TOKIO MARINE FINANCIAL SOLUTIONS LTD.

BASE PROSPECTUS

TOKIO MARINE FINANCIAL SOLUTIONS LTD.(incorporated with limited liability in the Cayman Islands)

¥400,000,000,000 Programme for theIssuance of Debt Instruments

This Base Prospectus has been approved by the United Kingdom Financial Services Authority (the“FSA”), which is the United Kingdom competent authority for the purposes of Directive 2003/71/EC (the“Prospectus Directive”) and relevant implementing measures in the United Kingdom, as a base prospectus issuedin compliance with the Prospectus Directive and relevant implementing measures in the United Kingdom for thepurpose of giving information with regard to the issue of debt instruments (“Instruments”) issued under theprogramme (the “Programme”) described in this Base Prospectus during the period of twelve months after thedate hereof. An application has been made to admit such Instruments during the period of twelve months after thedate hereof to listing on the Official List of the FSA and an application has been made to admit such Instrumentsto trading on the Regulated Market of the London Stock Exchange plc (the “London Stock Exchange”), which isan EEA Regulated Market (as defined below). The Programme also permits Instruments to be issued on the basisthat they will not be admitted to listing, trading and/or quotation by any listing authority, stock exchange and/orquotation system or to be admitted to listing, trading and/or quotation by such other or further listing authorities,stock exchanges and/or quotation systems as may be agreed with Tokio Marine Financial Solutions Ltd (the“Issuer”). The Instruments have the benefit of a Support Agreement (as defined on page 5 of this Base Prospectus)entered into with Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine & Nichido”). See “TheSupport Agreement” as set out in this Base Prospectus.

Instruments have not been and will not be registered under the United States Securities Act of 1933, asamended (the “Securities Act”) and may not be offered or sold within the United States or to, or for the accountor benefit of, U.S. persons except in certain transactions exempt from, or not subject to, the registrationrequirements of the Securities Act. Terms used in the preceding sentence have the meanings given to them byRegulation S under the Securities Act.

No instruments may be issued under this Programme which are to be admitted to trading on a market whichis a regulated market for the purposes of Directive 2004/39/EC (Markets and Financial Instruments Directive)(each an “EEA Regulated Market”) or offered to the public in any EEA Member State which have a minimumdenomination of less than EUR 50,000 (or its equivalent in another currency).

Investing in the Instruments involves certain risks, in particular, that in the event that the Issuer or anySubsidiary ceased or threatened to cease to carry on all or any substantial part of its business and, in whole orin part as a result of such action, the credit ratings assigned to the Programme were not lowered, this would notin and of itself be an Event of Default (as defined in Condition 7 (Events of Default and Enforcement Events) setout in this Base Prospectus). See “Risk Factors” beginning on page 9 to read about factors that should becarefully considered before investing in the Instruments.

Arranger for the ProgrammeMORGAN STANLEY

DealersBofA MERRILL LYNCH CITI

DAIWA SECURITIES SMBC EUROPE DEUTSCHE BANKGOLDMAN SACHS INTERNATIONAL J.P. MORGAN

MORGAN STANLEY MITSUBISHI UFJ SECURITIES INTERNATIONAL PLC

NOMURA INTERNATIONAL

29 October 2009

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The Base Prospectus should be read and construed with any amendments or supplements thereto andwith any other documents incorporated by reference and, in relation to any Series (as defined herein) ofInstruments, should be read and construed together with the relevant Final Terms (as defined herein).

The Issuer and Tokio Marine & Nichido accept responsibility for the information contained in theBase Prospectus.

To the best of the knowledge and belief of the Issuer and Tokio Marine & Nichido (which have takenall reasonable care to ensure that such is the case), the information contained in the Base Prospectus is inaccordance with the facts and does not omit anything likely to affect the import of such information.

This Base Prospectus comprises a base prospectus for the purposes of Article 5.4 of the ProspectusDirective and for the purpose of giving information with regard to the Issuer and Tokio Marine & Nichidowhich is necessary to enable investors to make an informed assessment of the assets and liabilities, financialposition, profit and losses and prospects of the Issuer and Tokio Marine & Nichido.

The Issuer has confirmed to the dealers (the “Dealers”) described under “Subscription and Sale”below that the Base Prospectus is true, accurate and complete in all material respects and is not misleading;that the opinions and intentions expressed therein are honestly held and based on reasonable assumptions;that there are no other facts in relation to the information contained or incorporated by reference in the BaseProspectus the omission of which would, in the context of the Programme or the issue of the Instruments,make any statement therein or opinions or intentions expressed therein misleading in any material respect;and that all reasonable enquiries have been made to verify the foregoing. The Issuer has further confirmedto the Dealers that this Base Prospectus (together with the relevant Final Terms) contains all such informationas investors and their professional advisers would reasonably require, and reasonably expect to find, for thepurpose of making an informed assessment of the assets and liabilities, financial position, profits and lossesof the Issuer, and where applicable, Tokio Marine & Nichido and of the rights attaching to the relevantInstruments.

No person has been authorised by the Issuer to give any information or to make any representationnot contained in or not consistent with the Base Prospectus or any other document entered into in relation tothe Programme or any information supplied by the Issuer or such other information as is in the public domainand, if given or made, such information or representation should not be relied upon as having been authorisedby the Issuer or any Dealer.

No representation or warranty is made or implied by the Dealers or any of their respective affiliates,and neither the Dealers nor any of their respective affiliates makes any representation or warranty or acceptsany responsibility, as to the accuracy or completeness of the information contained in the Base Prospectus.Neither the delivery of the Base Prospectus or any Final Terms nor the offering, sale or delivery of anyInstrument shall, in any circumstances, create any implication that the information contained in the BaseProspectus is true subsequent to the date thereof or the date upon which this Base Prospectus has been mostrecently amended or supplemented or that there has been no adverse change in the financial situation of theIssuer or Tokio Marine & Nichido since the date thereof or, if later, the date upon which the Base Prospectushas been most recently amended or supplemented or that any other information supplied in connection withthe Programme is correct at any time subsequent to the date on which it is supplied or, if different, the dateindicated in the document containing the same.

The distribution of the Base Prospectus and any Final Terms and the offering, sale and delivery of theInstruments in certain jurisdictions may be restricted by law. Persons into whose possession the BaseProspectus or any Final Terms comes are required by the Issuer and the Dealers to inform themselves aboutand to observe any such restrictions. For a description of certain restrictions on offers, sales and deliveriesof Instruments and on the distribution of the Base Prospectus or any Final Terms and other offering materialrelating to the Instruments, see “Subscription and Sale” and “Provisions Relating to the Investments whilstin Global Form”.

Neither the Base Prospectus nor any Final Terms constitutes an offer or an invitation to subscribe foror purchase any Instruments and should not be considered as a recommendation by the Issuer, the Dealers

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or any of them that any recipient of the Base Prospectus or any Final Terms should subscribe for or purchaseany Instruments. Each recipient of the Base Prospectus or any Final Terms shall be taken to have made itsown investigation and appraisal of the condition (financial or otherwise) of the Issuer and Tokio Marine &Nichido.

This Base Prospectus is to be read in conjunction with all documents which are deemed to beincorporated herein by reference. This Base Prospectus shall be read and construed on the basis that suchdocuments are incorporated in and form part of this Base Prospectus.

The maximum aggregate principal amount of Instruments permitted to be outstanding at any one timeunder the Programme will not exceed ¥400,000,000,000 (and for this purpose, any Instruments denominatedin another currency shall be translated into Japanese Yen at the date of the agreement to issue suchInstruments calculated in accordance with the provisions of the Dealership Agreement.) The maximumaggregate principal amount of Instruments which may be outstanding under the Programme may beincreased from time to time, subject to compliance with the relevant provisions of the Dealership Agreementas defined under “Subscription and Sale”.

Each of the Issuer and Tokio Marine & Nichido has undertaken, in connection with the listing of theInstruments on any EEA Regulated Market, that if there shall occur any adverse change in the business orfinancial position of the Issuer or, as the case may be, Tokio Marine & Nichido, or a significant new factor,material mistake or inaccuracy relating to the information included in the Base Prospectus which is capableof affecting the assessment of the securities and which arises or is noted between the time when the BaseProspectus is approved and the final closing of the offer to the public, or as the case may be, the time whenthe trading on the regulated market begins, the Issuer will prepare or procure the preparation of anamendment or supplement to the Base Prospectus or, as the case may be, publish a new Base Prospectus, foruse in connection with any subsequent issue by the Issuer of Instruments to be listed on the Official List ofthe FSA and admission to trading on the London Stock Exchange.

The Issuer will, at the specified offices of the Paying Agents, provide, free of charge, upon the oral orwritten request therefor, a copy of the Base Prospectus. Written or telephone requests for such documentsshould be directed to the specified office of any Paying Agent.

In this Base Prospectus, unless otherwise specified, references to a “Member State” are references toa Member State of the European Economic Area, references to “JPY”, “¥” or “Yen” are to the lawfulcurrency of Japan and all references to “U.S. $” and “U.S. Dollars” are to the lawful currency of the UnitedStates of America. References to “billions” are to thousands of millions. Figures may be subject to rounding.Unless specified otherwise, references to “GAAP” are to Generally Accepted Accounting Principles in therelevant country.

For convenience, certain Yen amounts herein have been translated to U.S. Dollars. However, suchtranslations should not be construed as representations that such Yen amounts have been, could be or couldin the future be, converted into U.S. Dollars at such rate(s) or any other rates. The corresponding ratesprevailing on 30 December, 2008 and 31 March, 2009 were ¥90.2 = U.S.$1 and ¥98.23 = U.S.$1respectively.

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TABLE OF CONTENTS

Page

GENERAL DESCRIPTION OF THE PROGRAMME .............................................................. 5

RISK FACTORS .......................................................................................................................... 9

TERMS AND CONDITIONS OF THE INSTRUMENTS ........................................................ 17

PROVISIONS RELATING TO THE INSTRUMENTS WHILST IN GLOBAL FORM .......... 42

FORM OF FINAL TERMS ........................................................................................................ 45

USE OF PROCEEDS .................................................................................................................. 58

2nd AMENDED AND RESTATED SUPPORT AGREEMENT ................................................ 59

TOKIO MARINE FINANCIAL SOLUTIONS LTD .................................................................. 65

History .................................................................................................................................... 65

Audit Report .......................................................................................................................... 66

Financial Statements................................................................................................................ 67

Balance Sheets ........................................................................................................................ 67

Notes to the Financial Statements .......................................................................................... 72

Management .......................................................................................................................... 82

TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD ................................................ 83

History .................................................................................................................................... 83

Audit Report .......................................................................................................................... 84

Consolidated Financial Statements ........................................................................................ 85

Consolidated Balance Sheets .................................................................................................. 85

Notes to the Consolidated Financial Statements .................................................................... 91

Directors and Officers of Tokio Marine & Nichido ................................................................ 148

Litigation ................................................................................................................................ 149

Principal Subsidiaries ............................................................................................................ 149

Management .......................................................................................................................... 151

TAXATION .................................................................................................................................. 154

SUBSCRIPTION AND SALE .................................................................................................... 156

GENERAL INFORMATION ...................................................................................................... 159

IN CONNECTION WITH THE ISSUE OF ANY TRANCHE (AS DEFINED HEREIN) OFINSTRUMENTS UNDER THE PROGRAMME, THE DEALER (IF ANY) WHO IS SPECIFIED INTHE RELEVANT FINAL TERMS AS THE STABILISING INSTITUTION MAY OVER ALLOT OREFFECT TRANSACTIONS WITH A VIEW TO SUPPORTING THE MARKET PRICE OF THEINSTRUMENTS OF THE SERIES OF WHICH SUCH TRANCHE FORMS PART AT A LEVELHIGHER THAN THAT WHICH MIGHT OTHERWISE PREVAIL. HOWEVER, THERE MAY BENO OBLIGATION ON THE STABILISING MANAGER (OR ANY AGENT OF THE STABILISINGMANAGER) TO DO THIS. ANY STABILISATION ACTION MAY BEGIN ON OR AFTER THEDATE ON WHICH ADEQUATE PUBLIC DISCLOSURE OF THE TERMS OF THE OFFER OFTHE RELEVANT TRANCHE OF INSTRUMENTS IS MADE AND, IF COMMENCED, MAY BEDISCONTINUED AT ANY TIME BUT IT MUST END NO LATER THAN THE EARLIER OF 30DAYS AFTER THE ISSUE DATE OF THE RELEVANT TRANCHE OF INSTRUMENTS AND 60DAYS AFTER THE DATE OF THE ALLOTMENT OF THE RELEVANT TRANCHE OFINSTRUMENTS. SUCH STABILISING SHALL BE IN COMPLIANCE WITH ALL APPLICABLELAWS, REGULATIONS AND RULES. ANY STABILISATION ACTION OR OVER-ALLOTMENTMUST BE CONDUCTED BY THE RELEVANT STABILISING MANAGER(S) (OR PERSON(S)ACTING ON BEHALF OF ANY STABILISING MANAGER(S) IN ACCORDANCE WITH ALLAPPLICABLE LAW AND RULES.

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GENERAL DESCRIPTION OF THE PROGRAMME

The following general description does not purport to be complete and is qualified in its entirety bythe remainder of this Base Prospectus. Words and expressions defined in the “Forms of Final Terms” or“Terms and Conditions of the Instruments” below shall have the same meanings in this general description.

Words and expressions defined in the “Terms and Conditions of the Notes” below or elsewhere in thisBase Prospectus have the same meaning in this general description of the Programme.

Issuer: Tokio Marine Financial Solutions Ltd.

Support Agreement: The Issuer has the benefit of a 2nd Amended and Restated Support Agreementdated 26 August, 2005 entered into with Tokio Marine & Nichido Fire InsuranceCo., Ltd. (“Tokio Marine & Nichido”) (as amended, supplemented or replaced,subject to and in accordance with the provisions of such agreement and the Deedof Covenant dated 29 October, 2009, the “Support Agreement”). Tokio Marine& Nichido has covenanted in the Support Agreement to, inter alia, ensure thatthe Issuer has a minimum adjusted net worth of not less than U.S.$10,000,000at all times and (upon receipt of a request for payment from the Issuer) toprovide funds to the Issuer to meet certain payment obligations, including itsobligations under the Instruments, subject to certain conditions. Tokio Marine &Nichido and the Issuer have further agreed that Holders (as defined below) ofInstruments shall have the right to demand that the Issuer enforces such rights,failing which such Holders may proceed directly against Tokio Marine &Nichido themselves, subject to certain provisions specified in the SupportAgreement. The Issuer has agreed in the Deed of Covenant (as defined below)not to amend the Support Agreement without the prior written consent of theHolders of Instruments holding not less than two-thirds of the aggregateprincipal amount of outstanding Instruments. The Support Agreement mayterminate by either (i) the written agreement of the Issuer and Tokio Marine &Nichido or (ii) the delivery by Tokio Marine & Nichido to the Issuer of writtennotice of termination in certain circumstances. Any such termination would notaffect any obligation which Tokio Marine & Nichido had to the Issuer in respectof any Instrument issued under the Programme prior to the termination. TheSupport Agreement does not constitute a guarantee and Tokio Marine & Nichidois not, therefore, a guarantor of the Instruments. See the “Support Agreement”.

Arranger: Morgan Stanley & Co. International plc.

Dealers: Citigroup Global Markets Limited, Daiwa Securities SMBC Europe Limited,Deutsche Bank AG, London Branch, Goldman Sachs International, J.P. MorganSecurities Ltd., Merrill Lynch International, Mitsubishi UFJ SecuritiesInternational plc, Morgan Stanley & Co. International plc, Nomura Internationalplc and any other dealer appointed from time to time by the Issuer eithergenerally in respect of the Programme or in relation to a particular Tranche (asdefined below) of Instruments.

Issue and Paying Agent: The Bank of New York Mellon acting through its London Branch.

Initial Programme Amount: Up to ¥400,000,000,000 (and, for this purpose, any Instruments denominated inanother currency shall be translated into Japanese Yen at the date of theagreement to issue such Instruments using the spot rate of exchange for thepurchase of such currency against payment of Japanese Yen being quoted by theIssue and Paying Agent on the date on which the relevant agreement in respectof the relevant Tranche (as defined below) was made or such other rate as theIssuer and the relevant Dealer may agree) in aggregate principal amount ofInstruments outstanding at any one time. The maximum aggregate principal

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amount of Instruments permitted to be outstanding at any one time under theProgramme will not exceed ¥400,000,000,000 (and for this purpose, anyInstruments denominated in another currency shall be translated into JapaneseYen at the date of the agreement to issue such Instruments calculated inaccordance with the provisions of the Dealership Agreement). The maximumaggregate principal amount of Instruments which may be outstanding under theProgramme may be increased from time to time, subject to compliance with therelevant provisions of the Dealership Agreement as defined under “Subscriptionand Sale”.

Issuance in Series: Instruments will be issued in series (each, a “Series”). Each Series maycomprise one or more tranches (“Tranches” and each, a “Tranche”) issued ondifferent issue dates. The Instruments of each Series will all be subject toidentical terms, except that the issue date and the amount of the first payment ofinterest may be different in respect of different Tranches. The Instruments ofeach Tranche will all be subject to identical terms in all respects save that aTranche may comprise Instruments of different denominations.

Form of Instruments: Instruments will be issued in bearer form. In respect of each Tranche ofInstruments, the Issuer will deliver a temporary global Instrument (a“Temporary Global Instrument”) or (if so specified in the relevant FinalTerms in respect of Instruments to which U.S. Treasury Regulation {sect}1.163-5(c)(2)(i)(C) (the “TEFRA C Rules”) applies (as so specified in such FinalTerms)) a permanent global instrument (a “Permanent Global Instrument”).Such global Instrument will be deposited on or before the relevant issue datetherefore with a depository or a common depository for Euroclear BankS.A./N.V. (“Euroclear”) and/ or Clearstream Banking, société anonyme,Luxembourg (“Clearstream, Luxembourg”) and/or any other relevant clearingsystem. Each Temporary Global Instrument will be exchangeable for aPermanent Global Instrument or, if so specified in the relevant Final Terms, forInstruments in definitive form (“Definitive Instruments”). Each PermanentGlobal Instrument will be exchangeable for Definitive Instruments, if sospecified in the relevant Final Terms in accordance with its terms. TemporaryGlobal Instruments and Permanent Global Instruments are referred to herein asglobal instruments (“Global Instruments”). Definitive Instruments will, ifinterest-bearing, either have interest coupons (“Coupons”) attached and, ifappropriate, a talon (“Talon”) for further Coupons and will, if the principalthereof is repayable by installments, have payment receipts (“Receipts”)attached.

Currencies: Instruments may be denominated in any currency or currencies, subject tocompliance with all applicable legal and/or regulatory and/or central bankrequirements.

Status: Instruments will rank pari passu among themselves and at least pari passu withall other unsecured indebtedness of the Issuer from time to time outstandingsubject to regulatory and statutory restrictions.

Issue Price: Instruments may be issued at any price and either on a fully or partly paid basis,as specified in the relevant Final Terms.

Maturities: Any maturity, subject, in relation to specific currencies, to compliance with allapplicable legal and/or regulatory and/or central bank requirements.

Where Instruments have a maturity of less than one year and either (a) the issueproceeds are received by the Issuer in the United Kingdom or (b) the activity ofissuing the Instruments is carried on from an establishment maintained by the

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Issuer in the United Kingdom, such Instruments (i) must have a minimumdenomination of £100,000 (or its equivalent in other currencies) and be soldonly to persons whose ordinary activities involve them in acquiring, holding,managing or disposing of investments (as principal or agent) for the purposes oftheir businesses or (ii) be issued in other circumstances which do not constitutea contravention of section 19 of the Financial Services and Markets Act 2000(the “FSMA”).

Redemption: Instruments may be redeemable at par or at such other Redemption Amount(detailed in a formula or otherwise) as may be specified in the relevant FinalTerms.

Early Redemption: Early redemption will be permitted for taxation reasons as mentioned in “Termsand Conditions of the Instruments – Early Redemption for Taxation Reasons”,but will otherwise be permitted only to the extent specified in the relevant FinalTerms.

Interest: Instruments may be interest-bearing or non-interest bearing. Interest (if any)may accrue at a fixed or floating rate and may vary during the lifetime of therelevant Series.

Denominations: No instruments may be issued under the Programme which are to be admittedto trading on any EEA Regulated Market or offered to the public in any EEAMember State which have a minimum denomination of less than EUR50,000 (orequivalent in another currency). Subject thereto, Instruments will be issued insuch denominations as may be specified in the relevant Final Terms, subject tocompliance with all applicable legal and/or regulatory and/or central bankrequirements.

Taxation: Payments in respect of Instruments will be made without withholding ordeduction for, or on account of, any present or future taxes, duties, assessmentsor governmental charges of whatever nature imposed or levied by or on behalfof the Cayman Islands or any political subdivision thereof or any authority oragency therein or thereof having power to tax, unless the withholding ordeduction of such taxes, duties, assessments or governmental charges is requiredby law. In that event, the Issuer will (subject to customary exceptions) pay suchadditional amounts as will result in the holders of Instruments or Couponsreceiving such amounts as they would have received in respect of suchInstruments or Coupons had no such withholding or deduction been required.

The Support Agreement provides that Tokio Marine & Nichido will payadditional amounts as will result in persons receiving such amounts as theywould have received had no such withholding been required. See “The SupportAgreement”.

Governing Law: The Instruments and all related contractual documentation will be governed by,and construed in accordance with, English law.

The Support Agreement is governed by, and construed in accordance with, theinternal laws of the State of New York.

Application has been made for the Instruments issued under the Programme tobe listed on the Official List of the FSA and admitted to trading on the RegulatedMarket of the London Stock Exchange. The Programme also permitsInstruments to be issued on the basis that they will not be admitted to listing,trading and/or quotation by any listing authority, stock exchange and/orquotation system to be admitted to listing, trading and/or quotation by such

Listing and Admissionto trading:

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other or further listing authorities, stock exchanges and/or quotation systems asmay be agreed with the Issuer.

Terms and Conditions: Final Terms will be prepared in respect of each Tranche of Instruments a copyof which will, in the case of Instruments to be listed on the Official List of theFSA and admitted to trading on the London Stock Exchange, be delivered to theLondon Stock Exchange on or before the date of issue (the closing date) of suchInstruments. The terms and conditions applicable to each Tranche will be thoseset out herein under “Terms and Conditions of the Instruments” assupplemented, modified or replaced by the relevant Final Terms.

Deed of Covenant: In the case of Instruments in global form, individual investor’s rights will begoverned by a Deed of Covenant dated 29 October, 2009 (the “Deed ofCovenant”).

A copy of the Deed of Covenant will be available for inspection at the specifiedoffice of the Issue and Paying Agent and the other paying agents.

Clearing Systems: Euroclear, Clearstream, Luxembourg and/or any other clearing system as maybe specified in the relevant Final Terms.

Ratings: As at the date hereof, Moody’s Investors Service Inc., Rating and InvestmentInformation, Inc. and Japan Credit Rating Agency, Ltd. assigned a rating of Aa2,AA+ and AAA, respectively, to the Programme. Tranches of Instruments issuedunder the Programme may be rated or unrated. Where a Tranche of Instrumentsis rated, its rating will not necessarily be the same as the rating applicable to theProgramme. A security rating is not a recommendation to buy, sell or holdsecurities and may be subject to suspension, reduction or withdrawal at any timeby the assigning rating agency.

Selling Restrictions: For a description of certain restrictions on offers, sales and deliveries ofInstruments and on the distribution of offering material in the United States ofAmerica, the European Economic Area, the United Kingdom, the CaymanIslands and Japan, see under “Subscription and Sale”.

Risk Factors: There are certain risks related to any issue of Instruments under the Programmewhich investors should ensure they fully understand. Additionally, thederivatives and financial instruments markets in which the Issuer and TokioMarine & Nichido operate, and the insurance markets in which Tokio Marine &Nichido operates, may be affected by uncertain or unfavourable economic,market and other conditions. These risks are set out on pages 9 to 14 of this BaseProspectus.

Substitution: The Issuer may, without the consent of the Holder of any Instruments, substitutean Affiliate of Tokio Marine & Nichido as Issuer and principal obligor inrelation to any Instrument (including any Receipt, Coupon & Talon relatingthereto), and any such substitute will be entitled to exercise every right andpower of the Issuer in relation to (i) any Instruments, Receipts, Coupons andTalons (whether outstanding at the date of such substitution or to be issuedthereafter); (ii) the Issue and Paying Agency Agreement; and (iii) the Deed ofCovenant, subject to, and in the manner contemplated by, Condition 13A of theTerms and Conditions of the Instruments.

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RISK FACTORS

Risk Relating to the Issuer

The Issuer’s ability to make payments of principal and interest on the Instruments will depend on theperformance of its trading activities in cash financial instruments and both over-the-counter and exchangetraded financial derivative instruments. The Issuer is exposed to market risk, credit risk and cash liquidityrisk resulting from its trading activities in cash financial instruments and both over-the-counter and exchangetraded financial derivative instruments.

Market risks include the risk that the Issuer may incur losses arising from fluctuation in future pricesof the relevant financial instruments from changes in interest rates, foreign exchange rates and stock prices.

Credit risks include risks that the Issuer may incur losses when its counterparties in derivativetransactions fail to perform obligations set forth in the initial agreements due to insolvency or otherwise,other than any losses arising from deterioration of the credit standing of trade reference stated in creditderivative agreements.

Cash liquidity risk is the potential loss the Issuer may incur as a result of the need to raise cash at shortnotice at a premium to its normal costs of funding.

Condition 7.01(vii) (Events of Default and Enforcement Events) has been amended for Instrumentsto be issued on or after 2 November, 2007 by the addition of the following wording to the end of thisCondition, as shown in bold and italics: “... (iv) the Issuer or any of its Subsidiaries (if any) ceases orthreatens to cease to carry on all or any substantial part of its business and the Issuer has not obtained fromeach of Moody’s Investors Service Inc., Rating and Investment Information Inc. and Japan Credit RatingAgency, Ltd. confirmation in writing that the carrying out of such an action will not result in adowngrading of the then current credit rating applied by such rating agency to the Programme; ...”. Thisdiffers from Condition 7.01(vii) (Events of Default and Enforcement Events) applicable to Instrumentsissued pursuant to the Terms and Conditions contained in earlier Base Prospectuses from 6 November 2006and earlier, which did not contain the additional wording.

