Corporate Governance Report

Transcription

1 Corporate Governance Report Tokio Marine Holdings, Inc. Last Update: June 26, 2017 Tokio Marine Holdings, Inc. Tsuyoshi Nagano, President & Chief Executive Officer Contact: Toru Kikuchi, Legal Dept. Securities Code: The corporate governance of Tokio Marine Holdings, Inc. (the Company ) is as follows. I. Fundamental Views on Corporate Governance, and Basic Information on Capital Structure, Corporate Attributes and Other Matters 1. Fundamental Views The Company defines the Tokio Marine Group Corporate Philosophy and is committed to the continuous enhancement of corporate value by fulfilling its responsibilities to shareholders, customers, society, employees and other stakeholders. For this purpose, the Company hereby establishes a sound and transparent corporate governance system and, based on its Basic Policies for Internal Controls, aims to exercise appropriate control over the Tokio Marine Group (the Group ) companies as a holding company. In the various basic business policies for the Group, the Company prescribes basic terms for the management of the group companies and compliance, risk management and internal audit of the Group. Moreover, business strategies, business projects and other important plans by principal group companies are subject to the Company's prior approval, while their compliance with various basic business policies and the implementation status of their business plans are confirmed by the Company. Through these and other measures, the Company manages the principal group companies. Based on the ability of the principal group companies to meet business results indices, etc., defined by the management strategy, evaluations on business results of principal group companies shall be made on a yearly basis, and the results of such evaluations will be incorporated into compensation for Directors and Executive Officers of the group companies. [Reasons for Non-compliance with the Principles of the Corporate Governance Code] The Company complies with all principles of the Corporate Governance Code. [Disclosure Based on the Principles of the Corporate Governance Code] (Updated) [Principle 1-4] (1) For details on the Company s policy on holding business-related equities, see Article 3 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. With regarding to reduction of business-related equities, the Group plans to continuously sell more than JPY100 billion yen per year during the term of current Mid-Term business plan from fiscal year 2015 to fiscal year The Group has achieved a reduction of JPY117.0 billion yen in fiscal year 2016, resulting in a reduction of JPY 1.5 trillion yen in cumulative total since fiscal year 2004 (on market value at the time of sale). As a result of such efforts, book value of business-related equities held at the end of fiscal year 2016 has declined by more than half from those held at the end of fiscal year (Policy on holding business-related equities) Article 3-1 -

2 Business-related equities are implemented by a portion of the Company s business subsidiaries (companies at which the Company directly holds a majority of voting rights) with the intent of strengthening transaction relationships, held with the intent to improve corporate value of the Group. However, the Company will continue to improve its capital to items that are not easily affected by fluctuations in share price, and from the viewpoint of improving capital efficiency, continue to work to reduce the total amount. (2) With regard to the business-related equities the Company holds, the Board of Directors reviews risk and returns of major issues every year to confirm economic rationality. (3) With regard to standards for exercising voting rights, Tokio Marine & Nichido Fire Insurance Co., Ltd. ( Tokio Marine & Nichido ), a core subsidiary of the Company, prescribes them as follows. < Tokio Marine & Nichido: The Japanese Version of the Stewardship Code (excerpt)> If it is considered that a certain agenda may significantly damage corporate value, Tokio Marine & Nichido shall decide on whether to approve it through a careful examination. Tokio Marine & Nichido shall closely pay attention to the following items. * Election or dismissal of directors (by a company operating in deficit for a certain consecutive period, etc.) * Awarding of retirement allowance (by a company operating in deficit for a certain consecutive period, etc.) * Increase of compensation of directors and audit & supervisory board members (by a company operating in deficit for a certain consecutive period, etc.) * Issuance of new shares or share acquisition rights under favorable conditions * Corporate reorganization, including a merger, acquisition, or transfer and assignment of business * Capital reduction accompanied by a decrease in net assets * Introduction of anti-takeover measures * Existence or nonexistence of outside directors * Proposals from shareholders, etc. In the case of agendas that breach laws or regulations or constitute antisocial activities, Tokio Marine & Nichido opposes them regardless of the circumstances. [Principle 1-7] For details on the framework of the procedures for related party transactions, see Article 4 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Related party transactions) Article 4 The Company shall define Rules of the Board of Directors and the Tokio Marine Group Basic Policies for Management of Intragroup Transactions, and the Board of Directors shall monitor related party transactions between Officers and subsidiaries, etc., in an effort to ensure that the joint interests of the Company and shareholders are not harmed. [Principle 3-1] (1) For details on the corporate philosophy, see the Corporate Philosophy ( disclosed on the Company s website. For details on the corporate strategy and business plan, see Corporate Strategy ( disclosed on the Company s website. (2) For details on the Company s fundamental corporate governance policy, see the Tokio Marine Holdings Fundamental Corporate Governance Policy attached. For details on the Company s fundamental views on corporate governance, see Article 1 of the same policy as follows. (Fundamental views on corporate governance) Article 1 Tokio Marine Holdings, Inc. (the Company ), shall define the Tokio Marine Group Corporate Philosophy and is committed to the continuous enhancement of corporate value by fulfilling its - 2 -

