligations of Members

(Obligations of Members)

Article 31 The obligations of a member shall be limited to the amount of his/her insurance premium payments.

(Notices and Demands)

Article 32 (1) It shall be sufficient for any notice or demand to an Applicant for membership, or member of a Mutual Company to be sent to the place or contact address of which the Applicant or member has notified the incorporators or Mutual Company; provided, however, that this shall not apply to a notice or demand on any particular pertaining to the insurance relationship.

(2) The notice or demand in the main clause of the preceding paragraph shall be deemed to have arrived at the time when such notice or demand would normally have arrived.

(3) The provisions of the main clause of paragraph (1) and the preceding paragraph shall apply mutatis mutandis to the cases where a document is delivered to the members in giving a notice under Article 299, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1) or where the particulars that are required to be included in such document are provided by electromagnetic means. In this case, the term "to have arrived" in the preceding paragraph shall be deemed to be replaced with "to have been effected by delivery of such document or provision of such particulars by electromagnetic means"; and any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Members List)

Article 32-2 (1) A Mutual Company shall, pursuant to the provisions of Cabinet Office Ordinance, prepare a members list in which it details or records the particulars specified by Cabinet Office Ordinance as particulars required for such members list.

(2) A Mutual Company shall keep its members list at its principal office.

(3) A member or creditor may make the following requests at any time during the business hours of the Mutual Company. In this case, however, the member or creditor shall disclose the reason for his/her request:

(i) Where the members list has been prepared in writing, a request to investigate or copy the written document; or

(ii) Where the members list has been prepared in the form of electromagnetic record, a request to investigate or copy anything that shows the particulars recorded on such electromagnetic record in a manner specified by Cabinet Office Ordinance.

(4) A Mutual Company may not reject any request made under the preceding paragraph unless:

(i) The member or creditor making such request (hereinafter referred to as "Requestor" in this paragraph) does so with any other intent than to investigate in connection with the protection or exercise his/her rights;

(ii) The Requestor makes a request with the intent to preclude the Mutual Company from performing its business or to harm the common interest of the members;

(iii) The Requestor operates, or engages in, any business that is substantially in a competitive relationship with the business of the Mutual Company;

(iv) The Requestor makes a request with the intent to inform a third party of any fact obtained by investigating or copying the members list for material gain; or

(v) The Requestor has, within the past two years, informed a third party of any fact learned by investigating or copying the members list for material gain.

(Reference Date)

Article 33 (1) For the purpose of identifying the persons who shall exercise their rights as members, a Mutual Company may deem the persons who enjoy its membership on a certain date within four months prior to the date of exercising such rights as the members who shall exercise said rights.

(2) A Mutual Company that has fixed the "certain date" set forth in the preceding paragraph shall give public notice of such date no later than two weeks before the date; provided, however, that this shall not apply to the cases where said date is fixed by the articles of incorporation.

(3) The rights set forth in paragraph (1) shall not include any right provided for otherwise in this Act or the rights specified by Cabinet Order such as the right to distribution of surplus.

(Benefits Provided for the Exercise of the Rights of a Member or Representative Member)

Article 33-2 (1) A Mutual Company shall not provide a person with economic benefits for the exercise of his/her member's rights or representative member's rights (limited to benefits given on the account of the Mutual Company or its de facto Subsidiary Company (meaning a juridical person whose management is deemed to be controlled by the Mutual Company pursuant to the provisions of Cabinet Office Ordinance, such as a Stock Company in which the Mutual Company holds the majority of all shareholders' voting rights; the same shall apply hereinafter).

(2) The provisions of Article 120, paragraphs (2) to (5) inclusive (Benefits Provided for the Exercise of a Shareholder's Right) of the Companies Act shall apply mutatis mutandis to the case set forth in the preceding paragraph; and the provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2), Article 849, paragraph (5), and Article 851, paragraph (1), item (i) and paragraph (2)) (Liability Actions, etc. Against a Stock Company) of that Act shall apply mutatis mutandis to an action for the return of benefits under Article 120, paragraph (3) of that Act as applied mutatis mutandis pursuant to this paragraph, respectively. In this case, the term "paragraph (1)" in Article 120, paragraphs (3) and (4) of that Act shall be deemed to be replaced with "Article 33-2, paragraph (1) of the Insurance Business Act"; the term "all shareholders" in Article 120, paragraph (5) shall be deemed to be replaced with "all members"; the term "A shareholder (excluding a Holder of Shares Less than One Unit who is unable to exercise rights pursuant to the provisions of the articles of incorporation) having the shares" in Article 847, paragraph (1) (Liability Actions, etc.) of that Act shall be deemed to be replaced with "person who has been a member"; and the term "shareholder" in Article 847, paragraph (3) to (5) inclusive and (7) shall be deemed to be replaced with "member"; and any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Grounds for Withdrawal)

Article 34 (1) A member shall withdraw his/her membership on any of the following grounds:

(i) Termination of the insurance relationship; or

(ii) Occurrence of an event specified in the articles of incorporation.

(2) In the event of a member's death (excluding where the death falls under the items of the preceding paragraph) or a member being extinguished in a merger, the heir or any other general successor to the member shall assume the rights and obligations of the member.

(3) Where the deceased or extinguished member set forth in the previous paragraph has two or more general successors (meaning general successors by inheritance and limited to those who have not effected the payment of insurance premiums in whole or in part; hereinafter the same shall apply in this paragraph), the general successors shall assume the obligation of effecting the insurance premium payments jointly and severally.

(4) If a deceased or extinguished member has two or more general successors (limited to general successors by inheritance; hereinafter the same shall apply in this paragraph), the general successors may not exercise the member's rights that they have assumed, unless they appoint one person to exercise such rights.

(Claims for a Refund)

Article 35 A withdrawn member may, pursuant to the terms of the articles of incorporation or insurance contract, claim refund of the money associated with his/her rights; provided, however, that this shall not apply to the cases where the withdrawn member is replaced by another person.

(Prescription)

Article 36 The claim for refund set forth in the preceding Article shall lapse by prescription, unless exercised within three years.

Subsection 4 Administrative Organs

Division 1 General Members' Councils

(Voting Rights)

Article 37 Each member shall be entitled to one vote at a general members' council meeting.

(Authority of General Members' Councils)

Article 37-2 The general members' council may resolve only the matters provided for in this Act and the matters provided for in the articles of incorporation.

(Resolutions of a General Members' Council)

Article 37-3 (1) Unless otherwise provided for in this Act or the articles of incorporation, a resolution of the general members' council is adopted by the majority vote of the attending members at a session where at least half of the members are present.

(2) A general members' council may not adopt a resolution on any other matter than matters listed in Article 298, paragraph (1), item (ii) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1); provided, however, that this shall not apply to a request for the appointment of a person set forth in Article 316, paragraph (1) or (2) of that Act as applied mutatis mutandis pursuant to Article 41, paragraph (1), or for the attendance of the accounting auditors set forth in Article 398, paragraph (2) of that Act as applied mutatis mutandis pursuant to Article 53-23.

(Right to Demand the Convocation of the General Members' Council)

Article 38 (1) Members having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period) not less than three thousandths (or in cases where lesser proportion is prescribed in the articles of incorporation, such proportion) of the total membership, or three thousand (or in cases where smaller number is prescribed in the articles of incorporation) or more members of a Mutual Company (or, in mutual Low-Cost, Short-Term Insurers specified by Cabinet Order (hereinafter referred to as a "Specified Mutual Company"), members equal to or exceeding the number specified by Cabinet Order), who have been members of the Mutual Company may,,by showing matters which are a purpose for a general members' council meeting (limited to matters on which the general members' council may adopt a resolution; hereinafter the same shall apply in this Division) and the reason for convocation, demand that the directors call a general members' council meeting.

(2) In the following cases, members who have made a demand pursuant to the provisions of the preceding paragraph may call a general members' council with the permission of the court.

(i) In cases where the convocation procedures are not effected without delay after the demand pursuant to the provisions of the preceding paragraph; or

(ii) In cases where the notice for the convocation of the general members' council which designates, as the date of the general members' council meeting, a date falling within the period of eight weeks (or in cases where any period less than that is provided for in the articles of incorporation, such period) from the day of a demand pursuant to the provisions of the preceding paragraph, is not given.

(3) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 871 (Appending of Reasons), Article 874 (limited to the segment pertaining to item (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the previous paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Right to Submit Proposals)

Article 39 (1) Members having consecutively for the preceding six months or more (or, in cases where shorter period is prescribed in the articles of incorporation, such period) no less than one thousandth (or in cases where lesser proportion is prescribed in the articles of incorporation, such proportion) of the total membership, or one thousand (or in case where smaller number is prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number prescribed by Cabinet Order), who have been members of the Mutual Company, may demand that the directors include certain items (limited to matters on which the general members' council may adopt a resolution) in the agenda for a general members' council meeting. In this case, the demand shall be submitted no later than eight weeks (or any shorter period prescribed by the articles of incorporation) prior to the date of the general members' council meeting.

(2) A member may submit a proposal at a general members' council meeting with respect to any agenda item for the meeting; provided, however, that this shall not apply to the cases where the proposal is in violation of any applicable law or regulation or the articles of incorporation, or where three years have not elapsed since the day on which an essentially identical proposal was not approved by at least one tenth (1/10) of the votes of the members (or any smaller proportion prescribed by the articles of incorporation) of the general members' council.

(3) Members representing at least one thousandth (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or one thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), may demand the directors that, no later than eight weeks (or any shorter period prescribed by the articles of incorporation) prior to the date of the general members' council, members be notified of the outline of any proposal to be submitted by said member with respect to an agenda item of the meeting (or, where a notice is to be given under Article 299, paragraph (2) (excluding the items (i) and (ii)) or (3) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1), such outline be described in, or recorded on, that notice); provided, however, that this shall not apply to the cases where the proposal is in violation of any applicable law or regulation or the articles of incorporation, or where three years have not elapsed since the day on which an essentially identical proposal was not approved by at least one tenth of the membership (or any smaller proportion prescribed by the articles of incorporation) in the general members' council.

(Right to Demand the Election of Inspector for a General Members' Council)

Article 40 (1) A Mutual Company or members representing at least one thousandth (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or one thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in paragraph (1) of the preceding Article), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), may file a petition with the court, prior to a session of the general members' council, for the election of an inspector to be retained to investigate the convocation procedures and method of resolution of such a council.

(2) The provisions of Article 306, paragraphs (3) to (7) inclusive (Election of Inspector on Calling Procedures of Shareholders' Meeting) and Article 307 (Determination by The Court of the Calling of Shareholders' Meeting) of the Companies Act shall apply mutatis mutandis to the preceding paragraph. In this case, the term "preceding two paragraphs" in Article 306, paragraph (3) of that Act shall be deemed to be replaced with "Article 40, paragraph (1) of the Insurance Business Act"; the term "Stock Company" in Article 306, paragraphs (4) and (7) shall be deemed to be replaced with "Mutual Company"; the term "shareholders' meeting" in Article 307 of that Act shall be deemed to be replaced with "general members' council meeting"; and the term "shareholders" in Article 307, paragraph (1), item (ii) of that Act shall be deemed to be replaced with "members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of Reasons), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the preceding two paragraphs. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Mutatis Mutandis Application of the Companies Act)

Article 41 (1) The provisions of Article 296 (Convocation of Shareholders' Meetings), Article 298 (excluding the proviso to paragraphs (2) and (3)) (Determination to Convoke a Shareholders' Meeting), Article 299 (excluding items of paragraph (2)) (Notice of Convocation for a Shareholders' Meeting), Article 300 to 302 inclusive (Omission of Convocation Procedures, Delivery of Voting Forms and Reference Documents for a Shareholders' Meeting), Article 310 to 312 inclusive (Proxy Voting, Voting in Writing, Voting by Electromagnetic Means), Article 314 to 317 inclusive (Accountability of Directors, etc., Authority of Chairperson, Investigation of Materials Submitted to the Shareholders' Meeting, Resolution for Postponement or Adjournment), Article 318 (excluding paragraph (5)) (Minutes), Article 319 (excluding paragraph (4)) (Omission of Resolution of Shareholders' Meetings) and Article 320 (Omission of Reports to Shareholders' Meetings) of the Companies Act shall apply mutatis mutandis to the general members' council of a Mutual Company. In this case, the terms "Stock Company" and "company with board of directors" in those provisions shall be deemed to be replaced with "Mutual Company"; the term "head office" in those provisions shall be deemed to be replaced with "principal office"; the term "operating hours" in those provisions shall be deemed to be replaced with "business hours"; the term "Annual shareholders' meeting" in Article 296, paragraph (1) of that Act shall be deemed to be replaced with "Annual general members' council meeting"; the term "paragraph (4) of the following Article" in Article 296, paragraph (3), and the term "paragraph (4) of the preceding Article" in Article 298, paragraphs (1) and (4) of that Act shall be deemed to be replaced with "Article 38, paragraph (2) and Article 50, paragraph (2) of the Insurance Business Act"; the term "(excluding shareholders who may not exercise their voting rights on all matters which may be resolved at a shareholders' meetings. The same shall apply in the following Article to Article 302 inclusive)" in Article 298, paragraph (2) shall be deemed to be deleted; the term "two weeks (or one week if the Stock Company is not a Public Company, except in cases where the particulars listed in paragraph (1), item (iii) or (iv) of the preceding Article are decided, (or if a shorter period of time is provided for in the articles of incorporation in cases where the Stock Company is a Stock Company other than the Company with Board of Directors, such shorter period of time))" in Article 299, paragraph (1) of that Act shall be deemed to be replaced with "two weeks"; the term "in the following cases" in Article 299, paragraph (2) shall be deemed to be deleted; the term "Reference Documents for a Shareholders' Meeting" in Articles 301 and 302 of that Act shall be deemed to be replaced with "reference documents for a general members' council meeting"; the term "shareholders (excluding the shareholders who may not exercise their voting rights on all matters which may be resolved at the shareholders' meeting under the preceding paragraph. The same shall apply hereinafter in paragraph (4) of the following Article and in Article 312, paragraph (5))" in Article 310, paragraph (7) of that Act shall be deemed to be replaced with "members"; the term "Article 297" in Article 316, paragraph (2) of that Act shall be deemed to be replaced with "Article 38 of the Insurance Business Act"; the term "branch offices" in Article 318, paragraph (3) of that Act shall be deemed to be replaced with "secondary offices"; and the term "all shareholders (limited to those who may exercise their voting rights with respect to such matter)" in Article 319, paragraph (1) of that Act shall be deemed to be replaced with "all members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(2) The provisions of Article 830 (Action for a Declaratory Judgment as to the Absence or Invalidity of a Resolution of a Shareholders' Meeting, etc.), Article 831 (Action to Revoke a Resolution of a Shareholders' Meeting, etc.), Article 834 (limited to the segment pertaining to items (xvi) and (xvii)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836, paragraphs (1) and (3) (Order to Provide Security), Article 837 (Mandatory Consolidation of Oral Arguments, etc.), Article 838 (Persons Affected by a Judgment Being Upheld), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (g)) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action for a declaratory judgment as to the absence or invalidity of a resolution of the general members' council of a Mutual Company and to an action to rescind a resolution of the general members' council of a Mutual Company. In this case, the term "a Shareholder, etc. (or, in cases where the Shareholders' Meeting, etc. set forth in each such item is an Organizational Meeting or a Class Organizational Meeting, a Shareholder, etc., a Shareholder at Incorporation, a Director at Incorporation or a Company Auditor at Incorporation)" in Article 831, paragraph (1) of that Act shall be deemed to be replaced with "members, directors, company auditors or liquidators of a Mutual Company (or, in a company with Committees, members, directors, executive officers or liquidators)"; and the term "a director, company auditor or liquidator pursuant to the provisions of Article 346(1) (including cases where it is applied mutatis mutandis pursuant to Article 479(4)), and in cases where such resolution is the resolution of an Organizational Meeting or Class Organizational Meeting, it shall include a Director at Incorporation or a Company Auditor at Incorporation)" in Article 831, paragraph (1) of that Act shall be deemed to be replaced with "directors, company auditors or liquidators (including a person who assumes the rights and obligations of a director, company auditor or liquidator pursuant to the provisions of Article 53-12, paragraph (1) of the Insurance Business Act (including the cases where it is applied mutatis mutandis pursuant to Article 180-5, paragraph (4) of that Act)"; any other necessary technical replacement of terms shall be specified by Cabinet Order.

Division 2 General Representative Members' Councils

(Establishment of a General Representative Members' Council and Representative Members' Terms of Office, etc.)

Article 42 (1) A Mutual Company may, pursuant to the provisions of its articles of incorporation, establish an administrative organ composed of the representative members elected from among its members (hereinafter referred to as "General Representative Members' Council"), in lieu of a general members' council.

(2) The articles of incorporation set forth in the preceding paragraph shall specify the particulars prescribed by Cabinet Office Ordinance, such as the number, term of office, and method of election of representative members.

(3) The term of office of a representative member shall not exceed four years.

(Voting Rights of Representative Members)

Article 43 Each representative member shall be entitled to one vote at General Representative Members' Council Meetings.

(Authority of the General Representative Members' Council)

Article 43-2 (1) The General Representative Members' Council may resolve only the matters provided for in this Act and the matters provided for in the articles of incorporation.

(2) Any provisions in the articles of incorporation to the effect that the directors, executive officers, board of directors or any other organ than the general members' council or General Representative Members' Council may decide on a matter which requires a resolution of the general members' council (or General Representative Members' Council, where the company has such a council) pursuant to the provisions of this Act shall be null and void.

(Method of Adopting, etc. Resolutions of the General Representative Members' Council)

Article 44 (1) Unless otherwise provided for in this Act or the articles of incorporation, a resolution at a General Representative Members' Council Meeting is adopted by the majority vote of the attending representative members at a session where at least half of the representative members are present; provided, however, the number of the general representatives required to attend the General Representative Members' Council Meeting shall not be less than one-third of the total number of general representatives, notwithstanding the provisions of the articles of incorporation.

(2) The General Representative Members' Council may not adopt a resolution on any other matter than matters listed in Article 298, paragraph (1), item (ii) of the Companies Act as applied mutatis mutandis pursuant to Article 49, paragraph (1); provided, however, that this shall not apply to electing the person set forth in Article 316, paragraph (1) or (2) of that Act as applied mutatis mutandis pursuant to Article 49, paragraph (1), or to requiring the attendance of accounting auditors under Article 398, paragraph (2) of that Act as applied mutatis mutandis pursuant to Article 53-23.

(Proxy Voting)

Article 44-2 (1) A representative member may exercise his/her voting right by proxy, where the articles of incorporation include any provisions to that effect. In this case, such representative member shall designate only one proxy, and the representative member or proxy shall submit to the Mutual Company a document certifying the authority of proxy.

(2) Any proxy under the preceding paragraph shall be a representative member.

(3) The provisions of Article 310 (excluding paragraphs (1) and (5)) (Proxy Voting) of the Companies Act shall apply mutatis mutandis to paragraph (1). In this case, the term "preceding paragraph" in paragraph (2) of that Article and the term "paragraph (1)" in paragraph (3) of that Article shall be deemed to be replaced with "Article 44-2, paragraph (1) of the Insurance Business Act"; the term "Stock Company" in Article 310, paragraphs (3), (4), (6) and (7) shall be deemed to be replaced with "Mutual Company"; the term "Article 299, paragraph (3)" in Article 310, paragraph (4) shall be deemed to be replaced with "Article 299, paragraph (3) as applied mutatis mutandis pursuant to Article 49, paragraph (1) of the Insurance Business Act"; and the term "shareholders (excluding the shareholders who may not exercise their voting rights on all matters which may be resolved at the shareholders' meeting under the preceding paragraph. The same shall apply in paragraph (4) of the following Article and in Article 312, paragraph (5))" in Article 310, paragraph (7) shall be deemed to be replaced with "members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Right to Demand Convocation of a General Representative Members' Council Meeting)

Article 45 (1) Members representing at least three thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or three thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 38, paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), or nine (or any smaller number prescribed by the articles of incorporation) or more representative members may demand the directors to convene a General Representative Members' Council Meeting by indicating the proposed agenda for the meeting (limited to matters on which the General Representative Members' Council may adopt a resolution; hereinafter the same shall apply in this Division) and the reason for the convocation.

(2) In the following cases, a member or a representative member who made a demand pursuant to the provisions of the preceding paragraph may convene the General Representative Members' Council Meeting with the permission of the court.

(i) Where the convening procedure is not effected without delay after a demand pursuant to the provisions of the preceding paragraph; or

(ii) Where a notice for the convocation of a General Representative Members' Council Meeting which designates, as the date of the General Representative Members' Council Meeting, a date falling within the period of eight weeks (or any shorter period prescribed by the articles of incorporation) from the day of a demand pursuant to the provisions of the preceding paragraph, is not given.

(3) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 871 (Appending of the Reason), Article 874 (limited to the segment pertaining to item (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Right to Submit Proposals)

Article 46 (1) Members representing at least one thousandth (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or one thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 39, paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), or three (or any smaller number prescribed by the articles of incorporation) or more representative members may demand the directors to include certain items (limited to matters on which the General Representative Members' Council may adopt a resolution) in the agenda for the General Representative Members' Council Meeting. In this case, the demand shall be submitted no later than eight weeks (or any shorter period prescribed by the articles of incorporation) prior to the date of the General Representative Members' Council Meeting.

(2) Representative members may submit a proposal at a General Representative Members' Council Meeting with respect to any agenda item for the meeting; provided, however, that this shall not apply to the cases where the proposal is in violation of any applicable law or regulation or the articles of incorporation, or where three years have not elapsed since the day on which an essentially identical proposal was not approved at a General Representative Members' Council Meeting by at least one tenth of the representative members (or any smaller proportion prescribed by the articles of incorporation).

(3) Members representing at least one thousandth (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or one thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 39, paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), or three (or any smaller number prescribed by the articles of incorporation) or more representative members may demand the directors that, no later than eight weeks (or any shorter period prescribed by the articles of incorporation) prior to the date of the General Representative Members' Council Meeting, members be notified of the outline of any proposal to be submitted with respect to an agenda item of the meeting (or, where a notice is to be given under Article 299, paragraph (2) (excluding the items) or (3) of the Companies Act as applied mutatis mutandis pursuant to Article 49, paragraph (1), such outline be described in, or recorded on, that notice); provided, however, that this shall not apply to the cases where the proposal is in violation of any applicable law or regulation or the articles of incorporation, or where three years have not elapsed since the day on which an essentially identical proposal was not approved at a General Representative Members' Council Meeting by at least one tenth of the representative members (or any smaller proportion prescribed by the articles of incorporation).

(Right to Demand the Election of an Inspector for a General Representative Members' Council Meeting)

Article 47 (1) A Mutual Company, members representing at least one thousandth (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or one thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 39, paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), or three (or any smaller number prescribed by the articles of incorporation) or more representative members may file a petition with the court, prior to the session of the General Representative Members' Council, for the election of an inspector who shall be retained to investigate the convocation procedures and method of resolution related to such a council.

(2) The provisions of Article 306, paragraphs (3) to (7) inclusive (Election of an Inspector for the Convocation Procedures of a Shareholders' Meeting) and Article 307 (Determination by the Court of the Calling of Shareholders' Meeting) of the Companies Act shall apply mutatis mutandis to the preceding paragraph. In this case, the term "preceding two paragraphs" in Article 306, paragraph (3) of that Act shall be deemed to be replaced with "Article 40, paragraph (1) of the Insurance Business Act"; the term "Stock Company" in Article 306, paragraphs (4) and (7) shall be deemed to be replaced with "Mutual Company"; the term "shareholders' meeting" in Article 307 of that Act shall be deemed to be replaced with "General Representative Members' Council Meeting"; and the term "shareholders" in paragraph (1), item (ii) of that Article shall be deemed to be replaced with "representative members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the preceding two paragraphs. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Delivery, etc. of Reference Documents and Voting Forms for a General Representative Members' Council Meeting)

Article 48 (1) The directors (or, where members or representative members convene the General Representative Members' Council pursuant to the provisions of Article 45, paragraph (2), such members or representative members; hereinafter the same shall apply in this Article) shall, when dispatching a notice under Article 299, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article with relevant changes in interpretation, give the representative members documents detailing particulars of reference with regard to the exercise of voting rights pursuant to the provisions of Cabinet Office Ordinance.

(2) If the directors dispatch notices by electromagnetic means referred to in Article 299, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article with relevant changes in interpretation to the representative members who have given consent under the same paragraph, the directors may, in lieu of giving the documents pursuant to the provisions of the preceding paragraph, provide the particulars that are required to be included in such documents by electromagnetic means; provided, however, that, if requested by any representative member, they shall give these documents to such representative member.

(3) Where the matters listed in Article 298, paragraph (1), item (iii) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article with relevant changes in interpretation are decided, the directors shall, when giving a notice under Article 299, paragraph (1) of that Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article, provide the representative members with documents to be used by the representative members to exercise their voting rights (hereinafter referred to as "Voting Forms" in this Article) pursuant to the provisions of Cabinet Office Ordinance.

(4) If the directors give a notice by electromagnetic means referred to in Article 299, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article with relevant changes in interpretation to the representative members who have given consent under the same paragraph, the directors may, in lieu of giving out Voting Forms pursuant to the provisions of the preceding paragraph, provide the particulars that are required to be included in such documents by electromagnetic means; provided, however, that, if requested by any representative member, the directors shall give their voting form to such representative member.

(5) Where the matters listed in Article 298, paragraph (1), item (iv) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article with relevant changes in interpretation are decided, the directors shall, when giving a notice to the representative members who have given consent under Article 299, paragraph (3) of the Companies Act by electromagnetic means referred to in the same paragraph, provide the representative members with the particulars that are required to be included in the Voting Forms by such electromagnetic means pursuant to the provisions of Cabinet Office Ordinance.

(6) In the cases prescribed in the preceding paragraph, if any representative member who has not given consent under Article 299, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to paragraph (1) of the following Article requests, no later than one week prior to the date of the General Representative Members' Council Meeting, to be provided the particulars that are required to be included in the Voting Forms by electromagnetic means, the directors shall, immediately, provide such particulars to such representative member by electromagnetic means pursuant to the provisions of Cabinet Office Ordinance.

(Mutatis Mutandis Application of the Companies Act)

Article 49 (1) The provisions of Article 296 (Convocation of Shareholders' Meetings), Article 298 (excluding paragraphs (2) and (3)) (Determination to Convoke a Shareholders' Meeting), Article 299 (excluding paragraph (2), items (i) and (ii)) (Notice of Calling of Shareholders' Meetings), Article 300 (Omission of Calling Procedures), Article 311 (Voting in Writing), Article 312 (Voting by Electromagnetic Method), Article 314 to 317 inclusive (Accountability of Directors, etc., Authority of Chairperson, Investigation of Materials Submitted to a Shareholders' Meeting, Resolution for Postponement or Adjournment) and Article 318 (excluding paragraph (5)) (Minutes) of the Companies Act shall apply mutatis mutandis to the General Representative Members' Council of a Mutual Company. In this case, the terms "Stock Company" and "company with board of directors" in those provisions shall be deemed to be replaced with "Mutual Company"; the term "head office" in those provisions shall be deemed to be replaced with "principal office"; the term "operating hours" in those provisions shall be deemed to be replaced with "business hours"; the term "shareholder" in those provisions (excluding Article 298, paragraph (1) (excluding items), Article 298, paragraph (4), Article 311, paragraph (4), Article 312, paragraph (5), Article 314 and Article 318, paragraph (4)) shall be deemed to be replaced with "representative member"; the term "Annual shareholders' meeting" in Article 296, paragraph (1) of that Act shall be deemed to be replaced with "Annual General Representative Members' Council Meeting"; the term "paragraph (4) of the following Article" in Article 296, paragraph (3) shall be deemed to be replaced with "Article 45, paragraph (2) of the Insurance Business Act"; the terms "paragraph (4) of the preceding Article" and "shareholder" in Article 298, paragraph (1) (excluding the items) and Article 298, paragraph (4) of that Act shall be deemed to be replaced with "Article 45, paragraph (2) of the Insurance Business Act" and "member or representative member," respectively; the term "two weeks (or one week if the Stock Company is not a Public Company, except in cases where the particulars listed in items (iii) and (iv), paragraph (1) of the preceding Article are decided, (or if a shorter period of time is provided for in the articles of incorporation in cases where the Stock Company is a Stock Company other than the Company with Board of Directors, such shorter period of time))" in Article 299, paragraph (1) of that Act shall be deemed to be replaced with "two weeks"; the term "in the following cases" in Article 299, paragraph (2) shall be deemed to be deleted; the term "shareholders" in Article 311, paragraph (4) and Article 312, paragraph (5) of that Act shall be deemed to be replaced with "members"; the terms "by the shareholders" and "common interest of the shareholders" in Article 314 of that Act shall be deemed to be replaced with "by the representative members" and "common interest of the representative members," respectively; the term "Article 297" in Article 316, paragraph (2) of that Act shall be deemed to be replaced with "Article 45 of the Insurance Business Act"; the term "branch offices" in Article 318, paragraph (3) of that Act shall be deemed to be replaced with "secondary offices"; and the term "shareholders" in Article 318, paragraph (4) of that Act shall be deemed to be replaced with "members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(2) The provisions of Article 830 (Action for a Declaratory Judgment as to the Absence or Invalidity of a Resolution of a Shareholders' Meeting, etc.), Article 831 (Action to Revoke a Resolution of a Shareholders' Meeting, etc.), Article 834 (limited to the segment pertaining to items (xvi) and (xvii)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836, paragraphs (1) and (3) (Order to Provide Security), Article 837 (Mandatory Consolidation of Oral Arguments, etc.), Article 838 (Persons Affected by a Judgment Being Upheld), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (g)) (Commissioning of Registration by Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action for a declaratory judgment as to the absence or invalidity of a resolution of the General Representative Members' Council of a Mutual Company and to an action to revoke a resolution of the General Representative Members' Council of a Mutual Company. In this case, the term "a Shareholder, etc. (or, in cases where the Shareholders' Meeting, etc. set forth respectively in each such item is an Organizational Meeting or a Class Organizational Meetings, a Shareholder, etc., a Shareholder at Incorporation, a Director at Incorporation or a Company Auditor at Incorporation)" in Article 831, paragraph (1) of that Act shall be deemed to be replaced with "members, directors, company auditors or liquidators of a Mutual Company (or, in a company with Committees, members, directors, executive officers or liquidators)"; and the term "a director, company auditor or liquidator pursuant to the provisions of Article 346(1) (including cases where it is applied mutatis mutandis pursuant to Article 479(4)), and in cases where such resolution is a resolution of an Organizational Meeting or Class Organizational Meeting, it shall include a Director at Incorporation or a Company Auditor at Incorporation)" in the same Article shall be deemed to be replaced with "directors, company auditors or liquidators (including a person who assumes the rights and obligations of a director, executive officer or liquidator pursuant to the provisions of Article 53-12, paragraph (1) of the Insurance Business Act (including the cases where it is applied mutatis mutandis pursuant to Article 180-5, paragraph (4) of that Act)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Right to Demand the Convocation of a General Members' Council)

Article 50 (1) Even where a Mutual Company has established a General Representative Members' Council pursuant to the provisions of Article 42, paragraph (1), members representing at least five thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation), may demand the directors to convene the general members' council with the purpose of abolishing the General Representative Members' Council or modifying any particular prescribed by the articles of incorporation pursuant to the provisions of paragraph (2) in that Article, by indicating the proposed agenda for the meeting and the reason for the convocation.

(2) In the following cases, the members who made a demand pursuant to the provisions of the preceding paragraph may convene a general members' council meeting with the permission of the court.

(i) Where the convening procedure is not effected without delay after a demand pursuant to the provisions of the preceding paragraph; or

(ii) Where a notice for the convocation of the general members' council which designates, as the date of the general members' council meeting, a date falling within the period of eight weeks (or any shorter period provided for in the articles of incorporation) from the day of a demand pursuant to the provisions of the preceding paragraph, is not given.

(3) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 871 (Appending of the Reason), Article 874 (limited to the segment pertaining to item (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) Where a resolution modifying any particular prescribed by the articles of incorporation pursuant to the provisions of Article 42, paragraph (2) is adopted by the general members' council convened pursuant to the provisions of the preceding three paragraphs, the General Representative Members' Council may not adopt a resolution amending the articles of incorporation regarding the particular thus modified, unless three years have elapsed since the day on which the amendment of the articles of incorporation came into effect regarding such particular.

Division 3 Establishment of Administrative Organs Other than General Members' Councils and General Representative Members' Councils, etc.

(Administrative Organs)

Article 51 (1) A Mutual Company shall have in place the following administrative organs:

(i) Board of directors; and

(ii) Company auditors or Committees.

(2) A Mutual Company may have accounting advisors, a board of company auditors or accounting auditors pursuant to the provisions of the articles of incorporation.

(3) A Mutual Company that is an Insurance Company and a Mutual Company listed in Article 272-4, paragraph (1), item (i), sub-item (b) (other than a company with Committees) shall have in place a board of company auditors and an accounting auditor.

(4) A company with Committees shall not have any company auditors.

(5) A company with Committees shall have accounting auditors.

(Election)

Article 52 (1) Officers (meaning directors, accounting advisors and company auditors; hereinafter the same shall apply in this Division) and accounting auditors shall be elected by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council; hereinafter the same shall apply in this Subsection).

(2) In adopting a resolution under the preceding paragraph, substitute officers may be elected as prescribed by Cabinet Office Ordinance as a precaution against cases in which there are no officers in office or where there is a vacancy which results in a shortfall in the number of officers prescribed by this Act or the articles of incorporation.

(Relationship between a Mutual Company and Its Officers, etc.)

Article 53 The relationship held by a Mutual Company with its officers and accounting auditors shall be governed by the provisions on mandate.

(Qualifications, etc. of Directors)

Article 53-2 (1) None of the following persons may act as a director:

(i) A juridical person;

(ii) An adult ward, a person under curatorship, or a person who is similarly treated under foreign laws and regulations;

(iii) A person who has been sentenced to a penalty for having violated the provisions of this Act, the Companies Act or the Act on General Incorporated Associations and General Incorporated Foundations (Act No. 48 of 2006), or for having committed: a crime under Article 197 (Crime of False Statements in a Securities Registration Report, etc.), Article 197-2, items (i) to (x)-3 inclusive or (xiii) (Crime of Solicitation of Securities by Unregistered Agents. etc.), Article 198, item (viii) (Crime of Violating a Court's Restrictive Injunction or Order for Suspension), Article 199 (Crime of Refusal to Report, etc.), Article 200, items (i) to (xii)-2 inclusive or item (xxi) (Crime of Non-Submission of a Correction Report, etc.), Article 203, paragraph (3) (Bribery of an Officer or Staff Member of a Financial Instruments Transaction Business Operators, etc.) or Article 205, items (i) to (vi) inclusive, item (xvi) or (xx) (Crime of Non-Submission of Written Notice, etc. on Specified Solicitation, etc.) of the Financial Instruments and Exchange Act (Act No. 25 of 1948); a crime under Article 549 (Crime of Fraudulent Reorganization), Article 550 (Crime of Providing a Specific Creditor, etc. with Collateral, etc.), Article 552 to 555 inclusive (Crime of Refusal to Report or Undergo Investigation, etc., Crime of Destruction of Materials on the Status of Business and Property, etc., Crime of Obstruction of the Duties of a Bankruptcy Trustee, etc.) or Article 557 (Bribery) of the Act on Special Measures, etc. concerning Reorganization Proceedings for Financial Institutions, etc. (Act No. 95 of 1996); a crime under Article 255 (Crime of Fraudulent Rehabilitation), Article 256 (Crime of Providing a Specific Creditor, etc. with Collateral), Article 258 to 260 inclusive (Crime of Refusal to Report or Undergo Investigation, etc., Crime of Destruction of Materials on the Status of Business and Property, etc., Crime of Obstruction of the Duties of a Supervising Commissioner, etc.) or Article 262 (Bribery) of the Civil Rehabilitation Act (Act No. 225 of 1999); a crime under Article 65 (Crime of Refusal to Report or Be Investigated, etc.), Article 66 (Crime of Obstruction of the Duties of a Recognition Trustee, etc.), Article 68 (Bribery) or Article 69 (Crime of Disposal or Export of Property without Permission) of the Act on Recognition of and Assistance for Foreign Insolvency Proceedings (Act No. 129 of 2000); a crime under Article 265 (Crime of Fraudulent Bankruptcy), Article 266 (Crime of Providing a Specific Creditor, etc. with Collateral), Article 268 to 272 inclusive (Crime of Refusal to Explain or Be Investigated, etc., Crime of Refusing to Disclose Important Property, etc., Crime of Destruction of Materials on the Status of Business and Property, etc., Crime of Refusal to Explain at a Hearing, etc., Crime of Obstruction of the Duties of a Bankruptcy Trustee, etc.), or Article 274 (Bribery) of the Bankruptcy Act (Act No. 75 of 2004), for whom two years have not elapsed since the day on which the execution of the sentence was completed or the sentence ceased to apply; or

(iv) A person who was sentenced to imprisonment or severer punishment for violating the provisions of laws and regulations other than those provided for in the preceding item, and who has not completed the execution of the sentence or to whom the sentence still applies (excluding persons for whom the execution of the sentence is suspended).

(2) A director of a company with Committees may not concurrently serve as a manager or any other employee of such company with Committees.

(3) A Mutual Company shall have three or more directors.

(Directors' Terms of Office)

Article 53-3 (1) Directors' terms of office shall continue until the conclusion of the annual general members' council meeting (or annual General Representative Members' Council Meeting, where the company has such meeting; hereinafter the same shall apply in this Subsection) for the last business year which ends within two years from the time of their election; provided, however, that this shall not preclude the shortening of the their terms of office by the articles of incorporation or by a resolution of the general members' council.

(2) For the purpose of applying the provisions of the preceding paragraph to the directors of a company with Committees, the term "two years" in that paragraph shall be deemed to be replaced with "one year."

(3) The provisions of Article 332, paragraph (4) (excluding item (iii)) (Directors' terms of office) of the Companies Act shall apply mutatis mutandis to the terms of office of the directors of a Mutual Company. In this case, the term "preceding three paragraphs" in that paragraph shall be deemed to be replaced with "Article 53-3, paragraphs (1) and (2) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Qualifications, etc. of Accounting Advisors)

Article 53-4 The provisions of Article 333 (Qualifications of Accounting Advisors) and Article 334 (excluding Article 332, paragraph (2) and Article 332, paragraph (4), item (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 334, paragraph (1)) (Accounting Advisors' Terms of Office) of the Companies Act shall apply mutatis mutandis to the accounting advisors of a Mutual Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Qualifications, etc. of Company Auditors)

Article 53-5 (1) The provisions of Article 53-2, paragraph (1) shall apply mutatis mutandis to the company auditors of a Mutual Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(2) A company auditor of a Mutual Company may concurrently serve neither as a director, or manager or any other employee of that Mutual Company or its de facto Subsidiary Company, nor as an executive officer or accounting advisor (or, where the accounting advisor is a juridical person, any member of that juridical person who is supposed to carry out relevant duties) of such de facto Subsidiary Company.

(3) A company with a board of company auditors shall have three or more company auditors, of whom half or more shall be outside company auditors (meaning those company auditors of a Mutual Company who have never been a director, executive officer or accounting advisor (or, if the accounting advisor is a juridical person, any member of that juridical person who is supposed to carry out relevant duties), or manager or any other employee of the Mutual Company or its de facto Subsidiary Company; the same shall apply hereinafter).

(Company Auditors' Terms of Office)

Article 53-6 (1) Company auditors' terms of office shall continue until the conclusion of the annual general members' council meeting for the last business year which ends within four years from the time of their election.

(2) The provisions of Article 336, paragraphs (3) and (4) (limited to the segment pertaining to item (ii) (Company Auditors' Terms of Office) of the Companies Act shall apply mutatis mutandis to the company auditors of a Mutual Company. In this case, the term "paragraph (1)" in paragraph (3) of that Article shall be deemed to be replaced with "Article 53-6, paragraph (1) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Qualifications, etc. of Accounting Auditors)

Article 53-7 The provisions of Article 337 (Qualifications of Accounting Auditors) and Article 338, paragraphs (1) and (2) (Accounting Auditors' Terms of Office) of the Companies Act shall apply mutatis mutandis to the accounting auditors of a Mutual Company; and the provisions of Article 338, paragraph (3) of that Act shall apply mutatis mutandis to the accounting auditors of a Mutual Company other than that set forth in Article 53-14, paragraph (5), respectively. In this case, the term "Article 435, paragraph (2)" in Article 337, paragraph (3), item (i) of that Act shall be deemed to be replaced with "Article 54-3, paragraph (2) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Dismissal)

Article 53-8 (1) Officers and accounting auditors of a Mutual Company may be dismissed at any time by a resolution of the general members' council.

(2) A person dismissed pursuant to the provisions of the preceding paragraph shall be entitled to demand from the Mutual Company compensation for damages arising from the dismissal, except in cases where there are justifiable reasons for such dismissal.

(Dismissal of Accounting Auditors by Company Auditors, etc.)

Article 53-9 (1) The company auditor may dismiss an accounting auditor if that accounting auditor:

(i) has breached his/her professional obligations or neglected his/her duties.

(ii) has engaged in conduct unbecoming of an accounting auditor; or

(iii) has difficulty in, or is unable to cope with the execution of his/her duties due to a mental or physical disorder.

(2) Any dismissal pursuant to the provisions of the preceding paragraph shall be effected by the unanimous consent of all company auditors, where the company has two or more company auditors.

(3) If an accounting auditor is dismissed pursuant to the provisions of paragraph (1), the company auditor (or, where the company has two or more company auditors, a company auditor appointed from among themselves) shall report such fact and the reason for dismissal to the first general members' council meeting convened after the dismissal.

(4) For the purpose of applying the provisions of the preceding three paragraphs to a company with a board of company auditors, the term "company auditor" in paragraph (1) shall be deemed to be replaced with "board of company auditors"; the term "company auditors, where the company has two or more company auditors" in paragraph (2) shall be deemed to be replaced with "company auditors"; and the term "company auditor (or, where the company has two or more company auditors, a company auditor appointed from among themselves)" in the preceding paragraph shall be deemed to be replaced with "company auditor appointed by the board of company auditors."

(5) For the purpose of applying the provisions of paragraphs (1) to (3) inclusive to a company with Committees, the term "company auditor" in paragraph (1) shall be deemed to be replaced with "audit committee"; the term "company auditors, where the company has two or more company auditors" in paragraph (2) shall be deemed to be replaced with "Audit Committee Members"; and the term "company auditor (or, where the company has two or more company auditors, a company auditor appointed from among themselves)" in paragraph (3) shall be deemed to be replaced with "audit committee member appointed by the committee."

(Method of Adopting Resolution for Election, etc. of Officers)

Article 53-10 (1) Notwithstanding the provisions of Article 37, paragraph (1) and Article 44, paragraph (1), resolutions of the general members' council for the election or dismissal of officers are adopted by the majority vote (or any larger proportion prescribed by the articles of incorporation) of the attending members (or, where the company has a General Representative Members' Council, representative members) at a session where at least half (or any other proportion larger than one third prescribed by the articles of incorporation) of the members (or representative members) are present.

(2) Notwithstanding the provisions of the preceding paragraph, in case where dismissal of a company auditor is to be resolved, it shall be adopted by a resolution set forth in Article 62, paragraph (2).

(Mutatis Mutandis Application of the Companies Act)

Article 53-11 The provisions of Article 343 (Consent of Company Auditors to Election of Company Auditors) (excluding paragraph (4)) of the Companies Act shall apply mutatis mutandis to the election of the company auditors of a Mutual Company; the provisions of Article 344 (Consent of Company Auditors to the Election of Accounting Auditors) of that Act shall apply mutatis mutandis to the election of the accounting auditors of a Mutual Company; and the provisions of Article 345 (Statement of Opinions on Election of Accounting Advisors, etc.) of that Act shall apply mutatis mutandis to the statement of opinions regarding the election or dismissal, or resignation of the accounting advisors, company auditors or accounting auditors of a Mutual Company. In this case, the term "Article 298, paragraph (1), item (i)" in paragraph (3) of that Article shall be deemed to be replaced with "Article 298, paragraph (1), item (i) as applied mutatis mutandis pursuant to Article 41, paragraph (1) or Article 49, paragraph (1) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Measures for Vacancies Arising among the Officers, etc.)

Article 53-12 (1) Where a Mutual Company has no officers or where any vacancy arises which results in a shortfall in the number of officers prescribed by this Act or the articles of incorporation, an officer who retired from office due to the expiration of his/her term of office or resignation shall retain the rights and obligations of an officer until a newly elected officer (including a person who is to temporarily carry out the duties of an officer under the following paragraph) assumes his/her office.

(2) In the case prescribed in the preceding paragraph, the court may, if it finds necessary, appoint a person to temporarily carry out the duties of an officer, in response to a petition filed by any interested party.

(3) The court may, if it has appointed a person to temporarily carry out the duties of an officer under the preceding paragraph, specify the amount of the remuneration to be paid thereto by the Mutual Company.

(4) Where a Mutual Company has no accounting auditors or where any vacancy arises which results in a shortfall in the number of accounting auditors prescribed by the articles of incorporation, and an accounting auditor is not elected without delay, the company auditor shall appoint a person to temporarily carry out the duties of an accounting auditor.

(5) The provisions of Article 337 of the Companies Act as applied mutatis mutandis pursuant to Article 53-7 and the provisions of Article 53-9 shall apply mutatis mutandis to the person who is to temporarily carry out the duties of an accounting auditor under the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(6) For the purpose of applying the provisions of paragraph (4) to a company with a board of company auditors, the term "company auditor" in that paragraph shall be deemed to be replaced with "board of company auditors."

(7) For the purpose of applying the provisions of paragraph (4) to a company with Committees, the term "company auditor" in that paragraph shall be deemed to be replaced with "audit committee."

(8) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act), Article 876 (Supreme Court Rules) and Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (a) and (c)) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to paragraphs (2) and (3). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 4 Directors and Boards of Directors

(Authority of the Directors)

Article 53-13 (1) The following directors execute the business of the Mutual Company:

(i) A representative director; and

(ii) A director other than a representative director, who is appointed by resolution of the board of directors as the director who is to execute the business of the Mutual Company.

(2) The directors listed in the items of the preceding paragraph shall report the status of the execution of his/her duties to the board of directors at least once in every three months.

(Authority, etc. of the Board of Directors)

Article 53-14 (1) A board of directors shall be composed of all of the directors.

(2) The board of directors shall carry out the following duties:

(i) Deciding the execution of the Mutual Company's business;

(ii) Supervising the execution of duties by directors; and

(iii) Appointing and removing representative directors.

(3) The board of directors shall appoint the representative director from among the directors.

(4) The board of directors may not delegate decisions on the execution of important business, such as the following particulars, to directors. :

(i) The appropriation of and acceptance of assignment of important assets;

(ii) Borrowing in a significant large amounts;

(iii) The election and dismissal of an important employee including a manager;

(iv) The establishment, modification or abolition of secondary offices and other important structures;

(v) The particulars specified by Cabinet Office Ordinance as important particulars of the solicitation of persons who subscribe for bonds (meaning the bonds as defined in that Article), such as the particular listed in Article 61, item (i);

(vi) Revision of a system necessary for ensuring that the execution of duties by directors complies with laws and regulations and the articles of incorporation, and of any other system specified by Cabinet Office Ordinance as a system necessary for ensuring propriety in the business of a Mutual Company; or

(vii) Exemption from liability under Article 53-33, paragraph (1) pursuant to the provisions of the articles of incorporation under Article 426, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-36 with relevant changes in interpretation.

(5) In a Mutual Company that is an Insurance Company and a Mutual Company listed in Article 272-4, paragraph (1), item (i), sub-item (b), the board of directors shall decide on the particulars listed in item (vi) of the preceding paragraph.

(Mutatis Mutandis Application of the Companies Act)

Article 53-15 The provisions of Article 350 (Liability for Damages Caused by Directors' Actions), Article 352 (Authority of Persons Who Perform Duties on Behalf of Directors), Article 354 to 357 inclusive (Apparent Representative Directors, Duty of Loyalty, Restrictions on Competition and Conflict of Interest Transactions, Director's Duty to Report), Article 358 (excluding paragraph (1), item (ii)) (Election of Inspector of Execution of Operation), Article 359 (Decision by the Court to Call a Shareholders' Meeting), Article 360, paragraph (1) (Prohibition of Directors' Actions by the Shareholders), Article 361 (Remuneration for Directors) and Article 365, paragraph (2) (Restrictions on Competition and Transactions with Companies with a Board of Directors) of the Companies Act shall apply mutatis mutandis to the directors of a Mutual Company; the provisions of Article 349, paragraphs (4) and (5) (Representatives of Companies), and Article 351 (Measures When Vacancy Arises in the Office of a Representative Director) of that Act shall apply mutatis mutandis to the representative director of a Mutual Company; the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of Reasons), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to items (i) and (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to the directors or representative director of a Mutual Company; and the provisions of Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (a) and (c)) (Commissioning of Registration by Judicial Decision) of that Act shall apply mutatis mutandis to the representative director of a Mutual Company. In this case, the term "shareholders' meeting" in Article 356, paragraph (1) of that Act shall be deemed to be replaced with "board of directors"; the term "shareholders" in Article 358, paragraph (1) of that Act shall be deemed to be replaced with "members or representative members"; the term "Shareholders who hold not less than 3 percent of the voting rights (or, in cases where a lesser proportion is prescribed in the articles of incorporation, such proportion) of all shareholders (excluding shareholders who may not exercise their voting rights on all matters which may be resolved at shareholders' meetings)" in Article 358, paragraph (1), item (i) of that Act shall be deemed to be replaced with "Members representing at least three thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or three thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 38, paragraph (1) of the Insurance Business Act), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation) (or, where the company has a General Representative Members' Council, those persons, or nine (or any other smaller number prescribed by the articles of incorporation) or more representative members)"; the term "shareholders" in Article 358, paragraph (7) shall be deemed to be replaced with "members or representative members"; the term "shareholders" in Article 359, paragraph (1), item (ii) of that Act shall be deemed to be replaced with "members (or, where the company has a General Representative Members' Council, representative members)"; and the terms "shareholders having the shares" and "substantial detriment" in Article 360, paragraph (1) of that Act shall be deemed to be replaced with "persons who have been members" and "irreparable damages," respectively; any other necessary technical change in interpretation shall be prescribed by Cabinet Order.

(Management of Boards of Directors)

Article 53-16 The provisions of Part II, Chapter IV, Section 5, Subsection 2 (excluding Article 367, and Article 371, paragraphs (3) and (5)) (Operations) of the Companies Act shall apply mutatis mutandis to the management of the board of directors of a Mutual Company; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (i)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to an application for permission under Article 371, paragraph (2) or (4) of that Act as applied mutatis mutandis pursuant to this Article with relevant changes in interpretation. In this case, the terms "shareholder" and "at any time during the business hours of a Stock Company" in Article 371, paragraph (2) (Minutes) of that Act shall be deemed to be replaced with "member (or, where the company has a General Representative Members' Council, such representative members)" and "with the permission of the court," respectively; the term "Parent Company or Subsidiary" in Article 371, paragraph (6) shall be deemed to be replaced with "de facto Subsidiary Company as defined in Article 33-2, paragraph (1) of the Insurance Business Act"; the term "Article 363, paragraph (2)" in Article 372, paragraphs (2) and (3) (Omission of Report to Board of Directors) of that Act shall be deemed to be replaced with "Article 53-13, paragraph (2) of the Insurance Business Act"; the term "Article 417, paragraph (4)" in Article 372, paragraph (3) shall be deemed to be replaced with "Article 417, paragraph (4) as applied mutatis mutandis pursuant to Article 53-30, paragraph (5) of the Insurance Business Act"; and the term "Article 362, paragraph (4), items (i) and (ii)" in Article 373, paragraphs (1) and (2) (Resolution of board of directors by special directors) of that Act shall be deemed to be replaced with "Article 53-14, paragraph (4), items (i) and (ii) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 5 Accounting Advisors

(Authority, etc. of Accounting Advisors)

Article 53-17 The provisions of Part II, Chapter IV, Section 6 (excluding Article 378, paragraph (1), item (ii) and Article 378, paragraph (3)) (Accounting Advisors) of the Companies Act shall apply mutatis mutandis to the accounting advisors of a Mutual Company. In this case, the terms "Article 435, paragraph (2)," "supplementary schedules thereof, the Temporary Financial Statements (referring to the Temporary Financial Statements provided for in Article 441, paragraph (1), hereinafter the same shall apply in this Chapter)" and "Article 444, paragraph (1)" in Article 374, paragraph (1) (Authority of Accounting Advisors) of that Act shall be deemed to be replaced with "Article 54-3, paragraph (2) of the Insurance Business Act," "annex detailed statement thereto" and "Article 54-10, paragraph (1) of the Insurance Business Act," respectively; the term "Article 333, paragraph (3), item (ii) or (iii)" in Article 374, paragraph (5) shall be deemed to be replaced with "Article 333, paragraph (3), item (ii) or (iii) as applied mutatis mutandis pursuant to Article 53-4 of the Insurance Business Act"; the term "Article 436, paragraph (3), Article 441, paragraph (3) or Article 444, paragraph (5)" in Article 376, paragraph (1) (Attendance at board of directors meetings) of that Act shall be deemed to be replaced with "Article 54-4, paragraph (3) or Article 54-10, paragraph (5) of the Insurance Business Act"; the term "Article 368, paragraph (2)" in Article 376, paragraph (3) of that Act shall be deemed to be replaced with "Article 368, paragraph (2) as applied mutatis mutandis pursuant to Article 53-16 of the Insurance Business Act"; and the term "Article 319, paragraph (1)" in Article 378, paragraph (1), item (i) (Retention and Inspection of Financial Statements by Accounting Advisors) of that Act shall be deemed to be replaced with "Article 319, paragraph (1) as applied mutatis mutandis pursuant to Article 41, paragraph (1) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 6 Company Auditors and Board of Company Auditors

(Authority of Company Auditors)

Article 53-18 (1) The company auditors shall audit the execution of duties by directors (or, in a company with accounting advisors (meaning a Stock Company or Mutual Company which has accounting advisors; the same shall apply hereinafter), directors and accounting advisors). In this case, the company auditors shall prepare audit reports pursuant to the provisions of Cabinet Office Ordinance.

(2) The company auditors may at any time request a business report from the directors and accounting advisors, and managers and other employees, or investigate the status of the business and property of the Mutual Company.

(3) The company auditors may, if it is necessary for the purpose of carrying out their duties, request a business report from a de facto Subsidiary Company of the Mutual Company, or investigate the status of the business and property of such de facto Subsidiary Company.

(4) The de facto Subsidiary Company set forth in the preceding paragraph may refuse to submit reports or undergo investigation as set forth in that paragraph if there are justifiable grounds for it to do so.

(Authority of Board of Company Auditors)

Article 53-19 (1) The board of company auditors shall be composed of all company auditors.

(2) The board of company auditors shall carry out the following duties; provided, however, that a decision under item (iii) may not preclude company auditors from exercising their authority:

(i) Preparing audit reports;

(ii) Appointing and removing full-time company auditors; and

(iii) Deciding on the particulars of the execution of the duties of company auditors, such as audit policy and method of investigating the status of the business and property of the company with board of company auditors.

(3) The board of company auditors shall appoint full-time company auditors from among the company auditors.

(4) The company auditors shall report the status of the execution of their duties to the board of company auditors whenever the latter so requests.

(Mutatis Mutandis Application of the Companies Act)

Article 53-20 The provisions of Article 382 to 388 inclusive (Duty to Report to Directors, Duty to Attend Board of Directors Meetings, Duty to Report to Shareholders' Meetings, Prohibition of Directors' Actions by the Company Auditors, Representation of Company in Actions between Company with Auditors and Directors, Remunerations for Company Auditors, Requests for Indemnification of Expenses) of the Companies Act shall apply mutatis mutandis to the company auditors of a Mutual Company. In this case, the term "Article 373, paragraph (1)" in Article 383, paragraph (1) of that Act shall be deemed to be replaced with "Article 373, paragraph (1) as applied mutatis mutandis pursuant to Article 53-16 of the Insurance Business Act"; the term "proviso to Article 366, paragraph (1)" in Article 383, paragraph (2) shall be deemed to be replaced with "proviso to Article 366, paragraph (1) as applied mutatis mutandis pursuant to Article 53-16 of the Insurance Business Act"; the term "Article 373, paragraph (2)" in Article 383, paragraph (4) shall be deemed to be replaced with "Article 373, paragraph (2) as applied mutatis mutandis pursuant to Article 53-16 of the Insurance Business Act"; the term "Article 349, paragraph (4), Article 353 and Article 364" in Article 386, paragraph (1) of that Act and the term "Article 349, paragraph (4)" in Article 386, paragraph (2) shall be deemed to be replaced with "Article 349, paragraph (4) as applied mutatis mutandis pursuant to Article 53-15 of the Insurance Business Act"; the term "Article 847, paragraph (1)" in Article 386, paragraph (2), item (i) of that Act shall be deemed to be replaced with "Article 847, paragraph (1) as applied mutatis mutandis pursuant to Article 53-37 of the Insurance Business Act"; and the terms "Article 849, paragraph (3)" and "Article 850, paragraph (2)" in Article 386, paragraph (2), item (ii) of that Act shall be deemed to be replaced with "Article 849, paragraph (3) as applied mutatis mutandis pursuant to Article 53-37 of the Insurance Business Act" and "Article 850, paragraph (2) as applied mutatis mutandis pursuant to Article 53-37 of the Insurance Business Act," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Management of Boards of Company Auditors)

Article 53-21 The provisions of Part II, Chapter IV, Section 8, Subsection 2 (Operations) of the Companies Act shall apply mutatis mutandis to the management of the board of company auditors of a Mutual Company; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (i)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to the application for permission under Article 394, paragraph (2) of that Act (including the cases where it is applied mutatis mutandis pursuant to Article 394, paragraph (3); hereinafter the same shall apply in this Article) as applied mutatis mutandis pursuant to this Article. In this case, the term "shareholder" in Article 394, paragraph (2) (Minutes) of that Act shall be deemed to be replaced with "member (or, where the company has a General Representative Members' Council, representative member)"; the term "and to the cases where it is necessary for the purpose of exercising the rights of a Member of the Parent Company" in Article 394, paragraph (3) shall be deemed to be deleted; and the term "Parent Company or Subsidiary" in Article 394, paragraph (4) shall be deemed to be replaced with "de facto Subsidiary Company as defined in Article 33-2, paragraph (1) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 7 Accounting Auditors

(Authority, etc. of Accounting Auditors)

Article 53-22 (1) The accounting auditors shall audit the financial statements (meaning the financial statements as defined in Article 54-3, paragraph (2); hereinafter the same shall apply in this Subsection), annexed detailed statements thereto and consolidated financial statements (meaning the consolidated financial statements as defined in Article 54-10, paragraph (1)) of the Mutual Company pursuant to the provisions of the following Subsection. In this case, the accounting auditors shall prepare accounting audit reports pursuant to the provisions of Cabinet Office Ordinance.

(2) The accounting auditors may at any time inspect and copy the following materials or request reports on accounting from the directors and accounting advisors and managers or other employees:

(i) Any account book (meaning the accounting book as defined in Article 54-2, paragraph (1); hereinafter the same shall apply in this Subsection) or related material prepared in writing; and

(ii) Where account books or related materials are prepared in the form of electromagnetic record, anything that displays the data recorded on such electromagnetic record in a manner specified by Cabinet Office Ordinance.

(3) The accounting auditors may, if it is necessary for the purpose of carrying out their duties, request a report on accounting from a de facto Subsidiary Company of the company with accounting auditors, or investigate the status of the business and property of the company with accounting auditors or such de facto Subsidiary Company.

(4) The de facto Subsidiary Company set forth in the preceding paragraph may refuse to submit a report or undergo investigation as set forth in that paragraph if there are justifiable grounds for it to do so.

(5) The accounting auditors shall not employ a person falling under any of the following items in carrying out their duties:

(i) A person listed in Article 337, paragraph (3), item (i) or (ii) of the Companies Act as applied mutatis mutandis pursuant to Article 53-7;

(ii) A person who is a director, executive officer, accounting advisor or company auditor, or manager or any other employee of the company with accounting auditors or its de facto Subsidiary Company; or

(iii) A person who is in continuous receipt of remuneration from the company with accounting auditors or its de facto Subsidiary Company for any business other than those carried out as a certified public accountant or audit firm.

(6) For the purpose of applying the provisions of paragraph (2) to a Mutual Company that is a company with Committees, the term "directors" in that paragraph shall be deemed to be replaced with "directors, executive officers."

(Mutatis Mutandis Application of the Companies Act)

Article 53-23 The provisions of Article 397 to 399 inclusive (Report to Company Auditors, Statement of Opinions at the Annual Shareholders' Meeting, Involvement of Company Auditors in Decision on Remunerations for Accounting Auditors) of the Companies Act shall apply mutatis mutandis to the accounting auditors of a Mutual Company. In this case, the term "Article 396, paragraph (1)" in Article 398, paragraph (1) of that Act shall be deemed to be replaced with "Article 53-22, paragraph (1) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 8 Committees and Executive Officers

(Appointment, etc. of Committee Members)

Article 53-24 (1) Each Committee shall be composed of three or more committee members.

(2) The members of each Committee shall be appointed from among the directors by a resolution of the board of directors.

(3) The majority of the members of each Committee must be outside directors (meaning those directors of a Mutual Company who are neither executive directors (meaning a director of a Mutual Company listed in Article 53-13, paragraph (1), item (i) or (ii) or any other director who has executed the business of the Mutual Company; the same shall apply hereinafter) or executive officers, nor a manager or any other employee of the Mutual Company or its de facto Subsidiary Company, and have never served as an executive director or executive officer, or as a manager or any other employee of the Mutual Company or its de facto Subsidiary Company; the same shall apply hereinafter).

(4) An audit committee member may not concurrently serve as an executive officer or executive director of a company with Committees or its de facto Subsidiary Company, or as an accounting advisor (or, where the accounting advisor is a juridical person, any staff member of the juridical person, who is to carry out the relevant duties) or manager or any other employee of a de facto Subsidiary Company of the company with Committees.

(Removal, etc. of Committee Members)

Article 53-25 (1) A committee member may be removed at any time by a resolution of the board of directors.

(2) The provisions of Article 401, paragraphs (2) to (4) inclusive (Removal of Committee Members), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of Reasons), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeals), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act), Article 876 (Supreme Court Rules) and Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (a) and (c)) (Commissioning of Registration by Judicial Decision) of the Companies Act shall apply mutatis mutandis to the committee members of a company with Committees. In this case, the term "paragraph (1) of the preceding Article" in Article 401, paragraph (2) of that Act shall be deemed to be replaced with "Article 53-24, paragraph (1) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Election, etc. of Executive Officers)

Article 53-26 (1) A company with Committees shall have one or more executive officers.

(2) An executive officer shall be elected by a resolution of the board of directors.

(3) The relationship between a company with Committees and its executive officers shall be governed by the provisions on mandate.

(4) The provisions of Article 53-2, paragraph (1) shall apply mutatis mutandis to an executive officer.

(5) An executive officer may serve concurrently as a director.

(6) An executive officer's term of office shall continue until the conclusion of the first board of directors meeting convened after the conclusion of the annual general members' council meeting for the last business year ending within one year from the time of their election; provided, however, that this shall not preclude the shortening of his/her term of office by the articles of incorporation.

(7) The provisions of Article 402, paragraph (8) (Election of Executive Officers) of the Companies Act shall apply mutatis mutandis to the terms of office of the executive officers of a Mutual Company. In this case, the term "the preceding paragraph" in that paragraph shall be deemed to be replaced with "Article 53-26, paragraph (6) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Dismissal, etc. of Executive Officers)

Article 53-27 (1) An executive officer may be dismissed at any time by a resolution of the board of directors.

(2) An executive officer dismissed pursuant to the provisions of the preceding paragraph may demand from the company with Committees compensation for damages arising from the dismissal, unless the company has justifiable grounds for his/her dismissal.

(3) The provisions of Article 401, paragraphs (2) to (4) inclusive of the Companies Act as applied mutatis mutandis pursuant to Article 53-25, paragraph (2), and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act), Article 876 (Supreme Court Rules) and Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (a) and (c)) (Commissioning of Registration by a Judicial Decision) of that Act shall apply mutatis mutandis to the cases where a Mutual Company has no executive officer or any vacancy in the number of executive officers prescribed by the articles of incorporation. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Authority, etc. of Committees)

Article 53-28 (1) The nominating Committee shall determine the contents of proposals to be submitted to the general members' council regarding the election and dismissal of directors (or, in a company with accounting advisors, directors and accounting advisors).

(2) The audit Committee shall carry out the following duties:

(i) Auditing the execution of duties by executive officers, etc. (meaning executive officers and directors, or, in a company with accounting advisors, executive officers, directors and accounting advisors; hereinafter the same shall apply in this Division) and preparing audit reports; and

(ii) Determining the contents of proposals to be submitted to the general members' council regarding the election and dismissal of accounting auditors, and the non-reappointment of accounting auditors.

(3) Notwithstanding the provisions of Article 361, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-15, and the provisions of Article 379, paragraphs (1) and (2) of that Act as applied mutatis mutandis pursuant to Article 53-17, the compensation committee shall determine the contents of remunerations, etc. (meaning the property considerations received from the Mutual Company in exchange for execution of duties, such as remunerations and bonuses; hereinafter the same shall apply in this paragraph) for individual executive officers, etc. Where an executive officer serves concurrently as a manager or any other employee of the company with Committees, the same shall apply to the contents of remunerations, etc. for such manager or other employee.

(4) A company with Committees may not refuse any of the following requests made to it by a committee member with respect to the execution of his/her duties (limited to a request regarding the execution of the duties of the committee to which he/she belongs; hereinafter the same shall apply in this paragraph), unless the company proves that the expenses or obligations pertaining to the request are not necessary for the execution of the duties of such committee member:

(i) A request for advance payment of expenses;

(ii) A request for reimbursement of paid expenses and any interest incurred thereon from the date of payment; or

(iii) A request for payment of any obligation incurred (or, where the obligation is not yet due, furnishing of reasonable security) to the creditor.

(5) The provisions of Article 405 to 409 inclusive (Investigations by Audit Committees, Duty to Report to the Board of Directors, Prohibition of Executive Officers' Actions, etc. by Audit Committee Members, Representation of a Company with Committees in Actions between the Company and Its Executive Officers or Directors, Methods for Decisions on Remuneration by the Compensation Committee) of the Companies Act shall apply mutatis mutandis to the Committees or committee members of a company with Committees. In this case, the term "provisions of Article 349, paragraph (4) applied mutatis mutandis under Article 420, paragraph (3), and the provisions of Article 353 and Article 364" in Article 408, paragraph (1) of that Act shall be deemed to be replaced with "provisions of Article 349, paragraph (4) as applied mutatis mutandis pursuant to Article 420, paragraph (3) as applied mutatis mutandis pursuant to Article 53-32 of the Insurance Business Act"; the term "Article 349, paragraph (4) applied mutatis mutandis under Article 420, paragraph (3)" in Article 408, paragraph (3) shall be deemed to be replaced with "Article 349, paragraph (4) as applied mutatis mutandis pursuant to Article 420, paragraph (3) as applied mutatis mutandis pursuant to Article 53-32 of the Insurance Business Act"; the term "Article 847, paragraph (1)" in Article 408, paragraph (3), item (i) of that Act shall be deemed to be replaced with "Article 847, paragraph (1) as applied mutatis mutandis pursuant to Article 53-37 of the Insurance Business Act"; the terms "Article 849, paragraph (3)" and "Article 850, paragraph (2)" in Article 408, paragraph (3), item (ii) of that Act shall be deemed to be replaced with "Article 849, paragraph (3) as applied mutatis mutandis pursuant to Article 53-37 of the Insurance Business Act" and "Article 850, paragraph (2) as applied mutatis mutandis pursuant to Article 53-37 of the Insurance Business Act," respectively; and the term "Article 404, paragraph (3)" in Article 409, paragraph (2) of that Act shall be deemed to be replaced with "Article 53-28, paragraph (3) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(6) The provisions of Part II, Chapter IV, Section 10, Subsection 3 (Operation of Committees) of the Companies Act shall apply mutatis mutandis to the management of the Committees of a company with Committees; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (i)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to the application for permission under Article 413, paragraph (3) of that Act (including the cases where it is applied mutatis mutandis pursuant to Article 413, paragraph (4); hereinafter the same shall apply in this paragraph) as applied mutatis mutandis pursuant to this Article. In this case, the term "shareholder" in Article 413, paragraph (3) (Minutes) shall be deemed to be replaced with "member (or, where the company has a General Representative Members' Council, representative member"; the term "and where it is necessary for the purpose of exercising the rights of a Member of the Parent Company" in Article 413, paragraph (4) shall be deemed to be deleted"; and the term "or its Parent Company or Subsidiary" in Article 413, paragraph (5) of that Act shall be deemed to be replaced with "or its de facto Subsidiary Company as defined in Article 33-2, paragraph (1) of the Insurance Business Act; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Authority of the Directors of a Company with Committees)

Article 53-29 The directors of a company with Committees may not execute the business of the company with Committees unless otherwise provided for in this Act or any order pursuant to this Act.

(Authority of the Board of Directors of a Company with Committees)

Article 53-30 (1) Notwithstanding the provisions of Article 53-14, the board of directors of a company with Committees shall carry out the following duties:

(i) Making decisions on the following particulars and any other decision on the execution of the company with Committees' business:

(a) Basic management policy;

(b) Particulars specified by Cabinet Office Ordinance as necessary for the execution of the duties of the audit committee;

(c) In a Mutual Company with two or more executive officers, the particulars of the interrelationship between executive officers, such as allocation of duties and line of control among executive officers;

(d) The directors to receive requests for the convocation of a board of directors meeting under Article 417, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to paragraph (5); and

(e) Establishment of a system to ensure that the execution of duties by executive officers conforms to the applicable laws and regulations and the articles of incorporation, as well as any other system required by Cabinet Office Ordinance to ensure the properness of the Mutual Company's business: and

(ii) Supervising the execution of duties by executive officers, etc.

(2) The board of directors of a company with Committees shall decide on the particulars listed in item (i), sub-items (a) to (e) inclusive of the preceding paragraph.

(3) The board of directors of a company with Committees may not delegate to a director the execution of duties listed in paragraph (1), item (i) or (ii).

(4) The board of directors of a company with Committees may, by adopting a resolution, delegate to an executive officer decisions on the execution of the company's business; provided, however, that this shall not apply to the following particulars:

(i) Decisions on the particulars listed in the items of Article 298, paragraph (1) of the Companies Act as applied mutatis mutandis to Article 41, paragraph (1) or Article 49, paragraph (1);

(ii) Decisions on the contents of proposals to be submitted to the general members' council (excluding those regarding the election and dismissal of directors, accounting advisors and accounting auditors, and the non-reappointment of accounting auditors);

(iii) Authorization under Article 356, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-15 (including the cases where it is applied mutatis mutandis pursuant to the first sentence of Article 419, paragraph (2) of that Act as applied mutatis mutandis pursuant to Article 53-32);

(iv) Designation of the directors to convene a board of directors meetings under the proviso to Article 366, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-16;

(v) Appointment of committee members under Article 53-24, paragraph (2) and removal of committee members under Article 53-25, paragraph (1);

(vi) Election of executive officers under Article 53-26, paragraph (2) and dismissal of executive officers under Article 53-27, paragraph (1);

(vii) Designation of persons to represent the company with Committees under Article 408, paragraph (1), item (i) of the Companies Act as applied mutatis mutandis pursuant to Article 53-28, paragraph (5);

(viii) Appointment of the representative executive officer under the first sentence of Article 420, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-32 and removal of the representative executive officer under Article 420, paragraph (2) of that Act as applied mutatis mutandis pursuant to Article 53-32;

(ix) Exemption from liability under Article 53-33, paragraph (1) pursuant to the provisions of the articles of incorporation under Article 426, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-36 with relevant changes in interpretation;

(x) Authorization under Article 54-4, paragraph (3) and Article 54-10, paragraph (5);

(xi) Decisions on the contents of any contract involving the actions listed in the items of Article 62-2, paragraph (1);

(xii) Decisions on the contents of any entity conversion plan; and

(xiii) Decisions on the contents of any merger agreement.

(5) The provisions of Article 417 (Operations of Board of Directors of Company With Committees) of the Companies Act shall apply mutatis mutandis to the operation of the board of directors of a company with Committees. In this case, the term "paragraph (1), item (i)-2 of the preceding Article" in paragraph (2) of that Article shall be deemed to be replaced with "Article 53-30, paragraph (1), item (i), sub-item (d) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Authority of Executive Officers)

Article 53-31 The executive officers shall carry out the following duties:

(i) Making decisions on the execution of the company with Committees' business as delegated by a resolution of the board of directors under paragraph (4) of the preceding Article; and

(ii) Executing the company with Committees' business.

(Mutatis Mutandis Application of the Companies Act)

Article 53-32 The provisions of Article 419 (excluding the second sentence of paragraph (2)) (Executive Officer's Duty to Report to Audit Committee Members), Article 421 (Apparent Representative Executive Officers) and Article 422, paragraph (1) (Prohibition of Executive Officers' Actions by Shareholders) of the Companies Act shall apply mutatis mutandis to the executive officers of a company with Committees; the provisions of Article 420 (Representative Executive Officers) shall apply mutatis mutandis to the representative executive officer of a company with Committees; the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to items (i) and (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to the executive officers or representative executive officer of a company with Committees; and the provisions of Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (a) and (c)) (Commissioning of Registration by a Judicial Decision) of that Act shall apply mutatis mutandis to the representative executive officer of a company with Committees. In this case, the term "Article 355, Article 356 and Article 365, paragraph (2)" in the first sentence of Article 419, paragraph (2) of that Act shall be deemed to be replaced with "Article 355, Article 356 and Article 365, paragraph (2) as applied mutatis mutandis pursuant to Article 53-15 of the Insurance Business Act"; the term "Article 357" in Article 419, paragraph (3) shall be deemed to be replaced with "Article 357 as applied mutatis mutandis pursuant to Article 53-15 of the Insurance Business Act"; the terms "Article 349, paragraphs (4) and (5)," "Article 352" and "Article 401, paragraphs (2) to (4) inclusive" in Article 420, paragraph (3) of that Act shall be deemed to be replaced with "Article 349, paragraphs (4) and (5) as applied mutatis mutandis pursuant to Article 53-15 of the Insurance Business Act," "Article 352 as applied mutatis mutandis pursuant to Article 53-15 of that Act" and "Article 401, paragraphs (2) to (4) inclusive as applied mutatis mutandis pursuant to Article 53-25 of the Insurance Business Act," respectively; and the term "shareholders having the shares" in Article 422, paragraph (1) of that Act shall be deemed to be replaced with "persons who have been members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 9 Officer, etc. Liability

(Officer, etc. Liability to a Mutual Company)

Article 53-33 (1) Directors, executive officers, accounting advisors, company auditors or accounting auditors (hereinafter referred to as "Officers, etc." in this Division) who have been negligent in their duties shall be liable to the Mutual Company for any damage resulting from such negligence.

(2) Where a director or executive officer has conducted a transaction set forth in Article 356, paragraph (1), item (i) (Restrictions on Competition and Transactions Involving a Conflict of Interest) of the Companies Act in violation of the provisions of Article 356, paragraph (1) of that Act as applied mutatis mutandis pursuant to Article 53-15 (including the cases where it is applied mutatis mutandis pursuant to the first sentence of Article 419, paragraph (2) of that Act as applied mutatis mutandis pursuant to the preceding Article; hereinafter the same shall apply in this paragraph), the amount of the profits obtained by the director, executive officer or a third party as a result of such transaction shall be presumed to be the amount of the damages set forth in the preceding paragraph.

(3) Where a Mutual Company incurs any damages as a result of a transaction set forth in Article 356, paragraph (1), item (ii) or (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 53-15 (including the cases where it is applied mutatis mutandis pursuant to the first sentence of Article 419, paragraph (2) of that Act as applied mutatis mutandis pursuant to the preceding Article), the following directors or executive officers shall be presumed to have been negligent in their duties:

(i) The directors or executive officers set forth in Article 356, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-15 (including the cases where it is applied mutatis mutandis pursuant to the first sentence of Article 419, paragraph (2) of that Act as applied mutatis mutandis pursuant to the preceding Article);

(ii) The directors or executive officers who decided that the Mutual Company would carry out such transaction; or

(iii) The directors who agreed to the board of directors' resolution approving such a transaction (in a company with Committees, limited to the cases where such transaction is carried out between the company with Committees and the directors or gives rise to a conflict of interest between the company with Committees and the directors).

(Exemption from Liability for Damages to a Mutual Company)

Article 53-34 Officers, etc. may not be exempted from the liability under paragraph (1) of the preceding Article without the consent of all members.

(Officer Liability, etc. for Damages to Third Parties)

Article 53-35 (1) Officers, etc. shall be liable for any damages incurred by a third party as a result of their bad faith or gross negligence in carrying out their duties.

(2) The provisions of the preceding paragraph shall also apply where the persons listed in the following items have acted as provided for in the relevant items; provided, however, that this shall not apply to the cases where such persons prove that they did not fail to exercise due care in carrying out their duties:

(i) Directors and executive officers: the following actions:

(a) Giving false notice with respect to an important particular of which notice is required to by given in soliciting funds or subscribers for company bonds (meaning the company bonds as defined in Article 61), or including a false detail or record in a material used in explaining the business or any other particular of the Mutual Company for the purpose of such solicitation;

(b) Including a false detail or record of an important particular that must be entered or recorded in financial statements and business reports, and annexed detailed statements thereto;

(c) Making a false registration; and

(d) Giving a false public notice (including the measures provided for in Article 54-7, paragraph (3));

(ii) Accounting advisors: including a false detail or record with regard to an important particular that must be detailed or recorded in financial statements and annexed detailed statements thereto, and accounting advisors' reports:

(iii) Auditors and Audit Committee Members: including a false detail or record with regard to an important particular that must be detailed or recorded in an audit report: and

(iv) Accounting auditors: including a false detail or record with regard to an important particular that must be detailed or recorded in an accounting audit report.

(Mutatis Mutandis Application of the Companies Act)

Article 53-36 The provisions of Article 425 (excluding paragraph (1), item (ii), the second sentence of paragraphs (4) and (5)) (Partial Exemption from Liability), Article 426 (excluding paragraph (4)) (Provisions of the Articles of Incorporation on Exemption by Directors), Article 427 (Limited Liability Contracts), Article 428 (Special Provisions on Transactions Carried Out by a Director for Himself/Herself) and Article 430 (Officers' Joint and Several Liability, etc.) of the Companies Act shall apply mutatis mutandis to the liability for damages of the Officers, etc. of a Mutual Company. In this case, the terms "Article 423, paragraph (1)" and "Article 424" in those provisions shall be deemed to be replaced with "Article 53-33, paragraph (1) of the Insurance Business Act" and "Article 53-34 of the Insurance Business Act," respectively; the term "resolution" in Article 425, paragraph (1) of that Act shall be deemed to be replaced with "the resolution set forth in Article 62, paragraph (2) of the Insurance Business Act"; the term "the consent of directors with respect to an exemption from liability under the provisions of the articles of incorporation pursuant to the provisions of that paragraph (limited to exemptions from liability for directors (excluding those who are Audit Committee Members) and executive officers) is to be obtained, and to the cases where a proposal regarding such exemption from liability" in Article 426, paragraph (2) of that Act shall be deemed to be replaced with "a proposal regarding an exemption from liability pursuant to the provisions of the articles of incorporation under that paragraph (limited to exemptions from liability for directors (excluding those who are Audit Committee Members) and executive officers)"; the term "shareholders having not less than 3 percent (or, in cases where lesser proportion is prescribed in the articles of incorporation, such proportion) of the voting rights of all shareholders (excluding Officers, etc. subject to the liability referred to in paragraph (3))" in Article 426, paragraph (5) shall be deemed to be replaced with "members representing at least three thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership (excluding the number of members who are Officers, etc. subject to the liability referred to in paragraph (3)) of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 38, paragraph (1) of the Insurance Business Act)"; and the term "Article 425, paragraphs (4) and (5)" in Article 427, paragraph (5) of that Act shall be deemed to be replaced with "the first sentence of Article 425, paragraph (4)"; any other necessary technical change in interpretation shall be prescribed by Cabinet Order.

(Liability Actions, etc. Against a Mutual Company)

Article 53-37 The provisions of Part VII, Chapter II, Section 2 (excluding Article 847, paragraph (2), Article 849, paragraph (5), Article 851, paragraph (1), item (i) and Article 851, paragraph (2)) (Liability Actions, etc. Against a Stock Company) of the Companies Act shall apply mutatis mutandis to an action for accountability in a Mutual Company; and the provisions of Section 3 of said Chapter (excluding Article 854, paragraph (1), item (i), sub-item (a) and Article 854, paragraphs (2) to (4) inclusive) (Action to Dismiss the Officer of a Stock Company) and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (j)) (Commissioning of Registration by a Judicial Decision) of that Act shall apply mutatis mutandis to an action to dismiss the officer of a Mutual Company. In this case, the terms "A shareholder (excluding a Holder of Shares Less than One Unit who is unable to exercise rights pursuant to the provisions of the articles of incorporation) having the shares" and "Article 423, paragraph (1)" in Article 847, paragraph (1) (Action to Dismiss the Officer of a Stock Company) of that Act shall be deemed to be replaced with "persons who have been members" and "Article 53-33, paragraph (1) of Insurance Business Act," respectively; the term "shareholder" in Article 847, paragraphs (3) to (5) inclusive and (7) shall be deemed to be replaced with "member"; and the provisions of Article 854, paragraph (1), item (i) of that Act shall be deemed to be replaced with "members representing at least three thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or three thousand (or any smaller number prescribed by the articles of incorporation) or more members of a Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 38, paragraph (1) of the Insurance Business Act), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation) (or, where the company has a General Representative Members' Council, those members or nine (or any smaller number prescribed by the articles of incorporation) or more representative members"; any other necessary technical change in interpretation shall be prescribed by Cabinet Order.

Subsection 5 Mutual Companies' Accounting, etc.

Division 1 Accounting Principles

Article 54 A Mutual Company's accounting shall be subject to such business accounting practices that are generally accepted as fair and adequate.

Division 2 Financial Statements, etc.

(Preparation and Retention, etc. of Accounting Books)

Article 54-2 (1) A Mutual Company shall prepare accurate account books in a timely manner pursuant to the provisions of Cabinet Office Ordinance.

(2) A Mutual Company shall retain its account books and important materials regarding its business for ten years from the time of the closing of the account books.

(3) The court may, upon petition or by its own authority, order a party to litigation to submit its accounting books in whole or in part.

(Preparation and Retention of Financial Statements, etc.)

Article 54-3 (1) A Mutual Company shall prepare a balance sheet as of the date of its establishment pursuant to the provisions of Cabinet Office Ordinance.

(2) A Mutual Company shall, pursuant to the provisions of Cabinet Office Ordinance, prepare financial statements (meaning the balance sheet, profit and loss statement, proposal on appropriation of surplus or disposal of losses and any other statement specified by Cabinet Office Ordinance as necessary and appropriate in order to indicate the status of the Mutual Company's property and profits or losses; hereinafter the same shall apply in this Division) and a business report for each business year and their annexed detailed statements.

(3) The financial statements, business report, and annexed detailed statements may be prepared in the form of electromagnetic record.

(4) A Mutual Company shall retain its financial statements and annexed detailed statements thereto for ten years from the time of preparation of the financial statements.

(Auditing, etc. of Financial Statements, etc.)

Article 54-4 (1) In a Mutual Company (other than a company with accounting auditors), the financial statements and business report and their annexed detailed statements under paragraph (2) of the preceding Article, shall be audited by the company auditors pursuant to the provisions of Cabinet Office Ordinance.

(2) In a company with accounting auditors, the documents listed in the following items shall be audited by the persons listed in the relevant items pursuant to the provisions of Cabinet Office Ordinance:

(i) The financial statements and annexed detailed statements thereto set forth in paragraph (2) of the preceding Article: the company auditors (or, in a company with Committees, the audit committee) and accounting auditors; and

(ii) The business report and annexed detailed statements thereto set forth in paragraph (2) of the preceding Article: the company auditors (or, in a company with Committees, the audit committee).

(3) The financial statements and business report, and annexed detailed statements thereto audited under the preceding two paragraphs shall be approved by the board of directors.

(Provision of Financial Statements, etc. to Members)

Article 54-5 In giving a notice of convocation of the annual general members' council meeting (or, where the company has a General Representative Members' Council Meeting, such a council meeting; hereinafter the same shall apply in this Subsection), the directors shall, pursuant to the provisions of Cabinet Office Ordinance, provide the members (or, in a Mutual Company with a General Representative Members' Council, representative members; hereinafter the same shall apply in this Subsection) with the financial statements and business report (including any audit report or accounting audit report) that have been approved under paragraph (3) of the preceding Article.

(Submission, etc. of Financial Statements, etc. at the Annual General Members' Council Meeting)

Article 54-6 (1) The directors shall submit or provide the financial statements and business report approved under Article 54-4, paragraph (3) at the annual general members' council meeting.

(2) The financial statements submitted or provided pursuant to the provisions of the preceding paragraph shall be approved at the annual general members' council meeting.

(3) The directors shall report the contents of the business report submitted or provided pursuant to the provisions of paragraph (1) at the annual general members' council meeting.