Accordingly, in the event that the Issuer or any Subsidiary of the Issuer ceased or threatened to ceaseto carry on all or any substantial part of its business and the credit rating assigned by a rating agency that hasrated this Programme was confirmed by that rating agency to remain unchanged from the applicable creditrating prior to such an action, this would not be an Event of Default (as defined in Condition 7 (Events ofDefault and Enforcement Events)) as set out in this Base Prospectus and, accordingly, would not entitleHolders of Instruments with Condition 7 as set out in this Base Prospectus to give notice to the Issuerdeclaring that any such Instrument shall be forthwith due and payable. However, no assurance can be giventhat, should the Issuer or any Subsidiary of the Issuer cease or threaten to cease to carry on all or anysubstantial part of its business, the Issuer would be able to meet its obligations under or in respect of allInstruments issued and its obligations and liabilities generally under the Programme as they respectively falldue without reliance on the Support Agreement. Were this to occur, Holders of Instruments would be moredependent upon Tokio Marine & Nichido’s ability to comply with its obligations under the SupportAgreement by maintaining the Issuer’s net worth at no less than U.S.$10,000,000 or to meet the Issuer’spayment obligations in respect of the Instruments.

Risks Relating to Tokio Marine & Nichido

Tokio Marine & Nichido and its consolidated subsidiaries carry out various derivative transactions inorder to provide a wide range of financial instruments that meet customers’ hedging needs as well as theirdiverse and complex investment/procurement needs.

The Issuer’s ability to meet its payment obligations is enhanced by the Support Agreement underwhich Tokio Marine & Nichido has covenanted to ensure that the Issuer has a minimum adjusted net worthof no less than U.S.$10,000,000 at all times and upon request, to provide additional funds to the Issuer tomeet its payment obligations. Holders of Instruments may also have direct rights to enforce the Issuer’s

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rights against Tokio Marine & Nichido under certain circumstances set out in the Support Agreement.Therefore, the right of Holders of Instruments to receive payment under the Instruments could be adverselyaffected if Tokio Marine & Nichido is declared bankrupt, is liquidated or is re-organised or, if as a result ofa decline in its business, it is unable to meet its obligations to the Issuer under the Support Agreement.

The derivative activities carried out by Tokio Marine & Nichido and its consolidated subsidiariesentail market risks and credit risks. Market risk refers to the possibility of losses arising from the valuechanges caused by price fluctuations in the underlying financial instruments and indexes such as interestrates, foreign exchange rates and stock prices. Credit risks include risks that Tokio Marine & Nichido andits consolidated subsidiaries may incur losses when their counterparties in derivative transactions fail toperform obligations set forth in the initial agreements due to insolvency or otherwise, other than any lossesarising from deterioration of the credit standing of trade reference stated in credit derivative agreements.

The insurance and financial strength ratings attributed to Tokio Marine & Nichido or its operatingsubsidiaries by the major rating agencies may be changed, suspended or withdrawn at any time by the ratingagencies. A change to the ratings attributed to Tokio Marine & Nichido or its operating subsidiaries may havean adverse effect on the financial condition, results of operations, and cashflows of Tokio Marine & Nichidoand its operating subsidiaries. Weather related events and other catastrophes such as hurricanes andearthquakes, coupled with the potential for further catastrophes to which Tokio Marine & Nichido or itsoperating subsidiaries may be exposed (including acts of terrorism) raise the possibility that the competitiveand financial position of Tokio Marine & Nichido and/or its operating subsidiaries could deteriorate andratings could be downgraded. The credit ratings assigned to indebtedness of Tokio Marine & Nichido mayaffect both its ability to obtain new financing and trade credit and the costs of financing and credit. Forexample, if Tokio Marine & Nichido credit ratings were downgraded, it could increase the cost of capital,make efforts to raise capital or trade credit more difficult and have an adverse impact on businessrelationships and reputation.

Investment returns are an important part of the overall business of Tokio Marine & Nichido and itsoperating subsidiaries, and fluctuations in the financial markets, primarily the fixed income and equitymarkets, could have a material adverse effect on the financial conditions, results of operations and cash flowsof Tokio Marine & Nichido and its operating subsidiaries.

The investment returns of Tokio Marine & Nichido and its operating subsidiaries are also susceptibleto changes in general economic conditions, including changes that impact the market value of assets held intheir investment portfolios.

Tokio Marine & Nichido and its operating subsidiaries maintain loss reserves for their insurancebusinesses to cover estimated liability for losses and loss adjustment expenses for reported and unreportedlosses incurred as of the end of each accounting period. Such loss reserves may prove to be inadequate tocover actual losses and benefits experience. Additional losses, including losses arising from changes in theinterpretation of legal liability, or the assessment of damages caused by judicial decisions or changes in law,the type or magnitude of which cannot be foreseen, may emerge in the future.

Loss reserves are established using internal “best estimate” reserving practices, which means thatliability for losses and benefits represents what are believed will be the probable amount that will be requiredto ultimately settle all claims incurred as of the fiscal year-end and interim statements. These estimates arebased on actuarial and statistical projections, at a given time, of facts and circumstances known at that timeand estimates of trends in loss severity and other variable factors, including new concepts of liability or otherchanges in legal precedents and general economic conditions. Changes in these trends or other variablefactors could result in claims in excess of loss reserves.

For some types of losses it has been necessary, and may over time be necessary, to increase estimatedultimate loss and, therefore, the related loss reserves. Consequently, actual losses, benefits and relatedexpenses paid may differ from estimates reflected in the loss reserves in the financial statements of TokioMarine & Nichido and its operating subsidiaries.

Any insufficiencies in or need to increase loss reserves maintained by Tokio Marine & Nichido andits operating subsidiaries for future claims on insurance obligations underwritten by Tokio Marine & Nichido

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and its operating subsidiaries could have a material adverse effect on the financial condition, results ofoperations and cash flows of Tokio Marine & Nichido and its operating subsidiaries (as applicable).

Tokio Marine & Nichido and its operating subsidiaries participate in a highly competitive market.Developments in this market and increased competition may adversely affect the financial position of TokioMarine & Nichido and its operating subsidiaries. Continued consolidation of the insurance industry couldlead to market-wide price reductions resulting in pressure on margins. Such competitive pressure may leadto adjustments to policy terms, withdrawal from or reduction of capacity in certain business lines orreduction of prices resulting in decreased margins.

Tokio Marine & Nichido and its operating subsidiaries are exposed to various currency exchange riskswhich can affect liquidity, profit and loss, shareholders’ equity, capital position and the overall economicenterprise value. Fluctuations in exchange rates between currencies could impact on the consolidatedfinancial condition, results of operations and cash flow from year to year of Tokio Marine & Nichido.

Insurance laws, regulations and policies currently governing Tokio Marine & Nichido and itsoperating subsidiaries may change at any time in ways which may adversely affect their business.Furthermore, the timing or form of any future regulatory initiatives cannot be predicted. Tokio Marine &Nichido and its subsidiaries are subject to applicable government regulation in each of the jurisdictions inwhich business is conducted. The insurance industry is also affected by political, judicial and other legaldevelopments which have at times in the past resulted in new areas or expanded scope of liability.

Satisfaction of increased regulatory requirements could require additional regulatory capital, lead toadditional expense or otherwise adversely affect Tokio Marine & Nichido’s financial position and that of itsoperating subsidiaries.

General insurance companies frequently experience losses from catastrophes. Catastrophes may havea material adverse effect on the financial condition, results of operations and cash flows of Tokio Marine &Nichido and its operating subsidiaries.

Natural catastrophes include, but are not limited to hurricanes, floods, windstorms, earthquakes,tornadoes, fires, severe hail and severe winter weather, and are inherently unpredictable in terms of both theiroccurrence and severity. Catastrophes can also be man-made, such as terrorist attacks, explosions, fires andoil spills. The incidence and severity of these catastrophes in any given period are inherently unpredictable.

There is a risk that provisions for future obligations to employees under pension plans may not beadequate. This could result from longer life expectancies, changes in interest rates and fluctuations in equitymarkets. In addition, pension related regulations are subject to review and change in the jurisdictions inwhich Tokio Marine & Nichido and its subsidiaries operate. Further changes to actuarial assumptions injurisdictions in which Tokio Marine & Nichido and its subsidiaries have employees, and other factors, couldadversely affect Tokio Marine & Nichido and its subsidiaries ability to meet their pension fundingobligations.

Risk Relating To The Instruments

There is no active trading market for the Instruments.

Instruments issued under the Programme will be new securities which may not be widely distributedand for which there is currently no active trading market (unless in the case of any particular Tranche, suchTranche is to be consolidated with and form a single series with a Tranche of Instruments which is alreadyissued). If the Instruments are traded after their initial issuance, they may trade at a discount to their initialoffering price, depending upon prevailing interest rates, the market for similar securities, general economicconditions and the financial condition of the Issuer. Although application has been made for the Instrumentsissued under the Programme to be listed on the Official List of the FSA and admitted to trading on theLondon Stock Exchange, there is no assurance that such applications will be accepted, that any particularTranche of Instruments will be so admitted or that an active trading market will develop. Accordingly, thereis no assurance as to the development or liquidity of any trading market for any particular Tranche ofInstruments.

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The Instruments may be redeemed prior to maturity.

Unless in the case of any particular Tranche of Instruments the relevant Final Terms specifiesotherwise, in the event that the Issuer would be obliged to increase the amounts payable in respect of anyInstruments due to any withholding or deduction for or on account of, any present or future taxes, duties,assessments or governmental charges of whatever nature imposed, levied, collected, withheld or assessed byor on behalf of the Cayman Islands or any political subdivision thereof or any authority therein or thereofhaving power to tax, the Issuer may redeem all outstanding Instruments in accordance with the Conditions.

In addition, if in the case of any particular Tranche of Instruments the relevant Final Terms specifiesthat the Instruments are redeemable at the Issuer’s option in certain other circumstances the Issuer maychoose to redeem the Instruments at times when prevailing interest rates may be relatively low. In suchcircumstances an investor may not be able to reinvest the redemption proceeds in a comparable security atan effective interest rate as high as that of the relevant Instruments.

Because the Global Instruments are held by or on behalf of Euroclear and Clearstream, Luxembourg,investors will have to rely on their procedures for transfer, payment and communication with the Issuer.

Instruments issued under the Programme may be represented by one or more Global Instruments.Such Global Instruments will be deposited with a common depositary for Euroclear and Clearstream,Luxembourg. Except in the circumstances described in the relevant Global Instrument, investors will not beentitled to receive definitive Instruments. Euroclear and Clearstream, Luxembourg will maintain records ofthe beneficial interests in the Global Instruments. While the Instruments are represented by one or moreGlobal Instruments, investors will be able to trade their beneficial interests only through Euroclear andClearstream, Luxembourg.

While the Instruments are represented by one or more Global Instruments the Issuer will discharge itspayment obligations under the Instruments by making payments to the common depositary for Euroclear andClearstream, Luxembourg for distribution to their account holders. A holder of a beneficial interest in aGlobal Instrument must rely on the procedures of Euroclear and Clearstream, Luxembourg to receivepayments under the relevant Instruments. The Issuer has no responsibility or liability for the records relatingto, or payments made in respect of, beneficial interests in the Global Instruments.

Holders of beneficial interests in the Global Instruments will not have a direct right to vote in respectof the relevant Instruments. Instead, such holders will be permitted to act only to the extent that they areenabled by Euroclear and Clearstream, Luxembourg to appoint appropriate proxies. Similarly, holders ofbeneficial interests in the Global Instruments will not have a direct right under the Global Instruments to takeenforcement action against the Issuer in the event of a default under the relevant Instruments but will haveto rely upon their rights under the Deed of Covenant.

Minimum Specified Denomination and higher integral multiples

In relation to any issue of Instruments which have a denomination consisting of the minimumSpecified Denomination plus a higher multiple of another smaller amount, it is possible that the Instrumentsmay be traded in amounts in excess of €50,000 (or its equivalent) that are not integral multiples of €50,000(or its equivalent). In such a case a Holder of such an Instrument who, as a result of trading such amounts,holds a principal amount of less than the minimum Specified Denomination may not receive a definitiveInstrument in respect of such holding (should definitive Instruments be printed) and would need to purchasea principal amount of Instruments such that its holding amounts to the minimum Specified Denomination.

Credit Rating

The Instruments have been assigned a rating of Aa2 by Moody’s Investors Service Inc., AA + byRating and Investment Information, Inc. and AAA by Japan Credit Rating Agency, Ltd. Tranches ofInstruments issued under the Programme may be rated or unrated. Where a Tranche of Instruments is rated,such rating will not necessarily be the same as the ratings described above. A security rating is not arecommendation to buy, sell or hold securities and may be subject to suspension, reduction or withdrawal at

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any time by the assigning rating agency. Any adverse change in an applicable credit rating could adverselyaffect the trading price for the Instruments issued under the Programme.

Partly Paid Instruments

The Issuer may ensure Instruments where the issue price is payable in more than one instalment.Failure to pay any subsequent instalment could result in an investor losing all of its investment.

Instruments may not be a suitable investment for all investors

Each potential investor in any Instruments must determine the suitability of that investment in lightof, its own circumstances. In particular, each potential investor should:

(i) have sufficient knowledge and experience to make a meaningful evaluation of the relevantInstruments, the merits and risks of investing in the relevant Instruments and the informationcontained or incorporated by reference in this Prospectus or any applicable supplement;

(ii) have access to, and knowledge of, appropriate analytical tools to evaluate, in the context of itsparticular financial situation, an investment in the relevant Instruments and the impact suchinvestment will have on its overall investment portfolio;

(iii) have sufficient financial resources and liquidity to bear all of the risks of an investment in therelevant Instruments, including where principal or interest is payable in one or more currencies,or where the currency for principal or interest payments is different from the potentialinvestor’s currency;

(iv) understand thoroughly the terms of the relevant Instruments and be familiar with the behaviourof any relevant indices and financial markets; and

(v) be able to evaluate (either alone or with the help of a financial adviser) possible scenarios foreconomic, interest rate and other factors that may affect its investment and its ability to bearthe applicable risks.

Modification and waivers and substitution

The Terms and Conditions of the Instruments contain provisions for calling meetings of Holders ofInstruments to consider matters affecting their interests generally. These provisions permit defined majoritiesto bind all Holders of Instruments including Holders of Instruments who did not attend and vote at therelevant meeting and Holders of Instruments who voted in a manner contrary to the majority.

Exchange rate risks and exchange controls

The relevant Issuer will pay principal and interest on the Instruments in the currency as may bespecified in the Final Terms (the “Specified Currency”). This presents certain risks relating to currencyconversions if an investor’s financial activities are denominated principally in a currency or currency unit(the “Investor’s Currency”) other than the Specified Currency. These include the risk that exchange ratesmay significantly change (including changes due to devaluation of the Specified Currency or revaluation ofthe Investor’s Currency) and the risk that authorities with jurisdiction over the Investor’s Currency mayimpose or modify exchange controls. An appreciation in the value of the Investor’s Currency relative to theSpecified Currency would decrease (1) the Investor’s Currency-equivalent yield on the Instruments, (2) theInvestor’s Currency equivalent value of the principal payable on the Instruments and (3) the Investor’sCurrency equivalent market value of the Instruments.

Government and monetary authorities may impose (as some have done in the past) exchange controlsthat could adversely affect an applicable exchange rate. As a result, investors may receive less interest orprincipal than expected, or no interest or principal.

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Interest rate risks

Investment in fixed rate Instruments involves the risk that subsequent changes in market interest ratesmay adversely affect the value of fixed rate Instruments.

Legal investment considerations may restrict certain investments

The investment activities of certain investors are subject to legal investment laws and regulations, orreview or regulation by certain authorities. Each potential investor should consult its legal advisers todetermine whether and to what extent (1) Instruments are legal investments for it, (2) Instruments can beused as collateral for various types of borrowing and (3) other restrictions apply to its purchase or pledge ofany Instruments. Financial institutions should consult their legal advisers or the appropriate regulators todetermine the appropriate treatment of Instruments under any applicable risk-based capital or similar rules.

Loss of Investment

If, in the case of any particular Tranche of Instruments, the relevant Final Terms do not specify thatthe Instruments are wholly principal protected, there is a risk that any investor may lose the value of theirentire investment or part of it and that the Instruments may trade significantly below their issue price at anytime prior to redemption.

Index Linked Instruments, Dual Currency Instruments and Instruments linked to Swap Rates, interest,formula or other underlying

The Issuer may issue Instruments with principal or interest determined by reference to interest or swaprates or an index or formula, to changes in the prices of securities or commodities, to movements in currencyexchange rates or other factors (each, a “Relevant Factor”). In addition, the Issuer may issue Instrumentswith principal or interest payable in one or more currencies, which may be different from the currency inwhich the Instruments are denominated.

Potential investors should be aware that:

(i) the market price of such Instruments may be very volatile;

(ii) they may receive no interest;

(iii) payment of principal or interest may occur at a different time or in a different currency thanexpected;

(iv) they may lose all or a substantial portion of their principal;

(v) a Relevant Factor may be subject to significant fluctuations that may not correlate with changesin interest rates, currencies or other indices;

(vi) if a Relevant Factor is applied to Instruments in conjunction with a multiplier greater than oneor contains some other leverage factor, the effect of changes in the Relevant Factor on principalor interest payable is likely to be magnified; and

(vii) the timing of changes in a Relevant Factor may affect the actual yield to investors, even if theaverage level is consistent with their expectations. In general, the earlier the change in theRelevant Factor, the greater the effect on yield.

Risks Relating to Current Market Conditions

The investments, business, profitability and results of operations of the Issuer or, as the case may be,Tokio Marine & Nichido, may be adversely affected as a result of the difficult conditions in the financialmarkets

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Since the second half of 2007, disruption in the global credit markets, coupled with the re-pricing ofcredit risk and the deterioration of the housing markets in the United States and United Kingdom andelsewhere, created increasingly difficult conditions in the financial markets. Among the sectors of the globalcredit markets that are experiencing particular difficulty due to the current crisis are the markets associatedwith sub-prime mortgage backed securities, asset backed securities, collateralized debt obligations,leveraged finance and complex structured securities. These conditions have resulted in historic volatility, lessliquidity or no liquidity, widening of credit spreads and a lack of price transparency in certain markets.

Most recently, these conditions have resulted in the failures of a number of financial institutions in theUnited States and Europe and unprecedented action by governmental authorities and central banks aroundthe world. It is difficult to predict how long these conditions will exist and how the Issuer’s or, as the casemay be, Tokio Marine & Nichido’s, investments and markets will be adversely affected. These conditionsmay be exacerbated by persisting volatility in the financial sector and the capital markets, or concerns about,or a default by, one or more institutions, which could lead to significant market-wide liquidity problems,losses or defaults by other institutions. Accordingly, these conditions could adversely affect the Issuer’s or,as the case may be, Tokio Marine & Nichido’s, investments, consolidated financial condition or results ofoperations in future periods. In addition, the Issuer or, as the case may be, Tokio Marine & Nichido, maybecome subject to litigation and regulatory or governmental scrutiny, or may be subject to changes inapplicable regulatory regimes that may be materially adverse to them and their prospects. Furthermore, it isnot possible to predict what structural and/or regulatory changes may result from the current marketconditions or whether such changes may be materially adverse to the Issuer or, as the case may be, TokioMarine & Nichido and their prospects.

If current market conditions and circumstances deteriorate further, or continue for protracted periodsof time, this could lead to a decline in credit quality, corrections in asset prices and increases in defaults andnon-performing debt, which may have a negative impact on the rating, performance or value of investmentsof the Issuer or, as the case may be, Tokio Marine & Nichido, and materially adversely affect their business,profitability and results of operations.

The Issuer or, as the case may be, Tokio Marine & Nichido, may incur losses associated withcounterparty exposures

The Issuer or, as the case may be, Tokio Marine & Nichido, faces the possibility that a counterpartywill be unable to honour its contractual obligations. These counterparties may default on their obligationsdue to bankruptcy, lack of liquidity, operational failure or other reasons. This risk may arise, for example,from entering into swap or other derivative contracts under which counterparties have obligations to makepayments to the Issuer or Tokio Marine & Nichido; executing currency or other trades that fail to settle atthe required time due to non-delivery by the counterparty or systems failure by clearing agents, exchanges,clearing houses or other financial intermediaries. Such counterparty risk is more acute in difficult marketconditions where the risk of failure of counterparties is higher.

The value of certain investments of the Issuer or, as the case may be, Tokio Marine & Nichido, mayfall given the uncertainty involved in determining the fair value of such investments generally, andparticularly in difficult market conditions

Under generally accepted accounting principles in Japan, the Issuer recognises at fair value derivativeproduct assets and liabilities as further described in “Significant Accounting Policies” in the notes to theaudited financial statements of the Issuer for the year ended 31 December, 2008.

Under generally accepted accounting principles in Japan, Tokio Marine & Nichido recognises at fairvalue derivative product assets and liabilities as further described in “Basis of Presentation and SignificantAccounting Policies” for the year ended 31 March, 2009.

Generally, to establish the fair value of these instruments, the Issuer and, where relevant, Tokio Marine& Nichido rely on quoted market prices in active markets or, where the market for a financial instrument isnot sufficiently active, valuation techniques that utilise, wherever possible, observable market inputs.Observable inputs for such valuation models may not be available or may become unavailable due to the

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changes in market conditions or the disappearance of active markets for certain instruments that have takenplace over the past several months.

To the extent that valuation is based on models or inputs that are not observable in the market, thedetermination of fair value can be subjective and dependent on the significance of unobservable inputs to theoverall valuation. Unobservable inputs are determined based on the best information available, for exampleby reference to similar assets, similar maturities, appropriate proxies or other analytical techniques. In suchcircumstances, the Issuer’s and, where relevant, Tokio Marine & Nichido’s internal valuation models requireit to make assumptions, judgments and estimates in order to establish fair value. In common with otherfinancial institutions, these internal valuation models are complex, and the assumptions, judgements andestimates the Issuer and, where relevant, Tokio Marine & Nichido is required to make often relate to mattersthat are inherently uncertain, such as expected cash flows, the ability of borrowers to service debt, houseprice appreciation and depreciation, and relative levels of defaults and deficiencies. Such assumptions,judgments and estimates may need to be updated to reflect changing trends and market conditions. Theresulting changes in the fair values of financial instruments could have a material adverse effect on theIssuer’s or, as the case may be, Tokio Marine & Nichido’s earnings and financial condition.

Financial institutions may use different accounting categorisations for the same or similar financialassets due to their different intentions regarding those assets. In determining fair value of financialinstruments, different financial institutions may use different valuation techniques, assumptions, judgmentsand estimates, which may result in lower or higher fair values for such financial instruments.

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TERMS AND CONDITIONS OF THE INSTRUMENTS

The following are the Terms and Conditions of the Instruments which as supplemented, modified orreplaced in relation to any Instruments by the relevant Final Terms, will be applicable to each Series ofInstruments. The terms and conditions applicable to any instrument in global form will differ from thoseterms and conditions which would apply to the Instrument were it in definitive form to the extent describedunder “Provisions Relating to the Instruments while in Global Form” below.

Tokio Marine Financial Solutions Ltd. (the “Issuer”) has established a Programme for the issuance ofDebt Instruments (the “Programme”) of up to ¥400,000,000,000 in aggregate principal amount of theinstruments (the “Instruments”). The Instruments are issued pursuant to and in accordance with an amendedand restated issue and paying agency agreement dated 29 October, 2009 (as amended, supplemented orreplaced from time to time, the “Issue and Paying Agency Agreement”) and made between Tokio MarineFinancial Solutions Ltd. (the “Issuer”), The Bank of New York Mellon acting through its London Branch inits capacity as issue and paying agent (the “Issue and Paying Agent”, which expression shall include anysuccessor to The Bank of New York Mellon acting through its London Branch in its capacity as such, andtogether with any additional paying agents appointed in accordance with the Issue and Paying AgencyAgreement, the “Paying Agents”). For the purposes of making determinations or calculations of interestrates, interest amounts, redemption amounts or any other matters requiring determination or calculation inaccordance with the Conditions of any Series of Instruments (as defined below), the Issuer may appoint acalculation agent (the “Calculation Agent”) for the purposes of such Instruments, in accordance with theprovisions of the Issue and Paying Agency Agreement, and such Calculation Agent shall be specified in therelevant Final Terms (as defined below). The Instruments have the benefit of a deed of covenant (as amended,supplemented or replaced from time to time, the “Deed of Covenant”) dated 29 October, 2009 executed bythe Issuer in relation to the Instruments. The Issuer and, in certain circumstances, the Holders (as defined inCondition 2.01) have the benefit of a 2nd Amended and Restated Support Agreement entered into betweenthe Issuer and Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine & Nichido”) dated 26August 2005 (as amended, supplemented or replaced from time to time, subject to and in accordance withsuch agreement and the provisions of the Deed of Covenant, the “Support Agreement”). Copies of the Issueand Paying Agency Agreement, the Deed of Covenant and the Support Agreement are available forinspection during normal business hours at the specified office of each of the Paying Agents. All personsfrom time to time entitled to the benefit of obligations under any Instruments shall be deemed to have noticeof, and shall be bound by, all of the provisions of the Issue and Paying Agency Agreement, the Deed ofCovenant and the Support Agreement insofar as they relate to the relevant Instruments.

The Instruments are issued in series (each, a “Series”), and each Series may comprise one or moretranches (“Tranches” and each, a “Tranche”) of Instruments. Each Tranche will be the subject of a FinalTerms (the “Final Terms”), copies of which shall be obtainable and available for inspection during normalbusiness hours at the specified offices of the Paying Agents. In the case of a Tranche of Instruments inrelation to which application has not been made for listing on any stock exchange, copies of the Final Termswill only be available for inspection by a Holder of or, as the case may be, a Relevant Account Holder (asdefined in the Deed of Covenant) in respect of, such Instruments.