3 responsibilities to shareholders, customers, society, employees and other stakeholders. For this purpose, the Company hereby establishes a sound and transparent corporate governance system and, based on its Basic Policies for Internal Controls, aims to exercise appropriate control over the Tokio Marine Group companies as a holding company. (3) For details on the Company s policies and procedures for the determination of compensation for Directors, Audit & Supervisory Board Members and Executive Officers, see Article 17 through Article 20 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Responsibilities of the Compensation Committee) Article 17 The Company shall establish a Compensation Committee to serve as an advisory body to its Board of Directors. 2 The Compensation Committee shall deliberate on the following matters and report to the Board of Directors: 1 Evaluation of the performance of Directors (full-time) and Executive Officers of the Company and its principal business subsidiaries; and 2 The compensation system for Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries and the level of compensation for Directors (full-time) and Executive Officers of the Company and its principal business subsidiaries. (Composition of the Compensation Committee) Article 18 The Compensation Committee shall generally consist of approximately five members. 2 As a general rule, a majority of the members of each committee shall be selected from outside of the Company, and the chairman of each committee shall be one of the outside members. (Policies on determination of compensation for Directors, Audit & Supervisory Board Members and Executive Officers) Article 19 Policies to determine compensation for Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries are as follows: 1 Ensure "transparency," "fairness" and "objectivity" regarding compensation for Directors, Audit & Supervisory Board Members and Executive Officers; 2 Strengthen incentives for improving the business performance of the Company by introducing a performance-linked compensation system; 3 Enhance accountability through sharing returns with shareholders by introducing compensation system linked to meeting the Company's business results indices based on the management strategy and Company share price; and 4 Fully implement a performance-based pay system through processes designed to objectively evaluate individual performance of Directors (full-time) and Executive Officers with respect to management objectives. 2 In order to determine the level of compensation for Directors, Audit & Supervisory Board Members and Executive Officers, of the Company and its principal subsidiaries, the Company shall set the standard of compensation for each position, depending on the responsibilities of Directors, Audit and Supervisory Board Members and Executive Officers and take the business performance of the Company and the level of compensation of other companies into consideration. 3 Based on ability to meet business results indices, etc., defined by the management strategy, evaluations on business results shall be made on a yearly basis, and the results of such evaluations will be incorporated into compensation for Directors (full-time) and Executive Officers. (Compensation System for Directors, Audit & Supervisory Board Members and Executive Officers) Article 20 Compensation for Directors (full-time) and Executive Officers consists of three elements: fixed compensation, bonuses related to the business performance of the Company and the performance of the individual and stock options. 2 Compensation for Directors (part-time) consists of two elements: fixed compensation and stock options