(4) In a company with accounting auditors, for the purpose of applying the provisions of the preceding two paragraphs to the cases where the financial statements approved under Article 54-4, paragraph (3) satisfy the requirements specified by Cabinet Office Ordinance for accurate indication of the status of a Mutual Company's property and profits or losses in compliance with the applicable laws and regulations and the articles of incorporation, the term "financial statements" in paragraph (2) shall be deemed to be replaced with "proposal on appropriation of surplus or disposal of losses"; and the term "business report" in the preceding paragraph shall be deemed to be replaced with "financial statements (excluding the proposal on appropriation of surplus or disposal of losses) and business report."

(Public Notice of Financial Statements)

Article 54-7 (1) A Mutual Company shall, pursuant to the provisions of Cabinet Office Ordinance, give public notice of its balance sheet (or, in a Mutual Company set forth in Article 53-14, paragraph (5), its balance sheet and profit and loss statement) without delay after the conclusion of the annual general members' council meeting.

(2) Notwithstanding the provisions of the preceding paragraph, it shall be sufficient for a Mutual Company which adopts, as its Method of Public Notice, publication in a daily newspaper that publishes the particulars of current events, to give public notice of the gist of the balance sheet set forth in that paragraph.

(3) Pursuant to the provisions of Cabinet Office Ordinance, the Mutual Company set forth in the preceding paragraph may, without delay after the conclusion of the annual general members' council meeting, take measures to make the information contained in the balance sheet provided for in paragraph (1) constantly available to many and unspecified persons by electromagnetic means for a period of five years from the date on which the annual general members' council meeting was concluded. The provisions of the preceding two paragraphs shall not apply in this case.

(4) The provisions of the preceding three paragraphs shall not apply to a Mutual Company which is to submit its securities report to the Prime Minister pursuant to the provisions of Article 24, paragraph (1) (Submission of Securities Report) of the Financial Instruments and Exchange Act.

(Retention and Inspection, etc. of Financial Statements, etc.)

Article 54-8 (1) A Mutual Company shall retain its financial statements and business report for each business year, and their annexed detailed statements (including the audit report or accounting audit report; hereinafter referred to as "Financial Statements, etc." in this Article) at its principal office for a period of five years from the day that is two weeks before the date of the annual general members' council meeting (or, in the case of Article 319, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1), the date of the proposal set forth in that paragraph).

(2) A Mutual Company shall keep the copies of its Financial Statements, etc. for each business year at its secondary offices for a period of three years from the day that is two weeks before the date of its annual general members' council meeting (or, in the case of Article 319, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1), the date of the proposal set forth in that paragraph); provided, however, that this shall not apply to the cases where the Financial Statements, etc. have been prepared in the form of electromagnetic records, if the Mutual Company adopts the measures specified by Cabinet Office Ordinance in order to enable its secondary offices to meet the requests listed in items (iii) and (iv) of the following paragraph.

(3) The creditors and insured persons of a Mutual Company, such as Policyholders and beneficiaries of insurance proceeds, may make the following requests at any time during the business hours of the Mutual Company; provided, however, that they pay the fees determined by the Mutual Company in making a request falling under item (ii) or (iv):

(i) Where the Financial Statements, etc. have been prepared in writing, a request to inspect or copy such documents;

(ii) A request for a certified copy or extract of the documents referred to in the preceding item;

(iii) Where the Financial Statements, etc. are prepared in the form of electromagnetic records, a request to inspect anything that shows the particulars recorded in the electromagnetic records in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding item by the electromagnetic means determined by the Mutual Company, or to be issued a document detailing such particulars.

(Order to Submit Financial Statements, etc.)

Article 54-9 The court may, upon petition or by its own authority, order a party to litigation to submit in whole or in Part the financial statements and annexed detailed statements thereto.

(Consolidated Financial Statements)

Article 54-10 (1) A company with accounting auditors may, pursuant to the provisions of Cabinet Office Ordinance, prepare consolidated financial statements (meaning those statements specified by Cabinet Office Ordinance as necessary and appropriate in order to indicate the status of the property and profits or losses of a corporate group comprised of the company with accounting auditors and its de facto Subsidiary Companies; hereinafter the same shall apply in this Article) for each business year.

(2) Consolidated financial statements may be prepared in the form of electromagnetic records.

(3) An entity that is a Mutual Company set forth in Article 53-14, paragraph (5) as of the last day of a business year shall submit a securities report to the Prime Minister pursuant to the provisions of Article 24, paragraph (1) of the Financial Instruments and Exchange Act and shall prepare consolidated financial statements for the business year.

(4) Consolidated financial statements shall be audited by the company auditors (or, in a company with Committees, the audit committee) and accounting auditors, pursuant to the provisions of Cabinet Office Ordinance.

(5) The consolidated financial statements audited under the preceding paragraph shall be approved by the board of directors.

(6) The provisions of Article 54-5 and Article 54-6, paragraphs (1) and (3) shall apply mutatis mutandis to consolidated financial statements. In this case, the term "contents of the business report" in Article 54-6, paragraph (3) shall be deemed to be replaced with "contents of the consolidated financial statements and the result of audit under Article 54-10, paragraph (4)"; any technical change in interpretation shall be specified by Cabinet Order.

Division 3 Payment of Interest on Funds, Redemption of Funds and Distributions of Surplus

(Restrictions on Payment of Interest on Funds, etc.)

Article 55 (1) Payment of interest on funds may be made in an amount not exceeding the amount of net assets on the balance sheet after the sum total of the following amounts (referred to as "maximum limit of interest payment" in Article 55-3, paragraph (3), item (i)) has been deducted therefrom:

(i) The total amount of funds;

(ii) The deficiency reserves and the reserves for redemption of funds set forth in Article 56 (including the total amount of any reduction of the reserves for redemption of funds pursuant to the provisions of Article 59, paragraph (2); the same shall apply in the following paragraph); and

(iii) Other amounts specified by Cabinet Office Ordinance.

(2) Redemption of funds or distribution of surplus may be made in an amount not exceeding the amount of net assets on the balance sheet after deducting the sum total of the following amounts (referred to as "maximum limit of redemption, etc." in Article 55-3, paragraph (3), item (ii)); provided, however, that such redemption or distribution may only be effected after the amount credited to assets in the balance sheet pursuant to the provisions of the first sentence of Article 113 (including the cases where it is applied mutatis mutandis pursuant to Article 272-18) has been amortized in full:

(i) The total amount of funds;

(ii) The deficiency reserves and the reserves for redemption of funds set forth in Article 56;

(iii) The amount of interest on funds paid under the preceding paragraph;

(iv) The deficiency reserves to be set aside for the accounting period; and

(v) Other amounts specified by Cabinet Office Ordinance.

(3) Where a Mutual Company has made any payment of interest on funds, or redemption of funds or distribution of surplus in violation of the provisions of the preceding two paragraphs, a creditor of the Mutual Company may cause it to refund the money thus expended.

(Distributions of Surplus)

Article 55-2 (1) Any distribution of surplus shall be made in conformity with the standards specified by Cabinet Office Ordinance for fair and equitable distribution.

(2) A Mutual Company shall, as the particulars listed in Article 23, paragraph (1), item (vii), prescribe in its articles of incorporation that, where the company makes an appropriation of surplus for each accounting period, it shall set aside at least the amount calculated by multiplying the appropriable amount specified by Cabinet Office Ordinance by a certain proportion as the reserves for distributing surplus to members pursuant to the provisions of Cabinet Office Ordinance.

(3) The certain proportion set forth in the preceding paragraph shall not be less than the proportion specified by Cabinet Office Ordinance.

(4) Notwithstanding the provisions of the preceding two paragraphs, a Mutual Company may, where it faces unavoidable circumstances in light of the status of its settlement of account, prescribe in its articles of incorporation that, so far as the appropriation of surplus for the accounting period is concerned, the company shall set aside as the Reserves specified by Cabinet Office Ordinance under paragraph (2) the amount calculated by multiplying the amount prescribed by Cabinet Office Ordinance under paragraph (2) by a ratio that is smaller than that prescribed by Cabinet Office Ordinance under the preceding paragraph.

(5) Any provisions in the articles of incorporation under the preceding paragraph shall not take effect unless it is approved by the Prime Minister.

(Liability for Payment of Interest on Funds, etc.)

Article 55-3 (1) Where a Mutual Company has paid any interest on funds in violation of the provisions of Article 55, paragraph (1), or made any redemption of funds or distribution of surplus in violation of the provisions of paragraph (2) of the same Article, the persons who were granted any money due to such action (referred to as "payment of interest on funds, etc." hereinafter in this Article as well as in the following Article) and the persons listed in the following items shall jointly and severally assume the obligation to pay to the Mutual Company the exact amount of money that those recipients have been granted:

(i) The executing person who has carried out any duty related to the payment of interest on funds, etc. (meaning the executive director (or, in a company with Committees, executive officer) or any other person specified by Cabinet Office Ordinance as having participated, in the course of functions, in the execution of duties to be carried out by the executive director); and

(ii) Where the annual general members' council meeting has adopted a resolution pertaining to a proposal related to the appropriation of surplus or disposal of losses (limited to the cases where the contents of the proposal approved by the resolution are in violation of the provisions of Article 55, paragraph (1) or (2)), the person specified by Cabinet Office Ordinance as the director who has presented the proposal to the annual general members' council meeting.

(2) Notwithstanding the provisions of the preceding paragraph, a person listed in item (i) or (ii) of that paragraph shall not assume the obligation under that paragraph, if the person proves that he/she did not fail to exercise due care in carrying out his/her duties.

(3) A person listed in the items of paragraph (1) may not be exempted from the obligation under that paragraph; provided, however, that this shall not apply if all of the members agree to exempt the person from the obligation to the amount prescribed in the relevant items in the cases listed in the following items:

(i) In the case of a payment of interest on funds: maximum limit of interest payment; or

(ii) In the case of a redemption of funds or distribution of surplus (excluding the cases set forth in the proviso to Article 55, paragraph (2)): maximum limit of redemption, etc.

(Restrictions, etc. on Right to Obtain Reimbursement from Members)

Article 55-4 Where a Mutual Company has made any payment of interest on funds, etc. in violation of the provisions of Article 55, paragraph (1) or (2), a member without knowledge of such violation shall not be obliged to meet any request for reimbursement made by a person listed in the items of paragraph (1) of the preceding Article who has paid the money prescribed in that paragraph.

Division 4 Reserve for Redemption of Funds and Deficiency Reserve

(Establishment of Reserve for Redemption of Funds)

Article 56 (1) A Mutual Company shall, in redeeming its funds, set aside the amount of money to be redeemed as the reserves for redemption of funds.

(2) A Mutual Company shall, if it has been released from any debt pertaining to its funds, deduct the amount of debt thus relieved from the total amount of its funds and set it aside as the reserves for redemption of funds.

(Reduction of Reserve for Redemption of Funds)

Article 57 (1) A Mutual Company may reduce the amount of the reserves for redemption of funds by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council).

(2) The resolution set forth in the preceding paragraph shall be a resolution under Article 62, paragraph (2).

(3) The documents prescribed in Articles 18, 19 and 46 of the Commercial Registration Act as well as the following documents shall be attached to a written application for registration of change due to any reduction of the reserves for redemption of funds pursuant to the provisions of paragraph (1):

(i) A written statement certifying that the company has given a public notice under Article 17, paragraph (2) as applied mutatis mutandis pursuant to the following paragraph with relevant changes in interpretation;

(ii) Where any Policyholder or other creditor has stated his/her objection under Article 17, paragraph (4) as applied mutatis mutandis pursuant to the following paragraph with relevant changes in interpretation, a written statement certifying that the company has made payment or provided equivalent security to such Policyholder or other creditor or entrusted equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment, or that the reduction of the reserves for redemption of funds poses no risk of harming the interest of such Policyholder or other creditor; and

(iii) A written statement certifying that the number of the Policyholders who have stated their objections under Article 17, paragraph (6) as applied mutatis mutandis pursuant to the following paragraph with relevant changes in interpretation has not exceeded one fifth of the total number of Policyholders set forth in that paragraph, or a written statement certifying that the amount specified by Cabinet Office Ordinance as belonging to such Policyholders has not exceeded one fifth of the total amount set forth in that paragraph.

(4) The provisions of Article 16, paragraph (1) (excluding the proviso thereto) and (2), Article 17 (excluding the proviso to paragraph (1)), Article 17-2, paragraph (4), and Article 17-4 shall apply mutatis mutandis to a reduction of the reserves for redemption of funds under paragraph (1). In this case, the term "reduction of the capital, etc." in those provisions shall be deemed to be replaced with "reduction of the reserves for redemption of funds"; the terms "A Stock Company" and "ranging from two weeks before the date of the shareholders' meeting pertaining to the resolution on the reduction of the capital, etc. (or, the date of the board of directors meeting where Article 447, paragraph (3) (Reductions in Amount of Capital) or Article 448, paragraph (3) (Reductions in Amount of Reserves) of the Companies Act Applies) to six months from the Effective Date of the reduction of the capital, etc." in Article 16, paragraph (1) shall be deemed to be replaced with "In the case of Article 57, paragraph (1), a Mutual Company" and "ranging from two weeks before the date of the general members' council (or General Representative Members' Council, where the company has such a council) pertaining to the resolution under that paragraph to six months from the date of the reduction of the reserves for redemption of funds" respectively; the term "Where a Stock Company reduces the amount of its capital, etc. (excluding the cases where the whole of the amount by which the Reserves are reduced is appropriated to the capital)" in Article 17, paragraph (1) shall be deemed to be replaced with "In the case of Article 57, paragraph (1)"; and the term "Article 447, paragraph (1) (Reductions in amount of the Capital) or Article 448, paragraph (1) (Reductions in amount of Reserves) of the Companies Act" in Article 17, paragraph (6) shall be deemed to be replaced with "Article 57, paragraph (1)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(5) Any reduction of the reserves for redemption of funds under paragraph (1) shall not take effect unless it is approved by the Prime Minister.

(6) The provisions of Article 828, paragraph (1) (limited to the segment pertaining to item (v)) and (2) (limited to the segment pertaining to item (v)) (Actions to Invalidate Acts Concerning the Organization of a Company), Article 834 (limited to the segment pertaining to item (v)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836 to 839 inclusive (Order to Provide Security, Mandatory Consolidation of Oral Arguments, etc., Persons Affected by Where a Judgment Being Upheld, Effects of a Judgment of Invalidity, Revocation or Rescission), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (d)) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action to invalidate a reduction of the reserves for redemption of funds. In this case, the term "shareholders, etc." in Article 828, paragraph (2), item (v) of that Act shall be deemed to be replaced with "members, directors, company auditors or liquidators (or, in a company with Committees, members, directors, executive officers or liquidators) of a Mutual Company"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Deficiency Reserve)

Article 58 A Mutual Company shall set aside at least three thousandths of the amount expended in each accounting period for appropriation of surplus (including that Part of the reserves set forth in Article 55-2, paragraph (2) that is to be set aside pursuant to the provisions of Cabinet Office Ordinance) as the deficiency reserve, until such time as its funds (including the reserves for redemption of funds set forth in Article 56) reach their full amount (or any larger amount prescribed by the articles of incorporation).

(Reduction of Deficiency Reserve, etc. to Compensate Losses)

Article 59 (1) The loss compensation reserves may not be reduced, except in the case of allocating it to loss compensation.

(2) By derogation from Article 57, the reserves for redemption of funds may be reduced to compensate for the losses, where the deficiency reserves is not sufficient to cover the whole losses.

Subsection 6 Solicitation of Additional Funds

(Solicitation of Additional Funds)

Article 60 (1) A Mutual Company may, even after its establishment, solicit additional funds by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council; hereinafter the same shall apply in this paragraph). In this case, the Mutual Company shall determine the amount of such additional funds by a resolution of the general members' council.

(2) The resolution specified in the preceding paragraph shall be a resolution under Article 62, paragraph (2).

(Offer of Contributions of Funds)

Article 60-2 (1) A Mutual Company shall notify the persons who seek to make an offer to contribute funds in response to solicitation under paragraph (1) of the preceding Article of the following particulars:

(i) Particulars listed in Article 23, paragraph (1), item (ii) and items (iv) to (vi) inclusive;

(ii) The amount of the additional funds to be solicited, the rights enjoyed by the contributors to the funds and the method of redemption of the funds;

(iii) Payment date; and

(iv) The banks, etc. and other places where the payment of contribution of funds is to be handled.

(2) A person who offers to contribute to funds in response to the solicitation under paragraph (1) of the preceding Article shall submit to the Mutual Company a document detailing the following particulars:

(i) Name and address of the person who makes the offer; and

(ii) Planned amount of contribution of funds.

(3) In addition to the documents specified in Articles 18 and 46 of the Commercial Registration Act as applied mutatis mutandis pursuant to Article 67, the following documents shall be attached to the written application for registration of change due to any solicitation of additional funds under paragraph (1) of the preceding Article:

(i) A document certifying the offer of a contribution of funds or a contract under Article 30 as applied mutatis mutandis pursuant to the following paragraph; and

(ii) A document certifying that payment has been made to the funds under Article 30-3, paragraph (1) as applied mutatis mutandis pursuant to the following paragraph.

(4) The provisions of Article 28, paragraphs (3) to (6) inclusive, Article 29 to 30-2 inclusive, Article 30-3 (excluding paragraphs (2) and (3)), Article 30-5, paragraphs (2) and (3) of this Act and Article 209 (Timing of Shareholders Status) (excluding item (ii)) of the Companies Act shall apply mutatis mutandis to the solicitation of additional funds under paragraph (1) of the preceding Article. In this case, the term "incorporators" in those provisions shall be deemed to be replaced with "Mutual Company"; the term "preceding paragraph" in Article 28, paragraph (3) shall be deemed to be replaced with "Article 60-2, paragraph (2)"; the terms "the items of paragraph (1)" and "paragraph (2)" in Article 28, paragraph (4) shall be deemed to be replaced with "Article 60-2 the items of paragraph (1)" and "paragraph (2) of the same Article," respectively; the term "paragraph (2), item (i)" in Article 28, paragraph (5) shall be deemed to be replaced with "Article 60-2, paragraph (2), item (i)"; the term "paragraph (2), item (ii) of the preceding Article" in Article 29, paragraph (1) shall be deemed to be replaced with "Article 60-2, paragraph (2), item (ii)"; the term "the preceding two Articles" in Article 30 shall be deemed to be replaced with "Article 60-2, paragraph (1) (excluding item (iii)), and Article 28, paragraphs (3) to (6) inclusive and the preceding Article as applied mutatis mutandis pursuant to paragraph (4) of the same Article"; the terms "without delay" and "Article 28, paragraph (1), item (iii)" in Article 30-3, paragraph (1) shall be deemed to be replaced with "on the date set forth in Article 60-2, paragraph (1), item (iii)" and "Article 60-2, paragraph (1), item (iv)," respectively; the term "solicited at incorporation who has received the notice under paragraph (2) shall, unless he/she makes the payment by the date set forth in that paragraph" in Article 28, paragraph (5) be deemed to be replaced with", unless he/she makes the payment by the date set forth in paragraph (1)"; and the term "After the establishment of the Mutual Company" in Article 30-5, paragraph (3) shall be deemed to be replaced with "After a year has elapsed since the date of registration of change due to a solicitation of additional funds under Article 60, paragraph (1)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(5) The provisions of Article 828, paragraph (1) (limited to the segment pertaining to item (ii)) and (2) (limited to the segment pertaining to item (ii)) (Actions to Invalidate Acts Concerning the Organization of a Company), Article 834 (limited to the segment pertaining to item (ii)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836, paragraphs (1) and (3) (Order to Provide Security), Article 837 to 840 inclusive (Mandatory Consolidation of Oral Arguments, etc., Persons Affected by a Judgment Being Upheld, Effects of a Judgment of Invalidity, Revocation or Rescission, Effects of a Judgment Invalidating New Share Issue), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (b)) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action to invalidate a solicitation of additional funds under paragraph (1) of the preceding Article; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (ii)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 to 877 inclusive (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act, Supreme Court Rules, Mandatory Consolidation of Hearings, etc.) and Article 878, paragraph (1) (Effect of Judicial Decision) of that Act shall apply mutatis mutandis to an application under Article 840, paragraph (2) of that Act as applied mutatis mutandis pursuant to this paragraph. In this case, the term "shareholders, etc." in Article 828, paragraph (2), item (ii) of that Act shall be deemed to be replaced with "members, directors, company auditors or liquidators (or, in a company with Committees, members, directors, executive officers or liquidators) of a Mutual Company"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Subsection 7 Solicitation of Subscribers for Bonds Issued by Mutual Company

(Determination of the Particulars of Bonds for Subscription)

Article 61 Before a Mutual Company seeks to solicit persons to subscribe for the bonds (meaning the monetary claims against the Mutual Company which accrue as a result of any allocation made by the Mutual Company pursuant to the provisions of this Act and which are to be redeemed under the conditions that have been fixed with regard to the following particulars; hereinafter the same shall apply in this Subsection) that it issues, the company shall establish the following particulars with regard to the bonds for subscription (meaning the bonds that will be allocated to the persons who have subscribed for such bonds in response to the solicitation; hereinafter the same shall apply in this Subsection):

(i) The total monetary amount of the bonds for subscription;

(ii) The monetary amount of each bond for subscription;

(iii) The interest rate on the bonds for subscription;

(iv) The method and due date of redemption of the bonds for subscription;

(v) The method and due date of interest payment;

(vi) If bond certificates will be issued, that fact;

(vii) If it will be arranged that bondholders may not make, in whole or in part, a demand under Article 698 of the Companies Act as applied mutatis mutandis pursuant to Article 61-5, that fact;

(viii) If it will be arranged that the bond administrator may take the action listed in Article 61-7, paragraph (4), item (ii) in the absence of a resolution of the bondholders meeting, that fact;

(ix) The amount to be paid in for each bond for subscription (meaning the amount of money to be paid in exchange for each bond for subscription: hereinafter the same shall apply in this Subsection) or the minimum amount thereof, or the method of calculating such amount;

(x) Due date for payment of the money in exchange for the bonds for subscription;

(xi) If it will be arranged that the bonds for subscription will not be issued in their entirety if the persons to whom the bonds for subscription will be allocated have not been established by a certain date for the total monetary amount of the bonds, that fact and that certain date; and

(xii) In addition to what is listed in the preceding items, particulars specified by Cabinet Office Ordinance.

(Offer to Subscribe for Bonds)

Article 61-2 (1) A Mutual Company shall notify the persons who seek to make an offer to subscribe for bonds in response to a solicitation under the preceding Article of the following particulars:

(i) Name of the Mutual Company;

(ii) Particulars listed in the items of the preceding Article pertaining to such solicitation; and

(iii) In addition to what is listed in the preceding two items, particulars specified by Cabinet Office Ordinance.

(2) A person who offers to subscribe for bonds in response to the solicitation under the preceding Article shall submit to the Mutual Company a document detailing the following particulars:

(i) Name and address of the person who makes the offer;

(ii) The total par value of the bonds for which he/she seeks to subscribe and the number of bonds by par value; and

(iii) Where the Mutual Company has prescribed the minimum amount under item (ix) of the preceding Article, the preferred amount to be paid in.

(3) A person who makes an offer under the preceding paragraph may, in lieu of submitting the document prescribed in that paragraph, and pursuant to the provisions of Cabinet Order, provide the particulars that are required to be included in such document by electromagnetic means, with the consent of the Mutual Company. In this case, the person who has made the offer shall be deemed to have submitted the document prescribed in that paragraph.

(4) The provisions of paragraph (1) shall not apply to the cases where the Mutual Company has issued to the person who seeks to make an offer under paragraph (1) the prospectus prescribed in Article 2, paragraph (10) (Definitions) of the Financial Instruments and Exchange Act that details the particulars listed in the items of paragraph (1), or to any other case specified by Cabinet Office Ordinance as posing no risk to the protection of persons who seek to offer to subscribe for bonds.

(5) The Mutual Company shall immediately notify a person who has made an offer under paragraph (2) (hereinafter referred to as "Offeror" in this Subsection) of any change in the particulars listed in the items of paragraph (1) and the particular affected by the change.

(6) It shall be sufficient for a notice or demand to an Offeror to be sent by the Mutual Company to the address specified under paragraph (2), item (i) (or to any other place or contact address of which the Offeror has notified the Mutual Company for the receipt of notices or demands).

(7) The notice or demand in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand would normally have arrived.

(Allocation of Bonds for Subscription)

Article 61-3 (1) The Mutual Company shall select from among the Offerors the persons to receive allocation of the bonds for subscription, and determine the par value, and the number by name, of the bonds for subscription to be allocated to each of such persons. In this case, the Mutual Company may reduce the number of the bonds for subscription to be allocated to each Offeror for each name from the number prescribed in paragraph (2), item (ii) of the preceding Article.

(2) The Mutual Company shall notify the Offerors, no later than the day immediately preceding the date referred to in Article 61, item (x) of the par value, and the number by name, of the bonds for subscription that will be allocated to each Offeror.

(Special Provisions on Offers for Bonds for Subscription and the Allocation Thereof)

Article 61-4 The provisions of the preceding two Articles shall not apply to the cases where a person who seeks to subscribe for bonds concludes a contract for the subscription for the total amount of those bonds.

(Mutatis Mutandis Application of the Companies Act)

Article 61-5 The provisions of Article 680 to 683 inclusive (Bondholders of Bonds for Subscription, Bond Registry, Delivery of Document Stating Matters to Be Stated in Bond Registry, Management of Bond Registry), Article 684 (excluding paragraphs (4) and (5)) (Retention of the Bond Registry and Making It Available for Inspection) and Article 685 to 701 inclusive (Notices to Bondholders, Exercise of Rights by Co-owners, Assignment of Bonds with Issued Certificates, Perfection of Assignment of Bonds, Presumption of Rights, Stating or Recording Matters to Be Stated in Bond Registry Without Request from Bondholders, Stating or Recording Matters to Be Stated in Bond Registry as Requested by Bondholders, Pledges of Bonds with Issued Certificates, Perfection of Pledge of Bonds, Entries in Bond Registry Regarding Pledges, Delivery of Documents Stating Matters to Be Stated in Bond Registry Regarding Pledges, Perfection Requirements for Bonds Belonging to Trust Property, etc., Issuing of Bond Certificates, Matters to Be Stated on Bond Certificates, Conversions between Registered Bonds and Bearer Bonds, Loss of Bond Certificates, Redemption of Bonds where Coupons Missing, Extinctive Prescription of Right to Claim Redemption of Bonds) of the Companies Act shall apply mutatis mutandis to the cases where a Mutual Company issues bonds. In this case, the term "bond-issuing Company" in those provisions shall be deemed to be replaced with "bond-issuing mutual company"; the term "the preceding Article" in Article 680, item (ii) of that Act shall be deemed to be replaced with "Article 61-4 of the Insurance Business Act"; the term "Article 676, items (iii) though (viii)" in Article 681, item (i) of that Act shall be deemed to be replaced with "Article 61, items (iii) to (viii) inclusive of the Insurance Business Act"; the term "Article 720, paragraph (1)" in Article 685, paragraph (5) of that Act shall be deemed to be replaced with "Article 720, paragraph (1) as applied mutatis mutandis pursuant to Article 61-8, paragraph (2) of the Insurance Business Act"; and the term "Article 676, item (vii)" in Article 698 of that Act shall be deemed to be replaced with "Article 61, item (vii) of the Insurance Business Act"; any technical change in interpretation shall be specified by Cabinet Order.

(Designation of Bond Administrator)

Article 61-6 In issuing bonds, a Mutual Company shall designate a bond administrator to be entrusted with the receipt of payments, preservation of claims and other bond administration on behalf of the bondholders; provided, however, that this shall not apply to the cases where the par value of each bond is one hundred million yen or more, or any other case specified by Cabinet Office Ordinance as posing no risk to the protection of bondholders.

(Authority, etc. of Bond Administrator)

Article 61-7 (1) The bond administrator shall have the authority to carry out any action in or out of court to receive payments of claims pertaining to the bonds on behalf of the bondholders, or to secure the realization of claims pertaining to the bonds.

(2) Where the bond administrator has received any payment under the preceding paragraph, the bondholders may demand the payment of the redeemed amount of bonds and interest thereon from the bond administrator. In this case, the bondholders shall demand the payment of such redeemed amount in exchange for bond certificates, and the payment of such interest in exchange for coupons, if the issuance of bond certificates is stipulated.

(3) Any claim under the first sentence of the preceding paragraph shall lapse by prescription if not exercised within ten years.

(4) The bond administrator shall not take the following actions without a resolution of the bondholders meeting; provided, however, that this shall not apply to the actions listed in item (ii), if there is a stipulation with respect to the particulars listed in Article 61, item (viii):

(i) suspension of his/her payment for the entirety of the bonds, exemption from any liability resulting from a default on his/her debt, or settlement (excluding the actions listed in the following item);

(ii) Procedural actions with respect to the entirety of the bonds, or any action involved in bankruptcy procedures, rehabilitation procedures, corporate reorganization procedures or procedures for special liquidation (excluding the action set forth in paragraph (1)).

(5) The bond administrator shall, if he/she has taken the action listed in item (ii) of the preceding paragraph without a resolution of the bondholders meeting pursuant to the proviso to that paragraph, give public notice of this without delay, and notify each of the known bondholders thereof.

(6) A public notice under the preceding paragraph shall be made in accordance with the Method of Public Notice adopted by the bond-issuing mutual company; provided, however, that such public notice shall be given by way of publication in the Official Gazette, where that method is electronic public notice.

(7) The bond administrator may, if it is necessary for taking the action listed in paragraph (1) or the items of paragraph (4) with respect to the bonds with whose administration he/she has been entrusted, investigate with the permission of the court the status of the business and property of the bond-issuing mutual company.

(8) The provisions of Article 703 (Qualifications of Bond Managers), Article 704 (Obligations of Bond Managers), Article 707 to 714 inclusive (Appointment of Special Agent, Method of Acts of Bond Managers, Special Provisions on Multiple Bond Managers, Liability of Bond Manager, Resignation of Bond Managers, Liability of Bond Managers after Resignation, Dismissal of Bond Managers, Succession to Bond Manager's Administration of Bonds), Article 868, paragraph (3) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (iii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to items (i) and (iv)) (Restrictions on Appeal), Article 875 (Mandatory Consolidation of Hearings, etc.) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to a bond administrator. In this case, the term "bond-issuing company" in those provisions shall be deemed to be replaced with "bond-issuing mutual company"; the term "this Act" in Article 710, paragraph (1) of that Act shall be deemed to be replaced with "the Insurance Business Act"; and the term "Article 702" in Article 711, paragraph (2) of that Act shall be deemed to be replaced with "Article 61-6 of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Bondholders Meeting)

Article 61-8 (1) The bondholders shall form a bondholders meeting for each class of bond (meaning the class of bond set forth in Article 681, item (i) of the Companies Act as applied mutatis mutandis pursuant to Article 61-5).

(2) The provisions of Part IV, Chapter III (excluding Article 715 and Article 740, paragraph (3)) (Bondholders' Meeting), Part VII, Chapter II, Section 7 (Action to Rescind Performance, etc. by a Company That Issues Bonds), Article 868, paragraph (3) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (x) to (xii) inclusive) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 874 (limited to the segment pertaining to item (iv)) (Restrictions on Appeal), Article 875 (Mandatory Consolidation of Hearings, etc.) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the cases where a Mutual Company issues bonds. In this case, the term "bond-issuing company" in those provisions shall be deemed to be replaced with "bond-issuing mutual company"; the term "under Article 705, paragraphs (1) to (3) inclusive, and under Articles 708 and 709" in Article 737, paragraph (2) (Execution of Resolutions of Bondholders' Meetings) of that Act shall be deemed to be replaced with "of Article 61-7, paragraphs (1) to (3) inclusive of the Insurance Business Act, and the provisions of Articles 708 and 709 as applied mutatis mutandis pursuant to Article 61-7, paragraph (8) of that Act"; and the term "the provisions of Article 449, Article 627, Article 635, Article 670, Article 779 (including the cases where applied mutatis mutandis pursuant to paragraph (2) of Article 781), Article 789 (including the cases where applied mutatis mutandis pursuant to paragraph (2) of Article 793), Article 799 (including the cases where applied mutatis mutandis pursuant to paragraph (2) of Article 802) or Article 810 (including the cases where applied mutatis mutandis pursuant to paragraph (2) of Article 813)" in Article 740, paragraph (1) (Special provisions on objection procedures for creditors) of that Act shall be deemed to be replaced with "Article 17 (excluding the proviso to paragraph (1)) of the Insurance Business Act as applied mutatis mutandis pursuant to Article 57, paragraph (4) of that Act, and Articles 88 and 165-17 (including the cases where it is applied mutatis mutandis pursuant to Article 165-20 of that Act) of that Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Application of Secured Bond Trust Act, etc.)

Article 61-9 For the purpose of applying the Secured Bond Trust Act (Act No. 52 of 1905) and other laws and regulations specified by Cabinet Order, the bonds shall, pursuant to the provisions of Cabinet Order, be deemed to be bonds as defined in Article 2, item (xxiii) (Definitions) of the Companies Act.

(Special Provision on Short-Term Bonds)

Article 61-10 (1) A bond registry shall not be required for the bonds which meet all of the following requirements (referred to as "Short-Term Bonds" in the following paragraph):

(i) The par value of each bond is not less than one hundred million yen;

(ii) The due date for redemption of the principal is fixed on a day within one year from the payment date of the total amount of the bonds, and no judgment has been made authorizing installment payments;

(iii) The due date for interest payment is fixed on the same day as the due date for redemption under the preceding item; and

(iv) No security is furnished pursuant to the provisions of the Secured Bond Trust Act.

(2) The provisions of Article 61-6 to 61-8 inclusive shall not apply to Short-Term Bonds.

Subsection 8 Amendment in the Articles of Incorporation

Article 62 (1) Any amendment to the articles of incorporation shall require a resolution of the general members' council (or General Representative Members' Council, where the company has such a council).

(2) Notwithstanding the provisions of Article 37-3, paragraph (1) and Article 44, paragraph (1), the resolution set forth in the preceding paragraph is adopted by a three-quarter majority vote of the attending members at a session where at least half of the members are present (or by a three-quarter majority vote of the attending representative members at a session at which at least half of the representative members are present).

Subsection 9 Assignment, etc. of Business

Article 62-2 (1) A Mutual Company shall, before it takes any of the following actions, have the contract for the relevant action authorized by a resolution of the general members' council no later than the day immediately preceding the Effective Date of the action:

(i) Assignment of the whole of business;

(ii) Assignment of any important Part of the business (excluding the cases where the book value of the assets to be transferred by such assignment does not exceed one fifth (or any smaller proportion prescribed by the articles of incorporation) of the amount of the total assets of the Mutual Company as calculated by the method specified by Cabinet Office Ordinance);

(iii) Acquisition of the whole of business of another company (including a Mutual Company, foreign company or any other juridical person); or

(iv) Acquisition at any time within two years after the establishment of the Mutual Company (limited to the cases where it was incorporated pursuant to the provisions of Subsection 2; hereinafter the same shall apply in this item) of any asset that has existed since before its establishment and is to be used constantly for conducting its business; provided, however, that this shall not apply to the cases where the ratio of the amount listed in (a) to that listed in (b) does not exceed one fifth (or any smaller proportion prescribed by the articles of incorporation):

(a) The total book value of the property to be delivered in exchange for the asset;

(b) The amount of the net assets of the Mutual Company as calculated by the method specified by Cabinet Office Ordinance.

(2) The resolution set forth in the preceding paragraph shall be a resolution under paragraph (2) of the preceding Article.

Subsection 10 Miscellaneous Provisions

(Non-Member Contract)

Article 63 (1) A Mutual Company may, by provisions in its articles of incorporation, exclude from its membership the holders of non-participating policies or any other class of insurance policy specified by Cabinet Office Ordinance.

(2) The articles of incorporation set forth in the preceding paragraph shall specify the class of insurance policy to which that paragraph applies, as well as other particulars specified by Cabinet Office Ordinance.

(3) A Mutual Company shall not underwrite the insurance policies set forth in paragraph (1) over the limit specified by Cabinet Office Ordinance.

(4) Pursuant to the provisions of Cabinet Office Ordinance, a Mutual Company shall, if it underwrites any of the insurance policies set forth in paragraph (1), separate the accounting for such insurance policies from that for the insurance policies held by the members.

(5) The provisions of Part III, Chapter VI (Marine Insurance) of the Commercial Code shall apply mutatis mutandis to the insurance policies set forth in paragraph (1) (limited to those which fall under the category of a marine insurance contract). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(6) In addition to what is prescribed in the preceding paragraphs, necessary particulars of the insurance policies set forth in paragraph (1) shall be specified by Cabinet Office Ordinance.

(Mutatis Mutandis Application of the Companies Act)

Article 63-2 Article 824 (Dissolution Order for a Company), Article 826 (Duty of a Government Agency, etc. to Give Notice to the Minister of Justice), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (Hearing of Statements) (limited to the portion pertaining to item (xiii)), the main text of Article 871 (Appending of the Reason), Article 872 (Immediate Appeal) (limited to the portion pertaining to item (iv)), the main text of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act), Article 876 (Supreme Court Rules), Article 904 (Participation of the Minister of Justice) and Article 937, paragraph (1) (Commissioning of Registration by a Judicial Decision) (limited to the portion pertaining to sub-item (b) of item (iii)) of the Companies Act shall apply mutatis mutandis to an order for dissolution of a Mutual Company; Article 825 (Special Provisions on a Temporary Restraining Order Concerning Property of a Company), Article 868, paragraph (1), Article 870 (limited to the portion pertaining to item (ii)), Article 871, Article 872 (limited to the portions pertaining to items (i) and (iv)), Article 873, Article 874 (Restrictions on Appeal) (limited to the portions pertaining to items (ii) and (iii)), Article 875, Article 876, Article 905 and Article 906 (Special Provisions on a Temporary Restraining Order Concerning Property of a Company) of said Act shall apply mutatis mutandis to preservation of properties of a Mutual Company in case where a petition under Article 824, paragraph (1) of that Act as applied mutatis mutandis pursuant to this Article has been filed. In this case, technical replacement of terms as may be necessary shall be specified by Cabinet Order.

(Registration of Incorporation)

Article 64 (1) A Mutual Company shall complete its registration of incorporation at the location of its principal office within two weeks from the date of conclusion of the Organizational Meeting (or from the date of resignation of the incorporators pursuant to the provisions of Article 30-12, paragraph (3)).

(2) The following particulars shall be registered in the registration under the preceding paragraph:

(i) Particulars listed in Article 23, paragraph (1), items (i), (ii) and (iv) to (vii) inclusive;

(ii) The location of the offices;

(iii) The names of the directors;

(iv) The name and address of the representative director (excluding the cases set forth in item (xi));

(v) If the company is a company with accounting advisors, that fact, and the names of the accounting advisors and the place set forth in Article 378, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-17;

(vi) If the company is a company with auditors, that fact and the names of the company auditors;

(vii) If the company is a company with a board of company auditors, that fact, and if there are outside auditors among its auditors, that fact;

(viii) If the company is a company with accounting auditors, that fact and the names of the accounting auditors;

(ix) The name of a person appointed pursuant to the provisions of Article 53-12, paragraph (4) temporarily to carry out the duties of an accounting auditor;

(x) If it is stipulated that the special directors (meaning the special directors as defined in Article 373, paragraph (1) of the Companies Act; the same shall apply hereinafter) may adopt a resolution under that paragraph as applied mutatis mutandis pursuant to Article 53-16, the following particulars:

(a) That it is stipulated that the special directors may adopt a resolution under Article 373, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-16,

(b) The names of the special directors, and

(c) The fact that any outside directors among the directors, are outside directors;

(xi) If the company is a company with Committees, that fact and the following particulars:

(a) The fact that any outside directors among the directors, are outside directors,

(b) The names of the members of each committee and its executive officers, and

(c) The name and address of its representative executive officer;

(xii) Any provisions in the articles of incorporation for the exemption from liabilities of directors, executive officers, accounting advisors, company auditors or accounting auditors under Article 426, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-36;

(xiii) Any provisions in the articles of incorporation for the conclusion of contracts regarding the limit of the liabilities to be assumed by outside directors, accounting advisors, outside company auditors or accounting auditors under Article 427, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-36;

(xiv) If the provisions of the articles of incorporation set forth in the preceding item concern outside directors, the fact that any outside directors among the directors, are outside directors;

(xv) If the provisions in the articles of incorporation set forth in item (xiii) concern outside auditors, the fact that any outside auditors among the auditors, are outside auditors;

(xvi) If the relevant company seeks to take measures referred to in Article 54-7, paragraph (3), among the particulars necessary for allowing many and unspecified persons to receive the information contained in the balance sheet set forth in paragraph (1) of that Article, those specified by Cabinet Office Ordinance;

(xvii) Provisions in the articles of incorporation for the Method of Public Notice under Article 23, paragraph (1), item (viii);

(xviii) If the provisions in the articles of incorporation set forth in the preceding item specify electronic public notice as the Method of Public Notice, the following particulars:

(a) Particulars prescribed in Article 911, paragraph (3), item (xxix), sub-item (a) (Registration of Incorporation of a Stock Company) of the Companies Act which are necessary for ensuring that the information made public by electronic public notice is available to many and unspecified persons; and

(b) Any provisions in the articles of incorporation under the second sentence of Article 23, paragraph (3); and

(xix) Any provisions in the articles of incorporation under the second sentence of Article 113 (including the cases where it is applied mutatis mutandis pursuant to Article 272-18).

(3) The provisions of Article 915, paragraph (1) (Registration of a Change), Article 916 (limited to the segment pertaining to item (i)) (Registration of Relocation of Head Office to a District under the Jurisdiction of Another Registry), Article 918 (Registration of a Manager) and Part VII, Chapter IV, Section 2, Subsection 2 (excluding Article 932) (Registration at the Location of a Branch Office) of the Companies Act shall apply mutatis mutandis to a Mutual Company; and the provisions of Article 917 (limited to the segment pertaining to item (i)) (Registration of a Provisional Disposition, etc. Suspending Execution of Duties) of that Act shall apply mutatis mutandis to the directors, executive officers, accounting advisors, company auditors, representative director, committee members or representative executive officer of a Mutual Company. In this case, the term "the items of Article 911, paragraph (3) and the items of the three preceding Articles" in Article 915, paragraph (1) of that Act shall be deemed to be replaced with "the items of Article 64, paragraph (2) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Application for Registration of Incorporation)

Article 65 The following documents shall be attached to a written application under paragraph (1) of the preceding Article, in addition to the documents set forth in Article 18, Article 46 and Article 47, paragraph (3) of the Commercial Registration Act as applied mutatis mutandis pursuant to Article 67:

(i) Articles of incorporation;

(ii) A document certifying the offer to contribute funds or the contract set forth in Article 30;

(iii) List of prospective members;

(iv) In the case of a solicitation of members, a document certifying each prospective member's application for membership;

(v) Where the articles of incorporation include any detail or record of the particulars listed in the items of Article 24, paragraph (1), the following documents:

(a) A document containing the investigative report of the inspector or the directors at incorporation (or the directors at incorporation and company auditors at incorporation, where the Mutual Company to be incorporated is a company with auditors) and annexed documents thereto;

(b) In the case listed in Article 33, paragraph (10), item (ii) of the Companies Act as applied mutatis mutandis pursuant to Article 24, paragraph (2), a document certifying the market value of the securities set forth in that item; and

(c) In the case listed in Article 33, paragraph (10), item (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 24, paragraph (2), a document containing the verification set forth in that item and attached documents thereto;

(vi) A certified copy of any juridical decision on the report of the inspector;

(vii) A certificate of deposit of money under Article 30-4, paragraph (1);

(viii) A document regarding the appointment of the representative director at incorporation by the directors at incorporation;

(ix) Where the Mutual Company to be incorporated is a company with Committees, a document regarding the election of the executive officers at incorporation, and the appointment of the committee members at incorporation and representative executive officer at incorporation;

(x) Minutes of the Organizational Meeting;

(xi) A document certifying that the directors at incorporation, company auditors at incorporation and representative director at incorporation (or the directors at incorporation, committee members at incorporation, executive officers at incorporation and representative executive officer at incorporation, where the Mutual Company to be incorporated is a company with Committees) elected or appointed pursuant to the provisions of this Act have accepted the assumption of office;

(xii) Where accounting advisors at incorporation or accounting auditors at incorporation have been elected, the following documents:

(a) A document certifying that they have accepted the assumption of office;

(b) Where they are juridical persons, Certificates of Registered Particulars for such juridical persons, provided, however, that this shall not apply to the cases where the principal offices of such juridical persons are located within the district under the jurisdiction of the relevant registry office; and

(c) Where they are not juridical persons, a document certifying that the accounting advisors at incorporation meet the requirement of Article 333, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-4, or that the accounting auditors at incorporation meet the requirement of Article 337, paragraph (1) of that Act as applied mutatis mutandis pursuant to Article 53-7; and

(xiii) Where it is stipulated that the special directors may adopt a resolution under Article 373, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-16, a document certifying the appointment of the special directors and their acceptance of the assumption of office.

(Registries)

Article 66 A registry office shall keep a registry of mutual companies.

(Mutatis Mutandis Application of the Companies Act and the Commercial Registration Act to the Registration of Mutual Companies)

Article 67 The provisions of Part VII, Chapter IV, Section 1 (excluding Article 907) (General Provisions) of the Companies Act, and the provisions of Article 1-3 to 5 inclusive (Registry Office, Delegation of Affairs, Suspension of Affairs, Registrar, Disqualification of Registrar), Article 7 to 15 inclusive (Prohibition on Carrying Out of Registries and Other Documents, Loss and Restoration of Registries, Prevention of Loss of Registry, etc., Issuance of Certificate of Registered Matters, Issuance of Documents Specifying Extract of Matters Registered, Inspection of Annexed Documents, Certificate of Seal Impression, Certification of Matters Required for Verification of Measures to Identify the Creator of Electromagnetic Records and Other Matters, Fees, Registration Upon Application by a Relevant Party, Registration upon Commission), Article 17 to 27 inclusive (Method of Application for Registration, Documents to Be Attached to Written Application, Electromagnetic Record to be Attached to Written Application, Submission of Seal Impression, Acceptance of Applications, Receipt, Order of Registration, Identity Confirmation by Registrar, Dismissal of Application, Registration to be Made After Lapse of Period for Filing Action, Change in Administrative Zone, etc., Prohibition of Registration of Identical Trade Name at Same Location), Article 31 (Registration of Exemption of Liabilities Upon Transfer of Enterprise or Business), Article 33 (Cancellation of Registration of Trade Name), Article 44 to 46 inclusive (Registration of Company's Manager, General Rules on Documents to be Attached), Article 47, paragraphs (1) and (3) (Registration of Incorporation), Article 48 to 55 inclusive (Registration to be Made at Location of Branch Offices, Registration of Relocation of Head Office, Registration of Change of Directors and Other Officers, Registration of Change of Person Who is to Temporarily Perform Duties of Accounting Auditor), and Article 132 to 148 inclusive (Correction, Application for Cancellation, Ex Officio Cancellation, Exclusion from Application of the Administrative Procedure Act, Exclusion from Application of the Act on Access to Information Held by Administrative Organs, Exclusion from Application of the Act on Protection of Personal Information Held by Administrative Organs, Request for Review, Handling of Request for Review Case, Exclusion from Application of the Administrative Appeal Act, Delegation to Ordinance of the Ministry) of the Commercial Registration Act shall apply mutatis mutandis to a registration regarding a Mutual Company. In this case, the terms "trade name," "business office (or, in a company, head office; hereinafter the same shall apply in this Article" and "business office pertaining to" in Article 27 of the latter Act shall be deemed to be replaced with "trade name or name," "principal office" and "principal office pertaining to," respectively; the term "shareholders' meeting or class shareholders' meeting" in Article 46, paragraph (2) of that Act shall be deemed to be replaced with "general members' council (or General Representative Members' Council, where the company has such a council)"; the terms "Article 319, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 325 of the Companies Act) or Article 370 (including the cases where it is applied mutatis mutandis pursuant to Article 490, paragraph (5) of that Act) of the Companies Act" and "shareholders' meeting or class shareholder meeting" in Article 46, paragraph (3) of that Act shall be deemed to be replaced with "Article 319, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1) of the Insurance Business Act, or Article 370 of the Companies Act as applied mutatis mutandis pursuant to Article 53-16 or 180-15 of the Insurance Business Act" and "general members' council", respectively; the term "Article 416, paragraph (4) of the Companies Act" in Article 46, paragraph (4) shall be deemed to be replaced with "Article 53-30, paragraph (4) of the Insurance Business Act"; and the terms "head office" and "branch offices" in the provisions of Article 48 to 53 inclusive of that Act shall be deemed to be replaced with "principal office" and "secondary offices," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Mutatis Mutandis Application of the Companies Act on Electronic Public Notice)

Article 67-2 The provisions of Article 940, paragraphs (1) and (3) (Public Notice Period, etc. of Electronic Public Notice), Article 941 (Electronic Public Notice Investigation), Article 946 (Obligation, etc. of Investigation), Article 947 (Cases Where an Electronic Public Notice Investigation Is Unable to Be Carried Out), Article 951, paragraph (2) (Retention and Inspection, etc. of Financial Statements, etc.), Article 953 (Order for Improvement), and Article 955 (Statements, etc. in an Investigation Record Book, etc.) of the Companies Act shall apply mutatis mutandis to the cases where a Mutual Company gives public notice under this Act or any other Act in the form of electronic public notice. In this case, the terms "Article 440, paragraph (1)" and "annual shareholders' meeting" in Article 940, paragraph (1), item (ii) of that Act shall be deemed to be replaced with "Article 54-7, paragraph (1) of the Insurance Business Act" and "annual general members' council meeting (or annual General Representative Members' Council Meeting, where the company has such a council)," respectively; the term "the preceding two paragraphs" in Article 940, paragraph (3) of that Act shall be deemed to be replaced with "paragraph (1)"; and the term "public notice under this Act or any other Act (excluding the public notice under Article 440, paragraph (1)" in Article 941 of that Act shall be deemed to be replaced with "public notice under the Insurance Business Act (excluding the public notice under Article 54-7, paragraph (1) of that Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Section 3 Entity Conversion

Subsection 1 Entity Conversion from Stock Company to Mutual Company

(Entity Conversion)

Article 68 (1) A stock Insurance Company may convert to a mutual Insurance Company.

(2) A Stock Company that is a Low-Cost, Short-Term Insurer may convert to a Mutual Company that is a Low-Cost, Short-Term Insurer.

(3) Any entity conversion under the preceding two paragraphs (hereinafter referred to as "Entity Conversion" in this Subsection) shall require a solicitation of funds in order to raise the total amount of the funds of the Mutual Company after the Entity Conversion to or over the amount specified in one of the following items depending on the case:

(i) Entity Conversion under paragraph (1): the amount specified by Cabinet Order set forth in Article 6, paragraph (1); or

(ii) Entity Conversion under the preceding paragraph: the amount specified by Cabinet Order set forth in Article 272-4, paragraph (1), item (ii).

(4) The total amount of the funds set forth in the preceding paragraph may be comprised in whole or in Part of a Reserves set aside at the time of Entity Conversion. In this case, the converting company shall not be required to solicit funds under that paragraph to the extent covered by the reserve.

(5) The Reserves set forth in the preceding paragraph shall be deemed to be the reserves for redemption of funds, to which the provisions of this Act (excluding Article 56) shall apply.

(6) In the case of an Entity Conversion, the converting company may set aside a deficiency reserves in addition to the reserves set forth in paragraph (4).

(Authorization of Entity Conversion Plan)

Article 69 (1) A Stock Company shall, if it seeks to convert to a Mutual Company, prepare an Entity Conversion plan to be approved by a resolution at a shareholders' meeting.

(2) The resolution set forth in the preceding paragraph shall be a resolution under Article 309, paragraph (2) (Resolution of shareholders' meetings) of the Companies Act.

(3) A Stock Company, if it seeks to adopt a resolution under paragraph (1), shall provide an outline of the Entity Conversion plan in the notice to be given pursuant to Article 299, paragraph (1) (Notices of Convocation for Shareholders' Meetings) of the Companies Act.

(4) A Stock Company shall detail the following particulars in its Entity Conversion plan:

(i) The total amount of funds of the Mutual Company to be established by the Entity Conversion (hereinafter referred to as "Converted Mutual Company" in this Subsection);

(ii) The amounts of the reserves set forth in paragraph (4) of the preceding Article and of the deficiency reserves set forth in paragraph (6) of that Article;

(iii) The particulars of compensation to shareholders and holders of share options;

(iv) The particulars of the rights of Policyholders after the Entity Conversion; and

(v) The day on which the Entity Conversion takes effect (hereinafter referred to as "Effective Date" in this Subsection) and other particulars specified by Cabinet Office Ordinance.

(5) A Stock Company which has adopted a resolution under paragraph (1) shall, within two weeks from the date of the resolution, notify each of the registered pledgees of shares and registered pledgees of share options of the planned Entity Conversion.

(6) A notice under the preceding paragraph may be replaced by a public notice.

(7) The provisions of Article 219, paragraph (1) (limited to the segment pertaining to item (v)), (2) and (3) (Public Notice in Relation to Submission of Share Certificate), Article 220 (Cases where Share Certificates cannot be Submitted), and Article 293, paragraph (1) (limited to the segment pertaining to item (ii)) (Public Notice in relation to Submission of Share Option Certificate) of the Companies Act shall apply mutatis mutandis to a converting Stock Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Retention and Inspection, etc. of Documents Related to Entity Conversion Plans, etc.)

Article 69-2 (1) A converting Stock Company shall, for the period from the Day on Which the Entity Conversion plan Began to Be Kept to the Effective Date, keep at each of its business offices the documents or electromagnetic records in which the details of the Entity Conversion plan and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(2) The term "the Day on Which the Entity Conversion plan Began to Be Kept" in the preceding paragraph refers to the earliest of the date listed in the following items:

(i) The day two weeks before the date of the shareholders' meeting set forth in paragraph (1) of the preceding Article (or, in the case of Article 319, paragraph (1) (Omission of Resolution of Shareholders' Meetings) of the Companies Act, the date of proposal under that paragraph);

(ii) Where the converting Stock Company has issued share options, the date of notice under Article 777, paragraph (3) of the Companies Act as applied mutatis mutandis pursuant to Article 71 or the date of public notice set forth in Article 777, paragraph (4) of that Act as applied mutatis mutandis pursuant to Article 71, whichever is earlier; or

(iii) The date of public notice under paragraph (2) of the following Article.

(3) The creditors of a converting Stock Company, such as shareholders and Policyholders, may make the following requests to the company at any time during its operating hours; provided, however, that they pay the fees determined by the Stock Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in paragraph (1);

(ii) A request to be issued a certified copy or extract of the documents set forth in paragraph (1);

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in paragraph (1) in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in paragraph (1) by the electromagnetic means determined by the converting Stock Company, or to be issued a document detailing such particulars.

(4) The Converted Mutual Company shall, for six months from the Effective Date, keep at each of its offices the documents or electromagnetic records in which the details of the Entity Conversion plan and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(5) Policyholders or other creditors of a Converted Mutual Company may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the Converted Mutual Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Converted Mutual Company, or to be issued a document detailing such particulars.

(Objections of Creditors)

Article 70 (1) Policyholders or other creditors of a converting Stock Company may state to the company their objections to the Entity Conversion.

(2) A converting Stock Company shall publish the following particulars in the Official Gazette and by the Method of Public Notice prescribed by its articles of incorporation; provided, however, that the period for item (iv) may not be shorter than one month:

(i) The fact that an Entity Conversion will be carried out;

(ii) The name and address of the Converted Mutual Company;

(iii) Particulars specified by Cabinet Office Ordinance as pertaining to the financial statements of the converting Stock Company;

(iv) The fact that Policyholders or other creditors of the converting Stock Company may state their objections within a certain period of time; and

(v) In addition to what is listed in the preceding items, particulars specified by Cabinet Office Ordinance.

(3) Where no Policyholders or other creditors have stated their objections within the period set forth in item (iv) of the preceding paragraph, such Policyholders or creditors shall be deemed to have approved the Entity Conversion.

(4) Where any Policyholder or other creditor has stated his/her objection under paragraph (2), item (iv), the converting Stock Company shall make payment or provide equivalent security to such Policyholder or other creditor, or entrust equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment; provided, however, that this shall not apply to the cases where the Entity Conversion poses no risk of harming the interest of such Policyholder or other creditor;

(5) The provisions of the preceding paragraph shall not apply to the Policyholders or any rights held by other persons pertaining to insurance contracts (other than Insurance Claims, etc.).

(6) Any resolution of authorization under Article 69, paragraph (1) shall be null and void if the number of the Policyholders who have stated their objections within the period set forth in paragraph (2), item (iv) (excluding the holders of policies under which Insurance Claims, etc. had already arisen at the time of public notice under the paragraph (2) (but limited to those policies that would be terminated with the payment of the Insurance Claims, etc.); hereinafter the same shall apply in this paragraph and the following paragraph) exceeds one fifth of the total number of Policyholders, and the amount specified by Cabinet Office Ordinance as the credits (other than Insurance Claims, etc.) belonging to the insurance contracts of the Policyholders who have stated such objections exceeds one fifth of the total amount of credits belonging to the Policyholders.

(7) An Entity Conversion carried out pursuant to the provisions of the preceding paragraphs shall also be effective against the Policyholders who have stated their objections under the preceding paragraph and other persons who hold any right (other than Insurance Claims, etc.) pertaining to the insurance contracts involving the Policyholders.

(8) In addition to what is provided for in the preceding paragraphs, necessary particulars for the application of those provisions shall be specified by Cabinet Order.

(Demand for Purchase of Share Options, etc.)

Article 71 The provisions of Article 777 (Demand for Purchase of Share Options), Article 778 (Determination on Value of Share Options, etc.), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (iv)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Mandatory Consolidation of Hearings, etc.) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the cases where the converting Stock Company has issued share options. In this case, the term "converted membership company" in Article 778, paragraph (1), Article 778, paragraph (2), and Article 778, paragraph (4) of that Act shall be deemed to be replaced with "Converted Mutual Company (meaning a Converted Mutual Company as defined in Article 69, paragraph (4), item (i) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Contract during Procedure of Entity Conversion)

Article 72 (1) A converting Stock Company shall, if it seeks to conclude an insurance contract on or after the day following the date of public notice under Article 70, paragraph (2), notify the prospective Policyholder to the effect that the company is going through the procedure of Entity Conversion to obtain his/her consent.

(2) A Policyholder who has given his/her consent under the preceding paragraph shall not be deemed to be a Policyholder for the purpose of applying the following Article to Article 77 inclusive.

(Policyholders Meeting)

Article 73 Where the number of the Policyholders who have stated their objections within the period set forth in Article 70, paragraph (2), item (iv) or the amount of their credits as specified by Cabinet Office Ordinance set forth in paragraph (6) of the same Article has not exceeded the proportion specified in that paragraph, the directors of the converting Stock Company shall convene a policyholders meeting without delay following the completion of the procedure prescribed in the same Article.

(Method of Adopting Resolution, etc.)

Article 74 (1) Each Policyholder shall be entitled to one vote at the policyholders meeting.

(2) A resolution of the policyholders meeting is adopted by a three-quarter majority vote of the attending Policyholders at a session where at least half of the Policyholders are present.

(3) The provisions of Article 67, paragraph (1) (Determination to Call Organizational Meetings), Article 68 (excluding the items in paragraph (2) and paragraphs (5) to (7) inclusive) (Notices of Calling of Organizational Meetings), Articles 70 and 71 (Giving of Organizational Meeting Reference Documents and Voting Forms), Article 74 to 76 inclusive (Proxy Voting, Voting in Writing, Voting by Electromagnetic Method), Article 78 to 80 inclusive (Accountability of Incorporators, Authority of Chairperson, Resolution for Postponement or Adjournment), Article 81, paragraphs (1) to (3) inclusive (Minutes) and Article 316, paragraph (1) (Investigation of Materials Submitted to the Shareholders' Meeting) of the Companies Act shall apply mutatis mutandis to the policyholders meeting; and the provisions of Article 830 (Action for a Declaratory Judgment as to the Absence or Invalidity of a Resolution of a Shareholders' Meeting, etc.), Article 831 (Action to Revoke a Resolution of a Shareholders' Meeting, etc.), Article 834 (limited to the segment pertaining to items (xvi) and (xvii)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836, paragraphs (1) and (3) (Order to Provide Security), Article 837 (Mandatory Consolidation of Oral Arguments, etc.), Article 838 (Persons Affected by a Judgment Being Upheld), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (1) (limited to the segment pertaining to item (i), sub-item (g)) (Commissioning of Registration by a Judicial Decision) of that Act shall apply mutatis mutandis to an action for a declaratory judgment as to the absence or invalidity of a resolution of the policyholders meeting and to an action to rescind a resolution of the policyholders meeting. In this case, the terms "incorporators," "shareholders at incorporation" and "Stock Company" in those provisions shall be deemed to be replaced with "converting Stock Company," "policyholders" and "Mutual Company," respectively; the term "in the following cases" in Article 68, paragraph (2) of that Act shall be deemed to be deleted; the term "head office" in Article 74, paragraph (6) of that Act shall be deemed to be replaced with "principal office"; the term "shareholders" in Article 74, paragraph (7) of that Act shall be deemed to be replaced with "members"; and the terms "a Shareholder, etc. (or, in cases where the Shareholders' Meeting, etc. set forth respectively in each such item is an Organizational Meeting or a Class Organizational Meetings, a Shareholder, etc., a Shareholder at Incorporation, a Director at Incorporation or a Company Auditor at Incorporation)" and "a director, company auditor or liquidator pursuant to the provisions of Article 346(1) (including cases where it is applied mutatis mutandis pursuant to Article 479(4)), and in cases where such resolution is a resolution of an Organizational Meeting or Class Organizational Meeting, it shall include a Director at Incorporation or a Company Auditor at Incorporation)" in Article 831, paragraph (1) of that Act shall be deemed to be replaced with "policyholders, directors, company auditors or liquidators (or, in a company with Committees, Policyholders, directors, executive officers or liquidators" and "directors, company auditors or liquidators," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) It shall be sufficient for a notice or demand to a Policyholder to be sent by the converting Stock Company to the place or address which the Policyholder has notified to the Stock Company for the receipt of notices or demands.

(5) The notice or demand set forth in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand would normally have arrived.

(6) The provisions of the preceding two paragraphs shall apply mutatis mutandis to the delivery of documents to Policyholders in giving a notice under Article 68, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to paragraph (3) and provision by electromagnetic means of the particulars that are required to be included in such documents. In this case, the term "to have arrived" in the preceding paragraph shall be deemed to be replaced with "to have been effected by delivery of such document or provision of such particulars by electromagnetic means"; and any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Report of Directors)

Article 75 The directors shall report to the policyholders meeting the particulars related to an Entity Conversion.

(Resolution of Policyholders Meeting)

Article 76 (1) The policyholders meeting shall, in its resolutions, adopt the articles of incorporation of the Converted Mutual Company and other particulars required for the organization of the Converted Mutual Company, and elect the persons to serve as directors of the Converted Mutual Company.

(2) In the following cases, the policyholders meeting shall elect the persons set forth in the relevant items:

(i) Where the Converted Mutual Company is a company with accounting advisors, the persons to serve as accounting advisors of the Converted Mutual Company;

(ii) Where the Converted Mutual Company is a company with auditors, the persons to serve as company auditors of the Converted Mutual Company; and

(iii) Where the Converted Mutual Company is a company with accounting auditors, the persons to serve as accounting auditors of the Converted Mutual Company.

(3) The resolution set forth in Article 69, paragraph (1) may be amended by a resolution under paragraph (1); provided, however, that such amendment may not harm the interest of the creditors of the converting Stock Company.

(4) Any amendment under the preceding paragraph that poses the risk of causing any damage to the interest of shareholders shall be subject to the authorization of the shareholders' meeting. In this case, the provisions of Article 69, paragraph (2) shall apply mutatis mutandis.

(5) The resolution of authorization set forth in Article 69, paragraph (1) shall lose its effect without the authorization of the shareholders' meeting set forth in the preceding paragraph.

(6) The policyholders meeting may not adopt a resolution on any other matter than that listed in Article 67, paragraph (1), item (ii) of the Companies Act as applied mutatis mutandis pursuant to Article 74, paragraph (3); provided, however, that this shall not apply to a decision on the articles of incorporation of the Converted Mutual Company or on any other particular that is necessary for the organization of the Converted Mutual Company, and the election of the persons specified in paragraphs (1) and (2).

(General Council of Representative Policyholders)

Article 77 (1) The converting Stock Company may, by a resolution under Article 69, paragraph (1), establish an administrative organ composed of representative members elected from among the Policyholders (hereinafter referred to as "General Council of Representative Policyholders") in lieu of the policyholders meeting.

(2) The resolution set forth in the preceding paragraph shall specify the particulars specified by Cabinet Office Ordinance, such as the number and election method of representative members.

(3) Policyholders of a converting Stock Company (excluding the holders of the policies for which Insurance Claims, etc. had already arisen at the time of public notice under the following paragraph (but limited to those policies that would be terminated with the payment of the Insurance Claims, etc.); the same shall apply in that paragraph and paragraph (5)) may state to the converting Stock Company their objections to the resolution set forth in paragraph (1).

(4) A converting Stock Company shall give public notice of the following particulars within two weeks from the date of the resolution set forth in paragraph (1); provided, however, that such period for item (ii) may not be shorter than one month:

(i) Contents of the resolution set forth in paragraph (1);

(ii) The fact that Policyholders of the converting Stock Company may state their objections within a certain period of time; and

(iii) In addition to what is listed in the preceding two items, particulars specified by Cabinet Office Ordinance.

(5) Any resolution under paragraph (1) shall be null and void if the number of Policyholders who have stated their objections within the period set forth in item (ii) of the preceding paragraph exceeds one fifth of the total number of Policyholders, and the amount specified by Cabinet Office Ordinance as the credits (other than Insurance Claims, etc.) belonging to the insurance contracts of the Policyholders who have stated such objections exceeds one fifth of the total amount of credits belonging to the Policyholders.

(6) The provisions of Article 44-2 (excluding the second sentence of paragraph (3)) and Article 73 to the preceding Article inclusive shall apply mutatis mutandis to the General Council of Representative Policyholders. In this case, the term "the preceding paragraph" in Article 310, paragraph (2) of the Companies Act as applied mutatis mutandis pursuant to the first sentence of Article 44-2, paragraph (3) and the term "paragraph (1)" in Article 310, paragraph (3) shall be deemed to be replaced with "Article 44-2, paragraph (1) of the Insurance Business Act"; the term "Article 299, paragraph (3)" in Article 310, paragraph (4) shall be deemed to be replaced with "Article 68, paragraph (3) as applied mutatis mutandis pursuant to Article 74, paragraph (3) of the Insurance Business Act"; the term "shareholders (excluding the shareholders who may not exercise their voting rights on all matters which may be resolved at the shareholders' meeting under the preceding paragraph. The same shall apply hereinafter in paragraph (4) of the following Article and in Article 312, paragraph (5))" in Article 310, paragraph (7) shall be deemed to be replaced with "Policyholders or members"; the term "Article 74 to 76 inclusive" in Article 74, paragraph (3) shall be deemed to be replaced with "Articles 75 and 76"; and the term "Policyholder" in Article 74, paragraph (4) shall be deemed to be replaced with "representative member"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Solicitation of Funds in Entity Conversion)

Article 78 (1) A converting Stock Company shall, if it seeks to solicit additional funds for the Converted Mutual Company, solicit the required amount of such funds without delay following the conclusion of the policyholders meeting or General Council of Representative Policyholders (or, in the case of Article 76, paragraph (4), following the authorization of the shareholders' meeting set forth in that paragraph).

(2) A converting Stock Company shall notify the persons who seek to offer contributions to its funds in response to a solicitation under the preceding paragraph of the following particulars:

(i) Particulars listed in Article 23, paragraph (1), item (ii) and items (iv) to (vi) inclusive;

(ii) Amount of the additional funds to be solicited, the rights enjoyed by the contributors to the funds and the method of redemption of the funds;

(iii) Payment date; and

(iv) Location of the banks, etc. where the payment of contribution of funds is handled.

(3) The provisions of Article 28, paragraphs (2) to (6) inclusive, Article 29 to 30-2 inclusive, Article 30-3 (excluding paragraphs (2) and (3)), and Article 30-5, paragraphs (2) and (3) shall apply mutatis mutandis to a solicitation under (1). In this case, the term "incorporators" in those provisions shall be deemed to be replaced with "converting Stock Company"; the terms "funds solicited at incorporation" and "funds of a Mutual Company at incorporation" in those provisions shall be deemed to be replaced with "funds solicited under Article 78, paragraph (1)"; the term "the items in paragraph (1)" in Article 28, paragraph (4) shall be deemed to be replaced with "the items of Article 78, paragraph (2)"; the term "the preceding two Articles" in Article 30 shall be deemed to be replaced with "Article 78, paragraph (2) (excluding item (iii)) and Article 28, paragraphs (2) to (6) inclusive as applied mutatis mutandis pursuant to Article 30, paragraph (3)"; the term "Mutual Company thus established" in Article 30-4, paragraph (4) shall be deemed to be replaced with "Converted Mutual Company"; and the term "After the establishment of the Mutual Company" in Article 30-5, paragraph (3) shall be deemed to be replaced with "After the Entity Conversion"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Policyholders Meeting after Solicitation of Funds)

Article 79 (1) In the case of paragraph (1) of the preceding Article, the directors of the converting Stock Company shall, without delay after the total amount of the funds solicited under that paragraph has been paid in, convene a second policyholders meeting or General Council of Representative Policyholders.

(2) The persons to serve as directors (or directors and company auditors, where the Converted Mutual Company is a company with auditors) of the Converted Mutual Company shall investigate whether the total amount of the funds solicited under paragraph (1) of the preceding Article has been subscribed for and paid in, and report the result to the policyholders meeting or General Council of Representative Policyholders set forth in the preceding paragraph.

(3) The provisions of Article 94 (Special Provisions in case Directors at Incorporation are Incorporators) of the Companies Act shall apply mutatis mutandis to the policyholders meeting or General Council of Representative Policyholders set forth in paragraph (1), where all or some of the persons to serve as directors of the Converted Mutual Company are directors or executive officers of the converting Stock Company. In this case, the term "the particulars listed in the items of paragraph (1) of the preceding Article" in paragraph (1) of the same Article shall be deemed to be replaced with "whether the total amount of the funds solicited under Article 78, paragraph (1) of the Insurance Business Act has been subscribed for and paid in"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Authorization of Entity Conversion)

Article 80 (1) An Entity Conversion shall not take effect without the authorization of the Prime Minister.

(2) Whenever an application has been filed for the authorization referred to in the preceding paragraph, the Prime Minister shall examine whether it conforms to the following standards:

(i) The Converted Mutual Company would have a sufficient financial basis to execute the business of an Insurance Company, etc. in a sound and efficient manner;

(ii) The Entity Conversion poses no risk of harming the rights of Policyholders; and

(iii) In addition to what is listed in the preceding two items, the Entity Conversion poses no risk of precluding the sound business operation of an Insurance Company, etc.

(Effectuation, etc. of Entity Conversion)

Article 81 (1) A converting Stock Company shall become a Mutual Company on the Effective Date.

(2) The shares and share options of a converting Stock Company shall become null and void on the Effective Date.

(3) The Policyholders of a converting Stock Company shall become members of the Converted Mutual Company on the Effective Date.

(4) The provisions of the preceding three paragraphs shall not apply to the cases where a procedure under Article 70 has not been completed or where the Entity Conversion has been voluntarily abandoned.

(Public Notice, etc. of Entity Conversion)

Article 82 (1) A Converted Mutual Company shall, without delay following the Entity Conversion, give public notice of the effect that an Entity Conversion has been carried out and publish the particulars specified by Cabinet Office Ordinance. The same shall apply to the cases where a converting Stock Company has voluntarily abandoned the planned Entity Conversion after giving a public notice under Article 70, paragraph (2).

(2) A Converted Mutual Company shall, for six months following the Effective Date, keep at each of its offices the documents or electromagnetic records in which the progress of the procedures under Article 70 and any other particulars specified by Cabinet Office Ordinance as being involved in an Entity Conversion are detailed or recorded.

(3) Policyholders or other creditors of a Converted Mutual Company may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the Mutual Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Converted Mutual Company, or to be issued a document detailing such particulars.

(Pledge on Former Shares)

Article 83 The provisions of Article 151 (excluding the items) and Article 154 (Effect of pledge of shares) of the Companies Act shall apply mutatis mutandis to the monies which the shareholders are entitled to receive as a result of any Entity Conversion of a Stock Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Registration)

Article 84 (1) Where a Stock Company has carried out an Entity Conversion, the converting Stock Company shall make a registration of dissolution within two weeks from the date of Entity Conversion at the location of its head office and within three weeks from said date at the location of its branch offices; and the Converted Mutual Company shall complete registration of incorporation within two weeks from the date of Entity Conversion at the location of its principal office and within three weeks from said date at the location of its secondary offices.

(2) The following documents shall be attached to a written application for the registration of incorporation of a Mutual Company under the preceding paragraph, in addition to those specified in Articles 18, 19 and 46 of the Commercial Registration Act as applied mutatis mutandis pursuant to Article 67:

(i) Entity Conversion plan;

(ii) Articles of incorporation;

(iii) A document certifying that a public notice under Article 70, paragraph (2) has been given;

(iv) The minutes of the shareholders' meeting and policyholders meeting (or General Council of Representative Policyholders, where the company has such a council);

(v) Where any Policyholder or other creditor has stated his/her objection under Article 70, paragraph (4), a document certifying that the company has made payment or provided equivalent security to such Policyholder or other creditor, or entrusted equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment, or a document certifying that the Entity Conversion poses no risk of harming the interest of such Policyholder or other creditor;

(vi) A document certifying that the number of Policyholders who have stated their objections under Article 70, paragraph (6) has not exceeded one fifth of the total number of Policyholders, or a document certifying that the amount specified by Cabinet Office Ordinance set forth in that paragraph as the credits belonging to such Policyholders has not exceeded one fifth of the total amount set forth in that paragraph;

(vii) Where the converting Stock Company is a company issuing share certificates, a document certifying that a public notice has been given under the main clause of Article 219, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 69, paragraph (7), or a document certifying that the company has not issued share certificates for all of the shares.

(viii) Where the converting Stock Company has issued share options, a document certifying that a public notice has been given under Article 293, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 69, paragraph (7), or a document certifying that the company has not issued any stock option certificate under that paragraph.

(ix) A document certifying that the directors (or directors and company auditors, where the Converted Mutual Company is a company with auditors) of the Converted Mutual Company have accepted the assumption of office;

(x) Where accounting advisors or accounting auditors have been elected for the Converted Mutual Company, the following documents;

(a) A document certifying that they have accepted the assumption of office,

(b) Where they are juridical persons, Certificates of Registered Particulars for such juridical persons, provided, however, that this shall not apply to the cases where the principal offices of such juridical persons are located within the district under the jurisdiction of the relevant registry office, and

(c) Where they are not juridical persons, a document certifying that the accounting advisors meet the requirement of Article 333, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-4, or that the accounting auditors meet the requirement of Article 337, paragraph (1) of that Act as applied mutatis mutandis pursuant to Article 53-7;

(xi) Where funds have been solicited, a document certifying the offer to contribute funds or a contract under Article 30 as applied mutatis mutandis pursuant to Article 78, paragraph (3); and

(xii) Where funds have been solicited, a document certifying that payment has been made to the funds under Article 30-3, paragraph (1) as applied mutatis mutandis pursuant to Article 78, paragraph (3).

(3) Articles 76 and 78 (Registration of Entity Conversion) of the Commercial Registration Act shall apply mutatis mutandis to the case of paragraph (1). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Action to Invalidate an Entity Conversion)

Article 84-2 (1) The invalidity of an Entity Conversion may only be asserted in an action filed within six months from the Effective Date.

(2) An action to invalidate an Entity Conversion may only be filed by a person who was a shareholder, etc. (meaning a person who was a shareholder, director, company auditor or liquidator (or, in a company with Committees, a shareholder, director, executive officer or liquidator); hereinafter the same shall apply in this Section) of the converting Stock Company on the Effective Date, or a member, etc. (meaning a member, director, company auditor or liquidator (or, in a company with Committees, a member, director, executive officer or liquidator); hereinafter the same shall apply in this Section) or bankruptcy trustee of the Converted Mutual Company or a creditor of the Converted Mutual Company who has not approved of the Entity Conversion.

(3) An action to nullify an Entity Conversion is filed against the Converted Mutual Company.

(4) The provisions of Article 835, paragraph (1) (Jurisdiction over Actions), Article 836 to 839 inclusive (Order to Provide Security, Mandatory Consolidation of Oral Arguments, etc., Persons Affected by a Judgment Being Upheld), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff) and Article 937, paragraph (3) (limited to the segment pertaining to item (i)) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action to invalidate an Entity Conversion; the provisions of Article 840 (Effects of a Judgment of Invalidity of New Share Issue) of that Act shall apply mutatis mutandis to a judgment of invalidity of an Entity Conversion accompanied by the solicitation of funds set forth in Article 78, paragraph (1); and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (ii)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 to 877 inclusive (Mandatory Consolidation of Hearings, etc., Supreme Court Rules, Mandatory Consolidation of Hearings, etc.) and Article 878, paragraph (1) (Effects of a Judicial Decision) of that Act shall apply mutatis mutandis to an application under Article 840, paragraph (2) of that Act as applied mutatis mutandis pursuant to this paragraph. In this case, the term "shareholder" in Article 878, paragraph (1) shall be deemed to be replaced with "shareholder or member"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Subsection 2 Entity Conversion from Mutual Company to Stock Company

(Entity Conversion)

Article 85 (1) A mutual Insurance Company may convert to a stock Insurance Company.

(2) A Mutual Company that is a Low-Cost, Short-Term Insurer may convert to a Stock Company that is a Low-Cost, Short-Term Insurer.

(Authorization of Entity Conversion Plan)

Article 86 (1) A Mutual Company shall, if it seeks to carry out an Entity Conversion under the preceding Article (hereinafter referred to as "Entity Conversion" in this Subsection), prepare an Entity Conversion plan to be approved by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council; hereinafter the same shall apply in this Subsection).

(2) The resolution set forth in the preceding paragraph shall be a resolution under Article 62, paragraph (2).

(3) A Mutual Company, if it seeks to adopt a resolution under paragraph (1), shall provide an outline of the Entity Conversion plan in the notice to be given pursuant to Article 299, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1) or Article 49, paragraph (1).

(4) A Mutual Company shall prescribe the following particulars in its Entity Conversion plan:

(i) The purpose, trade name, location of the head office and total number of authorized shares of the Stock Company to be established by the Entity Conversion (hereinafter referred to as "Converted Stock Company" in this Subsection);

(ii) In addition to what is listed in the preceding item, particulars specified by the articles of incorporation of the Converted Stock Company;

(iii) Names of the directors of the Converted Stock Company;

(iv) For each category set forth in the following, the corresponding particulars specified therein:

(a) Where the Converted Stock Company is a company with accounting advisors: the names of the persons to serve as accounting advisors of the Converted Stock Company,

(b) Where the Converted Stock Company is a company with auditors: the names of the company auditors of the Converted Stock Company, or

(c) Where the Converted Stock Company is a company with accounting auditors: the names of the accounting auditors of the Converted Stock Company;

(v) The number of shares (or the classes of share and the number of shares by class, where the Converted Stock Company is a company with class shares) to be acquired by the members of the converting Mutual Company or the method of calculating such number, and particulars of the capital and Reserves of the Converted Stock Company;

(vi) Particulars related to the allocation of the shares set forth in the preceding item to the members of the converting Mutual Company;

(vii) The amount of, and calculation method for, any money granted to the members of the converting Mutual Company;

(viii) Particulars related to the allocation of the money set forth in the preceding item to the members of the converting Mutual Company;

(ix) The method of selling any additional fraction of shares to be issued as a result of the allocation of shares to the members of the converting Mutual Company and any other particular specified by Cabinet Office Ordinance regarding such sale.

(x) The method of purchasing any fraction of shares arising under the preceding item and any other particular specified by Cabinet Office Ordinance regarding such purchase;

(xi) Particulars related to the rights of Policyholders after the Entity Conversion; and

(xii) The day on which the Entity Conversion takes effect (hereinafter referred to as "Effective Date" in this Subsection) and any other particular specified by Cabinet Office Ordinance.

(5) A Mutual Company shall, as a particular to be prescribed by the articles of incorporation pursuant to the provisions of item (ii) of the preceding paragraph, include in the Converted Stock Company's articles of incorporation a principle pertaining to the policy dividends set forth in Article 114, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 272-18).

(Retention and Inspection, etc. of Documents Related to Entity Conversion Plans, etc.)

Article 87 (1) A converting Mutual Company shall, for the period ranging from the commencement date for the keeping of an Entity Conversion plan to the Effective Date, keep at each of its offices the documents or electromagnetic records in which the Entity Conversion plan and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(2) The term "the commencement date for the keeping of an Entity Conversion plan" in the preceding paragraph refers to the date listed in any of the following items, whichever is earlier:

(i) The day that is two weeks before the date of the general members' council meeting set forth in paragraph (1) of the preceding Article (or, in the case of Article 319, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1), the date of proposal under that paragraph); or

(ii) The date of public notice under paragraph (2) of the following Article.

(3) Policyholders or other creditors of a converting Mutual Company may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the Mutual Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in paragraph (1);

(ii) A request for a certified copy or extract of the documents set forth in paragraph (1);

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in paragraph (1) in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in paragraph (1) by the electromagnetic means determined by the converting Mutual Company, or to be issued a document detailing such particulars.

(4) The Converted Stock Company shall, for six months from the Effective Date, keep at each of its business offices the documents or electromagnetic records in which the details of the Entity Conversion plan and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(5) The creditors of a Converted Stock Company, such as Shareholders and Policyholders, may make the following requests to the company at any time during its operating hours; provided, however, that they pay the fees determined by the Converted Stock Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Converted Stock Company, or to be issued a document detailing such particulars.

(Objections of Creditors)

Article 88 (1) Policyholders or other creditors of a converting Mutual Company may state to the company their objections to the Entity Conversion.

(2) A converting Mutual Company shall give public notice of the following particulars in the Official Gazette and by the Method of Public Notice prescribed by its articles of incorporation; provided, however, that the period for item (iii) may not be shorter than one month:

(i) The fact that an Entity Conversion will be carried out;

(ii) The trade name and address of the Converted Stock Company;

(iii) The fact that Policyholders or other creditors of the converting Mutual Company may state their objections within a certain period of time; and

(iv) In addition to what is listed in the preceding three items, particulars specified by Cabinet Office Ordinance.

(3) Where no Policyholders or other creditors have stated their objections within the period set forth in item (iii) of the preceding paragraph, such Policyholders or creditors shall be deemed to have approved the Entity Conversion.

(4) Where any Policyholder or other creditor has stated his/her objection under paragraph (2), item (iii), the converting Mutual Company shall make payment or provide equivalent security to such Policyholder or other creditor, or entrust equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment; provided, however, that this shall not apply to the cases where the Entity Conversion poses no risk of harming the interest of such Policyholder or other creditor;

(5) The provisions of the preceding paragraph shall not apply to the Policyholders or any rights held by other persons pertaining to insurance contracts (other than Insurance Claims, etc.).

(6) Any resolution of authorization under Article 86, paragraph (1) shall be null and void if the number of the Policyholders who have stated their objections within the period set forth in paragraph (2), item (iii) (excluding the holders of policies under which Insurance Claims, etc. had already arisen at the time of public notice under the paragraph (2) (but limited to those policies that would be terminated with the payment of the Insurance Claims, etc.); the same shall apply hereinafter in this paragraph and in the following paragraph) exceeds one fifth of the total number of Policyholders, and the amount specified by Cabinet Office Ordinance as the credits (other than Insurance Claims, etc.) belonging to the insurance contracts of the Policyholders who have stated such objections exceeds one fifth of the total amount of credits belonging to the Policyholders.

(7) An Entity Conversion carried out pursuant to the provisions of the preceding paragraphs shall also be effective against the Policyholders who have stated their objections under the preceding paragraph and other persons who hold any right (other than Insurance Claims, etc.) pertaining to the insurance contracts involving the Policyholders.

(8) A converting Mutual Company shall, if it seeks to conclude an insurance contract on or after the day following the date of public notice under paragraph (2), notify the prospective Policyholder to the effect that the company is going through Entity Conversion procedures.

(9) In addition to what is provided for in the preceding paragraphs, necessary particulars for the application of those provisions shall be specified by Cabinet Order.

(Redemption of Funds, etc.)

Article 89 (1) A converting Mutual Company shall, where it has any amount of unredeemed funds, redeem the full amount of its funds as stipulated in the Entity Conversion plan; provided, however, that this shall not apply to any amount of credits pertaining to the funds delivered for the purpose of contribution in kind in issuing shares under Article 92.

(2) The provisions of Article 55, paragraph (2) and Article 56 shall not apply to an Entity Conversion from a Mutual Company to a Stock Company.

(Allocation of Shares or Monies to Members)

Article 90 (1) The members of a converting Mutual Company shall receive allocation of the Converted Stock Company's shares or monies as stipulated in the Entity Conversion plan.

(2) The allocation of shares or monies set forth in the preceding paragraph shall be made in accordance with the amount of contribution of each member (meaning the amount calculated pursuant to the provisions of Cabinet Office Ordinance as equivalent to the balance of the amount paid by a member as the insurance premiums and the profits obtained by investing the money received as such insurance premiums which have neither been allocated to the payment of benefits such as insurance proceeds or refunds, nor to business or other expenditures, after deducting the amount of assets to be retained for the performance of obligations under the insurance contract with the member).