References in these Terms and Conditions to Instruments are to Instruments of the relevant Series andany references to Coupons (as defined in Condition 1.02) and Receipts (as defined in Condition 1.03) are toCoupons and Receipts relating to Instruments of the relevant Series.

References in these Terms and Conditions to the Final Terms are to the Final Terms prepared inrelation to the Instruments of the relevant Tranche or Series.

In respect of any Instruments, references herein to these Terms and Conditions are to these terms andconditions as supplemented or modified or (to the extent thereof) replaced by the Final Terms. In the eventof any inconsistency between these conditions and the relevant Final Terms, the relevant Final Terms prevail.

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1. Form and Denomination

Form

1.01 Instruments are issued in bearer form and are serially numbered.

1.02 Interest-bearing Instruments in definitive form have attached thereto at the time of their initialdelivery coupons (“Coupons”), presentation of which will be a prerequisite to the payment of interest savein certain circumstances specified herein. In addition, if so specified in the Final Terms, such Instrumentshave attached thereto at the time of their initial delivery, a talon (“Talon”) for further coupons and theexpression “Coupons” shall, where the context so requires, include Talons.

1.03 Instruments in definitive form, the principal amount of which is repayable by installments(“Installment Instruments”) have attached thereto at the time of their initial delivery, payment receipts(“Receipts”) in respect of the installments of principal.

Denomination

1.04 Instruments are in the denomination or denominations (each of which denomination isintegrally divisible by each smaller denomination) specified in the Final Terms. Instruments of onedenomination may not be exchanged for Instruments of any other denomination.

Currency of Instruments

1.05 The Instruments are denominated in such currency as may be specified in the Final Terms. Anycurrency may be so specified, subject to compliance with all applicable legal and/or regulatory and/or centralbank requirements.

Partly Paid Instruments

1.06 Instruments may be issued on a partly paid basis (“Partly Paid Instruments”) if so specifiedin the Final Terms. The subscription moneys therefore shall be paid in such number of installments (“PartlyPaid Installments”) in such amounts, on such dates and in such manner as may be specified in the FinalTerms. The first such installment shall be due and payable on the date of issue of the Instruments. For thepurposes of these Terms and Conditions, in respect of any Partly Paid Instrument, “Paid Up Amount” meansthe aggregate amount of all Partly Paid Installments in respect thereof as shall have fallen due and been paidup in full in accordance with the Terms and Conditions.

Not less than 14 days nor more than 30 days prior to the due date for payment of any Partly PaidInstallment (other than the first such installment) the Issuer shall publish a notice in accordance withCondition 14 stating the due date for payment thereof and stating that failure to pay any such Partly PaidInstallment on or prior to such date will entitle the Issuer to forfeit the Instruments with effect from such date(“Forfeiture Date”) as may be specified in such notice (not being less than 14 days after the due date forpayment of such Partly Paid Installment), unless payment of the relevant Partly Paid Installment togetherwith any interest accrued thereon is paid prior to the Forfeiture Date. The Issuer shall procure that any PartlyPaid Installments paid in respect of any Instruments subsequent to the Forfeiture Date in respect thereof shallbe returned promptly to the persons entitled thereto. The Issuer shall not be liable for any interest on anyPartly Paid Installment so returned.

Interest shall accrue on any Partly Paid Installment which is not paid on or prior to the due date forpayment thereof at the Interest Rate (in the case of non-interest bearing Instruments, at the rate applicable tooverdue payments) and shall be calculated in the same manner and on the same basis as if it were interestaccruing on the Instruments for the period from and including the due date for payment of the relevant PartlyPaid Installment up to but excluding the Forfeiture Date. For the purpose of the accrual of interest, anypayment of any Partly Paid Installment made after the due date for payment shall be treated as having beenmade on the day preceding the Forfeiture Date (whether or not a Business Day as defined in Condition 5.09).

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Unless an Event of Default (or an event which with the giving of notice, the lapse of time or themaking or giving of any determination or certification would constitute an Event of Default) shall haveoccurred and be continuing, on the Forfeiture Date, the Issuer shall forfeit all of the Instruments in respectof which any Partly Paid Installment shall not have been duly paid, whereupon the Issuer shall be entitled toretain all Partly Paid Installments previously paid in respect of such Instruments and shall be discharged fromany obligation to repay such amount or to pay interest thereon.

2. Title and Transfer

2.01 Title to Instruments, Receipts and Coupons passes by delivery. References herein to the“Holders” of Instruments or of Receipts or Coupons are to the bearers of such Instruments or such Receiptsor Coupons.

2.02 The Holder of any Instrument or Coupon (except as otherwise required by applicable law orregulatory requirement) be treated as its absolute owner for all purposes (whether or not it is overdue andregardless of any notice of ownership, trust or any interest thereof or therein, any writing thereon, or any theftor loss thereof) and no person shall be liable for so treating such Holder.

3. Status

Status of the Instruments

3.01 The Instruments constitute direct, unconditional, unsubordinated and (subject to the provisionsof Condition 4) unsecured obligations of the Issuer and rank pari passu without any preference amongthemselves and at least pari passu with all other unsubordinated and unsecured obligations of the Issuer,present and future (save for certain mandatory exceptions provided by law).

Status of the Support Agreement

3.02 Tokio Marine & Nichido has covenanted in the Support Agreement to, inter alia, (i) ensure thatthe Issuer has a minimum Adjusted Net Worth (as defined therein) at all times and (ii) provide funds (at therequest of the Issuer) to the Issuer to meet certain payment obligations including its obligations to Holdersof Instruments. Tokio Marine & Nichido and the Issuer have further agreed that upon the failure of the Issuerto meet certain payment obligations including (but without limitation) its obligations to Holders ofInstruments, such Holder(s) shall have the right to demand that the Issuer enforce its rights under the SupportAgreement and in the event that the Issuer fails to do so, such Holder(s) may proceed directly against TokioMarine & Nichido to enforce such rights of the Issuer. The Support Agreement does not, however, constitutea guarantee of the Instruments, and Tokio Marine & Nichido is not a surety.

4. Negative Pledge

So long as any Instrument remains outstanding (as defined in the Issue and Paying AgencyAgreement), the Issuer shall not and shall procure that none of its Subsidiaries (if any) shall, create or permitto subsist any Security Interest upon the whole or any part of their present or future undertaking, assets orrevenues (including uncalled capital) to secure any Relevant Indebtedness or Guarantee of RelevantIndebtedness without (a) at the same time or prior thereto securing the Instruments equally and rateablytherewith or (b) providing such other security for the Instruments as may be approved by an ExtraordinaryResolution (as defined in the Issue and Paying Agency Agreement) of Instrumentholders.

In these Conditions:

“Guarantee” means, in relation to any Indebtedness of any Person, any obligation of another Personto pay such Indebtedness including (without limitation):

(i) any obligation to purchase such Indebtedness;

(ii) any obligation to lend money, to purchase or subscribe shares or other securities or to purchaseassets or services in order to provide funds for the payment of such Indebtedness;

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(iii) any indemnity against the consequences of a default in the payment of such Indebtedness otherthan an indemnity in a credit swap agreement entered into by the Issuer in the normal courseof its trading activities on the Issuer’s standard or usual terms of business; and

(iv) any other agreement to be responsible for such Indebtedness;

“Indebtedness” means any indebtedness of any Person for money borrowed or raised including(without limitation) any indebtedness for or in respect of:

(i) amounts raised by acceptance under any acceptance credit facility;

(ii) amounts raised under any note purchase facility;

(iii) the amount of any liability in respect of leases or hire purchase contracts which would, inaccordance with applicable law and generally accepted accounting principles, be treated asfinance or capital leases;

(iv) the amount of any liability in respect of any purchase price for assets or services the paymentof which is deferred for a period in excess of 60 days; and

(v) amounts raised under any other transaction (including, without limitation, any forward sale orpurchase agreement but excluding a debt securities repurchase agreement (arising in theordinary course of business)) having the commercial effect of a borrowing;

“Person” means any individual, company, corporation, firm, partnership, joint venture, association,organisation, state or agency of a state or other entity, whether or not having separate legal personality;

“Relevant Indebtedness” means any Indebtedness which is in the form of or represented by anybond, note, debenture, debenture stock, loan stock, certificate or other instrument which is, or is capable ofbeing, listed, quoted or traded on any stock exchange or in any securities market (including, withoutlimitation, any over-the-counter market);

“Security Interest” means any mortgage, charge, pledge, lien or other security interest including,without limitation, anything analogous to any of the foregoing under the laws of any jurisdiction; and

“Subsidiary” means, in relation to any Person (the “first Person”) at any particular time, any otherPerson (the “second Person”):

(i) whose affairs and policies the first Person controls or has the power to control, whether byownership of share capital, contract, the power to appoint or remove members of the governingbody of the second Person or otherwise; or

(ii) whose financial statements are, in accordance with applicable law and generally acceptedaccounting principles, consolidated with those of the first Person.

5. Interest

Interest

5.01 Instruments may be interest-bearing or non interest-bearing, as specified in the Final Terms.Words and expressions appearing in this Condition 5 and not otherwise defined herein or in the Final Termsshall have the meanings given to them in Condition 5.09.

Interest-bearing Instruments

5.02 Instruments which are specified in the Final Terms as being interest-bearing shall bear interestfrom their Interest Commencement Date at the Interest Rate payable in arrear on each Interest Payment Date.

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Floating Rate Instruments

5.03 If the Final Terms specifies the Interest Rate applicable to the Instruments as being FloatingRate it shall also specify which page (the “Relevant Screen Page”) on the Reuters Screen or any otherinformation vending service shall be applicable. If such a page is so specified, the Interest Rate applicableto the relevant Instruments for each Interest Accrual Period shall be determined by the Calculation Agent onthe following basis:

(i) the Calculation Agent will determine the offered rate for deposits (or, as the case may require,the arithmetic mean (rounded, if necessary, to the nearest ten thousandth of a percentage point,0.00005 per cent. being rounded upwards) of the rates for deposits) in the relevant currency fora period of the duration of the relevant Interest Accrual Period on the Relevant Screen Page asof the Relevant Time on the relevant Interest Determination Date;

(ii) if, on any Interest Determination Date, no such rate for deposits so appears (or, as the case maybe, if fewer than two such rates for deposits so appear) or if the Relevant Screen Page isunavailable, the Calculation Agent will request appropriate quotations and will determine thearithmetic mean (rounded as aforesaid) of the rates at which deposits in the relevant currencyare offered by four major banks in the London interbank market, selected by the CalculationAgent, at approximately the Relevant Time on the Interest Determination Date to prime banksin the London interbank market for a period of the duration of the relevant Interest AccrualPeriod and in an amount that is representative for a single transaction in the relevant market atthe relevant time;

(iii) if, on any Interest Determination Date, only two or three rates are so quoted, the CalculationAgent will determine the arithmetic mean (rounded as aforesaid) of the rates so quoted; or

(iv) if fewer than two rates are so quoted, the Calculation Agent will determine the arithmetic mean(rounded as aforesaid) of the rates quoted by four major banks in the Relevant Financial Centre(or, in the case of Instruments denominated in euro, in such financial centre or centres withinthe euro zone) selected by the Calculation Agent, at approximately 11.00 a.m. (RelevantFinancial Centre time (or local time at such other financial centre or centres as aforesaid)) onthe first day of the relevant Interest Accrual Period for loans in the relevant currency to leadingEuropean banks for a period of the duration of the relevant Interest Accrual Period and in anamount that is representative for a single transaction in the relevant market at the relevant time,and the Interest Rate applicable to such Instruments during each Interest Accrual Period willbe the sum of the relevant margin (the “Relevant Margin”) specified in the Final Terms andthe rate (or, as the case may be, the arithmetic mean (rounded as aforesaid) of the rates) sodetermined provided, however, that, if the Calculation Agent is unable to determine a rate (or,as the case may be, an arithmetic mean of rates) in accordance with the above provisions inrelation to any Interest Accrual Period, the Interest Rate applicable to such Instruments duringsuch Interest Accrual Period will be the sum of the Relevant Margin and the rate (or, as the casemay be, the arithmetic mean (rounded as aforesaid) of the rates) determined in relation to suchInstruments in respect of the last preceding Interest Accrual Period.

ISDA Rate Instruments

5.04 If the Final Terms specifies the Interest Rate applicable to the Instruments as being ISDA Rate,each Instrument shall bear interest as from such date, and at such rate or in such amounts, and such interestwill be payable on such dates, as would have applied (regardless of any event of default or termination eventor tax event thereunder) if the Issuer had entered into an interest rate swap transaction with the Holder ofsuch Instrument under the terms of an agreement to which the ISDA Definitions applied and under which:

– the Fixed Rate Payer, Fixed Amount Payer, Fixed Price Payer, Floating Rate Payer, FloatingAmount Payer or, as the case may be, the Floating Price Payer is the Issuer (as specified in theFinal Terms);

– the Effective Date is the Interest Commencement Date;

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– the Termination Date is the Maturity Date;

– the Calculation Agent is the Calculation Agent as specified in the Final Terms;

– the Calculation Periods are the Interest Accrual Periods;

– the Period End Dates are the Interest Period End Dates;

– the Payment Dates are the Interest Payment Dates;

– the Reset Dates are the Interest Period End Dates;

– the Calculation Amount is the Calculation Amount as specified in the Final Terms;

– the Day Count Fraction applicable to the calculation of any amount is that specified in the FinalTerms or, if none is so specified, as may be determined in accordance with the ISDADefinitions;

– the Applicable Business Day Convention applicable to any date is that specified in the FinalTerms or, if none is so specified, as may be determined in accordance with the ISDADefinitions; and

– the other terms are as specified in the Final Terms.

Maximum or Minimum Interest Rate

5.05 If any Maximum or Minimum Interest Rate is specified in the Final Terms, then the InterestRate shall in no event be greater than the maximum or be less than the minimum so specified.

Accrual of Interest

5.06 Interest shall accrue on the Outstanding Principal Amount of each Instrument during eachInterest Accrual Period from the Interest Commencement Date. Interest will cease to accrue as from the duedate for redemption therefore (or, in the case of an Installment Instrument, in respect of each installment ofprincipal, on the due date for payment of the relevant Installment Amount) unless upon due presentation orsurrender thereof (if required), payment in full of the Redemption Amount (as defined in Condition 6.10) orthe relevant Installment Amount is improperly withheld or refused or default is otherwise made in thepayment thereof in which case interest shall continue to accrue on the principal amount in respect of whichpayment has been improperly withheld or refused or default has been made (as well after as before anydemand or judgment) at the Interest Rate then applicable or such other rate as may be specified for thispurpose in the Final Terms until the date on which, upon due presentation or surrender of the relevantInstrument (if required), the relevant payment is made or, if earlier (except where presentation or surrenderof the relevant Instrument is not required as a precondition of payment), the seventh day after the date onwhich, the Issue and Paying Agent having received the funds required to make such payment, notice is givento the Holders of the Instruments in accordance with Condition 14 that the Issue and Paying Agent hasreceived the required funds (except to the extent that there is failure in the subsequent payment thereof to therelevant Holder).

Interest Amount(s), Calculation Agent and Reference Banks

5.07 If a Calculation Agent is specified in the Final Terms, the Calculation Agent, as soon aspracticable after the Relevant Time on each Interest Determination Date (or such other time on such date asthe Calculation Agent may be required to calculate any Redemption Amount or Installment Amount, obtainany quote or make any determination or calculation) will determine the Interest Rate and calculate theamount(s) of interest payable (the “Interest Amount(s)”) in accordance with Condition 5.08, calculate theRedemption Amount or Installment Amount, obtain such quote or make such determination or calculation,as the case may be, and cause the Interest Rate and the Interest Amounts for each Interest Period and therelevant Interest Payment Date or, as the case may be, the Redemption Amount or any Installment Amountto be notified to the Issue and Paying Agent, the Issuer, the Holders in accordance with Condition 14 and, if

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the Instruments are listed on a stock exchange and the rules of such exchange so require, such exchange assoon as possible after their determination or calculation but in no event later than the fourth London BankingDay thereafter or, if earlier in the case of notification to the stock exchange, the time required by the relevantstock exchange. The Interest Amounts and the Interest Payment Date so notified may subsequently beamended (or appropriate alternative arrangements made by way of adjustment) without notice in the eventof an extension or shortening of an Interest Accrual Period or the Interest Period. If the Calculation Amountis less than the minimum Specified Denomination the Calculation Agent shall not be obliged to publish eachInterest Amount but instead may publish only the Calculation Amount and Interest Amount in respect of anInstrument having the minimum Specified Denomination.

If the Instruments become due and payable under Condition 7, the Interest Rate and the accruedinterest payable in respect of the Instruments shall nevertheless continue to be calculated as previously inaccordance with this Condition but no publication of the Interest Rate or the Interest Amount so calculatedneed be made. The determination of each Interest Rate, Interest Amount, Redemption Amount andInstallment Amount, the obtaining of each quote and the making of each determination or calculation by theCalculation Agent shall (in the absence of manifest error) be final and binding upon the Issuer and theHolders and neither the Calculation Agent nor any Reference Bank shall have any liability to the Holders inrespect of any determination, calculation, quote or rate made or provided by it.

The Issuer will procure that there shall at all times be such Reference Banks as may be required forthe purpose of determining the Interest Rate applicable to the Instruments and a Calculation Agent, ifprovision is made for one in the Terms and Conditions.

If the Calculation Agent is incapable or unwilling to act as such or if the Calculation Agent fails dulyto establish the Interest Rate for any Interest Accrual Period or to calculate the Interest Amounts or any otherrequirements, the Issuer will appoint the London office of a leading bank engaged in the London interbankmarket to act as such in its place. The Calculation Agent may not resign its duties without a successor havingbeen appointed as aforesaid.

Calculations and Adjustments

5.08 The Interest Amount(s) in respect of any Instrument shall be calculated by applying the InterestRate for such Interest Accrual Period to the Calculation Amount, multiplying the product by the relevant DayCount Fraction, rounding the resulting figure to the nearest sub-unit of the Specified Currency (half a sub-unit being rounded upwards other than in the case of any Japanese Yen amount, which will be roundeddownwards to the next lower whole Japanese Yen amount) and multiplying such rounded figure by a fractionequal to the Specified Denomination of the relevant Instrument divided by the Calculation Amount, save that(i) if the Final Terms specifies a specific amount in respect of such period, the amount of interest payable inrespect of such Instrument for such period will be equal to such specified amount and (ii) in the case ofInstruments where the Interest Rate is fixed, the interest shall be calculated on the basis of a 360-day yearconsisting of 12 months of 30 days each and, in the case of an incomplete month, the number of dayselapsed. Where any Interest Period comprises two or more Interest Accrual Periods, the amount of interestpayable in respect of such Interest Period will be the sum of the amounts of interest payable in respect ofeach of those Interest Accrual Periods.

For the purposes of any calculations referred to in these Terms and Conditions (unless otherwisespecified in the Final Terms), (a) all percentages resulting from such calculations will be rounded, ifnecessary, to the nearest one hundred-thousandth of a percentage point (with 0.000005 per cent. beingrounded up to 0.00001 per cent.), (b) all United States Dollar amounts used in or resulting from suchcalculations will be rounded to the nearest cent (with one half cent being rounded up), (c) all Japanese Yenamounts used in or resulting from such calculations will be rounded downwards to the next lower wholeJapanese Yen amount and (d) all amounts denominated in any other currency used in or resulting from suchcalculations will be rounded to the nearest two decimal places in such currency, with 0.005 being roundedupwards.

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Definitions

5.09 “Applicable Business Day Convention” means the “Business Day Convention” which may bespecified in the Final Terms as applicable to any date in respect of the Instruments. Where the Final Termsspecifies “No Adjustment” in relation to any date, such date shall not be adjusted in accordance with anyBusiness Day Convention. Where the Final Terms fails either to specify an applicable Business DayConvention or “No Adjustment” for the purposes of an Interest Payment Date or an Interest Period End Date,then in the case of Instruments which bear interest at a fixed rate, “No Adjustment” shall be deemed to havebeen so specified and in the case of Instruments which bear interest at a floating rate, the Modified FollowingBusiness Day Convention shall be deemed to have been so specified. Different Business Day Conventionsmay apply, or be specified in relation to, the Interest Payment Dates, Interest Period End Dates and any otherdate or dates in respect of any Instruments.

“Banking Day” means, in respect of any city, any day on which commercial banks are open forbusiness (including dealings in foreign exchange and foreign currency deposits) in that city.

“Business Day” means a day (other than a Saturday or Sunday):

(i) in relation to Instruments denominated or payable in euro, a TARGET Settlement Day;

(ii) in relation to Instruments payable in any other currency, on which commercial banks are openfor business and foreign exchange markets settle payments in the Relevant Financial Centre inrespect of the relevant currency; and

(iii) in either case, on which commercial banks are open for business and foreign exchange marketssettle payments in any place in the relevant Final Terms.

“Business Day Convention” means a convention for adjusting any date if it would otherwise fall ona day that is not a Business Day and the following Business Day Conventions, where specified in the FinalTerms in relation to any date applicable to any Instruments, shall have the following meanings:

(i) “Following Business Day Convention” means that such date shall be postponed to the firstfollowing day that is a Business Day;

(ii) “Modified Following Business Day Convention” or “Modified Business Day Convention”means that such date shall be postponed to the first following day that is a Business Day unlessthat day falls in the next calendar month in which case that date will be the first preceding daythat is a Business Day;

(iii) “Preceding Business Day Convention” means that such date shall be brought forward to thefirst preceding day that is a Business Day; and

(iv) “FRN Convention” or “Eurodollar Convention” means that each such date shall be the datewhich numerically corresponds to the preceding such date in the calendar month which is thenumber of months specified in the Final Terms after the calendar month in which the precedingsuch date occurred provided that:

(a) if there is no such numerically corresponding day in the calendar month in which anysuch date should occur, then such date will be the last day which is a Business Day inthat calendar month;

(b) if any such date would otherwise fall on a day which is not a Business Day, then suchdate will be the first following day which is a Business Day unless that day falls in thenext calendar month, in which case it will be the first preceding day which is a BusinessDay; and

(c) if the preceding such date occurred on the last day in a calendar month which was aBusiness Day, then all subsequent such dates will be the last day which is a BusinessDay in the calendar month which is the specified number of months after the calendarmonth in which the preceding such date occurred.

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a “Calculation Amount” has the meaning given in the relevant Final Terms.

“Day Count Fraction” means, in respect of the calculation of an amount for any period of time(“Calculation Period”), such day count fraction as may be specified in the Final Terms and:

(i) if “Actual/Actual (ICMA)” is so specified, means:

(a) where the Calculation Period is equal to or shorter than the Regular Period during whichit falls, the actual number of days in the Calculation Period divided by the product of (1)the actual number of days in such Regular Period and (2) the number of Regular Periodsnormally ending in any year; and

(b) where the Calculation Period is longer than one Regular Period, the sum of:

(1) the actual number of days in such Calculation Period falling in the Regular Periodin which it begins divided by the product of (A) the actual number of days in suchRegular Period and (B) the number of Regular Periods normally ending in anyyear; and

(2) the actual number of days in such Calculation Period falling in the next RegularPeriod divided by the product of (A) the actual number of days in such RegularPeriod and (B) the number of Regular Periods normally ending in any year;

(ii) if “Actual/365” or “Actual/Actual (ISDA)” is so specified, means the actual number of daysin the Calculation Period divided by 365 (or, if any portion of the Calculation Period falls in aleap year, the sum of (A) the actual number of days in that portion of the Calculation Periodfalling in a leap year divided by 366 and (B) the actual number of days in that portion of theCalculation Period falling in a non-leap year divided by 365) or, in the case of an InterestPayment Date falling in a leap year, 366;

(iii) if “Actual/365 (Fixed)” is so specified, means the actual number of days in the CalculationPeriod divided by 365;

(iv) if “Actual/360” is so specified, means the actual number of days in the Calculation Perioddivided by 360;

(v) if “30/360” is so specified, means the number of days in the Calculation Period divided by 360(the number of days to be calculated on the basis of a year of 360 days with 12 30-day months(unless (i) the last day of the Calculation Period is the 31st day of a month but the first day ofthe Calculation Period is a day other than the 30th or 31st day of a month, in which case themonths that includes that last day shall not be considered to be shortened to a 30-day month,or (ii) the last day of the Calculation Period is the last day of the month of February, in whichcase the month of February shall not be considered to be lengthened to a 30-day month)); and

(vi) if “30E/360” or “Eurobond Basis” is so specified, means the number of days in theCalculation Period divided by 360 (the number of days to be calculated on the basis of a yearof 360 days with 12 30-day months, without regard to the date of the first day or last day of theCalculation Period unless, in the case of the final Calculation Period, the date of final maturityis the last day of the month of February, in which case the month of February shall not beconsidered to be lengthened to a 30-day month).

“Euro Zone” means the zone comprising the Member States of the European Union which adopt orhave adopted the euro as their lawful currency in accordance with the Treaty establishing the EuropeanCommunities, as amended by the Treaty on European Union.

“Interest Accrual Period” means, in respect of an Interest Period, each successive period beginningon and including an Interest Period End Date and ending on but excluding the next succeeding InterestPeriod End Date during that Interest Period provided always that the first Interest Accrual Period shallcommence on and include the Interest Commencement Date and the final Interest Accrual Period shall endon but exclude the date of final maturity.

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“Interest Commencement Date” means the date of issue of the Instruments (as specified in the FinalTerms) or such other date as may be specified as such in the Final Terms.

“Interest Determination Date” means, in respect of any Interest Accrual Period, the date falling suchnumber (if any) of Banking Days in such city(ies) as may be specified in the Final Terms prior to the firstday of such Interest Accrual Period, or if none is specified:

(i) in the case of Instruments denominated in Pounds Sterling, the first day of such Interest AccrualPeriod; or

(ii) in the case of instruments denominated or payable in euro the date falling two TARGETBusiness Days prior to the first day of such Interest Accrual Period; or

(iii) in any other case, the date falling two London Banking Days prior to the first day of suchInterest Accrual Period.