4 3 Compensation for Audit & Supervisory Board Members consists of one element: fixed compensation. (4) For details on the Company s policies and procedures for the selection and nomination of Directors, Audit & Supervisory Board Members and Executive Officers, see Article 9 and Article 12 through Article 15 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Conditions for selection of Directors) Article 9 Directors of the Company and its principal business subsidiaries (Tokio Marine & Nichido Fire Insurance Co., Ltd., Nisshin Fire and Marine Insurance Co., Ltd., and Tokio Marine & Nichido Life Insurance Co., Ltd.) shall have a deep understanding of the company s business type, possess a wide range of knowledge required for management, and as a member of the Board of Directors, have the ability to make decisions that are necessary to determine significant business execution matters. 2 In addition to meet the conditions outlined in the previous paragraph, Outside Directors of the Company and its principal business subsidiaries shall have deep insights and plentiful experiences in their fields (such as global corporate management, financial affairs, financial and accounting, law, compliance and internal control, technological innovation, and human resource management), and in principle, meeting the independence standards defined in Article Directors who are involved in the management of insurance companies within the Group shall not only meet the requirements in the first paragraph, but have knowledge and experience to manage operations of an insurance company fairly and efficiently as defined in Article 8-2 of the Insurance Business Act, and also have adequate social trust. (Selection of Audit & Supervisory Board Members) Article 12 Audit & Supervisory Board Members of the Company and its principal business subsidiaries shall have operational abilities and previous achievements and experience, etc., as Audit & Supervisory Board Members, and through implementation of high quality audits, secure sound and continuous growth of the company, contributing to the establishment of a superior corporate control system that can respond to societal trust. 2 In addition to meet the conditions outlined in the previous paragraph, Outside Audit & Supervisory Board Members of the Company and its principal business subsidiaries shall have deep insights and plentiful experiences in their fields (such as global corporate management, financial affairs, financial and accounting, law, compliance and internal control, technological innovation, and human resource management), and in principle, meeting the independence standards defined in Article Audit & Supervisory Board Members who are involved in the management of insurance companies within the Group shall not only meet the requirements in the second paragraph, but have knowledge and experience to audit performance of Directors of an insurance company fairly and efficiently as defined in Article 8-2 of the Insurance Business Act, and also have adequate social trust. (Conditions for selection of Executive Officers) Article 13 Executive Officers of the Company and its principal business subsidiaries shall be evaluated based on competency as officers, achievements, experience and personality among others and may become responsible for the execution of business at the company. (Responsibilities of the Nomination Committee) Article 14 The Company shall establish a Nomination Committee to serve as an advisory body to the Board of Directors. 2 The Nomination Committee shall deliberate on the following matters and report to the Board of Directors: 1 The appointment and dismissal of Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries; and 2 The criteria for the appointment of Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries

5 (Composition of the Nomination Committee) Article 15 The Nomination Committee shall generally consist of approximately five members. 2 As a general rule, a majority of the members shall be selected from outside of the Company, and the chairman shall be one of the outside members. (5) For an explanation on the selection and nomination of Directors and Audit & Supervisory Board Members, see the following. a. Outside Directors See [Directors], Outside Directors Relationship with the Company (2), Reasons of Appointment in II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management, as described below. b. Outside Audit & Supervisory Board Members See [Audit & Supervisory Board Members], Outside Audit & Supervisory Board Member s Relationship with the Company (2), Reasons of Appointment in II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management, as described below. c. Inside Officers Shuzo Sumi, Chairman of the Board We believe that he would be expected to fulfill his role adequately in deciding important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining The Tokio Marine and Fire Insurance Company, Limited ( Tokio Marine ). These include his intensive involvement in product planning and domestic insurance underwriting, his terms in office as Director and Chief Representative in London of Tokio Marine, and President & Chief Executive Officer and Chairman of the Board of Tokio Marine & Nichido and the Company. Tsuyoshi Nagano, President & Chief Executive Officer We believe that he would be expected to fulfill his role adequately in presiding over business operations in general as the head of Executive Officers, and to decide important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic and overseas insurance underwriting, his work in corporate planning and product planning, his terms in office as President & Chief Executive Officer of Tokio Marine & Nichido, and his current leadership role in the management of the Group as Group CEO. Kenji Iwasaki, Executive Vice President We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for business strategy and synergy of the Group, and to decide important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic insurance underwriting and corporate planning, his terms in office as Executive Officer of Tokio Marine & Nichido in charge of personnel affairs, corporate planning and corporate communications, and his current role of being responsible for business strategy and synergy of the Group as Executive Vice President of the Company. Kunihiko Fujii, Executive Vice President We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for risk management of the Group, and to decide important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in financial planning and overseas insurance business, his terms in office as Executive Officer of Tokio Marine & Nichido and the Company in charge of international business strategies with a focus on M&A and international ERM, and his current role of being - 5 -