(3) The provisions of Article 234, paragraph (1) (excluding all items) and (2) to (5) inclusive (Treatment of Fractions), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 871 (Appending of the Reason), Article 874 (limited to the segment pertaining to item (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the allocation of shares to the members of a converting Mutual Company pursuant to the provisions of the preceding two paragraphs. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) In addition to what is provided for in the preceding three paragraphs, particulars required for the allocation of shares or monies in the case of an Entity Conversion shall be specified by Cabinet Order.

(Amount of Surplus in Entity Conversion, etc.)

Article 91 (1) A converting Mutual Company shall, as a particular to be prescribed by the articles of incorporation pursuant to the provisions of Article 86, paragraph (4), item (ii), determine the amount of surplus in Entity Conversion.

(2) A Converted Stock Company may not distribute the surplus in excess of the amount of the net assets on the balance sheet after deduction of the amount of surplus in Entity Conversion.

(3) The amount of surplus in Entity Conversion shall be the total amount calculated for all withdrawn members as specified by Cabinet Office Ordinance in accordance with Cabinet Office Ordinance set forth in paragraph (2) of the preceding Article.

(4) In addition to what is provided for in paragraph (1) and the preceding paragraph, the amount to be set aside as capital reserves on Entity Conversion, the reduction of surplus in Entity Conversion and other particulars required for calculations on Entity Conversion shall be specified by Cabinet Office Ordinance.

(Issuance of Shares on Entity Conversion)

Article 92 A converting Mutual Company may, in carrying out the Entity Conversion, issue shares of the Converted Stock Company, in addition to the allocation of shares under Article 90, paragraph (1). In this case, the Entity Conversion plan shall stipulate the following particulars:

(i) The number of the shares to be issued pursuant to the provisions of this Article (hereinafter referred to as "Shares Issued on Entity Conversion" in this Subsection) (or, in a company with class shares, the classes and number of the Shares Issued on Entity Conversion; hereinafter the same shall apply in this Subsection);

(ii) The amount to be paid in for the Shares Issued on Entity Conversion (meaning the amount of money to be paid, or of non-monetary properties to be delivered, in exchange for a share issued on Entity Conversion; hereinafter the same shall apply in this Subsection);

(iii) Where contribution is to be made in the form of non-monetary property, that fact and the description and value of such property;

(iv) The date of the payment of money in exchange for the Shares Issued on Entity Conversion or the delivery of the property set forth in the preceding item;

(v) Particulars of the capital and capital reserves to be increased.

(Offer to Subscribe, etc. for Shares Issued on Entity Conversion)

Article 93 (1) A converting Mutual Company shall notify the persons who seek to make an offer to subscribe for Shares Issued on Entity Conversion of the following particulars:

(i) The trade name of the Converted Stock Company;

(ii) Particulars listed in the items of the preceding Article;

(iii) Places where any payment of money is to be handled; and

(iv) In addition to what is listed in the preceding three items, particulars specified by Cabinet Office Ordinance.

(2) A person who offers to subscribe for Shares Issued on Entity Conversion shall submit to the converting Mutual Company a document detailing the following particulars:

(i) The name and address of the person who makes the offer; and

(ii) The number of Shares Issued on Entity Conversion for which the person seeks to subscribe.

(3) A person who makes an offer under the preceding paragraph may, in lieu of submitting the document prescribed in that paragraph, and pursuant to the provisions of Cabinet Order, provide the particulars that are required to be included in such document by electromagnetic means, with the consent of the converting Mutual Company. In this case, the person who has made the offer shall be deemed to have submitted the document prescribed in that paragraph.

(4) The converting Mutual Company shall immediately notify a person who has made an offer under paragraph (2) (hereinafter referred to as "Offeror" in this Subsection) of any change in the particulars listed in the items of paragraph (1) and the particular affected by the change.

(5) It shall be sufficient for a notice or demand to an Offeror to be sent by the converting Mutual Company to the address specified under paragraph (2), item (i) (or to any other place or contact address of which the Offeror has notified the Mutual Company for the receipt of notices or demands).

(6) The notice or demand set forth in the preceding paragraph shall be deemed to have arrived at the time when such notice or demand would normally have arrived.

(7) The provisions of Article 10 shall apply mutatis mutandis to a notice given by the converting Mutual Company under paragraph (1). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Allocation of Shares Issued on Entity Conversion)

Article 94 (1) The converting Mutual Company shall select from among the Offerors the persons to receive allocation of the Shares Issued on Entity Conversion, and determine the number of the Shares Issued on Entity Conversion to be allocated to each of such persons. In this case, the Mutual Company may reduce the number of the Shares Issued on Entity Conversion to be allocated to each Offeror from the number prescribed in paragraph (2), item (ii) of the preceding Article.

(2) The converting Mutual Company shall notify the Offerors, no later than the day immediately preceding the date referred to in Article 92, item (iv) of the number of the Shares Issued on Entity Conversion that will be allocated to each Offeror.

(Subscription for Shares Issued on Entity Conversion)

Article 95 An Offeror shall be a subscriber for Shares Issued on Entity Conversion for the number of such shares allocated by the converting Mutual Company.

(Performance of Contribution)

Article 96 (1) Subscribers for Shares Issued on Entity Conversion (other than those who deliver properties under Article 92, item (iii) (hereinafter referred to as "Properties Contributed in Kind" in this Subsection)) shall, by the date set forth in item (iv) of the same Article, pay the full amount to be paid in for the Shares Issued on Entity Conversion allocated to each of them at any of the places where such payment is to be handled under Article 93, paragraph (1), item (iii).

(2) Subscribers for Shares Issued on Entity Conversion (limited to those who deliver Properties Contributed in Kind) shall, by the date set forth in Article 92, item (iv), deliver the Properties Contributed in Kind equivalent to the full amount to be paid in for the Shares Issued on Entity Conversion allocated to each of them.

(3) A subscriber for Shares Issued on Entity Conversion may not set off his/her obligation of payment under paragraph (1) or delivery under the preceding paragraph (hereinafter referred to as "Performance of Contribution" in this Subsection) against any claim against the converting Mutual Company.

(4) Any assignment of the right to become a holder of Shares Issued on Entity Conversion by Performance of Contribution may not be duly asserted against the Converted Stock Company.

(5) A subscriber for Shares Issued on Entity Conversion who fails to perform contribution shall lose his/her right to become a holder of Shares Issued on Entity Conversion by the Performance of Contribution.

(Timing of Obtaining Shareholder Status)

Article 96-2 A subscriber for Shares Issued on Entity Conversion shall, on the Effective Date, become the holder of the Shares Issued on Entity Conversion for which he/she has performed contribution.

(Restrictions on the Invalidation or Recession of Subscription)

Article 96-3 (1) The proviso to Article 93 (Concealment of True Intention) and the provisions of Article 94, paragraph (1) (Fictitious Manifestation of Intention) of the Civil Code shall not apply to the manifestation of an intention to offer to subscribe for Shares Issued on Entity Conversion or to the manifestation of an intention to allocate them.

(2) A subscriber for Shares Issued on Entity Conversion may neither assert the invalidity of his/her subscription for Shares Issued on Entity Conversion on the grounds of a mistake, nor rescind his/her subscription for Shares Issued on Entity Conversion on the grounds of fraud or duress, after one year has lapsed since the Effective Date or he/she has exercised any right regarding his/her shares.

(Contribution of Non-Monetary Property)

Article 96-4 The provisions of Article 207 (Contribution of Property Other than Monies), Article 212 (excluding paragraph (1), item (i)) (Liabilities of Persons Who Subscribed for Shares with Unfair Amount to Be Paid in), Article 213 (excluding paragraph (1), items (i) and (iii)) (Liabilities of Directors in Case of Shortfall in Value of Property contributed), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to items (ii) and (vii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to any stipulation for the particulars listed in Article 92, item (iii); and the provisions of Part VII, Chapter II, Section 2 (Liability Actions, etc. Against a Stock Company) of that Act shall apply mutatis mutandis to an action for payment under Article 212 (excluding paragraph (1), item (i)) of that Act as applied mutatis mutandis pursuant to this Article. In this case, the term "director" in Article 207, paragraph (10), item (i) of that Act shall be deemed to be replaced with "director of the converting Mutual Company set forth in Article 86, paragraph (1) of the Insurance Business Act"; the terms "Article 209" and "Article 199, paragraph (1), item (iii)" in Article 207, paragraph (2) shall be deemed to be replaced with "Article 96-2 of the Insurance Business Act" and "Article 92, item (iii) of that Act," respectively; the terms "Article 199, paragraph (1), item (iii)" and "application for subscription for shares for subscription or his/her manifestation of intention related to the contract provided for in Article 205" in Article 212, paragraph (2) of that Act shall be deemed to be replaced with "Article 92, item (iii) of the Insurance Business Act" and "application," respectively; and the term "shareholders having the shares" in Article 847, paragraph (1) of that Act shall be deemed to be replaced with "shareholders having the shares (or, where six months (or any shorter period prescribed by the articles of incorporation; hereinafter the same shall apply in this paragraph) have not lapsed since the Effective Date of an Entity Conversion, persons who had been members from six months prior until the Effective Date of the Entity Conversion and have been holding the shares without interruption since the Effective Date of the Entity Conversion)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Share Exchange on Entity Conversion)

Article 96-5 (1) A converting Mutual Company may, at the time of Entity Conversion, carry out a share exchange on Entity Conversion (meaning an exchange of shares whereby a converting Mutual Company causes all of the shares of the Converted Stock Company to be acquired by another Stock Company (hereinafter referred to as "Wholly Owning Parent Company for Share Exchange on Entity Conversion" in this Subsection) at the time of the Entity Conversion; hereinafter the same shall apply in this Subsection).

(2) A converting Mutual Company shall, in carrying out a share exchange on Entity Conversion, conclude a contract for share exchange on Entity Conversion with the Wholly Owning Parent Company for Share Exchange on Entity Conversion.

(3) The provisions of Article 791 (excluding paragraph (1), item (i) and paragraph (3)) (Retention and Inspection, etc. of Documents, etc. Related to an Absorption-Type Split or Share Exchange) of the Companies Act shall apply mutatis mutandis to a converting Mutual Company carrying out a share exchange on Entity Conversion; the provisions of Article 309, paragraph (2) (excluding all items) (Resolution of Shareholders' Meetings), Article 324, paragraph (2) (excluding all items (Resolution of Class Meetings) and Part V, Chapter V, Section 2, Subsection 2, Division 1 (excluding Article 795, paragraph (4), items (i) and (ii), Article 796, paragraph (3), item (i), sub-item (b), Article 799, paragraph (1), items (i) and (ii), Article 800, Article 801, paragraphs (1) and (2), Article 801, paragraph (3), items (i) and (ii), and Article 801, paragraph (5)) (Procedures for Stock Company) of that Act shall apply mutatis mutandis to a Wholly Owning Parent Company for Share Exchange on Entity Conversion; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (iv)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to an application under Article 798, paragraph (2) of that Act as applied mutatis mutandis pursuant to this paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Allocation, etc. of Shares of Wholly Owning Parent Company for Share Exchange to Members)

Article 96-6 (1) Notwithstanding the provisions of Article 90, paragraph (1), the members of a converting Mutual Company carrying out a share exchange on Entity Conversion shall, pursuant to the provisions of the Entity Conversion plan, receive allocation of shares issued, or monies granted, at the time of the share exchange by the Wholly Owning Parent Company for Share Exchange on Entity Conversion.

(2) The provisions of Article 90, paragraphs (2) to (4) inclusive shall apply mutatis mutandis to the case set forth in the preceding paragraph. In this case, the term "the preceding paragraph" in paragraph (2) of the same Article shall be deemed to be replaced with "Article 96-6, paragraph (1)"; the term "the preceding two paragraphs" in Article 90, paragraph (3) shall be deemed to be replaced with "Article 96-6, paragraph (1) and the preceding paragraph"; and the term "the preceding three paragraphs" in Article 90, paragraph (4) shall be deemed to be replaced with "Article 96-6, paragraph (1) and the preceding two paragraphs"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) Where a converting Mutual Company issuing shares pursuant to the provisions of Article 92 carries out a share exchange on Entity Conversion, the subscribers for shares who have made payments or delivered contributions in kind for their shares shall, pursuant to the provisions of the Entity Conversion plan, receive allocation of shares issued, or monies delivered, at the time of the share exchange by the Wholly Owning Parent Company for Share Exchange on Entity Conversion.

(Particulars of Share Exchange on Entity Conversion to be Prescribed by Entity Conversion Plan, etc.)

Article 96-7 In the case of a share exchange on Entity Conversion, the Entity Conversion plan and the contract for share exchange on Entity Conversion shall prescribe the following particulars:

(i) The names, trade names and addresses of the converting Mutual Company and the Wholly Owning Parent Company for Share Exchange on Entity Conversion;

(ii) The following particulars regarding any Shares, etc. (meaning shares or monies; hereinafter the same shall apply in this Section) issued or granted by the Wholly Owning Parent Company for Share Exchange on Entity Conversion to the members of the converting Mutual Company (including the subscribers for the shares issued pursuant to the provisions of Article 92; hereinafter the same shall apply in this Article) in carrying out the share exchange on Entity Conversion;

(a) Where the Shares, etc. are the shares of the Wholly Owning Parent Company for Share Exchange on Entity Conversion, the number of such shares (or, in a company with class shares, the classes of share and the numbers of shares by class) or the method of its calculation, and the particulars of the amounts of capital and Reserves of the Wholly Owning Parent Company for Share Exchange on Entity Conversion, or

(b) Where the Shares, etc. are monies, the amount of such monies or the method of its calculation;

(iii) In the case of the preceding item, the particulars of the allocation of the Shares, etc. set forth in that item to the members of the converting Mutual Company (excluding the Wholly Owning Parent Company for Share Exchange on Entity Conversion);

(iv) The method of selling any additional fraction of shares to be issued as a result of the allocation of shares to the members of the converting Mutual Company and any other particular specified by Cabinet Office Ordinance regarding such sale.

(v) The method of purchasing any additional fraction of shares arising under the preceding item and any other particular specified by Cabinet Office Ordinance regarding such purchase; and

(vi) The day on which the Entity Conversion and share exchange on Entity Conversion take effect.

(Share Transfer on Entity Conversion)

Article 96-8 (1) A converting Mutual Company may, at the time of Entity Conversion, carry out a share transfer on Entity Conversion (meaning a transfer whereby a converting Mutual Company or two or more converting mutual companies cause(s) all of the shares of the Converted Stock Company (including, in the case set forth in paragraph (1), item (ix) of the following Article, the Stock Company set forth in that item) to be acquired by a new Stock Company to be incorporated (hereinafter referred to as "Wholly Owning parent Company Formed by Share Transfer on Entity Conversion" in this Subsection) at the time of the Entity Conversion).

(2) The provisions of Article 96-6 shall apply mutatis mutandis to a share transfer on Entity Conversion. In this case, the term "Wholly Owning Parent Company for Share Exchange on Entity Conversion" in paragraph (1) of the same Article shall be deemed to be replaced with "Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion"; the term "Article 96-6, paragraph (1)" in Article 96-6, paragraph (2) shall be deemed to be replaced with "Article 96-6, paragraph (1) as applied mutatis mutandis pursuant to Article 96-8, paragraph (2)"; and the term "Wholly Owning Parent Company for Share Exchange on Entity Conversion" in Article 96-6, paragraph (3) shall be deemed to be replaced with "Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Particulars of Share Transfer on Entity Conversion to be Prescribed by Entity Conversion Plan, etc.)

Article 96-9 (1) In the case of a share transfer on Entity Conversion, the Entity Conversion plan shall prescribe the following particulars:

(i) The purpose of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion, the trade name, the location of its head office, and the total number of authorized shares;

(ii) In addition to what is listed in the preceding item, particulars specified by the articles of incorporation of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion;

(iii) The names of the persons to serve as directors at the incorporation of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion;

(iv) For each of the following categories, the particulars set forth therein:

(a) Where the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion is a company with accounting advisors: the names of the persons to serve as accounting advisors at the incorporation of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion,

(b) Where the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion is a company with auditors: the names of the persons to serve as company auditors at the incorporation of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion, or

(c) Where the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion is a company with accounting auditors: the names of the persons to serve as accounting auditors at the incorporation of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion;

(v) The number of the shares (or, in a company with class shares, the classes of share and the numbers of shares by class) to be issued by the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion to the members of the converting Mutual Company (including the subscribers for shares issued pursuant to the provisions of Article 92; hereinafter the same shall apply in this Article) in carrying out the share transfer on Entity Conversion or the method of calculating such number, and the particulars of the amounts of the capital and Reserves of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion;

(vi) Particulars of the allocation of the shares set forth in the preceding item to the members of the converting Mutual Company;

(vii) The amount of any money to be granted by the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion to the members of the converting Mutual Company in carrying out the share transfer on Entity Conversion or the method of calculating such amount;

(viii) In the case of the preceding item, the particulars of the allocation of the money set forth in that item to the members of the converting Mutual Company; and

(ix) In jointly incorporating a Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion with another converting Mutual Company or a Stock Company, that fact, and the particulars listed in Article 773, paragraph (1), items (ix) and (x) (Share Transfer Plan) of the Companies Act regarding the share options of the Stock Company.

(2) The provisions of Part II, Chapter I (excluding Article 27 (excluding items (iv) and (v)), Article 29, Article 31, Article 39, Section 6 and Article 49) (Incorporation) of the Companies Act shall not apply to the incorporation of a Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion.

(3) The articles of incorporation of a Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion shall be drafted by the converting Mutual Company carrying out the share transfer on Entity Conversion (or, in the case of paragraph (1), item (ix), the converting Mutual Company carrying out the share transfer on Entity Conversion and the Stock Company set forth in that item).

(4) The provisions of Article 811 (excluding paragraph (1), item (i)) (Retention and Inspection , etc. of Documents, etc. Related to an Incorporation-type Company Split or Share Transfer) of the Companies Act shall apply mutatis mutandis to a converting Mutual Company carrying out a share transfer on Entity Conversion; the provisions of Article 219, paragraph (1) (limited to the segment pertaining to item (viii)), (2) and (3) (Public Notice in Relation to Submission of Share Certificate), Article 220 (Cases Where Share Certificates Cannot be Submitted), Article 293, paragraph (1) (limited to the segment pertaining to item (vii)) and (2) to (4) inclusive (Public Notice in Relation to Submission of Share Option Certificate), Article 309, paragraph (2) (excluding the items) and (3) (limited to the segment pertaining to item (iii)) (Resolution of Shareholders' Meetings), Article 324, paragraph (2) (excluding the items) and (3) (limited to the segment pertaining to item (ii)) (Resolution of Class Meetings), and Part V, Chapter V, Section 3, Subsection 1, Division 1 (excluding Article 803, paragraph (1), items (i) and (ii), Article 805, Article 808, paragraph (1), items (i) and (ii), Article 808, paragraph (3), items (i) and (ii), Article 810, paragraph (1), items (i) and (ii), Article 811, paragraph (1), item (i), Article 811, paragraph (3), and Article 812) (Procedures for Stock Company) of that Act shall apply mutatis mutandis to a Stock Company set forth in paragraph (1), item (ix); and the provisions of Article 815, paragraph (3) (limited to the segment pertaining to item (iii)), (4) and (6) (Retention and Inspection, etc. of Documents, etc. Related to a Consolidation-type Merger Agreement, etc.) of that Act shall apply mutatis mutandis to a Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Authorization of Entity Conversion)

Article 96-10 (1) An Entity Conversion shall not take effect without the authorization of the Prime Minister.

(2) Whenever an application has been filed for the authorization set forth in the preceding paragraph, the Prime Minister shall examine whether it conforms to the following standards:

(i) The Converted Stock Company has a sufficient financial basis to execute its business in a sound and efficient manner;

(ii) The Entity Conversion poses no risk of harming the rights of Policyholders;

(iii) The allocation of shares or money under Article 90 or 96-6 (including the cases where it is applied mutatis mutandis pursuant to Article 96-8, paragraph (2)) has been carried out appropriately; and

(iv) In addition to what is listed in the preceding three items, the Entity Conversion poses no risk of precluding sound business operation.

(Effectuation, etc. of Entity Conversion)

Article 96-11 (1) A converting Mutual Company shall become a Stock Company on the Effective Date (or, in the case of a share transfer on Entity Conversion, the date of the establishment of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion).

(2) The members of a converting Mutual Company shall, on the Effective Date, become holders of the shares set forth in Article 86, paragraph (4), item (v) pursuant to the provisions on the particulars listed in Article 86, paragraph (4), item (vi).

(3) The provisions of the preceding two paragraphs shall not apply to the cases where a procedure under Article 88 has not been completed or where the Entity Conversion has been voluntarily abandoned.

Article 96-12 (1) Notwithstanding the provisions of paragraph (2) of the preceding Article and Article 96-2, the Wholly Owning Parent Company for Share Exchange on Entity Conversion shall acquire all of the issued shares of a Converted Stock Company (excluding the shares of the Converted Stock Company held by the Wholly Owning Parent Company for Share Exchange on Entity Conversion) on the Effective Date, where the converting Mutual Company carries out a share exchange on Entity Conversion.

(2) Notwithstanding the provisions of paragraph (2) of the preceding Article and Article 96-2, the members of a converting Mutual Company (including the subscribers for the shares issued pursuant to the provisions of Article 92) shall become holders of the shares set forth in Article 96-7, item (ii), sub-item (a) on the Effective Date pursuant to the provisions on the particulars listed in item (iii) of the same Article, where the converting Mutual Company carries out a share exchange on Entity Conversion.

(3) The provisions of the preceding two paragraphs shall not apply to the cases where a procedure under Article 88 has not been completed or where the Entity Conversion has been voluntarily abandoned.

Article 96-13 (1) Notwithstanding the provisions of Article 96-11, paragraph (2) and Article 96-2, the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion shall, on the date of its establishment, acquire all of the shares to be allocated to members pursuant to the provisions of Article 90, paragraph (1) (including the shares issued pursuant to the provisions of Article 92 and the shares issued by the Stock Company set forth in Article 96-9, paragraph (1), item (ix)), where the converting Mutual Company carries out a share transfer on Entity Conversion.

(2) Notwithstanding the provisions of Article 96-11, paragraph (2) and Article 96-2, the members of a converting Mutual Company (including the subscribers for the shares issued pursuant to the provisions of Article 92 and the shareholders of the Stock Company set forth in Article 96-9, paragraph (1), item (ix)) shall, on the date of the establishment of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion, become holders of the shares set forth in Article 96-9, paragraph (1), item (v) pursuant to the provisions on the particulars listed in Article 96-9, paragraph (1), item (vi), where the converting Mutual Company carries out a share exchange on Entity Conversion.

(3) The provisions of Article 774, paragraphs (4) and (5) (Effectuation, etc. of Share Transfer) of the Companies Act shall apply mutatis mutandis to the case of Article 96-9, paragraph (1), item (ix). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Registration)

Article 96-14 (1) Where a Mutual Company has carried out an Entity Conversion, the converting Mutual Company shall complete registration of dissolution within two weeks from the date of Entity Conversion at the location of its principal office and within three weeks from said date at the location of its secondary offices; and the Converted Stock Company shall make a registration of incorporation within two weeks from the date of Entity Conversion at the location of its head office and within three weeks from said date at the location of its branch offices.

(2) The provisions of Article 89 (limited to the segment pertaining to item (i) to (iv) inclusive) (Registration of Share Exchange) of the Commercial Registration Act shall apply mutatis mutandis to a share exchange on Entity Conversion carried out by a converting Mutual Company; and the provisions of Article 925 (excluding items (ii) and (iv)) (Registration of Share Transfer) and Article 930, paragraph (1) (limited to the segment pertaining to item (iv)) (Registration at Location of Branch Offices) of the Companies Act, and the provisions of Article 90 (Registration of Share Transfer) of the Commercial Registration Act shall apply mutatis mutandis to a share transfer on Entity Conversion carried out by a converting Mutual Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) The following documents shall be attached to a written application for registration of incorporation under paragraph (1), in addition to those specified in Articles 18, 19 and 46 of the Commercial Registration Act as applied mutatis mutandis pursuant to Article 67:

(i) Entity Conversion plan;

(ii) articles of incorporation;

(iii) The minutes of the Mutual Company's general members' council;

(iv) A document certifying that the directors (or directors and company auditors, where the Converted Stock Company is a company with auditors) of the Converted Stock Company have accepted the assumption of office;

(v) Where accounting advisors or accounting auditors have been appointed for the Converted Stock Company, the following documents;

(a) A document certifying that they have accepted the assumption of office,

(b) Where they are juridical persons, Certificates of Registered Particulars for such juridical persons, provided, however, that this shall not apply to the cases where the principal offices of such juridical persons are located within the district under the jurisdiction of the relevant registry office, and

(c) Where they are not juridical persons, a document certifying that the accounting advisors meet the requirement of Article 333, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 53-4, or that the accounting auditors meet the requirement of Article 337, paragraph (1) of that Act as applied mutatis mutandis pursuant to Article 53-7;

(vi) A document certifying a contract with any administrator of the shareholder registry;

(vii) A document certifying that a public notice under Article 88, paragraph (2) has been given;

(viii) Where any Policyholder or other creditor has stated his/her objection under Article 88, paragraph (4), a document certifying that the company has made payment or provided equivalent security to such Policyholder or other creditor, or entrusted equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment, or a document certifying that the Entity Conversion poses no risk of harming the interest of such Policyholder or other creditor;

(ix) A document certifying that the number of Policyholders who have stated their objections under Article 88, paragraph (6) has not exceeded one fifth of the total number of Policyholders, or a document certifying that the amount specified by Cabinet Office Ordinance set forth in that paragraph as the credits belonging to such Policyholders has not exceeded one fifth of the total amount set forth in that paragraph; and

(x) Where shares have been issued on the Entity Conversion pursuant to the provisions of Article 92, the following documents:

(a) A document certifying the offers to subscribe for the shares;

(b) Where contribution is to be made in the form of money, a document certifying that payments have been made under Article 96, paragraph (1);

(c) Where contribution is to be made in the form of non-monetary property, the following documents;

1. Where an inspector has been elected, a document containing the investigative report of the inspector and annexed documents thereto,

2. In the cases listed in Article 207, paragraph (9), item (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 96-4, a document certifying the market value of the securities,

3. In the cases listed in Article 207, paragraph (9), item (iv) of the Companies Act as applied mutatis mutandis pursuant to Article 96-4, a document containing the verification set forth in that item and annexed documents thereto, and

4. In the cases listed in Article 207, paragraph (9), item (v) of the Companies Act as applied mutatis mutandis pursuant to Article 96-4, the accounting books carrying the monetary claim set forth in that item; and

(d) Certified copy of any judicial decision on the report of the inspector.

(4) In addition to the documents set forth in Articles 18, 19 (Documents to be Attached to Written Application) and 46 (General Rules for Attached Documents) of the Commercial Registration Act, and Article 89 (limited to the segment pertaining to item (i) to (iv) inclusive) of that Act as applied mutatis mutandis pursuant to paragraph (2), and the documents listed in the items of the preceding paragraph, a Certificate of Registered Particulars for the Mutual Company (unless the principal office of the Mutual Company is located within the district under the jurisdiction of the relevant registry office) shall be attached to a written application for registration of change due to any share exchange on Entity Conversion carried out by a Wholly Owning Parent Company for Share Exchange on Entity Conversion.

(5) In addition to the documents set forth in Articles 18, 19 and 46 of the Commercial Registration Act, and Article 90 of that Act as applied mutatis mutandis pursuant to paragraph (2), and the documents listed in the items of paragraph (3), a Certificate Registered Particulars for the Mutual Company (unless the principal office of the Mutual Company is located within the district under the jurisdiction of the relevant registry office) shall be attached to a written application for incorporation due to any share transfer on Entity Conversion.

(6) The provisions of Articles 76 and 78 (Registration of Entity Conversion) of the Commercial Registration Act shall apply mutatis mutandis to the cases of paragraph (1); and the provisions of Article 46, paragraph (3) of that Act as applied mutatis mutandis pursuant to Article 67 shall apply mutatis mutandis to the cases of Article 3, item (iii), paragraph (4) and the preceding paragraph (limited to the segment pertaining to the documents listed in Article 3, item (iii)). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Mutatis Mutandis Application of Provisions on Entity Conversion from Stock Company to Mutual Company)

Article 96-15 The provisions of Article 82 shall apply mutatis mutandis to an Entity Conversion from a Mutual Company to a Stock Company. In this case, the term "Article 70, paragraph (2)" in paragraph (1) of the same Article shall be deemed to be replaced with "Article 88, paragraph (2)"; and the term "Article 70" in Article 82, paragraph (2) shall be deemed to be replaced with "Article 88"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Actions to Invalidate Entity Conversion)

Article 96-16 (1) The invalidity of an Entity Conversion may only be asserted in an action filed within six months from the Effective Date (or, in the case of a share transfer on Entity Conversion, the date of the establishment of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion; the same shall apply in the following paragraph).

(2) An action to invalidate an Entity Conversion may only be filed by the person listed in the relevant of the following items for the category of cases set forth in that item:

(i) In the case of an Entity Conversion accompanied by a share exchange on Entity Conversion, a person who was a member, etc. of the converting Mutual Company or a shareholder, etc. of the Wholly Owning Parent Company for Share Exchange on Entity Conversion as of the Effective Date, or a shareholder, etc. or bankruptcy trustee of the Converted Stock Company or a creditor of the Converted Stock Company who has not approved of the Entity Conversion or a shareholder, etc. or bankruptcy trustee of the Wholly Owning Parent Company for Share Exchange on Entity Conversion;

(ii) In the case of an Entity Conversion accompanied by a share transfer on Entity Conversion, a person who was a member, etc. of the converting Mutual Company as of the Effective Date, or a shareholder, etc. or bankruptcy trustee of the Converted Stock Company or the Stock Company set forth in Article 96-9, paragraph (1), item (ix) or a creditor of such Stock Company who has not approved of the Entity Conversion or a shareholder, etc. or bankruptcy trustee of the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion; or

(iii) In any other case than those listed in the preceding two paragraphs, a person who was a member, etc. of the converting Mutual Company as of the Effective Date, or a shareholder, etc. or bankruptcy trustee of the Converted Stock Company or a creditor of the Converted Stock Company who has not approved of the Entity Conversion.

(3) An action to invalidate an Entity Conversion is filed against the person listed in the relevant of the following items for the category of cases set forth in that item:

(i) In the case of item (i) of the preceding paragraph, the Converted Stock Company and the Wholly Owning Parent Company for Share Exchange on Entity Conversion;

(ii) In the case of item (ii) of the preceding paragraph, the Converted Stock Company and the Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion; or

(iii) In the case of item (iii) of the preceding paragraph, the Converted Stock Company.

(4) The provisions of Article 835, paragraph (1) (Jurisdiction over Actions), Article 836 to 839 inclusive (Order to Provide Security, Mandatory Consolidation of Oral Arguments, etc., Persons Affected by a Judgment Being Upheld, Effects of a Judgment of Invalidity, Revocation or Rescission), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (3) (limited to the segment pertaining to item (i)) and (4) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action to invalidate an Entity Conversion; the provisions of Article 840 (Effects of a Judgment of Invalidity of New Share Issue) of that Act shall apply mutatis mutandis to a judgment of invalidity of an Entity Conversion accompanied by the issuance of shares on Entity Conversion under Article 92; the provisions of Article 844 (Effects of a Judgment of Invalidity of a Share Exchange or Share Transfer) of that Act shall apply mutatis mutandis to a judgment of invalidity of an Entity Conversion accompanied by a share exchange on Entity Conversion or share transfer on Entity Conversion; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (ii)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 to 877 inclusive (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act, Supreme Court Rules, Mandatory Consolidation of Hearings, etc.) and Article 878, paragraph (1) (Effect of Judicial Decision) of that Act shall apply mutatis mutandis to an application under Article 840, paragraph (2) of that Act as applied mutatis mutandis pursuant to this paragraph. In this case, the term "shareholder" in Article 878, paragraph (1) shall be deemed to be replaced with "shareholder or member"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(5) For the purpose of applying the provisions of Article 475 (Causes of Commencement of Liquidation) of the Companies Act to a Wholly Owning Parent Company Formed by Share Transfer on Entity Conversion, the term "in the cases listed below" in that Article shall be deemed to be replaced with "in the cases listed below or the cases where a judgment in favor of any claim in an action to invalidate an Entity Conversion accompanied by a share transfer on Entity Conversion under Article 96-8, paragraph (1) of the Insurance Business Act has become final and binding."

Chapter III Business

(Scope of Business, etc.)

Article 97 (1) An Insurance Company may, in accordance with the types of licenses provided by Article 3, paragraph (2), underwrite insurance.

(2) An Insurance Company shall invest assets such as money received as insurance premiums by any of the methods specified by Cabinet Office Ordinance, such as acquisition of securities.

Article 97-2 (1) An Insurance Company shall not invest assets specified by Cabinet Office Ordinance, in excess of the amount calculated pursuant to the provisions of Cabinet Office Ordinance.

(2) In addition to the provisions under the preceding paragraph, the amount of assets as specified by Cabinet Office Ordinance to be invested by an Insurance Company regarding one person (including any party specially related to that one person as specified by Cabinet Office Ordinance, with said person; the same shall apply in the following paragraph) shall not exceed the amount calculated pursuant to the provisions of Cabinet Office Ordinance.

(3) If an Insurance Company has a Subsidiary or a party to which it is specially related as specified by Cabinet Office Ordinances (hereinafter referred to in this Article as "Subsidiary Companies, etc."), the total amount of assets as specified by Cabinet Office Ordinance to be invested in any one person by the Insurance Company and its Subsidiary Companies, etc. , or by such Subsidiary Companies, etc. shall not exceed the amount calculated pursuant to the provisions of Cabinet Office Ordinance.

Article 98 (1) An Insurance Company may, in addition to the business it carries out pursuant to the provisions of Article 97, carry out the following and other business incidental thereto:

(i) Business agency or standing in for the administrative services (limited to those specified by Cabinet Office Ordinance) of other insurance companies (including Foreign Insurers) for Low-Cost, Short-Term Insurers, shipowners' mutual insurance associations (meaning shipowners' mutual insurance associations prescribed in Article 2, paragraph (1) (Definition) of the Act on Shipowners' Mutual Insurance Associations (Act No. 177 of 1950)), and other persons conducting financial business;

(ii) Guarantee of obligation;

(iii) Underwriting (excluding that carried out for the purpose of secondary distribution) of National Government Bonds, local government bonds or Government-Guaranteed Bonds (hereinafter referred to as "National Government Bonds, etc." in this Article) or handling of public offerings of the National Government Bonds, etc. pertaining to that underwriting;

(iv) Acquisition or transfer (not for the purpose of asset investment) of monetary claims (including those indicated in any of the certificates specified by Cabinet Office Ordinance, such as certificates of negotiable deposits);

(iv)-2 Underwriting (excluding that carried out for the purpose of secondary distribution) of Specified Company Bonds issued by Special Purpose Companies (excluding Specified Short-Term Company Bonds and limited to those where only nominative monetary claims or rights of beneficiary of trust into which nominative monetary claims are placed are acquired using the money gained through the issuance of that Specified Company Bonds under Asset Securitization Plans) and any other securities specified by Cabinet Office Ordinance as those equivalent thereto (hereinafter referred to as "Specified Company Bonds, etc." in this item) or handling of public offering of the Specified Company Bonds, etc. pertaining to that underwriting;

(iv)-3 Acquisition or transfer of short-term Company bonds, etc. (except those for the investment of assets);

(v) Handling of a private placement of securities (except those that fall under monetary claims indicated on the certificates prescribed in item (iv) and Short-Term Bonds, etc.);

(vi) Derivative Transactions (excluding those which are carried out for the investment of assets and those which fall under the category of Transactions of Securities-Related Derivatives; the same shall apply in the following item) that are specified by Cabinet Office Ordinance (excluding those that fall under the category of business listed in item (iv));

(vii) Intermediation, brokerage or agency for Derivative Transactions (limited to those specified by Cabinet Office Ordinance);

(viii) Transactions where the relevant parties promise to give and receive money calculated based on the difference between the reference value that they have determined in advance, in terms of an indicator such as interest rate, currency value, commodity price or price of Carbon Dioxide Equivalent Quotas (meaning carbon dioxide equivalent quotas defined in Article 2, paragraph (6) (Definitions) of the Act on Promotion of Global Warming Countermeasures (Act No. 117 of 1998) or any other quotas similar thereto; the same shall apply in item (iv), paragraph (2) of the following Article) on the one hand, and the actual numerical value of that indicator at a fixed point of time in the future, on the other, or any equivalent transactions thereto, that are specified by Cabinet Office Ordinance (referred to as "Financial Derivative Transactions" in the next item) which are transactions found unlikely to damage the soundness of management of an Insurance Company as specified by Cabinet Office Ordinance (excluding those which are carried out for the purpose of asset investment and those falling under the categories of business listed in items (iv) and (vi));

(ix) Intermediation, brokerage or agency for Financial Derivative Transactions (excluding business that falls under the category of business specified in item (vii) and those specified by Cabinet Office Ordinance);

(x) Over-the-Counter Transactions of Securities-Related Derivatives (limited to those that are settled through giving and receiving the difference in the case where the securities pertaining to that Over-the-Counter Transactions of Securities-Related Derivatives fall under the category of monetary claims that are indicated in the form of certificates as prescribed in item (iv) and are not Short-Term Company Bonds, etc.; the same shall apply in the following item) (except those which are carried out for the investment of assets); and

(xi) Intermediation, brokerage or agency for Over-the-Counter Transactions of Securities-Related Derivatives.

(2) An Insurance Company shall, if it seeks to conduct the business listed in the preceding paragraph, item (i), specify its content and obtain authorization from the Prime Minister.

(3) The term "Government-Guaranteed Bonds" in paragraph (1), item (iii) means bonds, such as company bonds, for which redemption of the principal and payment of interest are guaranteed by the government.

(4) Business provided for in paragraph (1), item (iv) concerning the monetary claims indicated on the certificates prescribed in the same item which fall under securities and business provided for in the same paragraph, item (iv)-3 concerning Short-Term Bonds, etc. include business through which the actions listed in Article 2, paragraph (8), items (i) to (vi) inclusive and items (viii) to (x) inclusive (Definitions) of the Financial Instruments and Exchange Act are taken.

(5) The terms "special purpose company," "asset securitization program" or "specified company bond" in paragraph (1), item (iv)-2 mean the special purpose company, asset securitization program, or specified company bond prescribed in Article 2, paragraph (3), (4), or (7) (Definitions) of the Act on the Liquidation of Assets (Act No. 105 of 1998), respectively, and the term "specified short-term bond" means the specified short-term bond prescribed in Article 2, paragraph (8) of the same Act.

(6) The term "Short-Term Bonds, etc." set forth in paragraph (1), items (iv)-3, (v), and (x), and paragraph (4) means the following bonds:

(i) Short-Term Bonds prescribed in Article 66, item (i) (Ownership of Rights) of the Act on Transfer of Bonds, Shares, etc. ;

(ii) Deleted

(iii) Short-term investment corporation bonds prescribed in Article 139-12, paragraph (1) (Special Provisions Pertaining to Short-term Investment Corporation Bonds) of the Act on Investment Trust and Investment Corporation (Act No. 198 of 1951);

(iv) Short-Term Bonds prescribed in Article 54-4, paragraph (1) (Issuance of Short-Term Bonds) of the Shinkin Bank Act (Act No. 238 of 1951);

(v) Short-Term Bonds prescribed in Article 61-10, paragraph (1);

(vi) Specified Short-Term Bonds prescribed in the preceding paragraph;

(vii) Short-term Norinchukin Bank debentures prescribed in Article 62-2, paragraph (1) (Issuance of Short-Term Norinchukin Bank Debentures) of the Norinchukin Bank Act (Act No. 93 of 2001); and

(viii) Of the rights to be indicated in bonds issued by foreign juridical persons for which ownership of the rights is to be decided based on the entry or record in the transfer account registry pursuant to the provisions of the Act on Transfer of Bonds, Shares, etc. (excluding bonds having a nature of company bonds with share warrant), those that satisfy all of the following requirements:

(a) The amount of each right is not below hundred million yen;

(b) There are provisions on a fixed due date for redemption of the principal that is within one year from the day on which the total amount of the rights has been paid, and there are no provisions on an installment plan; and

(c) There are provisions to make the due date for the payment of interest the same date as the due date for the redemption of the principal set forth in (b).

(7) The "Handling of Private Placement of Securities" set forth in paragraph (1), item (v) means to handle the Private Placement of Securities (meaning the private placement of securities prescribed in Article 2, paragraph (3) (Definitions) of the Financial Instruments and Exchange Act).

(8) The term "Derivative Transactions" or "Transactions of Securities-Related Derivatives" set forth in paragraph (1), item (vi) or (vii) respectively means the Derivative Transactions prescribed in Article 2, paragraph (20) (Definitions) of the Financial Instruments and Exchange Act or the Transactions of Securities-Related Derivatives prescribed in Article 28, paragraph (8), item (vi) (Definitions) of that Act.

(9) The term "Over-the-Counter Transactions of Securities-Related Derivatives" in paragraph (1), item (x) or (xi) means the actions listed in Article 28, paragraph (8), item (iv) (Definitions) of the Financial Instruments and Exchange Act

Article 99 (1) An Insurance Company may, in addition to the business it carries out pursuant to the provisions of Article 97 and the preceding Article, carry out, with regard to the securities or transactions listed in the items of Article 33, paragraph (2) of the Financial Instruments and Exchange Act (Prohibition, etc. of Securities Services by Financial Institutions), business through which the actions listed in the items of the same paragraph (excluding business carried out pursuant to the provisions of the preceding Article, paragraph (1)) and business specified by Cabinet Office Ordinance as incidental thereto, within a limit so as not to preclude the performance of business under Article 97.

(2) In addition to the business it carries out pursuant to the provisions of Article 97 and the preceding Article, an Insurance Company may conduct the following businesses, within a limit so as not to preclude the performance of business under Article 97:

(i) Subscription or commissioning the administration of bonds such as local government bonds or company bonds; and

(ii) Trust business concerning secured bonds that is carried out pursuant to the Secured Bond Trust Act.

(iii) Investment Advisory Business as defined in Article 28, paragraph (6) (General Rules) of the Financial Instruments and Exchange Act;

(iv) Conclusion of a contract on obtaining or transferring Carbon Dioxide Equivalent Quotas or business for providing intermediation, brokerage, or agency therefor (excluding business conducted pursuant to paragraph (1) of the preceding Article) that is specified by Cabinet Office Ordinance; and

(v) Fund transfer business defined in Article 2, paragraph (2) (Definitions) of the Act on Financial Settlements (Act No. 59 of 2009).

(3) A Life Insurance Company may, in addition to the business it carries out pursuant to the provisions of Article 97 and the preceding Article, carry out business through which it underwrites trusts for insurance proceeds paid (hereinafter referred to as "Insurance-Proceed Trust Services"), within a limit so as not to preclude the performance of business under Article 97, notwithstanding the provisions of the Trust Business Act.

(4) An Insurance Company shall, if it seeks to conduct business prescribed in paragraph (1) pursuant to the provisions of the same paragraph, set forth the contents and method of any such business in connection with which the other parties are many and unspecified, and obtain authorization from the Prime Minister. The same shall apply if an Insurance Company seeks to modify the contents and method of business for which it obtained said authorization.

(5) An Insurance Company shall obtain authorization from the Prime Minister if it seeks to conduct business listed in the items of paragraph (2) pursuant to the provisions of the same paragraph.

(6) An Insurance Company shall, with regard to business listed in items (i), (ii) and (v) of paragraph (2), be deemed to be a bank (a company including a stock company or bank prescribed by laws and regulations in the case of a Mutual Company) pursuant to the provisions of Cabinet Order, for the purpose of the application of the laws and regulations specified by Cabinet Order, such as the Secured Bond Trust Act. In this case, the provisions of the proviso (Trade Name) of Article 14, paragraph (2) of the Trust Business Act shall not apply.

(7) A Life Insurance Company shall, if it seeks to engage in Insurance-Proceed Trust Services, set forth the method and obtain authorization from the Prime Minister. The same shall apply if a Life Insurance Company seeks to modify the method of business for which it obtained said authorization.

(8) The provisions of Article 11 (Business Deposits), Article 22 (Entrustment of Trust Business), Article 23 (Liability of Trust Company Pertaining to Entrustment of Trust Business), and Articles 24 to 31 inclusive (Conduct Rules Pertaining to Underwriting of Trust, Application mutatis mutandis of the Financial Instruments and Exchange Act, Explanation of Contents of Trust Contract, Written Issuance at Conclusion of Trust Contract, Issuance of Report on Trust Property Situation, Duty of Loyalty of Trust Company, etc., Conduct Rules Pertaining to Trust Property, Change of Important Trust, etc., Explanation of Reimbursement of Costs, etc. or Scope of Advance Payment, etc., Special Measures for Public Notice of Trusts, and Debt Set-off Pertaining to Trust Property), Article 42 (Inspection, etc.), and Article 49 (Dismissal Procedure in the Case of Rescission, etc. of License, etc.) of the Trust Business Act and Article 6 (Conclusion of Trust Contract on Loss Compensation, etc.) of the Act on Provision, etc. of Trust Business by Financial Institutions shall apply mutatis mutandis to cases where a Life Insurance Company engage in Insurance-Proceed Trust Services pursuant to the provisions of paragraph (3). In this case, the phrases listed in the middle column of the following table in the provisions of the Trust Business Act listed in the left column of the table shall be deemed to be replaced with the phrases listed in the right column of the table.

|Article 11, paragraph (10)|In the case where the registration under Article 7, paragraph (3) is not renewed, in the case where the license under Article 3 is rescinded pursuant to the provisions of Article 44, paragraph (1), in the case where the registration under Article 7, paragraph (1) is rescinded pursuant to the provisions of Article 45, paragraph (1), or the license under Article 3 or registration under Article 7, paragraph (1) pursuant to the provisions of Article 46, paragraph (1)|In the case where the license under Article 3, paragraph (1) of the Insurance Business Act is rescinded pursuant to the provisions of Articles 133 or 134 of the same Act, or the license under Article 3, paragraph (1) of the same Act pursuant to the provisions of Article 273 of the same Act|

|Article 42, paragraph (2)|Notification or measures under Article 17 to 19 inclusive or said|Said|

|Article 49, paragraph (1)|In the case where the registration under Article 7, paragraph (3) is not renewed, in the case where the license under Article 3 is rescinded pursuant to the provisions of Article 44, paragraph (1), or the registration under Article 7, paragraph (1) pursuant to the provisions of Article 45, paragraph (1)|License under Article 3, paragraph (1) of the Insurance Business Act pursuant to the provisions of Article 133 or 134 of the same Act|

(9) In the case where a Life Insurance Company entrusts a third party to act as an agent or intermediary for the conclusion of a trust contract underwritten pursuant to the provisions of paragraph (3), the Life Insurance Company shall be deemed to be a trust company and the provisions of Article 2, paragraph (8) (Definitions) and Chapter V (including penal provisions pertaining to these provisions) of the Trust Business Act shall apply. In this case, the term "affiliated trust company" in the same Chapter means "affiliated Life Insurance Company" and "Article 34, paragraph (1)" in Article 78, paragraph (1) of the same Act means "Article 111, paragraphs (1) and (2) of the Insurance Business Act."

(10) A Life Insurance Company that engages in Insurance-Proceed Trust Services pursuant to the provisions of paragraph (3) shall be deemed to be a trust company pursuant to the provisions of Cabinet Order, with regard to the application of what is specified by Cabinet Order in the laws and regulations on taxation with regard to said Insurance-Proceed Trust Services.

(Restriction on Other Business)

Article 100 An Insurance Company may not conduct business other than business it conducts pursuant to the provisions of Article 97 and the preceding two Articles and business conducted pursuant to other Acts.

(Measures Concerning Business Operations)

Article 100-2 Unless provided otherwise in this Act or any other Act, an Insurance Company shall, pursuant to the provisions of Cabinet Office Ordinance, take measures to ensure sound and appropriate management, such as explanation of important particulars of its business to its customers, appropriate handling of customer information acquired in relation to its business, and proper execution of any business entrusted to a third party.

(Establishment of a System for the Protection of Customers' Interests)

Article 100-2-2 (1) Whenever an Insurance Company, its Parent Financial Institution, etc. or Subsidiary Financial Institution, etc. conducts any transaction, such Insurance Company shall, pursuant to the provisions of Cabinet Office Ordinance, properly manage information connected with the business conducted by itself or its Subsidiary Financial Institution, etc. (limited to Insurance Business and any other business specified by Cabinet Office Ordinance), and establish a system for properly supervising the status of implementation of said business or taking any other measures necessary so that the interests of the customer of said business will not be unjustly impaired.

(2) The term "Parent Financial Institution, etc." as used in the preceding paragraph means a person that holds the majority of all shareholders' voting rights in an Insurance Company, and any other person that is specified by Cabinet Order as being closely related to said Insurance Company and which is an Insurance Company, Bank, Financial Instruments Transaction Business Operator (meaning a Financial Instruments Transaction Business Operator as defined in Article 2, paragraph (9) (Definitions) of the Financial Instruments and Exchange Act; the same shall apply hereinafter), or any other person conducting financial business that is specified by Cabinet Order.

(3) The term "Subsidiary Financial Institution, etc." as used in paragraph (1) means a person in which an Insurance Company holds the majority of All Shareholders' Voting Rights, etc. , and any other person that is specified by Cabinet Order as being closely related to said Insurance Company and which is an Insurance Company, Bank, Financial Instruments Transaction Business Operator, or any other person conducting financial business that is specified by Cabinet Order.

(Transactions, etc. with Specified Related Parties)

Article 100-3 An Insurance Company shall not make the following transactions or take the following actions with any Specified Related Party (meaning its Subsidiary Company, its Major Shareholder, the Insurance Holding Company of which it is a Subsidiary, or a Subsidiary of such Insurance Holding Company (other than the relevant Insurance Company itself); hereinafter the same shall apply in this Article), or any other parties to which an Insurance Company is specially related as specified by Cabinet Order, or with a customer of a Specified Related Party; provided, however, that this shall not apply to the cases where the authorization to make such transactions or take such actions is obtained from the Prime Minister for any of the compelling reasons specified by Cabinet Office Ordinance:

(i) Any transaction with the Specified Related Party, such as the purchase and sale of assets, carried out on significantly different terms and conditions from those applied to normal transactions of said Insurance Company; and

(ii) Any transaction made or action taken with the Specified Related Party or the customer of the Specified Related Party which is equivalent to the transaction listed in the preceding item and which is specified by a Cabinet Office Ordinance as posing a risk to the sound and appropriate business operation of said Insurance Company.

(Restriction on Becoming an Unlimited Partner, etc.)

Article 100-4 An Insurance Company may not become an unlimited partner or a partner who executes the business of a membership company.

(Exclusion from Application of the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade)

Article 101 (1) The provisions set forth in the Act on Prohibition of Private Monopolization and Maintenance of Fair Trade shall not apply to the following actions, which are taken with the authorization set forth in the following Article, paragraph (1); provided, however, that this shall not apply to the cases where any unfair trade practices are used, where the substantial restraint of competition in certain fields of trade unjustly harms the interests of Policyholders or the persons insured, or where one month has passed from the day of the public notice that was given under the provisions of Article 105, paragraph (4) (unless the Prime Minister has rendered a disposition under the provisions of Article 103 in response to the request in Article 105, paragraph (3)):

(i) Concerted actions carried out by a Non-Life Insurance Company with another Non-Life Insurance Company (including foreign non-life insurance companies, etc.) with regard to business specific to the aviation Insurance Business (meaning the business of underwriting insurance whose purpose is to insure aircraft (including rockets; hereinafter the same shall apply in this item) or cargo transported by aircraft, or insurance concerning liability for the compensation of damage caused by an aircraft accident; including business connected with underwriting injury insurance for persons on board the aircraft), the nuclear Insurance Business (meaning the business of underwriting insurance whose purpose is to insure a nuclear facility, or liability insurance for damages caused by an accident at a nuclear facility), the Automobile Liability Insurance Business based on the provisions of the Automobile Liability Insurance Act, or the business under an earthquake insurance contract prescribed in the Act on Earthquake Insurance (Act No. 73 of 1966); and

(ii) Concerted actions taken by a Non-Life Insurance Company with another Non-Life Insurance Company (including foreign non-life insurance companies, etc.) involving all or part of the following actions in connection with a reinsurance contract or insurance contract for reinsurance, if it is found that there is a risk of extreme disadvantage to a Policyholder or those insured unless a Non-Life Insurance Company and another Non-Life Insurance Company (including foreign non-life insurance companies, etc.) jointly provide for reinsurance in advance to carry out risk distribution or equalization with regard to business connected with the underwriting of insurance not listed in the preceding item:

(a) Ruling on contents of insurance contracts (except those pertaining to the insurance rate);

(b) Ruling on the method of damage obligatory contribution;

(c) Ruling on another party or amount concerning reinsurance transactions; and

(d) Ruling on the reinsurance rate and reinsurance fee.

(2) If a request under the provisions of Article 105, paragraph (3) is made concerning a Section of the contents of concerted actions, the provisions of the main clause of the preceding paragraph shall be deemed applicable notwithstanding the provisions of the proviso of the preceding paragraph (limited to the Parts pertaining to the public notice that was given under the provisions of paragraph (4) of the same Article) for Sections of the contents of the concerted actions which do not pertain to the request.

(Authorization of Concerted Actions)

Article 102 (1) If a Non-Life Insurance Company seeks to carry out concerted actions under the provisions of the items of paragraph (1) of the preceding Article or modify its contents, it shall obtain authorization from the Prime Minister.

(2) The Prime Minister shall not grant the authorization of the preceding paragraph unless he/she finds that the contents of the concerted actions pertaining to the application for authorization of the same paragraph conform to the following items:

(i) There is no unjust harm to the interest of Policyholders or those insured;

(ii) The business is not unfairly discriminatory;

(iii) There is no unreasonable restraint of enrollment and withdrawal; and

(iv) It stays within the minimum necessary level in light of risk distribution or equalization, or any other purpose of the concerted actions.

(Order to Change of Concerted Actions and Rescission of Authorization)

Article 103 The Prime Minister shall, if he/she finds that the contents of the concerted actions pertaining to the authorization of the preceding Article, paragraph (1) no longer conform to the items of the same Article, paragraph (2), order the Non-Life Insurance Company to modify the contents of the concerted actions or rescind the authorization.

(Notification of Abolition of Concerted Actions)

Article 104 A Non-Life Insurance Company shall, upon abolishing concerted actions notify the Prime Minister of this without delay.

(Relationship with the Fair Trade Commission)

Article 105 (1) If the Prime Minister seeks to grant the authorization set forth in Article 102, paragraph (1), he/she shall, in advance, obtain the consent of the Fair Trade Commission.

(2) The Prime Minister shall, upon rendering a disposition under the provisions of Article 103 or accepting a notification under the provisions of the preceding Article, notify the Fair Trade Commission of this without delay.

(3) The Fair Trade Commission may, if it finds that the contents of the concerted actions which obtained the authorization set forth in Article 102, paragraph (1) no longer conform to the items of the same Article, paragraph (2), request the Prime Minister to render a disposition under the provisions of Article 103.

(4) The Fair Trade Commission shall, upon making a request under the provisions of the preceding paragraph, give public notice of this in the official gazette.

(Obligation to Conclude a Contract ,etc. with a Designated Dispute Resolution Organization for Life Insurance Services)

Article 105-2 (1) A Life Insurance Company shall take the measures specified in the following items according to the category of cases set forth in the respective items:

(i) in cases where there is a Designated Dispute Resolution Organization for Life Insurance Services (meaning a Designated Dispute Resolution Organization for which the Category of Dispute Resolution Services, etc. is Life Insurance Services; hereinafter the same shall apply in this Article): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures for Life Insurance Services with a single Designated Dispute Resolution Organization for Life Insurance Services;

(ii) in cases where there is no Designated Life Insurance Dispute Resolution Organization: Complaint Processing Measures (meaning measures to have the person set forth in Article 308-13, paragraph (3), item (iii) provide advice or guidance to the employee or any other workers working to process complaints from the customers (including Policyholders, etc. other than customers; the same shall apply in this item) or any other measures specified by Cabinet Office Ordinance as being equivalent thereto; the same shall apply in the following Article, Article 272-13-2 and Article 299-2)) and Dispute Resolution Measures (meaning measures seeking to resolve disputes with customers through Certified Dispute Resolution Procedures (meaning Certified Dispute Resolution Procedures as defined in Article 2, item (iii) (Definition) of the Act on Promotion of Use of Alternative Dispute Resolution (Act No. 151 of 2004)) or any other measures specified by Cabinet Office Ordinance as being equivalent thereto; the same shall apply in the following Article, Article 272-13-2 and Article 299-2) concerning Life Insurance Services.

(2) A Life Insurance Company shall, if it has taken measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures pursuant to the provisions of the preceding paragraph, publicize the trade name or name of the Designated Dispute Resolution Organization for Life Insurance Services that is the counterparty to said Basic Contract for the Implementation of Dispute Resolution Procedures.

(3) The provisions of paragraph (1) shall not apply for the periods specified in the following items according to the category of cases set forth in the respective items:

(i) if the relevant case which had fallen under the cases set forth in paragraph (1), item (i), has come to fall under the cases set forth in item (ii) of that paragraph: the period specified by the Prime Minister as the period necessary to take the measures specified in that item at the time of granting authorization for abolition of Dispute Resolution Services, etc. under Article 308-23, paragraph (1) or rescinding the designation under Article 308-24, paragraph (1);

(ii) if the relevant case had fallen under the cases set forth in paragraph (1), item (i), and the abolition of Dispute Resolution Services, etc. of a single Designated Dispute Resolution Organization for the Life Insurance Services under that item has been authorized under Article 308-23, paragraph (1) or the designation under Article 308-2, paragraph (1) of a single Designated Dispute Resolution Organization for Life Insurance Services under that item has been rescinded pursuant to Article 308-24, paragraph (1) (excluding the case set forth in the preceding item): the period specified by the Prime Minister at the time of granting such authorization or making such rescission, as the period necessary for taking the measures specified in paragraph (1), item (i); and

(iii) if the relevant case which had fallen under the cases set forth in paragraph (1), item (ii) has come to fall under the cases set forth in item (i) of that paragraph: the period specified by the Prime Minister at the time of designation under Article 308-2, paragraph (1), as the period necessary to take the measures specified in that item.

(Obligation to Conclude a Contract, etc. with a Designated Dispute Resolution Organization for Non-Life Insurance Services)

Article 105-3 (1) A Non-Life Insurance Company shall take the measures specified in the following items according to the category of cases set forth in the respective items:

(i) in cases where there is a Designated Dispute Resolution Organization for Non-Life Insurance Services (meaning a Designated Dispute Resolution Organization for which the Category of Dispute Resolution Services, etc. is Non-Life Insurance Services; hereinafter the same shall apply in this Article): measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures for Non-Life Insurance Services with a single Designated Dispute Resolution Organization for Non-Life Insurance Services; or

(ii) in cases where there is no Designated Dispute Resolution Organization for Non-Life Insurance Services: Complaint Processing Measures and Dispute Resolution Measures concerning Non-Life Insurance Services.

(2) A Non-Life Insurance Company shall, if it has taken measures to conclude a Basic Contract for the Implementation of Dispute Resolution Procedures pursuant to the provisions of the preceding paragraph, publicize the trade name or name of the Designated Dispute Resolution Organization for Non-Life Insurance Services that is the counterparty to said Basic Contract for the Implementation of Dispute Resolution Procedures.

(3) The provisions of paragraph (1) shall not apply for the periods specified in the following items according to the category of cases set forth in the respective items:

(i) if the relevant case which had fallen under the cases set forth in paragraph (1), item (i), has come to fall under the cases set forth in item (ii) of that paragraph: the period specified by the Prime Minister at the time of granting authorization for abolition of Dispute Resolution Services, etc. under Article 308-23, paragraph (1) or rescinding the designation under Article 308-24, paragraph (1), as the period necessary to take the measures specified in that item;

(ii) if the relevant case had fallen under the cases set forth in paragraph (1), item (i), and the abolition of Dispute Resolution Services, etc. of a single Designated Dispute Resolution Organization for Non-Life Insurance Services under that item has been authorized under Article 308-23, paragraph (1) or the designation under Article 308-2, paragraph (1) of a single Designated Dispute Resolution Organization for Non-Life Insurance Services under that item has been rescinded pursuant to Article 308-24, paragraph (1) (excluding the case set forth in the preceding item): the period specified by the Prime Minister at the time of granting such authorization or making such rescission, as the period necessary for taking the measures specified in paragraph (1), item (i); and

(iii) if the relevant case which had fallen under the cases set forth in paragraph (1), item (ii) has come to fall under the cases set forth in item (i) of that paragraph: the period specified by the Prime Minister at the time of designation under Article 308-2, paragraph (1), as the period necessary to take the measures specified in that item.

Chapter IV Subsidiary, etc.

(Scope of an Insurance Company's Subsidiaries, etc.)

Article 106 (1) An Insurance Company shall not have as its Subsidiary any company other than a company that falls under any of the categories specified in the following items (hereinafter such companies shall be referred to as "Companies Eligible to Be Subsidiaries" in this Article):

(i) A Life Insurance Company;

(ii) A Non-Life Insurance Company;

(ii)-2 A Low-Cost, Short-Term Insurer;

(iii) A Bank;

(iv) A long term credit bank as defined in Article 2 (Definitions) of the Long Term Credit Bank Act (Act No. 187 of 1952) (hereinafter referred to as "Long Term Credit Bank");

(iv)-2 Fund transfer specialists defined in Article 2, paragraph (3) (Definitions) of the Act on Financial Settlements (excluding those falling under the company set forth in item (ix)) which exclusively conduct Fund Transfer Business (meaning the fund transfer business defined in paragraph (2) of that Article) or any other business specified by Cabinet Office Ordinance (referred to as "Companies Specialized in Fund Transfer" in Article 271-22, paragraph (1), item (iv)-2);

(v) A Financial Instruments Transaction Business Operator that, apart from the Securities Services (meaning Securities Services as defined in Article 28, paragraph (8) (General Rules) of the Financial Instruments and Exchange Act; the same shall apply hereinafter), exclusively conducts any of the business specified by Cabinet Office Ordinance, such as business in which any of the actions listed in Article 35, paragraph (1), items (i) to (viii) inclusive (Scope of Business of Persons Who Engage in Type 1 Financial Instruments Transaction Business or Investment Management) of that Act (hereinafter referred to as "Company Specializing in Securities") are taken;

(vi) A Financial Instruments Intermediary as defined in Article 2, paragraph (12) (Definitions) of the Financial Instruments and Exchange Act that, apart from the Financial Instruments Intermediation Services (meaning the Financial Instruments Intermediation Services defined in Article 2, paragraph (11) (Definitions) of that Act and limited to those in which the following actions are taken in the course of trade; hereinafter the same shall apply in this item), exclusively conducts any of the business specified by Cabinet Office Ordinance, such as business incidental to Financial Instruments Intermediation Services (hereinafter referred to as "Company Specialized in Securities Intermediation");

(a) Acts listed in Article 2, paragraph (11), item (i) (Definitions) of the Financial Instruments and Exchange Act;

(b) Intermediation for the entrustment of the purchase and sale of securities on Financial Instruments Exchange Markets prescribed in Article 2, paragraph (17) (Definitions) of the Financial Instruments and Exchange Act or Foreign Financial Instruments Markets prescribed in Article 2, paragraph (8), item (iii), sub-item (b) (Definitions) of that Act (excluding actions listed in (c));

(c) Intermediation for the entrustment of actions listed in item (iii) or (v) of Article 28, paragraph (8) (General Rules) of the Financial Instruments and Exchange Act; and

(d) Actions listed in Article 2, paragraph (11), item (iii) of the Financial Instruments and Exchange Act.

(vii) A trust company specialized in the Trust Business (meaning the Trust Business defined in Article 1, paragraph (1) of the Act on Provision of Trust Business by Financial Institutions; the same shall apply in item (viii), sub-item (a) of the following paragraph) (hereinafter referred to as "Companies Specialized in Trust Business");

(viii) Foreign companies that conduct Insurance Business;

(ix) Foreign companies that engage in Banking (meaning Banking prescribed in Article 2, paragraph (2) (Definitions, etc.) of the Banking Act; the same shall apply hereinafter) (excluding those that fall under the category of companies specified in preceding item);

(x) Foreign companies that engage in Securities Services (excluding those that fall under the category of companies specified in item (viii));

(xi) Foreign Companies that conduct Trust Business (means Trust Business prescribed in Article 2, paragraph (1) (Definitions) of the Trust Business Act; the same shall apply hereinafter) (excluding those that fall under the category of companies specified in item (viii));

(xii) Companies that exclusively operate Dependent Services or Finance-Related Services (limited, in case of those which operate Dependent Services, to companies that operate Dependent Services mainly for business operated by the Insurance Company, its Subsidiary Companies (limited to those that fall under any of the categories in item (i), (ii) or (viii); the same shall apply in paragraph (7)) or other entities specified by Cabinet Office Ordinance as being similar to the Insurance Company and its Subsidiary Companies, and in case of those which operate Finance-Related Services and fall under any of the following business categories, to the cases specified in for the respective categories):

(a) Companies which operate Specialized Banking-Related Services, Specialized Securities-Related Services and a Specialized Trust-Related Services: limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company's Banking Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc. Securities Subsidiaries, etc. and Trust Subsidiaries, etc.), and the total voting rights held by the Insurance Company's Securities Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc., Securities Subsidiaries, etc. and Trust Subsidiaries, etc.), and the total voting rights held by the Insurance Company's Trust Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc., Securities Subsidiaries, etc. and Trust Subsidiaries, etc.);

(b) Companies which operate Specialized Banking-Related Services and Specialized Securities-Related Services (excluding those falling under the category listed in (a)): limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company's Banking Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc. and Securities Subsidiaries, etc.), and the total voting rights held by the Insurance Company's Securities Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc. and Securities Subsidiaries, etc.);

(c) Companies which operate Specialized Banking-Related Services and Specialized Trust-Related Services (excluding those falling under the category listed in (a)): limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company's Banking Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc. and Trust Subsidiaries, etc.), and the total voting rights held by the Insurance Company's Trust Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc. and Trust Subsidiaries, etc.);

(d) Companies which operate Specialized Securities-Related Services and a Specialized Trust-Related Services (excluding those falling under the category listed in (a)): limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company's Securities Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Securities Subsidiaries, etc. and Trust Subsidiaries, etc.), and the total voting rights held by the Insurance Company's Trust Subsidiaries, etc. exceeds the total voting rights held by the Insurance Company and its Subsidiaries (other than its Securities Subsidiaries, etc. and Trust Subsidiaries, etc.);

(e) Companies which operate Specialized Banking-Related Services (excluding those falling under the category listed in (a), (b) or (c)): limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company's Banking Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Banking Subsidiaries, etc.);

(f) Companies which operate Specialized Securities-Related Services (other than a company falling under (a), (b) or (d)): limited to the case where among all voting rights in the company, the total voting rights held by the Insurance Company's Securities Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Securities Subsidiaries, etc.); and

(g) Companies which operate Specialized Trust-Related Services (excluding those falling under the category listed in (a), (c) or (d)); limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company's Trust Subsidiaries, etc. exceed the total voting rights held by the Insurance Company and its Subsidiaries (other than its Trust Subsidiaries, etc.);

(xiii) Companies specified by Cabinet Office Ordinance as those exploring new business fields or conducting new business activities found to contribute considerably to the improvement of management (limited to the case where, among all voting rights in the company, the total voting rights held by the Insurance Company and its Subsidiaries other than those falling under the categories listed in the preceding item and specified by Cabinet Office Ordinance (such excluded companies shall be referred to as "Specified Subsidiary" in paragraph (7) of the following Article) does not exceed the Voting Right Holding Threshold prescribed in paragraph (1) of the same Article); and

(xiv) Among Holding Companies whose Subsidiaries consist exclusively of companies falling under any of the categories specified in the preceding items, those specified by Cabinet Office Ordinance (including those which are scheduled to become such Holding Companies).

(2) In the preceding paragraph, the meanings of the terms listed in the following items shall be prescribed respectively in those items:

(i) Dependent Services: Business specified by Cabinet Office Ordinance as being dependent on the business of an Insurance Company or a company falling under any of item (ii)-2 to (xi) inclusive of the preceding paragraph;

(ii) Finance-Related Services: Business specified by Cabinet Office Ordinance as being incidental or related to the Insurance Business, Banking, Securities Services or Trust Business;

(iii) Specialized Banking-Related Services: Business specified by Cabinet Office Ordinance as incidental or related exclusively to Banking;

(iv) Specialized Securities-Related Services: Business specified by Cabinet Office Ordinance as being incidental or related exclusively to the Securities Services;

(v) Specialized Trust-Related Services: Business specified by Cabinet Office Ordinance as being incidental or related exclusively to the Trust Business.

(vi) Banking Subsidiary, etc. : An Insurance Company's Subsidiary that falls under any of the following categories:

(a) A Bank (including a Long Term Credit Bank; hereinafter the same shall apply in this item) or a foreign company that operates in banking;

(b) A Holding Company falling under item (xiv) of the preceding paragraph which has a company falling under (a) as its Subsidiary; or

(c) Any other company that is the Subsidiary of a Bank that is itself a Subsidiary of an Insurance Company and specified by Cabinet Office Ordinance;

(vii) Securities Subsidiary, etc. : An Insurance Company's Subsidiary that falls under any of the following categories:

(a) A Company Specializing in Securities, Company Specializing in Securities Intermediation, or foreign company engaged in Securities Services;

(b) A Holding Company that falls under the category listed in item (xiv) of the preceding paragraph and which has a company that falls under the category listed in (a) above as its Subsidiary; and

(c) Any other company that is a Subsidiary of that Insurance Company and that is a Subsidiary of a Company Specializing in Securities or a Subsidiary of a Company Specializing in Securities Intermediation and is specified by Cabinet Office Ordinance; and

(viii) Trust Subsidiary, etc. : An Insurance Company's Subsidiary that falls under any of the following categories:

(a) A Bank that operates in the Trust Business under the authorization set forth in Article 1, paragraph (1) (Authorization for Trust Business) of the Act on the Provision, etc. of Trust Business by Financial Institutions (hereinafter referred to as "Trust Bank" in this item);

(b) A Company Specialized in Trust Business or a foreign company that operates in the Trust Business;

(c) A Holding Company that falls under the category listed in item (xiv) of the preceding paragraph and which has a company that falls under the category listed in (a) or (b) above as its Subsidiary; and

(d) Any other company that is a Subsidiary of that Insurance Company and that is a Subsidiary of a Trust Bank or a Subsidiary of a Company Specialized in Trust Services and is specified by Cabinet Office Ordinance.

(3) The provisions of paragraph (1) shall not apply where a company other than a Company Eligible to Be a Subsidiary became the Subsidiary of that Insurance Company following any of the events specified by Cabinet Office Ordinance, such as the acquisition of shares or equity interests as a result of the exercise of security rights by the Insurance Company or its Subsidiaries; provided, however, that the Insurance Company shall take necessary measures for making the company, which became to its Subsidiary in a manner as described as above, cease to be its Subsidiary by the day on which one year has elapsed from the date on which that event arose.

(4) An Insurance Company shall, if it seeks to have as its Subsidiary any of the Companies Eligible to Be a Subsidiary listed in paragraph (1), items (i) to (xii) inclusive or (xiv) (other than a company specialized in Dependent Services (meaning Dependent Services falling under paragraph (2), item (i); hereinafter the same shall apply in this paragraph and paragraph (7)) or in any business specified by Cabinet Office Ordinance as ancillary or related to the Insurance Business (for a company operates Dependent Services, limited to one that operates them mainly for business operated by the Insurance Company); referred to as "Insurance Company, etc. Eligible to Be a Subsidiary" hereinafter in this Article as well as in paragraph (4), item (i) of the following Article), obtain in advance the authorization from the Prime Minister, unless it receives an authorization for business acquisition, merger or company split under Article 142, Article 167, paragraph (1) or Article 173-6, paragraph (1).

(5) The provisions of the preceding paragraph shall not apply where an Insurance Company, etc. Eligible to Be a Subsidiary became the Subsidiary of an Insurance Company due to the acquisition of its shares or equity interests as a result of the exercise of security rights by the Insurance Company or its Subsidiary, or any other justifiable event specified by Cabinet Office Ordinance; provided, however, that the Insurance Company shall take necessary measures for the Insurance Company, etc. Eligible to Be a Subsidiary to stop being its Subsidiary by the day on which one year has elapsed from the date on which the cause arose, unless the Insurance Company has obtained an authorization from the Prime Minister to allow the Insurance Company etc. Eligible to Be a Subsidiary that became its Subsidiary, continue to be its Subsidiary.

(6) The provisions of paragraph (4) shall apply mutatis mutandis to the cases where an Insurance Company seeks make a company it has as its Subsidiary which falls under any of the categories prescribed in the items of paragraph (1) into a Subsidiary that falls under any of the categories prescribed in the items of that paragraph (limited to an Insurance Company, etc. Eligible to Be a Subsidiary).

(7) In a case falling under item (xii) of paragraph (1), or paragraph (4), the Prime Minister shall establish standards for whether a company is operating Dependent Services mainly for an Insurance Company, its Subsidiaries, any other similar company specified by Cabinet Office Ordinance, or for the business conducted by an Insurance Company.

(Restrictions on the Acquisition of Voting Rights, etc. by an Insurance Company, etc.)

Article 107 (1) An Insurance Company and its Subsidiaries may not acquire or hold voting rights in a Domestic Company (excluding companies falling under the category listed in paragraph (1), items (i) to (vii) inclusive of the preceding Article, (xii) or (xiv) ; hereinafter the same shall apply in this Article) in a total number that exceeds the Voting Right Holding Threshold (meaning the number equal to 5 percent of All Shareholders' Voting Rights, etc. in the Domestic Company; the same shall apply in this Article).

(2) The provisions of the preceding paragraph shall not apply to the cases where an Insurance Company and its Subsidiaries, following any of the events specified by Cabinet Office Ordinance such as the acquisition of shares or equity interests through exercise of security rights, comes to acquire or hold voting rights in a Domestic Company if the total number of the voting right held by the Insurance Company and its Subsidiaries exceeds the Voting Right Holding Threshold; provided, however, that the Insurance Company and/or the Subsidiaries shall not continue to hold the part of the voting rights which it came to acquire or hold in excess of the Voting Right Holding Threshold after one year from the day on which it came to acquire or hold the voting rights, unless the Insurance Company has in advance obtained approval for holding such portion of the voting rights from the Prime Minister.

(3) In the case referred to in the proviso in the preceding paragraph, if the total number of voting rights acquired or held by the Insurance Company and its Subsidiaries exceeds 50 percent of All Shareholders' Voting Rights, etc. in a Domestic Company, the Prime Minister's approval given under that paragraph shall not cover the part of the voting rights which the Insurance Company and its Subsidiaries came to acquire or hold in excess of 50 percent; and the approval of the Prime Minister shall be given on the condition that the Insurance Company and its Subsidiaries promptly dispose of voting rights they came to acquire or hold in excess of the Voting Right Holding Threshold.

(4) Notwithstanding the provisions of paragraph (1), in the case listed in any of the following items, even if the total number of voting rights which an Insurance Company and its Subsidiaries will hold in a Domestic Company on the day prescribed in the respective items exceeds the Voting Right Holding Threshold, the Insurance Company and its Subsidiaries may hold them after that day; provided, however, that the Prime Minister shall not grant the authorization (or the license in the case of item (vi); the same shall apply in the next paragraph) referred to in the following items, if the total number voting rights that the relevant Insurance Company and its Subsidiaries will hold in the Domestic Company in the case referred to in the respective items exceeds 50 percent of All Shareholders' Voting Rights, etc. in that Domestic Company:

(i) If the Insurance Company has received the authorization set forth in paragraph (4) of the preceding Article and made a Subsidiary Insurance Company, etc. that is Eligible to Be a Subsidiary its Subsidiary (limited to the cases specified by Cabinet Office Ordinance): the day on which that company becomes its Subsidiary

(ii) If the Insurance Company has received the authorization set forth in Article 142 and been transferred any other party's business under (limited to the cases specified by Cabinet Office Ordinance): the day on which the transfer is carried out;

(iii) If a company that has been established by Joint Incorporation-Type Split following authorization under Article 173-6, paragraph (1) has obtained a license under Article 3, paragraph (1) and become an Insurance Company: the day companion which it obtains the license;

(iv) If the Insurance Company has succeeded any other party's business through an absorption-type split following authorization set forth in Article 173-6, paragraph (1) (limited to the cases specified by Cabinet Office Ordinance): the day on which the absorption-type split is carried out;

(v) If the Insurance Company is established by Merger under the authorization set forth in Article 167, paragraph (1): the day on which the Insurance Company is established; and

(vi) If the Insurance Company carries out a Merger under the authorization set forth in Article 167, paragraph (1) (limited to the cases where the Insurance Company survives the merger): the day on which the Merger is carried out.

(5) The Prime Minister's authorization set forth in the items of the preceding paragraph shall be given on the condition that, the portion of the voting rights in the Domestic Company that an Insurance Company and its Subsidiaries hold in excess of the Voting Right Holding Threshold as of the day specified in the respective items will be disposed of in accordance with standards set by the Prime Minister by the day on which five years has elapsed from the day.

(6) If an Insurance Company and its Subsidiaries come to hold a total number of voting rights in a Domestic Company which is in excess of the Voting Right Holding Threshold, the portion in excess of the Voting Right Holding Threshold shall be deemed to be acquired or held by that Insurance Company.

(7) In the cases of the referred to in the preceding paragraphs, with respect to acquisition or holding of voting rights in a company specified by Cabinet Office Ordinance as that exploring new business fields or as those engaged in new business activities which are found to significantly contribute to improvement of business management, a Specified Subsidiary shall be deemed not to be a Subsidiary of the Insurance Company.

(8) The provisions of Article 2, paragraph (15) shall apply mutatis mutandis to the voting rights acquired or held by an Insurance Company or its Subsidiaries under any of the preceding paragraphs.

Article 108 Deleted

Chapter V Accounting

(Business Year)

Article 109 The Business Year of an Insurance Company shall run from 1 April to 31 March of the next year.

(Business Report, etc.)

Article 110 (1) An Insurance Company shall, for each business year, prepare an interim business report and business report describing the status of its business and property for submission to the Prime Minister.

(2) Where an Insurance Company has a Subsidiary or any other company to which it is specially related as specified by Cabinet Office Ordinance (referred to as "Subsidiary Company, etc." hereinafter in this Chapter as well as in the following Chapter), the Insurance Company shall, for each business year, prepare in addition to the report set forth in the preceding paragraph an interim business report and business report describing the status of the business and property of the Insurance Company and its Subsidiary, etc. in a consolidated manner for submission to the Prime Minister.

(3) The particulars for inclusion in the reports set forth in the preceding two paragraphs, their submission dates and other necessary particulars regarding those reports shall be specified by Cabinet Office Ordinance.

(Public Inspection, etc. of Explanatory Documents on Business and Property Status)

Article 111 (1) An Insurance Company shall, for each business year, prepare explanatory documents detailing the particulars specified by Cabinet Office Ordinance as pertaining to the status of its business and property, and keep them for public inspection at its head office or principal office and branch offices or secondary offices, or any other equivalent place specified by Cabinet Office Ordinance.

(2) If an Insurance Company has a Subsidiary, etc. , the Insurance Company shall, for each business year, prepare in addition to the explanatory documents set forth in the preceding paragraph explanatory documents detailing, with regard to the Insurance Company and its Subsidiary, etc. , the particulars specified by Cabinet Office Ordinance as pertaining to the status of the business and property of the Insurance Company and its Subsidiary, etc. in a consolidated manner, and keep them for public inspection at the Insurance Company's head office or principal office and its branch offices or secondary offices, or any other equivalent place specified by Cabinet Office Ordinance.

(3) The explanatory documents set forth in the preceding two paragraphs may be prepared in the form of electromagnetic record.

(4) Where the explanatory documents set forth in paragraph (1) or (2) are prepared in the form of electromagnetic record, the Insurance Company may take the measures specified by Cabinet Office Ordinance as measures to ensure that the information recorded in the electromagnetic records is available to many and unspecified persons at its head office or principal office and its branch offices or secondary offices, or any other equivalent place specified by Cabinet Office Ordinance. In this case, the explanatory documents set forth in paragraph (1) or (2) shall be deemed to be kept for public inspection pursuant to the provisions of paragraph (1) or (2).

(5) In addition to what is provided for in the preceding paragraphs, the period for making the documents set forth in paragraph (1) or (2) available for public inspection and any other particular that is necessary in order to apply the provisions of the preceding paragraphs shall be specified by Cabinet Office Ordinance.

(6) An Insurance Company shall endeavor to disclose, in addition to the particulars set forth in paragraph (1) or (2), any particular that should serve as reference for Policyholders and other customers in knowing the status of the business and property of the Insurance Company and its Subsidiary, etc.

(Special Provisions on Valuation of Shares)

Article 112 (1) An Insurance Company may, if the current value of the quoted shares that it owns (excluding those shares which are accounted for under the Special Account set forth in Article 118, paragraph (1); hereinafter the same shall apply in this paragraph) exceeds the acquisition value of such shares, attach to the shares any value that exceeds their acquisition value but does not exceed their current value with the authorization of the Prime Minister, pursuant to the provisions of Cabinet Office Ordinance.

(2) Any profit recorded as a result of revaluation under the preceding paragraph shall be set aside as a Reserve specified by Cabinet Office Ordinance.

(Amortization of Business Expenditures, etc.)

Article 113 An Insurance Company may credit to the assets on the balance sheet an amount pertaining to its business expenditures for the first five years following the establishment of the Insurance Company as well as any other amount specified by Cabinet Office Ordinance. In this case, the Insurance Company shall, pursuant to the provisions of its articles of incorporation, amortize the amount thus credited within ten years from the establishment of the Insurance Company.

(Policy Dividend)

Article 114 (1) Any policy dividend (meaning the distribution to Policyholders, in whole or in Part, of those profits obtained by investing insurance premiums and the money received as insurance premiums which have neither been allocated to any payments such as insurance proceeds or refunds, nor to any business or other expenditures, where such distribution is stipulated in the insurance contracts, the same shall apply hereinafter) distributed by a stock Insurance Company shall meet the standards specified by Cabinet Office Ordinance as standards for fair and equitable distribution.

(2) A Cabinet Office Ordinance shall specified how to fund the reserves for policy dividends as well as any other necessary particular pertaining to Policyholder dividends.

(Price Fluctuation Reserve)

Article 115 (1) An Insurance Company shall, with regard to the assets specified by Cabinet Office Ordinance as susceptible to losses due to price fluctuation, such as shares (referred to as "Shares, etc." in the following paragraph), within its portfolio, set aside as a price fluctuation reserves the amount calculated pursuant to the provisions of Cabinet Office Ordinance; provided, however, that this shall not apply to any amount exempted from these funding standards by virtue of an authorization granted by the Prime Minister to relieve the Insurance Company of these standards in whole or in part.

(2) The Reserves set forth in the preceding paragraph shall not be reduced unless it is allocated to compensation for any excess amount of the losses due to buying and selling, etc. of Shares, etc. (meaning losses due to buying and selling, revaluation and fluctuation in foreign exchange rates, and losses on redemption) over the profits due to buying and selling, etc. of Shares, etc. (meaning profits due to buying and selling, revaluation and fluctuation in foreign exchange rates (excluding any profit credited as a result of revaluation under Article 112, paragraph (1)), and gains on redemption); provided, however, that this shall not apply to the cases where the Prime Minister has approved such reduction.

(Policy Reserve)

Article 116 (1) An Insurance Company shall, for each accounting period, set aside a certain amount of money as a policy reserves to prepare for future performance of obligations under its insurance contracts.

(2) The Prime Minister may set necessary standards for the method of funding the policy reserves pertaining to the long-term insurance contracts specified by Cabinet Office Ordinance, as well as for the levels of the coefficients that should constitute the basis for calculating the amount of the policy reserve, such as expected mortality.

(3) In addition to what is provided for in the preceding two paragraphs, the method of funding the policy reserves pertaining to any reinsured insurance contract and any other particular necessary to the funding of the policy reserves shall be specified by Cabinet Office Ordinance.

(Reserve for Outstanding Claims)

Article 117 (1) For each business year, an Insurance Company shall set aside a certain amount of money as reserves for outstanding claims, where it has any payments due, such as insurance proceeds or refunds (hereinafter referred to as "Insurance Proceeds, etc." in this paragraph), under its insurance contracts, or any other equivalent payment specified by Cabinet Office Ordinance that has not been recorded as an expenditure for Insurance Proceeds, etc.

(2) A Cabinet Office Ordinance shall specify the necessary particulars of the funding of the reserves for outstanding claims set forth in the preceding paragraph.

(Statutory Lien for Policyholders, etc. in Life Insurance Company)

Article 117-2 (1) In a Life Insurance Company, the Policyholders (excluding the holders of reinsurance policies) and the persons who have any of the following rights (excluding the rights pertaining to reinsurance) shall enjoy a statutory lien against the whole assets of the Life Insurance Company for the total amount of money paid for the insurers and for the amount of the relevant right, respectively:

(i) Insurance Claims;

(ii) The right to demand compensation for losses (other than the right listed in the preceding item); or

(iii) The right to demand a payment, such as refund, dividend of surplus or policy dividend (other than insurance proceeds).