“Interest Payment Date” means the date or dates specified as such in, or determined in accordancewith the provisions of, the Final Terms and, if an Applicable Business Day Convention is specified in theFinal Terms, as the same may be adjusted in accordance with the Applicable Business Day Convention or ifthe Applicable Business Day Convention is the FRN Convention and an interval of a number of calendarmonths is specified in the Final Terms as being the Interest Period, each of such dates as may occur inaccordance with the FRN convention at such specified period of calendar months following the date of issueof the Instruments (in the case of the first Interest Payment Date) or the previous Interest Payment Date (inany other case).

“Interest Period” means each successive period beginning on and including an Interest Payment Dateand ending on but excluding the next succeeding Interest Payment Date provided always that the first InterestPeriod shall commence on and include the Interest Commencement Date and the final Interest Period shallend on but exclude the date of final maturity.

“Interest Period End Date” means the date or dates specified as such in, or determined in accordancewith the provisions of, the Final Terms and, if an Applicable Business Day Convention is specified in theFinal Terms, as the same may be adjusted in accordance with the Applicable Business Day Convention or, ifthe Applicable Business Day Convention is the FRN Convention and an interval of a number of calendarmonths is specified in the Final Terms as the Interest Accrual Period, such dates as may occur in accordancewith the FRN Convention at such specified period of calendar months following the Interest CommencementDate (in the case of the first Interest Period End Date) or the previous Interest Period End Date (in any othercase) or, if none of the foregoing is specified in the Final Terms, means the date or each of the dates whichcorrespond with the Interest Payment Date(s) in respect of the Instruments.

“Interest Rate” means the rate or rates (expressed as a percentage per annum) or amount or amounts(expressed as a price per unit of relevant currency) of interest payable in respect of the Instruments specifiedin, or calculated or determined in accordance with the provisions of, the Final Terms.

“ISDA Definitions” means the 2000 ISDA Definitions, as amended and updated as at the date of issueof the first Tranche of the Instruments of the relevant Series (as specified in the Final Terms) as publishedby the International Swaps and Derivatives Association, Inc. (formerly the International Swap DealersAssociation, Inc.) or, if so specified in the relevant Final Terms, the 2006 ISDA Definitions as amended andupdated as at the date of issue of the First Tranche of the Instruments of the relevant Series (as specified inthe relevant Final Terms) as published by the International Swaps and Derivatives Association, Inc.

“Outstanding Principal Amount” means, in respect of an Instrument, its principal amount less, inrespect of any Installment Instrument, any principal amount on which interest shall have ceased to accrue inaccordance with Condition 5.06 or, in the case of a Partly Paid Instrument, the Paid Up Amount of suchInstrument or otherwise as indicated in the Final Terms except that the Paid Up Amount shall be deemed tobe nil for Instruments which have been forfeited by the Issuer on or after the Forfeiture Date as provided forin Condition 1.06.

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“Reference Banks” means such banks as may be specified in the Final Terms as the Reference Banksor, if none are specified, “Reference Banks” has the meaning given in the ISDA Definitions, mutatismutandis.

“Regular Period” means:

(i) in the case of Instruments where interest is scheduled to be paid only by means of regularpayments, each period from and including the Interest Commencement Date to but excludingthe first Interest Payment Date; and each successive period from and including one InterestPayment Date to but excluding the next Interest Payment Date;

(ii) in the case of Instruments where, apart from the first Interest Period, interest is scheduled to bepaid only by means of regular payments, each period from and including a Regular Date fallingin any year to but excluding the next Regular Date, where “Regular Date” means the day andmonth (but not the year) on which any Interest Payment Date falls; and

(iii) in the case of Instruments where, apart from one Interest Period other than the first InterestPeriod, interest is scheduled to be paid only by means of regular payments, each period fromand including a Regular Date falling in any year to but excluding the next Regular Date, where“Regular Date” means the day and month (but not the year) on which any Interest PaymentDate falls other than the Interest Payment Date falling at the end of the irregular Interest Period.

“Relevant Financial Centre” means such financial centre or centres as may be specified in relationto the relevant currency for the purposes of the definition of “Business Day” in the ISDA Definitions, asmodified or supplemented in the Final Terms.

“Relevant Time” means the time as of which any rate is to be determined as specified in the FinalTerms or, if none is specified, at which it is customary to determine such rate.

“Reuters Screen” means, when used in connection with a designated page and any designatedinformation, the display page so designated on the Reuter Money 3000 Service (or such other page as mayreplace that page on that service for the purpose of displaying such information).

“Specified Currency” has the meaning given in the relevant Final Terms.

“Specified Denomination(s)” has the meaning given in the relevant Final Terms.

“sub-unit” means for the purpose of calculating the Interest Amount(s) in the case of any currencyother than euro and U.S. dollars, the lowest amount of such currency that is available as legal tender in thecurrency of such country and, in the case of euro and U.S. dollars, means one cent.

“TARGET2” means the Trans-European Automated Real-Time Gross Settlement Express Transferpayment system which utilises a single shared platform and which was launched on 19 November 2007;

“TARGET Settlement Day” means any day on which TARGET2 is open for the settlement ofpayments in euro;

“Treaty” means the Treaty establishing the European Community, as amended.

Non-Interest Bearing Instruments

5.10 If any Redemption Amount (as defined in Condition 6.10) or Installment Amount in respect ofany Instrument which is non-interest bearing is not paid when due, interest shall accrue on the overdueamount at a rate per annum (expressed as a percentage per annum) equal to the Amortisation Yield definedin, or determined in accordance with the provisions of, the Final Terms or at such other rate as may bespecified for this purpose in the Final Terms until the date on which, upon due presentation or surrender ofthe relevant Instrument (if required), the relevant payment is made or, if earlier (except where presentationor surrender of the relevant Instrument is not required as a precondition of payment), the seventh day afterthe date on which, the Issue and Paying Agent having received the funds required to make such payment,notice is given to the Holders of the Instruments in accordance with Condition 14 that the Issue and Paying

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Agent has received the required funds (except to the extent that there is failure in the subsequent paymentthereof to the relevant Holder). The amount of any such interest shall be calculated by multiplying theproduct of the Amortisation Yield and the overdue sum by the Day Count Fraction as if the Day CountFraction was as specified for this purpose in the Final Terms or, if not so specified, 30E/360 (as defined inCondition 5.09).

Redemption and Purchase

Redemption at Maturity

6.01 Unless previously redeemed, or purchased and cancelled or unless such Instrument is stated inthe Final Terms as having no fixed maturity date, each Instrument shall be redeemed at its maturityredemption amount (the “Maturity Redemption Amount”) (which shall be its Outstanding PrincipalAmount or such other redemption amount as may be specified in or determined in accordance with the FinalTerms) (or, in the case of Installment Instruments, in such number of installments and in such amounts(“Installment Amounts”) as may be specified in, or determined in accordance with the provisions of, theFinal Terms) on the date or dates (or, in the case of Instruments which bear interest at a floating rate ofinterest, on the date or dates upon which interest is payable) specified in the Final Terms.

Early Redemption for Taxation Reasons

6.02 If, in relation to any Series of Instruments, (i) as a result of any change in the laws, regulationsor rulings of the Cayman Islands or of any political subdivision thereof or any authority or agency therein orthereof having power to tax or in the interpretation or administration of any such laws, regulations or rulingswhich becomes effective on or after the date of issue of such Instruments or any other date specified in theFinal Terms, the Issuer would be required to pay additional amounts as provided in Condition 8, (ii) suchobligation cannot be avoided by the Issuer taking reasonable measures available to it and (iii) suchcircumstances are evidenced by the delivery by the Issuer to the Issue and Paying Agent of a certificatesigned by two authorised signatories of the Issuer stating that the said circumstances prevail and describingthe facts leading thereto and an opinion of independent legal advisers of recognised standing to the effectthat such circumstances prevail, the Issuer may, at its option and having given no less than thirty nor morethan sixty days’ notice (ending, in the case of Instruments which bear interest at a floating rate, on a day uponwhich interest is payable) to the Holders of the Instruments in accordance with Condition 14 (which noticeshall be irrevocable), redeem all (but not some only) of the outstanding Instruments comprising the relevantSeries at their early tax redemption amount (the “Early Redemption Amount (Tax)”) (which shall be theirOutstanding Principal Amount or, in the case of Instruments which are non-interest bearing, their AmortisedFace Amount (as defined in Condition 6.11) or such other redemption amount as may be specified in, ordetermined in accordance with the provisions of, the Final Terms), together with accrued interest (if any)thereon provided, however, that no such notice of redemption may be given earlier than 90 days (or, in thecase of Instruments which bear interest at a floating rate, a number of days which is equal to the aggregateof the number of days falling within the then current interest period applicable to the Instruments plus 60days) prior to the earliest date on which the Issuer would be obliged to pay such additional amounts were apayment in respect of the Instruments then due.

The Issuer may not exercise such option in respect of any Instrument which is the subject of the priorexercise by the Holder thereof of its option to require the redemption of such Instrument under Condition6.06.

Optional Early Redemption (Call)

6.03 If this Condition 6.03 is specified in the Final Terms as being applicable, then the Issuer may,having given the appropriate notice and subject to such conditions as may be specified in the Final Terms,redeem all (but not, unless and to the extent that the Final Terms specifies otherwise, some only) of theInstruments of the relevant Series at their call early redemption amount (the “Early Redemption Amount(Call)”) (which shall be their Outstanding Principal Amount or, in the case of Instruments which are non-interest bearing, their Amortised Face Amount (as defined in Condition 6.11) or such other redemption

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amount as may be specified in, or determined in accordance with the provisions of, the Final Terms), togetherwith accrued interest (if any) thereon on the date specified in such notice.

The Issuer may not exercise such option in respect of any Instrument which is the subject of the priorexercise by the Holder thereof of its option to require the redemption of such Instrument under Condition6.06.

6.04 The appropriate notice referred to in Condition 6.03 is a notice given by the Issuer to theHolders of the Instruments of the relevant Series in accordance with Condition 14, which notice shall beirrevocable and shall specify:

– the Series of Instruments subject to redemption;

– whether such Series is to be redeemed in whole or in part only and, if in part only, the aggregateprincipal amount of and (except in the case of a Temporary Global Instrument or PermanentGlobal Instrument) the serial numbers of the Instruments of the relevant Series which are to beredeemed;

– the due date for such redemption, which shall be not less than thirty days nor more than sixtydays after the date on which such notice is given and which shall be such date or the next ofsuch dates (“Call Option Date(s)”) or a day falling within such period (“Call OptionPeriod”), as may be specified in the Final Terms and which is, in the case of Instruments whichbear interest at a floating rate, a date upon which interest is payable; and

– the Early Redemption Amount (Call) at which such Instruments are to be redeemed.

Partial Redemption

6.05 If the Instruments of a Series are to be redeemed in part only on any date in accordance withCondition 6.03 the Instruments to be redeemed shall be drawn by lot in such European city as the Issue andPaying Agent may specify, or identified in such other manner or in such other place as the Issue and PayingAgent may approve and deem appropriate and fair, subject always to compliance with all applicable laws andthe requirements of any stock exchange on which the relevant Instruments may be listed.

Optional Early Redemption (Put)

6.06 If this Condition 6.06 is specified in the Final Terms as being applicable, then the Issuer shall,upon the exercise of the relevant option by the Holder of any Instrument of the relevant Series, redeem suchInstrument on the date specified in the relevant Put Notice (as defined below) at its put early redemptionamount (the “Early Redemption Amount (Put)”) (which shall be its Outstanding Principal Amount or, ifsuch Instrument is non-interest bearing, its Amortised Face Amount (as defined in Condition 6.11) or suchother redemption amount as may be specified in, or determined in accordance with the provisions of, theFinal Terms), together with accrued interest (if any) thereon. In order to exercise such option, the Holdermust, not less than forty-five days before the date on which such redemption is required to be made asspecified in the Put Notice (which date shall be such date or the next of the dates (“Put Date(s)”) or a dayfalling within such period (“Put Period”) as may be specified in the Final Terms), deposit the relevantInstrument (together, in the case of an interest-bearing Instrument in bearer form, with all unmaturedCoupons appertaining thereto other than any Coupon maturing on or before the date of redemption (failingwhich the provisions of Condition 9A.06 apply)) during normal business hours at the specified office of anyPaying Agent together with a duly completed early redemption notice (“Put Notice”) in the form which isavailable from the specified office of any of the Paying Agents. No Instrument so deposited and optionexercised may be withdrawn (except as provided in the Issue and Paying Agency Agreement).

The holder of an Instrument may not exercise such option in respect of any Instrument which is thesubject of an exercise by the Issuer of its option to redeem such Instrument under either Condition 6.02 or6.03.

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Purchase of Instruments

6.07 The Issuer or any of its Subsidiaries may at any time purchase Instruments in the open marketor otherwise and at any price provided that all unmatured Receipts and Coupons appertaining thereto arepurchased therewith. If purchases are made by tender, tenders must be available to all Holders of Instrumentsalike.

Cancellation of Redeemed and Purchased Instruments

6.08 All unmatured Instruments and Coupons and unexchanged Talons redeemed or purchased,otherwise than in the ordinary course of business of dealing in securities or as a nominee in accordance withthis Condition 6 will be cancelled forthwith and may not be reissued or resold.

Further Provisions applicable to Redemption Amount and Installment Amounts

6.09 The provisions of Condition 5.07 and the last paragraph of Condition 5.08 shall apply to anydetermination or calculation of the Redemption Amount or any Installment Amount required by the FinalTerms to be made by the Calculation Agent.

6.10 References herein to “Redemption Amount” shall mean, as appropriate, the MaturityRedemption Amount, the final Installment Amount, Early Redemption Amount (Tax), Early RedemptionAmount (Call), Early Redemption Amount (Put) and Early Termination Amount or such other amount in thenature of a redemption amount as may be specified in, or determined in accordance with the provisions of,the Final Terms.

6.11 In the case of any Instrument which is non-interest bearing, the “Amortised Face Amount” shallbe an amount equal to the sum of:

(i) the Issue Price specified in the Final Terms; and

(ii) the product of the Amortisation Yield (compounded annually) being applied to the Issue Pricefrom (and including) the Issue Date specified in the Final Terms to (but excluding) the datefixed for redemption or (as the case may be) the date upon which such Instrument becomes dueand repayable.

Where such calculation is to be made for a period which is not a whole number of years, thecalculation in respect of the period of less than a full year shall be made on the basis of the Day CountFraction (as defined in Condition 5.09) specified in the Final Terms for the purposes of this Condition 6.11.

6.12 In the case of any Instrument which is non-interest bearing, if any Redemption Amount (otherthan the Maturity Redemption Amount) is improperly withheld or refused or default is otherwise made inthe payment thereof, the Amortised Face Amount shall be calculated as provided in Condition 6.11 but as ifreferences in subparagraph (ii) to the date fixed for redemption or the date upon which such Instrumentbecomes due and repayable were replaced by references to the earlier of:

(i) the date on which, upon due presentation or surrender of the relevant Instrument (if required),the relevant payment is made; and

(ii) (except where presentation or surrender of the relevant Instrument is not required as aprecondition of payment), the seventh day after the date on which, the Issue and Paying Agenthaving received the funds required to make such payment, notice is given to the Holders of theInstruments in accordance with Condition 14 of that circumstance (except to the extent thatthere is a failure in the subsequent payment thereof to the relevant Holder).

7. Events of Default and Enforcement Events

7.01 The following events or circumstances as modified by, and/or such other events, as may bespecified in, the Final Terms (each, an “Event of Default”) shall be acceleration events in relation to theInstruments of any Series, namely:

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(i) Non-payment: the Issuer fails to pay any amount of principal in respect of the Instruments ofthe relevant Series or any of them on or within seven days of the due date for payment thereofor fails to pay any amount of interest in respect of the Instruments of the relevant Series or anyof them on or within fourteen days of the due date for payment thereof; or

(ii) Breach of Issuer’s other obligations: the Issuer defaults in the performance or observance ofany of its other obligations under or in respect of the Instruments of the relevant Series or theIssue and Paying Agency Agreement and (except in any case where such default is incapableof remedy when no such continuation or notice, as is hereinafter mentioned, will be required)such default remains unremedied for 30 days after written notice requiring such default to beremedied has been delivered to the Issuer at the specified office of the Issue and Paying Agentby the Holder of any such Instrument; or

(iii) Support Agreement: (a) Tokio Marine & Nichido defaults in the performance or observance ofany of its obligations under or in respect of the Support Agreement or (b) the Issuer agrees tovary, amend, modify or supplement any of the provisions of the Support Agreement (except tocorrect a manifest error pursuant to Condition 13) without the prior written consent of Holdersof Instruments holding not less than two-thirds of the aggregate principal amount ofoutstanding (as defined in the Issue and Paying Agency Agreement) Instruments.

(iv) Cross-default of Issuer:

(i) any Indebtedness of the Issuer or any of its Subsidiaries (if any) is not paid when due or(as the case may be) within any originally applicable grace period;

(ii) any such Indebtedness becomes (or becomes capable of being declared) due and payableprior to its stated maturity otherwise than at the option of the Issuer or (as the case maybe) the relevant Subsidiary (if any) or (provided that no event of default, howsoeverdescribed, has occurred) any person entitled to such Indebtedness; or

(iii) the Issuer or any of its Subsidiaries (if any) fails to pay when due any amount payableby it under any Guarantee of any Indebtedness;

provided that the amount of Indebtedness referred to in sub-paragraph (i) and/or sub-paragraph (ii)above and/or the amount payable under any Guarantee referred to in sub-paragraph (iii) aboveindividually or in the aggregate exceeds U.S.$10,000,000 (or its equivalent in any other currency orcurrencies); or

(v) Unsatisfied judgment: one or more final judgment(s) or order(s) for the payment of anaggregate amount in excess of U.S.$10,000,000 (or its equivalent in any other currency orcurrencies) is rendered against the Issuer, or any of its Subsidiaries (if any) which continue(s)unsatisfied and unstayed for a period of 30 days after the date(s) thereof or, if later, the datetherein specified for payment; or

(vi) Security enforced: a secured party takes possession, or a receiver, manager or other similarofficer is appointed, of the whole or a substantial part of the undertaking, assets and revenuesof the Issuer or any of its Subsidiaries (if any); or

(vii) Insolvency etc: (i) the Issuer or any of its Subsidiaries (if any) becomes insolvent or is unableto pay its debts as they fall due, (ii) an administrator or liquidator of the Issuer or any of itsSubsidiaries (if any) or the whole or a substantial part of the undertaking, assets and revenuesof the Issuer or any of its Subsidiaries (if any) is appointed (or application for any suchappointment is made), (iii) the Issuer or any of its Subsidiaries (if any) takes any action for areadjustment or deferment of any of its obligations or makes a general assignment or anarrangement or composition with or for the benefit of its creditors or declares a moratorium inrespect of any of its Indebtedness or any Guarantee of any Indebtedness given by it, or (iv) theIssuer or any of its Subsidiaries (if any) ceases or threatens to cease to carry on all or anysubstantial part of its business and the Issuer has not obtained from each of Moody’s InvestorsService Inc., Rating and Investment Information Inc. and Japan Credit Rating Agency, Ltd.

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confirmation in writing that the carrying out of such an action will not result in a downgradingof the then current credit rating applied by such rating agency to the Programme; or

(viii) Winding up etc: an order is made or an effective resolution is passed for the winding up,liquidation or dissolution of the Issuer or any of its Subsidiaries (if any); or

(ix) Analogous event: any event occurs which under the laws of the Cayman Islands or Japan hasan analogous effect to any of the events referred to in paragraphs (v) to (viii) above; or

(x) Failure to take action etc: any action, condition or thing at any time required to be taken,fulfilled or done in order (i) to enable (a) the Issuer lawfully to enter into, exercise its rights andperform and comply with its obligations under and in respect of the Instruments and the Deedof Covenant or (b) Tokio Marine & Nichido lawfully to exercise its rights and perform andcomply with its obligations under the Support Agreement, (ii) to ensure that those obligationsare legal, valid, binding and enforceable and (iii) to make the Instruments, the Deed ofCovenant and the Support Agreement admissible in evidence in the courts of the CaymanIslands and Japan is not taken, fulfilled or done; or

(xi) Unlawfulness: it is or will become unlawful for (i) the Issuer to perform or comply with any ofits obligations under or in respect of the Instruments or the Deed of Covenant or (ii) TokioMarine & Nichido to perform or comply with any of its obligations under or in respect of theSupport Agreement; or

(xii) Government intervention: (i) all or any substantial part of the undertaking, assets and revenuesof the Issuer or any of its Subsidiaries is condemned, seised or otherwise appropriated by anyperson acting under the authority of any national, regional or local government or (ii) the Issueror any of its Subsidiaries (if any) is prevented by any such person from exercising normalcontrol over all or any substantial part of its undertaking, assets and revenues.

7.02 If any Event of Default shall occur in relation to any Series of Instruments, any Holder of anInstrument of the relevant Series may, by written notice to the Issuer, at the specified office of the Issue andPaying Agent, declare that such Instrument and (if the Instrument is interest-bearing) all interest then accruedon such Instrument shall be forthwith due and payable, whereupon the same shall become immediately dueand payable at its early termination amount (the “Early Termination Amount”) (which shall be itsOutstanding Principal Amount or, if such Instrument is non-interest bearing, its Amortised Face Amount (asdefined in Condition 6.11) or such other redemption amount as may be specified in, or determined inaccordance with the provisions of, the Final Terms), together with all interest (if any) accrued thereonwithout presentment, demand, protest or other notice of any kind, all of which the Issuer will expresslywaive, anything contained in such Instruments to the contrary notwithstanding, unless, prior thereto, allEvents of Default in respect of the Instruments of the relevant Series shall have been cured. If the Issuer isunable to pay the Early Termination Amount (or such other amount as aforesaid), Tokio Marine & Nichidomay be requested under the Support Agreement to provide sufficient funds to satisfy such Early TerminationAmount (or such other amount as aforesaid), and in the event that Tokio Marine & Nichido fails to performsuch obligation then the Holder may proceed directly against Tokio Marine & Nichido. The SupportAgreement may terminate at any time by either (i) the written agreement of the Issuer and Tokio Marine &Nichido, or (ii) in certain circumstances, the delivery by Tokio Marine & Nichido to the Issuer of writtennotice of termination. Any such termination would not affect any obligation which Tokio Marine & Nichidohad to the Issuer in respect of any Instrument issued under the Programme.

8. Taxation

8.01 All amounts payable (whether in respect of principal, interest or otherwise) in respect of theInstruments will be made free and clear of and without withholding or deduction for or on account of anypresent or future taxes, duties, assessments or governmental charges of whatever nature imposed or leviedby or on behalf of the Cayman Islands or any political subdivision thereof or any authority or agency thereinor thereof having power to tax, unless the withholding or deduction of such taxes, duties, assessments orgovernmental charges is required by law. In that event, the Issuer will pay such additional amounts as may

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be necessary in order that the net amounts receivable by the Holder after such withholding or deduction shallequal the respective amounts which would have been receivable by such Holder in the absence of suchwithholding or deduction; except that no such additional amounts shall be payable in relation to any paymentin respect of any Instrument or Coupon:

(i) presented for payment in the Cayman Islands; or

(ii) to, or to a third party on behalf of, a person who is liable to such taxes, duties, assessments orgovernmental charges in respect of such Instrument or Coupon by reason of his having someconnection with the Cayman Islands other than (a) the mere holding of such Instrument orCoupon or (b) the receipt of principal, interest or other amount in respect of such Instrumentor Coupon; or

(iii) presented for payment more than thirty days after the Relevant Date, except to the extent thatthe relevant Holder would have been entitled to such additional amounts on presenting thesame for payment on or before the expiry of such period of thirty days; or

(iv) where such withholding or deduction is imposed on a payment to an individual and is requiredto be made pursuant to European Council Directive 2004/48/EC or any law implementing orcomplying with, or introduced in order to conform to, this Directive; or

(v) presented for payment by or on behalf of a Holder who would have been able to avoid suchwithholding or deduction by presenting the relevant Instrument or Coupon to another PayingAgent in a Member State of the EU.

8.02 For the purposes of these Terms and Conditions, the “Relevant Date” means, in respect of anypayment, the date on which such payment first becomes due and payable, but if the full amount of themoneys payable has not been received by the Issue and Paying Agent, on or prior to such due date, it meansthe first date on which, the full amount of such moneys having been so received and being available forpayment to Holders, notice to that effect shall have been duly given to the Holders of the Instruments of therelevant Series in accordance with Condition 14.

8.03 If the Issuer becomes subject generally at any time to any taxing jurisdiction other than or inaddition to the Cayman Islands, references in Condition 6.02 and Condition 8.01 to the Cayman Islands shallbe read and construed as references to the Cayman Islands and/or to such other jurisdiction(s).

8.04 Any reference in these Terms and Conditions to “principal” and/or “interest” in respect of theInstruments shall be deemed also to refer to any additional amounts which may be payable under thisCondition 8. Unless the context otherwise requires, any reference in these Terms and Conditions to“principal” shall include any premium payable in respect of an Instrument, any Installment Amount orRedemption Amount and any other amounts in the nature of principal payable pursuant to these Terms andConditions and “interest” shall include all amounts payable pursuant to Condition 5 and any other amountsin the nature of interest payable pursuant to these Terms and Conditions.

9. Payments

9A Payments

9A.01 Payment of amounts (other than interest) due in respect of Instruments will be made againstpresentation and (save in the case of partial payment or payment of an Installment Amount (other than thefinal Installment Amount)) surrender of the relevant Instruments at the specified office of any of the PayingAgents.

Payment of Installment Amounts (other than the final Installment Amount) in respect of an InstallmentInstrument which is a Definitive Instrument with Receipts will be made against presentation of theInstrument together with (where applicable) the relevant Receipt and surrender of such Receipt.

The Receipts are not and shall not in any circumstances be deemed to be documents of title and ifseparated from the Instrument to which they relate will not represent any obligation of the Issuer.

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Accordingly, the presentation of an Instrument without the relative Receipt or the presentation of a Receiptwithout the Instrument to which it appertains shall not entitle the Holder to any payment in respect of therelevant Installment Amount.