6 responsible for risk management of the Group as Executive Vice President of the Company. Ichiro Ishii, Executive Vice President We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business of the Group, and to decide important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of global experience and results he has achieved since joining Tokio Marine. These include his involvement in product planning and overseas insurance businesses in the U.S., Asia and elsewhere, and his current role of being responsible for overseas insurance business as Executive Vice President of the Company. Ian Brimecome, Senior Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved so far. These include his intensive involvement in numerous M&A projects for insurance companies when he worked for investment banks in Europe and North America, his contribution to expand overseas insurance business of the Group after his assumption of office as a senior strategic advisor of the Company in 2007, and his current terms in office as Executive Officer of the Company in charge of overseas business in Europe and elsewhere. Hirokazu Fujita, Senior Managing Director We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for investment management of the Group, and to decide important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in accounting, his terms in office as Executive Officer of Tokio Marine & Nichido and the Company in charge of accounting and financial planning, and his current role of being responsible for investment management of the Group as Senior Managing Director of the Company. Shozo Mori, Senior Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for retention strategy of the Group, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic insurance underwriting and product planning, his work in product planning as Executive Officer of Tokio Marine & Nichido, and his current role of being responsible for retention strategy of the Group as Executive Officer of the Company. Shinichi Hirose, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in product planning, marketing planning and the domestic life insurance and property and casualty insurance businesses, and his leadership role in the management of Tokio Marine & Nichido Life Insurance Co., Ltd. as President & Chief Executive Officer. Makoto Okada, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic insurance underwriting, his work in human resources planning and marketing planning, and his current role as Executive Officer of the Company in charge of overseas business in Asia and elsewhere

7 Takayuki Yuasa, Managing Director We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for capital strategy of the Group, and to decide important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his involvement in corporate planning, finance, accounting, and the domestic life insurance and property and casualty insurance businesses, his terms in office as Executive Officer of Tokio Marine & Nichido and the Company being responsible for risk management, and his current role of being responsible for capital strategy of the Group as Managing Director of the Company. Shigeru Inaba, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for IT and cybersecurity management of the Group, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his involvement in IT planning and service promotion, and his current terms in office as Executive Officer of Tokio Marine & Nichido in charge of IT planning. Yasunobu Fukuda, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his involvement in domestic insurance underwriting, overseas insurance business and sales promotion, and his terms in office as Executive Officer of Tokio Marine & Nichido in charge of domestic insurance underwriting. Satoru Komiya, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic insurance underwriting, his work in human resources planning and marketing planning, and his role as Executive Officer of the Company in charge of overseas research. Akira Harashima, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in overseas insurance business and his role as Executive Officer in charge of overseas business in the U.S. and elsewhere. Tadashi Handa, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for overseas insurance business, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic insurance underwriting and product development, and his leadership role as General Manager of Corporate Planning Dept. of Tokio Marine & Nichido. Kazuhiko Nakamura, Managing Executive Officer We believe that he would be expected to fulfill his role adequately in determining and executing business operations in his charge as Executive Officer responsible for personnel affairs of the Group, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in financial planning and domestic sales, management of group companies, and his leadership role as General Manager of Human Resources Dept. of Tokio Marine & Nichido. Toshifumi Kitazawa, Director We believe that he would be expected to fulfill his role adequately in deciding important matters regarding - 7 -