(2) The statutory lien set forth in the preceding paragraph shall be ranked next in priority to the statutory lien set forth in Article 306, item (i) of the Civil Code (Statutory lien for expenses for common interest).

(Special Accounts)

Article 118 (1) An Insurance Company shall, as regards performance-linked insurance contracts (meaning the insurance contracts stipulating that insurance proceeds, refunds or other benefits shall be paid to the Policyholders in accordance with the performance of investment of the money received as insurance premiums) and any other class of insurance contract specified by Cabinet Office Ordinance, create a Special Account to separate the property managed under such insurance contracts from other properties (hereinafter referred to as "Special Account" in this Article).

(2) Unless provided otherwise in Cabinet Office Ordinance, an Insurance Company shall not take any of the following actions:

(i) Transferring any property to be accounted for under a Special Account to a Non-Special Account or to another Special Account; or

(ii) Transferring to a Special Account any property other than a property to be accounted for under the Special Account.

(3) A Cabinet Office Ordinance shall specify how to manage the property belonging to a Special Account and any other necessary particulars for Special Accounts.

Article 119 Deleted

(Appointment of Actuary, etc.)

Article 120 (1) The board of directors of an Insurance Company (limited to a Life Insurance Company or a Non-Life Insurance Company meeting the requirements specified by Cabinet Office Ordinance. The same shall apply in the paragraph (3) and in Article 122) shall appoint an actuary to Participate with regard to the particulars specified by Cabinet Office Ordinance as actuarial particulars involving, among others, the method of calculating insurance premiums.

(2) The actuary shall be a person with necessary knowledge and experience with regard to actuarial science who meets the requirements specified by Cabinet Office Ordinance.

(3) An Insurance Company shall, if it has appointed an actuary or if its actuary has left office, notify the Prime Minister of this without delay, pursuant to the provisions of Cabinet Office Ordinance.

(Actuary's Duties)

Article 121 (1) The actuary shall, for each accounting period, check the following particulars pursuant to the provisions of Cabinet Office Ordinance and submit to the board of directors a written opinion describing his/her findings:

(i) Whether the policy reserves pertaining to the insurance contracts specified by Cabinet Office Ordinance has been funded according to sound actuarial practice;

(ii) Whether policy dividends or dividends of surplus to members have been distributed in a fair and equitable manner; and

(iii) Any other particular specified by Cabinet Office Ordinance.

(2) The actuary shall, without delay following the submission to the board of directors of the written opinion set forth in the preceding paragraph, submit a copy of the written opinion to the Prime Minister.

(3) The Prime Minister may request the actuary to provide explanations about the copy of his/her written opinion set forth in the preceding paragraph and to present an opinion on any other particular within the scope of his/her duties.

(4) In addition to what is provided for in the preceding three paragraphs, any necessary particulars of a written opinion as set forth in paragraph (1) shall be specified by Cabinet Office Ordinance.

(Dismissal of Actuary)

Article 122 The Prime Minister may order an Insurance Company to dismiss its actuary, if the latter has violated any provisions of this Act or any dispositions of the Prime Minister under this Act.

(Designation, etc.)

Article 122-2 (1) The Prime Minister may, on application, designate a general incorporated association that he/she considers to conform to the following standards regarding the business set forth in the following paragraph as a person to conduct such business:

(i) The incorporated association is found to have sufficient accounting and technical expertise to ensure proper performance of its business; and

(ii) In addition to the standard set forth in the preceding item, the incorporated association has the ability to implement its business in a fair and appropriate manner.

(2) An incorporated association designated pursuant to the provisions of the preceding paragraph (hereinafter referred to as "Designated Association" in this Article) shall conduct any of the following business:

(i) Developing and training persons with expert knowledge and skills on actuarial science;

(ii) Conducting necessary research and study, preparing statistics, collecting data, or providing information regarding actuarial science;

(iii) Any business involving the levels of coefficients that should constitute the basis for calculating the amount of the policy reserves set forth in Article 116, paragraph (2) or pertaining to any other actuarial particular, with which the Prime Minister has entrusted it; or

(iv) Business incidental to any of the business listed in the preceding three items.

(3) The Prime Minister may, if he/she finds that an improvement is required in the operation of business set forth in the preceding paragraph, order the Designated Association to take necessary measures for such improvement.

(4) The Prime Minister may, if he/she finds it necessary for ensuring proper operation of business specified in paragraph (2), request the Designated Association to submit as necessary a report on the services under that paragraph or its property, or cause his/her officials to enter the Designated Association's offices, ask questions about the business provided for in that paragraph or its property or inspect its books and documents and other related materials.

(5) The Prime Minister may rescind a designation under paragraph (1) (referred to as "Designation" in item (ii) and the following paragraph), if the Designated Association:

(i) is found to be unable to implement its business under paragraph (2) in a fair and appropriate manner;

(ii) has committed any wrongful conduct in relation to the Designation; or

(iii) has violated an order under paragraph (3).

(6) In addition to what is provided for in the preceding paragraphs, the procedure of Designation and any other necessary particulars involving Designated Associations shall be specified by Cabinet Office Ordinance.

Chapter VI Supervision

(Change of Particulars Prescribed in Statement of Business Procedures, etc.)

Article 123 (1) An Insurance Company must obtain authorization from the Prime Minister if it seeks to modify the particulars prescribed in the documents listed in Article 4, paragraph (2), items (ii) to (iv) inclusive (except the particulars specified by Cabinet Office Ordinance as being not very likely to impair the protection of Policyholders, etc.).

(2) An Insurance Company shall, if it seeks to modify the particulars specified by Cabinet Office Ordinance set forth in the preceding paragraph in the case where it seeks to modify the particulars prescribed in the documents prescribed in the same paragraph, notify the Prime Minister thereof in advance.

(Authorization of Change of Particulars Prescribed in Statement of Business Procedures, etc.)

Article 124 Whenever an application has been filed for the authorization referred to in the preceding Article, paragraph (1), the Prime Minister shall examine whether the particulars set forth in each of the following items conform to the standards prescribed in the relevant item:

(i) particulars given in the documents listed in Article 4, paragraph (2), items (ii) and (iii): the standards set forth in Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive; and

(ii) particulars given in the documents listed in Article 4, paragraph (2), item (iv): the standards set forth in Article 5, paragraph (1), item (iv), sub-item (a) to (c) inclusive.

(Notification, etc. of Change of Particulars Prescribed in Statement of Business Procedures, etc.)

Article 125 (1) In the case where a notification under the provisions of Article 123, paragraph (2) is made, it shall be deemed that the change pertaining to said notification was made on the day on which ninety days have passed since the day immediately following the date on which the Prime Minister received said notification.

(2) The Prime Minister may, if he/she finds that the particulars of a notification under the provisions of Article 123, paragraph (2) conform to the standards listed in Article 5, paragraph (1), item (iii), sub-item (a) to (e) inclusive of or item (iv), sub-item (a) to (c) inclusive, shorten the period of time prescribed in the preceding paragraph to a period of time found to be reasonable. In this case, the Prime Minister shall, without delay, give notice of the shortened period of time to the person that made said notification.

(3) The Prime Minister may, if there are reasonable grounds requiring a reasonable period of time for examining whether the particulars of a notification under the provisions of Article 123, paragraph (2) conform to the standards listed in Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive or item (iv), sub-items (a) to (c) inclusive and if the Prime Minister finds that said examination will not terminate within the period of time prescribed in paragraph (1), extend the period of time to a period found to be reasonable. In this case, the Prime Minister shall, without delay, give notice of the extended period of time and the reasons for the extension to the person that made said notification.

(4) The Prime Minister may, if he/she finds that the particulars of the notification under the provisions of Article 123, paragraph (2) do not conform to the standards listed in Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive or item (iv), sub-items (a) to (c) inclusive, order the person that made said notification to modify the particulars of said notification for a limited period or revoke said notification, limited to within a period of time until the day on which ninety days have passed since the day following the date on which said notification was received (the extended period of time in the case where the period of time is extended pursuant to the provisions of the preceding paragraph).

(Authorization of an amendment in the articles of incorporation)

Article 126 Any resolutions of the shareholders' meeting or the general members' council or the General Representative Members' Council concerning any amendment in the articles of incorporation involving the following particulars of an Insurance Company shall not come into effect without obtaining the authorization of the Prime Minister:

(i) Trade name or name;

(ii) The particulars of the redemption of funds;

(iii) Reasons for the withdrawal of members;

(iv) The set number of representative members and the particulars of how they are selected;

(v) The particulars of the contract set forth in Article 63, paragraph (1);

(vi) The particulars of the policy on Policyholders' dividends in a Converted Stock Company set forth in Article 86, paragraph (5);

(vii) The particulars of the appropriation of residual assets set forth in Article 182;

(viii) The particulars of the policy set forth in Article 240-5, paragraph (5).

(Particulars Requiring Notice)

Article 127 (1) An Insurance Company shall, if it falls under any of the following items, notify the Prime Minister of this pursuant to the provisions of Cabinet Office Ordinance:

(i) If it has commenced Insurance Business;

(ii) If it seeks to have a company falling under the category specified in Article 106, paragraph (1), item (xii) or (xiii) (excluding one for which paragraph (4) provides that in order to have such a company as its Subsidiary, an Insurance Company is to obtain authorization) become its Subsidiary (excluding the case where it seeks to accept a transfer of business or to effect a merger or company split upon obtaining authorization pursuant to the provisions of Article 142, Article 167, paragraph (1) or Article 173-6, paragraph (1));

(iii) If its Subsidiary ceases to be its Subsidiary (excluding the case where it accepted a business or demerged upon obtaining authorization under the provisions of Article 142 or Article 173-6, paragraph (1)), or if a Subsidiary that falls under the category of an Insurance Company, etc. That Is Eligible to Be a Subsidiary prescribed in Article 106, paragraph (4) becomes a Subsidiary that does not fall under the category of an Insurance Company, etc. That Is Eligible to Be a Subsidiary;

(iv) If it seeks to increase the amount of capital or the total amount of funds;

(v) If it modifies the articles of incorporation with regard to particulars other than those provided for otherwise;

(vi) If it seeks to establish an branch office or secondary office or representative office in a foreign state;

(vii) If its voting rights are acquired or come to be held by a single shareholder, in excess of 5 percent of all shareholders' voting rights; or;

(viii) If it falls under any of the other cases specified by a Cabinet Office Ordinance (Cabinet Office Ordinance or Ordinance of the Ministry of Finance for those pertaining to the financial bankruptcy processing system and financial crisis management).

(2) The provisions of Article 2, paragraph (15) shall apply mutatis mutandis to the voting rights in an Insurance Company to be acquired or held by one shareholder prescribed in the preceding paragraph, item (vii).

(Submission of Reports or Materials)

Article 128 (1) The Prime Minister may, if he/she finds it necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company, require the Insurance Company to submit reports or materials concerning the status of its business or property.

(2) If and to the extent that the Prime Minister finds it particularly necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company, he/she may require said Insurance Company's Subsidiary, etc. (meaning a Subsidiary Company or any other juridical person specified by Cabinet Office Ordinance as one whose operations are controlled by the Insurance Company; the same shall apply in the following paragraph and the following Article, paragraphs (2) and (3)) or a person the Insurance Company has entrusted with its business, to submit reports or materials that would helpful to understand the status of the business or property of the Insurance Company.

(3) An Insurance Company's Subsidiary, etc. or a person that an Insurance Company has entrusted with its business may refuse to submit reports or materials required under the provisions of the preceding paragraph if there are justifiable grounds for it to do so.

(Inspection)

Article 129 (1) The Prime Minister may, if he/she finds it necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company, have his/her officials enter a facility of the Insurance Company, such as a business or other office, ask questions about the status of its business or property, or inspect relevant objects such as books and documents.

(2) If and to the extent that the Prime Minister finds it particularly necessary in entering a site, asking questions, or conducting an inspection under the preceding paragraph, he/she may have his/her officials enter a facility of the Insurance Company's Subsidiary, etc. or of a person the Insurance Company has entrusted with its business, have such officials question the Insurance Company or ask questions about any particulars that are necessary for their inspection, or have such officials inspect relevant objects such as books and documents.

(3) An Insurance Company's Subsidiary, etc. or a person that an Insurance Company has entrusted with its business may refuse the questioning and inspection under the provisions of the preceding paragraph if there are justifiable grounds for it to do so.

(Standard of Soundness)

Article 130 The Prime Minister may use the following amounts with respect to an Insurance Company and establish whether or not the Insurance Company has an appropriate level of solvency in terms of its ability to pay for Insurance Proceeds, etc. as the standard by which the soundness of its business management is determined:

(i) Total amount of the items specified by Cabinet Office Ordinance such as capital, funds and reserves; and

(ii) Amount calculated pursuant to the provisions of Cabinet Office Ordinance as the amount for coping with possible risks exceeding standard predictions that may occur due to any events pertaining to the insurance being underwritten, such as insured events.

(Order for Modification of the Particulars Prescribed in Statement of Business Procedures, etc.)

Article 131 If and to the extent that the Prime Minister finds it necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company in light of the status of the business or property of the Insurance Company or a change in the circumstances, he/she may order the Insurance Company to modify the particulars prescribed in the documents listed in Article 4, paragraph (2), items (ii) to (iv) inclusive.

(Suspension of Business, etc.)

Article 132 (1) If the Prime Minister finds it necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company in light of the status of the business or property of the Insurance Company or the status of the assets of the Insurance Company and its Subsidiary, etc. , he/she may request the Insurance Company to submit an improvement program for ensuring soundness in its management by identifying particulars with regard to which measures are to be taken as well as due dates or order changes to the submitted improvement program, or, to the extent that the Prime Minister finds necessary, he/she may order the full or partial suspension of business of the Insurance Company with due dates, or order the deposit of property of the Insurance Company or other necessary measures for supervision.

(2) An order under the provisions of the preceding paragraph (including the request for submission of an improvement program) that it is found to be necessary to issue due to an Insurance Company's level of solvency in terms of its ability to pay for Insurance Proceeds, etc. , must be an order specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance that corresponds to the Insurance Company's level of solvency in terms of its ability to pay for Insurance Proceeds, etc.

(Rescission of License, etc.)

Article 133 The Prime Minister may, if an Insurance Company has come to fall under any of the following items, order the full or partial suspension of the business of the Insurance Company or the dismissal of the director, executive officer, accounting advisor, or company auditor, or rescind the license set forth in Article 3, paragraph (1):

(i) If it is in violation of laws and regulations, disposition of the Prime Minister pursuant to laws and regulations, or particularly important particulars among those prescribed in the documents listed in the items of Article 4, paragraph (2);

(ii) If it is in violation of the conditions attached to said license; and

(iii) If it engages in conduct prejudicial to the public interest.

Article 134 The Prime Minister may, if he/she finds that the property status of an Insurance Company is significantly worsening and that it is not appropriate for it to continue in the Insurance Business from the viewpoint of protecting Policyholders, etc. , rescind the license of the Insurance Company set forth in Article 3, paragraph (1).

Chapter VII Portfolio Transfers of Insurance Contracts, Assignment or Acquisition of Business, and Entrustment of Business and Property Administration

Section 1 Portfolio Transfers of Insurance Contracts

(Portfolio Transfers of Insurance Contracts)

Article 135 (1) An Insurance Company may, pursuant to the provisions of this Act, transfer insurance contracts to another Insurance Company (including a Foreign Insurance Company, etc.; hereinafter the same shall apply in this paragraph) under an Agreement with such other Insurance Company (hereinafter referred to as "Transferee Company" in this Section).

(2) A transfer of insurance contracts shall cover the whole insurance contracts for which the policy reserves is calculated on the same basis (excluding the insurance contracts specified by Cabinet Office Ordinance, such as those for which an insured event had occurred by the time of public notice under Article 137, paragraph (1) (limited to those contracts which would be terminated with the payment of the insurance proceeds pertaining to the insured event)).

(3) An Agreement under paragraph (1) shall provide for the particulars of the transfer of the Insurance Company's property which accompanies the transfer of insurance contracts. In this case, the Insurance Company which seeks to transfer insurance contracts (hereinafter referred to as "Transferor Company" in this Section) shall retain the property deemed necessary to protect the interest of the Transferor Company's creditors other than the Policyholders to which pertains the insurance contracts to be transferred under the Agreement (hereinafter referred to as "Affected Policyholders" in this Section).

(4) In an Agreement under paragraph (1), the Transferor Company may stipulate minor changes to the clauses of the insurance contracts to be transferred under the Agreement, so long as such changes are not disadvantageous to the Policyholders.

(Resolution on Transfer of Insurance Contracts)

Article 136 (1) Any transfer of insurance contracts under paragraph (1) of the preceding Article shall require a resolution at a shareholders' meeting or a general members' council meeting (or a General Representative Members' Council Meeting, where the company has such a council) (referred to as "Shareholders' Meeting, etc." hereinafter in this Chapter, as well as in Chapters VIII and X) in both the Transferor Company and the Transferee Company (other than a Foreign Insurance Company, etc.).

(2) The resolution set forth in the preceding paragraph shall be a resolution under Article 309, paragraph (2) (Resolution of shareholders' meetings) of the Companies Act or under Article 62, paragraph (2) above.

(3) In adopting a resolution under paragraph (1), the Transferor Company and the Transferee Company shall describe the gist of the Agreement set forth in paragraph (1) of the preceding Article in the notice to be given under Article 299, paragraph (1) (Notice of Calling of Shareholders' Meetings) of the Companies Act (including the cases where it is applied mutatis mutandis pursuant to Article 41, paragraph (1) and Article 49, paragraph (1)).

(Retention, etc. of Documents Pertaining to the Transfer of Insurance Contracts)

Article 136-2 (1) The directors (or, in a company with Committees, executive officers) of the Transferor Company shall keep at each of its business offices or offices the documents specified by Cabinet Office Ordinance, such as the written Agreement concluded under paragraph (1) of the preceding Article, for a period ranging from two weeks before the date of the Shareholders' Meeting, etc. set forth in Article 136, paragraph (1) to the end of the period specified pursuant to the provisions of paragraph (2) of the following Article in a supplementary note to the public notice set forth in paragraph (1) of the following Article.

(2) A shareholder or a Policyholder of the Transferor Company may, within the company's operating hours or business hours, make a request to inspect the documents set forth in the preceding paragraph, or may request a certified copy or extract of such documents in exchange for the fees determined by the Transferor Company.

(Public Notice of, and Filing of Objection to, Transfer of Insurance Contracts)

Article 137 (1) The Transferor Company shall, within two weeks from the date of the resolution set forth in Article 136, paragraph (1), give public notice of the gist of the Agreement concluded under Article 135, paragraph (1), and the balance sheets of the Transferor Company and the Transferee Company (for a Foreign Insurance Company, etc., the balance sheet for its Insurance Business in Japan), as well as other particulars specified by Cabinet Office Ordinance.

(2) The public notice set forth in the preceding paragraph shall include a supplementary note to the effect that any affected Policyholder who is opposed to the transfer must state his/her objection within a certain period of time.

(3) The period under the preceding paragraph cannot be less than one month.

(4) A transfer of insurance contracts shall not be carried out where the number of the Affected Policyholders who have stated their objections within the period set forth in paragraph (2) exceeds one fifth of all Affected Policyholders, and the amount specified by Cabinet Office Ordinance as the credits belonging to the insurance contracts of the Affected Policyholders who have thus stated their objections (excluding any insurance claim, etc. (meaning the Insurance Claims, etc. set forth in Article 17, paragraph (5)) that had arisen with regard to such insurance contracts by the time of public notice under paragraph (1)) exceeds one fifth of the amount prescribed as the credits belonging to all Affected Policyholders.

(5) Where the number of the Affected Policyholders who have stated their objections within the period set forth in paragraph (2) or the amount of credits specified by Cabinet Office Ordinance set forth in the preceding paragraph for such Policyholders does not exceed the proportion specified in that paragraph, all of the Affected Policyholders shall be deemed to have approved the transfer of insurance contracts.

(Suspension of Conclusion of Insurance Contracts)

Article 138 The Transferor Company shall not conclude any insurance contract that belongs to the same class as the insurance contracts to be transferred, for the period ranging from the time of the adoption of the resolution under Article 136, paragraph (1) to the time of execution or renunciation of the transfer of insurance contracts.

(Authorization of Transfer of Insurance Contracts)

Article 139 (1) Any transfer of insurance contracts shall be not become effective without the authorization of the Prime Minister.

(2) Whenever an application has been filed for the authorization set forth in the preceding paragraph, the Prime Minister shall examine whether it conforms to the following standards:

(i) the transfer of insurance contracts is appropriate in light of the protection of Policyholders, etc. ;

(ii) it is certain that the Transferee Company will perform its business in an appropriate, fair and efficient manner following the transfer of insurance contracts; and

(iii) the transfer poses no risk of unduly harming the interest of the creditors of the Transferor Company other than the Affected Policyholders.

(Public Notice, etc. of Transfer of Insurance Contracts)

Article 140 (1) The Transferor Company shall, following the transfer of insurance contracts, give public notice of without delay the fact that a transfer of insurance contracts has been carried out and other particulars specified by Cabinet Office Ordinance. The same shall apply where the company has renounced the transfer of insurance contracts.

(2) The Transferee Company shall, if it has received any transfer of insurance contracts, notify the Policyholders affected by the transfer of insurance contracts thereof (or, where any minor change to the transferred insurance contracts under Article 135, paragraph (4) is stipulated in the Agreement set forth in paragraph (1) of the same Article, of the fact that it has received a transfer of insurance contracts and the contents of such minor change) within three months from such transfer.

(3) Where the Transferor Company has outstanding loans or other claims against Policyholders, and such claims are to be assigned to the Transferee Company under the Agreement on the transfer of insurance contracts set forth in Article 135, paragraph (1), a notice in the form of an instrument carrying a fixed date under Article 467 (Requirement for Assertion of Assignment of Nominative Claims Against Third Parties ) of the Civil Code shall be deemed to have been given to the Policyholders if a public notice under the first sentence of paragraph (1) has been given, in accordance with the Method of Public Notice specified by the company, by way of publication in a daily newspaper that publishes the particulars of current events. In this case, the date of the public notice shall be deemed to be the fixed date.

(Membership through Transfer of Insurance Contracts)

Article 141 Where insurance contracts are transferred to a Mutual Company, the Policyholders affected by the transfer become members of the Mutual Company; provided, however, that this shall not apply to the cases where the articles of incorporation of the Transferee Company do not grant membership to the Policyholders with the same class of insurance contracts as those covered by the transfer agreement.

Section 2 Assignment or Acquisition of Business

(Authorization of Assignment or Acquisition of Business)

Article 142 Unless otherwise specified by Cabinet Office Ordinance, any assignment or acquisition of business involving Insurance Company or insurance companies shall be not become effective without the authorization of the Prime Minister.

(Special Provisions on Insurance Companies Engaged in Insurance-Proceed Trust Services)

Article 143 (1) Where a Mutual Company engaged in Insurance-Proceed Trust Services has adopted a resolution on the transfer of all insurance contracts, and the general members' council (or the General Representative Members' Council, where the company has such a council) or the board of directors has adopted a resolution on the assignment of business including Insurance-Proceed Trust Services, the Mutual Company shall, within two weeks from the date of the latter resolution, give public notice of the effect that any beneficiary of a monetary trust (hereinafter referred to as "Beneficiary" in this Article) who is opposed to the gist of the resolution and the assignment of business must state their objections within a certain period of time.

(2) The period under the preceding paragraph cannot be less than one month.

(3) Where no beneficiaries have stated their objections during the period set forth in paragraph (1), the beneficiaries shall be deemed to have approved the assignment of business.

Section 3 Entrustment of Business and Property Administration

(Entrustment of Business and Property Administration)

Article 144 (1) An Insurance Company may, pursuant to the provisions of this Act, entrust another Insurance Company (including a Foreign Insurance Company, etc. (unless otherwise p specified by Cabinet Office Ordinance); hereinafter the same shall apply in this paragraph) with the administration of its business and property under an Agreement with such other Insurance Company (hereinafter referred to as "Entrusted Company" in this Section).

(2) Any entrustment of the administration business set forth in the preceding paragraph shall require a resolution of the Shareholders' Meeting, etc. in both the Insurance Company entrusting the administration business (hereinafter referred to as "Entrusting Company" in this Section) and the Entrusted Company (other than a Foreign Insurance Company, etc.).

(3) The resolution set forth in the preceding paragraph shall be a resolution under Article 309, paragraph (2) (Resolution of shareholders' meetings) of the Companies Act or under Article 62, paragraph (2) above.

(4) The provisions of Article 136, paragraph (3) shall apply mutatis mutandis to the adoption of a resolution under paragraph (2).

(Authorization of Entrustment of Business and Property Administration)

Article 145 (1) Any entrustment of business and property administration under paragraph (1) of the preceding Article shall be not become effective without the authorization of the Prime Minister.

(2) Whenever an application has been filed for the authorization set forth in the preceding paragraph, the Prime Minister shall examine whether it conforms to the following standards:

(i) the entrustment of administration is necessary and appropriate in light of the protection of Policyholders, etc. ; and

(ii) it is certain that the Entrusted Company will perform business to which the entrustment of administration pertains in an appropriate, fair and efficient manner.

(Public Notice and Registration)

Article 146 (1) The Entrusting Company shall, without delay following the authorization set forth in paragraph (1) of the preceding Article, give public notice of the gist of the Agreement set forth in Article 144, paragraph (1) (hereinafter referred to as "Administration Entrustment Agreement" in this Section) and register the entrustment of the administration business, and the Entrusted Company's trade name, name and its head office or principal office, or its principal branch in Japan (meaning the principal branch in Japan set forth in Article 187, paragraph (1), item (iv)).

(2) The registration set forth in the preceding paragraph shall be made at the location of the Entrusted Company's head office or principal office.

(3) The following documents shall be attached to a written application for the registration set forth in paragraph (1), in addition to the documents set forth in Articles 18 and 19 (Documents to be Attached to Written Application) and Article 46 (General Rules on Attached Documents) of the Commercial Registration Act (including the cases where it is applied mutatis mutandis pursuant to Article 67):

(i) A copy of the Administration Entrustment Agreement; and

(ii) The minutes of the Shareholders' Meeting, etc. of the Entrusted Company (other than a Foreign Insurance Company, etc.).

(Internal Relationship)

Article 147 Unless provided otherwise in this Act, the relationship between the Entrusting Company and the Entrusted Company shall be governed by the provisions on mandate.

(External Relationship)

Article 148 (1) The Entrusted Company shall, in taking any action on behalf of the Entrusting Company, such as the conclusion of an insurance contract, indicate that it does so on behalf of the Entrusting Company.

(2) Any action taken without the indication set forth in the preceding paragraph shall be deemed to have been taken on the Entrusted Company's own account.

(3) The provisions of Article 11, paragraphs (1) and (3) (Manager's Authority of Representation) of the Companies Act shall apply mutatis mutandis to an Entrusted Company. In this case, the terms "a Company" and" business" in paragraph (1) of the same Article shall be deemed to be replaced with "the Entrusting Company set forth in Article 144, paragraph (2) of the Insurance Business Act" and "business and properties," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) The provisions of Article 78 (Liability for Damages Pertaining to the Actions of the Representative) of the Act on General Incorporated Associations and General Incorporated Foundations shall apply mutatis mutandis to an Entrusting Company. In this case, the term "representative director or any other representative" in that Article shall be deemed to be replaced with "Entrusted Company set forth in Article 144, paragraph (1) of the Insurance Business Act."

(Amendment or Cancellation of Administration Entrustment Agreement)

Article 149 (1) Any amendment to an Administration Entrustment Agreement or cancellation of an Administration Entrustment Agreement shall require a resolution of the Shareholders' Meeting, etc. in both the Entrusting Company and the Entrusted Company (other than a Foreign Insurance Company, etc.).

(2) The amendment or cancellation set forth in the preceding paragraph shall be not become effective without the authorization of the Prime Minister.

(3) The provisions of Article 144, paragraphs (3) and (4) shall apply mutatis mutandis to the adoption of a resolution under paragraph (1).

(Public Notice, etc. of Amendment or Termination of Administration Entrustment Agreement)

Article 150 (1) If an Entrusting Company has obtained authorization under paragraph (2) of the preceding Article, it shall give public notice of this without delay. The same shall apply if an Administration Entrustment Agreement has been terminated due to any cause other than the cancellation set forth in paragraph (1) of the same Article.

(2) The provisions of Article 146, paragraph (3) shall apply mutatis mutandis to the registration of any amendment to an Administration Entrustment Agreement or cancellation of an Administration Entrustment Agreement. In this case, the term "following documents" in that paragraph shall be deemed to be replaced with "following documents (or, in the case of termination due to any other cause than cancellation, the document listed in item (i) and a document certifying the occurrence of the cause of termination)"; and the term "Administration Entrustment Agreement" in Article 146, paragraph (3), item (i) shall be deemed to be replaced with "Administration Entrustment Agreement (or, in the case of any amendment, Administration Entrustment Agreement thus amended)."

Article 151 Deleted

Chapter VIII Dissolution, Merger, Company Split and Liquidation

Section 1 Dissolution

(Causes of Dissolution)

Article 152 (1) For the purpose of applying the provisions of Article 471 (Grounds for Dissolution) of the Companies Act to Stock Companies that conduct Insurance Business, the term "below" in that Article shall be deemed to be replaced with "in item (iii) to (vi) inclusive."

(2) The provisions of Article 471 of the Companies Act as applied with the change in interpretation set forth in the preceding paragraph shall apply mutatis mutandis to a Mutual Company. In this case, the term "a shareholders' meeting" in item (iii) of that Article shall be deemed to be replaced with "a general members' council meeting (or a General Representative Members' Council Meeting, where the company has such a council)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) An Insurance Company, etc. shall dissolve due to the following causes (or, for a Stock Company that conducts Insurance Business, the cause listed in item (ii)), in addition to the causes listed in Article 471, items (iii) to (vi) inclusive of the Companies Act as applied with the change in interpretation set forth in paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to the preceding paragraph):

(i) Transfer of all insurance contracts; or

(ii) Cancellation of a license under Article 3, paragraph (1) or a registration under Article 272, paragraph (1).

(Authorization of Dissolution, etc.)

Article 153 (1) None of the following shall be effective without authorization of the Prime Minister:

(i) A resolution of the Shareholders' Meeting, etc. that approves dissolution of the Insurance Company, etc. ;

(ii) A resolution of the shareholders' meeting that approves abolition of the Insurance Business; and

(iii) A merger in which the parties solely consist of stock companies or include a Stock Company or stock companies conducting Insurance Business (excluding a merger under Article 167, paragraph (1); the same shall apply in the following paragraph).

(2) Whenever an application has been filed for the authorization set forth in the preceding Article, the Prime Minister shall examine whether it conforms to the following standards:

(i) If the application for authorization is from an Insurance Company, that the dissolution or abolition of Insurance Business by resolution, or that the merger, is inevitable in light of the status of business and property of the Insurance Company; or

(ii) That the dissolution or abolition of Insurance Business envisaged by the resolution, or that the planned merger, poses no risk to the protection of Policyholders, etc.

(3) The Prime Minister is not to grant the authorization referred to in paragraph (1), if the Insurance Company, etc. that has submitted the application under paragraph (1) (limited to a Stock Company or a Mutual Company whose articles of incorporation include the provisions set forth in Article 63, paragraph (1)) is the insurer under any existing insurance contracts (excluding the insurance contracts specified by Cabinet Order, such as those for which an insured event had occurred by the date of the application (limited to those contracts which would be terminated with the payment of the insurance proceeds pertaining to the insured event)).

(Public Notice of Dissolution, etc.)

Article 154 Upon obtaining the authorization set forth in paragraph (1) the Insurance Company, etc. , of the preceding Article shall, without delay, give public notice of that effect and details of the particulars for which the authorization is granted pursuant to the provisions of Cabinet Office Ordinance.

(Registration of Dissolution due to Transfer of Insurance Contracts)

Article 155 The following documents shall be attached to a written application for registration of dissolution due to the cause listed in Article 152, paragraph (3), item (i), in addition to the documents set forth in Articles 18, 19 and 46 of the Commercial Registration Act as applied mutatis mutandis pursuant to Article 67, and in Article 71, paragraph (3) of that Act as applied mutatis mutandis pursuant to Article 158:

(i) The minutes of the Shareholders' Meeting, etc. of the Transferee Company (other than a Foreign Insurance Company, etc.) set forth in Article 135, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 272-29);

(ii) A document certifying that a public notice has been given under Article 137, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 272-29);

(iii) A document certifying that the number of those Affected Policyholders set forth in Article 137, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 272-29) who have stated their objections within the period set forth in that paragraph, or the amount of credits specified by Cabinet Office Ordinance set forth in Article 137, paragraph (4) (including the cases where it is applied with relevant changes in interpretation pursuant to the provisions of Article 251, paragraph (2) and where it is applied mutatis mutandis pursuant to Article 272-29; hereinafter the same shall apply in this item) as belonging to such Affected Policyholders has not exceeded the proportion set forth in Article 137, paragraph (4); and

(iv) A document certifying any public notice given under Article 250, paragraph (4).

(Procedure, etc. of Dissolution for Mutual Company)

Article 156 Any resolution on the dissolution of a Mutual Company shall be a resolution under Article 62, paragraph (2).

(Retention, etc. of Documents Pertaining to a Dissolution)

Article 156-2 (1) A Mutual Company shall, for the period ranging from two weeks before the date of the general members' council meeting (or General Representative Members' Council Meeting, where the company has such a council) pertaining to the resolution on its dissolution to the date of such resolution (or, where the resolution is adopted by the General Representative Members' Council, the day that is one month after the date of public notice under paragraph (1) of the following Article), keep at each of its offices the documents or electromagnetic records in which the dissolution proposal and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(2) Members of a Mutual Company may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the Mutual Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Mutual Company, or to be issued a document detailing such particulars.

Article 157 (1) Where the General Representative Members' Council has adopted a resolution on dissolution, the Mutual Company shall, within two weeks from the date of such resolution, give public notice of the gist of the resolution and its balance sheet, as well as any other particular specified by Cabinet Office Ordinance.

(2) In the case set forth in the preceding paragraph, members representing at least five thousandths (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 50, paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months may demand the directors to convene the general members' council with the purpose of discussing the particulars of the resolution, by indicating the proposed agenda for the meeting and the reason for the convocation. In this case, the demand shall be made within one month from the date of public notice under that paragraph.

(3) In the case referred to in the preceding paragraph, the resolution of the General Representative Members' Council shall lose its effect, unless the general members' council adopts a resolution approving the resolution of the General Representative Members' Council on dissolution within six weeks from the date of demand under that paragraph.

(4) The provisions of Article 156 shall apply mutatis mutandis to the resolution of the general members' council set forth in the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

Article 158 The provisions of Article 926 (Registration of Dissolution) of the Companies Act, and Article 71, paragraphs (1) and (3) (Registration of Dissolution) of the Commercial Registration Act shall apply mutatis mutandis to a Mutual Company. In this case, the term "Article 478, paragraph (1), item (i) of the Companies Act" in Article 71, paragraph (3) of the Commercial Registration Act shall be deemed to be replaced with "Article 180-4, paragraph (1), item (i) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Section 2 Merger

Subsection 1 General Rules

Article 159 (1) A Mutual Company may merge with another Mutual Company or a Stock Company that conducts Insurance Business. In this case, a merger agreement shall be concluded between the mutual companies or between the Mutual Company and the Stock Company.

(2) In the case referred to in the preceding paragraph, the company surviving the merger or the company incorporated by the merger shall be the company that falls under one of the following items in the case set forth in each of those items:

(i) Where a Mutual Company merges with another Mutual Company: a Mutual Company; or

(ii) Where a Mutual Company merges with a Stock Company that conducts Insurance Business: a Mutual Company or a Stock Company that conducts Insurance Business.

Subsection 2 Merger Agreement

(Absorption-Type Merger Agreement between Mutual Companies)

Article 160 Where mutual companies carry out an absorption-type merger (meaning any merger that a Mutual Company effects with another Mutual Company or a Stock Company, whereby the surviving mutual or Stock Company succeeds to any and all rights and obligations of the absorbed mutual or Stock Company; the same shall apply hereinafter), the absorption-type merger agreement shall provide for the following particulars:

(i) The names and addresses of the Mutual Company surviving the absorption-type merger (hereinafter referred to as the "Mutual Company Surviving the Absorption-Type Merger" in this Section) and the Mutual Company extinguished in the merger (hereinafter referred to as "Absorbed Mutual Company" in this Section);

(ii) The amount of any money to be granted to the members of the Absorbed Mutual Company;

(iii) The particulars of the rights of the Policyholders of the Absorbed Mutual Company following the merger;

(iv) The date on which the Merger takes effect; and

(v) Any other particular specified by Cabinet Office Ordinance.

(Consolidation-Type Merger Agreement between Mutual Companies)

Article 161 Where mutual companies carry out a consolidation-type merger (meaning any merger effected by two or more mutual companies or by two or more mutual and stock companies, whereby the new mutual or Stock Company established in the merger succeeds to any and all rights and obligations of the mutual or stock companies consolidated by the merger; the same shall apply hereinafter), the consolidation-type merger agreement shall provide for the following particulars:

(i) The names and addresses of the Mutual Companies that will be extinguished in the merger (hereinafter referred to as "Consolidated Mutual Companies" in this Section);

(ii) The purpose and name of the Mutual Company to be established in the merger (hereinafter referred to as the "Mutual Company Established by the Consolidation-Type Merger" in this Section) and the address of its principal office;

(iii) In addition to what is listed in the preceding item, particulars specified by the articles of incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(iv) The names of the directors at incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(v) The particulars set forth in the following items in accordance with the categories provided therein:

(a) Where the Mutual Company Established by the Consolidation-Type Merger is a company with accounting advisors: the names of the accounting advisors at incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(b) Where the Mutual Company Established by the Consolidation-Type Merger is a company with auditors: the names of the company auditors at incorporation of the Mutual Company Established by the Consolidation-Type Merger; or

(c) Where the Mutual Company Established by the Consolidation-Type Merger is a company with accounting auditors: the names of the accounting auditors at incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(vi) The amount of any money to be granted to the members of the Consolidated Mutual Companies;

(vii) The particulars of the rights of Policyholders following the merger; and

(viii) Any other particular specified by Cabinet Office Ordinance.

(Absorption-Type Merger Agreement between Stock and Mutual Companies Survived by Mutual Company)

Article 162 (1) In an absorption-type merger between a Stock Company and a Mutual Company where the surviving Insurance Company, etc. is the Mutual Company, the merger agreement shall provide for the following particulars:

(i) The trade names, names and addresses of the Stock Company extinguished in the merger (hereinafter referred to as "Absorbed Stock Company" in this Section) and the Mutual Company Surviving the Absorption-Type Merger;

(ii) The method of compensation for the shareholders and holders of share options of the Absorbed Stock Company;

(iii) The particulars of the Reserves of the Mutual Company Surviving the Absorption-Type Merger;

(iv) The particulars of the rights of the Policyholders of the Absorbed Stock Company following the merger;

(v) The date on which the merger takes effect; and

(vi) Any other particular specified by Cabinet Office Ordinance.

(2) The provisions of Article 68, paragraph (6) shall apply mutatis mutandis to the absorption-type merger set forth in the preceding paragraph. In this case, the term "deficiency reserves in addition to the reserves set forth in paragraph (4)" in that paragraph shall be deemed to be replaced with "deficiency reserve"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) The provisions of Article 72, paragraph (1) shall apply mutatis mutandis to the Absorbed Stock Company set forth in paragraph (1), item (i). In this case, the terms "Article 70, paragraph (2)" and "Entity Conversion" in that paragraph shall be deemed to be replaced with "Article 165-7, paragraph (2)" and "absorption-type merger," respectively; and the term "to obtain his/her consent" shall be deemed to be deleted; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) The provisions of Article 83 shall apply mutatis mutandis to the absorption-type merger set forth in paragraph (1). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Consolidation-Type Merger between Stock and Mutual Companies Incorporating Mutual Company)

Article 163 (1) In a consolidation-type merger between a Stock Company (or stock companies) and a Mutual Company where the Insurance Company, etc. to be incorporated is a Mutual Company, the merger agreement shall provide for the following particulars:

(i) The trade names, names and addresses of the Stock Company (or stock companies) extinguished in the merger (hereinafter referred to as "Consolidated Stock Company" in this Section) and the consolidated mutual company;

(ii) The purpose and name of the Mutual Company Established by the Consolidation-Type Merger and the address of its principal office;

(iii) In addition to what is listed in the preceding item, particulars specified by the articles of incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(iv) The names of the directors at incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(v) The particulars set forth in the following items in accordance with the categories provided therein:

(a) Where the Mutual Company Established by the Consolidation-Type Merger is a company with accounting advisors: the names of the accounting advisors at incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(b) Where the Mutual Company Established by the Consolidation-Type Merger is a company with auditors: the names of the company auditors at incorporation of the Mutual Company Established by the Consolidation-Type Merger; or

(c) Where the Mutual Company Established by the Consolidation-Type Merger is a company with accounting auditors: the names of the accounting auditors at incorporation of the Mutual Company Established by the Consolidation-Type Merger;

(vi) The method of compensation for the shareholders and holders of share options of the Consolidated Stock Company;

(vii) The amount of any money to be granted to the members of the consolidated mutual company;

(viii) The particulars of the Reserves of the Mutual Company Established by the Consolidation-Type Merger;

(ix) The particulars of the rights of Policyholders following the merger; and

(x) Any other particular specified by Cabinet Office Ordinance.

(2) The provisions of paragraph (2) of the preceding Article shall apply mutatis mutandis to the consolidation-type merger set forth in the preceding paragraph; and the provisions of paragraph (3) of that Article shall apply mutatis mutandis to a Consolidated Stock Company. In this case, the term "absorption-type merger" in Article 162, paragraph (3) shall be deemed to be replaced with "consolidation-type merger"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) The provisions of Article 83 shall apply mutatis mutandis to the consolidation-type merger set forth in paragraph (1). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Absorption-Type Merger Agreement between Stock and Mutual Companies Survived by Stock Company)

Article 164 (1) In an absorption between a Stock Company and a Mutual Company where the surviving Insurance Company, etc. is the Stock Company, the merger agreement shall provide for the following particulars:

(i) The trade names, names and addresses of the Stock Company surviving the merger (hereinafter referred to as "Stock Company Surviving the Absorption-Type Merger" in this Section) and the Absorbed Mutual Company;

(ii) The following particulars of any share, etc. (meaning any share or money; hereinafter the same shall apply in this Section) to be granted to the members of the Absorbed Mutual Company by the Stock Company Surviving the Absorption-Type Merger in carrying out the merger:

(a) Where the share, etc. is the shares of the Stock Company Surviving the Absorption-Type Merger, the number of such shares (or, in a company with class shares, the classes of such shares and the number of shares by class) or the method of calculating such number, and the particulars of the amounts of capital and Reserves of the Stock Company Surviving the Absorption-Type Merger; or

(b) Where the share, etc. is money, the amount of such money or the method of calculating the amount;

(iii) Where the preceding item applies, the particulars of the allocation of Shares, etc. to the members of the Absorbed Mutual Company (excluding the Stock Company Surviving the Absorption-Type Merger) under that item;

(iv) The method of sale for the new shares to be issued for fractional lots generated by the allocation of shares to the members of the Absorbed Mutual Company, and any other particular specified by Cabinet Office Ordinance regarding such sale;

(v) Where the shares set forth in the preceding item are purchased, the method of the purchase and any other particular specified by Cabinet Office Ordinance regarding such purchase;

(vi) The amount of any money to be granted to the contributors to the funds of the Absorbed Mutual Company;

(vii) The particulars of the rights of the Policyholders of the Absorbed Mutual Company following the merger;

(viii) The particulars of the amount of surplus from consolidation;

(ix) The date on which the merger takes effect; and

(x) Any other particular specified by Cabinet Office Ordinance.

(2) The provisions of the main clause of Article 89, paragraph (1) and Article 89, paragraph (2) shall apply mutatis mutandis to the absorption-type merger set forth in the preceding paragraph. In this case, the terms "converting Mutual Company," "Effective Date" and "entity conversion plan" in paragraph (1) of the same Article shall be deemed to be replaced with "Absorbed Mutual Company," "date set forth in Article 164, paragraph (1), item (ix)" and "absorption-type merger agreement set forth in Article 164, paragraph (1)," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(3) The provisions of Article 90 shall apply mutatis mutandis to the absorption-type merger set forth in paragraph (1); and the provisions of Article 162, paragraph (3) shall apply mutatis mutandis to an Absorbed Mutual Company. In this case, the terms "members of a converting mutual company," "Converted Stock Company" and "entity conversion plan" in Article 90, paragraph (1) shall be deemed to be replaced with "members of an Absorbed Mutual Company," "Stock Company Surviving the Absorption-Type Merger" and "absorption-type merger agreement set forth in Article 164, paragraph (1)" respectively; and the term "Article 165-7, paragraph (2)" in Article 162, paragraph (3) shall be deemed to be replaced with "Article 165-17, paragraph (2)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) The provisions of Article 91 shall apply mutatis mutandis to a Stock Company Surviving an Absorption-Type Merger. In this case, the term "amount of surplus in Entity Conversion" in that Article shall be deemed to be replaced with "amount of merger surplus"; the term "as a particular to be specified by the articles of incorporation pursuant to the provisions of Article 86, paragraph (4), item (ii)" in Article 91, paragraph (1) shall be deemed to be replaced with "in its articles of incorporation"; the term "paragraph (3) of the preceding Article" in Article 91, paragraph (2) shall be deemed to be replaced with "paragraph (2) of the preceding Article as applied mutatis mutandis pursuant to Article 164, paragraph (3)"; and the terms "capital Reserve on Entity Conversion" and "calculations on Entity Conversion" in Article 91, paragraph (4) shall be deemed to be replaced with "capital Reserve on an absorption-type merger under Article 164, paragraph (1)" and "calculations on such absorption-type merger," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Consolidation-Type Merger Agreement between Stock and Mutual Companies Incorporating Stock Company)

Article 165 (1) In a consolidation-type merger between a Stock Company (or stock companies) and a Mutual Company where the Insurance Company, etc. to be incorporated is a Stock Company, the merger agreement shall provide for the following particulars:

(i) The trade names, names and addresses of the consolidated companies (meaning the Consolidated Stock Company and the consolidated mutual company; hereinafter the same shall apply in this Section);

(ii) The purpose, trade name, address of the head office, and total number of authorized shares of the Stock Company to be established in the merger (hereinafter referred to as "Stock Company Established by Consolidation-Type Merger" in this Section);

(iii) In addition to what is listed in the preceding item, particulars specified by the articles of incorporation of the Stock Company Established by the Consolidation-Type Merger;

(iv) The names of the persons to serve as directors at the incorporation of the Stock-Company Established by the Consolidation-Type Merger;

(v) The particulars set forth in the following items in accordance with the categories provided therein:

(a) Where the Stock-Company Established by the Consolidation-Type Merger is a company with accounting advisors: the names of the persons to serve as accounting advisors at the incorporation of the Stock Company Established by the Consolidation-Type Merger;

(b) Where the Stock Company Established by the Consolidation-Type Merger is a company with auditors: the names of the persons to serve as company auditors at the incorporation of the Stock Company Established by the Consolidation-Type Merger; or

(c) Where the Stock Company Established by the Consolidation-Type Merger is a company with accounting auditors: the names of the persons to serve as accounting auditors at the incorporation of the Stock Company Established by the Consolidation-Type Merger;

(vi) The number of the Stock Company Established by the Consolidation-Type Merger's shares (or, in a company with class shares, the classes of share and the number of shares by class) to be granted by the company in carrying out the merger to the shareholders of the Consolidated Stock Company in lieu of the latter company's shares, or the method of calculating such number;

(vii) The number of the Stock Company Established by the Consolidation-Type Merger's shares (or, in a company with class shares, the classes of shares and the number of shares by class) to be granted by the company in carrying out the merger to the members of the consolidated mutual company;

(viii) The particulars of the amounts of the capital and reserves of the Stock Company Established by the Consolidation-Type Merger;

(ix) The particulars of the allocation of shares under item (vi) or (vii) to the shareholders of the Consolidated Stock Company (excluding any Consolidated Stock Company or consolidated mutual company) or the members of the consolidated mutual company (excluding any Consolidated Stock Company or consolidated mutual company);

(x) The method of sale for the new shares to be issued for fractional lots generated by the allocation of shares to the members of the consolidated mutual company, and any other particular specified by Cabinet Office Ordinance regarding such sale;

(xi) Where the shares set forth in the preceding item are purchased, the method of the purchase and any other particular specified by Cabinet Office Ordinance regarding such purchase;

(xii) Where a Consolidated Stock Company has issued share options, the following particulars of the Stock Company Established by the Consolidation-Type Merger's share options or money to be granted by the latter company in carrying out the merger to the holders of share options of the Consolidated Stock Company in lieu of such share options:

(a) Where share options of the Stock Company Established by the Consolidation-Type Merger are granted to the holders of stock options of the Consolidated Stock Company, the contents and number of the share options thus granted and the method of calculating such number;

(b) In the case prescribed in (a), if the share options of the Consolidated Stock Company set forth in (a) are share options attached to bonds, the fact that the Stock Company Established by the Consolidation-Type Merger will assume the obligations pertaining to the bonds (meaning bonds as defined in Article 2, item (xxiii) of the Companies Act; the same shall apply in this sub-item) with stock options, and the classes of bonds covered by such assumption and the total value of the bonds by class or the method of calculating such amount; or

(c) Where any money is granted to the holders of stock options of a Consolidated Stock Company other than that set forth in (a), the amount of such money or the method of calculating such amount;

(xiii) Where the preceding item applies, the particulars of the allocation of Stock Company Established by the Consolidation-Type Merger's share options or money to the holders of share options of the Consolidated Stock Company set forth in that item;

(xiv) The amount of any money to be granted to the shareholders of the Consolidated Stock Company, or the contributors to the funds and the members of the consolidated mutual company;

(xv) The particulars of the rights of Policyholders following the merger;

(xvi) The particulars of the amount of surplus from consolidation; and

(xvii) Any other particular specified by Cabinet Office Ordinance.

(2) In the case prescribed in the preceding paragraph, the consolidated companies may, where all or any of the consolidated stock company is a company with class shares, prescribe the following particulars as particulars listed in item (vi) of that paragraph, depending on the class structure of the shares issued by the Consolidated Stock Company:

(i) If they do not allocate shares of the Stock Company Established by the Consolidation-Type Merger to any specific class of shareholder, that fact and the relevant class of share; and

(ii) In addition to what is listed in the preceding item, if they treat each class of share in a different manner in allocating shares of the Stock Company Established by the Consolidation-Type Merger, that fact and a description of such different treatment.

(3) Where paragraph (1) applies, the provisions for the particulars listed in item (vi) of that paragraph shall include a clause that the shares of the Stock Company Established by the Consolidation-Type Merger shall be allocated in accordance with the number of shares (or, where the articles of incorporation include provisions for the particulars listed in item (ii) of the preceding paragraph, the number of shares by class) held by each shareholder of the Consolidated Stock Company (excluding any Consolidated Stock Company, consolidated mutual company or holder of the class of share set forth in item (i) of the preceding paragraph).

(4) The provisions of the main clause of Article 89, paragraph (1) and Article 89, paragraph (2) shall apply mutatis mutandis to the consolidation-type merger set forth in paragraph (1). In this case, the terms "converting Mutual Company," "Effective Date" and "entity conversion plan" in paragraph (1) of the same Article shall be deemed to be replaced with "consolidated mutual company," "date of the establishment of the Stock Company Established by the Consolidation-Type Merger" and "consolidation-type merger agreement set forth in Article 165, paragraph (1)," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(5) The provisions of Article 90 shall apply mutatis mutandis to the consolidation-type merger set forth in paragraph (1); and the provisions of Article 162, paragraph (3) shall apply mutatis mutandis to a consolidated mutual company. In this case, the terms "members of a converting Mutual Company," "Converted Stock Company" and "entity conversion plan" in Article 90, paragraph (1) shall be deemed to be replaced with "members of a consolidated mutual company," "Stock Company Established by the Consolidation-Type Merger" and "consolidation-type merger agreement set forth in Article 165, paragraph (1)" respectively; and the term "Article 165-7, paragraph (2)" in Article 162, paragraph (3) shall be deemed to be replaced with "Article 165-17, paragraph (2)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(6) The provisions of Article 91 shall apply mutatis mutandis to a Stock Company Established by the Consolidation-Type Merger. In this case, the term "amount of surplus in Entity Conversion" in that Article shall be deemed to be replaced with "amount of surplus from consolidation"; the term "Article 86, paragraph (4), item (ii)" in Article 91, paragraph (1) shall be deemed to be replaced with "Article 165, paragraph (1), item (iii)"; the term "paragraph (2) of the preceding Article" in Article 91, paragraph (3) shall be deemed to be replaced with "paragraph (2) of the preceding Article as applied mutatis mutandis pursuant to Article 165, paragraph (5)"; and the terms "capital Reserve on Entity Conversion" and "calculations on Entity Conversion" in Article 91, paragraph (4) shall be deemed to be replaced with "capital reserves on a consolidation-type merger under Article 165, paragraph (1)" and "calculations on such consolidation-type merger," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Subsection 3 Procedure of Merger

Division 1 Procedures for Extinguished Stock Companies

(Retention and Inspection, etc. of Documents Related to a Merger Agreement, etc.)

Article 165-2 (1) An Extinguished Stock Company (meaning an Absorbed Stock Company or a Consolidated Stock Company; hereinafter the same shall apply in this Section) shall, for the period ranging from any of the following dates, whichever is the earliest, to the date on which the merger takes effect (hereinafter referred to as "Effective Date" in this Section), keep at each of its business offices the documents or electromagnetic records in which the details of the merger agreement and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(i) The day that is two weeks before the date of the shareholders' meeting set forth in paragraph (1) of the following Article or the class meeting set forth in paragraph (5) of the same Article;

(ii) The date of notice under Article 165-4, paragraph (1) or the date of public notice under paragraph (2) of the same Article, whichever is earlier; or

(iii) The date of public notice under Article 165-7, paragraph (2).

(2) The creditors of an Extinguished Stock Company, such as shareholders and Policyholders, may make the following requests to the company at any time during its operating hours; provided, however, that they pay the fees determined by the Extinguished Stock Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Extinguished Stock Company, or to be issued a document detailing such particulars.

(Authorization of Merger Agreement)

Article 165-3 (1) An extinguished stock company shall have its merger agreement approved by a resolution of the shareholders' meeting by the day before the Effective Date.

(2) The resolution set forth in the preceding paragraph to be adopted by an extinguished stock company shall be a resolution under Article 309, paragraph (2) (Resolution of shareholders' meetings) of the Companies Act.

(3) An extinguished stock company shall, if it seeks to adopt a resolution under paragraph (1), provide an outline of the merger agreement in the notice to be given pursuant to Article 299, paragraph (1) (Notice of Calling of Shareholders' Meetings) of the Companies Act.

(4) Notwithstanding the provisions of paragraph (2), where the merger involves an extinguished stock company that is a public company (meaning a public company as defined in Article 2, item (v) (Definitions) of the Companies Act; hereinafter the same shall apply in this Section), and all or Part of the Shares, etc. to be distributed to the shareholders of the extinguished stock company are shares with restriction on transfer, the resolution set forth in paragraph (1) shall be a resolution under Article 309, paragraph (3) of that Act; provided, however, that this shall not apply to the cases where the extinguished stock company is a company with class shares.

(5) In a consolidation-type merger involving a Consolidated Stock Company that is a company with class shares, where all or Part of the shares of the Stock Company Established by the Consolidation-Type Merger to be distributed to the shareholders of the Consolidated Stock Company are shares with restriction on transfer, the merger shall be null and void unless approved by a resolution of the class meeting composed of the holders of the class of share (excluding shares with restriction on transfer) for which the shares with restriction on transfer are to be distributed (or, where the shares with restriction on transfer are to be distributed to the holders of two or more classes of share, the class meetings each composed of the holders of one of such classes of share); provided, however, that this shall not apply to the cases where no shareholders can exercise their voting rights in the relevant class meeting.

(6) Any resolution by a Consolidated Stock Company under the preceding paragraph shall be a resolution under Article 324, paragraph (3) (Resolution of Class Meetings) of the Companies Act.

(Notice, etc. to Shareholders, etc.)

Article 165-4 (1) An extinguished stock company shall, no later than twenty days before the Effective Date, notify its shareholders and the registered pledgees of its shares, and the holders of its share options and the registered pledgees of its share options of the planned merger, and of the trade name or name and address of the Mutual Company Surviving the Absorption-Type Merger, or the Stock Company conducting Insurance Business or Mutual Company to be incorporated by the merger (hereinafter referred to as "Formed Company" in this Section).

(2) A notice under the preceding paragraph may be replaced with a public notice.

(3) The provisions of Article 219, paragraph (1) (limited to the segment pertaining to item (vi)), (2) and (3) (Public Notice in Relation to Submission of Share Certificate), Article 220 (Cases Where Share Certificates Cannot be Submitted), and Article 293, paragraph (1) (limited to the segment pertaining to item (iii) (Public Notice in Relation to Submission of Share Option Certificate) of the Companies Act shall apply mutatis mutandis to an extinguished stock company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Right to Request Purchase of Shares)

Article 165-5 (1) The following shareholders may request the extinguished stock company to purchase the shares that they hold at a fair price:

(i) A shareholder who, prior to the shareholders' meeting to approve the merger agreement (including the class meeting; hereinafter the same shall apply in this item), has given notice to the extinguished stock company of his/her intent to oppose the merger, and has actually opposed the merger at the shareholders' meeting (limited to a shareholder who can exercise his/her voting rights at the shareholders' meeting); and

(ii) A shareholder who cannot exercise his/her voting rights at the shareholders' meeting.

(2) The provisions of Article 785, paragraphs (5) to (7) inclusive (Dissenting Shareholders' Share Purchase Demand), Article 786 (Determination, etc. of Price of Shares), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (iv)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to a request made under the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Right to Request Purchase of Share Options)

Article 165-6 (1) A holder of share options of an extinguished stock company may request the company to purchase the share options that he/she holds at a fair price:

(2) The provisions of Article 787, paragraphs (5) to (7) inclusive (Demand for Purchase of Share Options), Article 788 (Determination, etc. of Price of Share Options), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (iv)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to a request made under the preceding paragraph. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Objections of Creditors)

Article 165-7 (1) Policyholders or other creditors of an extinguished stock company may state to the company their objections to the merger.

(2) An extinguished stock company shall give public notice of the following particulars in the Official Gazette and by the Method of Public Notice prescribed by its articles of incorporation; provided, however, that the period for item (iv) may not be shorter than one month:

(i) The fact that a merger will be carried out;

(ii) The trade names or names and addresses of the Mutual Company Surviving the Absorption-Type Merger or other consolidated companies (meaning consolidated stock companies and Consolidated Mutual Companies; the same shall apply in Article 165-17, paragraph (2)) and the Formed Company;

(iii) The particulars specified by Cabinet Office Ordinance as pertaining to the financial statements of an extinguished stock company;

(iv) The fact that Policyholders or other creditors of the extinguished stock company may state their objections within a certain period of time; and

(v) In addition to what is listed in the preceding items, particulars specified by Cabinet Office Ordinance.

(3) Where no Policyholders or other creditors have stated their objections within the period set forth in item (iv) of the preceding paragraph, such Policyholders or other creditors shall be deemed to have approved the merger.

(4) The provisions of Article 70, paragraphs (4) to (8) inclusive shall apply mutatis mutandis to objections of creditors under paragraph (1). In this case, the term "paragraph (2), item (iv)" in paragraphs (5) and (6) of the same Article shall be deemed to be replaced with "Article 165-7, paragraph (2), item (iv)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Change in Effective Date of Absorption-Type Merger)

Article 165-8 (1) An Absorbed Stock Company may change the Effective Date in an agreement with the Mutual Company Surviving the Absorption-Type Merger.

(2) In the case set forth in the preceding paragraph, the Absorbed Stock Company shall give public notice of the Effective Date thus changed by the day before the original Effective Date (or, where the changed Effective Date falls before the original Effective Date, the changed Effective Date).

(3) Where the Effective Date has been changed pursuant to the provisions of paragraph (1), the changed Effective Date shall be deemed to be the Effective Date for the purpose of applying the provisions of this Section.

Division 2 Procedures for a Stock Company Surviving an Absorption-Type Merger

(Retention and Inspection, etc. of Documents Related to an Absorption-Type Merger Agreement, etc.)

Article 165-9 (1) A Stock Company Surviving an Absorption-Type Merger shall, for the period ranging from any of the following dates, whichever is the earliest, to the day that is six months after the Effective Date, keep at each of its business offices the documents or electromagnetic records in which the details of the absorption-type merger agreement and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(i) Where the merger agreement needs to be approved by a resolution of the shareholders' meeting (including the class meeting), the day that is two weeks before the date of the shareholders' meeting;

(ii) The date of notice under Article 165-4, paragraph (1) as applied mutatis mutandis pursuant to Article 165-12 or the date of public notice under Article 165-4, paragraph (2) as applied mutatis mutandis pursuant to Article 165-12, whichever is earlier; or

(iii) The date of public notice under Article 165-7, paragraph (2) as applied mutatis mutandis pursuant to Article 165-12.

(2) The creditors of a Stock Company Surviving an Absorption-Type Merger, such as Shareholders and Policyholders, may make the following requests to the company at any time during its operating hours; provided, however, that they pay the fees determined by the Stock Company Surviving the Absorption-Type Merger in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Stock Company Surviving the Absorption-Type Merger, or to be issued a document detailing such particulars.

(Authorization of Absorption-Type Merger Agreement, etc.)

Article 165-10 (1) A Stock Company Surviving an Absorption-Type Merger shall have its merger agreement approved by a resolution of the shareholders' meeting by the day before the Effective Date.

(2) The resolution set forth in the preceding paragraph to be adopted by the Stock Company Surviving the Absorption-Type Merger shall be a resolution under Article 309, paragraph (2) (Resolution of Shareholders' Meetings) of the Companies Act.

(3) A Stock Company Surviving an Absorption-Type Merger, if it seeks to adopt a resolution under paragraph (1), shall provide an outline of the absorption-type merger agreement in the notice to be given pursuant to Article 299, paragraph (1) (Notice of Calling of Shareholders' Meetings) of the Companies Act.

(4) Where a Stock Company Surviving an Absorption-Type Merger succeeds to the assets of the Absorbed Mutual Company including its own shares, its directors shall explain the particulars of such shares in the shareholders' meeting set forth in paragraph (1).

(5) In an absorption-type merger wherein the company surviving the merger is a company with class shares, and in which the Shares, etc. to be granted to the members of the Absorbed Mutual Company are shares of the Stock Company Surviving the Absorption-Type Merger, the merger shall be null and void unless approved by a resolution of the class meeting composed of the holders of the class of share set forth in Article 164, paragraph (1), item (ii), sub-item (a) (limited to the shares with restriction on transfer which are not covered by the provisions in the articles of incorporation set forth in Article 199, paragraph (4) (Determination of Subscription Requirements) of the Companies Act) (or, where the shares are to be granted to the holders of two or more classes of share, the class meetings each composed of the holders of one of such classes of share); provided, however, that this shall not apply to the cases where no shareholders can exercise their voting rights in the relevant class meeting.

(6) Any resolution by a Stock Company Surviving an Absorption-Type Merger under the preceding paragraph shall be a resolution under Article 324, paragraph (3) (Resolution of Class Meetings) of the Companies Act.

(Cases where Authorization of an Absorption-Type Merger Agreement is not Required, etc.)

Article 165-11 (1) The provisions of the preceding Article paragraphs (1) to (4) inclusive shall not apply where the amount set forth in item (i) does not exceed one fifth (or any smaller proportion prescribed by the articles of incorporation of the Stock Company Surviving the Absorption-Type Merger) of the amount set forth in item (ii); provided, however, that this shall not apply to cases where all or part of the Shares, etc. delivered to members of an Absorbed Mutual Company are shares with restriction on transfer of the Stock Company Surviving the Absorption-Type Merger and where the Stock Company Surviving the Absorption-Type Merger is not a Public Company:

(i) The total of the following amounts:

(a) The amount calculated by multiplying the number of Stock Company Surviving the Absorption-Type Merger's shares to be distributed to the members of the Absorbed Mutual Company by the amount of net assets per share (meaning the amount of net assets per share set forth in Article 141, paragraph (2) (Notice of purchases by Stock Company) of the Companies Act); and

(b) The amount of money to be granted to the members of the Absorbed Mutual Company;

(ii) The amount of net assets of the Stock Company Surviving the Absorption-Type Merger as calculated by the method specified by Cabinet Office Ordinance.

(2) In the case prescribed in the main clause of the preceding paragraph, an absorption-type merger agreement shall be approved by a resolution of the shareholders' meeting by the day before the Effective Date, where the holders of the number of shares specified by Cabinet Office Ordinance (limited to those who can exercise their voting rights at the shareholders' meeting set forth in paragraph (1) of the preceding Article) have notified to the Stock Company Surviving the Absorption-Type Merger of their intention to oppose to the merger within two weeks from the date of notice under Article 165-4, paragraph (1) as applied mutatis mutandis pursuant to the following Article or the date of public notice under Article 165-4, paragraph (2) as applied mutatis mutandis pursuant to the following Article.

(Provision on Mutatis Mutandis Application)

Article 165-12 The provisions of Article 165-4, Article 165-5, paragraph (2) and Article 165-7 of this Act of this Act and Article 797, paragraphs (1) and (2) (Dissenting Shareholders' Share Purchase Demand) of the Companies Act shall apply mutatis mutandis to a Stock Company Surviving an Absorption-Type Merger. In this case, the term "and address" in Article 165-4, paragraph (1) shall be deemed to be replaced with ", address and, where Article 165-10, paragraph (4) applies, the particulars of the shares set forth in that paragraph"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Retention and Inspection, etc. of Documents Related to Absorption-Type Merger, etc.)

Article 165-13 (1) A Stock Company Surviving an Absorption-Type Merger shall, without delay following the Effective Date, prepare documents or electromagnetic records in which the rights and obligations of the Absorbed Mutual Company assumed by the Stock Company Surviving the Absorption-Type Merger as a result of the absorption-type merger and any other particulars specified by Cabinet Office Ordinance as being involved in an absorption-type merger are detailed or recorded.

(2) A Stock Company Surviving an Absorption-Type Merger shall, for six months from the Effective Date, keep at each of its business offices documents or electromagnetic records set forth in the preceding paragraph.

(3) The creditors of a Stock Company Surviving an Absorption-Type Merger, such as Shareholders and Policyholders, may make the following requests to the company at any time during its operating hours; provided, however, that they pay the fees determined by the Stock Company Surviving the Absorption-Type Merger in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Stock Company Surviving the Absorption-Type Merger, or to be issued a document detailing such particulars.

Division 3 Procedures for a Stock Company Established by Consolidation-Type Merger

Article 165-14 (1) The provisions of Part II, Chapter I (excluding Article 27 (excluding items (iv) and (v)), Article 29, Article 31, Article 39, Section 6 and Article 49) (Incorporation) of the Companies Act shall not apply to the incorporation of a Stock Company Established by a Consolidation-Type Merger.

(2) The articles of incorporation of a Stock Company Established by a Consolidation-Type Merger shall be drafted by the consolidated companies.

(3) The provisions of the preceding Article shall apply mutatis mutandis to a Stock Company Established by a Consolidation-Type Merger. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 4 Procedures for Extinguished Mutual Companies

(Retention and Inspection, etc. of Documents Related to a Merger Agreement, etc.)

Article 165-15 (1) An extinguished mutual company (meaning an Absorbed Mutual Company or a consolidated mutual company; hereinafter the same shall apply in this Section) shall, for the period ranging from any of the following dates, whichever is earlier, to the Effective Date, keep at each of its offices the documents or electromagnetic records in which the details of the merger agreement and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(i) The day that is two weeks before the date of the general members' council meeting (or General Representative Members' Council Meeting, where the company has such a council; hereinafter the same shall apply in this Subsection) set forth in paragraph (1) of the following Article; or

(ii) The date of public notice under Article 165-17, paragraph (2).

(2) Policyholders or other creditors of an extinguished mutual company may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the extinguished mutual company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the extinguished mutual company, or to be issued a document detailing such particulars.

(Authorization of Merger Agreement)

Article 165-16 (1) An extinguished mutual company shall have its merger agreement approved by a resolution of the general members' council by the day before the Effective Date.

(2) The resolution set forth in the preceding paragraph to be adopted by an extinguished mutual company shall be a resolution under Article 62, paragraph (2).

(Objections of Creditors)

Article 165-17 (1) Policyholders or other creditors of an extinguished mutual company may state to the company their objections to the merger.

(2) An extinguished mutual company shall give public notice of the following particulars in the Official Gazette and by the Method of Public Notice prescribed by its articles of incorporation; provided, however, that the period for item (iii) may not be shorter than one month:

(i) The fact that a merger will be carried out;

(ii) The trade names or names and addresses of the Company Surviving the Absorption-Type Merger (meaning the Mutual Company Surviving the Absorption-Type Merger or Stock Company Surviving the Absorption-Type Merger; hereinafter the same shall apply in this Section) or other consolidated companies and the Formed Company;

(iii) The fact that Policyholders or other creditors of the extinguished mutual company may state their objections within a certain period of time; and

(iv) In addition to what is listed in the preceding items, any particular specified by Cabinet Office Ordinance.

(3) Where no Policyholders or other creditors have stated their objections within the period set forth in item (iii) of the preceding paragraph, such Policyholders or other creditors shall be deemed to have approved the merger.

(4) The provisions of Article 88, paragraphs (4) to (6) inclusive shall apply mutatis mutandis to objections of creditors under paragraph (1). In this case, the term "paragraph (2), item (iii)" in paragraphs (4) and (6) of the same Article shall be deemed to be replaced with "Article 165-17, paragraph (2), item (iii)"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Change in Effective Date of an Absorption-Type Merger)

Article 165-18 (1) An Absorbed Mutual Company may change the Effective Date in an agreement with the Company Surviving the Absorption-Type Merger.

(2) In the case set forth in the preceding paragraph, the Absorbed Mutual Company shall give public notice of the Effective Date thus changed by the day before the original Effective Date (or, where the changed Effective Date falls before the original Effective Date, the changed Effective Date).

(3) Where the Effective Date has been changed pursuant to the provisions of paragraph (1), the changed Effective Date shall be deemed to be the Effective Date for the purpose of applying the provisions of this Section.

Division 5 Procedures for a Mutual Company Surviving an Absorption-Type Merger

(Retention and Inspection, etc. of Documents Related to an Absorption-Type Merger Agreement, etc.)

Article 165-19 (1) A Mutual Company Surviving an Absorption-Type Merger shall, for the period ranging from any of the following dates, whichever is earlier, to the day that is six months after the Effective Date, keep at each of its offices the documents or electromagnetic records in which the details of the absorption-type merger agreement and any other particulars specified by Cabinet Office Ordinance are detailed or recorded.

(i) The day that is two weeks before the date of the general members' council meeting set forth in Article 165-16, paragraph (1) as applied mutatis mutandis pursuant to the following Article; or

(ii) The date of public notice under Article 165-17, paragraph (2) as applied mutatis mutandis pursuant to the following Article.

(2) Policyholders or other creditors of a Mutual Company Surviving an Absorption-Type Merger may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the Mutual Company Surviving the Absorption-Type Merger in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Mutual Company Surviving the Absorption-Type Merger, or to be issued a document detailing such particulars.

(Mutatis Mutandis Application of Provisions)

Article 165-20 The provisions of Articles 165-16 and 165-17 shall apply mutatis mutandis to a Mutual Company Surviving an Absorption-Type Merger. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Retention and Inspection, etc. of Documents Related to an Absorption-Type Merger, etc.)

Article 165-21 (1) A Mutual Company Surviving an Absorption-Type Merger shall, without delay following the Effective Date, prepare documents or electromagnetic records in which the rights and obligations of the Absorbed Mutual Company or Absorbed Stock Company which are assumed by the Mutual Company Surviving the Absorption-Type Merger as a result of the absorption-type merger and any other particulars specified by Cabinet Office Ordinance as being involved in an absorption-type merger are detailed or recorded.

(2) A Mutual Company Surviving an Absorption-Type Merger shall, for six months from the Effective Date, keep at each of its offices documents or electromagnetic records set forth in the preceding paragraph.

(3) Policyholders or other creditors of a Mutual Company Surviving an Absorption-Type Merger may make the following requests to the company at any time during its business hours; provided, however, that they pay the fees determined by the Stock Company Surviving the Absorption-Type Merger in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Mutual Company Surviving the Absorption-Type Merger, or to be issued a document detailing such particulars.

Division 6 Procedures for a Mutual Company Established by Consolidation-Type Merger

Article 165-22 (1) The provisions of Chapter II, Section 2, Subsection 2 (excluding Article 23 (excluding paragraph (1), item (ix) and paragraph (4)), Article 25, Article 26, Article 30-10, paragraphs (2) to (4) inclusive and (6), and Article 30-13, paragraph (1)) shall not apply to the incorporation of a Mutual Company Established by a Consolidation-Type Merger.

(2) The articles of incorporation of a Mutual Company Established by a Consolidation-Type Merger shall be drafted by the consolidated companies.

(3) The provisions of the preceding Article shall apply mutatis mutandis to a Mutual Company Established by a Consolidation-Type Merger. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

Division 7 Special Provisions on the Merger of Stock Companies

(Special Provisions on the Retention and Inspection, etc. of Documents Related to Merger Agreements, etc.)

Article 165-23 For the purpose of applying the provisions of Article 782, paragraph (1), Article 794, paragraph (1) (Retention and Inspection, etc. of Documents, etc. Related to an Absorption-type Merger Agreement, etc.) and Article 803, paragraph (1) (Retention and Inspection, etc. of Documents, etc. Related to a Consolidation-type Merger Agreement, etc.) of the Companies Act to a merger of stock companies that conducts Insurance Business pursuant to Article 748 (Conclusion of a Merger Agreement) of that Act, the terms "Ordinance of the Ministry of Justice" and "its head office" in those provisions shall be deemed to be replaced with "Ordinance of the Ministry of Justice or Cabinet Office Ordinance" and "each of its business offices," respectively.

(Special Provisions on Objections of the Creditors)

Article 165-24 (1) Policyholders or other creditors of a stock company conducting Insurance Business that seeks to carry out a merger under Article 748 (Conclusion of a Merger Agreement) of the Companies Act (limited to the cases where the company to survive the merger or to be incorporated by the merger is a stock company conducting Insurance Business) (hereinafter referred to as "Merging Company under the Companies Act" in this Section) may state to the company their objections to the merger.

(2) In the case set forth in the preceding paragraph, a Merging Company under the Companies Act shall give public notice of the following particulars in the Official Gazette and by the Method of Public Notice prescribed by its articles of incorporation; provided, however, that the period for item (iv) may not be shorter than one month:

(i) The fact that a merger will be carried out;

(ii) The trade names and addresses of the merging companies and the company to survive the merger or the company to be incorporated by the merger;

(iii) The particulars specified by Cabinet Office Ordinance as pertaining to the financial statements of the companies set forth in the preceding item;

(iv) The fact that Policyholders or other creditors of the Merging Company under the Companies Act may state their objections within a certain period of time; and

(v) In addition to what is listed in the preceding items, any particular specified by Cabinet Office Ordinance.

(3) Where no Policyholders or other creditors have stated their objections within the period set forth in item (iv) of the preceding paragraph, such Policyholders or other creditors shall be deemed to have approved the merger.

(4) Where any Policyholder or other creditor has stated his/her objection under paragraph (2), item (iv), the merging company under the Company Act shall make payment or provide equivalent security to such Policyholder or other creditor, or entrust equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment; provided, however, that this shall not apply to the cases where the merger poses no risk of harming the interest of such Policyholder or other creditor;

(5) The provisions of the preceding paragraph shall not apply to the Policyholders or any rights held by other persons pertaining to insurance contracts (other than Insurance Claims, etc.).

(6) Any resolution approving the merger under shall be null and void if the number of the Policyholders who have stated their objections within the period set forth in paragraph (2), item (iv) (excluding the holders of policies under which Insurance Claims, etc. had arisen by the time of public notice under paragraph (2) (but limited to those policies that would be terminated with the payment of the Insurance Claims, etc.); hereinafter the same shall apply in this paragraph and the following paragraph) exceeds one fifth of the total number of Policyholders, and the amount specified by Cabinet Office Ordinance as the credits (other than Insurance Claims, etc.) belonging to the insurance contracts of the Policyholders who have stated such objections exceeds one fifth of the total amount of credits belonging to the Policyholders.

(7) A merger carried out pursuant to the provisions of the preceding paragraphs shall also be effective against the Policyholders who have stated their objections under the preceding paragraph and other persons who hold any right (other than Insurance Claims, etc.) pertaining to the insurance contracts involving the Policyholders.

(8) In addition to what is provided for in the preceding paragraphs, necessary particulars for the application of those provisions shall be specified by Cabinet Order.

(9) The provisions of Articles 789, 799 and 810 (Objections of Creditors) of the Companies Act shall not apply to a Merging Company under the Companies Act.

Division 8 Public Notice, etc. after Merger

Article 166 (1) An Insurance Company, etc. surviving a merger or an Insurance Company, etc. incorporated by a merger shall, without delay following the merger, give public notice of the fact that the merger has been carried out and the particulars specified by Cabinet Office Ordinance. The same shall apply where an Insurance Company, etc. that has given public notice under paragraph (2) of the preceding Article (including the cases where it is applied mutatis mutandis pursuant to Article 165-12), Article 165-17, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) or paragraph (2) of the preceding Article has renounced the planned merger.

(2) An Insurance Company, etc. surviving a merger or an Insurance Company, etc. incorporated by a merger shall, for six months from the date of the merger, keep at each of its business offices or offices the documents or electromagnetic records in which the progress of the procedures provided for in Article 165-7 (including the cases where it is applied mutatis mutandis pursuant to Article 165-20), Article 165-17 (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) and any other particulars specified by Cabinet Office Ordinance as being involved in a merger are detailed or recorded.

(3) The creditors, such as Shareholders and Policyholders, of an Insurance Company, etc. surviving a merger or an Insurance Company, etc. incorporated by a merger may make the following requests at any time during its operating hours or business hours; provided, however, that they pay the fees determined by the Insurance Company, etc. in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by the Insurance Company, etc. surviving a merger or the Insurance Company, etc. incorporated by a merger, or to be issued a document detailing such particulars.

Subsection 4 Effectuation, etc. of Merger

(Authorization of Merger)

Article 167 (1) Any merger involving an Insurance Company, etc. (limited to the cases where the Insurance Company, etc. survives the merger or where an Insurance Company, etc. is established by the merger) shall be null and void without the authorization of the Prime Minister.

(2) Whenever an application has been filed for the authorization set forth in the preceding paragraph, the Prime Minister shall examine whether it conforms to the following standards:

(i) The merger is appropriate in light of the protection of Policyholders, etc. ;

(ii) If the application for authorization is from an Insurance Company, that the merger poses no risk of impeding the appropriate competitive relationships among insurance companies; and

(iii) It is certain that the Insurance Company, etc. surviving the merger or the Insurance Company, etc. established by the merger will perform its business in an appropriate, fair and efficient manner following the merger.

(3) The Prime Minister must not give the authorization set forth in paragraph (1) for any application made under that paragraph for a merger between an Insurance Company and a Low-Cost, Short-Term Insurer, unless the company surviving the merger or the company established by the merger is an Insurance Company.

(Deemed License, etc.)

Article 168 (1) A Stock Company or Mutual Company established by a merger with the authorization set forth in paragraph (1) of the preceding Article shall, at the time of its establishment, be deemed to obtain the license from the Prime Minister set forth in Article 3, paragraph (1) where the merger involves an Insurance Company, or the registration set forth in Article 272, paragraph (1) where the merger does not involve any Insurance Company.

(2) The license set forth in the preceding paragraph shall be either of the two types of license listed in Article 3, paragraph (2), whichever was obtained under paragraph (1) of the same Article by the Insurance Company that is extinguished in the merger.

(Effectuation, etc. of Merger)

Article 169 (1) A Mutual Company Surviving an Absorption-Type Merger shall, on the Effective Date, succeed to the rights and obligations of the absorbed company (meaning the Absorbed Mutual Company or Absorbed Stock Company; hereinafter the same shall apply in this Section).

(2) The dissolution of an absorbed company following a merger may not be duly asserted against a third party prior to the registration of the merger.

(3) The shares and share options of an Absorbed Stock Company shall expire on the Effective Date.

(4) The Policyholders of an absorbed company shall gain membership in the Mutual Company Surviving the Absorption-Type Merger on the Effective Date; provided, however, that this shall not apply to the cases where the Mutual Company Surviving the Absorption-Type Merger's articles of incorporation do not grant membership to the Policyholders with the same class of insurance contracts as those covered by the merger agreement.

(5) The provisions of the preceding paragraphs shall not apply where the procedure set forth in Article 165-7 or 165-17 (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) has not been completed, or where the absorption-type merger has been voluntarily abandoned.

Article 169-2 (1) A Mutual Company Established by a Consolidation-Type Merger shall, on the date of its establishment, succeed to the rights and obligations of the consolidated companies.

(2) The Policyholders of a consolidated company shall gain membership in the Mutual Company Established by a Consolidation-Type Merger on the date of the latter's establishment; provided, however, that this shall not apply to the cases where the Mutual Company Established by the Consolidation-Type Merger's articles of incorporation do not grant membership to the Policyholders with the same class of insurance contracts as those covered by the merger agreement.

(3) The shares and share options of a Consolidated Stock Company shall expire on the date of the establishment of the Mutual Company Established by the Consolidation-Type Merger.

Article 169-3 (1) A Stock Company Surviving an Absorption-Type Merger shall succeed to the rights and obligations of the absorbed company on the Effective Date.

(2) The dissolution of an absorbed company following a merger may not be duly asserted against a third party prior to the registration of the merger.

(3) Where the merger agreement provides for the particulars listed in Article 164, paragraph (1), item (ii), sub-item (a), the members of an Absorbed Mutual Company shall, on the Effective Date, become holders of the shares set forth in said sub-item pursuant to the provisions of the merger agreement on the particulars listed in Article 164, paragraph (1), item (iii).

(4) The provisions of the preceding three paragraphs shall not apply where the procedure set forth in Article 165-7 as applied mutatis mutandis pursuant to Article 165-12 or in Article 165-17 has not been completed, or where the absorption-type merger has been voluntarily abandoned.

Article 169-4 (1) A Stock Company Established by a Consolidation-Type Merger shall, on the date of its establishment, succeed to the rights and obligations of the consolidated companies.

(2) The shareholders or members of a consolidated company shall, on the date of the establishment of the Stock Company Established by the Consolidation-Type Merger, become the holders of the shares set forth in Article 165, paragraph (1), item (vi) or (vii) pursuant to the provisions of the merger agreement on the particulars listed in Article 165, paragraph (1), item (ix).

(3) The share options of a Consolidated Stock Company shall expire on the date of the establishment of the Stock Company Established by the Consolidation-Type Merger.

(4) In the case prescribed in Article 165, paragraph (1), item (xii), sub-item (a), the holders of share options of a Consolidated Stock Company shall, on the date of the establishment of the Stock Company Established by the Consolidation-Type Merger, become holders of the latter company's share options as set forth in said sub-item, pursuant to the provisions of the merger agreement on the particulars listed in Article 165, paragraph (1), item (xiii).

(Registration of Merger)

Article 169-5 (1) Where a Mutual Company or stock company has undergone an absorption-type merger, it shall make, at the location of its principal office or head office, a registration of dissolution for the absorbed company and a registration of change for the Company Surviving the Absorption-Type Merger, within two weeks from the date on which the merger took effect.

(2) Where two or more Mutual Companies or Stock Companies are involved in a consolidation-type merger, they shall complete, at the location of their principal offices or head offices, registrations of dissolution for the consolidated companies and a registration of incorporation for the Formed Company, within two weeks from the dates specified in each of the following items in accordance with the categories provided therein:

(i) Where the consolidated companies only include stock companies, any of the following dates, whichever is the latest:

(a) The date of the resolution at the shareholders' meeting set forth in Article 165-3, paragraph (1);

(b) Where a resolution of the class meeting is required for the merger, the date of such resolution;

(c) The day on which twenty days have elapsed since a notice under Article 165-4, paragraph (1) or a public notice under paragraph (2) of the same Article was given;

(d) The date of completion of the procedure set forth in Article 165-7; or

(e) Any date fixed by the consolidated companies in an agreement;

(ii) Where the consolidated companies only include Mutual Companies, any of the following dates, whichever is the latest:

(a) The date of the resolution of the general members' council set forth in Article 165-16, paragraph (1);

(b) The date of completion of the procedure set forth in Article 165-17; or

(c) Any date fixed by the consolidated companies in an agreement; or

(iii) Where the consolidated companies include a Stock Company (or stock companies) and a Mutual Company, any of the dates specified in the preceding two items, whichever is the latest.

(3) In the cases prescribed in the preceding two paragraphs, the Mutual Company or Stock Company shall also complete the registration(s) set forth in the applicable provisions at the location of its (their) branch offices or secondary offices, within three weeks from the date specified in the applicable provision; provided, however, that a registration of change under paragraph (1) shall only be made where the change affects any of the particulars listed in the items of Article 930, paragraph (2) (Registration at Location of Branch Offices) of the Companies Act (including the cases where it is applied mutatis mutandis pursuant to Article 64, paragraph (3)).