9A.02 Payment of amounts in respect of interest on Instruments will be made:

(i) in the case of Instruments without Coupons attached thereto at the time of their initial delivery,against presentation of the relevant Instruments at the specified office of any of the PayingAgents outside (unless Condition 9A.03 applies) the United States; and

(ii) in the case of Instruments delivered with Coupons attached thereto at the time of their initialdelivery, against surrender of the relevant Coupons or, in the case of interest due otherwise thanon a scheduled date for the payment of interest, against presentation of the relevantInstruments, in either case at the specified office of any of the Paying Agents outside (unlessCondition 9A.03 applies) the United States.

9A.03 Payments of amounts due in respect of interest on the Instruments and exchanges of Talons forCoupon sheets in accordance with Condition 9A.06 will not be made at the specified office of any PayingAgent in the United States (as defined in the United States Internal Revenue Code and Regulationsthereunder) unless (a) payment in full of amounts due in respect of interest on such Instruments when dueor, as the case may be, the exchange of Talons at all the specified offices of the Paying Agents outside theUnited States is illegal or effectively precluded by exchange controls or other similar restrictions and (b) suchpayment or exchange is permitted by applicable United States law. If paragraphs (a) and (b) of the previoussentence apply, the Issuer shall forthwith appoint a further Paying Agent with a specified office in New YorkCity.

9A.04 If the due date for payment of any amount due in respect of any Instrument is not a RelevantFinancial Centre Day and a Local Banking Day (each as defined in Condition 9B.03), then the Holder thereofwill not be entitled to payment thereof until the next day which is such a day, (or as otherwise specified inthe Final Terms) and from such day and thereafter will be entitled to receive payment by cheque on any LocalBanking Day, and will be entitled to payment by transfer to a designated account on any day which is a LocalBanking Day, a Relevant Financial Centre Day and a day on which commercial banks and foreign exchangemarkets settle payments in the relevant currency in the place where the relevant designated account is locatedand no further payment on account of interest or otherwise shall be due in respect of such delay or adjustmentunless there is a subsequent failure to pay in accordance with these Terms and Conditions in which eventinterest shall continue to accrue as provided in Condition 5.06 or, if appropriate, Condition 5.10.

9A.05 Each Instrument initially delivered with Coupons, Talons or Receipts attached thereto shouldbe presented and, save in the case of partial payment of the Redemption Amount, surrendered for finalredemption together with all unmatured Receipts, Coupons and Talons relating thereto, failing which:

(i) if the Final Terms specifies that this paragraph (i) of Condition 9A.05 is applicable (and, in theabsence of specification, this paragraph (i) shall apply to Instruments which bear interest at afixed rate or rates or in fixed amounts) and subject as hereinafter provided, the amount of anymissing unmatured Coupons (or, in the case of a payment not being made in full, that portionof the amount of such missing Coupon which the Redemption Amount paid bears to the totalRedemption Amount due) (excluding, for this purpose, but without prejudice to paragraph (iii)below, Talons) will be deducted from the amount otherwise payable on such final redemption,the amount so deducted being payable against surrender of the relevant Coupon at the specifiedoffice of any of the Paying Agents at any time within ten years of the Relevant Date applicableto payment of such Redemption Amount;

(ii) if the Final Terms specifies that this paragraph (ii) of Condition 9A.05 is applicable (and, in theabsence of specification, this paragraph (ii) shall apply to Instruments which bear interest at afloating rate or rates or in variable amounts) all unmatured Coupons (excluding, for thispurpose, but without prejudice to paragraph (iii) below, Talons) relating to such Instruments(whether or not surrendered therewith) shall become void and no payment shall be madethereafter in respect of them;

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(iii) in the case of Instruments initially delivered with Talons attached thereto, all unmatured Talons(whether or not surrendered therewith) shall become void and no exchange for Coupons shallbe made thereafter in respect of them; and

(iv) in the case of Instruments initially delivered with Receipts attached thereto, all Receiptsrelating to such Instruments in respect of a payment of an Installment Amount which (but forsuch redemption) would have fallen due on a date after such due date for redemption (whetheror not surrendered therewith) shall become void and no payment shall be made thereafter inrespect of them.

The provisions of paragraph (i) of this Condition 9A.05 notwithstanding, if any Instruments shouldbe issued with a maturity date and an Interest Rate or Rates such that, on the presentation for payment of anysuch Instrument without any unmatured Coupons attached thereto or surrendered therewith, the amountrequired by paragraph (i) to be deducted would be greater than the Redemption Amount otherwise due forpayment, then, upon the due date for redemption of any such Instrument, such unmatured Coupons (whetheror not attached) shall become void (and no payment shall be made in respect thereof) as shall be required sothat, upon application of the provisions of paragraph (i) in respect of such Coupons as have not so becomevoid, the amount required by paragraph (i) to be deducted would not be greater than the Redemption Amountotherwise due for payment. Where the application of the foregoing sentence requires some but not all of theunmatured Coupons relating to an Instrument to become void, the relevant Paying Agent shall determinewhich unmatured Coupons are to become void, and shall select for such purpose Coupons maturing on laterdates in preference to Coupons maturing on earlier dates.

9A.06 In relation to Instruments initially delivered with Talons attached thereto, on or after the duedate for the payment of interest on which the final Coupon comprised in any Coupon sheet matures, theTalon comprised in the Coupon sheet may be surrendered at the specified office of any Paying Agent outside(unless Condition 9A.03 applies) the United States in exchange for a further Coupon sheet (including anyappropriate further Talon), subject to the provisions of Condition 10 below. Each Talon shall, for the purposeof these Conditions, be deemed to mature on the Interest Payment Date on which the final Coupon comprisedin the relative Coupon sheet matures.

9B Payments – General Provisions

9B.01 Save as otherwise specified in these Terms and Conditions, this Condition 9B is applicable inrelation to all Instruments.

9B.02 Payments of amounts due (whether principal, interest or otherwise) in respect of Instrumentswill be made in the currency in which such amount is due (a) by cheque (in the case of payment in JapaneseYen to a non-resident of Japan) drawn on an authorised foreign exchange bank or (b) at the option of thepayee, by transfer to an account denominated in the relevant currency specified by the payee (in the case ofpayment in Japanese Yen to a non-resident of Japan, a non-resident account with an authorised foreignexchange bank specified by the payee). Payments will, without prejudice to the provisions of Condition 8,be subject in all cases to any applicable fiscal or other laws and regulations.

9B.03 For the purposes of these Terms and Conditions:

(i) “Relevant Financial Centre Day” means, in the case of any currency other than euro, a dayon which commercial banks and foreign exchange markets settle payments in the RelevantFinancial Centre and in any other Relevant Financial Centre specified in the Final Terms andin the case of payment in euro, a TARGET Settlement Day; and

(ii) “Local Banking Day” means a day (other than a Saturday or Sunday) on which commercialbanks are open for business (including dealings in foreign exchange and foreign currencydeposits) in the place of presentation of the relevant Instrument or, as the case may be, Coupon.

9B.04 No commissions or expenses shall be charged to the holders of Instruments or Coupons inrespect of such payments.

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10. Prescription

10.01 Claims against the Issuer for payment of principal and interest in respect of Instruments willbe prescribed and become void unless made, in the case of principal, within ten years or, in the case ofinterest, five years after the Relevant Date (as defined in Condition 8.02) for payment thereof.

10.02 In relation to Definitive Instruments initially delivered with Talons attached thereto, there shallnot be included in any Coupon sheet issued upon exchange of a Talon any Coupon which would be void uponissue pursuant to Condition 9A.05 or the due date for the payment of which would fall after the due date forthe redemption of the relevant Instrument or which would be void pursuant to this Condition 10 or any Talonthe maturity date of which would fall after the due date for redemption of the relevant Instrument.

11. The Paying Agents and the Calculation Agent

11.01 The initial Paying Agents and their respective initial specified offices are specified below. TheCalculation Agent in respect of any Instruments shall be specified in the relevant Final Terms. The Issuerreserves the right at any time to vary or terminate the appointment of any Paying Agent (including the Issueand Paying Agent) or the Calculation Agent and to appoint additional or other Paying Agents or anotherCalculation Agent provided that it will at all times maintain (i) an Issue and Paying Agent, (ii) so long as theInstruments are listed on the Official List and/or admitted to trading on the London Stock Exchange’s Gilt-Edged and Fixed Interest Market and/or are admitted to listing, trading and/or quotation by any other listingauthority, stock exchange and/or quotation system, a Paying Agent (which may be the Issue and PayingAgent) each with a specified office in London and/or in such other place as may be required by the rules ofsuch other listing authority, stock exchange and/or quotation system, (iii) in the circumstances described inCondition 9A.03, a Paying Agent with a specified office in New York City, (iv) a Calculation Agent whererequired by the Terms and Conditions applicable to any Instruments (in the case of (i), (ii) and (iii) with aspecified office located in such place (if any) as may be required by the Terms and Conditions), and (vi) aPaying Agent in a European Union member state that will not be obliged to withhold or deduct tax pursuantto European Council Directive 2003/48/EC or any law implementing or complying with or introduced toconform to, such Directive. The Paying Agents and the Calculation Agent reserve the right at any time tochange their respective specified offices to some other specified office in the same city. Notice of all changesin the identities or specified offices of any Paying Agent or the Calculation Agent will be given promptly bythe Issuer to the Holders in accordance with Condition 14.

11.02 The Paying Agents and the Calculation Agent act solely as agents of the Issuer and, save asprovided in the Issue and Paying Agency Agreement or any other agreement entered into with respect to itsappointment, do not assume any obligations towards or relationship of agency or trust for any Holder of anyInstrument, Receipt or Coupon and each of them shall only be responsible for the performance of the dutiesand obligations expressly imposed upon it in the Issue and Paying Agency Agreement or other agreemententered into with respect to its appointment or incidental thereto.

12. Replacement of Instruments

If any Instrument, Receipt or Coupon is lost, stolen, mutilated, defaced or destroyed, it may bereplaced at the specified office of the Issue and Paying Agent or such Paying Agent or Paying Agents as maybe specified for such purpose in the Final Terms (“Replacement Agent”), subject to all applicable laws andthe requirements of any listing agency, stock exchange and/or quotation system on which the Instruments areadmitted to listing, trading and/or quotation, upon payment by the claimant of all expenses incurred inconnection with such replacement and upon such terms as to evidence, security, indemnity and otherwise asthe Issuer and the Replacement Agent may require. Mutilated or defaced Instruments, Receipts and Couponsmust be surrendered before replacements will be delivered therefore.

13. Meetings of Holders and Modification

The Issue and Paying Agency Agreement contains provisions (which shall have effect as ifincorporated herein) for convening meetings of the Holders of Instruments of any Series to consider anymatter affecting their interest, including (without limitation) the modification by Extraordinary Resolution

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(as defined in the Issue and Paying Agency Agreement) of these Terms and Conditions, the Deed of Covenantand the Support Agreement insofar as the same may apply to such Instruments. An Extraordinary Resolutionpassed at any meeting of the Holders of Instruments of any Series will be binding on all Holders of theInstruments of such Series, whether or not they are present at the meeting, and on all Holders of Couponsrelating to Instruments of such Series.

The Issuer may, with the consent of the Issue and Paying Agent, but without the consent of the Holdersof the Instruments of any Series or Coupons, amend these Terms and Conditions, the Deed of Covenant andthe Support Agreement insofar as they may apply to such Instruments to correct a manifest error. Subject asaforesaid, no other modification may be made to (i) these Terms and Conditions or the Deed of Covenantexcept with the sanction of an Extraordinary Resolution or (ii) to the Support Agreement, except with thewritten consent of Holders holding not less than two-thirds of the aggregate principal amount of outstanding(as defined in the Issue and Paying Agency Agreement) Instruments.

13A. Substitution of the Issuer

(a) The Issuer may at its option, without the consent of the Holder of any Instrument or Coupon,substitute for itself as Issuer and principal obligor in relation to any Instrument (including anyReceipt, Coupon or Talon relating thereto) (whether outstanding at the date of such substitutionor to be issued thereafter) any company, which is an Affiliate (as defined below) of TokioMarine & Nichido, such substitute (the “Substitute”) having given not less than thirty days normore than sixty days notice to the Holders of the Instruments in accordance with Condition 14,provided that:

(i) no payment in respect of the Instruments, the Receipts or the Coupons is at the relevanttime overdue and no Event of Default or event or circumstance which may (with thepassing of time, the giving of notice, the making of any determination, or anycombination thereof) constitute an Event of Default, has occurred and is continuing;

(ii) the Substitute shall, by means of a deed poll executed by the Substitute and the Issuer(substantially in the form scheduled to the Issue and Paying Agency Agreement asSchedule 7 (the “Deed Poll”)), (A) succeed to, and be substituted for, and may exerciseevery right and power of, the Issuer under the Instruments, Receipts, Coupons, Talons,the Issue and Paying Agency Agreement and the Deed of Covenant with the same effectas if the Substitute had been named as the Issuer herein and therein, and (B) agree toindemnify each Holder of an Instrument or Coupon against any tax, duty, assessment orgovernmental charge which is imposed on it by (or by any authority in or of) thejurisdiction of the country of the Substitute’s residence for tax purposes and, if different,of its incorporation with respect to any Instrument or Coupon or the Deed of Covenantand which would not have been so imposed had the substitution not been made, as wellas against any tax, duty, assessment or governmental charge, and any cost or expense,relating to the substitution;

(iii) all action, conditions and things required to be taken, fulfilled and done (including theobtaining of necessary consents) to ensure that (A) the Deed Poll, the Instruments andDeed of Covenant represent valid, legally binding and enforceable obligations of theSubstitute, and (B) that the Support Agreement, with any necessary and appropriateconsequential amendments, shall represent valid, legally binding and enforceableobligations of Tokio Marine & Nichido in relation to the obligations it has to theSubstitute, are taken, fulfilled or done;

(iv) the Substitute shall have become party to the Issue and Paying Agency Agreement, withany appropriate consequential amendments, as if it had been an original party to it;

(v) legal opinions shall have been addressed and delivered to the Issuer, the substitute andthe Issue and Paying Agent from lawyers of recognised standing in (A) each jurisdictionreferred to in (ii) above and in England as to the fulfilment of the requirements of

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Condition 13A(a)(ii) to (iv) and the other matters specified in the Deed Poll and that theInstruments, the Issue and Paying Agency Agreement, the Deed of Covenant and theDeed Poll are legal, valid and binding obligations of the Substitute and (B) thejurisdiction of the country of Tokio Marine & Nichido’s residence for tax purposes and,if different, of its incorporation and in New York as to the fulfilment of the requirementsof Condition 13A(a)(iii) in respect of Tokio Marine & Nichido;

(vi) each stock exchange on which the Instruments are listed or admitted to trading shallhave confirmed that, following the proposed substitution of the Substitute, theInstruments will continue to be listed on such stock exchange;

(vii) Moody’s Investors Service Inc., Rating and Investment Information Inc. and JapanCredit Rating Agency, Ltd. have confirmed in writing to the Issuer that the substitutionof the Substitute will not result in a downgrading of the then current credit rating of suchrating agencies applicable to the Programme; and

(viii) if applicable, the Substitute has appointed a process agent as its agent in England toreceive service of process on its behalf in relation to any legal proceedings arising outof or in connection with the Instruments or the Deed of Covenant.

(b) Upon the execution of the Deed Poll and the delivery of the legal opinions and the ratingsconfirmations, the Substitute shall succeed to, and be substituted for, and may exercise everyright and power of, the Issuer under the Instruments (including any Receipts, Coupons andTalons relating thereto), the Deed of Covenant and the Issue and Paying Agency Agreementwith the same effect as if the Substitute had been named as the Issuer herein and therein, andthe Issuer shall be released from its obligations under these Conditions, the Instruments(including any Receipts, Coupons and Talons relating thereto) and the Issue and Paying AgencyAgreement.

(c) After a substitution pursuant to Condition 13A(a), the Substitute may, without the consent ofthe Holder of any Instrument, effect a further substitution (including the substitution in its placeof the original issuer of the Instruments or any earlier substitute therefor). All the provisionsspecified in Condition 13A(a) and (b) shall apply mutatis mutandis, and references in theseConditions to the Issuer shall, where the context so requires, be deemed to be or includereferences to any such further Substitute.

(d) The notice given under Condition 13A(a), in accordance with Condition 14, of the substitutionshall state that copies, or pending execution thereof final drafts, of the Deed Poll and otherrelevant documents and of the legal opinions are available for inspection by Holders of theInstruments or Coupons at the specified offices of the Issue and Paying Agent. The originals ofthe Deed Poll and other documents will be delivered to the Issue and Paying Agent to hold untilthere are no claims outstanding in respect of the Instruments, Receipts, Coupons or Talons, theDeed of Covenant, the Issue and Paying Agency Agreement or the Deed Poll. The Substituteand the Issuer shall in the Deed Poll acknowledge the right of every Holder of any Instrumentto the production of such documents. Copies of such documents will be available free of chargeat the specified office of each of the Paying Agents.

Upon the substitution becoming effective, references in these Conditions to “the CaymanIslands” shall be deemed to be replaced by reference to the country of incorporation and, ifdifferent, the country of tax residence of the Substitute. In the case of any further substitutions,deemed references in these Conditions to the relevant jurisdictions of the current Substituteshall, where the context so requires, be deemed to be replaced by references to the relevantjurisdictions of any such further Substitute. As used herein, “Affiliate” means any entitycontrolled, directly or indirectly, by the Issuer, any entity that controls the Issuer, directly orindirectly, or any entity under common control with the Issuer. For this purpose, “control” ofthe Issuer or any entity means ownership of a majority of the voting power of the Issuer or suchentity.

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14. Notices

Notices to Holders of Instruments will, save where another means of effective communication hasbeen specified herein or in the Final Terms, be deemed to be validly given if published in a leading dailynewspaper having general circulation in London (which is expected to be the Financial Times). The Issuershall also ensure that notices are duly published in compliance with the requirements of each listingauthority, stock exchange and/or quotation system on which the Instruments are admitted to listing, tradingand/or quotation. Any notice so given will be deemed to have been validly given on the date of first suchpublication (or,if required to be published in more than one newspaper, on the first date on which publicationshall have been made in all the required newspapers). Holders of Coupons will be deemed for all purposesto have notice of the contents of any notice given to Holders of Instruments in accordance with thisCondition.

In addition to the notice provisions specified in the preceding sentences, as long as the globalInstrument is held in its entirety on behalf of Euroclear or Clearstream, Luxembourg there may be substitutedfor publication in newspaper(s) the delivery of the notice to Euroclear or Clearstream, Luxembourg as thecase may be. Such notice to Euroclear or Clearstream, Luxembourg may be given in any of the followingmanners and will be deemed effective as indicated:

(a) if in writing and delivered in person or by courier, on the date it is delivered:

(b) if sent by facsimile transmission, on the date that transmission is received by a responsibleemployee of the recipient in legible form (it being agreed that the burden of proving receipt willbe on the sender and will not be met by transmission report generated by the sender’s facsimilemachine);

(c) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receiptrequested), on the date that mail is delivered or its delivery is attempted; or

(d) if sent by electronic messaging system on the date that electronic message is received (it beingagreed that the burden of proving receipt will be on the sender and will not be met by receivingreceipt electronically);

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Business Dayor that communication is delivered (or attempted) or received, as applicable, after the close of business on aBusiness Day, in which case that communication shall be deemed given and effective on the first followingday that is a Business Day. For this purpose, Business Day means a day on which commercial banks are openfor business in the city of the recipient.

15. Further Issues

The Issuer may from time to time, without the consent of the Holders of any Instruments or Coupons,create and issue further instruments, bonds or debentures having the same terms and conditions as suchInstruments in all respects (or in all respects except for the first payment of interest, if any, on them and/orthe denomination thereof) so as to form a single series with the Instruments of any particular Series.

16. Currency Indemnity

The currency in which the Instruments are denominated or, if different, payable, as specified in theFinal Terms (the “Contractual Currency”), is the sole currency of account and payment for all sumspayable by the Issuer in respect of the Instruments, including damages. Any amount received or recoveredin a currency other than the Contractual Currency (whether as a result of, or of the enforcement of, ajudgment or order of a court of any jurisdiction or otherwise) by any Holder of an Instrument or Coupon inrespect of any sum expressed to be due to it from the Issuer shall only constitute a discharge to the Issuer tothe extent of the amount in the Contractual Currency which such Holder is able to purchase with the amountso received or recovered in that other currency on the date of that receipt or recovery (or, if it is notpracticable to make that purchase on that date, on the first date on which it is practicable to do so). If thatamount is less than the amount in the Contractual Currency expressed to be due to any Holder of an

39


Instrument or Coupon in respect of such Instrument or Coupon the Issuer shall indemnify such Holderagainst any loss sustained by such Holder as a result. In any event, the Issuer shall indemnify each suchHolder against any cost of making such purchase which is reasonably incurred. These indemnities constitutea separate and independent obligation from the Issuer’s other obligations, shall give rise to a separate andindependent cause of action, shall apply irrespective of any indulgence granted by any Holder of anInstrument or Coupon and shall continue in full force and effect despite any judgment, order, claim or prooffor a liquidated amount in respect of any sum due in respect of the Instruments or any judgment or order.Any such loss aforesaid shall be deemed to constitute a loss suffered by the relevant Holder of an Instrumentor Coupon and no proof or evidence of any actual loss will be required by the Issuer.

17. Waiver and Remedies

No failure to exercise, and no delay in exercising, on the part of the Holder of any Instrument, anyright hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude anyother or future exercise thereof or the exercise of any other right. Rights hereunder shall be in addition to allother rights provided by law. No notice or demand given in any case shall constitute a waiver of rights totake other action in the same, similar or other instances without such notice or demand.

18. Law and Jurisdiction

The Instruments, the Issue and Paying Agency Agreement and the Deed of Covenant

18.01 Governing Law:The Instruments, the Issue and Paying Agency Agreement, the Deed ofCovenant and all non-contractual obligations arising from or connected with them are governed by Englishlaw.

18.02 English Courts:The courts of England have exclusive jurisdiction to settle any dispute (a“Dispute”), arising from or connected with the Instruments, the Issue and Paying Agency Agreement and theDeed of Covenant (including a dispute regarding the existence, validity or termination of the Instruments,the Issue and Paying Agency Agreement and the Deed of Covenant) or the consequences of their respectivenullity.

18.03 Appropriate Forum: The parties agree that the courts of England are the most appropriate andconvenient courts to settle any Dispute and, accordingly, that they will not argue to the contrary.

18.04 Rights of the Holder of any Instrument to take proceedings outside England: Condition 18.02is for the benefit of the Holders of the Instruments only. As a result, nothing in this Condition 18 preventsany Holder of an Instrument from taking proceedings relating to a Dispute (“Proceedings”) in any othercourts with jurisdiction. To the extent allowed by law, the Holders of the Instruments may take concurrentProceedings in any number of jurisdictions.

18.05 Service of Process: The Issuer agrees that the documents which start any Proceedings and anyother documents required to be served in relation to those Proceedings may be served on it by being deliveredto Clifford Chance Secretaries Limited at 10 Upper Bank Street, London E14 5JJ or, if different, itsregistered office for the time being or at any address of the Issuer in Great Britain at which process may beserved on it in accordance with the Companies Act 2006. If such person is not or ceases to be effectivelyappointed to accept service of process on behalf of the Issuer, the Issuer shall appoint a further person inEngland to accept service of process on its behalf and notify the name and address of such person to the Issueand Paying Agent and, failing such appointment within 15 days, any Holder of an Instrument shall be entitledto appoint such a person by written notice addressed to the Issuer and delivered to the Issuer or the specifiedoffice of the Issue and Paying Agent. Nothing in this paragraph shall affect the right of any Holder of anInstrument to serve process in any other manner permitted by law. This clause applies to Proceedings inEngland and to Proceedings elsewhere.

18.06 Consent to Enforcement: The Issuer consents generally in respect of any Proceedings to thegiving of any relief or the issue of any process in connection with such Proceedings including (withoutlimitation) the making, enforcement or execution against any property whatsoever (irrespective of its use orintended use) of any order or judgment which may be made or given in such Proceedings.

40


18.07 Waiver of Immunity: To the extent that the Issuer may in any jurisdiction claim for itself or itsassets or revenues immunity from suit, execution, attachment (whether in aid of execution, before judgmentor otherwise) or other legal process and to the extent that in any such jurisdiction there may be attributed toitself or its assets or revenues such immunity (whether or not claimed), the Issuer agrees not to claim andirrevocably waives such immunity to the full extent permitted by the laws of such jurisdiction.

18.08 No person shall have any right to enforce any term or condition in respect of any Instrumentsunder the Contracts (Rights of Third Parties) Act 1999.

The Support Agreement

18.09 The Support Agreement is governed by, and shall be construed in accordance with the internallaws of the State of New York.

41


PROVISIONS RELATING TO THE INSTRUMENTS WHILST IN GLOBAL FORM

(A) Relationship of Accountholders with Clearing Systems

Each of the persons shown in the records of Euroclear and/or Clearstream, Luxembourg and/or anyother clearing system as the holder of a Global Instrument must look solely to Euroclear and/or Clearstream,Luxembourg and/or such other clearing system (as the case may be) for such person’s share of each paymentmade by the Issuer to the bearer of such Global Instrument and in relation to all other rights arising underthe Global Instruments, subject to and in accordance with the respective rules and procedures of Euroclear,Clearstream, Luxembourg or such clearing system (as the case may be). Such persons shall have no claimdirectly against the Issuer in respect of payments due on the Instruments for so long as the Instruments arerepresented by such Global Instrument and such obligations of the Issuer will be discharged by payment tothe bearer of such Global Instrument in respect of each amount so paid. References in these provisionsrelating to the Instruments in global form to “holder” or “accountholder” are to those persons shown in therecords of the relevant clearing system as a holder of an Instrument.

(B) Form and Exchange

(1) TEFRA D or TEFRA C: The Final Terms shall specify whether U.S. Treasury Regulation {sect}1.1635(c)(2)(i)(D) (the “TEFRA D Rules”) or U.S. Treasury Regulation {sect} 1.163- 5(c)(2)(i)(C) (the“TEFRA C Rules”) shall apply. Each Tranche of Instruments is represented upon issue by a TemporaryGlobal Instrument, unless the Final Terms specifies otherwise and the TEFRA C Rules apply.