8 business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in product planning, domestic insurance underwriting, management of group companies, his terms in office as President & Chief Executive Officer of Tokio Marine & Nichido Life Insurance Co., Ltd. and his current leadership role in the management of Tokio Marine & Nichido as President & Chief Executive Officer. Katsumi Nakazato, Director We believe that he would be expected to fulfill his role adequately in deciding important matters regarding business execution and supervision of the execution of duties by other directors as a member of the Board, based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in domestic insurance underwriting and sales promotion, and his current leadership role in the management of Tokio Marine & Nichido Life Insurance Co., Ltd. as President & Chief Executive Officer. Takaaki Tamai, Audit & Supervisory Board Member (full-time) We believe that he would be expected to fulfill his audit functions based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in financial planning, product planning and overseas insurance business, and his terms in office as Director of the Company in charge of corporate planning, accounting, risk management and overseas insurance business. He, as a director of the Company and Tokio Marine & Nichido, was in charge of accounting dept. and has extensive insight regarding finance and accounting matters. Takashi Ito, Audit & Supervisory Board Member (full-time) We believe that he would be expected to fulfill his audit functions based on his wealth of experience and results he has achieved since joining Tokio Marine. These include his intensive involvement in product planning, corporate planning and legal matters, and his terms in office as Director of the Company in charge of risk management, legal matters and audit. He was General Manager of Corporate Planning Dept. of the Company and has extensive insight regarding finance and accounting matters. [Supplementary Principle 4-11] For details on the scope of entrustment to Directors and Executive Officers, see Article 7 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Responsibilities of the Board of Directors and its Members) Article 7 The Board of Directors is responsible for decisions on important matters relating to the execution of the Company s business and for supervising the performance of individual Directors. 2 The Company shall define Rules of the Board of Directors, and define the content of significant business execution to be determined by the Board of Directors. Determination of significant business execution includes formulating Group management strategies, formulating Group management plans, establishing internal control systems within the Group, and business investment that is larger than a certain level. 3 Each Director shall endeavor to enable the Board of Directors to fulfill the responsibilities and functions outlined in the first paragraph above. 4 The Company shall entrust decision-making to Executive Officers of matters that do not require decisions to be made by the Board of Directors. [Principle 4-8] The Company selected four independent Outside Directors from among thirteen Directors in total. [Principle 4-9] For details on independence standards for independent Outside Directors, see Article 16 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members) - 8 -

9 Article 16 Independence of Outside Directors and Outside Audit & Supervisory Board Members is judged when none of the following is applicable. Further details are defined in Exhibit. 1 A manager, former manager, employee, or former employee of the Company 2 A manager or employee of a company with which the Company has significant transactions. 3 A relative of Directors or Audit & Supervisory Board Members of the Company 4 A person in an advisory role who has been receiving more than a certain amount, as a compensation from the Company other than due to performance of duties as a Director or Audit & Supervisory Board Member of the Company 5 A person who is a major shareholder, a manager or an employee of such legal entity Exhibit: Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members Outside Directors and Outside Audit & Supervisory Board Members of the Company are judged to be independent from the Company if they do not fall within any of the following categories: 1 an executive of the Company or a subsidiary or affiliate of the Company; 2 a person who has been an executive of the Company or a subsidiary or affiliate of the Company in the past ten years; 3 a party whose major client or supplier is the Company or a principal business subsidiary of the Company (a party whose transactions with the Company or a principal business subsidiary of the Company in the most recent fiscal year amount to 2% or more of its consolidated net sales), or an executive thereof; 4 a party who is a major client or supplier of the Company or a principal business subsidiary of the Company (a party whose transactions with the Company or a principal business subsidiary of the Company in the most recent fiscal year amount to 2% or more of consolidated ordinary income of the Company), or an executive thereof; 5 a financial institution or other major creditor which the Company or a principal business subsidiary of the Company relies on to the extent that it is an indispensable funding source that cannot be replaced, or an executive thereof; 6 an executive of a corporation or association or any other organization that receives donations from the Company or a principal business subsidiary of the Company in excess of a certain amount in the most recent fiscal year (10 million yen or 2% of the total revenue of such organization in the most recent fiscal year, whichever is larger); 7 a spouse or relative within the third degree of kinship of a Director, Audit & Supervisory Board Member, or Executive Officer of the Company or a subsidiary or affiliate of the Company; 8 a consultant, accountant, lawyer, or other specialist who receives compensation from the Company or a principal business subsidiary of the Company other than compensation for Directors, Audit & Supervisory Board Members and Executive Officers of the Company or a principal business subsidiary of the Company in excess of a certain amount in the most recent fiscal year (10 million yen or 2% of the total revenue of a corporation or association or any other organization to which such specialist belongs in the most recent fiscal year, whichever is larger); or 9 a party who holds 10% or more of the voting rights of all shareholders of the Company at the end of the most recent fiscal year, or an executive thereof. [Supplementary Principle 4-111] For details on the Company s views on the composition of the Board of Directors, see Article 8 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Composition of the Board of Directors and Directors term of office) Article 8 The number of Directors shall generally be approximately ten members, of whom, as a general rule, at least three shall be Outside Directors. 2 To secure effectiveness of the Board of Directors, when selecting Directors, a balanced composition shall be established, with various viewpoints and specializations. 3 Directors shall be appointed for a term of office of one year. Directors may be re-appointed. [Supplementary Principle 4-112] - 9 -