(Application for Registration of Merger, etc.)

Article 170 (1) The following documents shall be attached to a written application for registration of change due to a merger under Article 159, paragraph (1) and Article 165-23, in addition to the documents set forth in Articles 18 and 19 (Documents to be Attached to Written Application) and Article 46 (General Rules on Attached Documents) of the Commercial Registration Act (including the cases where they are applied mutatis mutandis pursuant to Article 67), and Article 80 (Registration of Absorption-Type Merger) of that Act (including the cases where it is applied mutatis mutandis pursuant to paragraph (3)):

(i) A document certifying that a public notice has been given under Article 165-7, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-12), Article 165-17, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) or Article 165-24, paragraph (2);

(ii) For an extinguished stock company or Stock Company Surviving an Absorption-Type Merger, a document certifying that the number of the Policyholders who raised their objections within the period set forth in Article 165-7, paragraph (2), item (iv) (including the cases where it is applied mutatis mutandis pursuant to Article 165-12) has not exceeded one fifth of the total number of Policyholders set forth in Article 70, paragraph (6) (including the cases where it is applied with relevant changes in interpretation pursuant to the provisions of Article 255, paragraph (2) (hereinafter referred to as "The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2)"in this item); hereinafter the same shall apply in this item) as applied mutatis mutandis pursuant to Article 165-7, paragraph (4) (including the cases where it is applied mutatis mutandis pursuant to Article 165-12; hereinafter the same shall apply in this item) (or, in The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2), one tenth of such total number), or a document certifying that the amount of credits specified by Cabinet Office Ordinance set forth in Article 70, paragraph (6) as applied mutatis mutandis pursuant to Article 165-7, paragraph (4) as belonging to such Policyholders has not exceeded one fifth (or, in The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2), one tenth) of the total amount set forth in Article 70, paragraph (6) as applied mutatis mutandis pursuant to Article 165-7, paragraph (4);

(iii) For an extinguished Mutual Company or a Mutual Company Surviving an Absorption-Type Merger, a document certifying that the number of the Policyholders who raised their objections within the period set forth in Article 165-17, paragraph (2), item (iii) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) has not exceeded one fifth of the total number of Policyholders set forth in Article 88, paragraph (6) (including the cases where it is applied with relevant changes in interpretation pursuant to the provisions of Article 255, paragraph (2) (hereinafter referred to as "The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2)"in this item); hereinafter the same shall apply in this item) as applied mutatis mutandis pursuant to Article 165-17, paragraph (4) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20; hereinafter the same shall apply in this item) (or, in The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2), one tenth of such total number), or a document certifying that the amount of credits specified by Cabinet Office Ordinance set forth in Article 88, paragraph (6) as applied mutatis mutandis pursuant to Article 165-17, paragraph (4) as belonging to such Policyholders has not exceeded one fifth (or, in The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2), one tenth) of the total amount set forth in Article 88, paragraph (6) as applied mutatis mutandis pursuant to Article 165-17, paragraph (4);

(iv) For a Merging Company under the Companies Act, a document certifying that the number of the Policyholders who raised their objections within the period set forth in Article 165-24, paragraph (2), item (iv) has not exceeded one fifth of the total number of Policyholders set forth in paragraph (6) of the same Article (including the cases where it is applied with relevant changes in interpretation pursuant to the provisions of Article 255, paragraph (2) (hereinafter referred to as "The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2)"in this item); hereinafter the same shall apply in this item) (or, in The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2), one tenth of such total number), or a document certifying that the amount of credits specified by Cabinet Office Ordinance set forth in Article 165-24, paragraph (6) as belonging to such Policyholders has not exceeded one fifth (or, in The Cases of Application with Relevant Changes in Interpretation Pursuant to the Provision of Article 255, paragraph (2), one tenth) of the total amount set forth in that paragraph; and

(v) A document certifying any public notice made under Article 254, paragraph (3).

(2) The documents listed in the items of the preceding paragraph shall be attached to a written application for registration of incorporation due to a merger under Article 159, paragraph (1) and Article 165-23, in addition to the documents set forth in Articles 18, 19 and 46 of the Commercial Registration Act (including the cases where they are applied mutatis mutandis pursuant to Article 67), and Article 81 (Registration of Consolidation-Type Merger) of that Act (including the cases where it is applied mutatis mutandis pursuant to the following paragraph).

(3) The provisions of Article 79 to 83 inclusive (Registration of Merger) of the Commercial Registration Act shall apply mutatis mutandis to a registration pertaining to a Mutual Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Actions to Invalidate a Merger)

Article 171 The provisions of Article 828, paragraph (1) (limited to the segment pertaining to items (vii) and (viii)) and (2) (limited to the segment pertaining to items (vii) and (viii)) (Actions to Invalidate Acts Concerning the Organization of a Company), Article 834 (limited to the segment pertaining to items (vii) and (viii)) (Defendant), Article 835, paragraph (1) (Jurisdiction over Actions), Article 836 to 839 inclusive (Order to Provide Security, Mandatory Consolidation of Oral Arguments, etc., Persons Affected by a Judgment Being Upheld, Effects of a Judgment of Invalidity, Revocation or Rescission), Article 843 (excluding paragraph (1), items (iii) and (iv), and the proviso to paragraph (2)) (Effects of a Judgment of Invalidity of a Merger), Article 846 (Liability for Damages Where a Judgment Is Entered Against the Plaintiff), and Article 937, paragraph (3) (limited to the segment pertaining to items (ii) and (iii)) and (4) (Commissioning of Registration by a Judicial Decision) of the Companies Act shall apply mutatis mutandis to an action to invalidate a merger under Article 159, paragraph (1); and the provisions of Article 868, paragraph (5) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (xv)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to an application under Article 843, paragraph (4) of that Act as applied mutatis mutandis pursuant to this Article. In this case, the term "members, etc." in Article 828, paragraph (2), items (vii) and (viii) of that Act shall be deemed to be replaced with "members, directors, company auditors or liquidator(s) (or, in a company with Committees, members, directors, executive officers or liquidator(s)) of a Mutual Company"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Article 172 Deleted

Article 173 Deleted

Section 3 Company Split

(Split of Stock Company Conducting Insurance Business)

Article 173-2 (1) Where a Stock Company that conducts Insurance Business (hereinafter referred to as "Stock Insurance Company" in this Section) transfers its insurance contracts in a company split (hereinafter referred to as "Split" in this Section), the transfer shall cover the whole insurance contracts for which the policy reserves is calculated on the same basis (excluding the insurance contracts specified by Cabinet Order, such as those for which an insured event had occurred by the time of public notice under Article 173-4, paragraph (2) (limited to those contracts which would be terminated with the payment of the insurance proceeds pertaining to the insured event)).

(2) A Stock Insurance Company that transfers its insurance contracts in a Split may, in the relevant incorporation-type company split plan or absorption-type split agreement (hereinafter referred to as "Split Plan, etc."), stipulate minor changes to the clauses of the insurance contracts to be transferred in the Split, so long as such changes are not disadvantageous to the Policyholders.

(Retention and Inspection, etc. of Documents Pertaining to a Split, etc.)

Article 173-3 For the purpose of applying the provisions of Article 782, paragraph (1) (Retention and Inspection. etc. of Documents, etc. Related to an Absorption-type Merger Agreement, etc.), Article 794, paragraph (1) (Retention and Inspection, etc. of Documents, etc. Related to an Absorption-type Merger Agreement, etc.) and Article 803, paragraph (1) (Retention and Inspection, etc. of Documents, etc. Related to a Consolidation-type Merger Agreement, etc.) of the Companies Act to a Stock Insurance Company involved in a Split, the terms "particulars prescribed by the Ordinance of the Ministry of Justice" and "head office" in those provisions shall be deemed to be replaced with "particulars prescribed by a Ordinance of the Ministry of Justice and particulars specified by Cabinet Office Ordinance" and "business offices," respectively.

(Objections of Creditors)

Article 173-4 (1) Where a Stock Insurance Company is involved in a Split, the persons listed in the following items may state their objections thereto to the Stock Insurance Company set forth in each of those items:

(i) Policyholders or other creditors (limited to the creditors set forth in Article 789, paragraph (1), item (ii) (Objections of Creditors) of the Companies Act) of a splitting company in an absorption-type split (meaning a Stock Company or limited liability company carrying out an absorption-type split; hereinafter the same shall apply in this Article) that is a Stock Insurance Company: the splitting company in an absorption-type split;

(ii) Policyholders or other creditors of a succeeding company in an absorption-type split (meaning a Stock Company, general Partnership company, limited Partnership company or limited liability company assuming, in whole or in Part, the rights and obligations of the splitting company in an absorption-type split with regard to its business; the same shall apply hereinafter) that is a Stock Insurance Company: the succeeding company in an absorption-type split; and

(iii) Policyholders or other creditors (limited to the creditors set forth in Article 810, paragraph (1), item (ii) (Objections of Creditors) of the Companies Act) of a splitting company in an incorporation-type company split (meaning a Stock Company or limited liability company carrying out an incorporation-type company split; hereinafter the same shall apply in this Article) that is a Stock Insurance Company: the splitting company in an incorporation-type company split.

(2) In the case set forth in the preceding paragraph, a Stock Insurance Company falling under any of the items of that paragraph (hereinafter referred to as "Split-Involved Company" in this Article) shall give public notice of the following particulars in the Official Gazette and by the Method of Public Notice prescribed by the Split-Involved Company in its articles of incorporation, and notify each of the known creditors of said particulars (limited to the creditors set forth in Article 789, paragraph (3) or Article 810, paragraph (3) of the Companies Act); provided, however, that the period set forth in item (iv) may not be shorter than one month:

(i) The fact that a Split will be carried out;

(ii) The trade name and address of the companies listed in (a) or (b) in accordance with the categories of Split set forth in (a) and (b):

(a) In the case of an absorption-type split: the splitting company in an absorption-type split and the succeeding company in an absorption-type split; or

(b) In the case of an incorporation-type split: the splitting company in an incorporation-type company split and the Stock Company, general Partnership company, limited Partnership company or limited liability company to be incorporated by the Split.

(iii) The particulars specified by Cabinet Office Ordinance as pertaining to the financial statements of a Stock Company falling under (a) or (b) of the preceding item;

(iv) The fact that Policyholders or other creditors of the Split-Involved Company may raise their objections within a certain period of time; and

(v) In addition to what is listed in the preceding items, particulars specified by Cabinet Office Ordinance.

(3) Where no Policyholders or other creditors have raised their objections within the period set forth in item (iv) of the preceding paragraph, such Policyholders or other creditors shall be deemed to have approved the merger.

(4) Where any Policyholder or other creditor has raised his/her objection under paragraph (2), item (iv), the Split-Involved Company shall make payment or provide equivalent security to such Policyholder or other creditor, or entrust equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment; provided, however, that this shall not apply to the cases where the Split poses no risk of harming the interest of such Policyholder or other creditor.

(5) The provisions of the preceding paragraph shall not apply to the Policyholders or any rights held by other persons pertaining to insurance contracts (other than Insurance Claims, etc.).

(6) Any Split shall be invalid if the number of the Policyholders who have raised their objections within the period set forth in paragraph (2), item (iv) (excluding the holders of policies under which Insurance Claims, etc. had already arisen at the time of public notice under the paragraph (2) (but limited to those policies that would be terminated with the payment of the Insurance Claims, etc.); hereinafter the same shall apply in this paragraph and the following paragraph) exceeds one fifth of the total number of Policyholders (limited to those who may raise their objections pursuant to the provisions of paragraph (1)), and the amount specified by Cabinet Office Ordinance as the credits (other than Insurance Claims, etc.) belonging to the insurance contracts of the Policyholders who have raised such objections exceeds one fifth of the total amount of credits belonging to the Policyholders (limited to those who may raise their objections pursuant to the provisions of paragraph (1)).

(7) A Split carried out pursuant to the provisions of the preceding paragraphs shall also be effective against the Policyholders who have raised their objections under the preceding paragraph and other persons who hold any right (other than Insurance Claims, etc.) pertaining to the insurance contracts involving the Policyholders.

(8) In addition to what is provided for in the preceding paragraphs, the necessary particulars for applying those provisions shall be specified by Cabinet Order.

(9) The provisions of Articles 789 and 799 (Objections of Creditors) and Article 810 of the Companies Act shall not apply to a Stock Insurance Company falling under paragraph (1), item (i) or (ii).

(10) For the purpose of applying to the cases set forth in paragraph (1) the provisions of Article 759, paragraphs (2) and (3) (Effectuation, etc. of an Absorption-type Company Split Which Causes a Stock Company to Succeed to Rights and Obligations), Article 761, paragraphs (2) and (3) (Effectuation, etc. of an Absorption-type Company Split Which Causes a Membership Company to Succeed to Rights and Obligations), Article 764, paragraphs (2) and (3) (Effectuation, etc. of an Incorporation-type Company Split by Which a Stock Company is Incorporated), and Article 766, paragraphs (2) and (3) (Effectuation, etc. of an Incorporation-type Company Split by Which a Membership Company is Incorporated), Article 791, paragraph (1), item (i) (Retention and Inspection, etc. of Documents, etc. Related to an Absorption-type Company Split or Share Exchange), Article 801, paragraph (2) (Retention and Inspection, etc. of Documents, etc. Related to an Absorption-type Merger, etc.) and Article 811, paragraph (1), item (i) (Retention and Inspection, etc. of Documents, etc. Related to an Incorporation-type Company Split or Share Transfer) of the Companies Act, the term "objections pursuant to the provisions of Article 789, paragraph (1), item (ii) (including the cases where it is applied mutatis mutandis pursuant to Article 793, paragraph (2); the same shall apply in the following paragraph)" in Article 759, paragraph (2) and Article 761, paragraph (2) of that Act shall be deemed to be replaced with "objections pursuant to the provisions of Article 789, paragraph (1), item (ii) (including the cases where it is applied mutatis mutandis pursuant to Article 793, paragraph (2); the same shall apply in the following paragraph) or the provisions of Article 173-4, paragraph (1) of the Insurance Business Act"; the term "individual notification under Article 789, paragraph (2) (excluding item (iii) and including the cases where it is applied mutatis mutandis pursuant to Article 793, paragraph (2); the same shall apply hereinafter in this paragraph as well as in the following paragraph)" in Article 759, paragraph (2) and Article 761, paragraph (2) of that Act shall be deemed to be replaced with "individual notification under Article 789, paragraph (2) (excluding item (iii) and including the cases where it is applied mutatis mutandis pursuant to Article 793, paragraph (2); the same shall apply hereinafter in this paragraph as well as in the following paragraph) or under Article 173-4, paragraph (2) of the Insurance Business Act"; the term "objections pursuant to the provisions of Article 810, paragraph (1), item (ii) (including the cases where it is applied mutatis mutandis pursuant to Article 813, paragraph (2); the same shall apply in the following paragraph)" in Article 764, paragraph (2) and Article 766, paragraph (2) of that Act shall be deemed to be replaced with "objections pursuant to the provisions of Article 810, paragraph (1), item (ii) (including the cases where it is applied mutatis mutandis pursuant to Article 813, paragraph (2); the same shall apply in the following paragraph) or the provisions of Article 173-4, paragraph (1) of the Insurance Business Act"; the term "individual notification under Article 810, paragraph (2) (excluding item (iii) and including the cases where it is applied mutatis mutandis pursuant to Article 813, paragraph (2); the same shall apply hereinafter in this paragraph as well as in the following paragraph)" in Article 764, paragraph (2) and Article 766, paragraph (2) of that Act shall be deemed to be replaced with "individual notification under Article 810, paragraph (2) (excluding item (iii) and including the cases where it is applied mutatis mutandis pursuant to Article 813, paragraph (2); the same shall apply hereinafter in this paragraph as well as in the following paragraph) or under Article 173-4, paragraph (2) of the Insurance Business Act"; the term "individual notification under Article 789, paragraph (2)" in Article 759, paragraph (2) and Article 761, paragraph (2) of that Act shall be deemed to be replaced with "individual notification under Article 789, paragraph (2) or under Article 173-4, paragraph (2) of the Insurance Business Act"; the term "individual notification under Article 810, paragraph (2)" in Article 764, paragraph (2) and Article 766, paragraph (2) of that Act shall be deemed to be replaced with "individual notification under Article 810, paragraph (2) or under Article 173-4, paragraph (2) of the Insurance Business Act"; the terms "Article 789, paragraph (1), item (ii)" and "paragraph (2) of the same Article" in Article 759, paragraph (3) and Article 761, paragraph (3) of that Act shall be deemed to be replaced with "Article 789, paragraph (1), item (ii) or Article 173-4, paragraph (1) of the Insurance Business Act" and "Article 789, paragraph (2) or Article 173-4, paragraph (2) of that Act," respectively; and the terms "Article 810, paragraph (1), item (ii)" and "Article 810, paragraph (2)" in Article 764, paragraph (3) and Article 766, paragraph (3) of that Act shall be deemed to be replaced with "Article 810, paragraph (1), item (ii) or Article 173-4, paragraph (1) of the Insurance Business Act" and "Article 810, paragraph (2) or Article 173-4, paragraph (2) of that Act," respectively; and the term "Ordinance of the Ministry of Justice" in Article 791, paragraph (1), item (i), Article 801, paragraph (2) and Article 811, paragraph (1), item (i) of that Act shall be deemed to be replaced with "Cabinet Office Ordinance," respectively.

(11) The provisions of Article 759, paragraphs (2) and (3), Article 761, paragraphs (2) and (3), Article 764, paragraphs (2) and (3), and Article 766, paragraphs (2) and (3) of the Companies Act shall not apply to the creditor specified by Cabinet Order, such as a person holding any right pertaining to an insurance contract, a Beneficiary of money trust pertaining to the Insurance-Proceed Trust Services set forth in Article 99, paragraph (3).

(Suspension of Conclusion of Insurance Contracts)

Article 173-5 A Stock Insurance Company that transfers its insurance contracts in a Split shall not conclude any insurance contract that belongs to the same type as the insurance contracts to be transferred, for the period ranging from the time of adoption of the resolution on the Split to the time of execution or renunciation of the Split.

(Authorization of Split of Stock Insurance Company)

Article 173-6 (1) Any Split of a Stock Insurance Company shall be null and void without the authorization of the Prime Minister.

(2) Whenever an application has been filed for the authorization set forth in the preceding paragraph, the Prime Minister shall examine whether it conforms to the following standards:

(i) The Split is appropriate in light of the protection of Policyholders, etc. ;

(ii) If the application for authorization is from an Insurance Company, that the Split poses no risk of impeding the appropriate competitive relationships among Insurance Companies; and

(iii) It is certain that the Stock Insurance Company applying for the authorization will perform its business in an appropriate, fair and efficient manner following the Split.

(3) The Prime Minister may not approve any application made under paragraph (1) pertaining to a Split that involves the transfer of insurance contracts of an Insurance Company, unless the company that acquires the insurance contracts is an Insurance Company.

(Public Notice, etc. of Split)

Article 173-7 (1) A Stock Insurance Company that transfers its insurance contracts in a Split shall, following the Split, give public notice of without delay the fact that its insurance contracts have been transferred in the Split and other particulars specified by Cabinet Office Ordinance. The same shall apply where the company has renounced the Split.

(2) A Stock Insurance Company that has acquired insurance contracts in a Split shall, within three months from the date of the Split, notify the Policyholders affected by the transfer of insurance contracts in the Split thereof (or, where any minor change under Article 173-2, paragraph (2) is stipulated in the Split Plan, etc. with regard to the insurance contracts transferred in the Split, of the fact that it has acquired the insurance contracts in the Split and the contents of such minor change).

(3) Where a Stock Insurance Company that transfers its insurance contracts in a Split has outstanding loans or other claims against Policyholders, and such claims are to be assigned to the Stock Insurance Company that acquires the insurance contracts under the Split Plan, etc. , a notice in the form of an instrument carrying a fixed date under Article 467 (Requirement for Assertion of Assignment of Nominative Claims Against Third Parties) of the Civil Code shall be deemed to have been given to the Policyholders if a public notice under the first sentence of paragraph (1) has been given by way of publication in a daily newspaper that publishes the particulars of current events. In this case, the date of the public notice shall be deemed to be the fixed date.

(Registration of Split)

Article 173-8 (1) The following documents shall be attached to a written application for registration of incorporation due to an incorporation-type split, in addition to the documents specified in Articles 18 and 19 (Documents to be Attached to Written Application), Article 46 (General Rules on Attached Documents), Article 86 (excluding item (viii)) (Registration of Company Split) and Article 109, paragraph (2) (excluding that segment in item (iii) pertaining to the documents listed in Article 86, item (viii) of that Act and including the cases where it is applied mutatis mutandis pursuant to Article 116, paragraph (1) and Article 125 of that Act) (Registration of Company Split) of the Commercial Registration Act:

(i) A document certifying that a public notice under Article 173-4, paragraph (2) has been given;

(ii) Where any Policyholder or other creditor has raised his/her objection under Article 173-4, paragraph (4), a document certifying that the company has made payment or provided equivalent security to such Policyholder or other creditor, or entrusted equivalent property to a trust company, etc. for the purpose of ensuring that such Policyholder or other creditor receive the payment, or a document certifying that the Split poses no risk of harming the interest of such Policyholder or other creditor;

(iii) A document certifying that the number of Policyholders who raised their objections under Article 173-4, paragraph (6) has not exceeded one fifth of the total number of Policyholders, or a document certifying that the amount specified by Cabinet Office Ordinance set forth in that paragraph as the credits belonging to such Policyholders has not exceeded one fifth of the total amount set forth in that paragraph;

(2) The documents listed in the items of the preceding paragraph shall be attached to a written application for registration of change due to an absorption-type split carried out by a Stock Company, general Partnership company, limited Partnership company or limited liability company that is the succeeding company in an absorption-type split, in addition to the documents set forth in the following provisions of the Commercial Registration Act: Article 18, Article 19, Article 46, Article 85 (excluding the segment pertaining to the documents listed in item (iii) or (viii) of the same Article with regard to a Stock Insurance Company) (Registration of Company Split), Article 93 (General Rules on Attached Documents) (including the cases where it is applied mutatis mutandis pursuant to Articles 111 and 118 of that Act) and Article 109, paragraph (1) (excluding that segment in item (ii) pertaining to the documents listed in Article 85, item (viii) of that Act and including the cases where it is applied mutatis mutandis pursuant to Article 106, paragraph (1) and Article 125 of that Act).

Section 4 Liquidation

(Appointment and Dismissal of Liquidators by Prime Minister)

Article 174 (1) The Prime Minister shall appoint liquidators, at the request of interested persons or the Minister of Justice, or without any party's request, where an Insurance Company, etc. has dissolved on the grounds listed in Article 471, item (vi) (Grounds for Dissolution) of the Companies Act as applied with relevant changes in interpretation pursuant to the provisions of Article 152, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 152, paragraph (2)), or at the request of interested persons or without any party's request where no one is entitled to become a liquidator pursuant to the provisions of Article 180-4, paragraph (1) or under Article 478, paragraph (1) (Assumption of Office of Liquidators) of that Act or where an Insurance Company, etc. falls under Article 180, item (ii) or under Article 475, item (ii) (Causes of Commencement of Liquidation) of that Act.

(2) For the purpose of applying the provisions of Article 477, paragraph (4) (Establishment of Structures Other than Shareholders' Meetings) of the Companies Act to a Stock Company that conducts Insurance Business, the term "Large Company" in that paragraph shall be deemed to be replaced with "Insurance Company or a Stock Company listed in Article 272-4, paragraph (1), item (i), sub-item (b) of the Insurance Business Act."

(3) The provisions of Article 478, paragraphs (2) to (4) inclusive of the Companies Act shall not apply to a Stock Company that conducts Insurance Business.

(4) Notwithstanding the provisions of Article 180-4, paragraph (1) or Article 478, paragraph (1) of the Companies Act, the Prime Minister shall appoint liquidators where an Insurance Company, etc. has dissolved due to the cancellation of a license under Article 3, paragraph (1) or a registration under Article 272, paragraph (1).

(5) The provisions of Article 8-2, paragraph (2) shall apply mutatis mutandis to the liquidator(s) of a Stock Company that conducts Insurance Business.

(6) For the purpose of applying to a Stock Company that conducts Insurance Business, the provisions of Article 331, paragraph (1), item (iii) (Qualifications of Directors) of the Companies Act as applied mutatis mutandis pursuant to Article 478, paragraph (6) of that Act, the term "this Act" in that item shall be deemed to be replaced with "the Insurance Business Act, this Act."

(7) The Prime Minister may, if he/she appoints liquidators pursuant to the provisions of paragraph (1), (4) or (9), designate from among them a liquidator (hereinafter referred to as "Representative Liquidator" in this Section) who represents the Stock Company or Mutual Company to be liquidated (hereinafter referred to as "Insurance Company in Liquidation, etc." in this Section).

(8) The liquidator(s) (excluding the persons appointed by the Prime Minister and the liquidator(s) in the case of special liquidation) shall, within two weeks from the date of their assumption of office, notify the Prime Minister of the following particulars; provided, however, that this shall not apply to the cases where special liquidation has commenced in the meantime.

(i) Grounds for the dissolution (or, for an Insurance Company in Liquidation, etc. falling under Article 180, item (ii) or under Article 475, item (ii) of the Companies Act, that fact) and the date of dissolution; and

(ii) The name(s) and address(es) of the liquidator(s).

(9) In the case of the liquidation of an Insurance Company, etc. (other than a special liquidation), the Prime Minister may dismiss a liquidator, if he/she finds material grounds for such dismissal. In this case, the Prime Minister may appoint another liquidator.

(10) For the purpose of applying the provisions of Article 479 (Dismissal of Liquidators) of the Companies Act to the liquidation of a Stock Company that conducts Insurance Business, the term "court pursuant to the provisions of paragraphs (2) to (4) inclusive of the preceding Article" in paragraph (1) of that Article shall be deemed to be replaced with "Prime Minister"; and the term "liquidator" in paragraph (2) of that Article shall be deemed to be replaced with "liquidator (other than a person appointed by the Prime Minister)."

(11) The provisions of Article 73, paragraphs (1) and (3) (Registration of Liquidators), and Article 74, paragraph (1) (Registration of Change with Regard to Liquidators) of the Commercial Registration Act (including the cases where it is applied mutatis mutandis pursuant to Article 183, paragraph (2)) shall apply mutatis mutandis to a liquidator appointed by the Prime Minister. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(12) The Prime Minister shall, where he/she dismisses a liquidator pursuant to the provisions of paragraph (9), commission a registration to that effect to the registry office with jurisdiction over the head office or principal office of the Insurance Company in Liquidation, etc.

(Remuneration for Liquidators Appointed by Prime Minister)

Article 175 (1) A liquidator appointed pursuant to the provisions of paragraphs (1), (4) or (9) of the preceding Article may receive remuneration from the Insurance Company in Liquidation, etc.

(2) The amount of the remuneration set forth in the preceding paragraph shall be determined by the Prime Minister.

(Submission of Closing Financial Statements, etc.)

Article 176 The liquidator(s) of an Insurance Company in Liquidation, etc. (other than the liquidator(s) in the case of a special liquidation) shall, if the Shareholders' Meeting, etc. has approved the material set forth in Article 492, paragraph (3) (Preparation of Inventory of Property) or Article 497, paragraph (2) (Provision of Balance Sheet to Annual Shareholders' Meeting) (including the cases where they are applied mutatis mutandis pursuant to Article 180-17), or Article 507, paragraph (3) (Conclusion of Liquidation) (including the cases where it is applied mutatis mutandis pursuant to Article 183, paragraph (1)) of the Companies Act, submit such material (or, where such material has been prepared in the form of electromagnetic record or where an electromagnetic record has been prepared in lieu of such material, the electromagnetic record specified by Cabinet Office Ordinance or a document describing the information contained in the electromagnetic record) to the Prime Minister without delay.

(Cancellation of Insurance Contracts after Dissolution)

Article 177 (1) Where an Insurance Company, etc. has dissolved on the grounds listed in Article 471, item (iii) or (vi) (Grounds for Dissolution) of the Companies Act as applied with relevant changes in interpretation pursuant to the provisions of Article 152, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 152, paragraph (2)) or in Article 152, paragraph (3), item (ii), a Policyholder may cancel his/her insurance contract prospectively.

(2) In the case referred to in the preceding paragraph, any insurance contract that is not cancelled by the Policyholder pursuant to the provisions of that paragraph shall lose its effect on the day that is three months after the date of dissolution.

(3) In the cases set forth in the preceding two paragraphs, the Insurance Company in Liquidation, etc. shall refund to the Policyholder the amount of money reserved for the insured, any unearned premium (meaning the insurance premium paid for that Part of the period of insurance stipulated in an insurance contract which had not lapsed by the time at which the insurance contract was cancelled or lost its effect) and any other amount of money specified by Cabinet Office Ordinance.

(Permission of Performance during Period for Stating Claims)

Article 178 For the purpose of applying the provisions of Article 500 (Restrictions on Performance of Obligations) of the Companies Act to the liquidation of a Stock Company that conducts Insurance Business, the term "court" in paragraph (2) of that Article shall be deemed to be replaced with "Prime Minister."

(Order for Supervision of Liquidation)

Article 179 (1) In the case of the liquidation of an Insurance Company, etc. (other than a special liquidation), the Prime Minister may, if he/she finds it necessary, order the Insurance Company in Liquidation, etc. to deposit its properties or to take any other necessary measure for supervising the liquidation.

(2) The provisions of Article 128, paragraph (1), Article 129, paragraph (1), Article 272-22, paragraph (1) and Article 272-23, paragraph (1) shall apply mutatis mutandis to the case referred to in the preceding paragraph, if the Prime Minister finds it necessary for supervising the liquidation of an Insurance Company in Liquidation, etc.

(Causes of Commencement of Mutual Company's Liquidation)

Article 180 A Mutual Company shall go into liquidation in the following cases, pursuant to the provisions of this Section:

(i) Where the company has dissolved (excluding the cases where it has dissolved on the grounds listed in Article 471, item (iv) of the Companies Act as applied mutatis mutandis pursuant to Article 152, paragraph (2) and where it has dissolved as a result of a ruling for the commencement of bankruptcy proceedings and such bankruptcy proceedings have not ended); or

(ii) Where a judgment allowing an action to invalidate the company's incorporation has become final and binding.

(Capacity of Mutual Companies in Liquidation)

Article 180-2 A Mutual Company that goes into liquidation pursuant to the provisions of the preceding Article (hereinafter referred to as a "Mutual Company in Liquidation" in this Section) shall be deemed to remain in existence until the liquidation is completed, to the extent of the purpose of the liquidation.

(Administrative Organs of Mutual Companies in Liquidation Other than General Members' Councils and General Representative Members' Councils)

Article 180-3 (1) A Mutual Company in Liquidation shall have one or more liquidator(s) and company auditor(s).

(2) A Mutual Company in Liquidation may have a board of liquidators or a board of company auditors as prescribed by its articles of incorporation.

(3) A Mutual Company in Liquidation whose articles of incorporation provide for the establishment of a board of company auditors shall also have a board of liquidators.

(4) In a Mutual Company in Liquidation that was a company with Committees when it fell under Article 180, item (i) or (ii), the Audit Committee Members shall become the company auditors.

(5) The provisions of Article 51 shall not apply to a Mutual Company in Liquidation.

(Assumption of Office of Liquidators)

Article 180-4 (1) The following persons shall become the liquidators of a Mutual Company in Liquidation:

(i) Directors (unless the company has a person falling under the following item or item (iii));

(ii) Person(s) prescribed by the articles of incorporation; and

(iii) Person(s) elected by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council).

(2) For the purpose of applying the provisions of item (i) of the preceding paragraph and Article 53-5, paragraph (3) to a Mutual Company in Liquidation that was a company with Committees when it fell under Article 180, item (i) or (ii), the term "Directors" in item (i) of the preceding paragraph shall be deemed to be replaced with "Directors other than Audit Committee Members"; and the term "outside company auditors (meaning those company auditors of a Mutual Company who have never been a director, executive officer or accounting advisor (or, if the accounting advisor is a juridical person, any member of that juridical person who is supposed to carry out relevant duties), or manager or any other employee of the Mutual Company or any of its de facto Subsidiaries; the same shall apply hereinafter)" in Article 180, paragraph (3) shall be deemed to be replaced with "persons who have never been a director, executive officer or accounting advisor (or, if the accounting advisor is a juridical person, any member of that juridical person who is supposed to carry out relevant duties), or manager or any other employee of the company with a board of auditors or any of its de facto Subsidiaries."

(3) The provisions of Article 8-2, paragraph (2), Article 53 and Article 53-2, paragraph (1) shall apply mutatis mutandis to the liquidator(s) of a Mutual Company in Liquidation; and the provisions of Article 53-2, paragraph (3) shall apply mutatis mutandis to the liquidators of a Mutual Company with a board of liquidators (meaning a mutual liquidating company that has a board of liquidators; hereinafter the same shall apply in this Section). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Dismissal of Liquidators)

Article 180-5 (1) A liquidator (other than a person appointed by the Prime Minister pursuant to the provisions of Article 174, paragraph (1), (4) or (9)) may be dismissed at any time by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council).

(2) The court may, if it finds any material grounds, dismiss a liquidator under the preceding paragraph in response to a petition filed by members representing at least three thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or three thousand (or any smaller number prescribed by the articles of incorporation) or more members of the Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 38, paragraph (1)), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation) (or, in a company with a General Representative Members' Council, those members or nine (or any smaller number prescribed by the articles of incorporation) or more representative members).

(3) The provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 870 (limited to the segment pertaining to item (iii)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to a petition under the preceding paragraph; and the provisions of Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-item (e) and item (iii), sub-item (a)) (Commissioning of Registration by a Judicial Decision) of that Act shall apply mutatis mutandis to a judicial decision on the dismissal of a liquidator under paragraph (1). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) The provisions of Article 53-12, paragraphs (1) to (3) inclusive, and the provisions of Article 868, paragraph (1), Article 870 (limited to the segment pertaining to item (ii), Article 871, Article 872 (limited to the segment pertaining to item (iv)), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875, Article 876 and Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (b) and (c)) of the Companies Act shall apply mutatis mutandis to the liquidator set forth in paragraph (1). In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Company Auditor's Term of Office)

Article 180-6 The provisions of Article 53-6 shall not apply to the company auditors of a Mutual Company in Liquidation.

(Liquidator's Duties)

Article 180-7 The liquidator(s) of a Mutual Company in Liquidation shall carry out the following duties:

(i) Completion of pending transactions;

(ii) Collection of debts and performance of obligations; and

(iii) Distribution of residual assets.

(Execution of Business)

Article 180-8 (1) The liquidator(s) shall execute the business of the Mutual Company in Liquidation (other than a Mutual Company with a board of liquidators; hereinafter the same shall apply in this Article).

(2) If a Mutual Company in Liquidation has two or more liquidators, the business of the company is decided by the majority of the liquidators, unless otherwise provided for in the articles of incorporation.

(3) In the case set forth in the preceding paragraph, the liquidators may not delegate to any liquidator a decision regarding any of the following particulars:

(i) Appointment or dismissal of a manager;

(ii) Establishment, relocation or abolition of a secondary office;

(iii) Particulars listed in the items of Article 298, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 41, paragraph (1) or Article 49, paragraph (1); or

(iv) Revision of a system to ensure that the liquidators carry out their duties in compliance with applicable laws and regulations and the articles of incorporation, and any other system required by Cabinet Office Ordinance for ensuring that the business of a Mutual Company in Liquidation is executed in an appropriate manner.

(4) The provisions of Article 353 to 357 inclusive (Representation of Companies in Actions Between Stock Company and Directors, Apparent Representative Directors, Duty of Loyalty, Restrictions on Competition and Conflicting Interest Transactions, Director's Duty to Report), Article 360, paragraph (1) (Prohibition of Directors' Actions by the Shareholders) and Article 361 (Remuneration for Directors) of the Companies Act shall apply mutatis mutandis to a liquidator (with regard to the provisions of Article 361 of that Act, other than a liquidator appointed by the Prime Minister pursuant to the provisions of Article 174, paragraph (1), (4) or (9)). In this case, the term "Article 349, paragraph (4)" in Article 353 of that Act shall be deemed to be replaced with "Article 349, paragraph (4) as applied mutatis mutandis pursuant to Article 180-9, paragraph (5) of the Insurance Business Act"; the term "a Representative Director" in Article 354 of that Act shall be deemed to be replaced with "the Representative Liquidator"; and the terms "shareholders having the shares" and "substantial detriment" in Article 360, paragraph (1) of that Act shall be deemed to be replaced with "persons who have been members of the company" and "irreparable damage," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Representative of Mutual Company in Liquidation)

Article 180-9 (1) The liquidator(s) shall represent the Mutual Company in Liquidation; provided, however, that this shall not apply to the cases where the liquidating Insurance Company appoints a Representative Liquidator or any other person to act as its representative.

(2) Where a Mutual Company in Liquidation has two or more liquidators, each of the liquidators shall represent the company for the purpose of the main clause of the preceding paragraph.

(3) A Mutual Company in Liquidation (other than a Mutual Company with a board of liquidators) may appoint a Representative Liquidator from among its liquidators (excluding a person appointed by the Prime Minister pursuant to the provisions of Article 174, paragraph (1), (4) or (9); hereinafter the same shall apply in this paragraph) in accordance with its articles of incorporation, by mutual vote of the liquidators pursuant to the provisions of its articles of incorporation, or by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council).

(4) Where a representative director has been appointed, the representative director shall act as the Representative Liquidator if the directors become the liquidators pursuant to the provisions of Article 180-4, paragraph (1), item (i).

(5) The provisions of Article 349, paragraphs (4) and (5) (Representatives of Companies) and Article 351 (Measures when Vacancy Arises in Office of Representative Director) of the Companies Act shall apply mutatis mutandis to the Representative Liquidator of a Mutual Company in Liquidation; the provisions of Article 352 (Authority of Persons Who Perform Duties on Behalf of Directors) of that Act shall apply mutatis mutandis to a person appointed by a provisional disposition order under Article 56 (Commission of Registration of Provisional Disposition for Stay of Execution of Duties by Representative of Juridical Person, etc.) of the Civil Provisional Relief Act to act for a liquidator or the Representative Liquidator of a Mutual Company in Liquidation; the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (ii)) (Hearing of Statements), Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal), Article 874 (limited to the segment pertaining to items (i) and (iv)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to the liquidator(s) or Representative Liquidator of a Mutual Company in Liquidation; and the provisions of Article 937, paragraph (1) (limited to the segment pertaining to item (ii), sub-items (b) and (c)) (Commissioning of Registration by a Judicial Decision) of that Act shall apply mutatis mutandis to a person who must carry out the duties of the temporary Representative Liquidator of a Mutual Company in Liquidation. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Commencement of Bankruptcy Proceedings for Mutual Company in Liquidation)

Article 180-10 (1) The liquidators shall, if it has become clear that the assets of the Mutual Company in Liquidation are not sufficient to fully discharge its debts, immediately file a petition for commencement of bankruptcy proceedings.

(2) If a Mutual Company in Liquidation has become subject to a ruling for the commencement of bankruptcy proceedings, the liquidator(s) shall be deemed to have accomplished their duties when they have transferred their tasks to the bankruptcy trustee.

(3) In the case prescribed in the preceding paragraph, the bankruptcy trustee may recover any payment made to creditors by the Mutual Company in Liquidation.

(Liquidator's Liability for Damages to Mutual Company in Liquidation)

Article 180-11 (1) A liquidator shall be liable to the Mutual Company in Liquidation for any damage caused by the failure to carry out his/her (their) duties.

(2) Where a liquidator has carried out the transaction listed in Article 356, paragraph (1), item (i) of the Companies Act in violation of Article 356, paragraph (1) of that Act as applied mutatis mutandis pursuant to Article 180-8, paragraph (4), the amount of the profit gained by the liquidator or any third party from such transaction shall be presumed to be the amount of the damage set forth in the preceding paragraph.

(3) Any of the following liquidators shall be presumed to have failed to carry out his/her duties if the Mutual Company in Liquidation has suffered any damage from the transaction set forth in Article 356, paragraph (1), item (ii) or (iii) of the Companies Act as applied mutatis mutandis pursuant to Article 180-8, paragraph (4):

(i) A liquidator falling under Article 356, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 180-8, paragraph (4);

(ii) A liquidator who decided that the Mutual Company in Liquidation carry out such transaction; or

(iii) A liquidator who agreed to the board of liquidators' resolution to approve such transaction.

(4) The provisions of Article 53-34 and the provisions of Article 428, paragraph (1) (Special Provision on Transactions Carried out by Director for Himself/Herself) of the Companies Act shall apply mutatis mutandis to the liability of a liquidator under paragraph (1). In this case, the term "Article 356, paragraph (1), item (ii) (including the cases where it is applied mutatis mutandis pursuant to Article 419, paragraph (2))" in Article 428, paragraph (1) of that Act shall be deemed to be replaced with "Article 356, paragraph (1), item (ii) as applied mutatis mutandis pursuant to Article 180-8, paragraph (4) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Liquidator's Liability for Damages to a Third Party)

Article 180-12 (1) A liquidator of a Mutual Company in Liquidation shall be liable to a third party for any damage caused by his/her bad faith or gross negligence in carrying out his/her duties.

(2) The provisions of the preceding paragraph shall also apply where the liquidator set forth in that paragraph has acted as follows; provided, however, that this shall not apply to the cases where the liquidator has proven that he/she did not fail to exercise due care in so acting:

(i) Giving false notice with respect to any important particular of which notice must be given in soliciting subscribers for bonds (meaning the bonds set forth in Article 61), or including a false detail or record in any material used to explain the Mutual Company in Liquidation's business or other particulars for the purpose of such solicitation;

(ii) Including a false detail or record with regard to any important particular that must be detailed or recorded in the inventory of property, etc. set forth in Article 492, paragraph (1) of the Companies Act as applied mutatis mutandis pursuant to Article 180-17 or the balance sheet and administrative report set forth in Article 494, paragraph (1) of that Act as applied mutatis mutandis pursuant to Article 180-17, or in the annexed detailed statements thereto;

(iii) Making a false registration; or

(iv) Giving false public notice.

(Joint and Several Liability of Liquidators and Company Auditors)

Article 180-13 (1) If a liquidator or company auditor is liable for any damage caused to the Mutual Company in Liquidation or a third party, and the other liquidator(s) or company auditor(s) are also liable for such damages, the other liquidator(s) or company auditor(s) shall be his/her joint and several obligors.

(2) The provisions of Article 430 of the Companies Act as applied mutatis mutandis pursuant to Article 53-36 shall not apply to the case set forth in the preceding paragraph.

(Authority, etc. of Board of Liquidators)

Article 180-14 (1) The board of liquidators of a Mutual Company in Liquidation shall be composed of all of its liquidators.

(2) The board of liquidators shall carry out the following duties:

(i) Decisions on the execution of business of the Mutual Company with a board of liquidators;

(ii) Supervision of the execution of duties by the liquidators; and

(iii) Appointment and removal of the Representative Liquidator.

(3) The board of liquidators shall appoint the Representative Liquidator from among the liquidators; provided, however, that this shall not apply to the cases where the Representative Liquidator has been appointed otherwise.

(4) The board of liquidators may remove the Representative Liquidator that it has appointed or the person who has become the Representative Liquidator pursuant to the provisions of Article 180-9, paragraph (4).

(5) Where the Prime Minister has appointed the Representative Liquidator of a Mutual Company in Liquidation pursuant to the provisions of Article 174, paragraph (7), the board of liquidators may not appoint or remove the Representative Liquidator.

(6) The board of liquidators may not delegate to any liquidator an important decision on the execution of business, including on any of the following particulars:

(i) The appropriation of and acceptance of assignment of important assets ;

(ii) Contracting of a large amount of debt;

(iii) Appointment or removal of a manager or any other important employee;

(iv) Establishment, change or abolition of a secondary office or any other important structure;

(v) The particulars specified by Cabinet Office Ordinance as important particulars of the solicitation of subscribers for bonds (meaning the bonds set forth in Article 61), such as the particulars listed in Article 61, item (i); or

(vi) Revision of a system to ensure that the liquidators carry out their duties in compliance with applicable laws and regulations and the articles of incorporation, and any other system required by Cabinet Office Ordinance for ensuring that the business of a Mutual Company in Liquidation is executed in an appropriate manner.

(7) The business of a Mutual Company with a board of liquidators shall be executed by:

(i) The Representative Liquidator in a Mutual Company in Liquidation; or

(ii) A liquidator other than the Representative Liquidator appointed by a resolution of the board of liquidators to execute the business of the Mutual Company with a board of directors.

(8) A liquidator listed in the items of the preceding paragraph shall report, at least once in every three months, the status of execution of his/her duties to the board of liquidators.

(9) The provisions of Article 364 (Representation of Company in Actions between Companies with Board of Directors and Directors) and Article 365 (Restrictions on Competition and Transactions with Companies with Board of Directors) of the Companies Act shall apply mutatis mutandis to a Mutual Company with a board of liquidators. In this case, the term "Article 353" in Article 364 of that Act shall be deemed to be replaced with "Article 353 as applied mutatis mutandis pursuant to Article 180-8, paragraph (4) of the Insurance Business Act"; the term "Article 356" in Article 365, paragraph (1) of that Act shall be deemed to be replaced with "Article 356 as applied mutatis mutandis pursuant to Article 180-8, paragraph (4) of the Insurance Business Act"; and the term "the items of Article 356, paragraph (1)" in Article 365, paragraph (2) of that Act shall be deemed to be replaced with "the items of Article 356, paragraph (1) as applied mutatis mutandis pursuant to Article 180-8, paragraph (4) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Operations of Board of Liquidators)

Article 180-15 The provisions of Part II, Chapter IV, Section 5, Subsection 2 (excluding Article 367, Article 371, paragraphs (3) and (5), Article 372, paragraph (3), and Article 373) (Operations) of the Companies Act shall apply mutatis mutandis to the operations of the board of liquidators of a Mutual Company with a board of liquidators; and the provisions of Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 869 (Prima Facie Showing), Article 870 (limited to the segment pertaining to item (i)) (Hearing of Statements), the main clause of Article 871 (Appending of the Reason), Article 872 (limited to the segment pertaining to item (iv)) (Immediate Appeal) the main clause of Article 873 (Stay of Execution of the Judicial Decision of the Prior Instance), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of that Act shall apply mutatis mutandis to an application for permission under Article 371, paragraph (2) or (4) of that Act as applied mutatis mutandis pursuant to this Article. In this case, the terms "shareholder" and "at any time during the business hours of a Stock Company" in Article 371, paragraph (2) (Minutes) of that Act shall be deemed to be replaced with "member (or representative member, where the company has a General Representative Members' Council)" and "with the permission of the court," respectively; the term "Parent Company or Subsidiary" in Article 371, paragraph (6) of that Act shall be deemed to be replaced with "de facto Subsidiaries as set forth in Article 33-2, paragraph (1) of the Insurance Business Act"; and the term "Article 363, paragraph (2)" in Article 372, paragraph (2) (Omission of report to board of directors) of that Act shall be deemed to be replaced with "Article 180-14, paragraph (8) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Application of Provisions on Directors, etc.)

Article 180-16 For the purpose of applying to a Mutual Company in Liquidation the provisions of Chapter II, Section 2, Subsection 3; Chapter II, Section 2, Subsection 4, Divisions 1 and 2; Article 53-5, paragraph (2); Article 343, paragraphs (1) and (2) of the Companies Act as applied mutatis mutandis pursuant to Article 53-11; Article 345, paragraph (3) of that Act as applied mutatis mutandis pursuant to Article 345, paragraph (4) of that Act as applied mutatis mutandis pursuant to Article 53-11; Article 359 of that Act as applied mutatis mutandis pursuant to Article 53-15; Chapter II, Section 2, Subsection 4, Division 6; and Article 62-2, the provisions pertaining to a director, representative director, board of directors or Mutual Company shall be deemed applicable to a liquidator, Representative Liquidator, board of liquidators or Mutual Company with board of liquidators, respectively.

(Inventory of Property, etc.)

Article 180-17 The provisions of Part II, Chapter IX, Section 1, Subsection 3 (excluding Article 496, paragraph (3) and Article 497, paragraph (1), item (iii)) (Property Inventories) of the Companies Act shall apply mutatis mutandis to a Mutual Company in Liquidation. In this case, the terms "the items of Article 489, paragraph (7)" and "the items of Article 475" in Article 492, paragraph (1) (Preparation of Inventory of Property) of that Act shall be deemed to be replaced with "Article 180-14, paragraph (7), item (i) or (ii) of the Insurance Business Act" and "Article 180, item (i) or (ii) of that Act," respectively; and the term "the items of Article 475" in Article 494, paragraph (1) (Preparation and Retention of Balance Sheet) of that Act shall be deemed to be replaced with "Article 180, item (i) or (ii) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Order of Appropriation of Property)

Article 181 (1) The liquidator(s) of a Mutual Company in Liquidation shall perform the obligations, and redeem the funds of the Mutual Company.

(2) In the case referred to in the preceding paragraph, the funds shall not be redeemed prior to the performance of the Mutual Company's obligations.

(Performance of Obligations, etc.)

Article 181-2 The provisions of Part II, Chapter IX, Section 1, Subsection 4 (Performance of Obligations), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 871 (Appending of the Reason), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to a Mutual Company in Liquidation. In this case, the term "the items of Article 475" in Article 499, paragraph (1) (Public Notices to Creditors) of that Act shall be deemed to be replaced with "Article 180, item (i) or (ii) of the Insurance Business Act"; and the term "court" in Article 500, paragraph (2) of that Act shall be deemed to be replaced with "Prime Minister"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Distribution of Residual Assets)

Article 182 (1) Unless otherwise provided in the articles of incorporation, any appropriation of the residual assets of a Mutual Company in Liquidation shall be made by a resolution of the general members' council (or General Representative Members' Council, where the company has such a council).

(2) The residual assets of a Mutual Company in Liquidation shall be distributed to its members or disposed of in a manner that contributes to the protection of Policyholders, etc.

(3) Any distribution of the residual assets of a Mutual Company in Liquidation to its members shall be made in accordance with the members' amount of contribution (meaning the amount calculated pursuant to the provisions of Cabinet Office Ordinance as that part of the profits obtained by investing the insurance premiums paid by the members and the amount of money received as such insurance premiums which have neither been allocated to any payments such as insurance proceeds or refunds, nor to any business or other expenditures (including any refund under Article 177, paragraph (3)).

(4) Any measures of the residual assets of a Mutual Company in Liquidation in a manner that contributes to the protection of Policyholders, etc. under paragraph (2) shall be made in an amount not exceeding the total amount calculated in accordance with Cabinet Office Ordinance set forth in the preceding paragraph for all withdrawing members, pursuant to the provisions of Cabinet Office Ordinance.

(5) The resolution set forth in paragraph (1) shall be a resolution under Article 62, paragraph (2).

(6) Any resolution under paragraph (1) shall be null and void without the authorization of the Prime Minister.

(Completion of Liquidation Process, etc.)

Article 183 (1) The provisions of Article 507 (Conclusion of Liquidation), Article 508 (Retention of Accounting Materials), Article 868, paragraph (1) (Jurisdiction over Non-Contentious Cases), Article 871 (Appending of the Reason), Article 874 (limited to the segment pertaining to item (i)) (Restrictions on Appeal), Article 875 (Exclusion from Application of the Provisions of the Non-Contentious Cases Procedures Act) and Article 876 (Supreme Court Rules) of the Companies Act shall apply mutatis mutandis to a Mutual Company in Liquidation. In this case, the term "the items of Article 489, paragraph (7)" in Article 508, paragraph (1) of that Act shall be deemed to be replaced with "Article 180-14, paragraph (7), item (i) or (ii) of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(2) The provisions of Article 928 (excluding paragraph (2)) (Registration of a Liquidator), Article 929 (limited to the segment pertaining to item (i)) (Registration of Completion of Liquidation) and the main clause of Article 932 (Registration of a Change, etc. with Regard to a Branch Office) of the Companies Act, and Article 73 to 75 inclusive (Registration of Liquidators, Registration of Change Related to Liquidator, Registration of Completion of Liquidation) of the Commercial Registration Act shall apply mutatis mutandis to a registration regarding the liquidation of a Mutual Company. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Mutatis Mutandis Application of the Companies Act to the Special Liquidation of a Mutual Company)

Article 184 The provisions of Part II, Chapter IX, Section 2 (excluding Article 522, paragraph (3) and Article 541) (Special Liquidations), Part VII, Chapter II, Section 4 (Action Concerning Special Liquidation), Part VII, Chapter III, Sections 1 (excluding Article 868, paragraphs (2) to (5) inclusive and Article 870 to 874 inclusive) (General Provisions) and 3 (excluding Article 879, Article 880, and Article 898, paragraphs (1), (2) and (5)) (Special Provisions on Procedures of Special Liquidation ), and Article 938, paragraphs (1) to (5) inclusive (Commissioning of Registration by a Juridical Decision Concerning Special Liquidation) of the Companies Act shall apply mutatis mutandis to a Mutual Company in Liquidation. In this case, the term "shareholders who have held, for the consecutive period of the past six months or more (or, in cases where a shorter period is provided for in the articles of incorporation, such period), not less than 3 percent of the voting rights held by all of the shareholders (excluding the shareholders that cannot exercise voting rights on all matters on which resolutions can be passed at the shareholders' meeting; or, in cases where any proportion less than that is provided for in the articles of incorporation, such proportion) or shareholders who have held, for the consecutive period of the past six months or more (or, in cases where a shorter period is provided for in the articles of incorporation, such period), not less than 3 percent of the issued shares (excluding treasury shares; or, in cases where a lower proportion is provided for in the articles of incorporation, such proportion)" in Article 522, paragraph (1) (Order to investigate) of that Act shall be deemed to be replaced with "members representing at least three thousandths (or any smaller proportion prescribed by the articles of incorporation) of the total membership, or three thousand (or any smaller number prescribed by the articles of incorporation) or more members of the Mutual Company (or, in a Specified Mutual Company, members equal to or exceeding the number specified by Cabinet Order set forth in Article 38, paragraph (1) of the Insurance Business Act), who have been members of the Mutual Company without interruption for the preceding six months (or any shorter period prescribed by the articles of incorporation)"; the term "assigned claims owed by the Liquidating Stock Company or shares in" in Article 532, paragraph (2) (Remunerations of Supervisors) of that Act shall be deemed to be replaced with "acquire any claim against"; the term "Chapter VII (excluding Article 467, paragraph (1), item (v))" in Article 536, paragraph (3) (Restrictions on Assignment of Business) of that Act shall be deemed to be replaced with "Article 62-2 of the Insurance Business Act"; and the term "Article 492, paragraph (1)" in Article 562 (Report to Creditors' Meeting of Outcome of Investigations by Liquidators) of that Act shall be deemed to be replaced with "Article 492, paragraph (1) as applied mutatis mutandis pursuant to Article 180-17 of the Insurance Business Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

Chapter IX Foreign Insurers

Section 1 General Rules

(License)

Article 185 (1) A Foreign Insurer may, only in cases where it established a branch office, etc. in Japan (meaning an office in Japan, such as a branch office or secondary office, of the Foreign Insurer, or the office of a person delegated by the Foreign Insurer to act as an agent for the underwriting of insurance for the Foreign Insurer's Insurance Business in Japan; the same shall apply hereinafter in this Section to Section 5 inclusive) and obtained a license of the Prime Minister, transact Insurance Business under that license at said branch office, etc. , notwithstanding the provisions of Article 3, paragraph (1).

(2) The license set forth in the preceding paragraph refers to two types of licenses: the foreign life insurance business license and the foreign non-life insurance business license.

(3) The same person cannot obtain both the foreign life insurance business license and the foreign non-life insurance business license.

(4) The foreign life insurance business license shall be a license pertaining to the business of underwriting the classes of insurance listed in Article 3, paragraph (4), item (i) or, in addition, underwriting the classes of insurance listed in the same paragraph, items (ii) or (iii).

(5) The foreign non-life insurance business license shall be a license pertaining to the business of underwriting the classes of insurance listed in Article 3, paragraph (5), item (i) or, in addition, underwriting the classes of insurance listed in the same paragraph, item (ii) or (iii).

(6) A Foreign Insurance Company, etc. shall, except as otherwise specified by Cabinet Office Ordinance, conclude, in Japan, an insurance contract pertaining to any persons with an address or residence in Japan or property located in Japan, or vessels or aircraft with Japanese nationality.

(Foreign Insurers, etc. Without Branch Offices, etc. in Japan)

Article 186 (1) A Foreign Insurer without a branch office, etc. in Japan shall not conclude an insurance contract pertaining to any persons with an address or residence in Japan or property located in Japan, or vessels or aircrafts with Japanese nationality (except for insurance contracts specified by Cabinet Order; the same shall apply in the following paragraph); provided, however, that this shall not apply to insurance contracts pertaining to the permission set forth in the same paragraph.

(2) A person that seeks to apply to a Foreign Insurer without a branch office, etc. in Japan for an insurance contract pertaining to any persons with an address or residence in Japan or property located in Japan, or vessels or aircrafts with Japanese nationality, shall obtain the permission of the Prime Minister pursuant to the provisions of Cabinet Office Ordinance before the application is made.

(3) The Prime Minister shall not grant the permission set forth in the preceding paragraph in the case where the insurance contract is found to fall under any of the following items:

(i) The contents of that insurance contract are in violation of laws and regulations or are unfair;

(ii) In place of concluding that insurance contract, it is easy to conclude an insurance contract between insurance companies or foreign insurance companies, etc. which have equivalent or favorable conditions relative to that insurance contract;

(iii) The conditions of that insurance contract are significantly less balanced compared to the conditions that shall normally be attached in the case of concluding an insurance contract similar to that contract between insurance companies or foreign insurance companies, etc. ;

(iv) There is a risk of unjustifiable infringement to the interests of the insured and other relevant persons due to the conclusion of that insurance contract; and

(v) There is a risk of adverse effect to the sound development of the Insurance Business in Japan or harm to the public interest due to the conclusion of that insurance contract.

(Application Procedures for a License, etc.)

Article 187 (1) A Foreign Insurer that seeks to obtain the license set forth in Article 185, paragraph (1) shall submit a written application for a license to the Prime Minister, detailing the following particulars:

(i) The name of the home country of that Foreign Insurer (meaning the country where that Foreign Insurer started Insurance Business or the country that enacted laws and regulations in relation to the establishment of a juridical person pertaining to that Foreign Insurer; hereinafter the same shall apply in this Section to Section 4 inclusive) and the name or trade name or denomination of that Foreign Insurer, address or location of the head office or principal office, and date of commencement or establishment of Insurance Business;

(ii) Name and address of the representative person in Japan;

(iii) Types of license desired; and

(iv) Principal branch in Japan (meaning the branch office, etc. which the Foreign Insurer has prescribed as the headquarters of Insurance Business in Japan; hereinafter the same shall apply in this Section to Section 4 inclusive).

(2) A certificate proving the following particulars which was issued by the competent organization in the home country shall be attached to the written application for a license set forth in the preceding paragraph:

(i) That the commencement of Insurance Business of that Foreign Insurer or the establishment of a juridical person pertaining to that Foreign Insurer was done lawfully; and

(ii) That the Foreign Insurer is lawfully conducting Insurance Business in its home country that are similar to the Insurance Business it seeks to conduct in Japan after obtaining that license.

(3) In addition to what is prescribed in the preceding paragraph, the following documents and other documents specified by Cabinet Office Ordinance shall be attached to the written application for a license set forth in paragraph (1):

(i) Articles of incorporation or equivalent documents;

(ii) Statement of business procedures in Japan;

(iii) General policy conditions of the insurance contract concluded in Japan; and

(iv) Statement of calculation procedures for insurance premiums and policy reserves pertaining to the insurance contract concluded in Japan.

(4) The documents listed in item (ii) to (iv) inclusive of the preceding paragraph must detail the particulars specified by Cabinet Office Ordinance.

(5) The provisions of Article 5 shall apply mutatis mutandis to cases where an application has been filed for the license set forth in Article 185, paragraph (1). In this case, the term "business of an Insurance Company" in Article 5, paragraph (1), items (i) and (ii) shall be deemed to be replaced with "business in Japan of a Foreign Insurance Company, etc.", the term "the preceding Article, paragraph (2), items (ii) and (iii)" in the same paragraph, item (iii) shall be deemed to be replaced with "Article 187, paragraph (3), items (ii) and (iii)", and the term "the preceding Article, paragraph (2), item (iv)" in the same paragraph, item (iv) shall be deemed to be replaced with "Article 187, paragraph (3), item (iv)".

(Conditions for a License)

Article 188 (1) The Prime Minister may, in the case where the Insurance Business that a Foreign Insurer which applied for a foreign life insurance business license seeks to conduct in Japan only involves the underwriting of insurance contracts in which the insurance proceeds are indicated in a foreign currency and for which the counter parties are the persons specified by Cabinet Order, grant a license set forth in Article 185, paragraph (1) with conditions attached to the effect that the Foreign Insurer may only conduct business that is related to that insurance contract.

(2) The provisions specified by a Cabinet Order, such as Article 196, shall not apply to Foreign Life Insurance Companies, etc. , which obtained the license set forth in Article 185, paragraph (1) attached with conditions set forth in the preceding paragraph; any necessary special measures concerning the application of this Act may be specified by Cabinet Order.

(3) Special measures regarding the application procedures for a license set forth in Article 185, paragraph (1) of a Foreign Insurer in the case prescribed in paragraph (1) and other necessary particulars involving the application of the provisions of paragraph (1) shall be specified by Cabinet Order.

(Public Notice of Prime Minister)

Article 189 The Prime Minister shall, whenever he/she grants the license set forth in Article 185, paragraph (1), give public notice thereof and the particulars listed in the items of Article 187, paragraph (1) in the official gazette without delay. The same shall apply if a notification is made under the provisions of Article 209 on the change of particulars listed in the same paragraph, items (i), (ii) or (iv).

(Deposit)

Article 190 (1) A Foreign Insurance Company, etc. shall deposit money to the deposit office closest to the principal branch in Japan in the amount specified by Cabinet Order deemed to be necessary and appropriate to protect Policyholders, etc. in Japan.

(2) The Prime Minister may, if he/she finds it necessary to protect Policyholders, etc. in Japan, order a Foreign Insurance Company, etc. to deposit money in the amount found to be reasonable, in addition to the amount specified by Cabinet Order of the preceding paragraph, prior to commencing Insurance Business in Japan.

(3) If Foreign Insurance Company, etc. , pursuant to the provisions of Cabinet Order, concludes a contract pursuant to the provisions of Cabinet Order under which the required deposit will be deposited for that Foreign Insurance Company, etc. at the order of the Prime Minister, and notifies the Prime Minister of this, said Foreign Insurance Company, etc. may choose not to deposit all or part of the amount set forth in the preceding two paragraphs in the amount that it has been decided will be deposited under that contract while the contract is in effect (hereinafter referred to in this Article as "Contract Amount").

(4) The Prime Minister may, if he/she finds it necessary to protect Policyholders, etc. in Japan, order any persons who have concluded the contract set forth in the preceding paragraph with a Foreign Insurance Company, etc. or that Foreign Insurance Company, etc. to deposit all or part of the amount corresponding to the Contract Amount.

(5) A Foreign Insurance Company, etc. shall not commence Insurance Business pertaining to its license unless it has deposited (including the conclusion of the contract set forth in paragraph (3); the same shall apply in paragraph (8)) the deposit set forth in paragraph (1) (including the following deposit in the case where a company is ordered to deposit the money set forth in paragraph (2) pursuant to the provisions of the same paragraph) and notified the Prime Minister of this.

(6) Policyholders under insurance contracts in Japan, the insured, or any persons who shall receive insurance proceeds have the right to receive payment ahead of other obligees with regard to the deposit pertaining to that Foreign Insurance Company, etc. concerning claims resulting from an insurance contract.

(7) The necessary particulars related to the execution of the rights set forth in the preceding paragraph shall be specified by Cabinet Order.

(8) If a deposit amount (including Contract Amount) has come short of the amount specified by Cabinet Order which is referred to in paragraph (1) for any reason such as the execution of the rights set forth in paragraph (6), the Foreign Insurance Company, etc. shall deposit the deficit within two weeks from the date specified by Cabinet Office Ordinance and notify the Prime Minister of this without delay.

(9) A Foreign Insurance Company, etc. may replace the deposit set forth in paragraph (1), paragraph (2), or the preceding paragraph with national government bond certificates, local government bond certificates, or other securities specified by Cabinet Office Ordinance (including transfer bonds specified by Article 278, paragraph (1) (Deposit of Transfer Bonds) of the Act on Transfer of Corporate Bonds, Shares, etc.; the same shall apply in Article 223, paragraph (10), Article 272-5, paragraph (9) and Article 291, paragraph (9)).

(10) A deposit which was deposited pursuant to the provisions of paragraph (1), (2), (4), or (8) may be reclaimed pursuant to the provisions of Cabinet Order in a case under any of the following items:

(i) If the license set forth in Article 185, paragraph (1) pertaining to that Foreign Insurance Company, etc. is revoked pursuant to the provisions of Articles 205 or 206; and

(ii) If the license set forth in Article 185, paragraph (1) pertaining to that Foreign Insurance Company, etc. loses its validity pursuant to the provisions of Article 273.

(11) In addition to what is specified in the preceding paragraphs, the necessary particulars of deposits shall be specified by Cabinet Office Ordinance and Ordinance of the Ministry of Justice.

(Trade Name or Denomination of a Foreign Insurance Company, etc.)

Article 191 The provisions of Article 7, paragraph (2) shall not apply to a Foreign Insurance Company, etc.

(Representative Person in Japan)

Article 192 (1) Representative persons in Japan of a Foreign Insurance Company, etc. (except for foreign companies prescribed in Article 2, item (ii) (Definitions) of the Companies Act; hereinafter the same shall apply in this paragraph to paragraph (3) inclusive) shall have the authority to take any action in or out of court in connection with the business in Japan of that Foreign Insurance Company, etc.

(2) Restrictions on the right set forth in the preceding paragraph may not be asserted against a third party without knowledge of such restrictions.

(3) A Foreign Insurance Company, etc. shall bear responsibility for the compensation of damage caused to a third party in connection with representative persons in Japan carrying out their duties.

(4) Representative persons in Japan of a Foreign Insurance Company, etc. shall, even after retiring from their posts, have rights and duties as representative persons in Japan until the registration of Article 22 (Registration of Manager) of the Commercial Code or Article 933, paragraph (2) (Registration of Foreign Company) of the Companies Act (including the cases where it is applied mutatis mutandis pursuant to Article 215) regarding the name and address and other locations of representative persons who shall act in their place or public notice under the provisions of the second sentence of Article 189 is made.

(5) Representative persons in Japan of a Foreign Insurance Company, etc. shall not engage in the day-to-day business of other company, except if authorized by the Prime Minister.

(6) Whenever an application has been filed for the authorization referred to in the preceding paragraph, the Prime Minister may only grant the authorization if he/she finds that the particulars given in the application are unlikely to interfere with the sound and appropriate business operation of the Foreign Insurance Company, etc. in Japan.

(Foreign Mutual Company)

Article 193 (1) A Foreign Mutual Company shall prescribe representative persons in Japan if it seeks to continue conducting in Japan. In this case, at least one of the representative persons in Japan shall be a person with an address in Japan.

(2) The provisions of Article 818 (Prohibition, etc. of Continuous Transactions Prior to Registration) and Article 819 (Public Notice of What is Equivalent to a Balance Sheet) of the Companies Act shall apply mutatis mutandis to a Foreign Mutual Company. In this case, the term "foreign company registered as a foreign company (limited to those where similar companies or their closest equivalents in Japan are stock companies)" in the same Article, paragraph (1) shall be deemed to be replaced with "Foreign Mutual Company registered as a Foreign Mutual Company", the term "Article 438, paragraph (2)" in the same Article, paragraph (1) shall be deemed to be replaced with "Article 54-6, paragraph (2) of the Insurance Business Act," and the term "Article 939, paragraph (1), item (i) or (ii)" in the same Article, paragraph (2) shall be deemed to be replaced with "Article 217, paragraph (1), item (i) of the Insurance Business Act." In addition, the necessary technical change in interpretation shall be specified by Cabinet Order.

Section 2 Business, Accounting, etc.

(Establishment of System for Protection of Customers' Interests)

Article 193-2 (1) Whenever a Foreign Insurance Company, etc. , or its Parent Financial Institution, etc. or Subsidiary Financial Institution, etc. conducts any transaction, such Foreign Insurance Company, etc. shall, pursuant to the provisions of Cabinet Office Ordinance, properly manage the information on business conducted by itself or its Subsidiary Financial Institution, etc. (limited to Insurance Business and any other business specified by Cabinet Office Ordinance) and establish a system for properly supervising the status of implementation of said business or taking any other measures necessary so that the interests of the customer of said business will not be unjustly impaired.

(2) The term "Parent Financial Institution, etc." as used in the preceding paragraph means a person who holds the majority of All Shareholders' Voting Rights, etc. in a Foreign Insurance Company, etc. and any other person that is specified by Cabinet Order as being closely related to said Foreign Insurance Company, etc. and which is an Insurance Company, Bank, Financial Instruments Transaction Business Operator, or any other person conducting financial business that is specified by Cabinet Order.

(3) The term "Subsidiary Financial Institution, etc." as used in paragraph (1) means a person in which a Foreign Insurance Company, etc. holds the majority of All Shareholders' Voting Rights, etc. , and any other person that is specified by Cabinet Order as being closely related to said Foreign Insurance Company, etc. and which is an Insurance Company, Bank, Financial Instruments Transaction Business Operator, or any other person conducting financial business that is specified by Cabinet Order.

(Transactions, etc. with Specially Related Parties)

Article 194 A Foreign Insurance Company, etc. shall not make any of the following transactions or actions with parties to which it is specially related as specified by a Cabinet Order (hereinafter referred to as a "Specially Related Party" in this Article) or a customer of any Specially Related Party; provided, however, that this shall not apply where the Prime Minister has approved such transaction or action for any of the compelling reasons specified by a Cabinet Office Ordinance:

(i) Any transaction, such as the purchase and sale of assets, conducted with a Specially Related Party in a branch office, etc. of the Foreign Insurance Company, etc. on significantly different terms and conditions from those applied to normal transactions of the Foreign Insurance Company, etc. ; or

(ii) Any transaction or action taken with a Specially Related Party or a customer related to a Specially Related Party in a branch office, etc. of the Foreign Insurance Company, etc. that is equivalent to the transaction listed in the preceding item and specified by a Cabinet Office Ordinance as posing a risk to the sound and appropriate management of the Insurance Business conducted by the Foreign Insurance Company, etc. in Japan.

(Submission of Closing Financial Statements of Head Office or Principal Office)

Article 195 A Foreign Insurance Company, etc. shall, for each business year, submit to the Prime Minister an inventory of property, balance sheet, profit and loss statement and business report prepared in its head office or principal office, pursuant to the provisions of a Cabinet Office Ordinance, within a reasonable period of time following the end of the business year.

(Retention and Inspection, etc. of the Articles of Incorporation, etc.)

Article 196 (1) The representative person of a Foreign Insurance Company, etc. in Japan shall keep in its principal branch in Japan its articles of incorporation or any other equivalent document (or, for a Foreign Mutual Company, such document and its members list in Japan), or a electromagnetic record thereof.

(2) The representative person of a Foreign Insurance Company, etc. in Japan shall, pursuant to the provisions of a Cabinet Office Ordinance, keep in its principal branch in Japan the document or electromagnetic record set forth in the preceding Article for five years from the day following the date of its submission pursuant to the provisions of that Article.

(3) The representative person of a Foreign Insurance Company, etc. in Japan shall, pursuant to the provisions of a Cabinet Office Ordinance, prepare the following documents and annex detailed statements thereto for each accounting period of the business year in Japan and keep them in its principal branch in Japan for five years from the day following the date of the end of the business year in Japan covered by such accounting.

(i) Balance sheet for Insurance Business conducted in Japan;

(ii) Profit and loss statement for Insurance Business conducted in Japan; and

(iii) Business report for Insurance Business conducted in Japan.

(4) The documents set forth in the preceding paragraph may be prepared in the form of electromagnetic record.

(5) The creditors and insured of a Foreign Insurance Company, etc. , such as Policyholders and beneficiaries of insurance proceeds, may make the following requests at any time during the hours in which the Foreign Insurance Company, etc. should be doing business; provided, however, that they pay the fees determined by the Foreign Insurance Company, etc. in making a request falling under item (ii) or (iv):

(i) Where the documents set forth in paragraphs (1) to (3) inclusive are prepared in writing, a request to inspect such documents;

(ii) A request for a certified copy or extract of the documents referred to in the preceding item;

(iii) Where the documents set forth in paragraphs (1) to (3) inclusive are prepared in the form of electromagnetic record, a request to inspect anything that shows the particulars recorded in the electromagnetic records in a manner specified by a Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding item by the electromagnetic means determined by the Foreign Insurance Company, etc. , or to be issued a document detailing such particulars.

(Obligation to Hold Assets in Japan)

Article 197 A Foreign Insurance Company, etc. shall, pursuant to the provisions of a Cabinet Office Ordinance, hold in Japan the assets equivalent to the sum total of the amount calculated pursuant to the provisions of a Cabinet Office Ordinance on the basis of the policy reserves and reserves for outstanding claims set aside in Japan pursuant to the provisions of Article 116, paragraph (1) and 117, paragraph (1) as applied mutatis mutandis pursuant to Article 199, and the amount specified by a Cabinet Office Ordinance as equivalent to equity capital, such as the deposit set forth in Article 190.

(Mutatis Mutandis Application of the Companies Act, etc.)

Article 198 (1) The provisions of Article 8 (No Use of Name, etc. that is likely to be mistaken for a company) of the Companies Act shall apply mutatis mutandis to the use of a trade name or name that is likely to be mistaken for a Foreign Mutual Company; the provisions of Article 9 (Liability of Company Permitting Others to Use Its Trade Name) of that Act shall apply mutatis mutandis to the name of a Foreign Mutual Company; the provisions of Part I, Chapter III, Section 1 (Employees of a Company) of that Act shall apply mutatis mutandis to the employees of a Foreign Mutual Company; the provisions of Part I, Chapter III, Section 2 (excluding Article 18) (Commercial Agents of the Companies) of that Act shall apply mutatis mutandis to a person acting as an agent or intermediary in a transaction for a Foreign Mutual Company; the provisions of Part I, Chapter IV (excluding Article 24) (Non Competition after Assignment of Business) of that Act shall apply mutatis mutandis to the cases where a Foreign Mutual Company has assigned its business or acquired any business or operation; and the provisions of Article 54, Article 54-2 and Article 54-3, paragraphs (1) and (4) shall apply mutatis mutandis to the books and other materials of a Foreign Mutual Company. In this case, any technical change in interpretation required shall be specified by Cabinet Order.

(2) The provisions of Part II, Chapter I (excluding Article 501 to 503 inclusive and Article 523) (General Provisions) of the Commercial Code shall apply mutatis mutandis to the actions taken by a Foreign Mutual Company; the provisions of Part II, Chapter II (Buying or Selling) of said Code shall apply mutatis mutandis to buying or selling between a Foreign Mutual Company and a merchant or Mutual Company (including a Foreign Mutual Company); the provisions of Part II, Chapter III (Current Account) of said Code shall apply mutatis mutandis to a contract pertaining to set-offs between a Foreign Mutual Company and a person with which it has normal transactions; the provisions of Part II, Chapter V (excluding Article 545) (Brokerage Business) of said Code shall apply mutatis mutandis to the acting as an intermediary by a Foreign Mutual Company in a commercial transaction between third parties; and the provisions of Part II, Chapter VI (excluding Article 558) (Commission Agent Business) and Article 593 (Deposit) of said Code shall apply mutatis mutandis to a Foreign Mutual Company.

(Mutatis Mutandis Application of Provisions on Business, etc.)

Article 199 The provisions of Article 97, Article 97-2, paragraphs (1) and (2), Article 98, Article 99, paragraphs (1), (2) and (4) to (6) inclusive, Article 100 and Article 100-2 shall apply mutatis mutandis to the business of the branch offices, etc. of a Foreign Insurance Company, etc. ; the provisions of Article 99, paragraphs (3) and (7) to (10) inclusive shall apply mutatis mutandis to the business of the branch offices, etc. of a Foreign Life Insurance Company, etc. ; the provisions of Article 101 to 105 inclusive shall apply mutatis mutandis to concerted actions taken by a Foreign Non-Life Insurance Company, etc. with another Non-Life Insurance Company (including a Foreign Non-Life Insurance Company, etc.); the provisions of Article 7-2, Article 109, Article 110, paragraphs (1) and (3), Article 111, paragraph (1) and paragraphs (3) to (6) inclusive, Article 112, Article 114 to 118 inclusive, and Article 120 to 122 inclusive shall apply mutatis mutandis to a Foreign Insurance Company, etc. ; the provisions of Article 105-2 shall apply mutatis mutandis to a Foreign Life Insurance Company, etc. ; and the provisions of Article 105-3 shall apply mutatis mutandis to a Foreign Non-Life Insurance Company, etc. In this case, the term "Article 3, paragraph (2)" in Article 97, paragraph (1) shall be deemed to be replaced with "Article 185, paragraph (2)"; the term "Mutual Company" in Article 99, paragraph (6) shall be deemed to be replaced with "Foreign Mutual Company"; the term "In the case where the license of Article 3, paragraph (1) of the Insurance Business Act is cancelled pursuant to the provisions of Article 133 or 134 of that Act, or in the case where the license of Article 3, paragraph (1) of that Act loses its effect pursuant to the provisions of Article 273 of that Act" in Article 99, paragraph (8) shall be deemed to be replaced with "In the case where the license of Article 185, paragraph (1) of the Insurance Business Act is cancelled pursuant to the provisions of Article 205 or 206 of that Act, or in the case where the license of Article 185, paragraph (1) of that Act loses its effect pursuant to the provisions of Article 273 of that Act"; the term "Article 3, paragraph (1) of the Insurance Business Act pursuant to the provisions of Article 133 or 134 of that Act" in Article 99, paragraph (8) shall be deemed to be replaced with "Article 185, paragraph (1) of the Insurance Business Act pursuant to the provisions of Article 205 or 206 of that Act"; the term "Article 111, paragraphs (1) and (2)" in Article 99, paragraph (9) shall be deemed to be replaced with "Article 111, paragraph (1) as applied mutatis mutandis pursuant to Article 199"; the term "Designated Dispute Resolution Organization for Life Insurance Services" in the items of paragraph (1) of Article 105-2, paragraph (2) of that Article and item (ii) of paragraph (3) of that Article shall be deemed to be replaced with "Designated Dispute Resolution Organization for Foreign Life Insurance Services"; the term "Life Insurance Services" in the items of paragraph (1) of that Article shall be deemed to be replaced with "Foreign Life Insurance Services"; the term "Designated Dispute Resolution Organization for Non-Life Insurance Services" in the items of paragraph (1) of Article 105-3, paragraph (2) of that Article and item (ii) of paragraph (3) of that Article shall be deemed to be replaced with "Designated Dispute Resolution Organization for Foreign Non-Life Insurance Services"; the term "Non-Life Insurance Services" in the items of paragraph (1) of that Article shall be deemed to be replaced with "Foreign Non-Life Insurance Services"; the term "business year" in Article 109 shall be deemed to be replaced with "business year in Japan"; the term "for each business year, prepare an interim business report and business report describing the status of its business and property" in Article 110, paragraph (1) shall be deemed to be replaced with "for each business year in Japan, prepare an interim business report and business report describing the status of its business and property in Japan"; the term "for each business year, prepare explanatory documents detailing the particulars specified by Cabinet Office Ordinance as pertaining to the status of its business and property" in Article 111, paragraph (1) shall be deemed to be replaced with "for each business year in Japan, prepare explanatory documents detailing the particulars specified by Cabinet Office Ordinance as pertaining to the status of its business and property in Japan"; the term "its head office or principal office and its branch offices or secondary offices, or any other equivalent place specified by a Cabinet Office Ordinance" in Article 111, paragraphs (1) and (4) shall be deemed to be replaced with "the branch office of the Foreign Insurance Company, etc. in Japan or any other equivalent place specified by a Cabinet Office Ordinance"; the term "business and property of the Insurance Company and its Subsidiary, etc." in Article 111, paragraph (6) shall be deemed to be replaced with "business and property of the Foreign Insurance Company, etc. in Japan"; the term "owns" in Article 112, paragraph (1) shall be deemed to be replaced with "owns in Japan"; the term ", pursuant to the provisions of a Cabinet Office Ordinance" in Article 112, paragraph (1) shall be deemed to be deleted; the term "set aside as a reserve" in Article 112, paragraph (2) shall be deemed to be replaced with "set aside in Japan as a reserve"; the term "Policyholders" in Article 114, paragraph (1) shall be deemed to be replaced with "Policyholders in Japan"; the terms "within its portfolio" and "set aside as price fluctuation reserve" in Article 115, paragraph (1) shall be deemed to be replaced with "within its portfolio in Japan" and "set aside in Japan as price fluctuation reserve," respectively; the term "Shares, etc." in Article 115, paragraph (2) shall be deemed to be replaced with "Shares, etc. in Japan"; the terms "each accounting period," "insurance contracts" and "set aside a certain amount of money" in Article 116, paragraph (1) shall be deemed to be replaced with "each accounting period of the business year in Japan," "insurance contracts in Japan" and "set aside in Japan a certain amount of money," respectively; the term "funding the policy reserve" in Article 116, paragraph (2) shall be deemed to be replaced with "funding in Japan the policy reserve"; the term "insurance contract" in Article 116, paragraph (3) shall be deemed to be replaced with "insurance contract in Japan"; the terms "each accounting period," "insurance contracts," "as expenditure" and "reserves for outstanding claims" in Article 117, paragraph (1) shall be deemed to be replaced with "each accounting period of the business year in Japan," "insurance contracts in Japan," "in Japan as expenditure" and "reserves for outstanding claims in Japan," respectively; the terms "insurance contract specified by a Cabinet Office Ordinance" and "create" in Article 118, paragraph (1) shall be deemed to be replaced with "insurance contract in Japan specified by a Cabinet Office Ordinance" and "create in Japan," respectively; the terms "board of directors," "Life Insurance Company or a Non-Life Insurance Company meeting the requirements specified by a Cabinet Office Ordinance," "actuary" and "method of calculating insurance premiums" in Article 120, paragraph (1) shall be deemed to be replaced with "representative person," "Foreign Life Insurance Company, etc. or a Foreign Non-Life Insurance Company, etc. meeting the requirements specified by a Cabinet Office Ordinance," "actuary of the Foreign Insurance Company, etc. in Japan" and "method of calculating the insurance premiums applicable to the insurance contracts concluded in Japan," respectively; the term "actuary" in Article 120, paragraph (2) shall be deemed to be replaced with "actuary of a Foreign Insurance Company, etc. in Japan"; the terms "Insurance Company" and "actuary" in Article 120, paragraph (3) shall be deemed to be replaced with "Foreign Insurance Company, etc." and "actuary in Japan" respectively; the terms "actuary," "each accounting period," and "board of directors" in Article 121 shall be deemed to be replaced with "actuary of a Foreign Insurance Company, etc. in Japan," "each accounting period of the business year in Japan" and "representative person of the Foreign Insurance Company, etc. in Japan," respectively; and the terms "Insurance Company" and "actuary" in Article 122 shall be deemed to be replaced with "Foreign Insurance Company, etc." and "actuary in Japan", respectively.

Section 3 Supervision

(Submission of Reports or Materials)

Article 200 (1) The Prime Minister may, if he/she finds it necessary to protect Policyholders, etc. in Japan by ensuring the sound and appropriate business operation of a Foreign Insurance Company, etc. in Japan, request the Foreign Insurance Company, etc. or a person acting as an agent for the underwriting of insurance prescribed in Article 185, paragraph (1) to submit reports or materials concerning the status of its business in Japan or property of the Foreign Insurance Company, etc.

(2) If and to the extent that the Prime Minister finds it particularly necessary to protect Policyholders, etc. in Japan by ensuring the sound and appropriate business operation of a Foreign Insurance Company, etc. in Japan, he/she may request any Specially Related Party of the Foreign Insurance Company, etc. (meaning a Specially Related Party as prescribed in Article 194; the same shall apply in the following paragraph and the following Article) or person the Foreign Insurance Company, etc. has entrusted with its business in Japan (except for the person acting as an agent for the underwriting of insurance set forth in the preceding paragraph; the same shall apply in the next paragraph), to submit reports or materials that would be helpful to understand the status of the business in Japan or property of the Foreign Insurance Company, etc. .

(3) A Specially Related Party of a Foreign Insurance Company, etc. or person that a Foreign Insurance Company, etc. has entrusted with its business in Japan may refuse to submit reports or materials required under the preceding paragraph if there are justifiable grounds for it to do so.

(On-Site Inspection)

Article 201 (1) The Prime Minister may, if he/she finds it necessary to protect Policyholders, etc. in Japan by ensuring the sound and appropriate business operation of a Foreign Insurance Company, etc. in Japan, have his/her officials enter a branch office, etc. of the Foreign Insurance Company, etc. , ask questions on the status of its business in Japan or property of the Foreign Insurance Company, etc. , or inspect relevant items such as books and documents.