Where the Final Terms applicable to a Tranche of Instruments specifies that the TEFRA C Rulesapply, such Tranche is (unless otherwise specified in the Final Terms) represented upon issue by a PermanentGlobal Instrument.

Interests in a Temporary Global Instrument may be exchanged for:

(i) interests in a Permanent Global Instrument; or

(ii) if so specified in the Final Terms, definitive Instruments (“Definitive Instruments”).

Exchanges of interests in a Temporary Global Instrument for Definitive Instruments or, as the casemay be, a Permanent Global Instrument will be made only on or after the Exchange Date (as specified in theFinal Terms) and (unless the Final Terms specifies that the TEFRA C Rules are applicable to the Instruments)provided certification as to the beneficial ownership thereof as required by U.S. Treasury regulations (insubstantially the form set out in the Temporary Global Instrument or in such other form as is customarilyissued in such circumstances by the relevant clearing system) has been received.

(2) Limitation on entitlement under a Temporary Global Instrument after Exchange Date: Holders ofinterests in any Temporary Global Instrument shall not (unless, upon due presentation of such TemporaryGlobal Instrument for exchange (in whole but not in part only) for a Permanent Global Instrument or fordelivery of Definitive Instruments, such exchange or delivery is improperly withheld or refused and suchwithholding or refusal is continuing at the relevant payment date) be entitled to receive any payment inrespect of the Instruments represented by such Temporary Global Instrument which falls due on or after theExchange Date or be entitled to exercise any option on a date after the Exchange Date.

(3) Certification of non-U.S. beneficial ownership: Unless the Final Terms specifies that the TEFRAC Rules are applicable to the Instruments and subject to paragraph (2) above, if any date on which a paymentof interest is due on the Instruments of a Tranche occurs whilst any of the Instruments of that Tranche arerepresented by a Temporary Global Instrument, the related interest payment will be made on the TemporaryGlobal Instrument only to the extent that certification as to the beneficial ownership thereof as required byU.S. Treasury regulations (in substantially the form set out in the Temporary Global Instrument or in suchother form as is customarily issued in such circumstances by the relevant clearing system) has been receivedby Euroclear or Clearstream, Luxembourg or any other relevant clearing system which may be specified inthe Final Terms. Payments of amounts due in respect of a Permanent Global Instrument or (subject to

42


paragraph (2) above) a Temporary Global Instrument (if the Final Terms specifies that the TEFRA C Rulesare applicable to the Instruments) will be made through Euroclear or Clearstream, Luxembourg or any otherrelevant clearing system without any requirement for certification.

(4) Exchange for Definitive Instruments: Interests in a Permanent Global Instrument will beexchanged (subject to the period allowed for delivery as set out in (i) below), in whole but not in part onlyand at the request of the Holder of such Global Instrument, for Definitive Instruments (a) if Euroclear orClearstream,

Luxembourg or any other relevant clearing system is closed for business for a continuous period of 14days (other than by reason of legal holidays) or announces an intention permanently to cease business or (b)any of the circumstances described in Condition 7 occurs or (c) at any time on the request of the bearer, ifso specified in the Final Terms. Whenever a Permanent Global Instrument is to be exchanged for DefinitiveInstruments, the Issuer shall procure the prompt delivery of such Definitive Instruments, duly authenticatedand where and to the extent applicable, with Receipts, Coupons and Talons attached (each as defined inCondition 1.02 and Condition 1.03), in an aggregate principal amount equal to the principal amount of suchPermanent Global Instrument to the Holder of the Permanent Global Instrument against its surrender at thespecified office of the Issue and Paying Agent within 30 days of the Holder requesting such exchange.Furthermore, if,

(i) Definitive Instruments have not been delivered in accordance with the foregoing by 5.00 p.m.(London time) on the thirtieth day after the Holder has requested exchange, or

(ii) the Permanent Global Instrument (or any part thereof) has become due and payable inaccordance with the Conditions or the date for final redemption of the Permanent GlobalInstrument has occurred and, in either case, payment in full of the amount of the RedemptionAmount (as defined in Condition 6.10) together with all accrued interest thereon has not beenmade to the Holder in accordance with the Conditions on the due date for payment,

then such Permanent Global Instrument (including the obligation to deliver Definitive Instruments)will become void at 5.00 p.m. (London time) on such thirtieth day (in the case of (i) above) or at 5.00 p.m.(London time) on such due date (in the case of (ii) above) and the Holder of the Permanent Global Instrumentwill have no further rights thereunder (but without prejudice to the rights which such Holder or others mayhave under the Deed of Covenant). Under the Deed of Covenant, persons shown in the records of Euroclearand/or Clearstream, Luxembourg (or any other relevant clearing system) as being entitled to interests in theInstruments will acquire directly against the Issuer all those rights to which they would have been entitled if,immediately before the Permanent Global Instrument became void, they had been the Holders of DefinitiveInstruments in an aggregate principal amount equal to the principal amount of Instruments they were shownas holding in the records of Euroclear and/or Clearstream, Luxembourg or other relevant clearing system (asthe case may be).

(C) Amendment to Conditions

The Global Instruments contain provisions that apply to the Instruments that they represent, some ofwhich modify the effect of the Terms and Conditions of the Instruments set out in this Base Prospectus. Thefollowing is a summary of certain of those provisions:

(1) Meetings: The Holder of a Permanent Global Instrument (unless such Permanent GlobalInstrument represents only one Instrument) shall be treated as being two persons for the purposes of anyquorum requirements of a meeting of Holders and, at any such meeting, the Holder of a Permanent GlobalInstrument be treated as having the number of votes obtained by dividing the aggregate amount ofoutstanding Instruments represented or held by that Holder by the unit of currency in which the Instrumentsare denominated.

(2) Cancellation: Cancellation of any Instrument represented by a Permanent Global Instrument thatis required by the Conditions to be cancelled (other than upon its redemption) will be effected by reductionin the principal amount of the relevant Permanent Global Instrument.

43


(3) Purchase: Instruments represented by a Permanent Global Instrument may only be purchased bythe Issuer or any of its subsidiaries if they are purchased together with the rights to receive all futurepayments of interest and Installment Amounts (if any) thereon.

(4) Issuer’s Options: Any option of the Issuer provided for in the Conditions of the Instruments whilesuch Instruments are represented by a Permanent Global Instrument shall be exercised by the Issuer givingnotice to the Holders within the time limits set out in and containing the information required by theConditions, except that the notice shall not be required to contain the serial numbers of Instruments drawnin the case of a partial exercise of an option and accordingly no drawing of Instruments shall be required. Inthe event that any option of the Issuer is exercised in respect of some but not all of the Instruments of anySeries, the rights of accountholders with a clearing system in respect of the Instruments will be governed bythe standard procedures of Euroclear, Cedel Bank or any other clearing system (as the case may be).

(5) Holders’ Options: Any option of the Holders provided for in the Conditions of any Instrumentswhile such Instruments are represented by a Permanent Global Instrument may be exercised by the Holder

of such Permanent Global Instrument giving notice to the Issue and Paying Agent within the timelimits relating to the deposit of Instruments with a Paying Agent substantially in the form of the noticeavailable from any Paying Agent except that the notice shall not be required to contain the serial numbers ofthe Instruments in respect of which the option has been exercised, and stating the principal amount ofInstruments in respect of which the option is exercised and at the same time presenting for notation thePermanent Global Instrument to the Issue and Paying Agent, or to a Paying Agent acting on behalf of theIssue and Paying Agent.

(6) Notices: So long as any Instruments are represented by a Permanent Global Instrument and suchPermanent Global Instrument is held on behalf of a clearing system, notices to the holders of Instruments ofthat Series may be given by delivery of the relevant notice to the clearing system for communication by it toentitled accountholders in substitution for publication as required by the Conditions or by delivery of therelevant notice to the Holder of the Permanent Global Instrument. Any such notice will be deemed to havebeen given to holders of the Instruments on the date of delivery of the relevant notice to the clearing systemor the date of delivery of the relevant notice to the Holder of the Permanent Global Instrument.

(D) Partly Paid Instruments

While any Partly Paid Installments due from the holder of Partly Paid Instruments are overdue, nointerest in a Permanent Global Instruments representing such Instruments may be exchanged for an interestin a Permanent Global Instrument or for Definitive Instruments. If any Holder fails to pay any installmentdue on any Partly Paid Instruments within the time specified, the Issuer may forfeit such Instruments andshall have no further obligation to such Holder in respect of them.

44


FORM OF FINAL TERMS

FINAL TERMS

Series No.: [ ]

Tranche No.: [ ]

TOKIO MARINE FINANCIAL SOLUTIONS LTD.

¥400,000,000,000 PROGRAMME FOR THE ISSUANCE OF DEBT INSTRUMENTS

Issue of

[Aggregate Principal Amount of Tranche][Title of Instruments]

The Prospectus referred to below (as completed by these Final Terms) has been prepared on the basisthat any offer of Instruments in any Member State of the European Economic Area which has implementedthe Prospectus Directive (2003/71/EC) (each, a “Relevant Member State”) will be made pursuant to anexemption under the Prospectus Directive, as implemented in that Relevant Member State, from therequirement to publish a prospectus for offers of the Instruments. Accordingly any person making orintending to make an offer in that Relevant Member State of the Instruments may only do so in circumstancesin which no obligation arises for the Issuer or any Dealer to publish a prospectus pursuant to Article 3 of theProspectus Directive or supplement a prospectus pursuant to Article 16 of the Prospectus Directive, in eachcase, in relation to such offer. Neither the Issuer nor any Dealer has authorised, nor do they authorise, themaking of any offer of Instruments in any other circumstances.

PART A – CONTRACTUAL TERMS

Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the“Conditions”) set forth in the Base Prospectus dated [�] (and the supplemental Base Prospectus dated [�]which [(together)] constitute(s) a base prospectus (the “Base Prospectus”) for the purposes of Directive2003/71/EC (the “Prospectus Directive”). This document constitutes the Final Terms relating to the issueof Instruments described herein for the purposes of Article 5.4 of the Prospectus Directive and must be readin conjunction with such Base Prospectus [as so supplemented].

The Instruments have the benefit of a Support Agreement (as defined in the Conditions). The SupportAgreement does not constitute a guarantee of the Instruments.

Full information on the Issuer and the Instruments described herein is only available on the basis of acombination of these Final Terms and the Base Prospectus. The Base Prospectus [and the Supplemental BaseProspectus] [is] [are] available for viewing at, and copies may be obtained from, the specified offices of thePaying Agents.

The following alternative language applies if the first tranche of an issue which is being increased wasissued under a Base Prospectus with an earlier date.

[Terms used herein shall be deemed to be defined as such for the purposes of the Conditions (the“Conditions”) set forth in the base prospectus dated [original date]. These Final Terms contain the finalterms of the Instruments and must be read in conjunction with the Base Prospectus dated [current year] [andthe supplemental Base Prospectus dated [�] which [together] constitute[s] a base prospectus (the “BaseProspectus”) for the purposes of the Prospectus Directive (Directive 2003/71/EC) (the “ProspectusDirective”), save in respect of the Conditions which are extracted from the base prospectus dated [originaldate] and are attached hereto.] This document constitutes the Final Terms relating to the issue of instrumentsdescribed herein for the purposes of Article 5.4 of the Prospectus Directive.

Full information on the Issuer and the Instruments described herein is only available on the basis of acombination of these Final Terms and the Base Prospectus. The Base Prospectus [and the Supplemental Base

45


Prospectus] [is] [are] available for viewing at [[address] [and] [website]] and copies may be obtained from[address].

[Include whichever of the following apply or specify as “Not Applicable” (N/A). Note that thenumbering should remain as set out below, even if “Not Applicable” is indicated for individual paragraphsor subparagraphs. Italics denote directions for completing the Final Terms.]

[When adding any other final terms or information consideration should be given as to whether suchterms or information constitutes “significant new factors” and consequently trigger the need for asupplement to the Prospectus under Article 16 of the Prospectus Directive.]

1. Issuer: Tokio Marine Financial Solutions Ltd.

2. [(i)] Series Number [ ]

[(ii)] Tranche Number: [ ]

3. Specified Currency or Currencies [ ]

4. Aggregate Principal Amount [ ]

[(i)] Series: [ ]

[(ii)] Tranche: [ ]]

5. [(i)] Issue Price: [ ] per cent. of the Aggregate Principal Amount [plusaccrued interest from [insert date] (in the case offungible issues only, if applicable)]

[(ii)] Net Proceeds: [ ] (Required only for listed issues)

[(iii)] [Commission Payable: [[�] per cent. flat]

[(iv)] [Selling Concession: [[�] per cent.]

[(v)] [Expenses: [If Definitive Instruments specify that the Issuer mustbear the cost for producing Definitive Instruments.]

6. (i) Specified Denominations: [�]

[Note – where multiple denominations aboveEUR50,000 (or equivalent) are being used andInstruments are not being issued in registered form,the following sample wording should be followed:[EUR 50,000] and integral multiples of [EUR 1,000]in excess thereof up to and including [EUR 99,000].No Instruments in definitive form will be issued with adenomination above [EUR 99,000].]

So long as the Instruments are represented by aTemporary Global Instrument or a Permanent GlobalInstrument and the relevant clearing systems sopermit, the Instruments will be tradeable only in theminimum authorised denomination of [EUR 50,000]and higher integral multiples of [EUR 1,000],notwithstanding that no definitive Instruments will beissued with a denomination above [EUR 99,000].

(if fungible with an existing Series, detailsof that Series, including the date on whichthe Instruments become fungible.)]

46


[(ii)] Calculation Amount: [�]

[If there is only one Specified Denomination, insertthe Specified Denomination]

[If there are several Specified Denominations, insertthe highest common factor of these SpecifiedDenominations (note: there must be a common factorof two or more Specified Denominations).]

7. (i) Issue Date: [ ]

[(ii) Interest Commencement Date: [Specify/Issue Date/Not Applicable]]

8. Maturity Date: [Specify date or (for Floating Rate Instruments)Interest Payment Date falling in or nearest to therelevant month and year]

[If the issue proceeds are received by the Issuer in theUnited Kingdom and the Maturity Date is less thanone year from the Issue Date, the Instruments musthave a minimum redemption value of £100,000 (or itsequivalent in other currencies) and be sold only to“professional investors” (or another applicableexemption from section 19 of the FSMA must beavailable)]

9. Interest Basis [� per cent. Fixed Rate][[Specify reference rate] +/- � per cent. FloatingRate][Zero Coupon][Index-Linked Interest][Other (specify)](further particulars specified below)

10. Redemption/Payment Basis: [Redemption at par][Index-Linked Redemption][Dual Currency][Partly Paid][Instalment][Other (specify)]

[Specify details of any provision for convertibility ofInstruments into another interest or redemption/payment basis]

12. Put/Call Options: [Investor Put][Issuer Call][(further particulars specified below)]

13. Status of the Instruments: [Senior/[Dated/Perpetual]/Subordinated/if nothing isspecified, Instruments will be unsubordinated]

14. Listing: [London/other (specify)/None]

15. Method of Distribution: [Syndicated/Non-syndicated]

11. Change of Interest orRedemption/Payment Basis:

47


PROVISIONS RELATING TO INTEREST (IF ANY) PAYABLE

16. Fixed Rate Instrument Provisions [Applicable/Not Applicable]

(if not applicable delete the remaining sub-paragraphs of this paragraph)

(i) Interest Rate(s): [ ] per cent. per annum [payable [annually/semiannually/quarterly/monthly/other (specify)] inarrear]

(ii) Interest Payment Date(s): [ ] in each year [adjusted in accordance with[Specify Business Day Convention and any applicableBusiness Centre(s) for the definition of “BusinessDay”]/No Adjustment]

[Specify, unless no adjustment is required in whichcase specify “No Adjustment”. Note that theseconventions are only to apply for the purposes ofaccrual of interest. Thus, a fixed rate Instrumentshould normally specify “No Adjustment”, but forpurposes of payment, a modification may be requiredto match a swap (see paragraph 30 – Paymentsbelow). Care should be taken to match the maturitydate (as well as other key dates) of the Instrumentswith any underlying swap transaction. Since maturitydates do not automatically move with business dayconventions under ISDA, it may be necessary tospecify “No Adjustment” in relation to the maturitydate of the Instruments to disapply the ApplicableBusiness Day Convention.]

for Interest Payment Dates: [ ]

– for Maturity Date

– any other date

(iv) Interest Determination Date(s): [Specify number of Banking Days and in whichcity(ies), if different from Condition 5.09.]

(v) Fixed Coupon Amount[(s)]: [ ] per Instrument of [ ] Specified Denomination

(vi) Day Count Fraction: [30/360]/[Actual/Actual (ICMA)Note: use for Fixed Rate Instruments denominated inany currencies other than U.S. dollars/[If neither ofthese options applies, give details]]

(vii) Broken Amount(s): [ ] per Calculation Amount payable on the InterestPayment Date falling [in/on] [ ]

[Not Applicable/give details] (Consider if day countfraction, particularly for euro denominated issues,should be on an Actual/Actual basis. Also considerwhat should happen to unmatured Coupons in theevent of early redemption of the Instruments.)

17. Floating Rate Instrument Provisions [Applicable/Not Applicable]

(viii) Other terms relating to the methodof calculating interest for FixedRate Instruments:

(iii) Applicable Business DayConvention

48


(If not applicable, delete the remaining sub-paragraphs of this paragraph.)

[Specify dates (or if the Applicable Business DayConvention is the FRN Convention) number ofmonths]

[Specify. If nothing is specified Interest Period EndDates will correspond with Interest Payment Dates]

[Specify, unless no adjustment is required in whichcase specify “No Adjustment”. Note that theseconventions are only to apply for the purposes ofaccrual of interest. Care should be taken to match thematurity date (as well as other key dates) of theInstruments with any underlying swap transaction.Since maturity dates do not automatically move withbusiness day conventions under ISDA, it may benecessary to specify “No Adjustment” in relation tothe maturity date of the Instruments to disapply theApplicable Business Day Convention.]

for Interest Payment Dates: [ ]

– for Interest Period End Dates: [ ]

– for Maturity Date: [ ]

– any other date: [ ]

(iv) Relevant Financial Centre(s): [Specify any Relevant Financial Centres which may berequired for the purposes of the definition of BusinessDays (adjustment of Interest Payment Dates andInterest Period End Dates for accrual. If nothing isspecified, the ISDA Definitions for the relevantcurrency will apply (see Condition 5.09 – definition ofRelevant Financial Centre)].

(v) Default Interest Rate: [Specify if different from the Interest Rate]

(vi) Reference Banks: [Specify]

(vii) [Screen Rate Determination/ISDA Determination/other (give details)]

[[Name] shall be the Calculation Agent (no need tospecify if the Issue and Paying Agent is to performthis function)]

(ix) Screen Rate Determination:

– Reference Rate: [For example, LIBOR or EURIBOR]

– Relevant Screen Page: [Reuters Screen/Other]

– Interest Determination Date(s): [Specify number of Banking Days and in whichcity(ies), if different from Condition 5.09]

(viii) Party responsible for calculating the Interest Rate(s) and InterestAmount(s) (if not the Issue andPaying Agent):

Manner in which the Interest Rate(s)is/are to be determined:

(iii) Applicable Business DayConvention:

(ii) Interest Period End Dates or (if the Applicable Business DayConvention is the FRN Convention)Interest Accrual Period:

(i) Interest Payment Dates or (if the Applicable Business DayConvention is the FRN Convention)Interest Period:

49


– Relevant Time: [For example, 11.00 a.m. London time/Brussels time]

– Relevant Financial Centre: [For example, London/euro-zone (where euro-zonemeans the region comprised of the countries whoselawful currency is the euro)]

(x) ISDA Determination:

– ISDA Rate: Issuer is a [Fixed Rate/Fixed Amount/Fixed Price/Floating Rate/Floating Amount/Floating Price] Payer

– Floating Rate Option: [ ]

– Designated Maturity: [ ]

(xi) Relevant Margin(s): [+/-] [ ] per cent. per annum

(xii) Minimum Interest Rate: [ ] per cent. per annum

(xiii) Maximum Interest Rate: [ ] per cent. per annum

(xiv) Day Count Fraction: [ ]

[Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

18. Zero Coupon Instrument Provisions [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) [Amortisation/Accrual] Yield: [ ] per cent. per annum

(ii) Rate of interest on overdue amount [Specify, if not the [Amortisation/Accrual] Yield]

(iii) Day Count Fraction [Specify for the purposes of Condition 5.10 andCondition 6.11]

(iv) Reference Price: [ ]

[ ]

[Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Index/Formula/other variable: [Give or annex details]

[ ]

(Need to include a description of market disruptionor settlement disruption events and adjustmentprovisions).

(iii) Provisions for determining Couponwhere calculating by reference toIndex and/or Formula is impossibleor impracticable or otherwisedisrupted:

(ii) Calculation Agent responsible forcalculating the Rate(s) of Interestand/or Interest Amount(s). (If notthe Issue and Paying Agent):

19. Index-Linked Interest Instrument/othervariable-linked interest InstrumentProvisions

(v) Any other formula/basis ofdetermining amount payable:

(xv) Fall back provisions, roundingprovisions, denominator and anyother terms relating to the methodof calculating interest on FloatingRate Instruments, if different fromthose set out in the Conditions:

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(iv) Interest Period(s): [ ]

(v) Interest Payment Date: [ ]

(vi) Interest Determination Date: [Specify number of Banking days and in whichcity(ies), if different from Condition 5.09)]

(vii) Business Day Convention: [Floating Rate Convention/Following Business DayConvention/Modified Following BusinessConvention/Preceding Business Day Convention/other (give details)]

(viii) Additional Business Centre(s): [ ]

(ix) Minimum Rate of Interest: [ ] per cent. per annum

(x) Maximum Rate of Interest: [ ] per cent. per annum

(xi) Day Count Fraction: [ ]

20. Dual Currency Instrument Provisions [Applicable/Not Applicable](If not applicable, delete the remaining sub-paragraphs of this paragraph)

[Give details]

[ ]

(Need to include a description of market disruption orcalculation by reference to Rate of settlementdisruption events and adjustment provisions)

[ ]

PROVISIONS RELATING TO REDEMPTION

21. Call Option [Applicable/Not Applicable]

(If not applicable, delete the remaining sub-paragraphs of this paragraph)

[ ]

[ ] per Calculation Amount

(iii) If redeemable in part:

(a) Minimum Redemption Amount: [ ] per Calculation Amount

(b) Maximum Redemption Amount: [ ] per Calculation Amount

[ ](iv) Notice period (if other than as setout in the Conditions):

(ii) Early Redemption Amount (Call) ofeach Instrument and method, if any,of calculation of such amount(s):

(i) Call Option Date(s)/Call OptionPeriod:

(iv) Person at whose option SpecifiedCurrency(ies) is/are payable:

(iii) Provisions applicable wherecalculation by reference to Rate ofExchange impossible orimpracticable:

(ii) Calculation Agent, if any,responsible for calculating theprincipal and/or interest due (if notthe Issue and Paying Agent):

(i) Rate of Exchange/method ofcalculating Rate of Exchange:

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22. Put Option [Applicable/Not Applicable]

(If not applicable, delete the remaining sub-paragraphs of this paragraph)

(i) Put Date(s)/Put Period: [ ]


[ ]


(i) Index/Formula/variable: [give or annex details]

[ ]

[ ]

(iv) Determination Date(s): [ ]

[ ]

(vi) Payment Date: [ ]



24. Early Redemption Amount

[ ]Early Redemption Amount(s) perCalculation Amount payable onredemption for taxation reasons or inevent of default of the early redemptionand/or the method of calculating the same(if required or if different from that set outin the Conditions):

(viii) Maximum Maturity RedemptionAmount:

(vii) Minimum Maturity RedemptionAmount:

(v) Provisions for determining MaturityRedemption Amount wherecalculation by reference to Indexand/or Formula and/or othervariable is impossible orimpracticable or otherwisedisrupted:

(iii) Provisions for determining MaturityRedemption Amount wherecalculated by reference to Indexand/or Formula and/or othervariable:

(ii) Party responsible for calculating theMaturity Redemption Amount (ifnot the Issue and Paying Agent):

In cases where the Maturity RedemptionAmount is Index-Linked or other variable-linked:

23. Maturity Redemption Amount of eachInstrument

(iii) Notice period (if other than as setout in the Conditions):

(ii) Early Redemption Amount (Put) ofeach Instrument and method, if any,of calculation of such amount(s):

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GENERAL PROVISIONS APPLICABLE TO THE INSTRUMENTS

25. Form of Instruments: Bearer Instruments:

[Temporary Global Instrument exchangeable for aPermanent Global Instrument which is exchangeablefor Definitive Instruments on [ ] days’ notice/at anytime in the limited circumstances specified in thePermanent Global Instrument.]

[Temporary Global Instrument exchangeable forDefinitive Instruments on [ ] days’ notice]

[Permanent Global Instrument exchangeable forDefinitive Instruments on [ ] days’ notice/at anytime in the limited circumstances specified in thePermanent Global Instrument].

[Definitive Instruments to be in ICMA or successor’sformat]

[In relation to any Instruments issued with adenomination of EUR 50,000 (or equivalent) andintegral multiples of EUR 1,000 (or equivalent), thePermanent Global Instrument representing suchInstruments shall only be exchangeable for DefinitiveInstruments in the limited circumstances of (i) closureof clearing systems; (ii) event of default andenforcement events.]