10 For details on major occupations of Directors and Audit & Supervisory Board Members who concurrently serve in other positions, see the Notice of Convocation of the 15th Ordinary General Meeting of Shareholders ( [Supplementary Principle 4-113] (1) Evaluation of the effectiveness of the Board of Directors a. Process for evaluating the effectiveness of the Board of Directors To improve the role of the Board of Directors, the Company evaluates the Board of Directors once a year. Specifically, the Company has all of the Directors and the Audit & Supervisory Board Members respond to a survey regarding the operation and the performance of the Board of Directors so that the opinions of all members are heard. The survey results are reported to the Board of Directors. b. Results of the evaluation of the effectiveness of the Board of Directors The operations of the Board of Directors has generally received positive evaluations that its role is, generally, adequately conducted with respect to the following items; explanations and meeting materials have become easier to understand and improved; discussions at the Board of Directors meetings are open-minded and constructive; and responses to opinions from Outside Directors and Outside Audit & Supervisory Board Members are sincere. Meanwhile, the survey results pointed out that some material could be presented with plainer expressions and briefer explanations were needed in some cases. We are striving to improve these points. (2) Implementing Discussion on Corporate Strategy The Company aims to develop its corporate strategy around achieving sustainable growth and increasing medium-to-long term corporate value by reflecting the opinions of its outside directors and outside Audit & Supervisory Board Members. To achieve this, the Company carries out discussions regarding its operating environment and business challenges called Discussion on Corporate Strategy at meetings of its Board of Directors. The discussion topics are chosen through a survey of all directors and auditors. In fiscal year 2016, the themes listed below were discussed, and the Company continues to conduct such discussions in Exchanging ideas with executives of overseas subsidiaries Asset management and products strategy in the domestic life insurance business in the low interest rate environment Medium-to-long term business challenges of the Group in light of changes in the business environment [Supplemental Principle 4-142] For details on training policies for Directors and Audit & Supervisory Board Members, see Article 22 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Training Policies for Directors, Audit & Supervisory Board Members and Executive Officers) Article 22 The Company will provide opportunities for training, as necessary, to Directors, Audit & Supervisory Board Members and Executive Officers, to allow them to appropriately fulfill duties required in each respective area. The specific content of the training is as follows. For new Inside Directors and Inside Audit & Supervisory Board Members of the Company and the Group, the Company holds training sessions on the duties and responsibilities of Directors and Audit & Supervisory Board Members, at which an attorney-at-law serves as a lecturer. The Company also holds training sessions on the following themes for new Outside Directors and Outside Audit & Supervisory Board Members of the Company before they assume office, in order to provide them with an understanding of matters thought to be indispensable to enable them to fulfill their responsibilities: the Group s medium-term management plan, enterprise risk management (ERM), financial reporting and insurance accounting, international insurance business strategies, and an overview of the non-life insurance industry. In addition, the Company holds training sessions on the themes of enterprise risk management (ERM), financial reporting and insurance accounting for new Executive Officers of the Company and Tokio Marine &