(2) If and to the extent that the Prime Minister finds it particularly necessary in entering a site, asking questions, or conducting an inspection under the preceding paragraph, he/she may have his/her officials enter a facility of any Specially Related Party of the Foreign Insurance Company, etc. or person the Foreign Insurance Company, etc. has entrusted with its business in Japan, have such officials question the Foreign Insurance Company, etc. or ask questions about particulars that are necessary for the inspection, or have such officials inspect relevant items such as books and documents.

(3) A Specially Related Party of a Foreign Insurance Company, etc. or a person that a Foreign Insurance Company, etc. has entrusted with its business in Japan may refuse the questioning and inspection under the provisions of the preceding paragraph if there are justifiable grounds for it to do so.

(Standard of Soundness)

Article 202 The Prime Minister may use the following amounts with respect to a Foreign Insurance Company, etc. and establish whether or not the Foreign Insurance Company, etc. has an appropriate level of solvency in terms of its ability to pay Insurance Proceeds, etc. as the standard by which the soundness of its business management in Japan is determined:

(i) Total amount of the items specified by Cabinet Office Ordinance, such as the deposit set forth in Article 190; and

(ii) Amount calculated pursuant to the provisions of Cabinet Office Ordinance as the amount for coping with possible risks exceeding standard predictions that may occur due to any events pertaining to the insurance being underwritten in Japan, such as insured events.

(Order to Change Regarding Particulars Prescribed in Statement of Business Procedures, etc.)

Article 203 If and to the extent that the Prime Minister finds it necessary to protect Policyholders, etc. in Japan by ensuring the sound and appropriate business operation of a Foreign Insurance Company, etc. in Japan in light of the situation of the business or property of the Foreign Insurance Company, etc. or a change in the circumstances, he/she may order the Foreign Insurance Company, etc. to modify the particulars prescribed in the documents listed in Article 187, paragraph (3), items (ii) to (iv) inclusive.

(Suspension of Business, etc.)

Article 204 (1) If the Prime Minister finds it necessary to protect Policyholders, etc. in Japan by ensuring the sound and appropriate business operation of a Foreign Insurance Company, etc. in Japan in light of the status of the business or property of the Foreign Insurance Company, etc. , he/she may request that Foreign Insurance Company, etc. to submit an improvement plan for ensuring soundness in the business operation of that Foreign Insurance Company, etc. in Japan or order a change to the submitted improvement plan by designating the particulars and the time limit for which measures must be taken, or, to the extent the Prime Minister finds necessary, he/she may order suspension of the whole or part of business of that Foreign Insurance Company by setting a limit or order deposit of property of that Foreign Insurance Company or other measures necessary for the purpose of supervision.

(2) An order under the preceding paragraph(including the request of submission of an improvement plan) that it is found to be necessary to issue due to the level of solvency of the Foreign Insurance Company, etc. in terms of its ability to pay Insurance Proceeds, etc. , must be an order specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance for the category that corresponds to the level of solvency of the Foreign Insurance Company, etc. in terms of its ability to pay Insurance Proceeds, etc.

(Rescission of License, etc.)

Article 205 The Prime Minister may, if a Foreign Insurance Company, etc. has come to fall under any of the following items, order the full or partial suspension of the business in Japan of the Foreign Insurance Company, etc. or the dismissal of the representative person in Japan, or rescind the license set forth in Article 185, paragraph (1):

(i) If it is in violation of laws and regulations (including foreign laws and regulations), the measures of the Prime Minister pursuant to laws and regulations, or particularly vital particulars among those prescribed in the documents listed in the items of Article 187, paragraph (3)

(ii) If it is in violation of the conditions attached to the license set forth in Article 185, paragraph (1) or the license obtained in its country for Insurance Business (including any administrative measures similar to said license, such as permission or registration; the same shall apply in Article 209, item (vii)); and

(iii) If it engages in conduct that is prejudicial to the public interest.

Article 206 The Prime Minister may, if he/she finds that the situation of the property of a Foreign Insurance Company, etc. is significantly worsening and that it is not appropriate for it to continue in the Insurance Business in Japan from the viewpoint of protecting Policyholders, etc. in Japan, rescind the license of the Foreign Insurance Company, etc. set forth in Article 185, paragraph (1).

(Mutatis Mutandis Application of Provisions Concerning Supervision)

Article 207 The provisions in Article 123 to 125 inclusive shall apply mutatis mutandis to a Foreign Insurance Company, etc. In this case, the term "Article 4, paragraph (2), items (ii) to (iv) inclusive" in Article 123, paragraph (1) shall be deemed to be replaced with "Article 187, paragraph (3), items (ii) to (iv) inclusive," the term "Article 4, paragraph (2), items (ii) and (iii)" in Article 124, paragraph (1) shall be deemed to be replaced with "Article 187, paragraph (3), items (ii) and (iii)," the term "Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive" in Article 124, paragraph (1) shall be deemed to be replaced with "Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive as applied mutatis mutandis pursuant to Article 187, paragraph (5)," the term "Article 4, paragraph (2), item (iv)" in the same Article, item (ii) shall be deemed to be replaced with "Article 187, paragraph (3), item (iv)," the term "Article 5, paragraph (1), item (iv), sub-items (a) to (c) inclusive" in the same Article, item (ii) shall be deemed to be replaced with "Article 5, paragraph (1), item (iv), sub-items (a) to (c) inclusive as applied mutatis mutandis pursuant to Article 187, paragraph (5)," and the term "Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive or item (iv), sub-items (a) to (c) inclusive" in Article 125 shall be deemed to be replaced with "Article 5, paragraph (1), item (iii), sub-items (a) to (e) inclusive or item (iv), sub-items (a) to (c) inclusive as applied mutatis mutandis pursuant to Article 187, paragraph (5)."

Section 4 Abolition of Insurance Business, etc.

(Abolition of Insurance Business in Japan)

Article 208 A Foreign Insurance Company, etc. shall, if it seeks to abolish its Insurance Business in Japan (excluding the cases falling under paragraph (6) of the following Article), obtain authorization from the Prime Minister.

(Notification by Foreign Insurance Company, etc.)

Article 209 If a Foreign Insurance Company, etc. falls under any of the following items, it shall notify the Prime Minister of this without delay pursuant to the provisions of Cabinet Office Ordinance:

(i) it has started its Insurance Business in Japan;

(ii) it has modified any of the particulars listed in Article 187, paragraph (1), item (i), (ii) or (iv), or any of the particulars prescribed by the document listed in Article 187, paragraph (3), item (i);

(iii) it has modified the amount of its capital or contribution, or the total amount of its funds;

(iv) it has carried out an Entity Conversion;

(v) it has merged, transferred or succeeded to a business through a company split, or assigned or acquired the whole or an important Part of a business (other than a business that only pertains to branch offices, etc.);

(vi) it has dissolved (for any other reason than a merger) or abolished its Insurance Business;

(vii) it has had its license for Insurance Business canceled in its home country;

(viii) it has become subject to a ruling for the commencement of bankruptcy proceedings; or

(ix) it falls under any of the other cases specified by Cabinet Office Ordinance.

(Mutatis Mutandis Application of Provisions on Portfolio Transfers of Insurance Contracts)

Article 210 (1) The provisions of Chapter VII, Section 1 shall apply mutatis mutandis to the comprehensive transfer of insurance contracts in Japan by a Foreign Insurance Company, etc. In this case, the term "creditors" in Article 135, paragraph (3) shall be deemed to be replaced with "creditors of branch offices, etc. set forth in Article 185, paragraph (1)"; the term "Transferor Company and the Transferee Company" in Article 136, paragraphs (1) and (3) shall be deemed to be replaced with "Transferee Company"; the terms "two weeks before the date of the Shareholders' Meeting, etc. set forth in paragraph (1) of the preceding Article," "written agreement concluded under Article 135, paragraph (1)" and "business offices or offices" in Article 136-2, paragraph (1) shall be deemed to be replaced with "the date of preparation of the written agreement concluded under Article 135, paragraph (1) (hereinafter referred to as "Transfer Agreement" in this Section)," "Transfer Agreement" and "branch offices, etc.," respectively; the term "shareholder or Policyholder of the Transferor Company" in Article 136-2, paragraph (2) shall be deemed to be replaced with "affected Policyholder"; the term "resolution set forth in Article 136, paragraph (1)" in Article 137, paragraph (1) shall be deemed to be replaced with "preparation of the Transfer Agreement"; the terms "the time of the adoption of resolution under Article 136, paragraph (1)" and "shall not conclude" in Article 138 shall be deemed to be replaced with "the time of preparation of the Transfer Agreement" and "shall not conclude in Japan," respectively; and the term "creditors" in Article 139, paragraph (2), item (iii) shall be deemed to be replaced with "creditors of branch offices, etc. set forth in Article 185, paragraph (1)."

(2) Any Foreign Insurance Company, etc. that has transferred all of its insurance contracts in Japan shall be deemed to have abolished its Insurance Business in Japan. The provisions of Article 208 shall not apply in this case.

(Mutatis Mutandis Application of Provisions on the Transfer or Acceptance of Business, and Entrustment of Business and Property Administration)

Article 211 The provisions of Article 142 shall apply mutatis mutandis to a transfer or acceptance of business in Japan involving a Foreign Insurance Company, etc. or foreign insurance companies, etc. ; and the provisions of Chapter VII, Section 3 shall apply mutatis mutandis where a Foreign Insurance Company, etc. has entrusted the administration of its business and property in Japan. In this case, the term "both the Insurance Company entrusting administration of business (hereinafter referred to as "Entrusting Company" in this Section) and the Entrusted Company" in Article 144, paragraph (2) shall be deemed to be replaced with "the Entrusted Company"; the term "head office or principal office" in Article 146, paragraph (2) shall be deemed to be replaced with "principal branch in Japan set forth in that paragraph"; the term ", Article 19" in item (iii) of that paragraph shall be deemed to be replaced with "and Article 19," the term "and Article 46 (General Rules on Attached Documents) of the Commercial Registration Act (including the cases where they are applied mutatis mutandis pursuant to Article 67)" in Article 146, paragraph (3) shall be deemed to be replaced with "(including the cases where they are applied mutatis mutandis pursuant to Article 216, paragraph (1)"; the term "Entrusting Company set forth in Article 144, paragraph (2) of the Insurance Business Act" in Article 148, paragraph (3) shall be deemed to be replaced with "Foreign Insurance Company, etc. as defined in Article 2, paragraph (7) of the Insurance Business Act that has entrusted the administration of its business and property in Japan"; the term "Article 144, paragraph (1) of the Insurance Business Act" in Article 148, paragraph (4) shall be deemed to be replaced with "Article 144, paragraph (1) of the Insurance Business Act as applied mutatis mutandis pursuant to Article 211 of that Act"; and the term "both the Entrusting Company and the Entrusted Company" in Article 149, paragraph (1) shall be deemed to be replaced with "the Entrusted Company"; any other necessary technical changes in interpretation shall be specified by Cabinet Order.

(Liquidation of a Foreign Insurance Company, etc.)

Article 212 (1) A Foreign Insurance Company, etc. shall, if it falls under any of the following items, liquidate the whole of its property in Japan:

(i) its license under Article 185, paragraph (1) has been cancelled pursuant to the provisions of Article 205 or 206; or

(ii) its license under Article 185, paragraph (1) has lost its effect pursuant to the provisions of Article 273.

(2) If a Foreign Insurance Company, etc. goes into liquidation pursuant to the provisions of the preceding paragraph, the Prime Minister shall appoint (a) liquidator(s) at the request of any interested person or without any party's request. The same shall apply where he/she dismisses the liquidator(s).

(3) The Prime Minister shall, where he/she dismisses a liquidator pursuant to the provisions of the preceding paragraph, commission the registry office with jurisdiction over the principal branch of the Foreign Insurance Company in Liquidation, etc. in Japan to make a registration to that effect.

(4) The provisions of Article 500 (Restrictions on Performance of Obligations) of the Companies Act as applied with relevant changes in interpretation pursuant to the provisions of Article 178, and the provisions of Article 476 (Capacity of Liquidating Stock Companies), Part II, Chapter IX, Section 1, Subsection 2 (Structures for Liquidating Stock Companies), Article 492 (Preparation of an Inventory of Property), Part II, Chapter IX, Section 1, Subsection 4 (excluding Article 500) (Performance of Obligations), Article 508 (Retention of Accounting Materials), Part II, Chapter IX, Section 2 (excluding Articles 510, 511 and 514) (Special Liquidations), Part VII, Chapter III, Sections 1 (General Provisions) and 3 (Special Provisions on Procedures of Special Liquidation) and Article 938, paragraphs (1) to (5) inclusive (Commissioning of Registration by a Juridical Decision on Special Liquidation) of that Act shall apply mutatis mutandis to the liquidation of the property of a Foreign Insurance Company, etc. in Japan under paragraph (1), unless their specific characters forbid such application. In this case, any other necessary technical changes in interpretation shall be specified by Cabinet Order.

(5) The provisions of Article 177 shall apply mutatis mutandis to the liquidation of a Foreign Insurance Company, etc. under paragraph (1); the provisions of Article 175 and Article 179, paragraph (1) shall apply mutatis mutandis to the liquidation of a Foreign Insurance Company, etc. under paragraph (1) (excluding the cases to which apply the provisions of Part II, Chapter IX, Section 2 (excluding Articles 510, 511 and 514), Part VII, Chapter III, Sections 1 and 3, and Article 938, paragraphs (1) to (5) inclusive of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same shall apply in this paragraph); and the provisions of Article 200, paragraph (1) and Article 201, paragraph (1) shall apply mutatis mutandis to the liquidation of a Foreign Insurance Company, etc. under paragraph (1) where the Prime Minister finds it necessary for supervising the liquidation of the Foreign Insurance Company in Liquidation, etc. In this case, the term "date of dissolution" in Article 177, paragraph (2) shall be deemed to be replaced with "date of cancellation or expiration of the license issued to the Foreign Insurance Company, etc. under Article 185, paragraph (1)"; the term "Insurance Company in Liquidation, etc." in Article 177, paragraph (3) shall be deemed to be replaced with "Foreign Insurance Company in Liquidation, etc."; the terms "paragraph (1), (4) or (9) of the preceding Article" and "Insurance Company in Liquidation, etc." in Article 175 shall be deemed to be replaced with "Article 212, paragraph (2)" and "Foreign Insurance Company in Liquidation, etc.," respectively; and the term "Insurance Company in Liquidation, etc." in Article 179, paragraph (1) shall be deemed to be replaced with "Foreign Insurance Company in Liquidation, etc."; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(6) The provisions of Article 812 (Resignation of Representatives in Japan Whose Domiciles Are in Japan) of the Companies Act shall not apply to a Foreign Insurance Company, etc. (other than a Foreign Mutual Company) that has obtained a license from the Prime Minister set forth in Article 185, paragraph (1).

(Mutatis Mutandis Application of the Companies Act)

Article 213 The provisions of Article 822, paragraphs (1) to (3) inclusive (Liquidation of a Foreign Company's Property in Japan), Part VII, Chapter I, Section 2 (Order of Prohibition of Continuous Transactions or Closure of a Business Office of a Foreign Company), Part VII, Chapter III, Sections 1 (General Provisions), 4 (Special Provisions on Liquidation Proceedings of a Foreign Company) and 5 (Special Provisions on Procedures of a Dissolution Order, etc. for a Company), Article 937, paragraph (2) (Commissioning of Registration by a Judicial Decision), and Article 938, paragraph (6) (Commissioning of Registration by a Juridical Decision Concerning Special Liquidation) of the Companies Act shall apply mutatis mutandis where a Foreign Mutual Company has established a secondary office or other office in Japan. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

Section 5 Miscellaneous Provisions

(Registry)

Article 214 A registry office shall keep a registry of foreign mutual companies.

(Mutatis Mutandis Application of the Companies Act)

Article 215 The provisions of Part VII, Chapter IV, Section 1 (excluding Article 907) (General Provisions), and Article 933 (excluding paragraph (1), item (i) and paragraph (2), item (vii)) (Registration of Foreign Company), Article 934, paragraph (2) (Registration, etc. of Appointment of a Representative in Japan), Article 935, paragraph (2) (Registration, etc. of the Relocation of the Domicile of a Representative in Japan) and Article 936, paragraph (2) (Registration, etc. of Establishment of a Business Office in Japan) of the Companies Act shall apply mutatis mutandis to the registration of a Foreign Mutual Company. In this case, the term "this Act" in Part VII, Chapter IV, Section 1 (excluding Article 907) of that Act shall be deemed to be replaced with "the Insurance Business Act and this Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Mutatis Mutandis Application of the Commercial Registration Act)

Article 216 The provisions of Article 1-3 to 5 inclusive (Registry Office, Delegation of Affairs, Suspension of Affairs, Registrar, Disqualification of Registrar), Article 7 to 15 inclusive (Prohibition on Carrying Out of Registries and Other Documents, Loss and Restoration of Registries, Prevention of Loss of Registry, Issuance of Certificate of Registered Matters, Issuance of Documents Specifying Extract of Matters Registered, Inspection of Annexed Documents, Certificate of Seal Impression, Certification of Matters Required for Verification of Measures to Identify the Creator of Electromagnetic Records and Other Matters, Fees, Registration Upon Application by a Relevant Party, Registration upon Commission), Article 17, paragraphs (1), (2) and (4) (Method of Application for Registration), Article 18 to 19-2 inclusive (Documents to be Attached to Written Application, Electromagnetic Record to be Attached to Written Application), Article 20, paragraphs (1) and (2) (Submission of Seal Impression), Article 21 to 23-2 inclusive (Acceptance of Applications, Receipt, Order of Registration, Identify Confirmation by Registrar), Article 24 (excluding items (xi) and (xii)) (Dismissal of Application), Article 25 to 27 inclusive (Registration to be Made after Lapse of Period for Filing Action, Change in Administrative Zone, etc., Prohibition of Registration of Identical Trade Name at Same Location), Article 33 (Cancellation of Registration of Trade Name), Articles 44 and 45 (Registration of Company's Manager), Articles 51 and 52 (Registration of Relocation of Head Office), Article 128 (Applicant), Article 129 (Registration of Foreign Company), Article 130, paragraphs (1) and (3) (Registration of Change), and Article 132 to 148 inclusive (Correction, Application for Cancellation, Ex Officio Cancellation, Exclusion from Application of the Administrative Procedure Act, Exclusion from Application of the Act on Access to Information Held by Administrative Organs, Request for Review, Handling of Request of Review Case, Exclusion from Application of the Administrative Appeal Act, Delegation to Ordinance of the Ministry) of the Commercial Registration Act shall apply mutatis mutandis to a registration regarding a Foreign Mutual Company. In this case, the term "or the particulars that are required to be included in a written application pursuant to the provisions of the preceding paragraph" in Article 17, paragraph (4) of that Act shall be deemed to be deleted; the term "preceding two paragraphs" in Article 17, paragraph (4) of that Act shall be deemed to be replaced with "that paragraph"; the term "head office" in Article 51, paragraph (1) of that Act shall be deemed to be replaced with "office in Japan"; the term "a foreign company under Article 933, paragraph (1) of the Companies Act" in Article 129, paragraph (1) of that Act shall be deemed to be replaced with "the establishment of an office of a Foreign Mutual Company"; the term "the company has designated its representative person in Japan or established a business office in Japan" in Article 129, paragraph (3) of that Act shall be deemed to be replaced with "the company has established an office in Japan"; and the terms "for registration under the preceding two paragraphs," "registration has been made under the preceding two paragraphs" and "documents set forth in the preceding two paragraphs" in Article 130, paragraph (3) of that Act shall be deemed to be replaced with "for registration under the preceding paragraph," "registration has been made under that paragraph" and "document set forth in that paragraph," respectively; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Method of Public Notice by a Foreign Insurance Company, etc.)

Article 217 (1) A Foreign Insurance Company, etc. (limited to a foreign company or Foreign Mutual Company; the same shall apply in the following paragraph and paragraph (3)) shall designate as its Method of Public Notice:

(i) Publication in a daily newspaper that publishes the particulars of current events; or

(ii) Electronic public notice.

(2) Where a Foreign Insurance Company, etc. designates the method listed in item (ii) of the preceding paragraph as its Method of Public Notice, it shall be sufficient for the company to prescribe that electronic public notice shall be its Method of Public Notice. In this case, the company may designate the method listed in item (i) of that paragraph as the Method of Public Notice to be adopted where it is unable to give an electronic public notice due to an accident or any other unavoidable circumstances.

(3) The provisions of Article 940, paragraph (1) (excluding item (i)) and (3) (Public Notice Period, etc. of Electronic Public Notice), Article 941 (Electronic Public Notice Investigation), Article 946 (Obligation, etc. of Investigation), Article 947 (Cases Where an Electronic Public Notice Investigation Is Unable to Be Carried Out), Article 951, paragraph (2) (Retention and Inspection, etc. of Financial Statements, etc.), Article 953 (Order for Improvement), and Article 955 (Statements, etc. in an Investigation Record Book, etc.) of the Companies Act shall apply mutatis mutandis where a Foreign Insurance Company, etc. gives public notice under this Act or any other Act in the form of electronic public notice. In this case, the terms "Article 440, paragraph (1)" and "annual shareholders' meeting" in Article 940, paragraph (1), item (ii) of that Act shall be deemed to be replaced with "Article 819, paragraph (1) as applied mutatis mutandis pursuant to Article 193, paragraph (2) of the Insurance Business Act" and "procedure" respectively; the term "the preceding two paragraphs" in Article 940, paragraph (3) of that Act shall be deemed to be replaced with "paragraph (1)"; and the term "public notice under this Act or any other Act (excluding the public notice under Article 440, paragraph (1)" in Article 941 of that Act shall be deemed to be replaced with "public notice under the Insurance Business Act (excluding the public notice under Article 819, paragraph (1) as applied mutatis mutandis pursuant to Article 193, paragraph (2) of that Act"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(4) The Method of Public Notice by a Foreign Insurance Company, etc. (other than a foreign company or Foreign Mutual Company) shall be publication in a daily newspaper that publishes the particulars of current events.

(Notification of Establishment of a Representative Office in a Foreign State, etc.)

Article 218 (1) If a Foreign Insurer who does not have a license as set forth in Article 185, paragraph (1) falls under any of the following items and if item (i) applies, the insurer shall notify the Prime Minister of this and of the content of the relevant business, the location of the offices conducting such business and any other particular specified by Cabinet Office Ordinance and, if item (ii), (iii) or (iv) applies, shall notify the Prime Minister of this without delay:

(i) The insurer seeks to establish a resident office in a foreign state or any other office in Japan to conduct any of the following business (including the cases where it seeks to conduct such business in an office that has been established for any other purpose):

(a) Collection or provision of information regarding the Insurance Business; or

(b) Any other business related to the Insurance Business;

(ii) The insurer has abolished the office set forth in the preceding item;

(iii) The insurer has abolished the business listed in item (i), sub-item (a) or (b) that were provided at the office set forth in that item; or

(iv) The insurer has modified any of the particulars for which it has provided notification under item (i).

(2) The Prime Minister may, if he/she finds it necessary for the public interest, request the Foreign Insurer set forth in the preceding paragraph to submit a report or materials concerning the business listed in item (i), sub-item (a) or (b) of that paragraph that is conducted at the office set forth in that item.

Section 6 Special Provisions on Specified Juridical Persons

(Licensing)

Article 219 (1) A juridical person falling under both of the following items (hereinafter referred to as "Specified Juridical Person" in this Section) may designate a person (hereinafter referred to as "General Representative" in this Section) to act as an underwriting agent for those members of the Specified Juridical Person who provide insurance underwriting (hereinafter referred to as "Underwriting Members") for the juridical person's Insurance Business in Japan, or as a business agent for the Specified Juridical Person and its Underwriting Members for such Insurance Business in Japan, and obtain a license from the Prime Minister for its Underwriting Members to conduct Insurance Business in Japan:

(i) It was incorporated under a special foreign law or regulation; and

(ii) Pursuant to a special provisions of foreign laws or regulations, its members are allowed to conduct Insurance Business in the relevant foreign state without obtaining a license for Insurance Business (including any administrative measure similar to such license, such as permission or registration);

(2) The license set forth in the preceding paragraph shall be in two types: a specified life insurance business license and a specified non-life insurance business license.

(3) The same Specified Juridical Person may not obtain both a specified life insurance business license and a specified non-life insurance business license.

(4) A specified life insurance business license shall be a license for Underwriting Members to underwrite the type of insurance listed in Article 3, paragraph (4), item (i) as a business undertaking in Japan or, in addition, to underwrite the type of insurance listed in Article 3, paragraph (4), item (ii) or (iii).

(5) A specified non-life insurance business license shall be a license for an Underwriting Member to underwrite the type of insurance listed in Article 3, paragraph (5), item (i) as a business undertaking in Japan or, in addition, to underwrite the type of insurance listed in Article 3, paragraph (5), item (ii) or (iii).

(6) The Underwriting Members of a Specified Juridical Person that has obtained a license under paragraph (1) may, notwithstanding the provisions of Article 3, paragraph (1) and Article 185, paragraph (1), conduct Insurance Business in Japan in the offices of their general agent in accordance with the type of license issued under paragraph (2).

(Application Procedures for Licensing)

Article 220 (1) Any Specified Juridical Person that seeks to obtain the license set forth in paragraph (1) of the preceding Article shall submit to the Prime Minister a written application for a license detailing the following particulars:

(i) The trade name or name, address of the head office or principal office, and date of the incorporation of the Specified Juridical Person;

(ii) The name of the country that enacted the law or regulation under which the Specified Juridical Person was incorporated (hereinafter referred to as "Country with Jurisdiction over Incorporation" in this Section);

(iii) The name and address of the person who represents the Specified Juridical Person and its Underwriting Members in Japan (hereinafter referred to as the "Representative Person in Japan" in this Section);

(iv) The type of license desired; and

(v) The principal branch of the Specified Juridical Person and its Underwriting Members in Japan (meaning the head office of the General Representative; hereinafter the same shall apply in this Section).

(2) A certificate issued by the competent authorities of the Country with Jurisdiction over Incorporation certifying that the Specified Juridical Person was incorporated legally and that its Underwriting Members legally conduct the same type of Insurance Business as that which they seek to conduct in Japan, in the Country with Jurisdiction over Incorporation, shall be attached to the written application for a license set forth in the preceding paragraph.

(3) In addition to what is listed in the preceding paragraph, the following documents and other documents specified by Cabinet Office Ordinance shall be attached to the written application for the license set forth in paragraph (1):

(i) The articles of incorporation of the Specified Juridical Person or any other equivalent document;

(ii) A statement of business procedures pertaining to the business of the Underwriting Members in Japan;

(iii) The general policy conditions pertaining to the insurance contracts to be concluded by the Underwriting Members in Japan;

(iv) A statement on the calculation methods for the insurance premiums and policy reserves pertaining to the insurance contracts to be concluded by the Underwriting Members in Japan; and

(v) A document indicating the name or trade name, and address or location of the head office of the person specified by Cabinet Office Ordinance with whom the Underwriting Members may consult for the purpose of confirming the contents of insurance contracts in connection with the insurance underwriting business that they conduct in Japan.

(4) The documents listed in item (ii) to (iv) inclusive of the preceding paragraph must detail the particulars specified by Cabinet Office Ordinance.

(Licensing Examination Standards)

Article 221 (1) Whenever an application has been filed for the license set forth in Article 219, paragraph (1), the Prime Minister shall examine whether it conforms to the following standards:

(i) The person that filed the application (hereinafter referred to as "Applicant" in this paragraph) has, in light of its human resource structure, etc. , the necessary knowledge and experience to carry out the business of the Underwriting Members in an appropriate, fair and efficient manner, and must have sufficient social credibility;

(ii) The Applicant has sufficient property to ensure the performance of the insurance contract obligations of the Underwriting Members pursuant to the laws and regulations of the Country with Jurisdiction over Incorporation or the bylaws of the juridical person, and has taken other measures for the protection of Policyholders, etc. in a sufficient manner;

(iii) The prospects of revenues and expenditures for the Insurance Business the Underwriting Members would conduct in Japan are satisfactory

(iv) The particulars detailed in the documents listed in paragraph (3), item (ii) and (iii) of the preceding Article conform to the standards listed in Article 5, paragraph (1), item (iii), sub-item (a) to (e) inclusive; and

(v) The particulars detailed in the documents listed in paragraph (3), item (iv) of the preceding Article conform to the standards listed in Article 5, paragraph (1), item (iv), sub-items (a) to (c) inclusive.

(2) If and to the extent that the Prime Minister finds it necessary for the public interest in light of standards for examination prescribed in the preceding paragraph, he/she may impose conditions on the license referred to in Article 219, paragraph (1) or change them.

(Public Notice by the Prime Minister)

Article 222 If the Prime Minister has granted a license under Article 219, paragraph (1), he/she shall publish that fact and the particulars listed in the items of Article 220, paragraph (1) without delay in the Official Gazette. The same shall apply where the Prime Minister has been notified pursuant to Article 234 of the modification of any particular listed in Article 220, paragraph (1), item (i), (ii), (iii) or (v).

(Deposits)

Article 223 (1) A Specified Juridical Person that has obtained a license under Article 219, paragraph (1) (hereinafter referred to as "Licensed Specified Juridical Person") shall deposit the amount of money specified by Cabinet Order as necessary and appropriate for the protection of Policyholders, etc. in Japan with the deposit office located nearest to its principal branch in Japan.

(2) If the Prime Minister finds it necessary for the protection of Policyholders, etc. in Japan, he/she may order a Licensed Specified Juridical Person to deposit, in addition to the amount of money specified by Cabinet Order set forth in the preceding paragraph, the amount of money that he/she finds appropriate prior to the commencement of Insurance Business in Japan by its Underwriting Members.

(3) If a Licensed Specified Juridical Person has concluded an agreement stipulating that a required amount of deposit be made for the Licensed Specified Juridical Person by order of the Prime Minister pursuant to the provisions of Cabinet Order and has notified the Prime Minister of this, it may withhold in whole or in Part the deposit under the preceding two paragraphs regarding the amount to be deposited under said agreement (hereinafter referred to as the "Contract Amount" in this Article), so long as the agreement remains in effect.

(4) If the Prime Minister finds it necessary for the protection of Policyholders, etc. in Japan, he/she may order a person who has concluded with a Licensed Specified Juridical Person an agreement as set forth in the preceding paragraph or the Licensed Specified Juridical Person concerned to make a deposit in an amount corresponding to the whole or Part of the Contract Amount.

(5) Underwriting Members may not commence Insurance Business under a license referred to in Article 219, paragraph (1), unless the Licensed Specified Juridical Person has made the deposit under paragraph (1) (including any deposit made following an order for the deposit of money under paragraph (2) pursuant to the provisions of that paragraph) (including the conclusion of an agreement under paragraph (3); the same shall apply in paragraph (9)) and has notified the Prime Minister of this.

(6) The Policyholders, insurers or beneficiaries of insurance contracts concluded by Underwriting Members in Japan shall, with regard to any credit arising out of the insurance contracts, have a priority claim over other creditors on the deposit pertaining to the Licensed Specified Juridical Person.

(7) For the purpose of applying the provisions of the preceding paragraph, a Licensed Specified Juridical Person shall be deemed to have jointly and severally guaranteed the obligations of its Underwriting Members under the insurance contracts that they have concluded in Japan.

(8) The necessary particulars for enforcing a claim under paragraph (6) shall be specified by Cabinet Order.

(9) If and when the amount of a deposit (including the Contract Amount) falls below the amount specified by Cabinet Order set forth in paragraph (1) for reasons such as the enforcement of a claim under paragraph (6), the Licensed Specified Juridical Person shall compensate for the shortfall within two weeks from the date specified by Cabinet Office Ordinance, and notify the Prime Minister to that effect without delay.

(10) A Licensed Specified Juridical Person may deposit any of the securities specified by Cabinet Office Ordinance, such as a national government bond or local government bond, in lieu of the deposit set forth in paragraph (1), (2) or the preceding paragraph.

(11) The deposit made pursuant to the provisions of paragraph (1), (2), (4) or (9) may be recovered pursuant to the provisions of Cabinet Order, if and when:

(i) The license granted to the Licensed Specified Juridical Person under Article 219, paragraph (1) is cancelled pursuant to the provisions of Article 231 or 232; or

(ii) The license granted to the Licensed Specified Juridical Person under Article 219, paragraph (1) loses its effect pursuant to the provisions of Article 236.

(12) In addition to what is provided for in the preceding paragraphs, necessary particulars of a deposit shall be specified by Cabinet Office Ordinance/Ordinance of the Ministry of Justice.

(Notification on Underwriting Members Conducting Insurance Business in Japan, etc.)

Article 224 (1) A Representative Person in Japan shall notify the Prime Minister in advance of the names and addresses of the Underwriting Members to conduct Insurance Business in Japan, as well as the name or trade name, and address or location of the head office of the person specified by Cabinet Office Ordinance set forth in Article 220, paragraph (3), item (v). The same shall apply to any change in a particular of which notification has been given.

(2) A Representative Person in Japan shall keep at its principal branch in Japan a list of the Underwriting Members conducting Insurance Business in Japan.

(3) Policyholders and beneficiaries of insurance proceeds in connection with the business of the Underwriting Members in Japan, and other creditors and insured parties, may make any of the following requests to the General Representative at any time during the hours in which it should be doing business; provided, however, that they must pay the fees determined by the General Representative in making a request falling under item (ii) or (iv):

(i) Where the list set forth in the preceding paragraph has been prepared in writing, a request to inspect such a document;

(ii) A request for a certified copy or extract of the documents referred to in the preceding item;

(iii) Where the list set forth in the preceding paragraph has been prepared in the form of electromagnetic records, a request to inspect anything that shows the particulars recorded in the electromagnetic records in a manner specified by Cabinet Office Ordinance; or

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding item by the electromagnetic means determined by the General Representative, or to be issued a document detailing such particulars.

(Modification of Particulars Prescribed in a Statement of Business Procedures, etc.)

Article 225 (1) A Licensed Specified Juridical Person shall obtain authorization from the Prime Minister when it seeks to modify any of the particulars prescribed in the documents listed in Article 220, paragraph (3), items (ii) to (iv) inclusive (excluding the particulars specified by Cabinet Office Ordinance as posing little risk to the protection of Policyholders, etc. in Japan).

(2) A Licensed Specified Juridical Person shall, when it seeks to modify any of the particulars that are prescribed in the preceding paragraph and are specified by Cabinet Office Ordinance set forth in that paragraph, notify the Prime Minister to that effect in advance.

(3) The provisions of Articles 124 and 125 shall apply mutatis mutandis to the authorization under paragraph (1) and the notification set forth in the preceding paragraph. In this case, the term "Article 4, paragraph (2), items (ii) and (iii)" in Article 124, item (i) shall be deemed to be replaced with "Article 220, paragraph (3), items (ii) and (iii)"; and the term "Article 4, paragraph (2), item (iv)" in Article 124, item (ii) shall be deemed to be replaced with "Article 220, paragraph (3), item (iv)."

(Submission of Reports and Materials)

Article 226 (1) If the Prime Minister finds it necessary to protect Policyholders, etc. in Japan by ensuring the sound and appropriate business operation of the Underwriting Members in Japan, he/she may request the Licensed Specified Juridical Person, Underwriting Members or General Representative to submit a report or materials concerning the status of the business or property of the Licensed Specified Juridical Person or its Underwriting Members in Japan.

(2) If and to the extent that the Prime Minister finds it particularly necessary for the protection of Policyholders, etc. in Japan and for ensuring the sound and appropriate business operation of the Underwriting Members in Japan, he/she may request the Licensed Specified Juridical Person to which the Underwriting Members belong or a person the Underwriting Members have entrusted with their business in Japan (other than the Underwriting Members or General Representative; referred to as a "Person That a Licensed Specified Juridical Person, etc. Has Entrusted With Its Business" in the following paragraph, and paragraphs (2) and (3) of the following Article) to submit a report or materials that should serve as a reference concerning the status of the business or property of the Licensed Specified Juridical Person or Underwriting Members in Japan.

(3) A Person That a Licensed Specified Juridical Person, etc. Has Entrusted With Its Business may refuse to submit reports or materials required under the preceding paragraph if there are justifiable grounds for it to do so.

(On-Site Inspections)

Article 227 (1) If the Prime Minister finds it necessary for ensuring the sound and appropriate business operation of the Underwriting Members in Japan and for protecting Policyholders, etc. in Japan, he/she may have his/her officials enter the offices of the General Representative, ask questions on the status of the business or property of the Licensed Specified Juridical Person or its Underwriting Members, or inspect relevant items such as books and documents.

(2) If and to the extent that the Prime Minister finds it to be particularly necessary in entering a site, asking questions, or conducting an inspection pursuant to the provisions of the preceding paragraph, he/she may have his/her officials enter the office of a Person That the Licensed Specified Juridical Person, etc. Has Entrusted With Its Business, have such officials question the Licensed Specified Juridical Person or its Underwriting Members or ask questions about any particulars that are necessary for their inspection, or have such officials inspect relevant materials such as books and documents.

(3) A Person That a Licensed Specified Juridical Person, etc. Has Entrusted With Its Business may refuse the questioning and inspection under the preceding paragraph if there are justifiable grounds for it to do so.

(Standard of Soundness)

Article 228 The Prime Minister may use the following amounts with respect to a Licensed Specified Juridical Person and establish whether or not the Underwriting Members have an appropriate level of solvency in terms of their ability to pay Insurance Proceeds, etc. as the standard by which the soundness of the Underwriting Members' business management in Japan is determined:

(i) The sum total of the amounts specified by Cabinet Office Ordinance, such as the deposit under Article 223; and

(ii) An amount calculated pursuant to the provisions of Cabinet Office Ordinance as the amount corresponding to that part of risks which might materialize beyond normal expectations for any reasons pertaining to the insurance underwritten in Japan by the Underwriting members, such as the occurrence of insured events.

(Order to Modify Particulars Prescribed in a Statement of Business Procedures, etc.)

Article 229 If and to the extent that the Prime Minister finds it necessary for protecting Policyholders, etc. in Japan and for ensuring the sound and appropriate business operation of the Underwriting Members in Japan in light of the status of the business or property of the Licensed Specified Juridical Person and Underwriting Members or any changes in the circumstances, he/she may order the Licensed Specified Juridical Person to modify the particulars prescribed in the documents listed in Article 220, paragraph (3), items (ii) to (iv) inclusive.

(Suspension of Business, etc.)

Article 230 (1) If the Prime Minister finds it necessary for protecting the Policyholders, etc. in Japan and for ensuring the sound and appropriate business operation of the Underwriting Members in Japan in light of the status of the business or property of the Licensed Specified Juridical Person or Underwriting Members, he/she may request the Licensed Specified Juridical Person or Underwriting Members to submit an improvement program to ensure the soundness of the business operations of the Underwriting Members in Japan by identifying particulars for which measures must be taken as well as a time limit or order the modification of the submitted improvement program, or may, to the extent that he/she finds necessary, order the full or partial suspension of the business in Japan with a time limit or order the deposit of property or other measures necessary for supervision.

(2) An order under the preceding paragraph (including the request for submission of an improvement program) that it is found to be necessary to issue due to the Underwriting Members' level of solvency in terms of their ability to pay Insurance Proceeds, etc. , must be an order specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance for the category that corresponds to the Underwriting Members' level of solvency in terms of their ability to pay Insurance Proceeds, etc.

(Rescission of a License, etc.)

Article 231 The Prime Minister may order the full or partial suspension of business in Japan by the Underwriting Members or the dismissal of the Representative Person in Japan, or rescind the license set forth in Article 219, paragraph (1), if a Licensed Specified Juridical Person or its Underwriting Member:

(i) violates a law or regulation (including foreign law or regulation), any measures of the Prime Minister pursuant to a law or regulation, or any of the particularly important particulars prescribed in the documents listed in Article 220, paragraph (3), items (i) to (iv) inclusive;

(ii) violates any of the conditions attached to the license; or

(iii) engages in any conduct that harms public interest.

Article 232 If the Prime Minister finds that the status of the property of a Licensed Specified Juridical Person or its Underwriting Members has deteriorated so significantly that it is not appropriate for the Underwriting Members to conduct Insurance Business in Japan from the viewpoint of protecting Policyholders, etc. in Japan, he/she may cancel the license issued to the Licensed Specified Juridical Person under Article 219, paragraph (1).

(Authorization of Abolition of a General Representative)

Article 233 A Licensed Specified Juridical Person shall, when it seeks to abolish its General Representative, obtain authorization from the Prime Minister.

(Notification by Licensed Specified Juridical Person)

Article 234 If a Licensed Specified Juridical Person falls under any of the following items, it shall notify the Prime Minister of this without delay:

(i) its Underwriting Members have started their Insurance Business in Japan;

(ii) it has modified any of the particulars listed in Article 220, paragraph (1), item (i), (ii), (iii) or (v), or any of the particulars provided for in the document listed in Article 220, paragraph (3), item (i);

(iii) it has carried out an Entity Conversion;

(iv) it has assigned the whole of its business;

(v) it has dissolved (for any other reason than a merger);

(vi) it has been subject to a ruling for the commencement of bankruptcy proceedings;

(vii) its Underwriting Member conducting Insurance Business in Japan has been subject to a ruling for the commencement of bankruptcy proceedings; or

(viii) When it falls under any other case specified by Cabinet Office Ordinance.

(Liquidation of Licensed Specified Juridical Person and Underwriting Members)

Article 235 (1) A Licensed Specified Juridical Person and its Underwriting Members shall, when it falls under any of the following items, liquidate the whole of their property in Japan when:

(i) the license issued to the Licensed Specified Juridical Person under Article 219, paragraph (1) has been canceled pursuant to the provisions of Article 231 or 232; or

(ii) the license issued to the Licensed Specified Juridical Person under Article 219, paragraph (1) has lost its effect pursuant to the provisions of the following Article.

(2) The Prime Minister shall appoint (a) liquidator(s) at the request of interested persons or without any party's request, where a Licensed Specified Juridical Person and its Underwriting Members go into liquidation pursuant to the provisions of the preceding paragraph. The same shall apply to the dismissal of such liquidator(s).

(3) The Prime Minister shall, where he/she dismisses a liquidator pursuant to the provisions of the preceding paragraph, commission a registration to that effect to the registry office with jurisdiction over the principal branch of the liquidating Licensed Specified Juridical Person and its Underwriting Members in Japan.

(4) The provisions of Article 500 (Restrictions on Performance of Obligations) of the Companies Act as applied with relevant changes in interpretation pursuant to the provisions of Article 178, and the provisions of Article 476 (Capacity of Liquidating Stock Companies), Part II, Chapter IX, Section 1, Subsection 2 (Structures for Liquidating Stock Companies), Article 492 (Preparation of Inventory of Property), Part II, Chapter IX, Section 1, Subsection 4 (excluding Article 500) (Performance of Obligations), Article 508 (Retention of Accounting Materials), Part II, Chapter IX, Section 2 (excluding Articles 510, 511 and 514) (Special Liquidations), Part VII, Chapter III, Sections 1 (General Provisions) and 3 (Special Provisions on the Procedures of Special Liquidation) and Article 938, paragraphs (1) to (5) inclusive (Commissioning of Registration by a Juridical Decision Concerning Special Liquidation) of that Act shall apply mutatis mutandis to the liquidation of the property of a Licensed Specified Juridical Person and its Underwriting Members under paragraph (1), unless their specific characters forbid such application. In this case, any other necessary technical change in interpretation shall be specified by Cabinet Order.

(5) The provisions of Article 177 shall apply mutatis mutandis to the liquidation of a Licensed Specified Juridical Person and its Underwriting Members under paragraph (1); the provisions of Article 175 and Article 179, paragraph (1) shall apply mutatis mutandis to the liquidation of a Licensed Specified Juridical Person and its Underwriting Members under paragraph (1) (excluding the cases to which apply the provisions of Part II, Chapter IX, Section 2 (excluding Articles 510, 511 and 514), Part VII, Chapter III, Sections 1 and 3, and Article 938, paragraphs (1) to (5) inclusive of the Companies Act as applied mutatis mutandis pursuant to the preceding paragraph; hereinafter the same shall apply in this paragraph); and the provisions of Article 226, paragraph (1) and Article 227, paragraph (1) shall apply mutatis mutandis to the liquidation of a Licensed Specified Juridical Person and its Underwriting Members under paragraph (1) where the Prime Minister finds it necessary for supervising the liquidation of the liquidating Licensed Specified Juridical Person and its Underwriting Members. In this case, the term "date of dissolution" in Article 177, paragraph (2) shall be deemed to be replaced with "date of cancellation or expiration of the license issued to the Licensed Specified Juridical Person under Article 219, paragraph (1)"; the term "Insurance Company in Liquidation, etc." in Article 177, paragraph (3) shall be deemed to be replaced with "liquidating Underwriting Members"; the terms "paragraph (1), (4) or (9) of the preceding Article" and "Insurance Company in Liquidation, etc." in Article 175 shall be deemed to be replaced with "Article 235, paragraph (2)" and "liquidating Licensed Specified Juridical Person and its Underwriting Members," respectively; and the term "Insurance Company in Liquidation, etc." in Article 179, paragraph (1) shall be deemed to be replaced with "liquidating Licensed Specified Juridical Person and its Underwriting Members"; any other necessary technical change in interpretation shall be specified by Cabinet Order.

(Expiration of License)

Article 236 (1) The license from the Prime Minister to a Licensed Specified Juridical Person set forth in Article 219, paragraph (1) shall, when it falls under any of the following items, lose its effect when:

(i) all of its Underwriting Members have abolished their Insurance Business in Japan; or

(ii) no Underwriting Members start their Insurance Business in Japan within six months from the date of obtaining such license (excluding the cases where the Licensed Specified Juridical Person has received in advance the authorization of the Prime Minister for any compelling reason).

(2) Where any of Article 234, items (iv) to (vi) inclusive applies and the notification under Article 234 has been made, the license from the Prime Minister to the Licensed Specified Juridical Person that has made such notification shall lose its effect.

(Public Notice by Prime Minister)

Article 237 In the following cases, the Prime Minister shall give public notice to the relevant effect in the Official Gazette:

(i) When he/she orders suspension of the whole or part of Underwriting Members' business in Japan under Article 230, paragraph (1) or Article 231, or under Article 240, paragraph (1) as applied pursuant to the provisions of Article 240;

(ii) When he/she rescinds the license set forth in Article 219, paragraph (1) canceled pursuant to the provisions of Article 231 or 232;

(iii) any measures ordering the administration of business and property by an insurance administrator under Article 241, paragraph (1) as applied pursuant to the provisions of Article 240, or any order under Article 258, paragraph (1) as applied pursuant to the provisions of Article 240; and

(iv) When the license granted under Article 219, paragraph (1) loses its effect pursuant to the provisions of the preceding Article.

(Public Notice)

Article 238 Any public notice given by a Licensed Specified Juridical Person or its Underwriting Members pursuant to the provisions of this Act shall be published in a daily newspaper that publishes the particulars of current events.

(Notification by General Representative, etc.)

Article 239 A person who seeks to act as General Representative for a Specified Juridical Person that seeks to obtain the license set forth in Article 219, paragraph (1) or the Underwriting Members of the Specified Juridical Person shall, by the time of application for such license, shall notify the Prime Minister of the particulars specified by Cabinet Office Ordinance, such as the relevant fact, the contents of its business and the method of managing the property of the Underwriting Members in Japan. The same shall apply to any change in a particular with regard to which notification has been given.

(Application of this Act, etc.)

Article 240 (1) This Act shall apply as follows where a Specified Juridical Person has obtained the license set forth in Article 219, paragraph (1):

(i) For the purpose of applying the provisions of Article 185, paragraph (6); Article 186, paragraph (3); Article 191; Article 197; Article 97, Article 97-2, paragraphs (1) and (2), Article 98 to 100-2 inclusive, Article 112, and Article 114 to 122 inclusive as applied mutatis mutandis pursuant to Article 199; Article 210; Part II, Chapter X (excluding Articles 262, 265-2, 265-3, 265-6 and 265-42); Part III; and Part V (including the penal provisions pertaining thereto), the Underwriting Members of a Licensed Specified Juridical Person shall be deemed to be a Foreign Insurance Company, etc. , or a Foreign Life Insurance Company, etc. or Foreign Non-Life Insurance Company, etc. in accordance with the type of license issued under Article 219, paragraph (2). In this case, the term "Article 190" in Article 197 shall be deemed to be replaced with "Article 223"; the term "Article 185, paragraph (2)" in Article 97, paragraph (1) as applied mutatis mutandis pursuant to Article 199 shall be deemed to be replaced with "Article 219, paragraph (2)"; and the terms "In the case where the license of Article 185, paragraph (1) of the Insurance Business Act is canceled pursuant to the provisions of Article 205 or 206 of that Act, or in the case where the license of Article 185, paragraph (1) of that Act loses its effect pursuant to the provisions of Article 273 of that Act" and "Article 185, paragraph (1) of the Insurance Business Act pursuant to the provisions of Article 205 or 206 of that Act" in Article 99, paragraph (8) as applied mutatis mutandis pursuant to Article 199 shall be deemed to be replaced with "In the case where the license of Article 219, paragraph (1) of the Insurance Business Act is canceled pursuant to the provisions of Article 231 or 232 of that Act, or in the case where the license of Article 219, paragraph (1) of that Act loses its effect pursuant to the provisions of Article 236 of that Act" and "Article 219, paragraph (1) of the Insurance Business Act pursuant to the provisions of Article 231 or 232 of that Act," respectively.

(ii) For the purpose of applying the provisions of Article 101 to 105 inclusive (including the penal provisions pertaining thereto) as applied mutatis mutandis pursuant to Article 199, those Underwriting Members of a Specified Juridical Person with the specified non-life insurance business license who conduct Insurance Business in Japan shall be deemed to be a Foreign Non-Life Insurance Company, etc.

(iii) For the purpose of applying the provisions of Article 195; Article 7-2, Article 110, paragraphs (1) and (3), and Article 111, paragraph (1) and paragraphs (3) to (6) inclusive as applied mutatis mutandis pursuant to Article 199; Article 262; Article 265-2; Article 265-3; Article 265-6; and Article 265-42 (including the penal provisions pertaining thereto), a Licensed Specified Juridical Person shall be deemed to be a Foreign Insurance Company, etc. In this case, the term "inventory of property, balance sheet" in Article 195 shall be deemed to be replaced with "balance sheet of the Licensed Specified Juridical Person and its Underwriting Members"; the term "its business and property in Japan" in Article 110, paragraph (1) as applied mutatis mutandis pursuant to Article 199 shall be deemed to be replaced with "the business and property of the Licensed Specified Juridical Person and its Underwriting Members in Japan"; the term "its business and property in Japan" in Article 111, paragraph (1) as applied mutatis mutandis pursuant to Article 119 shall be deemed to be replaced with "the business and property of the Licensed Specified Juridical Person and its Underwriting Members in Japan"; the term "the branch office of the Foreign Insurance Company, etc. in Japan or any other equivalent place specified by Cabinet Office Ordinance" in Article 111, paragraphs (1) and (4) as applied mutatis mutandis pursuant to Article 119 shall be deemed to be replaced with "the head office and branch offices of the General Representative set forth in Article 219, paragraph (1) or any other equivalent place specified by Cabinet Office Ordinance"; and the term "business and property of the Foreign Insurance Company, etc. in Japan" in Article 111, paragraph (6) as applied mutatis mutandis pursuant to Article 119 shall be deemed to be replaced with "business and property of the Licensed Specified Juridical Person and its Underwriting Members in Japan."

(iii)-2 For the purpose of applying the provisions of Article 105-2 as applied mutatis mutandis pursuant to Article 199, a Specified Juridical Person which has obtained a specified life insurance business license shall be deemed to be a Foreign Life Insurance Company, etc. In this case, the term "Designated Dispute Resolution Organization for Foreign Life Insurance Services" in the items of paragraph (1) of Article 105-2, paragraph (2) of that Article and item (ii) of paragraph (3) of that Article as applied mutatis mutandis pursuant to Article 199 shall be deemed to be replaced with "Designated Dispute Resolution Organization for Specified Life Insurance Services"; and the term "Foreign Life Insurance Services" in the items of paragraph (1) of that Article shall be deemed to be replaced with "Specified Life Insurance Services."

(iii)-3 For the purpose of applying the provisions of Article 105-3 as applied mutatis mutandis pursuant to Article 199, a Specified Juridical Person which has obtained a specified non-life insurance business license shall be deemed to be a Foreign Non-Life Insurance Company, etc. In this case, the term "Designated Dispute Resolution Organization for Foreign Non-Life Insurance Services" in the items of paragraph (1) of Article 105-3, paragraph (2) of that Article and item (ii) of paragraph (3) of that Article as applied mutatis mutandis pursuant to Article 199 shall be deemed to be replaced with "Designated Dispute Resolution Organization for Specified Non-Life Insurance Services"; and the term "Foreign Non-Life Insurance Services" in the items of paragraph (1) of that Article shall be deemed to be replaced with "Specified Non-Life Insurance Services."

(iv) For the purpose of applying the provisions of Articles 192 and 196 (including the penal provisions pertaining thereto), a Representative Person in Japan shall be deemed to be the representative person of a Foreign Insurance Company, etc. in Japan. In this case, the terms "Policyholders, beneficiaries of insurance benefits, other creditors and insurers of a Foreign Insurance Company, etc.," "Foreign Insurance Company, etc. should be doing business" and "determined by the Foreign Insurance Company, etc." in Article 196, paragraph (5) shall be deemed to be replaced with "Policyholders, beneficiaries of insurance benefits, other creditors and insurers of Underwriting Members," "General Representative should be doing business" and "determined by the General Representative," respectively.

(v) For the purpose of applying the provisions of Article 109 as applied mutatis mutandis pursuant to Article 199, and Article 142 and Chapter VII, Section 3 as applied mutatis mutandis pursuant to Article 211 (including the penal provisions pertaining thereto), a Licensed Specified Juridical Person and its Underwriting Members shall be deemed to be a Foreign Insurance Company, etc.

(vi) The provisions of Article 218 shall not apply to the Underwriting Members of a Licensed Specified Juridical Person.

(2) For the purpose of applying the laws and regulations specified by Cabinet Order, such as the Act on Compensation for Nuclear Damage (Act No. 147 of 1961), the Underwriting Members of a Licensed Specified Juridical Person shall be deemed, pursuant to the provisions of Cabinet Order, as a Foreign Insurance Company, etc. , or a Foreign Life Insurance Company, etc. or Foreign Non-Life Insurance Company, etc. in accordance with the type of license issued under Article 219, paragraph (2).

Chapter X Special Measures, etc. for Protection of Policyholders, etc.

Section 1 Modification of Contract Conditions

(Reporting of Modification of Contract Conditions)

Article 240-2 (1) An Insurance Company (including a Foreign Insurance Company, etc.; hereinafter the same shall apply in this Section, excluding Article 240-5 and Article 240-6) may report to the Prime Minister to the effect that it will modify the clause of its contract (hereinafter referred to as a "Modification of Contract Conditions" in this Section), such as a reduction in the insurance proceeds and other modifications to contract clauses with regard to insurance contracts pertaining to that Insurance Company (excluding Contracts Exempt from Modification) in the case that there is a probability that the continuation of that Insurance Company's Insurance Business (In the case of Foreign Insurance Companies, etc., Insurance Business in Japan. Hereinafter the same shall apply in this Article, Article 240-11, Article 241 and Article 262) will be difficult in the light of the state of its business or property.

(2) In the case that an Insurance Company reports as set forth in the preceding paragraph, that Insurance Company shall show that there is a probability that the continuation of its Insurance Business will be difficult unless it makes a Modification of Contract Conditions, and that a Modification of Contract Conditions is inevitable for the protection of Insurance Policyholders, etc. (in the case of Foreign Insurance Companies, etc., Policyholders, etc. in Japan. Hereinafter the same shall apply in this Chapter), and the reason in writing.

(3) If the Prime Minister finds there to be grounds in the report set forth in paragraph (1), he/she shall approve the report.

(4) The term "Contracts Exempt from Modification," as prescribed in paragraph (1), refers to the insurance contracts specified by Cabinet Order, such as those for which an insured event has already occurred by the date of reference of the Modification of Contract Conditions (limited to those contracts which would be terminated with the payment of the insurance proceeds pertaining to the insured event).

(Suspension of Business, etc.)

Article 240-3 If the Prime Minister finds it necessary for the protection of Insurance Policyholders, etc. , in cases approved in paragraph (3) of the preceding Article, he/she may order that Insurance Company to suspend its business pertaining to the cancellation of said Insurance Company's insurance contracts and other necessary measures with a time limit.

(Limitations on Modification of Contract Conditions)

Article 240-4 (1) A Modification of Contract Conditions shall not affect the rights pertaining to an insurance contract corresponding to the policy reserves that must be accumulated by the date of reference of said Modification of Contract Conditions.

(2) Concerning the assumed interest rate that is to become the basis of calculation for the payments that are modified by the Modification of Contract Conditions, such as insurance proceeds and refunds, from the standpoint of the protection of Insurance Policyholders, etc. , the assumed interest rate shall not be less than the rate specified by Cabinet Order, taking into account the Insurance Company's property operating situation and other circumstances.

(Resolution of Modification of Contract Conditions)

Article 240-5 (1) An Insurance Company, when it seeks to carry out a Modification of Contract Conditions, shall obtain approval as set forth in Article 240-2, paragraph (3), and after that, a resolution mandating the Modification of Contract Conditions shall be passed by the Shareholders' Meeting, etc. of the Insurance Company.

(2) Cases described in the preceding paragraph shall be resolved as set forth in Article 309, paragraph (2) (Resolutions of a Shareholders' Meeting) or under Article 62, paragraph (2) of the Companies Act.

(3) An Insurance Company, in cases where a resolution is carried out as set forth in paragraph (1), shall, in a notice pursuant to the provisions of Article 299, paragraph (1) of the Companies Act (Notices of Convocation for Shareholders' Meetings) (including the cases where it is applied mutatis mutandis pursuant to Article 41, paragraph (1) and Article 49, paragraph (1)), show the particulars specified by Cabinet Office Ordinance, such as the reason why the Modification of Contract Conditions is inevitable, the details of the Modification of Contract Conditions, a forecast of the business and property situation after the Modification of Contract Conditions is effected, the particulars of funding and the handling of debts against creditors apart from Insurance Policyholders, etc. and the particulars of management responsibility.

(4) In cases where a resolution is carried out as set forth in paragraph (1), where there is a policy on monetary payments concerning the insurance contracts pertaining to the Modification of Contract Conditions, such as policy dividend and the distribution of the surplus, the Insurance Company shall show the details in the notice set forth in the preceding paragraph.

(5) Concerning the policy set forth in the preceding paragraph, the Insurance Company shall describe or record the policy in its articles of incorporation.

(Special Provisions concerning Extraordinary Resolutions, etc. of Shareholders' Meeting, etc., pertaining to Modification of Contract Conditions)

Article 240-6 (1) Resolutions set forth in paragraph (1) of the preceding Article of an Insurance Company that is a Stock Company, or resolutions listed in Article 309, paragraph (2), item (iv), (v), (ix), (xi), or (xii) of the Companies Act (Resolution of Shareholders' Meetings), or listed in Article 324, paragraph (2), item (i) or (iv) of that Act (Resolution of Class Meetings), or resolutions pursuant to the provisions of Article 69, paragraph (2), Article 136, paragraph (2), Article 144, paragraph (3), Article 165-3, paragraph (2), or Article 165-10, paragraph (2) of that Act that are to be decided together with said resolutions, may be made provisionally with the two-thirds majority vote of the attending shareholders, notwithstanding these provisions.

(2) Resolutions of a Shareholders' Meeting or a class meeting listed in the items of Article 309, paragraph (3) or in Article 324, paragraph (3), items (i) and (ii) of the Companies Act, or resolutions pursuant to the provisions of Article 323 of that Act (in the case that the provisions require a resolution of a class meeting), or in Article 165-3, paragraph (4) and Article 165-3, paragraph (6), or Article 165-10, paragraph (6) of that Act that are to be decided together with resolutions as set forth in paragraph (1) of the preceding Article of an Insurance Company that is a Stock Company may be made provisionally with the two-thirds majority vote of the attending shareholders at a session where the majority of the shareholders are present, notwithstanding these provisions.

(3) Resolutions as set forth in paragraph (1) of the preceding Article of an Insurance Company that is a Mutual Company, or resolutions pursuant to the provisions of Article 57, paragraph (2), Article 60, paragraph (2), Article 62, paragraph (2), Article 62-2, paragraph (2), Article 86, paragraph (2), Article 136, paragraph (2), Article 144, paragraph (3), Article 156, or Article 165-16, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) that are to be decided together with said resolutions may be made provisionally with the three-quarter majority vote of the attending members (or, where the company has a General Representative Members' Council, attending representative members).

(4) In the case that a resolution is made provisionally pursuant to the provisions of paragraph (1) (hereinafter referred to as "Provisional Resolution" in this Article), the Insurance Company shall notify the purpose of said Provisional Resolution to its shareholders and shall call a subsequent Shareholders' Meeting within one month of the date of adoption of the Provisional Resolution.

(5) In the case where a Provisional Resolution is approved by majority as prescribed in paragraph (1) at the Shareholders' Meeting set forth in the preceding paragraph, a resolution on the particulars of said Provisional Resolution shall be deemed to have existed when said approval was given.

(6) The provisions of the preceding two paragraphs shall apply mutatis mutandis to cases where a resolution is made provisionally pursuant to the provisions of paragraph (2). In these cases, the term "paragraph (1)" in the preceding paragraph shall be deemed to be replaced with the term "paragraph (2)."

(7) The provisions of paragraph (4) and paragraph (5) shall apply mutatis mutandis to cases where a resolution is made provisionally pursuant to the provisions of paragraph (3). In these cases, the term "shareholders" in paragraph (4) shall be deemed to be replaced with the term "Members" (in cases where a General Representative Members' Council has been established, "representative members"), the term "Shareholders' Meeting" in that paragraph and in paragraph (5) shall be deemed to be replaced with the term "general members' council meeting" (or "General Representative Members' Council Meeting," where the company has such a council), and the term "paragraph (1)" in that paragraph shall be deemed to be replaced with the term "paragraph (3)."

(Retention, etc. of Documents Related to the Modification of Contract Conditions)

Article 240-7 (1) From two weeks prior to the date the resolution shall be made as set forth in Article 240-5, paragraph (1) (in the case of Foreign Insurance Companies, etc., the date the decision was made concerning the Modification of Contract Conditions) until the date of issuance of the public notice pursuant to the provisions of Article 240-13, paragraph (1), the Insurance Company shall keep a document or electromagnetic records describing or recording the particulars specified by Cabinet Office Ordinance, such as the reason why the Modification of Contract Conditions is inevitable, the details of the Modification of Contract Conditions, a forecast of the business and property situation after the Modification of Contract Conditions is effected, the particulars of the funding and the handling of debts against creditors apart from Insurance Policyholders, etc. , and the particulars of management responsibility (in cases where there is a policy pursuant to the provisions of Article 240-5, paragraph (4), including the contents of the policy), at the company's business offices and other offices (in the case of Foreign Insurance Companies, etc., branch offices, etc. pursuant to the provisions of Article 185, paragraph (1)).

(2) Shareholders or Insurance Policyholders of the Insurance Company (in the case of Foreign Insurance Companies, etc., Insurance Policyholders in Japan) may make the following listed requests to that Insurance Company at any time during its operating hours or business hours; however, that they shall pay the fees determined by the Insurance Company in making a request falling under item (ii) or (iv);

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request for a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph in a manner specified by a Cabinet Office Ordinance;

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by the electromagnetic means determined by that Insurance Company, or to be issued a document detailing such particulars.

(Insurance Inspectors)

Article 240-8 (1) If the Prime Minister finds it necessary, in cases approved as set forth in Article 240-2, paragraph (3), he/she may appoint an Insurance Inspector and cause that Insurance Inspector to investigate relevant particulars such as the content of the Modification of Contract Conditions.

(2) In the case referred to in the preceding paragraph, the Prime Minister shall specify the particulars that must be investigated by the Insurance Inspector and the deadline by which he/she must report the investigation findings to the Prime Minister.

(3) If the Prime Minister finds that the Insurance Inspector is not carrying out the investigation appropriately, he/she may dismiss the Insurance Inspector.

(4) The provisions of Article 80 and Article 81, paragraph (1) (Duty of Care and Advance Payment of Costs and Compensation of Trustees) of the Corporate Rehabilitation Act (Act No. 154 of 2002) shall apply mutatis mutandis to the Insurance Inspector. In this case, the term "court" in that paragraph shall be deemed to be replaced with "the Prime Minister," and any technical changes in interpretation required shall be specified by a Cabinet Order.

(5) The costs and compensation prescribed in Article 81, paragraph (1) of the Corporate Rehabilitation Act, as applied mutatis mutandis pursuant to the preceding paragraph, shall be borne by an Insurance Company (referred to as the "Company Being Investigated" in the following Article and in Article 318-2) as provided in Article 240-2, paragraph (1).

(Investigations, etc., by Insurance Inspectors)

Article 240-9 (1) The Insurance Inspector may request directors, executive officers, accounting advisors, company auditors, accounting auditors, and managers or any other employee of the Company Being Investigated, and any person who has resigned from these positions, to make a report on the status of the business and property of the Company Being Investigated (with regard to any person who has resigned from these positions, limited to the status of particulars that could have been known by said person during the period when he/she was engaged to work for that Company Being Investigated), or inspect relevant items such as the books and documents of the Company Being Investigated.

(2) The Insurance Inspector may, when it is necessary to carry out his/her duty, inquire with, or request the cooperation of, relevant persons such as government agencies, public entities.

(Confidentiality Obligation of Insurance Inspectors)

Article 240-10 (1) The Insurance Inspector shall not divulge any secret learned in the course of his/her duties. The same shall apply after the Insurance Inspector resigns from office.

(2) When the Insurance Inspector is a juridical person, its officers and employees who are engaged in the duties of the Insurance Inspector shall not divulge any secret learned in the course of his/her duties. The same shall apply after said officers or employees are no longer engaged in the duties of the Insurance Inspector.

(Approval for the Modification of Contract Conditions)

Article 240-11 (1) In cases where a resolution (in the case of Foreign Insurance Companies, etc., a decision concerning the Modification of Contract Conditions; hereinafter the same shall apply in this Section) pursuant to the provisions of Article 240-5, paragraph (1) (including cases where it is deemed that there was a resolution as set forth in Article 240-5, paragraph (1) pursuant to the provisions of Article 240-6, paragraph (5) (including the cases where it is applied mutatis mutandis to paragraph (6) and paragraph (7) of that Article)), after that resolution, the Insurance Company shall, without delay, seek the approval of the Prime Minister concerning the Modification of Contract Conditions pertaining to that resolution.

(2) The Prime Minister shall not grant approval set forth in the preceding paragraph except in cases where measures necessary for the continuation of Insurance Business have been undertaken by that Insurance Company, and the Modification of Contract Conditions pertaining to the resolution as set forth in Article 240-5, paragraph (1) is found necessary for the continuation of Insurance Business of that Insurance Company, and appropriate from the standpoint of the protection of Insurance Policyholders, etc.

(Notice of the Modification of Contract Conditions and Raising of Objections, etc.)

Article 240-12 (1) In cases where approval is granted as set forth in paragraph (1) of the preceding Article, within two weeks of the date of said approval being granted, the Insurance Company shall make a public notice of the main contents of the Modification of Contract Conditions pertaining to the resolution set forth in Article 240-5, paragraph (1), and shall also notify the Insurance Policyholders who are subject to the Modification of Contract Conditions (hereinafter referred to as "Policyholders Subject to the Modification" in this Article) in writing of the contents of the Modification of Contract Conditions under the resolution set forth in that paragraph.

(2) In the case referred to in the preceding paragraph, the Insurance Company shall attach the documents specified by Cabinet Office Ordinance, such as documents showing the reason why the Modification of Contract Conditions is inevitable, documents showing a forecast of the business and property situation after the Modification of Contract Conditions is effected, documents showing the particulars of funding and the handling of debts against creditors other than Insurance Policyholders, etc. , and documents showing to the particulars of management responsibility (in cases where there is a policy pursuant to the provisions set forth in Article 240-5, paragraph (4), including documents showing the content of the policy). Moreover, the Insurance Company shall attach a supplementary note to the effect that any Policyholder Subject to the Modification who has an objection must raise that objection within a set period of time.

(3) The period under the preceding paragraph cannot be less than a month.

(4) Contract conditions shall not be modified when the number of Policyholders Subject to the Modification who have raised objections within the period of time set forth in paragraph (2) exceeds one tenth of the total number of Policyholders Subject to the Modification and the amount specified by a Cabinet Office Ordinance as an amount equivalent to the sum of the claims pertaining to the insurance contracts of Policyholders Subject to the Modification who have raised such objections exceeds one tenth of the total amount of that amount of Policyholders Subject to the Modification.

(5) When the number of Policyholders Subject to the Modification who have raised their objections within the period of time set forth in paragraph (2) or the amount specified by a Cabinet Office Ordinance belonging to those Policyholders as set forth in the preceding paragraph does not exceed the percentage specified in that paragraph, all of said Policyholders Subject to the Modification shall be deemed to have approved said Modification of Contract Conditions.

(Public Notice, etc. of the Modification of Contract Conditions)

Article 240-13 (1) An Insurance Company shall, without delay after the Modification of Contract Conditions, make a public notice of the fact a Modification of Contract Conditions has been made and any other particulars specified by Cabinet Office Ordinance. The same shall apply even when a Modification of Contract Conditions is not made.

(2) An Insurance Company shall, within three months after the Modification of Contract Conditions, notify the Insurance Policyholders pertaining to said Modification of Contract Conditions of the content of the rights and duties of Insurance Policyholders after said Modification of Contract Conditions.

Section 2 Dispositions, etc., by the Prime Minister on Business and Property Management, etc.

Subsection 1 Suspension of Business, Orders for Merger Consultations, etc., and Business and Property Management

(Suspension of Business, Orders for Merger Consultations, etc., and Business and Property Management)

Article 241 (1) If the Prime Minister finds that the continuation of Insurance Business will be difficult in light of the status of the business or property of an Insurance Company, etc. , or Foreign Insurance Company, etc. , or if he/she finds that the management of that business (in the case of Foreign Insurance Companies, etc., their business in Japan; hereinafter the same shall apply in this Article to Article 255-2 inclusive) is extremely inappropriate and that there is a risk that the continuation of Insurance Business could bring about a situation lacking in protection for Insurance Policyholders, etc. , the Prime Minister may order the whole or partial suspension of business, a merger, a transfer of insurance contracts (in the case of Foreign Insurance Companies, etc., the transfer of insurance contracts in Japan) or an agreement for the acquisition of the shares of that Insurance Company, etc. , or Foreign Insurance Company, etc. , by another Insurance Company, etc. , Foreign Insurance Company, etc. , or Insurance Holding Company, etc. (referred to as "Merger, etc." in Article 247, paragraph (1); Article 256 to Article 258 inclusive; Article 270-3-2, paragraph (4) and Article 270-3-2, paragraph (5); and Article 270-4, Article 270-4, paragraph (4) and Article 270-4, paragraph (5)) or any other necessary measure against that Insurance Company, etc. , or Foreign Insurance Company, etc. , or make a disposition ordering business and property management (in the case of Foreign Insurance Companies, etc., property located in Japan; the same shall apply in the following Article and Article 246-2 to Article 247-2 inclusive) by an Insurance Administrator.

(2) The term "Insurance Holding Company, etc." as used in this Chapter means the following:

(i) An Insurance Holding Company;

(ii) A Low-Cost, Short-Term Insurance Holding Company prescribed in Article 272-37, paragraph (2);

(iii) A company that has received the approval under Article 271-18, paragraph (1) to become a Holding Company whose Subsidiaries include an Insurance Company, due to an acquisition of shares;

(iv) A company that has received approval, as set forth in Article 272-35, paragraph (1), to become a Holding Company whose Subsidiaries include a Low-Cost, Short-Term Insurer, due to an acquisition of shares;

(v) A company, other than the companies listed in the preceding items (excluding an Insurance Company, etc., and Foreign Insurance Company, etc.), whose Subsidiaries include an Insurance Company, etc. , or Foreign Insurance Company, etc. , or which is attempting to make such company its Subsidiary.

(3) An Insurance Company, etc. , or Foreign Insurance Company, etc. , shall, when the continuation of its Insurance Business will be difficult in light of the state of its business or property, notify the Prime Minister to that effect and of the reason in writing.

Subsection 2 Business and Property Management

(Appointment, etc., of an Insurance Administrator)

Article 242 (1) When a disposition ordering business and property management by an Insurance Administrator has been issued under the provisions of paragraph (1) of the preceding Article (hereinafter referred to as "Disposition Ordering Management" in this Subsection and Article 258, paragraph (2)), the right to represent an Insurance Company, etc. , or Foreign Insurance Company, etc. , that has been rendered that disposition (hereinafter referred to as a "Managed Company"), execute its business, and manage and dispose of its property (in the case of the right to represent a Foreign Insurance Company, etc., limited to the scope of Insurance Business in Japan) shall be vested exclusively in an Insurance Administrator. The same shall apply to the rights of the directors and executive officers under the provisions of Article 828, paragraph (1) and Article 828, paragraph (2) (Actions to Invalidate Acts Concerning the Organization of a Company) (including the cases where it is applied mutatis mutandis pursuant to Article 30-15; Article 57, paragraph (6); Article 60-2, paragraph (5); and Article 171) and Article 831, paragraph (1) (Action to Revoke a Resolution of a Shareholders' Meeting, etc.) (including the cases where it is applied mutatis mutandis pursuant to Article 41, paragraph (2) and Article 49, paragraph (2)) and the provisions of Article 84-2, paragraph (2) and Article 96-16, paragraph (2) of the Companies Act.

(2) The Prime Minister shall, together with the Disposition Ordering Management, appoint one or several Insurance Administrators.

(3) The Prime Minister may order the Insurance Administrators to take necessary measures regarding the business and property management of the Managed Company.

(4) If the Prime Minister finds it necessary, he/she may appoint further Insurance Administrators after appointing Insurance Administrators pursuant to the provisions of paragraph (2), or when he/she finds that the Insurance Administrators are not appropriately managing the business and property of the Managed Company, dismiss the Insurance Administrators.

(5) If the Prime Minister has appointed Insurance Administrators pursuant to the provisions of paragraph (2) or the preceding paragraph or if he/she has dismissed Insurance Administrators pursuant to that paragraph, he/she shall notify the Managed Company of this, as well as giving public notice of that fact in the Official Gazette.

(6) The provisions of Article 69, Article 70, Article 80, and Article 81, paragraph (1) and Article 81, paragraph (5) (Execution of Duty by Several Trustees, Appointment of Trustee Representatives, Duty of Care, and Advance Payment of Costs and Compensation of a Trustee) of the Corporate Rehabilitation Act and the provisions of Article 78 (Liability for Damages with regard to Acts of Representative Persons) of the Act on General Incorporated Associations and General Incorporated Foundations shall apply mutatis mutandis to Insurance Administrators and the Managed Company, respectively. In this case, the term "permission of a court" in Article 69, paragraph (1) of the Corporate Rehabilitation Act shall be deemed to be replaced with "approval of the Prime Minister," the term "trustee representatives" in Article 70 of that Act shall be deemed to be replaced with "Insurance Administrator Representatives," the term "permission of a court" in paragraph (2) in that Article shall be deemed to be replaced with "Approval of the Prime Minister," the term "court" in Article 81, paragraph (1) of that Act shall be deemed to be replaced with "the Prime Minister," the term "trustee representatives" in paragraph (5) in that Article shall be deemed to be replaced with "Insurance Administrator Representatives," and the term "representative directors and other representative persons" in Article 78 of the Act on General Incorporated Associations and General Incorporated Foundations shall be deemed to be replaced with "Insurance Administrators."

Article 243 (1) An Insurance Company, etc. , may become an Insurance Administrator or an Insurance Administrator Representative.

(2) An Insurance Company, etc. , if requested by the Prime Minister to become an Insurance Administrator, shall not refuse in the absence of justifiable grounds.

(3) A Policyholders Protection Corporation may become an Insurance Administrator or an Insurance Administrator Representative and undertake the business of such.

(Notices and Registration)

Article 244 (1) If the Prime Minister shall issues a Disposition Ordering Management, he/she shall immediately notify the district court with jurisdiction over the location of the head office or principal office of the Managed Company of this, and attach a certified copy of the written order to a written commission and commission its registration in the registry of the head office or principal office of the Managed Company (in the case of a Foreign Insurance Company, etc., the location of a branch office, etc. as prescribed in Article 185, paragraph (1)).

(2) The name and address of the Insurance Administrator shall also be registered in the registration of the preceding paragraph.

(3) The provisions of paragraph (1) shall apply mutatis mutandis when modifications occur to particulars listed in the preceding paragraph.

(Suspension of Business)

Article 245 When a Disposition Ordering Management has been issued, the Managed Company shall suspend its business, except for those listed as follows; provided, however, that this shall not apply to a portion business when the Prime Minister finds it necessary that said portion not be suspended pursuant to a report by the Insurance Administrator.

(i) Where a contract has been concluded under the provisions of Article 270-6-7, paragraph (3) with an Affiliated Corporation as prescribed in Article 266, paragraph (1), business for paying insurance proceeds or any other benefit under a Covered Insurance Contract as prescribed in Article 270-3, paragraph (2), item (i) (hereinafter referred to as a "Covered Insurance Contract" in this Article) (limited to the amount calculated by multiplying the amount of the insurance proceeds or any other benefit under the Covered Insurance Contract by the rate specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance, in consideration of the type of Covered Insurance Contract, the assumed interest rate, any other content, and the timing that the insured event pertaining to said claim occurred, etc.; hereinafter referred to as "Covered Insurance Proceeds"), based on a creditor's right to claim Insurance Proceeds or any other right claimed by the creditor, as specified Cabinet Order, under said Covered Insurance Contract (hereinafter referred to as "Services for Paying Covered Insurance Proceeds").

(ii) Business involving the cancellation of specified Covered Insurance Contracts (meaning those Covered Insurance Contracts specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance as contracts having little necessity to maintain in order to protect Insurance Policyholders, etc.; the same shall apply hereinafter) within the period of time specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance (excluding business involving the payment of cancellation refunds or any other similar benefits; hereinafter referred to as "Business for Canceling Specified Covered Insurance Contracts").

(Prohibition on Entry of Name Changes for Shareholders)

Article 246 If a Managed Company (excluding a Foreign Insurance Company, etc.) is a Stock Company and the Prime Minister finds it necessary, the Prime Minister may prohibit the entry of a name change for the shareholders.

(Insurance Administrator's Duty to Report)

Article 246-2 An Insurance Administrator shall, without delay after taking office, investigate and report the following particulars to the Prime Minister:

(i) The course of events that lead to the circumstances under which the Managed Company received a Disposition Ordering Management;

(ii) The situation of the business and property of the Managed Company;

(iii) Any other necessary particular.

(Approval of Plans)

Article 247 (1) If the Prime Minister finds it necessary for the protection of Insurance Policyholders, etc. , that the maintenance of insurance contracts pertaining to the Managed Company (in the case of Foreign Insurance Companies, etc., insurance contracts in Japan; hereinafter the same shall apply in this Chapter, excluding Article 254 and Article 270-7, paragraph (1)) or business involving the cancellation of specified Covered Insurance Contracts or any other business be conducted smoothly, he/she may order the Insurance Administrator to prepare a plan, including the following particulars, related to business and property management:

(i) A policy related to the liquidation and rationalization of the business of the Managed Company; and

(ii) Measures to carry out smoothly a Merger, etc. , pertaining to the Managed Company.

(2) An Insurance Administrator shall obtain the approval of the Prime Minister when he/she has prepared the plan set forth in the preceding paragraph.

(3) An Insurance Administrator shall, without delay, when he/she has the approval set forth in the preceding paragraph, move on to the implementation of the plan set forth in paragraph (1) pertaining to said approval.

(4) An Insurance Administrator may, when unavoidable circumstances arise, receive approval from the Prime Minister and change or abolish the plan set forth in paragraph (1).

(5) If the Prime Minister finds it necessary for the protection of Insurance Policyholders, etc. , he/she may order the Insurance Administrator to change or abolish the plan set forth in paragraph (1).

(Investigations, etc., by Insurance Administrators)

Article 247-2 (1) The Insurance Administrator may request directors, executive officers, accounting advisors, company auditors, accounting auditors, and managers or any other employee of the Managed Company, and any person who has resigned from these positions, to make a report on the status of the business and property of the Managed Company (with regard to any person who has resigned from these positions, limited to the status of particulars that could have been known by said person during the period when he/she was engaged to work for that Managed Company), or inspect the books, documents, or any other items of the Managed Company.

(2) The Insurance Administrator may, when it is necessary to carry out his/her duty, inquire with, or request the cooperation of, government agencies, public entities, or any other person.

(Confidentiality Obligation of Insurance Administrators, etc.)

Article 247-3 (1) The Insurance Administrator and Insurance Administrator Representative (hereinafter referred to as "Insurance Administrator, etc." in this Article) shall not divulge any secret learned in the course of his/her duties. The same shall apply after the Insurance Administrator, etc. , resigns from office.

(2) When the Insurance Administrator, etc. , is a juridical person, its officers and employees who are engaged in the duties of the Insurance Administrator, etc. , shall not divulge any secret learned in the course of duty. The same shall apply after said officers or employees are no longer engaged in the duties of the Insurance Administrator, etc.

(Measures to Clarify Managers' Responsibility for the Bankruptcy of a Managed Company)

Article 247-4 (1) An Insurance Administrator shall, in order to cause directors, executive officers, accounting advisers, company auditors or accounting auditors of a Managed Company, or any person who has resigned from these positions, to perform his/her civil responsibility based on the breach of professional obligations, file an action with the court or take other necessary measures.

(2) An Insurance Administrator shall, if, in the course of his/her duties, he/she comes to consider that a crime has been committed, take the necessary measures toward prosecution.

(Transactions between an Insurance Administrator and a Managed Company)

Article 247-5 (1) An Insurance Administrator shall obtain the approval of the Prime Minister before carrying out, for himself/herself or for a third party, any transaction with the Managed Company. In this case, the provisions of Article 108 (Self-Contract and Representation of Both Parties) of the Civil Code shall not apply.

(2) An action shall be null and void if the approval set forth in the preceding paragraph has not been obtained; provided, however, that this may not be duly asserted against a third party without knowledge.

(Rescission of Dispositions Ordering Management by Insurance Administrator)

Article 248 (1) If the Prime Minister finds that there is no longer any need for a Disposition Ordering Management, he/she shall rescind that Disposition Ordering Management.

(2) The provisions of Article 244, paragraph (1) shall apply mutatis mutandis to the case set forth in the preceding paragraph.

(Special Provisions on Extraordinary Resolutions, etc., at Shareholders' Meetings, etc.)

Article 249 (1) In a Managed Company that is a Stock Company (excluding a Foreign Insurance Company, etc.; hereinafter the same shall apply in this Article and the following Article), resolutions at a Shareholders' Meeting or class meeting listed in Article 309, paragraph (2), item (iv), (v), (ix), (xi), or (xii) (Resolutions at Shareholders' Meetings) or Article 324, paragraph (2), item (i) or (iv) (Resolutions at Class Meetings) of the Companies Act, or resolutions pursuant to the provisions of Article 69, paragraph (2), Article 136, paragraph (2), Article 144, paragraph (3), Article 165-3, paragraph (2), or Article 165-10, paragraph (2), may be made provisionally with the two-thirds majority vote of the attending shareholders, notwithstanding these provisions.

(2) In a Managed Company that is a Stock Company, resolutions at a Shareholders' Meeting or class meeting listed in the items of Article 309, paragraph (3) or in Article 324, paragraph (3), items (i) and (ii) of the Companies Act or resolutions pursuant to the provisions of Article 323 (Cases of Provisions Requiring Resolution at a Class Meeting) of that Act or Article 165-3, paragraph (4) or Article 165-3, paragraph (6), or Article 165-10, paragraph (6) may be made provisionally with the two-thirds majority vote of the attending shareholders at a session where the majority of the shareholders are present, notwithstanding these provisions.

(3) In a Managed Company that is a Mutual Company, resolutions pursuant to the provisions of Article 57, paragraph (2), Article 60, paragraph (2), Article 62, paragraph (2), Article 62-2, paragraph (2), Article 86, paragraph (2), Article 136, paragraph (2), Article 144, paragraph (3), Article 156 or Article 165-16, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20) may be made provisionally with a three-quarters majority vote of the members attending the meeting (or attending the General Representative Members' Council meeting, where the company has such a council), notwithstanding these provisions.

(4) In the case where a resolution is made provisionally pursuant to the provisions of paragraph (1) (hereinafter referred to as a "Provisional Resolution" in this Article), the Managed Company shall notify its shareholders of the purpose of said Provisional Resolution and shall call a subsequent Shareholders' Meeting within one month of the date of adoption of said Provisional Resolution.

(5) In the case where a Provisional Resolution is approved by a majority as prescribed in paragraph (1) at the Shareholders' Meeting set forth in the preceding paragraph, a resolution on the particulars of said Provisional Resolution shall be deemed to have existed when said approval was given.

(6) The provisions of the preceding two paragraphs shall apply mutatis mutandis to cases where a resolution is made provisionally pursuant to the provisions of paragraph (2). In this case, the term "paragraph (1)" in the preceding paragraph shall be deemed to be replaced with the term "paragraph (2)."