26. Relevant Financial Centre Day: [Not Applicable/give details. Note that this itemrelates to the date and place of payment, and notinterest period end dates, to which items 16(ii), 17(iv)and 19(vii) relate]

[Yes/No. If yes, give details]

[Not Applicable/give details]

[Not Applicable/give details]

30. Payments:

[Specify whether paragraph (i) of Condition 9A.05 orparagraph (ii) of Condition 9A.05 applies. If nothingis specified paragraph (i) will apply to fixed rate orfixed coupon amount Instruments and paragraph (ii)will apply to floating rate or variable coupon amountInstruments]

(i) Unmatured Coupons missing uponEarly Redemption:

29. Details relating to Instalment Instruments:Instalment Amount, date on which eachpayment is to be made:

28. Details relating to Partly Paid Instruments:amount of each payment comprising theIssue Price and date on and method bywhich each payment is to be made andconsequences (if any) of failure to pay,including any right of the Issuer to forfeitthe Instruments (including ForfeitureDates in respect of late payment of PartlyPaid Instalments) and interest due on latepayment:

27. Talons for future Coupons or Receipts tobe attached to Definitive Instruments (anddates on which such Talons mature)

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[Specify whether, e.g. the Modified Following BusinessDay Convention should apply for purposes ofpayment]

31. Replacement of Instruments: [Specify Replacement Agent, if other than (or inaddition to) the Issue and Paying Agent]

32. Notices: [Specify any other means of effective communicationsother than as specified in Condition 14]

[Not Applicable/The provisions annexed to this FinalTerms apply]

34. Consolidation provisions: [Not Applicable/The provisions annexed to this FinalTerms apply]

35. Other terms or special conditions: [Not Applicable/give details]

DISTRIBUTION

36. (i) If syndicated, names of Managers: [Not Applicable/give details]

(ii) Relevant Dealer/Lead Manager [ ]

(iii) Stabilising Institution (if any): [ ]

37. If non-syndicated, name of Dealer: [Not Applicable/give details]

38. TEFRA: [Not Applicable/The [C/D] Rules are applicable/in theabsence of specification TEFRA D rules will apply]

39. Additional selling restrictions: [Not Applicable/give details]

United States of America: [Reg S Compliance Category: TEFRA C/TEFRA D/TEFRA not applicable]

[PURPOSE OF FINAL TERMS

These Final Terms comprise the final terms required for issue and admission to trading on the [specifyrelevant regulated market] of the Instruments described herein pursuant to the ¥400,000,000,000 Programmefor the Issuance of Debt Instruments of Tokio Marine Financial Solutions Ltd.]

RESPONSIBILITY

The Issuer accepts responsibility for the information contained in these Final Terms.

The Issuer declares that, having taken all reasonable care to ensure that such is the case the informationcontained in these Final Terms is, to the best of its knowledge, in accordance with the facts and contains noomission likely to affect its import.

[[�] has been extracted from [�]. The Issuer confirms that such information has been accurately reproducedand that, so far as it is aware, and is able to ascertain from information published by [�], no facts have beenomitted which would render the reproduced information inaccurate or misleading.]

Signed on behalf of the Issuer

By: ……………………………………Duly authorised

33. Redemption, renominalisation andreconventioning provisions:

(ii) Specify any modification to theadjustment provisions for paymentdates:

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PART B – OTHER INFORMATION

1. ADDITIONAL INFORMATION [Include any product specific risk factors which arenot covered under “Risk Factors” in the Prospectus. Ifany such additional risk factors need to be included,consideration should be given as to whether theyconstitute “significant new factors” and consequentlytrigger the need for a supplement to the Prospectusunder Article 16 of the Prospectus Directive, thepublication of which would in turn trigger theinvestor’s right to withdraw their acceptances withina 48 hour time period.]

2. LISTING

(i) Admission to trading: [Application has been made by the Issuer (or on itsbehalf) for the Instruments to be admitted to tradingon [�] with effect from [�]/] [Not Applicable.]

[ ]

3. RATINGS

Ratings: The Instruments to be issued [have been rated]/[areexpected to be rated]:

[Moody’s: [ ]]

[[Rating and Investment Information, Inc.]: [ ]]

[[Japan Credit Rating Agency, Ltd]: [ ]]

[[Other]: [ ]]

(The above disclosure should reflect the ratingallocated to Instruments of the type being issuedunder the Programme generally or, where the issuehas been specifically rated, that rating.)

4. [INTERESTS OF NATURAL AND LEGAL PERSONS INVOLVED IN THE[ISSUE/OFFER]

Need to include a description of any interest, including conflicting ones, that is material to the issue/offer, detailing the persons involved and the nature of the interest. May be satisfied by the inclusionof the following statement:

“Save as discussed in [“Subscription and Sale”], so far as the Issuer is aware, no person involved inthe offer of the Instruments has an interest material to the offer.”]

[(when adding any other description, consideration should be given as to whether such mattersdescribed constitute “significant new factors” and consequently trigger the need for a supplement tothe Prospectus under Article 16 of the Prospectus Directive)]

5. [REASONS FOR THE OFFER, ESTIMATED NET PROCEEDS AND TOTAL EXPENSES]

(i) [Reasons for the offer [ ]

(ii) Estimate of total expenses related toadmission to trading:

55


(See “Use of Proceeds” wording in Prospectus – ifreasons for offer different from making profit and/orhedging certain risks will need to include thosereasons here.)]

(ii) [Estimated net proceeds: [ ]

(If proceeds are intended for more than one use willneed to split out and present in order of priority. Ifproceeds insufficient to fund all proposed uses stateamount and sources of other funding.)

(iii) [Estimated total expenses: [ ] [If the notes are derivative securities for whichAnnex XII of the Prospectus Directive Regulationapplies it is [only necessary to include disclosure ofnet proceeds and total expenses at (ii) and (iii) abovewhere disclosure is included at (i) above.]

[ ]

The yield is calculated at the Issue Date on the basisof the Issue Price. It is not an indication of futureyield.

6. HISTORIC INTEREST RATES (Floating Rate Instruments only)

Details of historic [LIBOR/EURIBOR/other] rates can be obtained from [Reuters].]

7. [Index-Linked Instruments only – PERFORMANCE OF INDEX/FORMULA AND OTHERINFORMATION CONCERNING THE UNDERLYING

Need to include details of where past and future performance and volatility of the index/formula canbe obtained. Where the underlying is an index need to include the name of the index and a descriptionif composed by the Issuer and if the index is not composed by the Issuer need to include details ofwhere the information about the index can be obtained. Where the underlying is not an index need toinclude equivalent information. Include other information concerning the underlying required byParagraph 4.2 of Annex XII of the Prospectus Directive Regulation.

[(When completing this paragraph, consideration should be given as to whether such mattersdescribed constitute “significant new factors and consequently trigger the need for a supplement tothe Prospectus under Article 16 of the Prospectus Directive).]

[The Issuer [intends to provide post-issuance information [specify what information will be reportedand where it can be obtained] [does not intend to provide post-issuance information].

8. [Dual Currency Instruments only – PERFORMANCE OF RATE[S] OF EXCHANGE

Need to include details of where past and future performance and volatility of the relevant rate[s] canbe obtained.]

[(When completing this paragraph, consideration should be given as to whether such mattersdescribed constitute “significant new factors” and consequently trigger, the need for a supplement tothe Prospectus under Article 16 of the Prospectus Directive).]

9. OPERATIONAL INFORMATION

ISIN Code: [ ]

Common Code: [ ]

[Fixed Rate Instruments only – YIELDIndication of yield:

56


[Not applicable/give name(s) and number(s)]

Delivery: Delivery [against/free of] payment

[ ]Names and address of additional PayingAgent(s) (if any):

Any clearing system(s) other thanEuroclear Bank S.A./N.V. and ClearstreamBanking, société anonyme, Luxembourgand the relevant identification number(s):

57


USE OF PROCEEDS

The net proceeds of the issue of each Tranche of Instruments will be applied by the Issuer to meet partof its general financing requirements.

58


2nd AMENDED AND RESTATED SUPPORT AGREEMENT

THIS 2nd AMENDED AND RESTATED SUPPORT AGREEMENT (this “Agreement”) is made andentered into as of 26 August, 2005, by and between Tokio Marine & Nichido Fire Insurance Co., Ltd., aJapanese corporation (“Tokio Marine & Nichido”), and Tokio Marine Financial Solutions Ltd., anexempted company organised under the laws of the Cayman Islands (the “Subsidiary”).

RECITALS

WHEREAS, the Subsidiary (formerly known as First Chicago Tokio Marine Financial Products Ltd.),Tokio Marine & Nichido (formerly known as The Tokio Marine and Fire Insurance Co., Ltd.), The FirstNational Bank of Chicago, a national bank, now known as JPMorgan Chase Bank, NA, a national bank(“FNBC”) and First Chicago Asia Holdings Ltd. (“FCAHL”) entered into that certain Joint VentureAgreement, dated as of 24 December 1997 (the “Joint Venture Agreement”) pursuant to which the partiesestablished the Subsidiary for the purpose of conducting a financial derivatives business primarily in Asia;

WHEREAS, the Subsidiary enters into financial derivatives and other transactions that constituteCovered Obligations (as hereinafter defined) with, and become obligated thereunder, to FinancialTransaction Parties (as hereinafter defined);

WHEREAS, Tokio Marine & Nichido and the Subsidiary entered into that certain Support Agreementdated as of 26 December, 1997 (“the Original Support Agreement”) in connection with Tokio Marine &Nichido’s desire to enhance and maintain the financial condition of the Subsidiary, in order to facilitate theconduct of the Subsidiary’s business with Financial Transaction Parties;

WHEREAS, on 22 November, 2002, Tokio Marine & Nichido acquired all of the shares of theSubsidiary owned by FCAHL and the parties terminated the Joint Venture Agreement and on February 3,2003, the Subsidiary changed its name to Tokio Marine Financial Solutions Ltd., in relation to which theOriginal Support Agreement was amended and restated as Amended and Restated Support Agreement datedMarch 18, 2004 (the “First Amended and Restated Support Agreement”);

WHEREAS, as of 1 October, 2004, The Tokio Marine and Fire Insurance Co., Ltd. changed its nameto Tokio Marine & Nichido Fire Insurance Co., Ltd. upon its merger with The Nichido Fire & MarineInsurance Co., Ltd.;

WHEREAS, it is anticipated that Financial Transaction Parties that enter into Covered Obligationtransactions with the Subsidiary will rely on this Agreement in entering into such transactions; and

WHEREAS, Tokio Marine & Nichido and the Subsidiary desire to amend and restate the FirstAmended and Restated Support Agreement in accordance herewith;

NOW, THEREFORE, in consideration of the premises and of the mutual covenants contained hereinand for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,the parties hereto hereby agree as follows:

1. Definitions.

For the purposes of this Agreement the following terms shall have the indicated meanings, applicableto both the singular and the plural:

“Adjusted Net Worth” as of any date means the sum of (i) (A) the stockholder’s equity of theSubsidiary as of such date determined in accordance with GAAP, plus (B) all reserves of the Subsidiaryestablished on its books of account as of such date in accordance with GAAP, less (C) all goodwill,organisational expenses, noncompete agreements, licenses, patents and other like intangibles of theSubsidiary as of such date, plus (ii) all advances of money (together with accrued and unpaid interest) to theSubsidiary by Tokio Marine & Nichido, the repayment of which is evidenced by, and subject to the terms of,a Note, whether such advances are made by Tokio Marine & Nichido pursuant to Section 3.1 of thisAgreement or by Tokio Marine & Nichido otherwise than pursuant to this Agreement.

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“Business Day” means a day of the year on which banks are open for business in, and not requiredor authorised to close in, Tokyo, Japan.

“Commencement Date” means 5 January, 1998.

“Covered Obligation” means a debt, liability or obligation of the Subsidiary to a FinancialTransaction Party that arises out of a transaction that is effected prior to earliest of (i) the date of theexpiration of the term of this Agreement or (ii) the date. that notice of termination of this Agreement is givenpursuant to Section 4.2(a)(ii) or (iii) the date on which Tokio Marine & Nichido shall consent to thetermination of this Agreement pursuant to Section 4.2(a)(i).

“Financial Transaction Party” means (without duplication) (i) any Person that is a counterparty ina financial derivatives transaction with the Subsidiary, (ii) any Person that lends money or property to theSubsidiary or otherwise extends credit to the Subsidiary to enable the Subsidiary to purchase securities orother property or to meet obligations to a Financial Transaction Party, (iii) any Person that is a holder of anydebt security issued by the Subsidiary or the trustee under an indenture pursuant to which the Subsidiary hasissued debt securities, and (iv) any Person that is the beneficiary of a guaranty given by the Subsidiary of thefinancial obligations of another Person, in each case to the extent, but only to the extent that such transaction,loan, extension of credit, debt security or financial obligation is a Covered Obligation.

“GAAP” means respectively United States or Japanese generally accepted accounting principlesapplied on a consistent basis (except to the extent Tokio Marine & Nichido agrees in writing to anyinconsistent application of generally accepted accounting principles).

“Note” means a Subordinated Promissory Note issued by the Subsidiary to Tokio Marine & Nichidosubstantially in the form of Exhibit A hereto, whether such Note is issued pursuant to this Agreement orotherwise.

“Person” includes any natural person, partnership, limited liability company, corporation, trust,association, joint venture and other entity and any government, governmental agency or instrumentality orpolitical subdivision.

2. Representations and Warranties.

Each party hereby represents and warrants that this Agreement has been duly authorised, executed anddelivered by such party and that this Agreement constitutes a valid and legally binding obligation of suchparty enforceable in accordance with its terms, subject, as to enforcement, to bankruptcy, insolvency,reorganisation and other laws of general applicability relating to or affecting creditors rights and to generalequity principles.

3. Maintenance of Adjusted Net Worth; Liquidity Facility.

3.1 Adjusted Net Worth Maintenance.

Tokio Marine & Nichido shall cause the Subsidiary to have an Adjusted Net Worth of at least$10,000,000 (or its equivalent in another currency) at all times.

3.2 Liquidity Facility.

If the Subsidiary requires funds to meet its payment obligations to any Financial Transaction Party,upon request of the Subsidiary, Tokio Marine & Nichido shall provide the Subsidiary on a timely basis thefunds that the Subsidiary needs in order to meet these obligations.

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4. Term and Termination.

4.1 Term.

The term of this Agreement shall commence on the Commencement Date and shall expire on the dateof the dissolution or termination of the Subsidiary, subject to early termination pursuant to Section 4.2.

4.2 Termination.

(a) This Agreement shall be terminated prior to the expiration of the term hereof upon the first tooccur of the following:

(i) The written agreement of the Subsidiary and Tokio Marine & Nichido to terminate thisAgreement; and

(ii) The delivery by Tokio Marine & Nichido to the Subsidiary of written notice for thetermination of this Agreement.

(b) Upon the expiration of the term, or the termination, of this Agreement, (i) the Subsidiary shallgive prompt written notice of such termination to each Financial Transaction Party that hasentered into a transaction with the Subsidiary prior to such expiration or termination, exceptwhere the Subsidiary’s obligations under such transaction have been satisfied in full on or priorto the date of such expiration or termination, and (ii) subject to Section 4.2(c), Tokio Marine &Nichido shall have no further obligation under Section 3 or any other provision of thisAgreement.

(c) Notwithstanding Section 4.1, 4.2(a) or 4.2(b), such expiration or termination shall not beeffective as to the obligations of Tokio, Marine & Nichido contained in Section 3 with respectto the obligations of the Subsidiary to Financial Transaction Parties that remain outstanding onthe date of such expiration or termination until such obligations are no longer outstanding orhave been satisfied in full.

(d) Neither this Agreement nor any provision contained herein shall have any effect, directly orindirectly, upon or in respect of any obligation, indebtedness or liability of the Subsidiary to aFinancial Transaction Party that has not been incurred or issued on or prior to the date of theexpiration of the term of this Agreement or the date that notice of termination of this Agreementis given pursuant to Section 4.2(a)(ii) or on the date on which Tokio Marine & Nichido shallconsent to termination of this Agreement pursuant to Section 4.2(a)(i), as the case may be.

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5. Notices.

All notices, requests and other communications required or permitted hereunder shall be given inwriting in the English language and shall, unless otherwise stated herein, be given by hand delivery or bytelecopy or telex and addressed as follows:

To Tokio Marine & Nichido:

Tokio Marine & Nichido Fire Insurance Co., Ltd.Financial Planning Department14th Floor, Otemachi 1st Square,1-5-1 Otemachi, Chiyoda-ku, Tokyo, 100-0004, JapanTelecopy: 81-3-5223- 3531Telephone: 81-3-5223-3502

To the Subsidiary:Tokio Marine Financial Solutions Ltd.13th Floor, Jimbocho Mitsui Building105 Kanda Jimbocho 1-chome, Chiyoda-ku, Tokyo, 101-0051, JapanTelecopy: 81-3-3518-8571Telephone: 81-3-3518-8500

or at such other address as either party shall specify to the other party in writing in accordance with thisSection 5. Each such notice shall be effective (i) if given by telex or telecopy, upon receipt, if confirmed byreturn telecopy, telex or telephonic confirmation or otherwise from member of the Tokio Marine & NichidoFinancial Planning Department (in the case of Tokio Marine & Nichido) or from any officer of the Subsidiary(in the case of the Subsidiary), or (ii) if given by mail or any other means, when delivered to the address ofsuch party specified as aforesaid; provided, however that no notice to a party shall be deemed received ona day that is not a Business Day in the jurisdiction in which notices are to be addressed to such party. Anysuch notice shall not be effective until the next Business Day in such jurisdiction.

6. Specific Waivers.

Tokio Marine & Nichido hereby acknowledges and agrees that it shall perform its obligationshereunder without deduction, defense, setoff or counterclaim and further waives any right of subrogationwith respect to any advance made by it hereunder provided, however that Tokio Marine & Nichido maydemand and accept payments of principal of and interest on any outstanding Note issued by the Subsidiaryto it hereunder, and may enforce its rights under any such Note, so long as at the time of the receipt ofpayment or the enforcement of its rights (x) the Subsidiary’s Adjusted Net Worth is at least at the levelrequired by Section 3.1, and (y) Tokio Marine & Nichido is not then required by Section 3.2 to provide fundsto the Subsidiary. Tokio Marine & Nichido acknowledges and agrees that the failure or delay by theSubsidiary or any equity holder of the Subsidiary to perform its obligations under any agreement orinstrument to which it is a party or by which it is bound shall not affect Tokio Marine & Nichido’s obligationsunder this Agreement. Tokio Marine & Nichido waives any failure or delay on the part of the Subsidiary or,to the extent provided in Section 11.2, of any Financial Transaction Party, in asserting or enforcing any ofits rights or making any claims or demands under this Agreement.

7. Governing Law.

This Agreement shall be governed by, and construed in accordance with, the internal laws of the Stateof New York.

8. Submission to Jurisdiction.

Tokio Marine & Nichido and the Subsidiary each hereby irrevocably submits to the jurisdiction of anyState or Federal court sitting in the Borough of Manhattan, The City of New York, for any action orproceeding arising out of this Agreement. Tokio Marine & Nichido and the Subsidiary each hereby waives,

62


to the fullest extent permitted by law, any claim that any action or proceeding brought in any such court wasbrought in an inconvenient forum. Tokio Marine & Nichido hereby irrevocably appoints Tokio Marine AssetManagement (USA) Ltd., located at 230 Park Avenue, Suite 910, New York, New York 10169, as its agentto receive, on behalf of Tokio Marine & Nichido, service of copies of the summons and complaint and anyother process that may be served in any such action or proceeding. The Subsidiary hereby irrevocablyappoints Tokio Marine Asset Management (USA) Ltd., located at 230 Park Avenue, Suite 910, New York,New York 10169, as its agent to receive, on behalf of the Subsidiary, service of copies of the summons andcomplaint and any other process that may be served in any such action or proceeding.

9. Amendments.

This Agreement amends and restates the First Amended and Restated Support Agreement in itsentirety. This Agreement may be modified, amended or supplemented only by the written agreement of TokioMarine & Nichido and the Subsidiary; provided, however, that no such modification, amendment orsupplement shall be made if it would materially adversely affect the rights, whether absolute or contingent,of any Financial Transaction Party which have accrued or which may accrue under any financial transaction,other than rights with respect to any financial transaction entered into after the date of such modification,amendment or supplement.

10. No Assignment.

Neither Tokio Marine & Nichido nor the Subsidiary shall have the right to assign, transfer or delegateany of the rights or obligations under this Agreement, and any such assignment, transfer or delegation shallbe null and void.

11. Third Party Beneficiaries.

11.1 The parties hereto acknowledge and agree that Financial Transaction Parties that enter intotransactions with the Subsidiary and are thereby holders or payees of Covered Obligations are relying on theterms of this Agreement in determining the creditworthiness of the Subsidiary in entering into suchtransactions. Accordingly, a Financial Transaction Party that is a holder or payee of a Covered Obligationand complies with Section 11.2 is intended to be, and it hereby is, a third party beneficiary of this Agreement.This Agreement is not intended to benefit any other third party.

11.2 Upon the failure by the Subsidiary to meet its obligations to any Financial Transaction Party thatis a holder or payee of a Covered Obligation, such Financial Transaction Party shall have the right to demandthat the Subsidiary enforce the Subsidiary’s rights under Section 3.1 and 3.2 of this Agreement with respectto such Covered Obligations, and, if the Subsidiary fails or refuses to take timely action to enforce its rightsunder Section 3.1 or 3.2, such Financial Transaction Party may proceed directly against Tokio Marine &Nichido to enforce the Subsidiary’s rights under Sections 3.1 and 3.2 of this Agreement with respect to suchCovered Obligations.

12. Withholding Taxes.

All payments to the Subsidiary under this Agreement shall be free of all withholding, stamp and othertaxes and other governmental charges of any nature whatsoever. If any withholding is required, Tokio Marine& Nichido shall pay the same to the appropriate governmental body and shall pay such additional amount tothe Subsidiary which, after deduction of any withholding, stamp or other taxes or other governmental chargeof any nature whatsoever imposed with respect to the payment of such additional amount, shall result in theSubsidiary receiving an amount equal to the amount that otherwise would have been payable had there beenno such withholding.

13. Severability.

Any provision of this Agreement or any Exhibit hereto which is illegal, invalid, prohibited orunenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such illegality,

63


invalidity, prohibition or unenforceability without invalidating or impairing the remaining provisions hereofor affecting the validity or enforceability of such provision in any other jurisdiction.

IN WITNESS WHEREOF, the parties hereto have caused this 2nd Amended and Restated SupportAgreement to be executed by their respective duly authorised officers as of the date first written above.

TOKIO MARINE & NICHIDO FIREINSURANCE CO., LTD.

By: ....................................................................

Name:

Title:

TOKIO MARINE FINANCIALSOLUTIONS LTD.

By: ....................................................................

Name:

Title:

64


TOKIO MARINE FINANCIAL SOLUTIONS LTD.

History

Tokio Marine Financial Solutions Ltd. (formerly First Chicago Tokio Marine Financial Products Ltd.)was incorporated and registered on 4 December 1997 as an exempt company in the Cayman Islands pursuantto the Companies Law (1995 Revision) of the Cayman Islands. The Issuer is registered with the Registrar ofCompanies in the Cayman Islands (number CR-78153) and has been incorporated for an unlimited duration.As of 25 September 2007, the Issuer amended its Memorandum of Association and redenominated itsauthorized share capital into Japanese Yen. As at the date hereof, its authorized share capital consists of1,000,000 ordinary shares of JPY 1,178 par value of which 1,000,000 ordinary shares are issued andoutstanding.

The Issuer was initially established as a joint venture between Tokio Marine & Nichido Fire InsuranceCo., Ltd. (“Tokio Marine & Nichido”) (formerly The Tokio Marine and Fire Insurance Co., Ltd, “TokioMarine”) and Bank One, NA (“Bank One”, formerly The First National Bank of Chicago, now merged withJPMorgan Chase Bank, NA.). Upon the maturity of the term of joint venture, Tokio Marine & Nichidopurchased Bank One’s interest in the Issuer in November 2002 and the Issuer is now a wholly ownedsubsidiary of Tokio Marine & Nichido.

Since its inception, the Issuer has provided various high value-added financial services and products,revolving around over-the-counter derivatives products, to manage the various risks incurred through itsclients’ business operations and to efficiently raise and invest funds. As a wholly owned subsidiary of TokioMarine & Nichido, the Issuer’s financial derivative capabilities are enhanced by Tokio Marine & Nichido’sinsurance expertise to bring about highly integrated and customized solutions for the benefit of its clients.The Issuer was registered as a foreign securities firm on 28 January 1999 pursuant to the Laws on ForeignSecurities Firms and is currently registered as a Type 1 Financial Instruments Business Operator under theFinancial Instruments and Exchange Law and the law for abolishing and amending the related laws toimplement the law for amending the Securities and Exchange Law and other financial laws (collectively the“New Laws”). The Issuer’s Tokyo Branch mainly conducts business in Type 1 financial instruments inaccordance with the New Laws and other relevant laws and regulations.

The Issuer’s registered office is P.O. Box 309, George Town, Grand Cayman, Cayman Islands, BritishWest Indies, and its Tokyo Branch is Tokyo Club Building, 2-6 Kasumigaseki 3-chome, Chiyoda-ku, Tokyo100-0013, Japan.

The audited financial statements of Tokio Marine Financial Solutions Ltd. are produced hereafterfrom pages 67 – 82.

65


INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholder of Tokio Marine Financial Solutions Ltd.:

We have audited the accompanying balance sheets of Tokio Marine Financial Solutions Ltd. (the“Company”), a wholly owned subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd., as ofDecember 31, 2008 and 2007, and the related statements of operations, changes in equity, and cash flows forthe years then ended. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in Japan. Thosestandards require that we plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An audit also includes assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overallfinancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of the Company as of December 31, 2008 and 2007, and the results of its operations andits cash flows for the years then ended in conformity with accounting principles generally accepted in Japan.

As discussed in Note 13 to the financial statements, the Company entered into guarantee contracts toprovide default protection for collateral debt obligations.

Our audits also comprehended the translation of Japanese yen amounts into U.S.dollar amounts and,in our opinion, such translation has been made in conformity with the basis stated in Note 2a. SuchU.S.dollar amounts are presented solely for the convenience of readers outside Japan.

Deloitte Touche Tohmatsu

March 23, 2009

66


Tokio Marine Financial Solutions Ltd.

(A wholly owned subsidiary of Tokio Marine & Nichido Fire Insurance Co., Ltd.)