11 Nichido before they assume office. [Principle 5-1] For details on the Company s policy on constructive conversation with shareholders, see Article 23 of the Tokio Marine Holdings Fundamental Corporate Governance Policy as follows. (Policy on constructive conversation with shareholders) Article 23 To promote constructive conversation with shareholders, the Company shall work to establish structures according to the following basic principles. 1 The Company shall establish Executive Officers in charge of business execution to conduct overall management for conversations with shareholders, and establish a dedicated department (IR department) to plan and implement these activities. 2 Toward conversations with shareholders such as earnings announcements and presentation meetings for investors, etc., IR department of the Company shall work with other relevant departments to provide accurate and truthful information to shareholders. 3 Taking into account shareholding conditions and the views of shareholders, etc., the Company shall work to provide various methods to communicate with shareholders. 4 Concerning comments acquired during the course of conversations with shareholders, the Company shall periodically organize and analyze these comments, and report to the Board of Directors. 5 The Company, pursuant to its Insider Trading Prevention Regulations, shall exercise the utmost care with regard to unpublicized information, and shall have conversations with shareholders without utilizing any significant unpublicized information. 2. Capital Structure Foreign Shareholding Ratio 30% or more [Status of Major Shareholders] (Updated) Name / Company Name Number of Shares Owned Percentage (%) The Master Trust Bank of Japan, Ltd. (Trust Account) 45,731, Japan Trustee Services Bank, Ltd. (Trust Account) 40,754, State Street Bank and Trust Company (Standing proxy: Mizuho Bank, Ltd., Settlement & 24,802, Clearing Services Division) Meiji Yasuda Life Insurance Company (Standing proxy: Trust & Custody Services Bank, Ltd.) 15,779, JP Morgan Chase Bank (Standing proxy: Mizuho Bank, Ltd., Settlement & 14,825, Clearing Services Division) Japan Trustee Services Bank, Ltd. (Trust Account 5) 14,690, Japan Trustee Services Bank, Ltd. (Trust Account 1) 10,905, The Master Trust Bank of Japan, Ltd. (Retirement Benefits Trust Account for Mitsubishi Corporation) 10,832, Japan Trustee Services Bank, Ltd. (Trust Account 2) 10,770, Japan Trustee Services Bank, Ltd. (Trust Account 7) 10,457, Controlling Shareholder (excluding Parent Company) Parent Company None Supplementary Explanation (Updated)

12 Regarding shares of the Company, BlackRock Japan Co., Ltd. submitted the same to the Director-General of the Kanto Local Finance Bureau as of February 19, 2015, and Mitsubishi UFJ Financial Group, Inc. submitted a change report pertaining to a report of possession of large volume to the Director-General of the Kanto Local Finance Bureau as of July 19, However, since the Company cannot confirm the number of shares substantially held by them as of March 31, 2017, such information is not disclosed in the above list of major shareholders. 3. Corporate Attributes Listed Stock Exchange and Market Section Tokyo Stock Exchange, First Section Fiscal Year-End March Type of Business Insurance Number of Employees (consolidated) as of the 1,000 or more End of the Previous Fiscal Year Sales (consolidated) as of the End of the 1 trillion yen or more Previous Fiscal Year Number of Consolidated Subsidiaries as of the From 100 to less than 300 End of the Previous Fiscal Year 4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholders 5. Other Special Circumstances which may have Material Impact on Corporate Governance

13 II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Oversight in Management 1. Organizational Composition and Operation Organization Form Company with Audit & Supervisory Board [Directors] (Updated) Maximum Number of Directors Stipulated in the Articles of Incorporation Term of Office Stipulated in the Articles of Incorporation Chairperson of the Board Number of Directors (Updated) 13 Appointment of Outside Directors Number of Outside Directors 4 Number of Independent Directors, from among Outside Directors 15 1 year Chairman of the Board (except when serving concurrently as President) Appointed 4 Outside Directors Relationship with the Company (1) (Updated) Name Attribute Relationship with the Company* a b c d e f g h i j k Akio Mimura From another company Mikio Sasaki From another company Masako Egawa From another company Takashi Mitachi From another company * Categories for Relationship with the Company * when the director presently falls or has recently fallen under the category; when the director fell under the category in the past * when a close relative of the director presently falls or has recently fallen under the category; when a close relative of the director fell under the category in the past a. Executive of the Company or its subsidiaries b. Non-executive director or executive of a parent company of the Company c. Executive of a fellow subsidiary company of the Company d. A party whose major client or supplier is the Company or an executive thereof e. Major client or supplier of the Company or an executive thereof f. Consultant, accountant or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as a director/audit & supervisory board member g. Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a legal entity) h. Executive of a client or supplier company of the Company (which does not correspond to any of d, e, or f) (the director himself/herself only) i. Executive of a company, between which and the Company outside directors / audit & supervisory board members are mutually appointed (the director himself/herself only) j. Executive of a company or organization that receives a donation from the Company (the director himself/herself only)