(7) The provisions of paragraph (4) and paragraph (5) shall apply mutatis mutandis to cases where a resolution is made provisionally pursuant to the provisions of paragraph (3). In this case, the term "shareholders" in paragraph (4) shall be deemed to be replaced with the term "members present at the relevant meeting (or, where the company has a General Representative Members' Council, the representative members present)," the term "Shareholders' Meeting" in that paragraph and in paragraph (5) shall be deemed to be replaced with the term "general members' council meeting" (or "General Representative Members' Council Meeting," where the company has such a council), and the term "paragraph (1)" in that paragraph shall be deemed to be replaced with the term "paragraph (3)."

(Permission in lieu of Extraordinary Resolution of Shareholders' Meeting, etc.)

Article 249-2 (1) In the case where a Managed Company that is a Stock Company is unable to satisfy its obligations with its property, that Managed Company may obtain permission of a court and act with regard to the following particulars, notwithstanding the provisions of Article 447, paragraph (1) (Reductions in Amount of capital), Article 467, paragraph (1), items (i) and (ii) (Approvals of Assignment of Business), and Article 471, item (iii) (Grounds for Dissolution) of the Companies Act and the provisions of Article 136 (including the cases where it is applied mutatis mutandis pursuant to Article 272-29; the same shall apply in the following paragraph):

(i) Assignment of all or a material portion of business;

(ii) Reduction in the amount of capital;

(iii) Dissolution;

(iv) Transfer of insurance contracts.

(2) In the case where a Managed Company that is a Mutual Company is unable to satisfy its obligations with its property, that Managed Company may obtain permission of a court and act with regard to the following particulars, notwithstanding the provisions of Article 62-2, paragraph (1), items (i) and (ii), Article 136, and Article 156:

(i) Assignment of all or a material portion of business;

(ii) Transfer of insurance contracts;

(iii) Dissolution.

(3) The Insurance Administrator may obtain permission of a court and dismiss directors, executive officers, accounting advisers, company auditors, or accounting auditors of the Managed Company, notwithstanding the provisions of Article 339, paragraph (1) (Dismissal), Article 347, paragraph (1) (Election of Directors or Company Auditors at Class Meetings), or Article 403, paragraph (1) (Dismissal of Executive Officers) of the Companies Act or the provisions of Article 53-8, paragraph (1) or Article 53-27, paragraph (1).

(4) In the case where the Insurance Administrator seeks to dismiss directors, executive officers, accounting advisers, company auditors, or accounting auditors of the Managed Company pursuant to the provisions of the preceding paragraph, when the number of directors, executive officers, accounting advisers, company auditors, or accounting auditors will fail to meet the number prescribed by an Act or by the articles of incorporation by carrying out the dismissals, the Insurance Administrator may obtain permission of a court and appoint directors, executive officers, accounting advisers, company auditors, or accounting auditors of the Managed Company, notwithstanding the provisions of Article 329, paragraph (1) (Election), Article 347, paragraph (1) or Article 402, paragraph (2) (Election of Executive Officers) of the Companies Act or the provisions of Article 52, paragraph (1) or Article 53-26, paragraph (2).

(5) The directors, accounting advisers, company auditors, or accounting auditors of the Managed Company who have been elected pursuant to the provisions of the preceding paragraph shall retire from their posts at the conclusion of the first annual Shareholders' Meeting or annual general members' council meeting (in cases where there is a General Representative Members' Council, the Annual General Representative Members' Council Meeting) convened after the end of the business year during which they were appointed, and executive officers shall retire from their posts at the conclusion of the first meeting of the board of directors held after the conclusion of the first Annual Shareholders' Meeting convened after the end of the business year during which they were appointed.

(6) When the permissions prescribed in paragraph (1) to paragraph (4) inclusive (hereinafter referred to as "Replacement Permissions" in this Article and the following Article) have been obtained, it shall be deemed that a resolution of the Shareholders' Meeting, etc. , class meeting, or board of directors has been made concerning the particulars of said Replacement Permissions. With regard to the application of the provisions in Article 16, paragraph (1), Article 136-2, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 272-29), and Article 250, paragraphs (3) and (5) in this case, the term "two weeks before the date of the Shareholders' Meeting pertaining to the resolution on the reduction (excluding the cases where the whole of the amount by which the reserves are reduced is appropriated to the capital) of the capital or reserves (hereinafter referred to as "capital, etc." in this Section) (or, the date of the board of directors meeting where Article 447, paragraph (3) (Reductions in Amount of Capital) or Article 448, paragraph (3) (Reductions in Amount of Reserves) of the Companies Act applies)" in Article 60, paragraph (1) shall be deemed to be replaced with "a date within two weeks from the date of receipt of the permission set forth in Article 249-2, paragraph (1) pertaining to the reduction (excluding the cases where the whole of the amount by which the reserves are reduced is appropriated to the capital) of the capital or reserves," the term "two weeks before the date of the Shareholders' Meeting, etc. set forth in Article 136, paragraph (1) in the preceding Article" in Article 136-2 shall be deemed to be replaced with "a date within two weeks from the date of receipt of the permission set forth in Article 249-2, paragraph (1) or (2) pertaining to the transfer of insurance contracts," and the terms "the public notice set forth in the following paragraph" in Article 250, paragraph (3) and "the public notice set forth in the preceding paragraph" in paragraph (5) in that Article shall be deemed to be replaced with "the public notice set forth in Article 249-2, paragraph (8)"; and the provisions of Article 156-2 and Article 250, paragraph (4) shall not apply.

(7) The district court with jurisdiction over the location of the head office or principle office of that Managed Company shall have jurisdiction over the particulars of Replacement Permissions.

(8) The court shall, when it has made a decision on Replacement Permissions, serve that written decision on the Managed Company and make a public notice as to the gist of that decision.

(9) The public notice made pursuant to the provisions of the preceding paragraph shall be published in the Official Gazette.

(10) The decision on Replacement Permissions shall take effect as of the time it has been served on the Managed Company under the provisions of paragraph (8).

(11) Shareholders or members may make an immediate appeal against the decision on Replacement Permissions within an unextendable period of one week from the date of the public notice set forth in paragraph (8). In this case, when the immediate appeal is against a decision on Replacement Permissions pertaining to dissolution, it shall have the effect of a stay of execution.

(12) The provisions of Article 2 to Article 4 inclusive (Court with Jurisdiction, Priority Jurisdiction and Transfer, Designations of Courts with Jurisdiction), Article 15 (Statements and Attendance of a Public Prosecutor), Article 16 (Obligation to Notify a Public Prosecutor), Article 18, paragraphs (1) and (2) (Effect of Decisions), and Article 20 (Appeals) of the Act on Procedures in Non-Contentious Cases (Act No. 14 of 1898) shall not apply concerning the particulars of Replacement Permissions.

(Special Provisions on Registration Pertaining to Replacement Permissions)

Article 249-3 In cases where Replacement Permissions for the particulars listed in item (ii) or (iii) of paragraph (1) of the preceding Article, item (iii) of paragraph (2) of that Article, or in paragraph (3) or (4) of that Article have been granted, a certified copy or extract of the written decision for said Replacement Permissions shall be attached to the written application for registration for said particulars.

Subsection 3 Modification of Contract Conditions in Merger, etc.

(Modification of Contract Conditions in Transfer of Insurance Contracts)

Article 250 (1) In addition to the minor modifications prescribed in Article 135, paragraph (4) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29) made to the contract set forth in Article 135, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29), an Insurance Company, etc. , or Foreign Insurance Company, etc. , may, in the cases that fall under the following listed cases, prescribe a reduction in the insurance proceeds and any other modifications to contract clauses with regard to insurance contracts (excluding specified contracts) that will be transferred pursuant to that contract (excluding said minor modifications, that reduce the policy reserves that must be reserved from Insurance Premiums received after the time of the public notice, etc., prescribed in paragraph (3), item (i) with regard to Covered Insurance Contracts other than specified Covered Insurance Contracts (referred to as Covered Insurance Contracts prescribed in Article 270, paragraph (3), item (i)), and modifications that will establish disadvantageous content related to cancellation refunds or any other similar benefits specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance that accrue after the time of the public notice, etc., prescribed in that item with regard to specified Covered Insurance Contracts compared to other insurance proceeds or any other benefits pertaining to said specified Covered Insurance Contracts; hereinafter referred to in this Subsection as "Modifications to Contract Conditions"):

(i) In the case where agreement to a transfer of insurance contracts pertaining to all insurance contracts has been ordered pursuant to the provisions of Article 241, paragraph (1), when said insurance contracts are to be transferred;

(ii) In the case where the company is a Managed Company, when a transfer of insurance contracts pertaining to all or some insurance contracts is to be made in accordance with a plan as set forth in Article 247, paragraph (1) that has received approval as set forth in paragraph (2) in that Article (including the approval of modification as set forth in paragraph (4) in that Article);

(iii) In the case where the company is a Bankrupt Insurance Company as prescribed in Article 260, paragraph (2) that has received the recognition of the Prime Minister as set forth in Article 268, paragraph (1) or Article 270, paragraph (1), when insurance contracts pertaining to all its insurance contracts are to be transferred to a Relief Insurance Company as prescribed in Article 260, paragraph (3) (excluding the case given in the preceding two items).

(2) In the case where insurance contracts are to be transferred as set forth in the item (i) or (iii) in the preceding paragraph, all the insurance contracts pertaining to that Insurance Company, etc. , or Foreign Insurance Company, etc. , (including insurance contracts relevant to Business for Canceling Specified Covered Insurance Contracts), other than specified contracts, shall be transferred collectively.

(3) The term "Specified Contracts" prescribed in the preceding two paragraphs refers to the following:

(i) Insurance contracts for which an insured event (limited to insurance contracts which would be terminated with the payment of the insurance proceeds pertaining to the insured event) has already occurred at the Time of the Public Notice set forth in the following paragraph (when payment pertaining to said insurance contracts has already been suspended at the time of said public notice in the case where a whole or partial suspension of business has been ordered pursuant to the provisions of Article 241, paragraph (1) and payment pertaining to insurance contracts has been suspended or in the case where business has been suspended pursuant to the provisions of Article 245 (including the cases where it is applied mutatis mutandis pursuant to Article 258, paragraph (2)), paragraph (5) in this Article, Article 254, paragraph (4), or Article 255-2, paragraph (3), and payment pertaining to insurance contracts has been suspended; referred to as "Time of Public Notice, etc." in the following item);

(ii) Insurance contracts for which the insured period has already terminated at the Time of Public Notice, etc. (including those that, at the Time of Public Notice, etc., were cancelled during the insured period and any others for which a cause of termination of insurance contracts has occurred (excluding those for which payment pertaining to insurance contracts has been suspended pursuant to an order under the provisions of Article 240-3), and excluding those given in the preceding item).

(4) In the case set forth in paragraph (1), an Insurance Company, etc. , shall, on the date of mailing convocation notices for the Shareholders' Meeting, etc. , set forth in Article 136, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 272-29), make public notice to the effect that said Shareholders' Meeting, etc. , will be held and that a resolution to transfer insurance contracts that include said Modifications of Contract Conditions is the purpose of the meeting; a Foreign Insurance Company, etc. , shall, on the date the contracts set forth in Article 135, paragraph (1) are created, make public notice to the effect that contracts that contain said Modifications of Contract Conditions have been issued.

(5) The Insurance Company, etc. , or Foreign Insurance Company, etc. , set forth in paragraph (1) shall suspend all of its business (excluding Business for Paying Covered Insurance Proceeds and Business for Canceling Specified Covered Insurance Contracts) from the Time of Public Notice as set forth in the preceding paragraph, excluding the case where, already at the Time of Public Notice, the suspension of all of its business has been ordered pursuant to the provisions of Article 241, paragraph (1) or all of its business has been suspended pursuant to the provisions of the main clause of Article 245 (including the cases where it is applied mutatis mutandis pursuant to Article 258, paragraph (2)), the main clause of this paragraph, the main clause of Article 254, paragraph (4), or the main clause of Article 255-2, paragraph (3); provided, however, that this shall not apply to a portion of its business in the case that the Prime Minister has found it necessary that the portion of business not be suspended pursuant to a report from that Insurance Company, etc. , or Foreign Insurance Company, etc.

(Special Provisions on Public Notice of Transfer of Insurance Contracts and Raising of Objections)

Article 251 (1) In the case where insurance contracts are to be transferred as set forth in the paragraph (1) in the preceding Article, the public notice set forth in Article 137, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1)and Article 272-29) shall include a supplementary note on the main content of modifications in the rights and duties of Insurance Policyholders caused by a Modification of Contract Conditions and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(2) With regard to the application of the provisions of Article 135, paragraph (2) and Article 137, paragraph (4) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29; hereinafter the same shall apply in this paragraph) in the case where insurance contracts are to be transferred as set forth in the paragraph (1) in the preceding Article, "insurance contracts for which an insured event has already occurred at the Time of Public Notice set forth in Article 137, paragraph (1) (limited to insurance contracts which would be terminated with the payment of the insurance proceeds pertaining to the insured event) and any other insurance contracts specified by a Cabinet Order" in Article 135, paragraph (2) shall be deemed to be replaced with "Specified Contracts prescribed in Article 250, paragraph (3)," and the terms "one fifth" and "at the Time of Public Notice under the provisions of paragraph (1) with regard to said insurance contracts" in Article 137, paragraph (4) shall be deemed to be replaced with "one tenth" and "for said insurance contracts, in the case that said insurance contracts are Specified Contracts as prescribed in Article 250, paragraph (3)," respectively.

(Effect of Transfer of Insurance Contracts Accompanied by Modification in Contract Conditions)

Article 252 When a transfer of insurance contracts has taken place as set forth in Article 250, paragraph (1), the Transferee Company prescribed in Article 135, paragraph (1) shall assume the claims and obligations pertaining to insurance contracts pertaining to the transfer of insurance contracts under the conditions set forth after the Modifications to Contract Conditions specified in the contract set forth in Article 135, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29; hereinafter the same shall apply in this Article) have been made with regard to said insurance contracts.

(Notice of Modification of Contract Conditions)

Article 253 With regard to the application of the provisions of Article 140, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29; hereinafter the same shall apply in this Article) in the case where a transfer of insurance contracts has taken place as set forth in Article 250, paragraph (1), the term "the fact that a transfer of insurance contracts has been received and the content of said minor modifications when the minor modifications prescribed in the paragraph (4) in that Article have been established" in Article 140, paragraph (2) shall be deemed to be replaced with "the fact that a transfer of insurance contracts has been received and the content of the rights and duties of Insurance Policyholders after said Modification of Contract Conditions when the Modification of Contract Conditions prescribed in Article 250, paragraph (1) (including the minor modifications prescribed in Article 135, paragraph (4), hereinafter the same shall apply in this paragraph) has been established."

(Modification of Contract Conditions in a Merger Agreement)

Article 254 (1) An Insurance Company, etc. , may, in the cases that fall under the following listed cases, specify Modifications of Contract Conditions with regard to insurance contracts (excluding Specified Contracts) pertaining to that Insurance Company, etc. , in merger agreements:

(i) In the case where agreement to a merger has been ordered pursuant to the provisions of Article 241, paragraph (1), when a merger is sought;

(ii) In the case where the company is a Managed Company, when a merger is to be made in accordance with a plan as set forth in Article 247, paragraph (1) that has received approval as set forth in paragraph (2) in that Article (including the approval of modifications as set forth in paragraph (4) in that Article);

(iii) In the case where the company is a Bankrupt Insurance Company as prescribed in Article 260, paragraph (2) that has received the recognition of the Prime Minister as set forth in Article 268, paragraph (1) or Article 270, paragraph (1), when a merger is to be made that will result in the survival of a Relief Insurance Company as prescribed in Article 260, paragraph (3) (excluding the case given in the preceding two items).

(2) The provisions of Article 250, paragraph (3) shall apply mutatis mutandis to the Specified Contracts prescribed in the preceding paragraph. In this case, the term "the following paragraph" shall be deemed to be replaced with "Article 254, paragraph (3)."

(3) The Insurance Company, etc. , set forth in paragraph (1) shall, on the date of mailing convocation notices for the Shareholders' Meeting, etc. , at which a resolution will be made on the approval set forth in Article 783, paragraph (1) (Approval, etc., of the Absorption-type Merger Agreements, etc.), Article 795, paragraph (1) (Approval, etc., of the Absorption-type Merger Agreements, etc.), or Article 804, paragraph (1) (Approval, etc. of the Consolidation-type Merger Agreements, etc.) of the Companies Act, or Article 165-3, paragraph (1), Article 165-10, paragraph (1), or Article 165-16, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20), make public notice to the effect that said Shareholders' Meeting, etc. , will be held and that a resolution on the approval of a merger agreement is the purpose of the meeting.

(4) The Insurance Company, etc. , set forth in paragraph (1) shall suspend all of its business (excluding Business for Paying Covered Insurance Proceeds and Business for Canceling Specified Covered Insurance Contracts) from the Time of Public Notice as set forth in the preceding paragraph, excluding the case where, already at the Time of Public Notice, the suspension of all of its business has been ordered pursuant to the provisions of Article 241, paragraph (1) or all of its business has been suspended pursuant to the provisions of the main clause of Article 245 (including the cases where it is applied mutatis mutandis pursuant to Article 258, paragraph (2)), the main clause of Article 250, paragraph (5), the main clause of this paragraph, or the main clause of Article 255-2, paragraph (3); provided, however, that this shall not apply to a portion of its business in the case that the Prime Minister has found it necessary that the portion of business not be suspended pursuant to a report from that Insurance Company, etc.

(Special Provisions on Public Notice of Merger and Raising of Objections)

Article 255 (1) The Insurance Company, etc. , set forth in paragraph (1) in the preceding Article, shall attach a supplementary note to the public notice under the provisions of Article 165-7, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-12), Article 165-17, paragraph (2) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20), or Article 165-24, paragraph (2) on the main content of modifications in the rights and duties of Insurance Policyholders caused by a Modification of Contract Conditions and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(2) With regard to the application of the provisions of Article 70, paragraph (6), as applied mutatis mutandis pursuant to Article 165-7, paragraph (4) (including the cases where it is applied mutatis mutandis pursuant to Article 165-12), Article 88, paragraph (6), as applied mutatis mutandis pursuant to Article 165-17, paragraph (4) (including the cases where it is applied mutatis mutandis pursuant to Article 165-20), or Article 165-24, paragraph (6) in the case where a merger is to be made as set forth in paragraph (1) in the preceding Article, in these provisions, the term "insurance contracts under which the Insurance Claims, etc., had already arisen at the Time of Public Notice under the provisions of that paragraph (limited to those contracts that would be terminated with payment pertaining to said Insurance Claims, etc.)" shall be deemed to be replaced with "insurance contracts prescribed in Article 250, paragraph (3), as applied mutatis mutandis pursuant to Article 254, paragraph (2)," the term "one fifth" shall be deemed to be replaced with "one tenth," the term "Insurance Claims, etc." shall be deemed to be replaced with "insurance claims pertaining to the Specified Contracts prescribed in Article 250, paragraph (3), as applied mutatis mutandis pursuant to Article 254, paragraph (2), and any other rights specified by a Cabinet Order."

(3) In the case of a merger as set forth in paragraph (1) in the preceding Article, the Insurance Company, etc. , that survives after the merger or the Insurance Company, etc. , that is incorporated by the merger shall, within three months after the merger, notify the Insurance Policyholders of the Insurance Company, etc. , of that paragraph to that effect and of the content of the rights and duties of Insurance Policyholders after the Modification of Contract Conditions.

(Modification of Contract Conditions in an Acquisition of Shares)

Article 255-2 (1) An Insurance Company, etc. , or Foreign Insurance Company, etc. , may, in the following cases (limited to cases in which shares are acquired in order to set in place the particulars specified by the Prime Minister and the Minister of Finance as necessary for ensuring the sound and appropriate business operation of said Insurance Company, etc., or Foreign Insurance Company, etc., and for protecting Insurance Policyholders, etc.), prepare a plan to modify contract conditions and modify the contract conditions of insurance contracts (excluding Specified Contracts) with that Insurance Company, etc. , or Foreign Insurance Company, etc. In this case, the main content of changes in the rights and duties of Insurance Policyholders caused by the Modification of Contract Conditions and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance shall be specified in the plan to modify contract conditions:

(i) If an agreement has been ordered, pursuant to the provisions of Article 241, paragraph (1) for it to become the Subsidiary of another Insurance Company, etc. or Foreign Insurance Company, etc. or of an Insurance Holding Company, etc. through an acquisition of its shares, and it becomes the Subsidiary of another Insurance Company, etc. or Foreign Insurance Company, etc. or of an Insurance Holding Company, etc. through the acquisition of its shares;

(ii) If it is a Managed Company and has become the Subsidiary of another Insurance Company, etc. or Foreign Insurance Company, etc. or of an Insurance Holding Company, etc. through an acquisition of its shares in accordance with a plan as set forth in Article 247, paragraph (1) for which the approval set forth in the paragraph (2) in that Article has been received (including the approval of the modifications set forth in the paragraph (4) in that Article);

(iii) If it is a Bankrupt Insurance Company as prescribed in Article 260, paragraph (2) that has received the recognition of the Prime Minister as set forth in Article 268, paragraph (1), and become the Subsidiary of a Relief Insurance Company or Relief Insurance Holding Company, etc. , as prescribed in Article 260, paragraph (3) through an acquisition of its shares (excluding the case given in the preceding two items).

(2) The provisions of Article 250, paragraph (3) shall apply mutatis mutandis to the Specified Contracts prescribed in the preceding paragraph. In this case, the term "the following paragraph" in paragraph (3), item (i) in that Article shall be deemed to be replaced with "Article 255-4, paragraph (1)."

(3) An Insurance Company, etc. , or Foreign Insurance Company, etc. , that seeks to make the Modification of Contract Conditions set forth in paragraph (1) (hereinafter referred to as "Modified Company" in this Subsection) shall suspend all of its business (excluding Business for Paying Covered Insurance Proceeds and Business for Canceling Specified Covered Insurance Contracts ) from the Time of Public Notice as set forth in Article 255-4, paragraph (1), excluding the case where, already at the time of public notice, the suspension of all of its business has been ordered pursuant to the provisions of Article 241, paragraph (1) or all of its business has been suspended pursuant to the provisions of the main clause of Article 245 (including the cases where it is applied mutatis mutandis pursuant to Article 258, paragraph (2)), the main clause of Article 250, paragraph (5), the main clause of Article 254, paragraph (4), or the main clause of this paragraph; provided, however, that this shall not apply to a portion of its business in the case that the Prime Minister has found it necessary that the portion of business not be suspended pursuant to a report from that Insurance Company, etc. , or Foreign Insurance Company, etc.

(Retention, etc. of Documents Related to the Modification of Contract Conditions,)

Article 255-3 (1) A Modified Company shall, from the date of public notice under the provisions of the paragraph (1) in the following Article until the last day of the period of the supplementary note attached to the public notice of the paragraph (1) in that Article pursuant to the provisions of the paragraph (2) in that Article, keep the documents or electromagnetic records in which the details of the plan to modify contract conditions and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance are detailed or recorded, at the company's business offices or other offices.

(2) Insurance Policyholders under an insurance contract that is to be modified pursuant to a plan to modify contract conditions (referred to as "Policyholders Subject to the Modification" in the following Article) may make the following requests to the Modified Company during its operating hours or business hours; provided, however, that they pay the expenses determined by that Modified Company in making a request falling under item (ii) or (iv):

(i) A request to inspect the documents set forth in the preceding paragraph;

(ii) A request to be issued a certified copy or extract of the documents set forth in the preceding paragraph;

(iii) A request to inspect anything that shows the particulars recorded in the electromagnetic records set forth in the preceding paragraph by a manner specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance;

(iv) A request to be provided with the particulars recorded in the electromagnetic records set forth in the preceding paragraph by electromagnetic means determined by that Modified Company, or to be issued a document detailing such particulars.

(Public Notice of Modification of Contract Conditions and Raising of Objections)

Article 255-4 (1) A Modified Company shall, on the day of preparation of a plan to modify contract conditions, make a public notice on the gist of the plan to modify contract conditions and the balance sheet and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(2) The public notice set forth in the preceding paragraph shall include a supplementary note to the effect that any Policyholder Subject to the Modification who has an objection must raise that objections within a set period of time.

(3) The period under the preceding paragraph cannot be less than one month.

(4) Contract conditions shall not be modified when the number of Policyholders Subject to the Modification who have raised objections within the period of time set forth in paragraph (2) exceeds one tenth of the total number of Policyholders Subject to the Modification and the amount specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance as an amount equivalent to the sum of the claims pertaining to the insurance contracts of Policyholders Subject to the Modification who have raise d such objections exceeds one tenth of the total amount of that amount of Policyholders Subject to the Modification.

(5) When the number of Policyholders Subject to the Modification who have raised their objections within the period of time set forth in paragraph (2) or the amount specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance belonging to those Policyholders as set forth in the preceding paragraph does not exceed the percentage specified in that paragraph, all of said Policyholders Subject to the Modification shall be deemed to have approved said Modification of Contract Conditions.

(Public Notice, etc., of the Modification of Contract Conditions)

Article 255-5 (1) A Modified Company shall, without delay after the Modification of Contract Conditions, make a public notice of the fact a Modification of Contract Conditions has been made and of particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance. The same shall apply even when a Modification of Contract Conditions is not made.

(2) A Modified Company shall, within three months after the Modification of Contract Conditions, notify the Insurance Policyholders pertaining to said Modification of Contract Conditions of the content of the rights and duties of Insurance Policyholders after said Modification of Contract Conditions.

Section 3 Order, etc. for Implementation of Procedures for a Merger, etc.

(Designation of the Other Party to Consultations for a Merger, etc.)

Article 256 (1) The Prime Minister may, when an Insurance Company (including a Foreign Insurance Company, etc.; hereinafter the same shall apply in this Chapter, except in Article 260, paragraph (1), item (ii), Article 260, paragraph (6), and Article 260, paragraph (8), item (ii), and Article 270-6) falls under the category of a Bankrupt Insurance Company (meaning a Bankrupt Insurance Company as prescribed in Article 260, paragraph (2); hereinafter the same shall apply in this Section) and he/she finds it necessary, designate another Insurance Company or Insurance Holding Company, etc. , as the other party with which that Bankrupt Insurance Company shall hold a consultation pertaining to a Merger, etc. , and recommend that other Insurance Company or Insurance Holding Company, etc. to agree to participate in the consultation.

(2) If and to the extent that the Prime Minister finds it necessary for making the recommendation set forth in the preceding paragraph, he/she may deliver material related to the status of the business or property of a Bankrupt Insurance Company or an Insurance Company recognized as having a high probability of becoming a Bankrupt Insurance Company to another Insurance Company or Insurance Holding Company, etc. , and make any other necessary preparations for said recommendation.

(3) The Prime Minister may, request necessary cooperation, concerning the recommendation set forth in the paragraph (1) or the preparations set forth in the preceding paragraph, from the Policyholders Protection Corporation to which the Bankrupt Insurance Company or the Insurance Company recognized as having a high probability of becoming a Bankrupt Insurance Company has entered as a member.

(Mediation of the Merger Conditions, etc.)

Article 257 (1) The Prime Minister may, when no agreement is reached in the case set forth in paragraph (1) of the preceding Article, hear in advance the opinions of the Bankrupt Insurance Company pertaining to the recommendation set forth in that paragraph and the opinions of the other Insurance Company or Insurance Holding Company, etc. , that received the recommendation set forth in that paragraph, indicate the conditions and conduct necessary mediation.

(2) The provisions of paragraph (2) and paragraph (3) of the preceding Article, shall apply mutatis mutandis to the mediation set forth in the preceding paragraph. In this case, the term "Bankrupt Insurance Company or an Insurance Company recognized as having a high probability of becoming a Bankrupt Insurance Company" in paragraph (2) in that Article shall be deemed to be replaced with "Bankrupt Insurance Company."

(Order to Implement Merger Proceedings etc.)

Article 258 (1) The Prime Minister may, in the case set forth in paragraph (1) of the preceding Article, when the other Insurance Company or Insurance Holding Company, etc. , of that paragraph has consented to the conditions pertaining to the mediation, order the Bankrupt Insurance Company pertaining to the mediation set forth in that paragraph to conduct the proceedings necessary to execute the Merger, etc. , in accordance with said conditions.

(2) The provisions of Article 245 shall apply mutatis mutandis in the case set forth in the preceding paragraph (excluding the case where a Disposition Ordering Management has been received). In this case, the term "Insurance Administrator" in the proviso of that Article shall be deemed to be replaced with "said Bankrupt Insurance Company."

Section 4 Financial Assistance, etc., Provided by Policyholders Protection Corporations

Subsection 1 Policyholders Protection Corporations

Division 1 General Rules

(Purpose)

Article 259 The purpose of a policyholders protection corporation (hereinafter referred to as a "Corporation" in this Section, the following Section, Part V, and Part VI) is to protect Insurance Policyholders, etc. , by providing financial assistance in the transfer, etc. , of insurance contracts pertaining to a Bankrupt Insurance Company, providing executive management for the succeeding Insurance Company, underwriting insurance contracts, providing financial assistance pertaining to the payment of Covered Insurance Proceeds, and purchasing the Insurance Claims, etc. , thereby maintaining credibility in Insurance Business.

(Definitions)

Article 260 (1) The term "Transfer, etc., of Insurance Contracts" as used in this Section refers to the following:

(i) The transfer, between a Bankrupt Insurance Company and another Insurance Company, of insurance contracts pertaining to all or some of the insurance contracts pertaining to a Bankrupt Insurance Company;

(ii) The survival, by a merger of a Bankrupt Insurance Company (excluding a Foreign Insurance Company, etc.) and another Insurance Company, of that other Insurance Company;

(iii) That which is performed in order to set in place the particulars specified by the Prime Minister and the Minister of Finance as necessary for ensuring sound and appropriate operations in the business of a Bankrupt Insurance Company (in the case of Foreign Insurance Companies, etc., business in Japan; hereinafter the same shall apply in the following paragraph and the following Subsection) and for protecting Insurance Policyholders, etc. , by the acquisition of the shares of that Bankrupt Insurance Company under another Insurance Company or Insurance Holding Company, etc.

(2) The term "Bankrupt Insurance Company" as used in this Section means the following:

(i) A company that will likely suspend the payment of insurance proceeds or that has suspended the payment of insurance proceeds in the light of the status of its business or property (in the case of Foreign Insurance Companies, etc., property located in Japan; hereinafter the same shall apply in the following item);

(ii) A company that is unable to satisfy its obligations with its property or a company at which a situation will likely arise in which it is unable to satisfy its obligations with its property.

(3) The term "Relief Insurance Company" as used in this Section means a company that is not a Bankrupt Insurance Company among Insurance Companies that conduct a Transfer, etc. , of Insurance Contracts; the term "Relief Insurance Holding Company, etc." means an Insurance Holding Company, etc. that acquires the shares specified in paragraph (1), item (iii).

(4) The term "Financial Assistance" as used in this Section means the donation of money, the purchase of assets, or the Securing of Damage.

(5) The term "Securing of Damage" as used in this Section means, in the case where a loss is caused by the collection of the assets specified in the following items at amounts that fall below their book value or by any other reason, the making up of all or part of the amount of said loss to the company specified in each of the items based on a contract that was concluded in advance:

(i) Assets assumed by a Relief Insurance Company, a Secondary Successor Insurance Company (meaning an Insurance Company which is other than a Successor Insurance Company, that succeeds in the Succession to Inherited Insurance Contracts; the same shall apply hereinafter), or a Secondary Transferee Insurance Company (meaning an Insurance Company that receives a Secondary Transfer of Insurance Contracts ; the same shall apply hereinafter) by the transfer of insurance contracts as prescribed in paragraph (1), item (i), paragraph (8), item (i), or paragraph (11) or by a merger as prescribed in paragraph (1), item (ii) or paragraph (8), item (ii): That Relief Insurance Company, Secondary Successor Insurance Company, or Secondary Transferee Insurance Company.

(ii) The assets of an Insurance Company whose shares were acquired as prescribed in paragraph (1), item (iii) or paragraph (8), item (iii): That Insurance Company.

(6) The term "Successor Insurance Company" as used in this Section refers to an Insurance Company, the main purpose of that is to take over the insurance contracts of a Bankrupt Insurance Company by a transfer of insurance contracts or merger and to manage and dispose of said taken over insurance contracts, that is formed as the Subsidiary of a Corporation (meaning a company in which the Corporation holds voting rights exceeding 50 percent of all shareholders' voting rights; the same shall apply hereinafter).

(7) The term "Succession of Insurance Contracts" as used in this Section means the taking over, by a Successor Insurance Company, of the insurance contracts of a Bankrupt Insurance Company by a transfer of insurance contracts or merger and the management and disposition of said taken over insurance contracts.

(8) The term "Succession to Inherited Insurance Contracts" as used in this Section refers to the following:

(i) The transfer, between a Successor Insurance Company and another Insurance Company, of insurance contracts that represent all or part of those pertaining to the Successor Insurance Company;

(ii) The survival, by a merger between a Successor Insurance Company and another Insurance Company, of the other Insurance Company;

(iii) That that is performed in order to set in place the particulars specified by the Prime Minister and the Minister of Finance as necessary for ensuring the sound and appropriate business operation of a Successor Insurance Company and for protecting Insurance Policyholders, etc. , by the acquisition of the shares of that Successor Insurance Company under another Insurance Company or Insurance Holding Company, etc.

(9) The term "Underwriting Insurance Contracts" as used in this Section refers to the receiving of a transfer of insurance contracts pertaining to all or a part of the insurance contracts of a Bankrupt Insurance Company pursuant to a contract between a Corporation and that Bankrupt Insurance Company.

(10) The term "Management and Disposition of Insurance Contracts" as used in this Section refers to the acceptance of Insurance Premiums and the payment of insurance proceeds, refunds, or any other benefit based on insurance contracts, the utilization of money accepted as Insurance Premiums under insurance contracts and any other assets, the conclusion of reinsured insurance contracts pertaining to insurance contracts, the transfer of insurance contracts to Insurance Companies, and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance as pertaining to insurance contracts.

(11) The term "Secondary Transfer of Insurance Contracts" as used in this Section refers to the transfer, between an Organization that has underwritten insurance contracts and an Insurance Company, of insurance contracts that represent all or part of those that had been taken over by the underwriting thereof.

(Juridical Personality)

Article 261 A protection Corporation shall be a juridical person.

(Kinds of Corporations)

Article 262 (1) A Corporation shall, for each class of license for Insurance Business, accept as its members insurance companies that have received a license that falls under that Class of License.

(2) The Classes of License set forth in the preceding paragraph shall be the following two classes:

(i) Life insurance business licenses, foreign life insurance business licenses, and specified life insurance business licenses;

(ii) Non-life insurance business licenses, foreign non-life insurance business licenses, and specified non-life insurance business licenses.

(Name)

Article 263 (1) A Corporation shall use the term "Hoken Keiyakusha Hogo Kiko" (which means "Policyholders Protection Corporation") in its name.

(2) No person other than a Corporation shall use any term "Policyholders Protection Corporation" in its name.

(Registration)

Article 264 (1) A Corporation must complete its registration pursuant to the provisions of a Cabinet Order.

(2) No particulars that must be registered pursuant to the provisions of the preceding paragraph may be duly asserted against a third party prior to the registration.

(Mutatis Mutandis Application of the Act on General Incorporated Associations and General Incorporated Foundations)

Article 265 The provisions of Article 4 (Address) and Article 78 (Liability for Damages Due to the Actions of the Representative) of the Act on General Incorporated Associations and General Incorporated Foundations shall apply mutatis mutandis to a Corporation.

Division 2 Members

(Member Qualifications, etc.)

Article 265-2 (1) Those holding qualifications to be members of a Corporation shall be limited to Insurance Companies (excluding Insurance Companies specified by a Cabinet Order; hereinafter the same shall apply in the following Article).

(2) A Corporation shall not refuse entry to those who hold the qualifications to be members nor set unreasonable conditions with respect to that entry.

(Obligation to Join, etc.)

Article 265-3 (1) An Insurance Company shall join, as a member, one Corporation that accepts as its members insurance companies that have received a license that belongs to the class of license prescribed in Article 262, paragraph (2) (hereinafter referred to as "Class of License" in the following paragraph) that is the same as its license.

(2) A person who seeks to receive a license set forth in Article 3, paragraph (1), Article 185, paragraph (1), or Article 219, paragraph (1) (excluding persons specified by a Cabinet Order) shall, at the time of application for that license, undertake the procedures for joining one Corporation that accepts as its members insurance companies that are to receive the license falling under the Class of License that is the same as that license, pursuant to the provisions of a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(3) A person who has undertaken the procedures to join a Corporation pursuant to the provisions of the preceding paragraph will become a member of said Corporation upon receiving the license set forth in that paragraph.

(4) Whenever an Insurance Company becomes a member of a Corporation pursuant to the provisions of the preceding paragraph, the Corporation shall promptly report this to the Prime Minister and the Minister of Finance.

(Withdrawal, etc.)

Article 265-4 (1) A member shall withdraw for the following reasons:

(i) Rescission of license;

(ii) Expiration of license.

(2) A member may not withdraw from a Corporation, except in the cases occurring under the reasons listed in the items of the preceding paragraph or in the case where the member receives approval from the Prime Minister and Minister of Finance and becomes a member of another Corporation.

(3) In the case where a member withdraws from a Corporation, when there are expenses incurred by said Corporation to perform obligations pertaining to the following listed borrowing of funds, the member shall assume the obligation to pay as its obligatory contribution an amount calculated by said Corporation pursuant to the provisions of a Cabinet Office Ordinance or Ordinance of the Ministry of Finance as the expenses that must be borne by the members:

(i) The borrowing of funds performed pursuant to the provisions of Article 265-42 in order to implement the business listed in Article 265-28, paragraph (1), items (iii) to (vii) inclusive and Article 265-28, paragraph (2), items (i) to (iii) inclusive that said Corporation has decided to carry out by the day of that withdrawal;

(ii) The borrowing of funds that will be performed pursuant to the provisions of Article 265-42 in order to implement the business listed in Article 265-28, paragraph (1), items (iii) to (vii) inclusive and Article 265-28, paragraph (2), items (i) to (iii) inclusive that said Corporation has decided to carry out by the day of that withdrawal.

(4) Whenever an application has been filed for the approval set forth in paragraph (2), the Prime Minister and Minister of Finance may only give their approval if the member to which the application pertains conforms to the following standards:

(i) Said member has satisfied the obligations it bears as a member of the Corporation it seeks to withdraw from;

(ii) Said member appears certain to perform the obligation to pay as its obligatory contribution the amount calculated as prescribed in the preceding paragraph pursuant to the provisions of that paragraph;

(iii) Said member has undertaken procedures to enter another Corporation as a member.

(Monetary Penalties for Members)

Article 265-5 A Corporation may, pursuant to the provisions specified by the articles of incorporation, impose a monetary penalty on a member that has violated any provision of this Section or the Corporation's articles of incorporation or any other rules.

Division 3 Establishment

(Founders)

Article 265-6 In order to form a Corporation, ten or more insurance companies that seek to become its members must become the founders.

(Organizational Meetings)

Article 265-7 (1) The founders shall, after preparing articles of incorporation and a business plan, invite those who seek to become members, make a public notice of these together with the time and location at least two weeks before the date the meeting shall be held, and hold an Organizational Meeting.

(2) Approval of the articles of incorporation and business plan and the decision on any other particulars necessary for the incorporation of a Corporation shall depend on resolutions at the Organizational Meetings.

(3) The agenda of the Organizational Meeting set forth in the preceding paragraph is decided by a two-thirds majority vote of those in attendance at a meeting where at least one half of the founders and the persons with the qualifications to become members who have notified the founders in writing by the date of the Organizational Meeting that they will become members are present.

(4) The following particulars and any other particulars that are necessary to the operation of business in the business year including the date of incorporation of a Corporation may be decided by the resolution of the Organizational Meeting, notwithstanding the provisions of Article 265-25 and Article 265-34, paragraph (3):

(i) The preparation of business rules;

(ii) The decision of the budget and financial plan for the business year including the date of incorporation of the Corporation;

(iii) The decision of the obligatory contribution rate prescribed in Article 265-34, paragraph (1), items (i) and (ii).

(5) The provisions of Article 265-26, paragraph (2) shall apply mutatis mutandis in the case where the particulars prescribed in the preceding paragraph are made the business of the Organizational Meeting pursuant to the provisions of that paragraph. In this case, the term "items (i), (iii), and (v) of the preceding Article," shall be deemed to be replaced with "Article 265-7, paragraph (4), item (i)."

(6) The provisions of Article 265-27-4 and Article 265-27-5 shall apply mutatis mutandis to the resolutions of the Organizational Meeting.

(Application for Authorization for Establishment)

Article 265-8 (1) The founders shall, without delay after the end of the Organizational Meeting, apply for approval for incorporation by submitting to the Prime Minister and Minister of Finance an application for approval detailing the following particulars:

(i) Name;

(ii) Office address;

(iii) Names of the officers and members.

(2) Documents detailing the articles of incorporation, business plan, and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance shall be attached to the application for approval set forth in the preceding paragraph.

(Approval for Establishment)

Article 265-9 (1) Whenever an application has been filed for the approval under the provisions in paragraph (1) of the preceding Article, the Prime Minister and Minister of Finance shall examine whether the application conforms to the following standards:

(i) The procedure of incorporation and the content of the articles of incorporation and business plan conform to the provisions of laws and regulations;

(ii) There are no false details in the articles of incorporation and business plan.

(iii) There are no persons among the officers who fall under any of the items listed in Article 265-16;

(iv) It is found to be certain that business operation will be undertaken appropriately;

(v) The organization of the Corporation pertaining to the application conforms to the provisions of this Act.

(2) The Prime Minister and Minister of Finance shall, if they find as a result of the examination pursuant to the provisions of the preceding paragraph that the application conforms to the standards given in that paragraph, authorize the incorporation.

(Succession of Business)

Article 265-10 When an approval for incorporation has been granted, the founders shall, without delay, hand over business to the president of a Corporation.

(Period of Establishment, etc.)

Article 265-11 (1) A Corporation shall be established upon completing the registration of its incorporation at the location of its principal office.

(2) When a Corporation has completed the registration of its incorporation as set forth in the preceding paragraph, it shall notify the Prime Minister and Minister of Finance of this without delay.

Division 4 Management

(Articles of Incorporation)

Article 265-12 (1) A Corporation's articles of incorporation must detail the following particulars:

(i) Purpose;

(ii) Name;

(iii) Office address;

(iv) The particulars of the members;

(v) The particulars of the officers;

(vi) The particulars of the management committee and the evaluation examination board;

(vii) The particulars of the General Representative Members' Council;

(viii) The particulars of its business and the execution thereof;

(ix) The particulars of obligatory contributions;

(x) Particulars related to finances and accounting;

(xi) Particulars related to dissolution;

(xii) Particulars related to the amendment of the articles of incorporation;

(xiii) Method of Public Notices.

(2) Modifications to a Corporation's articles of incorporation shall be null and void without the approval of the Prime Minister and Minister of Finance.

(Decisions on Officers and Business)

Article 265-13 (1) A Corporation shall have one president, two or more directors, and one or more auditors as officers.

(2) The business of a Corporation shall be decided by the majority of the president and directors, unless otherwise provided for in the articles of incorporation.

(Duties and Authority of Officers)

Article 265-14 (1) The president shall represent a Corporation and preside over its business.

(2) The directors shall, as determined by the president, represent a Corporation, assist the president in administering the business of the Corporation, act on behalf of the president when he/she has had an accident, and perform the duties of the president when his/her position is vacant.

(3) The auditors shall audit the state of a Corporation's business and accounting, and report the results of those audits to the General Representative Members' Council.

(4) The auditors may, when it is found necessary based on the results of audits, submit opinions to the president or to the Prime Minister and Minister of Finance.

(Appointment, Dismissal, and Term of Office of Officers)

Article 265-15 (1) Officers shall be appointed or dismissed at General Representative Members' Council Meetings pursuant to the provisions of the articles of incorporation; provided, however, that the officers at the time of incorporation shall be appointed at an Organizational Meeting.

(2) The appointment and dismissal of officers under the provisions of the preceding paragraph shall be null and void without the approval of the Prime Minister and Minister of Finance,

(3) The term of office of officers shall be a period of time within two years as specified by the articles of incorporation; provided, however, that the term of office of officers at the time of incorporation shall be a period of time within two years as specified at the Organizational Meeting.

(4) Officers may be reappointed.

(Grounds for Disqualification of Officers)

Article 265-16 Persons who fall under any of the following items may not become officers:

(i) In the case where a Corporation had its approval for incorporation rescinded pursuant to the provisions of Article 265-47, a person who was an officer within the 30 days prior to the date of that rescission, where five years have not elapsed from the date of that rescission;

(ii) An adult ward or a person under curatorship or a bankrupt who has not obtained a restoration of rights;

(iii) A person who has been sentenced to imprisonment without work or severer punishment, where five years have not elapsed from the date that execution finished or the date he/she became no longer subject to that execution;

(iv) A person who has been sentenced to punishment by fine pursuant to the provisions of this Act, where five years have not elapsed from the date that execution finished or the date he/she became no longer subject to that execution.

(Prohibition of Concurrent Holding of Posts by Auditors)

Article 265-17 No auditor shall concurrently hold the post of president, director, management committee member, evaluation examination board member, or employee of a Corporation.

(Restrictions on Authority of Representation)

Article 265-18 With regard to particulars with regard to which there exists conflict of interests between a Corporation and the president or directors, these persons shall not have authority of representation. In this case, the auditor shall represent the Corporation, pursuant to the provisions specified by the articles of incorporation.

Article 265-18-2 The president may appoint, from among the employees of a Corporation, an agent who has the authority to undertake all action in and out of court related to a portion of the business of the Corporation.

(Management Committees)

Article 265-19 (1) A Corporation shall have a management committee (hereinafter referred to as the "Committee" in this Chapter).

(2) The Committee shall respond to consultation by the president and deliberate on matters that are important to the management of the Corporation's business (excluding the particulars of the evaluation of the property of a Bankrupt Insurance Company as prescribed in paragraph (2) of the following Article) in addition to dealing with the matters under its authority pursuant to this Act.

(3) The Committee may state its opinion to the president as to the management of the Corporation's business.

(4) Members of the Committee shall be appointed by the president, having received the approval of the Prime Minister and Minister of Finance, from among persons with relevant knowledge and experience needed for appropriate management of the Corporation's business.

(5) In addition to what is provided for in the preceding paragraphs, necessary particulars of the organization and management of the Committee shall be specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(Evaluation Examination Boards)

Article 265-20 (1) A Corporation shall have an evaluation examination board (hereinafter referred to as "Examination Board").

(2) The Examination Board shall respond to consultation by the president and deliberate on matters that are important in the evaluation of the property of a Bankrupt Insurance Company (in the case of Foreign Insurance Companies, etc., property located in Japan) that is a member of the Corporation in addition to dealing with the particulars under its authority pursuant to the provisions of the following Subsection.

(3) Members of the Examination Board shall be appointed by the president, having received the approval of the Prime Minister and Minister of Finance, from among persons with relevant knowledge and experience or expert knowledge regarding insurance or evaluation of property.

(4) In addition to what is provided for in the preceding three paragraphs, necessary particulars of the organization and management of the Examination Board shall be specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(Confidentiality Obligation, etc., of Officers, etc.)

Article 265-21 The Corporation's officers (meaning officers as set forth in Article 265-13, paragraph (1); hereinafter the same shall apply) or employees, members of the Committee, members of the Examination Board, or those who held these positions, shall not divulge or misappropriate any secret learned regarding their duties.

(Status of Officers, etc., as Government Employees)

Article 265-21-2 With regard to the application of the Penal Code (Act No. 45 of 1907) and any other penal provisions, a Corporation's officers and employees, members of the Committee, and members of the Examination Board shall be deemed to be employees engaged in public service pursuant to laws and regulations.

(Public Inspection, etc., of the List of Members)

Article 265-22 A Corporation shall, pursuant to the provisions of a Cabinet Office Ordinance or Ordinance of the Ministry of Finance, prepare a list of members, submit this to the Prime Minister and Minister of Finance, and make it available for public inspection.

Division 5 General Councils

(Convocation of the General Council)

Article 265-23 (1) The president shall, pursuant to the provisions of the articles of incorporation, call an ordinary General Council Meeting once every business year.

(2) If the president finds it necessary, he/she may call an extraordinary General Council Meeting.

(Attendance of Designated Employees at Meetings)

Article 265-24 Employees designated by the Prime Minister and Minister of Finance, respectively, may attend a General Council Meeting and state their opinions.

(Matters to Be Decided at General Council Meetings)

Article 265-25 In addition to what is specified elsewhere in this Act, decisions on the following matters must be effected by resolution of the General Council:

(i) The amendment of the articles of incorporation;

(ii) Decisions on or modifications to the budget and financial plan;

(iii) Preparation of or modifications to business rules;

(iv) Settlement of accounts;

(v) Dissolution;

(vi) Any other matters specified by the articles of incorporation.

(Agenda of a General Council Meeting)

Article 265-26 (1) A General Council may not open a meeting or vote on a resolution without the attendance of at least one half of its total members.

(2) Decisions on the agenda of a General Council meeting are effected by the majority vote of those in attendance at the meeting, and the chairperson makes the decisions in the event of a tie; provided, however, that decisions on the matters listed in items (i), (iii), and (v) of the preceding Article, are effected by a two-thirds majority vote of those present.

(3) The chairperson shall be governed by the provisions specified in the articles of incorporation.

(Extraordinary General Council Meetings)

Article 265-27 The president shall call an extraordinary General Council meeting when a one-fifth or more of all of the members indicate a matter that is a subject for a meeting and so request; provided, however, that a percentage that differs with the percentage of one-fifth of all of the members can be specified by the articles of incorporation.

(Convocation of General Council Meetings)

Article 265-27-2 A notice of convocation for a General Council Meeting shall be made in accordance with the method specified by the articles of incorporation at least five days prior to the day of the General Council Meeting, and shall indicate the matter that is the subject of that General Council Meeting.

(Matters to Be Resolved at a General Council Meeting)

Article 265-27-3 Only the matters for which notice was given in advance pursuant to the provisions of the preceding Article may be resolved at a General Council Meeting; provided, however, that this shall not apply when otherwise provided for in the articles of incorporation.

(Voting Rights of the Members)

Article 265-27-4 (1) The voting rights of members shall be equal.

(2) Members who do not attend a General Council Meeting may vote in writing or through a proxy.

(3) The provisions of the preceding two paragraphs shall not apply in the case where they are otherwise provided for in the articles of incorporation.

(Case of No Voting Rights)

Article 265-27-5 When a decision is to be made regarding the relationship between a Corporation and a certain member, that member shall have no voting rights.

Division 6 Business

(Business)

Article 265-28 (1) A Corporation shall undertake the following business in order to accomplish the purpose specified in Article 259:

(i) Business as an Insurance Administrator or Insurance Administrator Representative under the provisions of Article 243, paragraph (3);

(ii) The receipt and management of obligatory contributions under the provisions of the following Division;

(iii) Financial Assistance in the Transfer, etc. , of Insurance Contracts, Succession to Insurance Contracts, Succession to Inherited Insurance Contracts, and Secondary Transfer of Insurance Contracts under the provisions of the following Subsection;

(iv) Business for providing executive management for the Successor Insurance Company and any other Succession of Insurance Contracts under the provisions of the following Subsection;

(v) The Underwriting of Insurance Contracts pertaining to a Bankrupt Insurance Company and the Management and Disposition of Insurance Contracts pertaining to the Underwriting of Insurance Contracts under the provisions of the following Subsection;

(vi) Financial Assistance pertaining to the payment of Covered Insurance Proceeds under the provisions of the following Subsection;

(vii) Purchasing the Insurance Claims, etc. under the provisions of Subsection 3; .

(viii) The submission of a list of Insurance Policyholders under the provisions of Chapter IV, Section 6 (Authority, etc., of Policyholders Protection Corporations) and Chapter VI, Section 4 (Authority of Policyholders Protection Corporations) of the Act on Special Treatment of Corporate Reorganization Proceedings, etc. and Other Insolvency Proceedings by Financial Institutions, etc. , and any other business under these provisions;

(ix) Business incidental to what is listed in the preceding items.

(2) In addition to the business listed in the items of the preceding paragraph, a Corporation may conduct the following business within the limit that this does not interfere with the performance of business listed in item (iii) to (vii) inclusive of that paragraph:

(i) Loans of funds to its members;

(ii) Loans of funds to Insurance Policyholders, etc. , of a Bankrupt Insurance Company;

(iii) Purchase of the property of Insurance Companies in Liquidation (meaning Insurance Companies connected with the liquidation; hereinafter the same shall apply in Article 270-8-2 and Article 270-8-3) under the provisions of Subsection 4;

(iv) Business incidental to that listed in the preceding three items.

(Entrustment of Business)

Article 265-29 (1) A Corporation may not entrust its business to another party, except in the following cases:

(i) The case where the Corporation entrusts the acceptance of Insurance Premiums and any other business specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance among business involving the Management and Disposition of Insurance Contracts (hereinafter referred to as the "Insurance Premiums Acceptance Services, etc." in this Article) to an Insurance Company or any other party;

(ii) The case where the Corporation receives the approval of the Prime Minister and Minister of Finance in advance and entrusts business other than Insurance Premiums Acceptance Services, etc. , to an Insurance Company or any other party.

(2) An Insurance Company that a Corporation has entrusted with its Insurance Premiums Acceptance Services, etc. , or business for which it has received the approval set forth in item (ii) of the preceding paragraph, may conduct that business, notwithstanding the provisions of Article 100 (including the cases where it is applied mutatis mutandis pursuant to Article 199).

(Business Rules)

Article 265-30 (1) With regard to the business listed in each of the items of Article 265-28, paragraph (1) and paragraph (2) (hereinafter referred to as "Financial Assistance Services, etc."), a Corporation shall prepare business rules related to the implementation of Financial Assistance Services, etc. , and receive the approval of the Prime Minister and Minister of Finance before beginning Financial Assistance Services, etc. The same shall apply when the organization seeks to modify these rules.

(2) The business rules set forth in the preceding paragraph shall specify the particulars of Financial Assistance, the particulars of the Succession of Insurance Contracts, the particulars of the Underwriting of Insurance Contracts, the particulars of the receipt of obligatory contributions, the particulars of the purchase of Insurance Claims, etc. and any other particulars specified by Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(3) The Prime Minister and Minister of Finance may, when they find that the business rules approved as set forth in paragraph (1) are inappropriate for the proper and reliable operation of Financial Assistance Services, etc. , order their modification.

(Requests for the Submission of Materials, etc.)

Article 265-31 (1) A Corporation may request its members to submit materials when it is necessary for it to conduct its business, except in the cases where the submission of materials is requested pursuant to other provisions of this Section.

(2) Members who have been requested to submit materials pursuant to the provisions of the preceding paragraph shall submit such materials without delay.

(3) If the Prime Minister finds it to be particularly necessary for the implementation of a Corporation's business, in the case where there has been a request from the Corporation, he/she may deliver materials to the Corporation or allow the Corporation inspect such materials.

Division 7 Obligatory Contributions

(Insurance Policyholders Protection Funds)

Article 265-32 (1) A Corporation shall establish Insurance Policyholders Protection Funds as funds to be allocated for covering expenses incurred in implementing Financial Assistance Services, etc.

(2) Insurance Policyholders Protection Funds may not be used except in the case where they are allocated for covering expenses incurred in implementing Financial Assistance Services, etc.

(Payment of Obligatory Contributions)

Article 265-33 (1) A member shall pay its obligatory contribution to a Corporation, pursuant to the provisions of the articles of incorporation, during each of the Corporation's business years, to be allocated for covering expenses incurred in implementing Financial Assistance Services, etc.; provided, however, that this shall not apply with regard to the business year after a business year in which the balance of Insurance Policyholders Protection Funds at the end of that business year of the Corporation reaches an amount calculated pursuant to the provisions of the articles of incorporation as a sufficient amount in light of the estimated amount of expenses the Corporation will incur in implementing Financial Assistance Services, etc.

(2) A Corporation may, in the cases listed in the following items, exempt members corresponding to the Insurance Companies specified in each of the items from obligatory contribution pursuant to the provisions of the articles of incorporation, notwithstanding the provisions of the main clause of the preceding paragraph:

(i) When authorization has been granted by the Prime Minister as set forth in Article 268, paragraph (1): the Bankrupt Insurance Company pertaining to said authorization;

(ii) When a supplementary note has been included by the Prime Minister as set forth in Article 269, paragraph (1): the Bankrupt Insurance Company pertaining to said supplementary note;

(iii) When authorization has been granted by the Prime Minister as set forth in Article 270, paragraph (1): the Bankrupt Insurance Company pertaining to said authorization;

(iv) When a Successor Insurance Company has been formed: that Successor Insurance Company.

(Amount of Obligatory Contributions)

Article 265-34 (1) The amount of obligatory contributions that members must pay during each of a Corporation's business years shall be the total of the following amounts (in the case where a minimum amount of obligatory contribution has been set by the articles of incorporation, an amount equivalent to that minimum amount when that total amount is less than that minimum amount; hereinafter referred to as "Annual Amount of Obligatory Contribution" in this paragraph) for each member; provided, however, that the amount of the obligatory contribution that must be paid by members in the business year including the day of incorporation of the Corporation shall be an amount calculated by dividing the Annual Amount of Obligatory Contribution by 12 and multiplying this by the number of months in the business year including the day of incorporation of the Corporation:

(i) An amount calculated by multiplying the obligatory contribution rate by an amount calculated pursuant to the provisions of a Cabinet Office Ordinance or Ordinance of the Ministry of Finance as the amount of Insurance Premiums received over the year by each member;

(ii) An amount calculated by multiplying the obligatory contribution rate by an amount calculated pursuant to the provisions of a Cabinet Office Ordinance or Ordinance of the Ministry of Finance as the amount of liabilities that must be reserved to be allocated to the payment of policy reserves and any other Insurance Proceeds, etc. , by each member at the end of the business year.

(2) The number of months set forth in the provisions of the proviso to the preceding paragraph shall be one month when a fraction of less than one month results when calculated according to the calendar.

(3) The obligatory contribution rate set forth in the items of paragraph (1) shall be established by a Corporation after resolution by a General Representative Members' Council.

(4) A Corporation shall obtain the approval of the Prime Minister and Minister of Finance when it establishes the obligatory contribution rate set forth in the items of paragraph (1) or when it seeks to modify these rates.

(5) The obligatory contribution rate set forth in the items of paragraph (1) shall be established such that they conform to the following standards:

(i) The percentage is such that a Corporation's long-term finances will be balanced in light of the estimated amount of expenses the Corporation will incur in implementing Financial Assistance Services, etc. ;

(ii) The rate is such that certain members are not subject to discriminatory treatment (excluding what is done according to the soundness of the members' operation).

(6) If the obligatory contribution rate is established in conformity with the standards listed in item (i) of the preceding paragraph and the soundness of a member's operation can no longer be maintained due to the payment of obligatory contribution, the provisions of that paragraph must not be interpreted as preventing the temporary establishment of an obligatory contribution rate that does not conform with said standards.

(Late Payment Charges)

Article 265-35 (1) Members shall pay a late payment charge to the Corporation in the case where they do not pay obligatory contribution by the deadline established in the articles of incorporation.

(2) The amount of the late payment charge shall be an amount calculated by multiplying the unpaid obligatory contribution by 14. 5% a year in accordance with the number of days from the day after the deadline to the day of payment inclusive.

Division 8 Finances and Accounting

(Business Year)

Article 265-36 A Corporation's business year shall be from 1 April to 31 March of the following year inclusive; provided, however, that the business year including the day of incorporation of the Corporation shall be from the day of that incorporation to the first March 31 thereafter inclusive.

(Budget, etc.)

Article 265-37 (1) A Corporation that accepts as its members Insurance Companies that have received a license that falls under the Class of License described in Article 262, paragraph (2), item (i) (hereinafter referred to as "Life Insurance Policyholders Protection Corporation" in this paragraph and in Article 265-42-2) shall, every business year, prepare a budget and financial plan and receive the approval of the Prime Minister and Minister of Finance before the start of that business year (in the business year that includes the day of incorporation of the Life Insurance Policyholders Protection Corporation, without delay after incorporation). The same shall apply when the Corporation seeks to modify these.

(2) A Corporation that accepts as its members Insurance Companies that have received a license that falls under the Class of License described in Article 262, paragraph (2), item (ii) (hereinafter referred to as "Non-Life Insurance Policyholders Protection Corporation" in this paragraph) shall, every business year, prepare a budget and financial plan and submit these to the Prime Minister and Minister of Finance before the start of that business year (in the business year that includes the day of incorporation of the Non-Life Insurance Policyholders Protection Corporation, without delay after incorporation). The same shall apply when the Corporation has modified these.

(Approval, etc., of Financial Statements, etc.)

Article 265-38 (1) Every business year, the president shall prepare an inventory of property, balance sheet, and profit and loss statement, and a business report and statement of accounts according to the budget classifications for that business year (referred to as "Financial Statements, etc." in the following paragraph and following Article) and submit these to the auditor at least four weeks prior to the first ordinary General Council Meeting to be called after the end of that business year.

(2) The president shall attach the written opinion of the auditor to the Financial Statements, etc. , set forth in the preceding paragraph, submit these to the ordinary General Council Meeting set forth in that paragraph, and request its approval.

Article 265-39 (1) Every business year, a Corporation shall, within three months of the end of that business year, submit the Financial Statements, etc. , that received the approval of the ordinary General Council Meeting set forth in paragraph (2) of the preceding Article, to the Prime Minister and Minister of Finance and receive their approval.

(2) A Corporation shall, when it submits Financial Statements, etc. , to the Prime Minister and Minister of Finance pursuant to the provisions of the preceding paragraph, attach to these the written opinion of the auditor on the Financial Statements, etc.

(3) A Corporation shall without delay, when it has received the approval of the Prime Minister and Minister of Finance under the provisions of paragraph (1), give public notice of the inventory of property, balance sheet, and profit and loss statement in the Official Gazette, and shall keep the Financial Statements, etc. , annexed detailed statement, and the written opinion of the auditor set forth in the preceding paragraph at each office, and provide these for public inspection for a period of time specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(Separate Accounting)

Article 265-40 With regard to accounting related to business pertaining to the Management and Disposition of Insurance Contracts pertaining to the Underwriting of Insurance Contracts (including business incidental to this), a Corporation shall arrange Special Accounts, separate from other accounting (hereinafter referred to as "Special Insurance Accounts") for each Bankrupt Insurance Company pertaining to the Underwriting of Insurance Contracts.

(Abolition of Special Insurance Accounts)

Article 265-41 (1) A Corporation shall, in the case where it has underwritten insurance contracts pertaining to a Bankrupt Insurance Company that is its member, abolish the Special Insurance Account established for said Bankrupt Insurance Company when there is no longer a need to manage any of the insurance contracts pertaining to the Underwriting of Insurance Contracts due to termination, transfer, or any other reason.

(2) The Corporation shall, when it has abolished a Special Insurance Account under the provisions of the preceding paragraph, vest the property and debt belonging to said Special Insurance Account to a general account (meaning accounts other than the Corporation's Special Insurance Accounts (including Special Accounts prescribed in Article 118, paragraph (1) as applied by deeming the Corporation as an Insurance Company pursuant to the provisions of Article 270-6, paragraph (2)); the same shall apply in Article 270-5)).

(Borrowings)

Article 265-42 A Corporation may, when it finds it necessary for conducting Financial Assistance Services, etc. , receive the approval of the Prime Minister and Minister of Finance and borrow funds (including refinancing), within the amount specified by a Cabinet Order, from an Insurance Company or financial institution specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(Government Guarantee)

Article 265-42-2 The government may guarantee an obligation pertaining to the borrowing set forth in the preceding Article of a Life Insurance Policyholders Protection Corporation within the amount approved by a Diet resolution, notwithstanding the provisions of Article 3 of the Act on Limitations of Government Financial Assistance to Juridical Persons (Act No. 24 of 1946).

(Investment of Surplus Funds)

Article 265-43 Surplus funds occurring in the course of business of a Corporation, excluding those belonging to Special Insurance Accounts, shall be invested by the following methods:

(i) Retention in national government bonds or any other securities designated by the Prime Minister and Minister of Finance;

(ii) Deposit in financial institutions designated by the Prime Minister and Minister of Finance;

(iii) Any other method specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

(Delegation to Cabinet Office Ordinance or Ordinance of the Ministry of Finance)

Article 265-44 The particulars that are necessary to a Corporation's finances and accounting, in addition to what is provided for in Article 265-36 to the preceding Article inclusive, shall be specified by a Cabinet Office Ordinance or Ordinance of the Ministry of Finance.

Division 9 Supervision

(Supervision)

Article 265-45 (1) The Corporation shall be supervised by the Prime Minister and Minister of Finance.

(2) The Prime Minister and Minister of Finance may, when they find it necessary for the enforcement of the provisions of this Section, issue orders necessary for supervision to a Corporation.

(3) The Prime Minister and Minister of Finance may, when an officer of a Corporation engages in conduct that violates this Act, orders based on this Act or dispositions based on these, or the articles of incorporation or business rules, order said Corporation to dismiss that officer. In this case, when the Corporation has dismissed said officer after obtaining a resolution of the General Council, that dismissal shall take effect when the General Representative Members' Council has reached a resolution, notwithstanding the provisions of Article 265-15, paragraph (2).

(Report and On-Site Inspections)

Article 265-46 The Prime Minister and Minister of Finance may, within the limit necessary for the enforcement of the provisions of this Section, order a Corporation to submit a report or material related to its business or property, or have their officials enter the Corporation's office and inspect the state of its business or property or its books and documents or any other objects, or have such officials question the relevant persons.

(Rescission of Establishment Approval)

Article 265-47 The Prime Minister and Minister of Finance may, when a Corporation falls under any of the following items, rescind the approval of incorporation set forth in Article 265-9, paragraph (2):

(i) When it has violated this Act, orders based on this Act or the articles of incorporation or business rules of said Corporation;

(ii) When it has violated dispositions under the provisions of Article 265-30, paragraph (3) or Article 265-45, paragraph (2) or the first sentence of paragraph (3);

(iii) When it is found that the continuation of its business would be difficult due to the state of its business or property;

(iv) When it has engaged in conduct that harms the public interest.

Division 10 Miscellaneous Provisions

(Dissolution)

Article 265-48 (1) A Corporation shall dissolve due to the following reasons:

(i) The resolution of the General Representative Members' Council;

(ii) Rescission of approval of incorporation under the provisions of the preceding Article.

(2) Dissolution under the reason given in item (i) of the preceding paragraph shall be null and void without the approval of the Prime Minister and Minister of Finance.

(3) A Corporation shall, when there are residual assets after it has performed its obligations in the case of dissolution, vest said residual assets, pursuant to the provisions of a Cabinet Office Ordinance or Ordinance of the Ministry of Finance, in the other Corporations that its members join.

(4) Requisite measures related to the dissolution of a Corporation, in addition to what is provided for in the preceding paragraph, may be specified by a Cabinet Order, within the scope deemed reasonably necessary.

Subsection 2 Financial Assistance, etc.

Division 1 Petitions for Financial Assistance, etc.

(Petitions for Financial Assistance for the Transfer, etc. of Insurance Contracts)

Article 266 (1) The Relief Insurance Company or the Relief Insurance Holding Company, etc. may, in conjunction with a Bankrupt Insurance Company, petition the Corporation with which that Bankrupt Insurance Company is affiliated as a member (hereinafter referred to as the "Affiliated Corporation" in this and the following Subsections) to extend Financial Assistance with regard to the transfer, etc. of insurance contracts.

(2) An Affiliated Corporation may, when it finds it necessary in the case referred to in the preceding paragraph, request the Relief Insurance Company or the Relief Insurance Holding Company, etc. that made the petition under that paragraph, and the Bankrupt Insurance Company or other relevant persons, for the submission of materials.

(3) Within the Financial Assistance prescribed in paragraph (1), the purchase of the property shall be conducted pertaining to the property of the Bankrupt Insurance Company pertaining to the transfer, etc. of insurance contracts.

(Petition Related to the Succession, etc. to Insurance Contracts)

Article 267 (1) If the transfer, etc. of insurance contracts is one that has been specified as being difficult by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance on the grounds such as that there is no prospect of finding a Relief Insurance Company or Relief Insurance Holding Company, etc. , a Bankrupt Insurance Company may petition its Affiliated Corporation to succeed in a Succession to Insurance Contracts or Underwriting of Insurance Contracts (hereinafter referred to as "Succession, etc. to Insurance Contracts"), to .

(2) A Bankrupt Insurance Company shall, in the case of making the petition under the preceding paragraph, submit, to its Affiliated Corporation, materials which illustrate the content of the negotiation with other Insurance Companies or Insurance Holding Companies, etc. on the transfer, etc. of insurance contracts, and other materials specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

(3) A Bankrupt Insurance Company may, when petitioning for the Succession of Insurance Contracts under the provisions of paragraph (1), also petition the Affiliated Corporation to extend it Financial Assistance with regard to the Succession of Insurance Contracts (limited to donations of money or purchase of property).

(4) The provisions of paragraphs (2) and (3) of the preceding Article shall apply mutatis mutandis to the Financial Assistance of the preceding paragraph. In this case, the term "the Relief Insurance Company or the Relief Insurance Holding Company, etc. that filed the application in that paragraph, and the Bankrupt Insurance Company" in paragraph (2) of that Article shall be deemed to be replaced with "the Bankrupt Insurance Company."

(Authorization of Eligibility for the Transfer, etc. of Insurance Contracts)

Article 268 (1) In the case referred to in Article 266, paragraph (1), the Bankrupt Insurance Company and Relief Insurance Company, or the Bankrupt Insurance Company and Relief Insurance Holding Company, etc. which carry out the transfer, etc. of insurance contracts shall obtain the authorization of the Prime Minister for the transfer, etc. of insurance contracts by the time that the petition under that paragraph is made.

(2) The application for authorization of the preceding paragraph shall be filed jointly by the Bankrupt Insurance Company and Relief Insurance Company or Bankrupt Insurance Company and Relief Insurance Holding Company, etc. set forth in that paragraph.

(3) The Prime Minister may grant the authorization under paragraph (1), only in cases that fall under all of the following requirements:

(i) The transfer, etc. of insurance contracts contributes to the protection of Policyholders, etc. ;

(ii) The extension of Financial Assistance by the Affiliated Corporation is indispensable to the smooth implementation of the transfer, etc. of insurance contracts; and

(iii) There is a risk of loss of credibility in the Insurance Business in the case that all of the business of the Bankrupt Insurance Company pertaining to the transfer, etc. of insurance contracts are abolished or the Bankrupt Insurance Company is dissolved, without a transfer of insurance contracts, etc.

(4) If the Prime Minister has given the authorization under paragraph (1), he/she shall notify the Affiliated Corporation of this.

(5) If an Affiliated Corporation receives a notice under the provisions of the preceding paragraph, it shall promptly report this to the Minister of Finance.

(6) If a company attempting to acquire shares of a Bankrupt Insurance Company has filed an application for approval under Article 271-18, paragraph (1) to acquire shares and become a Holding Company whose Subsidiaries include an Insurance Company (hereinafter referred to as "Holding Company Approval" in this paragraph), the Prime Minister may not give the authorization under the provisions of paragraph (1) until after Holding Company Approval has been given for that company.

(Special Provisions on Authorization of Eligibility for the Transfer, etc. of Insurance Contracts)

Article 269 (1) The Prime Minister may, only in cases that fall under all of the following requirements, make a supplementary note in the recommendation of Article 256, paragraph (1), notwithstanding the provisions of paragraph (1) of the preceding Article, that the petition under Article 266, paragraph (1) may be made:

(i) The abolition of all business of a Bankrupt Insurance Company or the dissolution of the Bankrupt Insurance Company pertaining to the recommendation of Article 256, paragraph (1) falls under the requirements listed in paragraph (3), item (iii) of the preceding Article; and

(ii) The extension of Financial Assistance by the Affiliated Corporation is indispensable to the transfer, etc. of insurance contracts pertaining to said recommendation.

(2) The provisions of paragraphs (4) and (5) of the preceding Article shall apply mutatis mutandis to cases in which the supplementary note of the preceding paragraph was made.

(Authorization of Eligibility for Succession, etc. to Insurance Contracts)

Article 270 (1) In the case referred to in Article 267, paragraph (1), the Bankrupt Insurance Company shall obtain the authorization of the Prime Minister in regard to the Succession, etc. to Insurance Contracts of that paragraph by the time that the petition under that paragraph is made.

(2) The Prime Minister may give the authorization of the preceding paragraph, only in cases that fall under all of the following requirements:

(i) The Succession, etc. to Insurance Contracts contributes to the protection of Policyholders, etc. ;

(ii) There is a risk that without the Succession, etc. to Insurance Contracts, the Insurance Business would lose credibility in the event that all of the business of the Bankrupt Insurance Company that is petitioning the Affiliated Corporation for the Succession, etc. to Insurance Contracts were abolished or if the Bankrupt Insurance Company were dissolved,; and

(iii) In the case that petition is made for Financial Assistance under the provisions of Article 267, paragraph (3), the extension of said Financial Assistance is indispensable to the smooth implementation of the Succession of Insurance Contracts.

(3) If the Prime Minister has given the authorization under paragraph (1), he/she shall notify the Affiliated Corporation of this.

(4) If an Affiliated Corporation receives a notice under the provisions of the preceding paragraph, it shall promptly report this to the Minister of Finance.

(Evaluation of the Property of a Bankrupt Insurance Company)

Article 270-2 (1) A Bankrupt Insurance Company making the petition under Article 266, paragraph (1) or Article 267, paragraph (1) shall seek the confirmation of the Affiliated Corporation regarding the appropriateness of the evaluation the company made of its property (for a Foreign Insurance Company, etc., property in Japan; hereinafter the same shall apply in this Subsection) without delay at the same time that the petition was made or after the petition was made (referred to as "Property Self-Evaluation" in the next paragraph and paragraph (4)).

(2) If an Affiliated Corporation determines, after discussion by the Examination Board, that the Property Self-Evaluation for which confirmation under the preceding paragraph is being sought is appropriate, it shall notify the Bankrupt Insurance Company which requested this that the Property Self-Evaluation has been confirmed as appropriate.

(3) If an Affiliated Corporation finds it necessary for making a determination under the preceding paragraph, it may conduct an examination to evaluate the property of the Bankrupt Insurance Company that made said request.

(4) If an Affiliated Corporation determines, after discussion by the Examination Board, that the Property Self-Evaluation for which confirmation under paragraph (1) is being sought is not appropriate, it shall notify the Bankrupt Insurance Company which made the relevant request of this, and shall conduct an examination to evaluate the property of that Bankrupt Insurance Company.

(5) After confirming that the evaluation based on the examination under the provisions of the preceding paragraph is appropriate and after discussion by the Examination Board, the Affiliated Corporation shall notify the Bankrupt Insurance Company that made the relevant request of the content of the evaluation.

(6) If an Affiliated Corporation has made a notification under paragraph (2) or the preceding paragraph, it shall immediately report the particulars of the notification to the Prime Minister and Minister of Finance.

(Financial Assistance for the Transfer, etc. of Insurance Contracts)

Article 270-3 (1) After making a notification under paragraph (2) or paragraph (5) of the preceding Article to the Bankrupt Insurance Company which filed the petition under Article 266, paragraph (1), Affiliated Corporation shall make a decision without delay, after discussion by the Committee, on whether to extend the Financial Assistance pertaining to said petition.

(2) The amount of the Financial Assistance under the provisions of the preceding paragraph (limited to donation of money) shall be an amount equivalent to that calculated by adding the amount listed in item (iii) to the amount remaining after the deduction of the amount listed in item (ii) from the amount listed in item (i) with regard to the Bankrupt Insurance Company to which said Financial Assistance pertains:

(i) With regard to a Bankrupt Insurance Company's insurance contracts that fall under the category of insurance contract specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance (hereinafter referred to as a "Covered Insurance Contract"), the amount specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance as the liability that must be saved for allocation to the payment of Insurance Proceeds, etc. and for policy reserves (referred to as "Specified Policy Reserves, etc." in the following item and Article 270-5, paragraph (2)) multiplied by the rate specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance by taking into consideration the kind of Covered Insurance Contract, expected interest rate, other content, etc. ;

(ii) The amount of the asset value of that Bankrupt Insurance Company -- based on the evaluation of property confirmed under the provisions of paragraph (2) or paragraph (5) of the preceding Article (referred to as "Confirmed Evaluation of Property" in Article 270-5, paragraph (2)) -- which has been calculated as per Cabinet Office Ordinance and Ordinance of the Ministry of Finance as being the amount which corresponds to the Specified Policy Reserve, etc. pertaining to the Covered Insurance Contract; and

(iii) The amount of expense, which has been approved by the Affiliated Corporation as being necessary for the smooth transfer, etc. of the insurance contracts pertaining to said Financial Assistance, among the expenses that fall under those specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance as expenses which are deemed necessary for the transfer, etc. of insurance contracts pertaining to that Bankrupt Insurance Company.

(3) The Affiliated Corporation shall, when it has made the decision under paragraph (1), immediately report the particulars specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance, as those related to the decision, to the Prime Minister and Minister of Finance.

(4) The Affiliated Corporation shall, when it makes a decision to extend Financial Assistance under the provisions of paragraph (1), conclude a contract concerning said Financial Assistance with the Insurance Company or Insurance Holding Company, etc. that petitioned for said Financial Assistance, and that is to be the party to said Financial Assistance.

(5) When damage security is included in the Financial Assistance pertaining to the contract of the preceding paragraph, the Relief Insurance Company or the Relief Insurance Holding Company, etc. pertaining to that contract, under that contract, shall, if profits are accrued from the assets pertaining to said damage security, commit in that contract that it shall pay all or part of said profits to the Affiliated Corporation pertaining to that contract, or, as one that will have said assets from the transfer, etc. of insurance contracts, to take measures for making payment to the Affiliated Corporation pertaining to that contract.

Division 2 Succession of Insurance Contracts

(Succession of Insurance Contracts)

Article 270-3-2 (1) The Affiliated Corporation may, when it finds it necessary in the case of receiving a petition on the Succession of Insurance Contracts under the provisions of Article 267, paragraph (1), make a request that the Prime Minister take the measures under the provisions of Article 256, paragraph (1) be taken before making the decisions listed in items (i) and (ii) of paragraph (6) pertaining to said petition.

(2) The Prime Minister shall, without delay, notify the Affiliated Corporation, when the measures under the provisions of Article 256, paragraph (1) pursuant to the provisions of the preceding paragraph are requested, of whether said measures may be taken, and, in the case that said measures are to be taken, of the content of those measures.

(3) The Affiliated Corporation shall, when the content of the notification of the Prime Minister under the provisions of the preceding paragraph is to the effect that the measures under the provisions of Article 256, paragraph (1) are to be taken, stay the implementation of the procedure pertaining to the decision listed in paragraph (6), items (i) and (ii); provided, however, that this shall not apply to the confirmation procedures under the provisions of Article 270-2.

(4) In the case that the Prime Minister takes the measures under the provisions of Article 256, paragraph (1) the Bankrupt Insurance Company which petitioned for the Succession of Insurance Contracts under the provisions of Article 267, paragraph (1) shall, when that Bankrupt Insurance Company has reached an agreement pertaining to Merger, etc. , without delay, withdraw said petition.

(5) In the case prescribed in the preceding paragraph, when no agreement pertaining to Merger, etc. is reached, the Bankrupt Insurance Company of that paragraph shall, without delay, notify the Affiliated Corporation of this.

(6) The Affiliated Corporation shall, when it finds it unnecessary to make the request under the provisions of paragraph (1) of the Prime Minister, when the content of the notification of the Prime Minister under the provisions of paragraph (2) is to the effect that the measures under the provisions of Article 256, paragraph (1) cannot be taken, or when the notification under the provisions of the preceding paragraph is made, promptly, after discussion by the Committee, make the decision listed in items (i) and (ii) pertaining to the petition under paragraph (1) or the decision listed in item (ii):

(i) Ruling to the effect that the Affiliated Corporation will incorporate, as its Subsidiary, the Successor Insurance Company, which will carry out a transfer of insurance contracts from the Bankrupt Insurance Company or merge with that company to take over the insurance contracts from that company; and

(ii) Ruling to the effect that the Successor Insurance Company shall carry out a transfer of insurance contracts from the Bankrupt Insurance Company or merge with that company to take over the insurance contracts from that company.

(7) The Affiliated Corporation shall, when making a decision under the preceding paragraph on the Succession of Insurance Contracts pertaining to a petition it has received under Article 267, paragraph (3), also make a decision, after discussion by the Committee, on whether to extend the Financial Assistance pertaining to said petition.

(8) The provisions of paragraph (2) of the preceding Article shall apply mutatis mutandis to the amount of Financial Assistance under the provisions of the preceding paragraph (limited to donation of money), the provisions of paragraph (3) of that Article shall apply mutatis mutandis in the case that the Affiliated Corporation makes a decision under the preceding two paragraphs, and the provisions of paragraph (4) of that Article shall apply mutatis mutandis in the case that the Affiliated Corporation makes a decision to extend Financial Assistance pursuant to the provisions of the preceding paragraph. In this case, the term "transfer, etc. of insurance contracts" in paragraph (2) of that Article shall be deemed to be replaced with "Succession of Insurance Contracts," and the term "Insurance Company or Insurance Holding Company, etc. which filed the application for said Financial Assistance that becomes the party of said Financial Assistance" in paragraph (4) of that Article shall be deemed to be replaced with "Bankrupt Insurance Company which filed the application for said Financial Assistance."

(9) The Bankrupt Insurance Company that has made a petition under paragraph (1) may, when the Affiliated Corporation makes a decision listed in paragraph (6), items (i) or (ii), transfer all or part of the insurance contracts to the Successor Insurance Company pertaining to the decision, or may merge with that company.

(Incorporation of Successor Insurance Company, etc.)

Article 270-3-3 (1) The Affiliated Corporation shall, when it makes a decision listed in paragraph (6), item (i) of the preceding Article, after discussion by the Committee on the content of the contribution pertaining to the decision, become the incorporator for the incorporation of the Stock Company which will be the Successor Insurance Company, and make a contribution for the incorporation of the Stock Company, of which it became the incorporator for said incorporation, as its Subsidiary.

(2) In addition to the case prescribed in the preceding paragraph, the Affiliated Corporation shall, when it seeks to make a contribution to the Successor Insurance Company, go through Committee discussions thereon.

(3) The Affiliated Corporation shall, when it makes the contribution prescribed in the preceding two paragraphs, promptly report the content of the contribution to the Prime Minister and Minister of Finance about the content.

(Managing the Successor Insurance Company)

Article 270-3-4 (1) A Corporation shall manage a Successor Insurance Company (limited to those incorporated by said Corporation; hereinafter the same shall apply in this Article, Article 270-3-6, and Article 270-3-10) to enable its optimal implementation of the following particulars:

(i) When the decision listed in Article 270-3-2, paragraph (6), item (ii) is made, the transfer of insurance contracts or merger shall be carried out to take over the insurance contracts from the Bankrupt Insurance Company that was the subject of the decision; and

(ii) In managing and disposing the insurance contracts or in implementing other business, these shall be carried out in accordance with the guidelines specified in the following paragraph.

(2) A Corporation shall create guidelines on the management and disposition of the insurance contracts of a Successor Insurance Company and other business, and, upon obtaining the approval of the Prime Minister, make the guidelines public.

(3) A Corporation may offer any guidance and advice necessary for the management of a Successor Insurance Company.

(4) If a Corporation assigns the shares of a Successor Insurance Company or makes other dispositions, it shall promptly report this to the Prime Minister and Minister of Finance.

(Non-Application of Article 467 of the Companies Act)

Article 270-3-5 The provisions of Article 467, paragraph (1), item (v) of the Companies Act (Approvals of Assignment of Business) shall not apply to the property confirmed under the provisions of Article 270-2, paragraph (2) or Article 270-2, paragraph (5), in the case that the Corporation owns all of the issued shares of the Successor Insurance Company.

(Succession Agreements)

Article 270-3-6 (1) A Corporation shall conclude an agreement with a Successor Insurance Company that includes the following particulars (hereinafter referred to as "Succession Agreement"):

(i) That the Successor Insurance Company with which the Succession Agreement has been concluded (hereinafter referred to as "Successor Insurance Company Under the Agreement") is to set in place the particulars listed in Article 270-3-4, paragraph (1), items (i) and (ii);

(ii) The Successor Insurance Company Under the Agreement may petition the Corporation to purchase the assets of that Successor Insurance Company Under the Agreement; and

(iii) The Successor Insurance Company Under the Agreement shall, when it seeks to conclude a contract concerning the borrowing of the funds that fall under the guaranteed obligation prescribed in Article 270-3-8, paragraph (1), obtain the approval of the Corporation on the content of that contract to be concluded.

(2) A Corporation shall, when it concludes a Succession Agreement, immediately report the content of the agreement to the Prime Minister and Minister of Finance.

(Purchase of Property)

Article 270-3-7 (1) A Corporation shall, when it receives a petition under paragraph (1), item (ii) of the preceding Article, make a decision, after discussion by the Examination Board and the Committee, on whether to purchase the property pertaining to said petition, without delay.

(2) A Corporation shall, when it makes a decision under the provisions of the preceding paragraph, immediately report to the Prime Minister and Minister of Finance the particulars of the decision.

(3) A Corporation shall, when it makes a decision to purchase the property under the provisions of paragraph (1), conclude a contract concerning the purchase of the property with the Successor Insurance Company Under the Agreement that petitioned for the purchase of the property.