14 k. Others Outside Directors Relationship with the Company (2) (Updated) Name Designation as Independent Director Supplementary Explanation of the Relationship Akio Mimura He meets the Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members defined by the Company, which are provided in [Disclosure Based on the Principles of the Corporate Governance Code]. Mikio Sasaki He meets the Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members defined by the Company, which are provided in [Disclosure Based on the Principles of the Corporate Governance Code]. Masako Egawa She meets the Independence Standards for Outside Directors and Outside Audit & Supervisory Board Members defined by the Company, which are provided in [Disclosure Based on the Principles of the Corporate Governance Code]. Takashi Mitachi He meets the Independence Standards for Outside Directors Reasons of Appointment We believe that he would be expected to fulfill his supervisory functions and provide valuable advice based on his insight as a company manager, acquired through many years of experience in a management role. Furthermore, he does not fall under items set forth in the regulations of the exchange, and therefore we believe, as a result of a comprehensive consideration based on the above, that he is unlikely to cause conflicts of interest with general shareholders of the Company as an independent director. We believe that he would be expected to fulfill his supervisory functions and provide valuable advice based on his insight as a company manager, acquired through many years of experience in a management role. Furthermore, he does not fall under items set forth in the regulations of the exchange, and therefore we believe, as a result of a comprehensive consideration based on the above, that he is unlikely to cause conflicts of interest with general shareholders of the Company as an independent director. We believe that she would be expected to fulfill her supervisory functions and provide valuable advice based on her insight as a specialist in business management, acquired through many years of experience in financial institutions, involvement in academic activities related to corporate governance and experience at The University of Tokyo as an Executive Vice President. Furthermore, she does not fall under items set forth in the regulations of the exchange, and therefore we believe, as a result of a comprehensive consideration based on the above, that she is unlikely to cause conflicts of interest with general shareholders of the Company as an independent director. We believe that he would be expected to fulfill his supervisory functions and provide valuable advice based on his

15 and Outside Audit & Supervisory Board Members defined by the Company, which are provided in [Disclosure Based on the Principles of the Corporate Governance Code]. insight as a company manager, acquired through many years of experience in a consulting firm and a management role. Furthermore, he does not fall under items set forth in the regulations of the exchange, and therefore we believe, as a result of a comprehensive consideration based on the above, that he is unlikely to cause conflicts of interest with general shareholders of the Company as an independent director. Voluntary Establishment of Committee(s) Corresponding to Nomination Committee or Compensation Committee Established Committee s Name, Composition, and Attributes of Chairperson Committee Corresponding to Nomination Committee Committee Corresponding to Compensation Committee Committee s Name Nomination Committee Compensation Committee All Committee Members 5 5 Full-time Members 0 0 Inside Directors 1 1 Outside Directors 4 4 Outside Experts 0 0 Other 0 0 Chairperson Outside Director Outside Director Supplementary Explanation The Company establishes a Nomination Committee and Compensation Committee to serve as advisory bodies to the Board of Directors. The Nomination Committee shall deliberate on the following matters and report to the Board of Directors: the appointment and dismissal and the criteria for the appointment of Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries. The Compensation Committee shall deliberate on the following matters and report to the Board of Directors: the compensation system for Directors, Audit & Supervisory Board Members and Executive Officers of the Company and its principal business subsidiaries, the level of compensation for Directors (full-time) and Executive Officers of the Company and its principal business subsidiaries and the evaluation of the performance of Directors (full-time) and Executive Officers of the Company and its principal business subsidiaries. The Nomination Committee and the Compensation Committee shall generally consist of approximately five members, respectively. As a general rule, a majority of the members shall be selected from outside of the Company, and the chairman shall be one of the outside members. As of the date of submission of this report, both committees consist of five members, including four outside members, respectively, and the chairman was elected from among the outside members. The Nomination Committee deliberated on the following matters and reported to the Board of Directors: the criteria for the appointment and each agenda for candidates to become Directors, Audit & Supervisory Board Members and Executive Officers of the Company, Tokio Marine & Nichido, Nisshin Fire & Marine Insurance Co., Ltd., and Tokio Marine & Nichido Life Insurance Co., Ltd. The Compensation Committee deliberated on the following matters and reported to the Board of Directors: the compensation system for Directors, Audit &