(Loans of Funds and Obligation Guarantee)

Article 270-3-8 (1) For loans of funds that the Successor Insurance Company Under the Agreement finds to be necessary for the smooth implementation of business, the Corporation may, upon petition by the Successor Insurance Company Under the Agreement for a loan of such funds or upon petition to guarantee an obligation pertaining to the borrowing of the funds by the Successor Insurance Company Under the Agreement, after discussions by the Committee, extend said loan or guarantee said obligation when it recognizes these as being necessary.

(2) A Corporation shall, when it concludes a contract pertaining to the loan or guarantee of obligation under the preceding paragraph with the Successor Insurance Company Under the Agreement pursuant to the provisions of that paragraph, immediately report to the Prime Minister and Minister of Finance the content of the contract.

(Compensation for Losses)

Article 270-3-9 A Corporation may, when an amount has been accounted for pursuant to what is specified by a Cabinet Order for the amount of loss accrued by the Successor Insurance Company Under the Agreement by the implementation of business under the specifications of the Succession Agreement, give compensation for said losses, after discussions by the Committee, within the scope of that amount.

(Request for Reporting)

Article 270-3-10 A Corporation may, when it is necessary in order for it to conduct the business under the provisions of this Division, request a Successor Insurance Company to report on the status of the implementation of the Succession Agreement or on finances.

(Petitions for Financial Assistance for Succession to Inherited Insurance Contracts)

Article 270-3-11 (1) The Secondary Successor Insurance Company or Secondary Successor Insurance Holding Company, etc. (meaning Insurance Holding Companies, etc. that succeed in the Succession to Inherited Insurance Contracts; the same shall apply hereinafter) may petition the Corporation that incorporated the Successor Insurance Company pertaining to the inherited insurance contracts to be succeeded to (hereinafter referred to as "Incorporating Corporation") to jointly extend Financial Assistance for Succession to Inherited Insurance Contracts (limited to damage security) with the Successor Insurance Company.

(2) The Incorporating Corporation may, when it finds it necessary in the case referred to in the preceding paragraph, request the Secondary Successor Insurance Company or Secondary Successor Insurance Holding Company, etc. , which made the petition under that paragraph, and the Successor Insurance Company and other relevant persons to submit materials.

(Authorization, etc. of Eligibility for Succession to Inherited Insurance Contracts)

Article 270-3-12 (1) In the case referred to in paragraph (1) of the preceding Article, the Successor Insurance Company and Secondary Successor Insurance Company, which implement the Succession to Inherited Insurance Contracts, or the Successor Insurance Company and Secondary Successor Insurance Holding Company, etc. , shall obtain the authorization of the Prime Minister for the Succession to Inherited Insurance Contracts by the time that the petition under that paragraph is made.

(2) The provisions of Article 268, paragraph (2) to Article 268, paragraph (6) inclusive (except for paragraph (3), item (iii)) shall apply mutatis mutandis to the authorization of the preceding paragraph. In this case, the term "Bankrupt Insurance Company and Relief Insurance Company or Bankrupt Insurance Company and Relief Insurance Holding Company, etc." in paragraph (2) of that Article shall be deemed to be replaced with "Successor Insurance Company and Secondary Successor Insurance Company or Successor Insurance Company and Secondary Successor Insurance Holding Company, etc.," the term "transfer, etc. of insurance contract" in paragraph (3) of that Article shall be deemed to be replaced with "Succession to Inherited Insurance Contracts," the term "Affiliated Corporation" shall be deemed to be replaced with "Incorporating Corporation," the term "Affiliated Corporation" in paragraphs (4) and (5) of that Article shall be deemed to be replaced with "Incorporating Corporation," and the term "Bankrupt Insurance Company" in paragraph (6) of that Article shall be deemed to be replaced with "Successor Insurance Company."

(3) The provisions of Article 270-2 shall apply mutatis mutandis to cases in which a petition under paragraph (1) of the preceding Article is made. In this case, the term "Bankrupt Insurance Company" in Article 270-2 shall be deemed to be replaced with "Successor Insurance Company" the term "Affiliated Corporation" shall be deemed to be replaced with "Incorporating Corporation," and the term "its property (for a Foreign Insurance Company, etc., property in Japan; hereinafter the same shall apply in this Subsection)" in paragraph (1) of that Article shall be deemed to be replaced with "its property."

(Designation of the Other Party to Consultations on Succession to Inherited Insurance Contracts, etc.)

Article 270-3-13 (1) The Prime Minister may designate another Insurance Company or Insurance Holding Company, etc. as the other party with which the Successor Insurance Company shall hold a consultation pertaining to Succession to Inherited Insurance Contracts and recommend that other Insurance Company or Insurance Holding Company, etc. to participate in the consultation.

(2) The provisions of Article 256, paragraphs (2) and (3) and Article 257 shall apply mutatis mutandis to the recommendation of the preceding paragraph. In this case, the term "Bankrupt Insurance Company or an Insurance Company recognized as having a high probability of becoming a Bankrupt Insurance Company" in Article 256, paragraph (2) shall be deemed to be replaced with "Successor Insurance Company of that paragraph," the term "Policyholders Protection Corporation to which a Bankrupt Insurance Company or the Insurance Company that is recognized as having a high probability of becoming a Bankrupt Insurance Company has joined as a member" in Article 256, paragraph (3) shall be deemed to be replaced with "Policyholders Protection Corporation which incorporated the Successor Insurance Company of Article 270-3-13, paragraph (1)," and the term "Bankrupt Insurance Company" in Article 257, paragraph (1) shall be deemed to be replaced with "Successor Insurance Company."

(3) The Prime Minister may, only when he/she finds that the extension of Financial Assistance by the Incorporating Corporation is indispensable for Succession to Inherited Insurance Contracts pertaining to the recommendation of paragraph (1), make a supplementary note in said recommendation, notwithstanding the provisions of paragraph (1) of the preceding Article, that a petition under Article 270-3-11, paragraph (1) may be made.

(4) The provisions of Article 268, paragraph (4) and Article 268, paragraph (5) shall apply mutatis mutandis to the case that the supplementary note of the preceding paragraph is made.

(Financial Assistance in the Succession to Inherited Insurance Contracts)

Article 270-3-14 (1) The Incorporating Corporation shall, without delay after making the notification under Article 270-2, paragraph (2) or (5), as applied mutatis mutandis pursuant to Article 270-3-12, paragraph (3) to the Successor Insurance Company which made the petition under Article 270-3-11, paragraph (1), make a decision, after discussion by the Committee, on whether to extend the Financial Assistance pertaining to said petition.

(2) The provisions of Article 270-3, paragraph (3) shall apply mutatis mutandis in the case that the Incorporating Corporation makes the decision under the preceding paragraph, the provisions of paragraph (4) of that Article shall apply mutatis mutandis in the case that the Incorporating Corporation makes a decision to extend Financial Assistance pursuant to the provisions of the preceding paragraph, and the provisions of paragraph (5) of that Article shall apply mutatis mutandis to the Secondary Successor Insurance Company or Secondary Successor Insurance Holding Company, etc. which concludes the contract of paragraph (4) of that Article, as applied mutatis mutandis pursuant to this paragraph. In this case, the term "transfer, etc. of insurance contracts" in paragraph (5) of that Article shall be deemed to be replaced with "Succession to Inherited Insurance Contracts," and the term "Affiliated Corporation" shall be deemed to be replaced with "Incorporating Corporation."

Division 3 Underwriting of Insurance Contract

(Underwriting of Insurance Contracts)

Article 270-4 (1) The Affiliated Corporation may, when it finds it necessary in the case of receiving a petition for underwriting for the insurance contracts under the provisions of Article 267, paragraph (1), make request the Prime Minister that the measures under the provisions of Article 256, paragraph (1) be taken before underwriting the insurance contracts pertaining to said petition.

(2) The Prime Minister shall, without delay, notify the Affiliated Corporation, when the measures under the provisions of Article 256, paragraph (1) pursuant to the provisions of the preceding paragraph are requested, of whether said measures may be taken, and, in the case that said measures are to be taken, of the content of those measures.

(3) The Affiliated Corporation shall, when the content of the notification of the Prime Minister under the provisions of the preceding paragraph is to the effect that the measures under the provisions of Article 256, paragraph (1) shall be taken, stay the implementation of the procedure pertaining to the Underwriting of Insurance Contracts; provided, however, that this shall not apply to the confirmation procedure under the provisions of Article 270-2.

(4) In the case that the Prime Minister takes the measures under the provisions of Article 256, paragraph (1) under the provisions of paragraph (1), the Bankrupt Insurance Company which applied for the Underwriting of Insurance Contracts under the provisions of Article 267, paragraph (1) shall, when that Bankrupt Insurance Company has reached an agreement pertaining to a Merger, etc. , withdraw said petition without delay.

(5) In the case prescribed in the preceding paragraph, when no agreement pertaining to Merger, etc. is reached, the Bankrupt Insurance Company under that paragraph shall, without delay, notify the Affiliated Corporation of this.

(6) The Affiliated Corporation shall, when it finds it unnecessary to make the request under the provisions of paragraph (1) to the Prime Minister, when the content of the notification of the Prime Minister under the provisions of paragraph (2) is to the effect that the measures under the provisions of Article 256, paragraph (1) cannot be taken, or when the notification under the provisions of the preceding paragraph is made, promptly, after discussion by the Committee, make a decision listed in items (i) and (ii) pertaining to the petition under paragraph (1) or the decision listed in item (ii).

(7) The provisions of Article 270-3, paragraph (3) shall apply mutatis mutandis to the case that the Affiliated Corporation makes the decision under the preceding paragraph.

(8) The Bankrupt Insurance Company pertaining to the petition under paragraph (1) may, when the Affiliated Corporation makes a decision under the provisions of paragraph (6), transfer all or part of the relevant insurance contracts to said Affiliated Corporation pursuant to the contract with the Affiliated Corporation concerning the Underwriting of Insurance Contracts.

(9) The provisions of Article 135, paragraphs (2) to (4) inclusive, Article 136 to 140 inclusive, Article 155, Article 210, and Article 250 to 253 inclusive shall apply mutatis mutandis to the transfer of insurance contracts from the Bankrupt Insurance Company pertaining to the Underwriting of Insurance Contracts to the Affiliated Corporation. In this case, the term "paragraph (1)" in Article 135, paragraphs (3) and (4) shall be deemed to be replaced with "Article 270-4, paragraph (8)," the term "paragraph (1) of the preceding Article" "Transferor Company and the Transferee Company (other than a Foreign Insurance Company, etc.)," and "hereinafter in this Chapter, as well as in Chapter VIII and X" in Article 136, paragraph (1) shall be deemed to be replaced with "Article 270-4, paragraph (8)," "Transferor Company," and "Article 250, paragraph (4)," respectively. The term "Transferor Company and the Transferee Company" and "paragraph (1) of the preceding Article," in Article 136, paragraph (3) shall be deemed to be replaced with "Transferor Company" and "Article 270-4, paragraph (8)," respectively. The term "Article 135, paragraph (1)" and "Transferee Company" in Article 137, paragraph (1) shall be deemed to be replaced with "Article 270-4, paragraph (8)" and "Policyholders Protection Corporation of which that Insurance Company is a member (referred to as "Affiliated Corporation" in Articles 140, 155 and 252)," respectively. The term "the following standards" in Article 139, paragraph (2) shall be deemed to be replaced with "standards listed in items (i) and (iii)." The terms "Transferee Company," "Article 135, paragraph (1)," and "Article 135, paragraph (4)" in Article 140, paragraph (2) shall be deemed to be replaced with "Affiliated Corporation," "Article 270-4, paragraph (8)," and "Article 135, paragraph (4) as applied mutatis mutandis pursuant to paragraph (9) of that Article," respectively. The terms "Article 135, paragraph (1)" and "Transferee Company" in Article 140, paragraph (3) shall be deemed to be replaced with "Article 270-4, paragraph (8)" and "Affiliated Corporation," respectively. The term "minutes of the Shareholders' Meeting, etc. of the Transferee Company (other than a Foreign Insurance Company, etc.) set forth in Article 135, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 272-29)" in Article 155, item (i) shall be deemed to be replaced with "minutes of the General Council of Affiliated Corporation." The term "written agreement concluded under Article 135, paragraph (1) (hereinafter referred to as "Transfer Agreement" in this Section)" in Article 210, paragraph (1) shall be deemed to be replaced with "contract concluded under Article 270-4, paragraph (8) (hereinafter referred to as "Transfer Contract" in this Section)." The term "Article 135, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29)," "Article 268, paragraph (1) or Article 270, paragraph (1)," and "Relief Insurance Company as prescribed in Article 260, paragraph (3)" in Article 250, paragraph (1) shall be deemed to be replaced with "Article 270-4, paragraph (8)," "Article 270, paragraph (1)," and "Policyholders Protection Corporation of which that Bankrupt Insurance Company is a member," respectively. The term "Article 135, paragraph (1)" in Article 250, paragraph (4) shall be deemed to be replaced with "Article 270-4, paragraph (8)." The terms "Article 135, paragraph (1) (including the cases where it is applied mutatis mutandis pursuant to Article 210, paragraph (1) and Article 272-29; hereinafter the same shall apply in this Article)" and "Transferee Company prescribed in Article 135, paragraph (1)" in Article 252 shall be deemed to be replaced with "Article 270-4, paragraph (8)" and "Affiliated Corporation," respectively. Any other technical change in interpretation required shall be specified by a Cabinet Order.

(Transfer to Special Insurance Account pertaining to Underwriting of Insurance Contracts, etc.)

Article 270-5 (1) The Affiliated Corporation shall, when it underwrites the insurance contracts pursuant to the provisions of the preceding Article, incorporate the property of the Bankrupt Insurance Company pertaining to the Underwriting of Insurance Contracts, which it inherited with the transfer of insurance contracts pertaining to the Underwriting of Insurance Contracts, into the Special Insurance Account created for the purpose of that Bankrupt Insurance Company.

(2) The Affiliated Corporation shall, when it underwrites the insurance contracts pursuant to the provisions of the preceding Article, transfer, from the general account to the Special Insurance Account created for the purpose of that Bankrupt Insurance Company, the amount equivalent to the amount remaining after the deduction of the amount listed in item (ii) from the amount listed in item (i) with regard to the Bankrupt Insurance Company pertaining to said assumption of insurance contracts:

(i) The amount of Specified Policy Reserve, etc. pertaining to the Covered Insurance Contract pertaining to that Bankrupt Insurance Company, multiplied by the rate specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance by taking into consideration the kind of that Covered Insurance Contract, expected interest rate, other content, etc. ; and

(ii) The amount of the asset value of that Bankrupt Insurance Company, based on the Confirmed Evaluation of Property, which has been calculated as per Cabinet Office Ordinance and Ordinance of the Ministry of Finance as being the amount which corresponds to the Specified Policy Reserve, etc. pertaining to the Covered Insurance Contract.

(3) The Affiliated Corporation shall, when it underwrites the insurance contracts pursuant to the provisions of the preceding Article, take over the documents of the Bankrupt Insurance Company pertaining to said assumption of insurance contracts listed in Article 4, paragraph (2), items (ii) to (iv) inclusive.

(4) The Affiliated Corporation may, when an amount has been accounted pursuant to what is specified by Cabinet Order for the amount of loss accrued by the Special Insurance Account by the implementation of business involving the Management and Disposition of Insurance Contracts pertaining to the assumption of insurance contracts under the provisions of the preceding Article (including incidental business), transfer the amount from the general account to that Special Insurance Account, after discussion by the Committee, within the scope of that amount.

(Application of this Act to Corporations Conducting Insurance Business)

Article 270-6 (1) A Corporation may, notwithstanding the provisions of Article 3, paragraph (1), conduct Insurance Business to the extent necessary for the Management and Disposition of Insurance Contracts which were transferred pursuant to the contract concerning the Underwriting of Insurance Contracts concluded under the provisions of Article 270-4, paragraph (8).

(2) The application of this Act in the case that a Corporation conducts Insurance Business pursuant to the provisions of the preceding paragraph shall be prescribed as follows:

(i) For the purpose of applying the provisions of Article 9, paragraph (1) (limited to the sections pertaining to item (i)), Article 97, Article 97-2, paragraphs (1) and (2), Article 98, Chapter V of Part II (except for Articles 109, 113, and 114), Article 123 to 125 inclusive, Article 131, Sections 1 and 3 of Chapter VII of that Part, and Article 309 (including the penal provisions pertaining to the provisions), a Corporation shall be deemed to be an Insurance Company. In this case, the term "Article 3, paragraph (2)" in Article 97, paragraph (1) shall be deemed to be replaced with "Bankrupt Insurance Company prescribed in Article 260, paragraph (2) pertaining to the assumption of insurance contracts prescribed in paragraph (9) of that Article," the term "the following business and other business" in Article 98, paragraph (1) shall be deemed to be replaced with "business listed in items (i) and (ii)," the term "board of directors" in Article 120, paragraph (1) and Article 121, paragraphs (1) and (2) shall be deemed to be replaced with "president of the Policyholders Protection Corporation," the term "or general members' council meeting (or General Representative Members' Council Meeting, where the company has such a council) (referred to as 'Shareholders' Meeting, etc.' hereinafter in this Chapter, as well as in Chapter VIII and X)" in Article 136, paragraph (1) shall be deemed to be replaced with ", general members' council meeting (or General Representative Members' Council Meeting, where the company has such a council) or General Representative Members' Council Meeting of the Policyholders Protection Corporation (referred to as 'Shareholders' Meeting, etc.' in Article 144, paragraph (2) and Article 149, paragraph (1)," the terms "director (or, in a company with Committees, executive officers) of the Transferor Company" and "from two weeks before the date of the Shareholders' Meeting, etc. set forth in paragraph (1) of the preceding Article" in Article 136-2, paragraph (1) shall be deemed to be replaced with "director of the Policyholders Protection Corporation," and "from the date of the General Council of the Policyholders Protection Corporation of paragraph (1) of the preceding Article as applied with relevant changes in interpretation pursuant to the provisions of Article 270-6, paragraph (2), item (i)," respectively.

(ii) For the purpose of applying the provisions of Article 101 to 105 inclusive (including the penal provisions pertaining to the provisions), the Corporation shall be deemed to be a Non-Life Insurance Company in the case that the license which had been received by the Bankrupt Insurance Company pertaining to the Underwriting of Insurance Contracts, which was a member of said Corporation, falls under the Classes of License listed in Article 262, paragraph (2), item (ii); and

(iii) For the purpose of applying the provisions of Article 114, the Corporation shall be deemed to be a Stock Company that is an Insurance Company.

(3) In the case that a Corporation conducts Insurance Business pursuant to the provisions of paragraph (1), said Corporation shall, with regard to the application of the Automobile Liability Insurance Act and other laws and regulations specified by a Cabinet Order, be deemed to be an Insurance Company, or, according to the kind of membership license, a Life Insurance Company or Non-Life Insurance Company pursuant to the provisions of a Cabinet Order.

(Request for Financial Assistance in the Secondary Transfer of Insurance Contracts)

Article 270-6-2 (1) The Secondary Transferee Insurance Company may request the Corporation that underwrote the insurance contracts it seeks to have transferred pursuant to the Secondary Transfer of Insurance Contracts (hereinafter referred to as "Underwriting Corporation") to extend Financial Assistance in the Secondary Transfer of Insurance Contracts (limited to security against damages).

(2) The Underwriting Corporation may, when it finds it necessary in the case referred to in the preceding paragraph, ask the Secondary Transferee Insurance Company that made the request under that paragraph and other relevant persons to submit materials.

(Authorization of Eligibility for the Secondary Transfer of Insurance Contracts)

Article 270-6-3 (1) In the case referred to in paragraph (1) of the preceding Article, the Underwriting Corporation and the Secondary Transferee Insurance Company, which implement the Secondary Transfer of Insurance Contracts, shall obtain the authorization of the Prime Minister for the Secondary Transfer of Insurance Contracts by the time that the request under that paragraph is made.

(2) The provisions of Article 268, paragraphs (2) to (5) inclusive (except for paragraph (3), item (iii)) shall apply mutatis mutandis to the authorization of the preceding paragraph. In this case, the term "Bankrupt Insurance Company and Relief Insurance Company or Bankrupt Insurance Company and Relief Insurance Holding Company, etc." in paragraph (2) of that Article shall be deemed to be replaced with "Underwriting Corporation and Secondary Transferee Insurance Company," the term "transfer, etc. of insurance contracts" in paragraph (3) of that Article shall be deemed to be replaced with "Secondary Transfer of Insurance Contracts," the term "Affiliated Corporation" shall be deemed to be replaced with "Underwriting Corporation," and the term "Affiliated Corporation" in paragraphs (4) and (5) of that Article shall be deemed to be replaced with "Underwriting Corporation."

(Designation of Another Party to Consultations on the Secondary Transfer of Insurance Contracts, etc.)

Article 270-6-4 (1) The Prime Minister may designate an Insurance Company as the other party with which the Underwriting Corporation shall hold consultations pertaining to the Secondary Transfer of Insurance Contracts and recommend that that Insurance Company participate in the consultation.

(2) The provisions of Article 256, paragraphs (2) and (3) and Article 257 shall apply mutatis mutandis to the recommendation of the preceding paragraph. In this case, the term "Bankrupt Insurance Company or Insurance Company recognized as having a high probability of becoming a Bankrupt Insurance Company" in Article 256, paragraph (2) shall be deemed to be replaced with "Underwriting Corporation of that paragraph," the term "another Insurance Company or Insurance Holding Company, etc." shall be deemed to be replaced with "Insurance Company," the term "Bankrupt Insurance Company or Policyholders Protection Corporation which an Insurance Company that is recognized as having a high probability of becoming a Bankrupt Insurance Company has joined as a member" in Article 256, paragraph (3) shall be deemed to be replaced with "Underwriting Corporation of Article 270-6-4, paragraph (1)," the term "Bankrupt Insurance Company" in Article 257, paragraph (1) shall be deemed to be replaced with "Underwriting Corporation," and the term "other Insurance Company or Insurance Holding Company, etc." shall be deemed to be replaced with "Insurance Company."

(3) The Prime Minister may, only when he/she finds that the extension of Financial Assistance by the Underwriting Corporation is indispensable for the Secondary Transfer of Insurance Contracts pertaining to the recommendation of paragraph (1), make a supplementary note in said recommendation, notwithstanding the provisions of paragraph (1) of the preceding Article, that the petition under Article 270-6-2, paragraph (1) may be made.

(4) The provisions of Article 268, paragraph (4) and Article 268, paragraph (5) shall apply mutatis mutandis to the case that the supplementary note of the preceding paragraph is made.

(Financial Assistance for the Secondary Transfer of Insurance Contracts)

Article 270-6-5 (1) The Underwriting Corporation shall, when it receives the petition under the provisions of Article 270-6-2, paragraph (1), without delay make a decision, after discussion by the Examination Board and the Committee, on whether to extend the Financial Assistance pertaining to said petition.

(2) The provisions of Article 270-3, paragraph (3) shall apply mutatis mutandis to the case that the Underwriting Corporation makes a decision under the preceding paragraph, and the provisions of paragraph (4) of that Article shall apply mutatis mutandis in the case that the Underwriting Corporation makes a decision to extend Financial Assistance pursuant to the provisions of the preceding paragraph. In this case, the term "Insurance Company or Insurance Holding Company, etc. which made the request for said Financial Assistance that becomes a party to said Financial Assistance" in paragraph (4) of that Article shall be deemed to be replaced with "Secondary Transferee Insurance Company."

(3) The Secondary Transferee Insurance Company which concludes a contract under Article 270-3, paragraph (4), as applied mutatis mutandis pursuant to the preceding paragraph, shall, if profits are accrued from the assets pertaining to said damage security pertaining to that contract, commit in that contract that it shall pay all or part of said profits to the Underwriting Corporation pertaining to that contract.

Division 4 Financial Assistance for the Payment of Covered Insurance Proceeds

(Petitions for Financial Assistance for the Payment of Covered Insurance Proceeds)

Article 270-6-6 (1) The following Insurance Companies (referred to as "Specified Insurance Company" under Subsection 4) may petition the Affiliated Corporation to extend Financial Assistance in connection with the payment of Covered Insurance Proceeds (limited to donations of monies):

(i) An Insurance Company which has been ordered to suspend all or part of its business pursuant to the provisions of Article 241, paragraph (1), or which has suspended its business and is suspending its payments pertaining to the insurance contract pursuant to the provisions of Article 245 (including the cases where it is applied mutatis mutandis pursuant to Article 258, paragraph (2)), Article 250, paragraph (5) (including the cases where it is applied mutatis mutandis pursuant to Article 270-4, paragraph (9)), Article 254, paragraph (4) or Article 255-2, paragraph (3); and

(ii) An Insurance Company whose bankruptcy proceedings or reorganization proceedings are pending before the court and that is suspending its payments pertaining to the insurance contract.

(2) The Affiliated Corporation may, when it finds it necessary in the case referred to in the preceding paragraph, request the Specified Insurance Company that made the petition under that paragraph and other relevant persons to submit materials.

(Financial Assistance for the Payment of Covered Insurance Proceeds)

Article 270-6-7 (1) An Affiliated Corporation shall, when it receives a petition under paragraph (1) of the preceding Article, make a decision without delay, after discussion by the Committee, on whether to extend the Financial Assistance for the payment of the Covered Insurance Proceeds under said petition.

(2) An Affiliated Corporation shall, when it has made a decision under the preceding paragraph, immediately report on the particulars of the decision to the Prime Minister and the Minister of Finance.

(3) An Affiliated Corporation shall, when it has made the decision to extend Financial Assistance for the payment of Covered Insurance Proceeds pursuant to the provisions of paragraph (1), conclude a contract concerning the Financial Assistance for the payment of the Covered Insurance Proceeds with the Specified Insurance Company which filed the relevant petition.

Subsection 3 Purchase of Insurance Claims, etc.

(Purchase of Insurance Claims, etc.)

Article 270-6-8 (1) An Affiliated Corporation may, in the case that the Specified Insurance Company has suspended all of its payments pertaining to the insurance contract, make a decision, after discussion by the Committee, to purchase Insurance Claims pertaining to the Covered Insurance Contract and other rights specified by a Cabinet Order (limited to those whose purpose is not security interest; hereinafter referred to as "Insurance Claim, etc." in this Subsection).

(2) The purchase under the preceding paragraph shall be made in such a way that the Insurance Claim, etc. under the preceding paragraph is purchased based on the request of the creditor pertaining to the Insurance Claim, etc. , within the period during which all payments pertaining to the insurance contract are suspended, at the amount of the insurance proceeds under the Covered Insurance Contract and of other benefits, multiplied by the rate specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance by taking into consideration what is the kind of that Covered Insurance Contract, the expected interest rate, other content, the time when the insured event pertaining to that request took place, etc. (hereinafter referred to as "Purchase Amount"); provided, however, that the Affiliated Corporation shall, in the case that it called for the Insurance Claim, etc. pertaining to the purchase and when the amount which was collected from the calling deducted by the amount specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance as the cost of said purchase exceeds the Purchase Amount pertaining to said purchase, pay this excess amount to the creditor pertaining to said Insurance Claim, etc.

(3) The Affiliated Corporation shall, when it has made the decision under paragraph (1), immediately report on the particulars of the decision to the Prime Minister and Minister of Finance.

(Public Notice, etc. of Purchase)

Article 270-6-9 (1) The Affiliated Corporation shall, when it has made the decision under paragraph (1) of the preceding Article, promptly provide for the purchase location pertaining to the purchase of the Insurance Claim, etc. of that paragraph, the payment method for the Purchase Amount, and other particulars specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance, and give public notice thereof.

(2) The Affiliated Corporation shall, when it makes the payment under the provisions of the proviso of paragraph (2) of the preceding Article, in advance, after discussion by the Committee, provide for the payment amount, payment period, and other particulars specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance, and give public notice thereof.

(3) The provisions of paragraph (3) of the preceding Article shall apply mutatis mutandis to cases in which the particulars prescribed in the preceding paragraph are provided.

(Concerning Taxation)

Article 270-6-10 (1) In the case that a person entitled to the Insurance Claim, etc. receives payment of the Purchase Amount pertaining to the purchase under the provisions of Article 270-6-8, paragraph (2) with regard to said Insurance Claim, etc. , said payment of Purchase Amount received (in the case that the person who received the payment of that Purchase Amount receives payment for the Insurance Claim, etc. pertaining to that Purchase Amount under the provisions of the proviso of that paragraph, that amount of payment received is included) shall be deemed to be the amount of the insurance proceeds and of other benefits based on the Covered Insurance Contract pertaining to said Insurance Claim, etc. , and the provisions of the Income Tax Act (Act No. 33 of 1965) and other laws and regulations concerning income tax shall apply.

(2) In the case that the provisions of the preceding paragraph shall apply, necessary particulars involving the application of the special provisions of the proviso of Article 4-2 and Article 4-3 of the Act on Special Measures concerning Taxation (Act No. 26 of 1957) and other provisions of that paragraph shall be specified by a Cabinet Order.

(3) For the purpose of applying the provisions of the Inheritance Tax Act (Act No. 73 of 1950) and other laws and regulations concerning inheritance tax or gift tax pertaining to the payment of the Purchase Amount received in the case that payment of the Purchase Amount pertaining to the purchase of the Insurance Claim, etc. under the provisions of Article 270-6-8, paragraph (2) (in the case that the payment of said Insurance Claim, etc. pertaining to the Purchase Amount is received within three years of the occurrence of the insured event pertaining to said Insurance Claim, etc. under the provisions of the proviso of that paragraph, that amount of payment received is included; hereinafter the same shall apply in this paragraph) is received, the term "insurance proceeds (mutual aid money)" in Article 3, paragraph (1), item (i) of that Act shall be deemed to be "insurance proceeds (the Purchase Amount prescribed in Article 270-6-10, paragraph (2) of the Insurance Business Act (Act No. 105 of 1995); referred to as "Purchase Amount" in Article 5, paragraph (2)) and mutual aid money," the term "said recipient of insurance proceeds" shall be deemed to be "said recipient of insurance proceeds (any person who received payment of said Purchase Amount and," and the term "its equivalent" in Article 5, paragraph (2) of that Act shall be deemed to be "its equivalent (including the Purchase Amount; hereinafter the same shall apply)."

Subsection 4 Miscellaneous Provisions

(Loans to Members)

Article 270-7 (1) The lending of funds under Article 265-28, paragraph (2), item (i), within the extent of the amount that is found necessary, may be made in the following cases, based on an application therefor, limited to those in which it is found that the loan is necessary and appropriate for the smooth payment of insurance proceeds and other benefits by the members of the Corporation (for a Foreign Insurance Company, etc., insurance proceeds and other benefits pertaining to the insurance contract in Japan; hereinafter the same shall apply in this paragraph):

(i) In the case that a member of the Corporation is late in the payment of insurance proceeds or other benefits, or there is a risk of a member being late in a payment, due to temporary financial circumstances; and

(ii) In the case that a member of the Corporation that is the Specified Insurance Company concluded a contract under the provisions of Article 270-6-7, paragraph (3) with said Corporation.

(2) The loan of funds of item (i) of the preceding paragraph shall comply with the requirement that the calling of loan claims pertaining to the loan of funds is found to be certain and with other requirements specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

(3) Whenever an application has been filed for the lending of funds under the provisions of paragraph (1), a Corporation shall make a decision, after discussion by the Committee, on whether to lend the funds.

(4) A Corporation shall, if it has made the decision to lend the funds referred to in paragraph (1) pursuant to the provisions of the preceding paragraph, immediately report on the particulars of the decision to the Prime Minister and Minister of Finance.

(Loans to Policyholders, etc.)

Article 270-8 (1) If the members of a Corporation are Specified Insurance Companies, the lending of funds under Article 265-28, paragraph (2), item (ii) may be made to any person who is a Policyholder, etc. in an insurance contract with said member as specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance, and who is a entitled to the Insurance Claims and other rights specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance (hereinafter referred to as "Qualified Person" in this Article), within the extent of the amount specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance as the amount which they find that said Qualified Person is to receive based on said rights, when said lending is based on the application of said Qualified Person.

(2) The lending of funds under the preceding paragraph must be backed by the finding that the Qualified Person will certainly pay the debt pertaining to the loan of funds through payments of insurance proceeds and other benefits it will receive based on the rights of that paragraph, and in compliance with other requirements specified by a Cabinet Office Ordinance and Ordinance of the Ministry of Finance.

(3) A Corporation shall, if its member has become a Specified Insurance Company, make a decision, after discussion by the committee, on whether to lend funds to the Qualified Person of the member.

(4) A Corporation shall, when it has made the decision to loan the funds of paragraph (1) pursuant to the provisions of the preceding paragraph, immediately report on the particulars of the decision to the Prime Minister and Minister of Finance, and promptly, after discussion by the Committee, provide for the enquiry location pertaining to the loan of said funds, loan method, and other particulars specified by Cabinet Office Ordinance and Ordinance of the Ministry of Finance, and give public notice thereof.

(Petitions to Purchase the Assets of Insurance Companies in Liquidation)

Article 270-8-2 (1) An Insurance Company in Liquidation may petition a Corporation (limited to on of which that Insurance Company in Liquidation was a member) to purchase the assets of that Insurance Company in Liquidation.

(2) A Corporation may, when it finds it necessary in the case referred to in the preceding paragraph, request the Insurance Company in Liquidation that made the petition under that paragraph and other relevant persons to submit materials.

(Purchase of Assets of an Insurance Company in Liquidation)

Article 270-8-3 (1) A Corporation shall, when it receives a petition under paragraph (1) of the preceding Article, make a decision without delay, after discussion by the Examination Board and the committee, on whether to purchase the assets pertaining to said petition.

(2) A Corporation shall, when it has made the decision under the provisions of the preceding paragraph, immediately report on the particulars of the decision to the Prime Minister and Minister of Finance.

(3) A Corporation shall, when it has made the decision to purchase the assets pursuant to the provisions of paragraph (1), conclude a contract concerning the purchase of said assets with the Insurance Company in Liquidation which made to the petition for the purchase of said assets.

(Special Provisions on Taxation)

Article 270-9 (1) The registration and license tax shall not be imposed for the registration under the provisions of Article 244 (including the cases where it is applied mutatis mutandis pursuant to Article 248, paragraph (2)).

(2) Where a Corporation has accepted insurance contracts pertaining to a member Bankrupt Insurance Company pursuant to the provisions of Article 270-4, when it has acquired the right to real estate or movables from the transfer of property of that Bankrupt Insurance Company that accompanies the acceptance of that insurance contract prescribed in the contract concerning the acceptance of insurance contracts concluded pursuant to the provisions of Article 270-4, paragraph (8), the registration and license tax shall not be imposed for the registration of the transfer of said right to real estate or movables, limited to those which will be registered within one year after the acquisition pursuant to the provisions of the Ordinance of the Ministry of Finance.

(3) Where a Successor Insurance Company has acquired the right to real estate pursuant to the transfer of insurance contracts of the Bankrupt Insurance Company or a merger with that Bankrupt Insurance Company (referred to as "Transfer, etc. of Insurance Contracts Based on a Decision" in the following paragraph) that had been recognized as being qualified under the provisions of Article 270, paragraph (1) based on the decision listed in Article 270-3-2, paragraph (6), item (ii) under the provisions of Article 270-3-2, paragraph (6), the registration and license tax shall not be imposed for the registration of the transfer of said right to real estate, limited to that which will be registered within one year after the acquisition pursuant to the provisions of the Ordinance of the Ministry of Finance.

(4) The assignment of land or rights attached to the land, which the Successor Insurance Company acquired by the transfer of insurance contracts based on a decision, etc. (the assignment prescribed in Article 62-3, paragraph (2), item (i), sub-item (a) of the Act on Special Measures concerning Taxation), shall not fall under the assignment of land, etc. prescribed in Article 62-3, paragraph (2), item (i) of that Act, with regard to the application of the provisions of that Article and Articles 63, 68-68, and 68-69 of that Act pertaining to the Successor Insurance Company.

Section 5 Miscellaneous Provisions

(Opinion of the Prime Minister, etc. on Liquidation Proceedings, etc.)

Article 271 (1) The court may seek the Prime Minister's opinion or make him/her a request for an inspection or investigation regarding the liquidation procedures, bankruptcy procedures, rehabilitation procedures, reorganization procedures or approval assistance procedures of an Insurance Company, etc. or Foreign Insurance Company, etc.

(2) If the Prime Minister finds it necessary, he/she may state his/her opinion to the court on the procedures prescribed in the preceding paragraph.

(3) The provisions of Article 129, paragraph (1), Article 201, paragraph (1), Article 227, paragraph (1) and Article 272-23, paragraph (1) shall apply mutatis mutandis to cases where the Prime Minister has received a request for inspection or investigation from court pursuant to the provisions of paragraph (1).

(Special Provisions pertaining to Assignment of Revolving Mortgages)

Article 271-2 (1) When the Managed Company seeks to assign a revolving mortgage together with all of the claims it shall guarantee before the principal is established, through the assigning of property which will be carried out in conjunction with the assignment of insurance contracts to the Successor Insurance Company (meaning the Successor Insurance Company prescribed in Article 260, paragraph (6); the same shall apply in paragraph (5) and Article 271-2-3, paragraph (1), item (iii)), other insurance companies, or the Corporation that will underwrite (meaning the Underwriting of Insurance Contract prescribed in Article 260, paragraph (9); the same shall apply in paragraph (5)) the insurance contracts of that Managed Company (hereinafter referred to as "Successor Insurance Company, etc." in this Article), that Managed Company and that Successor Insurance Company, etc. may give public notice to the effect that the revolving mortgagor with an objection shall raise its objections to that Managed Company with regard to the following particulars within a certain period, or make the demand thereof:

(i) The fact that the revolving mortgage shall be assigned from that Managed Company to that Successor Insurance Company, etc. and the date thereof; and

(ii) The fact that the revolving mortgage shall guarantee said claim even after the revolving mortgage is assigned.

(2) The period referred to in the preceding paragraph shall not be less than two weeks.

(3) When the revolving mortgagor pertaining to the public notice or demand of paragraph (1) does not raise its objections to the particulars listed in the items of that paragraph within the period referred to in that paragraph, it shall be deemed that the revolving mortgagor consents to the particular listed in item (i) of that paragraph and that the revolving mortgagor and the Successor Insurance Company, etc. pertaining to the public notice or demand of that paragraph agree on the particular listed in item (ii) of that paragraph, respectively.

(4) When the revolving mortgagor raises its objections to part of the particulars listed in the items of paragraph (1), it shall be deemed that it has raised objections to all of the particulars listed in the items of that paragraph.

(5) The provisions of all preceding paragraphs shall apply mutatis mutandis to the case that the Successor Insurance Company or Corporation that underwrote the insurance contracts seeks to assign the revolving mortgage together with all of the claims it shall guarantee before the principal is established, through the assigning of property which will be carried out in conjunction with the assignment of insurance contracts to another Insurance Company.

(Special Provisions on Application Procedures for Registration, etc. of a Revolving Mortgage Transfer)

Article 271-2-2 (1) To apply for the registration of the revolving mortgage transfer in the case referred to in paragraph (3) of the preceding Article (including the cases where it is applied mutatis mutandis pursuant to paragraph (5) of that Article), information proving that public notice or demand was given and that the revolving mortgagor did not raise its objections within the period referred to in paragraph (1) of that Article (including the cases where it is applied mutatis mutandis pursuant to paragraph (5) of that Article) shall be provided with the application information.

(2) The registration of a change in the revolving mortgage to the effect of adding claims pertaining to the assignment to the scope of claims which are to be guaranteed by the revolving mortgage in the case set forth in paragraph (3) of the preceding Article (including the cases where it is applied mutatis mutandis pursuant to paragraph (5) of that Article) may be applied for only by the revolving mortgagor when the information prescribed in the preceding paragraph is provided along with the application information.

(Special Provisions on the Continuation of Business)

Article 271-2-3 (1) Each of the persons listed in the following items may, in the case that he/she has succeeded, through the transfer of an insurance contract or through a merger prescribed in those items, to rights and duties under a contract for business that he/she cannot conduct or a contract restricting his/her engagement in such business pursuant to laws and regulations on said persons' operations, continue to conduct the business under said contracts until the expiration date, if a duration is prescribed in said contract, or for a limited period of within two years from the date of succession, if no such duration is prescribed:

(i) An Insurance Company which has received the recommendation set forth in Article 256, paragraph (1), Article 270-3-13, paragraph (1), or Article 270-6-4, paragraph (1): transfer of insurance contract pertaining to said recommendation or merger;

(ii) A Relief Insurance Company, Secondary Successor Insurance Company, or Secondary Transferee Insurance Company, which has received the authorization set forth in Article 268, paragraph (1), Article 270-3-12, paragraph (1), or Article 270-6-3, paragraph (1) : transfer of insurance contracts pertaining to said authorization or merger; and

(iii) A Successor Insurance Company or Corporation, which carries out the transfer of insurance contracts pertaining to the authorization set forth in Article 270, paragraph (1) from, or the merge with, the Bankrupt Insurance Company which has received said authorization (meaning the Bankrupt Insurance Company prescribed in Article 260, paragraph (2)): transfer of that insurance contract or merger.

(2) Persons prescribed in the preceding paragraph may, in the case that there is a special circumstance in light of the convenience, etc. of the user of the business under the contracts prescribed in that paragraph, create a plan for managing said business for a specified period, and when said plan is approved by the Prime Minister, continue said business within the extent that the total amount of that contract of the day of the transfer of the insurance contract or merger is not exceeded, and, in accordance with said plan, renew the contract whose period set forth in that paragraph has expired or by exceeding the period set forth in that paragraph.

Chapter XI Shareholders

Section 1 General Rules

(Submission of Written Notices Pertaining to the Holding of Voting Rights in an Insurance Company, etc.)

Article 271-3 (1) A person who holds voting rights exceeding 5 percent of all shareholders' voting rights in a single Insurance Company or voting rights exceeding 5 percent of all shareholders' voting rights in a single Insurance Holding Company (excluding the State, a local public entity, or any juridical person specified by Cabinet Order as one equivalent thereto (referred to as the "State, etc." in Article 271-10); such person is hereinafter referred to as a "Large-Volume Holder of Insurance Company Voting Rights" in this Chapter and in Article 333) shall, pursuant to the provisions of Cabinet Office Ordinance, submit a written notice detailing the following particulars (hereinafter referred to in this Chapter as a "Statement of Insurance Company Voting Right Holdings") to the Prime Minister within five days (Sundays and other holidays specified by Cabinet Order are not included in the number of days; the same shall apply in paragraph (1) of the next Article) from the day on which he/she became a Large-Volume Holder of Insurance Company Voting Rights (within the number of days specified by Cabinet Office Ordinance in the where the number of voting rights held has not increased or in any other case specified by Cabinet Office Ordinance):

(i) The particulars of the Proportion of Voting Rights Held (meaning the proportion calculated by dividing the number of voting rights that a Large-Volume Holder of Insurance Company Voting Rights holds in an Insurance Company or Insurance Holding Company in which that Large-Volume Holder of Insurance Company Voting Rights is the holder of voting rights exceeding 5 percent of all shareholders' voting rights, by the number of all shareholders' voting rights in that Insurance Company or Insurance Holding Company; hereinafter the same shall apply in this Chapter), the particulars of acquisition funding, the purpose of holding the voting rights, and any other particulars specified by Cabinet Office Ordinance as important particulars of the holding of voting rights in an Insurance Company or Insurance Holding Company:

(ii) The trade name or name and address;

(iii) In the case of a juridical person, the amount of its capital (including the total amount of contribution) and the name of its representative person; and

(iv) In the case where the person conducts business, the name and location of the business office and the type of the business.

(2) The provisions of Article 2, paragraph (15) shall apply mutatis mutandis to the voting rights held by a Large-Volume Holder of Insurance Company Voting Rights in the case referred to in the preceding paragraph.

(Submission of a Statement of Changes to a Statement of Insurance Company Voting Right Holdings)

Article 271-4 (1) A Large-Volume Holder of Insurance Company Voting Rights shall, in the case where any particulars listed in the items of paragraph (1) of the preceding Article have been changed (in the case of a change in the Proportion of Voting Rights Held, it shall be limited to a case where the rate has increased or decreased by 1 percent or more) after the day on which he/she became a holder of voting rights exceeding 5 percent of all shareholders' voting rights in a single Insurance Company or voting rights exceeding 5 percent of all shareholders' voting rights in a single Insurance Holding Company, he/she shall, pursuant to the provisions of Cabinet Office Ordinance, submit a report pertaining to that change (hereinafter referred to as a "Statement of Changes" in this Article and the next Article) to the Prime Minister within five days from that day (within the number of days specified by Cabinet Office Ordinance in the case where the number of voting rights held has not increased or in any other case specified by Cabinet Office Ordinance); provided, however, that this shall not apply to the case where a Statement of Changes has already been submitted based on a 1 percent or greater decrease in the Proportion of Voting Rights Held and the Proportion of Voting Rights Held detailed in that Statement of Changes is 5 percent or less, or to any other case specified by Cabinet Office Ordinance.

(2) A person submitting a Statement of Changes based on a decrease in the Proportion of Voting Rights Held shall, in a case that conforms to the standards specified by Cabinet Order for a case where a large number of voting rights have been transferred within a short period, also detail the particulars of the party to whom the voting rights were transferred and the Consideration received in that Statement of Changes, pursuant to the provisions of Cabinet Office Ordinance.

(3) When circumstances that compel a person to submit another Statement of Changes have arisen by the day preceding the day of submission of a Statement of Insurance Company Voting Right Holdings or a Statement of Changes (hereinafter referred to as "Required Documents" in this Section), that Statement of Changes shall be submitted to the Prime Minister at the same time as the submission of the Required Documents that have yet to be submitted, notwithstanding the provisions of the main clause of paragraph (1).

(4) A person who has submitted Required Documents shall, if he/she finds that the contents detailed in said documents differ from fact or that said documents insufficiently detail or lack a particular that is required to be included or a fact that is necessary for preventing a misinterpretation, submit a correction report to the Prime Minister.

(5) The provisions of Article 2, paragraph (15) shall apply mutatis mutandis to the voting rights held by a Large-Volume Holder of Insurance Company Voting Rights in the case referred to in paragraphs (1) and (2).

(Special Provisions on Statements of Holdings in Insurance Company Voting Rights, etc.)

Article 271-5 (1) Notwithstanding the provisions of Article 271-3, paragraph (1), a Statement of Insurance Company Voting Right Holdings pertaining to voting rights held by a Bank, Financial Instruments Transaction Business Operator (limited to one that conducts Securities Services), trust company, or any other person specified by Cabinet Office Ordinance who has notified the Prime Minister of a Reference date, where the purpose of holding such voting rights is not for controlling the business activities of the Insurance Company or Insurance Holding Company that has issued the shares related to those voting rights (excluding the case where the Proportion of Voting Rights Held has exceeded the number specified by Cabinet Office Ordinance and any case specified by Cabinet Office Ordinance by taking into consideration the manner in which they are held and other circumstances; hereinafter referred to as "Voting Rights Subject to Special Provisions" in this Act) shall be submitted to the Prime Minister by detailing the particulars of the status of holding for those voting rights as of the Reference Date on which the Proportion of Voting Rights Held exceeded 5 percent for the first time and that are specified by Cabinet Office Ordinance, by the fifteenth day of the month following the month containing said Reference Date, pursuant to the provisions of Cabinet Office Ordinance.

(2) A Statement of Changes pertaining to Voting Rights Subject to Special Provisions (excluding one pertaining to a change where the voting rights become those that are not Voting Rights Subject to Special Provisions) shall be submitted to the Prime Minister by the days respectively prescribed in the following items for the categories of cases listed in those items, pursuant to the provisions of Cabinet Office Ordinance:

(i) A case where the Proportion of Voting Rights Held on a Reference Date that comes after the Reference Date pertaining to the Statement of Insurance Company Voting Right Holdings set forth in the preceding paragraph increased or decreased by 1 percent or more from the Proportion of Voting Rights Held that was detailed in that Statement of Insurance Company Voting Right Holdings or any other case where there was an important change to particulars specified by Cabinet Office Order prescribed in that paragraph: The fifteenth day of the month following the month containing said later Reference Date;

(ii) A case where the circumstances came to conform to the standards specified by Cabinet Office Ordinance for a case in which the Proportion of Voting Rights Held considerably increased or decreased by the last day of any month after the month containing the Reference Date pertaining to the Statement of Insurance Company Voting Right Holdings: The fifteenth day of the month following the month containing said last day;

(iii) A case where the Proportion of Voting Rights Held on a Reference Date that comes after the Reference Date pertaining to the Statement of Changes increased or decreased by 1 percent or more from the Proportion of Voting Rights Held that was detailed in that Statement of Changes or any other case where there was an important change to particulars specified by Cabinet Office Order prescribed in the preceding paragraph: The fifteenth day of the month following the month containing that later reference date; and

(iv) A case specified by Cabinet Office Ordinance as a case equivalent to any of the preceding three items: The day specified by Cabinet Office Ordinance.

(3) The Reference Date set forth in the preceding two paragraphs means the last day of the month in which a person specified by Cabinet Office Ordinance prescribed in paragraph (1) notified the Prime Minister pursuant to the provisions of Cabinet Office Ordinance and that of every three months thereafter.

(4) The provisions of Article 2, paragraph (15) shall apply mutatis mutandis to the Voting Rights Subject to Special Provisions held by a Large-Volume Holder of Insurance Company Voting Rights in the case referred to in paragraphs (1) and (2).

(Order to Submit Correction Report)

Article 271-6 In the case where Required Documents have been submitted pursuant to the provisions of Article 271-3, paragraph (1), Article 271-4, paragraph (1) or (3), or paragraph (1) or (2) of the preceding Article, the Prime Minister may, if he/she finds that there is a formal deficiency in the Required Documents or that the Required Documents insufficiently detail an important particular that is required to be included, order the person who has submitted the Required Documents to submit a correction report. In this case, a hearing shall be carried out irrespective of the categories of procedures for hearing statements under Article 13, paragraph (1) (Procedures Prerequisite for Adverse Dispositions) of the Administrative Procedure Act (Act No. 88 of 1993).

Article 271-7 The Prime Minister may, if he/she has discovered that Required Documents include a false detail with regard to an important particular, fail to detail an important particular that is required to be included, or fail to detail any fact that is necessary for preventing a misinterpretation, order the person who has submitted the Required Documents, at any time, to submit a correction report. In this case, a hearing shall be carried out irrespective of the categories of procedures for hearing statements under Article 13, paragraph (1) (Procedures Prerequisite for Adverse Dispositions) of the Administrative Procedure Act.

(Submission of Reports or Materials by a Large-Volume Holder of Insurance Company Voting Rights)

Article 271-8 The Prime Minister may, if he/she suspects that Required Documents include a false detail with regard to an important particular, fail to detail an important particular that is required to be included, or fail to detail a fact that is necessary for preventing a misinterpretation, order the Large-Volume Holder of Insurance Company Voting Rights that has submitted the Required Documents to submit reports or materials that should serve as reference in connection with the particulars that are required to be included in the Required Documents or facts that are necessary for preventing a misinterpretation.

(On-site Inspection of a Large-Volume Holder of Insurance Company Voting Rights)

Article 271-9 (1) The Prime Minister may, if he/she suspects that Required Documents include a false detail with regard to an important particular, fail to detail an important particular that is required to be included, or fail to detail any fact that is necessary for preventing a misinterpretation, have his/her officials enter an office or any other facility of the Large-Volume Holder of Insurance Company Voting Rights who has submitted the Required Documents, ask questions concerning the particulars that are required to be included in the Required Documents or facts necessary for avoiding misunderstanding, or inspect books and documents or other objects of that Large-Volume Holder of Insurance Company Voting Rights.

(2) The official that carries out the entry, questioning, or inspection under the provisions of the preceding paragraph shall indicate the reason for the entry, questioning, or inspection to the other party.

Section 2 Special Provisions Pertaining to an Insurance Company's Major Shareholders

Subsection 1 General Rules

(Authorization, etc. to Be Obtained by an Insurance Company's Major Shareholders)

Article 271-10 (1) A person who seeks to become the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold or a person who seeks to establish a company or any other juridical person that is the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold (excluding the State, etc., a company that seeks to become a Holding company as prescribed in Article 271-18, paragraph (1), the person prescribed in that paragraph, and an Insurance Holding Company that seeks to make the Insurance Company its Subsidiary) through any of the following transactions or actions shall obtain authorization from the Prime Minister in advance:

(i) Acquisition of voting rights in the Insurance Company by the person who seeks to become the holder of such voting rights (excluding acquisition of shares through exercise of security rights or acquisition of voting rights by any other cause specified by Cabinet Office Ordinance);

(ii) Acquisition of a license set forth in Article 3, paragraph (1), through a company that holds a number of voting rights equal to or exceeding the Major Shareholder Threshold, by the person who seeks to become the holder of said voting rights; or

(iii) Any other transactions or actions specified by Cabinet Order.

(2) A person who became the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold due to a cause other than the transactions or actions listed in the items of the preceding paragraph (excluding the State, etc., an Insurance Holding Company, and a Specified Holding Company prescribed in Article 271-18, paragraph (2); hereinafter referred to "Specified Major Shareholder" in this Article and Article 333) shall take necessary measures for becoming a person who is no longer the holder of a number of voting rights in the Insurance Company equal to or exceeding the Major Shareholder Threshold by the day on which one year has elapsed from the end of the Business Year of that Insurance Company including the date on which said cause arose (hereinafter referred to as the "Last Day of the Grace Period" in this paragraph and paragraph (4)); provided, however, that this shall not apply to the cases where that Specified Major Shareholder has obtained authorization from the Prime Minister to remain the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold even after the Last Day of the Grace Period.

(3) If a Specified Major Shareholder becomes a person who is no longer the holder of a number of voting rights equal in an Insurance Company equal to or exceeding the Major Shareholder Threshold due to a measure required under the preceding paragraph, he/she shall notify the Prime Minster of this without delay. The same applies if a Specified Major Shareholder becomes a person who is no longer the holder of a number of voting rights in the Insurance Company equal to or exceeding the Major Shareholder Threshold without such measures.

(4) The Prime Minister may order a person who became the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold or a company or any other juridical person established as the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold through any of the transactions or actions listed in the items of paragraph (1) without obtaining the authorization set forth in that paragraph or a person who remains the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold even after the Last Day of the Grace Period without obtaining the authorization set forth in the proviso to paragraph (2), to take necessary measures to cease being the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold.

Article 271-11 Whenever an application has been filed for the authorization set forth in paragraph (1) of the preceding Article or the proviso to paragraph (2) of the preceding Article, the Prime Minister shall examine whether it conforms to the following standards:

(i) If the person who applied for the authorization (hereinafter referred to in this Article as "Applicant") is a company or any other juridical person, or if a company or any other juridical person is to be established under the authorization, that the following standards are met:

(a) In light of the particulars of the acquisition funding, the purpose of holding the voting rights, or any other particulars involved in the holding of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold by that Applicant or the company or any other juridical person to be established under the authorization (hereinafter referred to as the "Juridical Person Applicant, etc." in this item), there shall be no risk of impairing the sound and appropriate business operation of the Insurance Company in which that Juridical Person Applicant, etc. is or will become the holder of a number of voting rights equal to or exceeding the Major Shareholder Threshold;

(b) In light of the status of property and income and expenditure of the Juridical Person Applicant, etc. and its Subsidiaries (including any company that will become a Subsidiary), there shall be no risk of impairing the sound and appropriate business operation of the Insurance Company in which that Juridical Person Applicant, etc. is or will become the holder of a number of voting rights equal to or exceeding the Major Shareholder Threshold;

(c) In light of such particulars as its personnel structure, etc. , the Juridical Person Applicant, etc. must have sufficient understanding concerning the public nature of the Insurance Business and must have sufficient social credibility; and

(ii) In cases other than the cases listed in the preceding items, that the following standards are met:

(a) In light of the particulars of the acquisition funding, the purpose of holding the voting rights, or any other particulars of the holding of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold by that Applicant, there shall be no risk of impairing the sound and appropriate business operation of the Insurance Company in which that Applicant is or will become the holder of a number of voting rights equal to or exceeding the Major Shareholder Threshold;

(b) In light of the status of the property of the Applicant (including the status of income and expenditure in the case where that Applicant is a person who conducts business), there shall be no risk of impairing the sound and appropriate business operation of the Insurance Company in which that Applicant is or will become the holder of a number of voting rights equal to or exceeding the Major Shareholder Threshold; and

(c) That Applicant has sufficient understanding of the public nature of the Insurance Business and holds sufficient social credibility.

Subsection 2 Supervision

(Submission of Reports or Materials by an Insurance Company's Major Shareholder)

Article 271-12 If and to the extent that the Prime Minister finds it particularly necessary for protecting Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company in requesting the Insurance Company to submit reports or materials pursuant to the provisions of Article 128, paragraph (1), he/she may request an Insurance Company's Major Shareholders who are the holders of a number of voting rights in the relevant Insurance Company equal to or exceeding the Major Shareholder Threshold, to submit reports or materials that could be helpful concerning the status of the business or property of that Insurance Company, indicating the reasons therefor.

(On-site Inspection of an Insurance Company's Major Shareholders)

Article 271-13 (1) If and to the extent that the Prime Minister finds it particularly necessary for protecting Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company in carrying out the entry, questioning, or inspection of the Insurance Company under the provisions of Article 129, paragraph (1), he/she may have an official to enter an office or any other facility of an Insurance Company's Major Shareholder that holds a number of voting rights in the relevant Insurance Company equal to or exceeding the Major Shareholder Threshold, ask questions concerning the status of the business or property of the Insurance Company or the Insurance Company's Major Shareholder, or inspect books and documents and other items of the Insurance Company's Major Shareholder.

(2) The official that carries out the entry, questioning, or inspection pursuant to the provisions of the preceding paragraph shall indicate the reason for the entry, questioning, or inspection to the other party.

(Order for an Insurance Company's Major Shareholder to Take Measures)

Article 271-14 The Prime Minister may, when an Insurance Company's Major Shareholder no longer conforms to the standards listed in the items of Article 271-11 (in the case where conditions are imposed on the authorization set forth in Article 271, paragraph (1) or the proviso to Article 271, paragraph (2) pertaining to that Insurance Company's Major Shareholder, based on the provisions of Article 310, paragraph (1), such standards shall include those conditions), order that Insurance Company's Major Shareholder to take necessary measures for conforming to the standards by designating the time limit for taking the measures.

(Request, etc. for an Insurance Company's Major Shareholder to Submit an Improvement Plan)

Article 271-15 (1) If and to the extent that the Prime Minister finds it particularly necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of an Insurance Company in light of the status of business or property (in the case that the Insurance Company's Major Shareholder is a company or any other juridical person, this includes the status of property of Subsidiaries of the Insurance Company's Major Shareholder or any other companies to which it is specially related as specified by Cabinet Office Ordinance to the Insurance Company's Major Shareholder) of the Insurance Company's Major Shareholder (limited to a person who holds voting rights exceeding 50 percent of all shareholders' voting rights in the Insurance Company; hereinafter the same shall apply in this Article), the Prime Minister may request the Insurance Company's Major Shareholder to submit an improvement plan for ensuring soundness in the business operation of the Insurance Company or order amendment of the submitted improvement plan by designating the particulars with regard to which measures must be taken and the time limit therefor, or may, to the extent necessary for achieving this, order measures necessary for supervision.

(2) Where the Prime Minister has issued an Insurance Company's Major Shareholder an order under the preceding paragraph, if he/she finds it necessary in light of the state of implementation of the measures under that order, he/she may order the Insurance Company in which the Insurance Company's Major Shareholder holds voting rights exceeding 50 percent of all shareholders' voting rights to take measures necessary for ensuring the sound and appropriate business operation of the Insurance Company.

(Rescission, etc. of the Authorization Granted to an Insurance Company's Major Shareholder)

Article 271-16 (1) The Prime Minister may, when an Insurance Company's Major Shareholder has violated any laws and regulations or a disposition given by the Prime Minister based on any laws and regulations or has engaged in conduct that harms the public interest, order the Insurance Company's Major Shareholder to take necessary measures for the purpose of supervision, or rescind the authorization set forth in Article 271-10, paragraph (1) or the proviso to Article 271-10, paragraph (2) for the Insurance Company's Major Shareholder. In this case, the authorization set forth in paragraph (1) of that Article that pertains to establishment shall be deemed to be granted to the company or other juridical person that has been established under the authorization which constitutes the relevant Insurance Company's Major Shareholder.

(2) An Insurance Company's Major Shareholder shall, when authorization set forth in Article 271-10, paragraph (1) or the proviso to Article 271-10, paragraph (2) has been rescinded pursuant to the provisions of the preceding paragraph, take necessary measures for ceasing to be the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold within a period designated by the Prime Minister.

Subsection 3 Miscellaneous Provision

(Application of this Act to an Insurance Company's Major Foreign Shareholders)

Article 271-17 Any special provisions and technical replacement of terms for applying this Act to a foreign national or a foreign juridical person that is the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold (hereinafter referred to as an "Insurance Company's Major Foreign Shareholder" in this Article) and any other necessary particulars for the application of the provisions of this Act to an Insurance Company's Major Foreign Shareholders shall be specified by Cabinet Order.

Section 3 Special Provisions Pertaining to Insurance Holding Company

Subsection 1 General Rules

(Authorization to be Obtained by Insurance Holding Company, etc.)

Article 271-18 (1) A company which seeks to become a Holding Company whose Subsidiaries include an Insurance Company, or a person who seeks to establish such a Holding Company through any of the following transactions or actions must obtain authorization from the Prime Minister in advance:

(i) Acquisition of Voting Rights in the Insurance Company by the company or its Subsidiary (excluding acquisition of shares through exercise of security rights or acquisition of voting rights by any other cause specified by Cabinet Office Ordinance);

(ii) Acquisition of the license set forth in Article 3, paragraph (1) by its Subsidiary; or

(iii) Any other transaction or action specified by Cabinet Order.

(2) When a company becomes a Holding Company whose Subsidiaries include an Insurance Company through a cause other than the transactions or actions listed in the items of the preceding paragraph (hereinafter referred to as "Specified Holding Company") it shall notify the Prime Minister of the fact that it has become a Holding Company whose Subsidiaries include an Insurance Company and of other particulars specified by Cabinet Office Ordinance, within three months after the end of the relevant Business Year including the day on which said cause arose.

(3) A Specified Holding Company shall take necessary measures to stop being a Holding Company whose Subsidiaries include an Insurance Company by the day on which one year has elapsed from the end of the Business Year that contains the day on which the cause referred to in the preceding paragraph arose (hereinafter referred to as the "Last Day of the Grace Period" in this paragraph and paragraph (5)); provided, however, that this shall not apply to the cases where said Specified Holding Company has obtained authorization from the Prime Minister to continue being a Holding Company whose Subsidiaries include an Insurance Company even after the Last Day of the Grace Period.

(4) If a Specified Holding Company has ceased to be a Holding Company whose Subsidiaries include an Insurance Company due to the measures required under the preceding paragraph, it shall notify the Prime Minister of this without delay. The same applies if a Specified Holding Company has ceased to be a Holding Company whose Subsidiaries include an Insurance Company without such measures.

(5) The Prime Minister may order a company that has become a Holding Company whose Subsidiaries include an Insurance Company or a person who established such a Holding Company due to any of the transactions or actions listed in the items of paragraph (1) without obtaining the authorization set forth in that paragraph, or a company that continues to be a Holding Company whose Subsidiaries include an Insurance Company even after the Last Day of the Grace Period without obtaining the authorization set forth in the proviso to paragraph (3), to take necessary measures to stop being a Holding Company whose Subsidiaries include an Insurance Company.

Article 271-19 (1) Whenever an application has been filed for the authorization set forth in paragraph (1) or the proviso to paragraph (3) of the preceding Article, the Prime Minister shall examine whether it conforms to the following standards:

(i) The company that has filed the application for authorization or which is to be established under the authorization (hereinafter referred to as the "Applicant, etc." in this Article) and its Subsidiaries (including companies scheduled to become its Subsidiaries; hereinafter the same shall apply in the following item) have good prospects for income and expenditure of the business;

(ii) In light of such particulars as its personnel structure, etc. , the Applicant, etc. has the knowledge and experience that will enable the Applicant, etc. to perform the business management of an Insurance Company that is or is scheduled to become its Subsidiary appropriately and fairly and must have sufficient social credibility.

(iii) The business content of the Subsidiary of the Applicant, etc. does not fall under Article 271-22, paragraph (3), item (i) or (ii).

(2) An Insurance Holding Company (excluding one established in accordance with the laws and regulations of the foreign state) shall be a stock company shall have the following organs:

(i) Board of directors;

(ii) Board of company auditors or committees; and

(iii) Accounting auditors.

(Qualification, etc. for Directors, etc. of Insurance Holding Company)

Article 271-19-2 (1) A person who has become subject to the decision under the commencement of bankruptcy proceedings and has not had restored his/her rights, or a person who is treated the same as such a person under the laws and regulations of a foreign state, may not be appointed as a director, executive officer or auditor of an Insurance Holding Company.

(2) The following provisions of the Companies Act shall not apply to an Insurance Holding Company: the proviso to Article 331, paragraph (2) (Qualifications of Directors) (including the cases where it is applied mutatis mutandis pursuant to Article 335, paragraph (1) (Qualifications of Company Auditors) of that Act), Article 332, paragraph (2) (Directors' Terms of Office) (including the cases where it is applied mutatis mutandis pursuant to Article 334, paragraph (1) (Accounting Advisors' Terms of Office) of that Act), Article 336, paragraph (2) (Company Auditors' Terms of Office) and the proviso to Article 402, paragraph (5) (Election of Executive Officers).

(3) An Insurance Holding Company may not become an unlimited partner or a partner who executes the business of a membership company.

(Mutatis Mutandis Application of Provisions on an Insurance Company's Major Shareholders)

Article 271-20 The provisions of Article 271-17 shall apply mutatis mutandis to a Holding Company whose Subsidiaries include an Insurance Company which was established in accordance with the laws and regulations of a foreign state.

Subsection 2 Business and Subsidiary Companies

(Scope of Business of an Insurance Holding Company, etc.)

Article 271-21 (1) An Insurance Holding Company may not conduct business other than managing the operations of its Insurance Company Subsidiaries the operations of the companies listed in Article 271-22, paragraph (1), items (ii)-2 to (xiv) inclusive, and the operations of any other company that has become its Subsidiary with the approval of the Prime Minister under Article 271-22, paragraph (1) or the proviso to Article 271-22, paragraph (4), or any other business incidental thereto.

(2) An Insurance Holding Company shall endeavor to ensure the sound and appropriate business operation of its Insurance Company Subsidiaries.

(Establishment of a System for the Protection of Customers' Interests)

Article 271-21-2 (1) When an Insurance Company that is the Subsidiary of a Insurance Holding Company, or the Parent Financial Institution, etc. or Subsidiary Financial Institution, etc. of a Insurance Holding Company conducts a transaction, such Insurance Holding Company shall, pursuant to the provisions of Cabinet Office Ordinance, properly manage the information on business conducted by its Insurance Company Subsidiaries or by its Subsidiary Financial Institutions, etc. (limited to the Insurance Business and any other business specified by Cabinet Office Ordinance) and establish a system for properly supervising the status of implementation of said business or taking any other measures necessary so that the interests of the customer of said business will not be unjustly impaired.

(2) The term "Parent Financial Institution, etc." as used in the preceding paragraph means the person who holds the majority of all shareholders' voting rights in an Insurance Holding Company, and any other person that is specified by Cabinet Order as being closely related to said Insurance Holding Company and which is an Insurance Company, Bank, Financial Instruments Transaction Business Operator, or any other person conducting financial business that is specified by Cabinet Order.

(3) The term "Subsidiary Financial Institution, etc." as used in paragraph (1) means a person in which an Insurance Holding Company holds the majority of All Shareholders' Voting Rights, etc. , and any other person specified by Cabinet Order as being closely related to said Insurance Holding Company and which is an Insurance Company (excluding said Insurance Holding Company's Insurance Company Subsidiaries), Bank, Financial Instruments Transaction Business Operator, or any other person conducting financial business that is specified by Cabinet Order.

(Scope of Subsidiaries of an Insurance Holding Company, etc.)

Article 271-22 (1) An Insurance Holding Company must receive the advance approval of the Prime Minister if it seeks to make any company other than the following its Subsidiary:

(i) a Life Insurance Company;

(ii) a Non-Life Insurance Company;

(ii)-2 Low-Cost, Short-Term Insurer;

(iii) a bank;

(iv) a Long Term Credit Bank;

(iv)-2 a Company Specialized in Fund Transfers;

(v) a Company Specializing in Securities;

(vi) a Company Specializing in Securities Intermediation;

(vii) a Company Specializing in Trusts;

(viii) a foreign company that conducts Insurance Business;

(ix) Foreign companies which operate in the Banking business (other than a company falling under the preceding item);

(x) a foreign company that conducts any Securities Services (other than a company falling under either of the preceding two items);

(xi) Foreign companies which operate in the Trust Business (other than a company falling under any of the preceding three items);

(xii) Companies which exclusively conduct the following business (limited, in case of those conducting business specified in (a) below, to companies that conduct such business mainly for business being conducted by the relevant Insurance Holding Company, its Subsidiaries (limited to persons that fall under any of the categories in items (i), (ii) and (viii); the same shall apply in paragraph (5)) or other entities specified by Cabinet Office Ordinance as being similar thereto):

(a) Business specified by Cabinet Office Ordinance as being dependent on the business of an Insurance Company or any of the companies listed in item (ii)-2 to the preceding item inclusive (referred to as "Dependent Services" in paragraph (5)); or

(b) Finance-Related Services listed in Article 106, paragraph (2), item (ii);

(xiii) Companies specified by Cabinet Office Ordinance as those exploring new business fields or conducting new business activities found to contribute considerably to the improvement of management (limited to a company in which a person specified by Cabinet Office Ordinance provided for in the preceding item holds voting rights exceeding the number calculated by multiplying All Shareholders' Voting Rights, etc. in the company by the rate specified by Cabinet Office Ordinance); or

(xiv) a Holding Company whose only Subsidiaries are companies listed in the preceding items and to be specified by Cabinet Office Ordinance (including a company that is scheduled to become such Holding Company).

(2) An Insurance Holding Company that seeks to receive the approval set forth in the preceding paragraph shall submit to the Prime Minister a written application detailing the business content, amount of capital and human resource structure of the company covered by the application for approval, as well as other particulars specified by Cabinet Office Ordinance.

(3) Whenever an application has been filed for the approval set forth in paragraph (1), unless the content of the business that the company to which the application pertains conducts or seeks to conduct falls under any of the following cases, the Prime Minister shall give such approval:

(i) it poses the risk of undermining the social credibility of the Insurance Company Subsidiaries of the Insurance Holding Company that filled the application because it falls under either (a) or (b), below:

(a) it may harm the public policy and good morals; or

(b) it may preclude the stable lives of the citizenry or sound development of the national economy; or

(ii) it is likely to damage the soundness of management of the company covered by the application in light of the amount of capital, human resource structure, etc. of the company, and any such damage to its managerial soundness in turn poses the risk of damaging the soundness of management of the Insurance Company Subsidiaries of the Insurance Holding Company that filled the application .

(4) The provisions of paragraph (1) shall not apply where a company other than those listed in the items of the same paragraph becomes a Subsidiary Company of the Insurance Holding Company as a result of the acquisition of shares or equity interests through the exercise of a security rights by the Insurance Holding Company or any of its Subsidiary Companies, or any other justifiable event to be specified by Cabinet Office Ordinance; provided, however, that the Insurance Holding Company shall, unless the Prime Minister approves that such company continue to be its Subsidiary Company, take necessary measures for ensuring that the company will cease to be its Subsidiary Company within one year from the date of such event.

(5) In the case referred to in paragraph (1), item (xii), the Prime Minister shall set the standards for to determining whether a company primarily performs Dependent Services for business conducted by the Insurance Holding Company, its Subsidiaries or any other similar company specified by Cabinet Office Ordinance.

(6) The relevant provisions of the Banking Act or the Long Term Credit Bank Act shall apply in lieu of the provisions of the preceding paragraphs to any Insurance Holding Company that seeks to become a Bank Holding Company (meaning a Bank Holding Company as defined in Article 2, paragraph (13) (Definitions, etc.) of the Banking Act; the same shall apply hereafter in this paragraph as well as in Article 272-39, paragraph (6)) or a Long Term Credit Bank Holding Company (meaning a Long Term Credit Bank Holding Company as defined in Article 16-4, paragraph (1) (Scope of Subsidiary Companies, etc.) of the Long Term Credit Bank Act; the same shall apply hereafter in this paragraph as well as in Article 272-39, paragraph (6)) by making a bank or Long Term Credit Bank its Subsidiary, or that already is a Bank Holding Company or Long Term Credit Bank Holding Company.

Subsection 3 Accounting

(Business Year of Insurance Holding Companies)

Article 271-23 The business year of an Insurance Holding Company shall run from 1 April to 31 March of the next year.

(Insurance Holding Companies' Business Reports, etc.)

Article 271-24 (1) An Insurance Holding Company shall, for each business year, prepare for submission to the Prime Minister an interim business report and business report describing in a consolidated manner the status of business or property of the Insurance Holding Company, and its Subsidiaries and any other company to which it is specially related as specified by Cabinet Office Ordinance (referred to as "Subsidiary Companies, etc." hereafter in this Subsection as well as in the following Subsection)

(2) The particulars for inclusion in the interim business report and business report, submission dates, and other necessary particulars of those reports shall be specified by Cabinet Office Ordinance.

(Public Inspection, etc. of Explanatory Documents on the Status of Business and Property Pertaining to Insurance Holding Company)

Article 271-25 (1) An Insurance Holding Company shall, for each business year, prepare explanatory documents describing, with regard to the Insurance Holding Company and its Subsidiary Companies, etc. , the particulars specified by Cabinet Office Ordinance as pertaining to the status of the business and property of the Insurance Holding Company and its Subsidiary Companies, etc. in a consolidated manner, and keep them for public inspection in the head office and branch offices of its Insurance Company Subsidiaries or any other equivalent place specified by Cabinet Office Ordinance.

(2) The explanatory documents set forth in the preceding paragraph may be prepared in the form of electromagnetic record.

(3) Where the explanatory documents set forth in paragraph (1) are prepared in the form of electromagnetic record, the Insurance Holding Company may take the measures to be specified by Cabinet Office Ordinance as measures to ensure that the information recorded in the electromagnetic records is available to many and unspecified persons by electromagnetic means at the head office and branch offices of its Insurance Company Subsidiaries or any other equivalent place to be specified by Cabinet Office Ordinance. In this case, the explanatory documents set forth in that paragraph shall be deemed to be kept for public inspection pursuant to the provisions of that paragraph.

(4) In addition to what is provided in the preceding three paragraphs, the period for making the documents set forth in paragraph (1) available for public inspection and any other necessary particulars involved in the application of these provisions of preceding paragraphs shall be specified by Cabinet Office Ordinance.

(5) An Insurance Holding Company shall endeavor to disclose, in addition to what is set forth in paragraph (1), any particular that would be helpful for the Policyholders and other customers of its Insurance Company Subsidiaries to know the status of the business and property of the Insurance Holding Company and its Subsidiary Companies, etc.

(Particulars for Inclusion in the Business Reports, etc. of an Insurance Holding Company)

Article 271-26 The particulars for inclusion in the business report and supplementary schedules prepared by an Insurance Holding Company pursuant to the provisions of Article 435, paragraph (2) (Preparation and Retention of Financial Statements, etc.) of the Companies Act, are specified by Cabinet Office Ordinance.

Subsection 4 Supervision

(Submission of Reports or Materials by Insurance Holding Company, etc.)

Article 271-27 (1) In requesting an Insurance Company to submit a report or materials pursuant to the provisions of Article 128, paragraph (1), if the Prime Minister finds it particularly necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of the Insurance Company, he/she may request the Insurance Holding Company of which the Insurance Company is a Subsidiary, that Insurance Holding Company's Subsidiary, etc. (meaning a Subsidiary of the Insurance Holding Company or any other person to be specified by Cabinet Office Ordinance as a juridical person whose operations are controlled by the Insurance Holding Company; the same shall apply in the following paragraph, and paragraphs (2) and (4) of the following Article), or a person the Insurance Holding Company has entrusted with its business, to submit a report or materials that should serve as reference regarding the status of the business or property of the Insurance Company, indicating the reason therefor.

(2) An Insurance Holding Company's Subsidiary, etc. or a person that an Insurance Holding Company has entrusted with its business may refuse to submit reports or materials under the preceding paragraph if there are justifiable grounds for it to do so.

(On-Site Inspection of Insurance Holding Company, etc.)

Article 271-28 (1) If and to the extent that the Prime Minister finds it particularly necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of the Insurance Company in making an entry, asking questions, or conducting inspection in an Insurance Company pursuant to the provisions of Article 129, paragraph (1), he/she may have his/her officials enter an office or any other facility of the Insurance Holding Company of which the Insurance Company is a Subsidiary to ask questions on the status of the business or property of the Insurance Company or Insurance Holding Company, or inspect the books and documents and other materials of the Insurance Holding Company.

(2) If and to the extent that the Prime Minister finds it particularly necessary for protecting the Policyholders, etc. and for ensuring the sound and appropriate business operation of the Insurance Company in making an entry, asking questions, or conducting inspection in an Insurance Company pursuant to the provisions of Article 129, paragraph (1), he/she, may have his/her officials enter the business office or any other facility of an Insurance Holding Company's Subsidiary, etc. of which the Insurance Company is a Subsidiary or the business office or any other facility of a person the Insurance Holding Company has entrusted with its business, have such officials question the Insurance Company or ask questions about any particulars that are necessary for their inspection, or have such officials inspect books and documents and other materials.

(3) The personnel who make an entry, ask questions or conduct inspection under the preceding two paragraphs shall indicate to the other party the reason for such entry, questioning or inspection.

(4) The provisions of paragraph (2) of the preceding Article shall apply mutatis mutandis to the questioning and inspection of an Insurance Holding Company's Subsidiary, etc. or of a person that an Insurance Holding Company has entrusted with its business under paragraph (2).

(Request for Submission of Improvement Plan, etc. by Insurance Holding Company, etc.)

Article 271-29 (1) If the Prime Minister finds it necessary for protecting the Policyholders, etc. and for ensuring the sound and proper business operation of an Insurance Holding Company's Insurance Company Subsidiaries, in light of the status of the business of said Insurance Holding Company or the property of the Insurance Holding Company and its Subsidiary Companies, etc. , the Prime Minister may request the Insurance Holding Company to submit an improvement plan for ensuring soundness in the management of the relevant Insurance Companies by designating particulars with regard to which measures must be taken and the time limit thereof, or may order, to the extent necessary for achieving this, measures necessary for supervision.

(2) In giving an order to an Insurance Holding Company under the preceding paragraph (including the request for submission of an improvement plan), if the Prime Minister finds it particularly necessary in light of conditions regarding the implementation of the ordered measures, he/she may order its Insurance Company Subsidiaries to take necessary measures for ensuring sound and appropriate business operation.

(Rescission of Authorization Pertaining to Insurance Holding Company, etc.)

Article 271-30 (1) The Prime Minister may, when an Insurance Holding Company has violated a law or regulation, its articles of incorporation or any disposition of the Prime Minister pursuant to a law or regulation, or has engaged in any conduct that harms the public interest, order the Insurance Holding Company to dismiss its directors, executive officers, accounting advisors or company auditors or to take necessary measures for the purpose of supervision, rescind the authorization given to the Insurance Holding Company under Article 271-18, paragraph (1) or the proviso to Article 271-18, paragraph (3), or order its Insurance Company Subsidiaries to suspend its business in whole or in part. In this case, the authorization set forth in paragraph (1) of that Article that was granted for establishment of the Insurance Holding Company shall be deemed to be granted to the Insurance Holding Company established under the authorization.

(2) An Insurance Holding Company shall, when the authorization set forth in Article 271-18, paragraph (1) or the proviso to Article 271-18, paragraph (3) is rescinded pursuant to the provisions of the preceding paragraph, take necessary measures to ensure that it will stop being a Holding Company whose Subsidiaries include an Insurance Company within a period designated by the Prime Minister.

(3) When the measures prescribed in the preceding paragraph have been taken, the day on which such measures were taken shall be deemed to be the date of occurrence of the event set forth in Article 171-10, paragraph (2) for the purpose of applying the provisions of the preceding paragraph where the company that has taken such measures continues to be the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold.

(4) If a Holding Company whose Subsidiaries include an Insurance Company falls under any of the following items and the Prime Minister finds it to be necessary, the Prime Minister may order that Holding Company's Insurance Company Subsidiaries to suspend its business in whole or in part:

(i) it has become a Holding Company whose Subsidiaries include an Insurance Company due to any of the transactions or actions listed in the items of that paragraph without the authorization required in Article 271-18, paragraph (1);

(ii) it was established as a Holding Company whose Subsidiaries include an Insurance Company without the authorization required in Article 271-18, paragraph (1);

(iii) it continues to be a Holding Company whose Subsidiaries include an Insurance Company even after the Last Day of the Grace Period set forth in Article 271-18, paragraph (3) without the authorization set forth in the proviso thereto; or

(iv) it has had the authorization under Article 271-18, paragraph (1) or the proviso to Article 271-18, paragraph (3) rescinded pursuant to the provisions of paragraph (1), and continues to be a Holding Company whose Subsidiaries include an Insurance Company after the end of the period designated by the Prime Minister under paragraph (2) without taking the measures set forth in that paragraph.

Subsection 5 Miscellaneous Provisions

(Authorization of Merger, Company Split, or Transfer of Business Involving Insurance Holding Company)

Article 271-31 (1) Any Merger involving an Insurance Holding Company or Insurance Holding Companies (limited to a merger as a result of which a company that was an Insurance Holding Company before the merger survives as an Insurance Holding Company) shall not be effective without authorization of the Prime Minister.

(2) No company split of which an Insurance Holding Company is party (limited to the case where the Insurance Holding Company which had its business succeeded by another party through the company split or the Insurance Holding Company which succeeded to another party's business through the company split continues to exist as a Insurance Holding Company even after the company split) shall be effective without authorization of the Prime Minister, except for the cases specified by Cabinet Order.

(3) No transfer of business where an Insurance Holding Company transfers or receives the whole or part of its or any other party's business (limited to the case where the Insurance Holding Company which transferred or received transfer of its or any other party's business continues to exist as an Insurance Holding Company even after the transfer or the receipt) shall be effective without authorization of the Prime Minister, except for the cases specified by Cabinet Order.

(4) The provisions of Article 271-19, paragraph (1) apply mutatis mutandis whenever an application has been filed for the authorization set forth in the preceding three paragraphs.

Section 4 Miscellaneous Provisions

(Particulars Requiring Notice)

Article 271-32 (1) If an Insurance Company's Major Shareholder (including a person who used to be an Insurance Company's Major Shareholder) falls under any of the following items, it shall notify the Prime Minister of this pursuant to the provisions of Cabinet Office Ordinance:

(i) If it becomes the Insurance Company's Major Shareholder under the authorization set forth in Article 271-10, paragraph (1) or is formed as the Insurance Company's Major Shareholder subject to such authorization;

(ii) If it comes to hold voting rights exceeding 50 percent of all shareholders' voting rights in the Insurance Company;

(iii) If it ceases to be the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold (excluding the case referred to in item (v));

(iv) If it ceases to hold voting rights exceeding 50 percent of all shareholders' voting rights in the Insurance Company (excluding the cases referred to in the preceding and following items);

(v) If it dissolves (including when a judgment invalidating its formation, share transfer, merger (limited to a merger for forming a company or any other juridical person that becomes the holder of a number of voting rights in an Insurance Company equal to or exceeding the Major Shareholder Threshold) or incorporation-type split has become final and binding);

(vi) If its voting rights are acquired or come to be held by a single shareholder, in excess of 50 percent of all shareholders' voting rights; or

(vii) If it falls under any other case specified by Cabinet Office Ordinance.

(2) If an Insurance Holding Company (including a former Insurance Holding Company) falls under any of the following items, it shall notify the Prime Minister of this pursuant to the provisions of Cabinet Office Ordinance:

(i) If it becomes an Insurance Holding Company subject to the authorization set forth in Article 271-18, paragraph (1) or is established as an Insurance Holding Company subject to such authorization;

(ii) If it stops being a Holding Company whose Subsidiaries include an Insurance Company (excluding the case referred to in item (v));

(iii) If it seeks to make any of the companies listed in the items of Article 271-22, paragraph (1) (except when it seeks to merge, Split or acquire a business with the authorization set forth in Article 271-31, paragraph (1), (2) or (3)) its Subsidiary;

(iv) If its Subsidiary ceases to be its Subsidiary (except when it splits or assigns a business with the authorization set forth in Article 271-31, paragraph (2) or (3), and the case referred to in item (ii));

(v) If it dissolves (including when a judgment invalidating its incorporation, share transfer, merger (limited to a merger for incorporating a Holding Company whose Subsidiaries include an Insurance Company) or incorporation-type split has become final and binding);

(vi) If it seeks to modify the amount of capital;

(vii) If its voting rights are acquired or come to be held by a single shareholder, in excess of 5 percent of all shareholders' voting rights; or

(viii) If it falls under any other case specified by Cabinet Office Ordinance.

(3) The provisions of Article 2, paragraph (15) shall apply mutatis mutandis to voting rights in an Insurance Company's Major Shareholder or an Insurance Holding Company which were acquired or have come to be held by the single shareholder set forth in paragraph (1), item (vi) or the preceding paragra