Balance Sheets

December 31, 2008 and 2007

Millions of Thousands ofJapanese Yen U.S. dollars

111111111344 1111

2008 2007 20081111 1111 1111

ASSETS:Cash and cash equivalents .............................................................. ¥65,856 ¥39,590 $730,107Deposits placed .............................................................................. 5,503 6,505 61,006Trading securities (Notes 2.c, 3 and 6) .......................................... 198,393 202,983 2,199,479Derivative product assets (Notes 2.d and 4) .................................. 77,892 56,365 863,549Other securities (Notes 2.c, 3 and 6) .............................................. 5 5 55Cash collateral placed (Note 13) .................................................... 15,965 177,000Intangible assets (Notes 2.f and 8) ................................................ 202Property and equipment (Notes 2.e and 7) .................................... 167Income taxes receivable (Notes 2.i and 9) .................................... 79 162 872Other assets (Note 6) ...................................................................... 1,602 2,066 17,761

1111 1111 1111

TOTAL .............................................................................................. ¥365,295 ¥308,045 $4,049,8291111 1111 11111111 1111 1111

LIABILITIES:Derivative product liabilities (Notes 2.d and 4) ............................ ¥81,496 ¥39,363 $903,503Cash collateral received.................................................................. 13,997 7,243 155,175Notes payable (Note 10) ................................................................ 199,041 201,435 2,206,667Long-term borrowings (Note 11) .................................................. 32,000 37,500 354,767Other liabilities (Note 9) ................................................................ 1,308 1,477 14,493

1111 1111 1111

Total liabilities .................................................................................. 327,842 287,018 3,634,6051111 1111 1111

COMMITMENTS AND CONTINGENT LIABILITIES (Note 13)

EQUITY:

Common stock, ¥1,178 par value— authorized, 1,000,000shares; issued and outstanding, 1,000,000 shares asof December 31, 2008 and 425,000 shares as ofDecember 31, 2007 (Note 2.j) .................................................... 1,178 501 13,060

Additional paid-in capital .............................................................. 50,154 24,711 556,032Accumulated deficit........................................................................ (14,113) (3,880) (156,465)Deferred gain (loss) on derivatives under hedge accounting

(Note 2.k).................................................................................... 234 (305) 2,5971111 1111 1111

Total equity .................................................................................... 37,453 21,027 415,2241111 1111 1111

TOTAL .............................................................................................. ¥365,295 ¥308,045 $4,049,8291111 1111 11111111 1111 1111

See notes to financial statements.

67

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Statements of Operations

Years Ended December 31, 2008 and 2007


111111111344 1111

2008 2007 20081111 1111 1111

TRADING AND OTHER REVENUES (Note 2.d) .......................... ¥(11,884) ¥(5,969) $(131,753)COMMISSION REVENUES............................................................ 406 388 4,503INTEREST REVENUE .................................................................... 2,922 3,648 32,397

1111 1111 1111

Total revenues............................................................................ (8,556) (1,933) (94,853)

INTEREST EXPENSE...................................................................... 2,524 1,762 27,978

BROKERAGE AND AGENT FEES ................................................ 60 60 6671111 1111 1111

Net revenues .............................................................................. (11,140) (3,755) (123,498)1111 1111 1111

OPERATING EXPENSES:Employee compensation and benefits ............................................ 1,020 1,159 11,304Occupancy and equipment ............................................................ 551 305 6,110Data processing and other services ................................................ 116 105 1,287Depreciation and amortization (Notes 7 and 8) ............................ 124 166 1,378Taxes, other than income taxes ...................................................... 131 94 1,450Other expenses................................................................................ 300 255 3,325

1111 1111 1111

Total operating expenses .......................................................... 2,242 2,084 24,8541111 1111 1111

LOSS ON DISPOSAL OF FIXED ASSETS .................................... 82 9191111 1111

LOSS ON IMPAIRMENT OF FIXED ASSETS (Notes 2g, 7 and 8) 645 7,1511111 1111

LOSS BEFORE INCOME TAXES .................................................. (14,109) (5,839) (156,422)1111 1111 1111

INCOME TAXES (Notes 2.i and 9):Current ............................................................................................ 4 4 43Refund .......................................................................................... (53)Deferred .......................................................................................... 547

1111 1111 1111

Total income taxes .................................................................... 4 498 431111 1111 1111

NET LOSS ........................................................................................ ¥(14,113) ¥(6,337) $ (156,465)1111 1111 11111111 1111 1111

Japanese Yen U.S. dollars111111111344 1111

2008 2007 20071111 1111 1111

LOSS PER SHARE (Note 2.j ) ........................................................ ¥(32,369.70) ¥(53,810.01) $ (358.87)


68

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Statements of Changes in Equity


Millions of Japanese Yen111111111111111111111111112

DeferredGain

Issued (Loss) onNumber of (Accumulated Derivatives

Shares of Additional Deficit) underCommon Common Paid-in Retained Hedge Total

Stock Stock Capital Earnings Accounting Equity11111 11111 11111 11111 11111 11111

BALANCE,JANUARY 1, 2007 .......... 50,000 ¥6 ¥4,706 ¥2,457 ¥(527) ¥ 6,642Cancellation of shares

denominated in US dollars (50,000) (6) (4,706) (4,712)New issue of shares

denominated inJapanese yen.................. 425,000 501 24,711 25,212

Net loss.............................. (6,337) (6,337)Net change in deferred

gain (loss) on derivativesunder hedge accounting.. 222 222

11111 11111 11111 11111 11111 11111

BALANCE,DECEMBER 31, 2007...... 425,000 501 24,711 (3,880) (305) 21,027

New issue of shares .......... 575,000 677 29,323 30,000Reclassification of deficit.. (3,880) 3,880Net loss.............................. (14,113) (14,113)Net change in deferred

gain (loss) onderivatives under hedgeaccounting .................... 539 539

11111 11111 11111 11111 11111 11111

BALANCE,DECEMBER 31, 2008.. 1,000,000 ¥1,178 ¥50,154 ¥(14,113) ¥234 ¥ 37,453

11111 11111 11111 11111 11111 1111111111 11111 11111 11111 11111 11111


69

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Statements of Changes in Equity

Years Ended December 31, 2008 and 2007 (continued)

Thousands of U.S. dollars111111111111111111111111112

DeferredGain

Issued (Loss) onNumber of (Accumulated Derivatives

Shares of Additional Deficit) underCommon Common Paid-in Retained Hedge Total

Stock Stock Capital Earnings Accounting Equity11111 11111 11111 11111 11111 11111

BALANCE,JANUARY 1, 2007 .......... 50,000 $65 $52,174 $27,240 $(5,846) $73,633Cancellation of shares

denominated in US dollars (50,000) (65) (52,174) (52,239)New issue of shares

denominated inJapanese yen.................. 425,000 5,550 273,962 279,512

Net loss.............................. (70,255) (70,255)Net change in deferred

gain (loss) onderivatives under hedgeaccounting .................... 2,467 2,467

11111 11111 11111 11111 11111 11111

BALANCE, DECEMBER 31, 2007...... 425,000 5,550 273,962 (43,015) (3,379) 233,118New issue of shares .......... 575,000 7,510 325,085 332,595Reclassification of deficit.. (43,015) 43,015Net loss.............................. (156,465) (156,465)Net change in deferred

gain (loss) onderivatives underhedge accounting .......... 5,976 5,976

11111 11111 11111 11111 11111 11111

BALANCE, DECEMBER 31, 2008...... 1,000,000 $13,060 $556,032 $(156,465) $2,597 $415,224

11111 11111 11111 11111 11111 1111111111 11111 11111 11111 11111 11111


70




Statements of Cash Flows



111111111344 1111

2008 2007 20081111 1111 1111

OPERATING ACTIVITIES:

Loss before income taxes ................................................................ ¥(14,109) ¥(5,839) $(156,422)Adjustments to reconcile loss before income taxes to

net cash provided by (used in) operating activities:Depreciation and amortization .................................................... 124 171 1,378Loss on disposal of fixed assets .................................................. 82 919Loss on impairment of fixed assets ............................................ 645 7,151Net interest revenue .................................................................... (398) (1,886) (4,418)Other-net...................................................................................... (77) (541) (850)Changes in operating assets and liabilities:

Trading securities ...................................................................... 4,590 (38,297) 50,890Derivative product assets and liabilities.................................... 26,031 (12,452) 288,593Other securities.......................................................................... 3,091Cash collateral placed .............................................................. (15,965) (177,000)Cash collateral received ............................................................ 6,754 1,063 74,872

1111 1111 1111

Subtotal .................................................................................. 7,677 (54,690) 85,113Interest income received .......................................................... 3,126 3,697 34,651Interest expense paid ................................................................ (2,562) (1,477) (28,405)Income tax expense received .................................................... 83 725 926

1111 1111 1111

Net cash provided by (used in) operating activities .............. 8,324 (51,745) 92,2851111 1111 1111

INVESTING ACTIVITIES:Purchase of intangible assets.......................................................... (47) (120) (526)Purchase of property and equipment.............................................. (434) (30) (4,805)Net decrease (increase) in deposit placed ...................................... 1,002 (504) 11,106

1111 1111 1111

Net cash provided by (used in) investing activities ................ 521 (654) 5,7751111 1111 1111

FINANCING ACTIVITIES:Proceeds from issuance of notes payable ...................................... 22,610 57,181 250,665Proceeds from borrowings.............................................................. 2,000Repayments of notes payable ........................................................ (24,965) (21,160) (276,771)Repayments of borrowings ............................................................ (5,500) (60,976)Proceeds from new shares issued .................................................. 30,000 20,500 332,594

1111 1111 1111

Net cash provided by financing activities .............................. 22,145 58,521 245,5121111 1111 1111

EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS ................................................................ (4,724) (1,515) (52,384)

1111 1111 1111

NET INCREASE IN CASH AND CASH EQUIVALENTS ............ 26,266 4,607 291,1881111 1111 1111

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR .... 39,590 34,983 438,9191111 1111 1111

CASH AND CASH EQUIVALENTS, END OF YEAR .................. ¥ 65,856 ¥ 39,590 $ 730,1071111 1111 11111111 1111 1111

NON-CASH FINANCING ACTIVITY: Reclassification of deficitto additional paid-in capital .......................................................... ¥ 3,880 $ 43,015


71




Notes to Financial Statements


1. ORGANIZATION

Tokio Marine Financial Solutions Ltd. (formerly First Chicago Tokio Marine Financial Products Ltd.)(the “Company”) was incorporated and registered on December 4, 1997 as an exempted company in theCayman Islands pursuant to the Companies Law (1995 Revision) of the Cayman Islands. The initial capitalpayment was made on December 29, 1997.

The Company was established as a joint venture between Tokio Marine & Nichido Fire Insurance Co.,Ltd. (formerly The Tokio Marine and Fire Insurance Co., Ltd.) (“Tokio Marine & Nichido”) and Bank OneNA Corporation (“Bank One”). The Company’s Tokyo branch was registered as a foreign securities firm onJanuary 28, 1999 pursuant to the Japan Law Concerning Foreign Securities Dealers. The Company’s Tokyobranch conducts the business in accordance with Financial Instruments and Exchange Law and other relevantlaws and regulations in Japan.

In November 2002, Tokio Marine & Nichido resolved the joint venture agreement with Bank One inlight of the maturity of the term of the agreement. Tokio Marine & Nichido purchased Bank One’s interestin the Company on November 22, 2002 and made the Company its wholly owned subsidiary. On the sameday, the Company purchased the stock from Tokio Marine & Nichido and immediately canceled the stock.Consequently, the Company changed its name to Tokio Marine Financial Solutions Ltd. on February 3, 2003.On September 25, 2007, Tokio Marine & Nichido made a capital contribution to the Company of¥20,500,000,000 (420,000 shares). Also, the Company’s issued and outstanding 50,000 shares of $1 eachwere canceled and the new 5,000 shares of ¥1,178 each were issued. The Company’s authorized shares werechanged from 500,000 shares to 1,000,000 shares simultaneously. On December 25, 2008, Tokio Marine &Nichido made a capital contribution to the Company of ¥30,000,000,000 (575,000 shares). On the same day,the Company reclassified its accumulated deficit of ¥3,879,956,366 to additional paid-in capital.

The Company is engaged in structuring and selling derivative financial products to a client base whichconsists primarily of institutions rated investment grade by one or more of the internationally recognizedrating agencies. Typical clients include large or medium sized corporations, financial institutions andsovereign entities.

The Company offers a wide range of derivative products, including interest rate swaps, foreignexchange products and other instruments.

As a wholly owned subsidiary of Tokio Marine & Nichido, the Company is working very closely withits parent in an effort to provide diverse risk solutions to the customers utilizing its state of the art financialtechnology.

2. SIGNIFICANT ACCOUNTING POLICIES

a. Basis of Presentation

(1) The Company’s financial statements have been prepared on the basis of generally acceptedaccounting principles in Japan (“J GAAP”), which are different in certain respects as to theapplication and disclosure requirements of International Financial Reporting Standards.

(2) For the purposes of reporting cash flows, the Company has defined cash equivalents as highlyliquid investments, with original maturities of three months or less.

(3) The preparation of financial statements in conformity with J GAAP requires management tomake estimates and assumptions that affect the amounts reported in the financial statements

72


and accompanying notes, including the determination of fair value of financial instruments.Estimates, by their nature, are based on judgment and available information. Therefore, actualresults could differ materially from those estimates.

The accompanying financial statements for the year ended 31 December 2008 are stated inJapanese Yen. The translation of Japanese Yen amounts into U.S. dollar amounts for the yearended 31 December 2008 is included solely for convenience of readers outside Japan and hasbeen made at the rate of 90.2 Yen to 1$, the appropriate rate of exchange as at 30 December2008. The translation should not be construed as a representation that Japanese Yen amountscould be converted into U.S. dollars at that or any other rate.

b. Foreign Currency Translation – The accounting records of the Company are maintained in Japaneseyen. Assets and liabilities that are denominated in foreign currencies are translated into Japanese yenat the prevailing rate of exchange on the accompanying balance sheet dates with resulting gains andlosses reflected in income. Non-Japanese yen transactions are translated at the rate of exchangeprevailing on the date of the transaction.

c. Securities Transactions – Proprietary securities transactions in regular-way trades are recorded on thetrade date, as if they had settled. Profit and loss arising from all securities transactions entered into forthe account and risk of the Company are recorded on a trade date basis. Other securities are classifiedas available-for-sale securities all of which are not marketable and are carried at cost.

d. Derivative Product Assets and Liabilities – The Company recognizes and measures all derivativefinancial instruments at fair value as either assets or liabilities on the balance sheets. The accountingfor the gains or losses resulting from changes in the value of those derivatives depends on the intendeduse of the derivative and whether it qualifies for hedge accounting. Derivative instruments embeddedin notes payable that meet all of the criteria in “Accounting Standards for Financial Instruments” areseparated from the host contracts and accounted for as derivative instruments pursuant to AccountingStandards for Financial Instruments.

Derivative instruments held for trading purposes

Derivative financial instruments used in trading activities are valued at fair value. Realized andunrealized gains and losses are included in trading revenue.

Purchased options, cap and floor contracts are reported in derivative product assets, and writtenoptions, cap and floor contracts are reported in derivative product liabilities. The fair value amountsrecognized for derivative financial instruments executed with the same counterparty under a legallyenforceable master netting arrangement are reported on a net basis. For other trading derivativefinancial instruments, unrealized gains are reported in derivative product assets and unrealized lossesare reported in derivative product liabilities.

Trading revenue includes profits and losses from trading activities. Valuation adjustments anddeferrals are provided against these values to account for unearned credit spreads, futureadministration costs and other risks. Brokerage and agent fees include trading related expenses andmarketing agent fees.

Derivative instruments held for purposes other than trading

Derivative instruments used in hedging activities are held for the purpose of managing exposures tofluctuations in various types of market risks embedded in notes payable and borrowings. TheCompany issues notes payable and makes borrowings at fixed or floating rates, and enters intocorresponding derivative contracts to hedge the related market risks. Valuation gains or losses onhedging instruments are mainly deferred as components of equity until the gains or losses on theunderlying hedged instruments are realized.

e. Property and Equipment – Property and equipment are stated at cost less accumulated depreciation.Depreciation of property and equipment other than leasehold improvements is computed on a straight-

73


line basis over the estimated useful lives. Salvage value of property and equipment that were acquiredbefore April 1, 2007 is 10% of the purchase cost, and the Company is able to depreciate up to 5% ofthe purchase cost. Due to the tax reform in 2007 fiscal year, salvage cost of property and equipmentthat were acquired on or after April 1, 2007 became zero and the Company is able to depreciate to ¥1.Leasehold improvements are amortized over the lesser of the useful life of the improvement or theterm of the underlying lease. The ranges of estimated useful lives of the assets are as follows:

Leasehold improvements 5 – 15 yearsFurniture and fixtures 5 – 15 yearsOffice equipment 3 – 6 years

f. Intangible Assets – Intangible assets that have finite useful lives, consisting primarily of software forthe trade processing system and the general ledger system, are amortized over their useful lives. TheCompany capitalizes and amortizes certain costs incurred in connection with internal use software.

Software 5 years

g. Long-lived assets – The Company reviews its long-lived assets for impairment whenever events orchanges in circumstance indicate the carrying amount of an asset or asset group may not berecoverable. An impairment loss would be recognized if the carrying amount of an asset or asset groupexceeds the sum of the undiscounted future cash flows expected to result from the continued use andeventual disposition of the asset or asset group. The impairment loss would be measured as theamount by which the carrying amount of the asset exceeds its recoverable amount, which is the higherof the discounted cash flows from the continued use and eventual disposition of the asset or the netselling price at disposition.

h. Liability for Severance Indemnities – Under the retirement allowance plan, certain employees whoseservices with the Company are terminated would usually be entitled to lump-sum severanceindemnities determined by reference to their current basic rate of pay, length of service and conditionsunder which the termination occurs.

At December 31, 2008 and 2007, there were 55 and 53 employees, respectively, entitled to receivesuch lump-sum severance indemnities. Provision for accrued pension and severance costs wereincluded in “employee compensation and benefits” in the financial statements. Accrued liabilities,amounts required to be paid if all employees covered by the plan voluntarily terminated theiremployment as of December 31, were approximately ¥121 million for 2008 and ¥241 million for2007.

i. Income Taxes – The Company computed and recorded income taxes currently receivable based upontaxable income determined in accordance with the applicable tax laws. The Company used the assetand liability approach for recording provisions for income taxes applicable to all revenue and expenseitems included in the statements of operations. A valuation allowance is recognized for any portion ofthe deferred tax assets where it is considered more likely than not that the tax benefit associated withcertain temporary differences will not be realized.

j. Per Share Data – The amount per share of net loss is computed by dividing net loss by the weighted-average number of shares outstanding for the period. The number of outstanding shares as ofDecember 31, 2008 and 2007 were 1,000,000 and 425,000, respectively.

k. Presentation of Equity – On December 9, 2005, the Accounting Standards Board of Japan (“ASBJ”)published a new accounting standard for presentation of equity. Under this accounting standard, anydeferred gain or loss on derivatives accounted for under hedge accounting was presented as acomponent of equity at December 31, 2008 and 2007, respectively.

74


3. TRADING AND OTHER SECURITIES

Trading and other securities as of December 31, 2008 and 2007 were as follows:


2008 200711111 11111

Trading securities:Corporate bonds ...................................................................................................... ¥137,920 ¥177,530Japanese government bonds .................................................................................... 60,473 25,453

11111 11111

Total ........................................................................................................................ ¥198,393 ¥202,983 11111 11111

11111 11111

Other securities – Unlisted stocks .......................................................................... ¥ 5 ¥ 511111 11111

Total ........................................................................................................................ ¥ 5 ¥ 511111 1111111111 11111

All securities other than unlisted stocks are marketable. Other securities consisted of available-for-salesecurities.

4. DERIVATIVE PRODUCT ASSETS AND LIABILITIES AND RELATED RISKS

The gross notional or contract amounts of derivative instruments and the fair values (carrying amount)of the related assets and liabilities as of December 31, 2008 and 2007 were as follows:


20081121111111111111

NotionalAmount Assets Liabilities

11112 11112 11112

Interest rate swaps and forward rate agreements(including caps, floors, swaptions and futures) ............................ ¥4,741,911 ¥94,404 ¥91,942

Cross currency swaps ........................................................................ 1,089,088 23,663 32,519Foreign exchange forward contracts and options .............................. 292,923 13,387 9,149Equity derivatives (including swaps, options and futures)................ 2,670 171 57Credit default swaps .......................................................................... 4,200 126 126Commodity derivatives (including swaps and caps) ........................ 13,383 3,147 5,137Bond derivatives (including options and futures).............................. 15,973 428

11112 11112 11112

Gross up total .................................................................................... ¥6,160,148 135,326 138,9301111211112

Customer netting................................................................................ (57,434) (57,434)11112 11112

Total after customer netting .............................................................. ¥77,892 ¥81,49611112 1111211112 11112

75



20071121111111111111

NotionalAmount Assets Liabilities

11112 11112 11112

Interest rate swaps and forward rate agreements(including caps, floors, swaptions and futures) ............................ ¥6,469,446 ¥67,571 ¥44,158

Cross currency swaps ........................................................................ 1,262,337 11,634 16,357Foreign exchange forward contracts and options .............................. 344,273 8,946 5,990Equity derivatives (including swaps, options and futures)................ 1,958 20 57Credit default swaps .......................................................................... 551 1 1Commodity derivatives (including swaps and caps) ........................ 39,984 17,817 22,328Bond derivatives (including options and futures).............................. 21,961 8 104

11112 11112 11112

Gross up total .................................................................................... ¥8,140,510 105,997 88,9951111211112

Customer netting................................................................................ (49,632) (49,632)11112 11112

Total after customer netting .............................................................. ¥56,365 ¥39,36311112 1111211112 11112

The Company is exposed to market risk, credit risk and cash liquidity risk resulting from its tradingactivities in cash financial instruments and both over-the-counter and exchange traded financial derivativeinstruments.

Market risk is the potential loss the Company may incur as a result of changes in the fair value offinancial instruments it holds on its books.

Credit risk is the potential loss the Company may incur if its counterparties fail to perform pursuantto the terms of their contractual obligations and the value of collateral held, if any, is not adequate to coversuch losses.

Cash liquidity risk is the potential loss the Company may incur as a result of raising cash at shortnotice at a premium to its normal cost of funding.

The Company has implemented operating policies in order to establish limits for and monitor theaforementioned risks. The operating policies are reviewed and approved by the Board of Directors. TheCompany monitors the amount of risk taken daily and performs a comparison versus pre-established limits.The Risk Oversight Department of the Company has a direct reporting line to the Board of Directors.

The Company minimizes market risk by frequently hedging its exposures. The Company’s credit riskpredominantly originates from exposure to publicly rated counterparties. As of December 30, 2008, creditexposures which arise from the derivative counterparties with the credit ratings of Aa3/AA– or better andthose with the credit ratings ranging from A1/A+ to Baa3/BBB– account for 60.0% and 37.9%, respectively.The Company had sufficient cash liquidity available to cover its needs.

5. SECURITIES RECEIVED AS COLLATERAL

The Company received collateral in the form of securities in connection with OTC derivativeinstruments. The fair value of securities received as collateral at December 31, 2008 and 2007, where theCompany was permitted to sell or repledge, was ¥5,019 million and ¥1,931 million, respectively.

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6. FINANCIAL ASSETS PLEDGED AS COLLATERAL


2008 200711111 11111

Corporate bonds .................................................................................................... ¥1,021Equity investments ................................................................................................ 5 ¥5Subordinated loans receivable ................................................................................ 28 8

11111 11111

Total ........................................................................................................................ ¥1,054 ¥1311111 1111111111 11111

The Company pledged collateral in the form of securities and other financial assets in connection withPrivate Finance Initiative (“PFI”) business as a member of the shareholders of a special purpose company(“SPC”) that is to collateralize the SPC’s liquidity against its preferred creditors. In addition, corporate bondsof ¥1,021 million as of December 31, 2008 were pledged as future margin deposits.

7. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of December 31, 2008 and 2007:


2008 200711111 11111

Leasehold improvements ........................................................................................ ¥99Furniture and fixtures .............................................................................................. 95Computer ................................................................................................................ 141Construction in progress.......................................................................................... 13

11111

Total.................................................................................................................... 348Less accumulated depreciation................................................................................ (181)

11111

Total ........................................................................................................................ ¥1671111111111

For the years ended December 31, 2008 and 2007, depreciation expense was ¥55 million and ¥30million, respectively.

The Company reviewed its property and equipment for impairment as of the year ended December31, 2008 and, as a result, recognized an impairment loss of ¥ 462 million as loss on impairment of fixedassets due to a continuous operating loss of the Company and the carrying amount of the relevant propertyand equipment was written down to the recoverable amount of ¥1. The recoverable amount of the Companywas measured at its value in use and the discount rate used for computation of present value of future cashflows was 1.382%.

An impairment loss for the year ended December 31, 2008 consists of the following:


Leasehold improvements .............................................................................................................. ¥254Furniture and fixtures.................................................................................................................... 174Computer ...................................................................................................................................... 34

111112

Total ........................................................................................................................................ ¥462111112111112

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8. INTANGIBLE ASSETS

The following table displays the intangible assets that were subject to amortization at December 31,2008 and 2007:


2008 20071111111111 1111111111

Gross GrossCarrying Accumulated Carrying Accumulated

Amount Amortization Amount Amortization11112 11112 11112 11112

Amortized intangible assets:Software for trade processing system .......................... ¥469 ¥458Software for general ledger system.............................. 84 77Software for risk evaluation system ............................ 243 63Others .......................................................................... 12 8

11112 11112

Total.............................................................................. ¥808 ¥60611112 1111211112 11112

The Company reviewed its intangible assets for impairment as of the year ended December 31, 2008and, as a result, recognized an impairment loss of ¥ 180 million as loss on impairment of fixed assets due toa continuous operating loss of the Company and the carrying amount of the relevant intangible assets waswritten down to the recoverable amount of ¥1. The recoverable amount of the Company was measured at itsvalue in use and the discount rate used for computation of present value of future cash flows was 1.382%.

An impairment loss for the year ended December 31, 2008 consists of the following:


Software for trade processing system .......................................................................................... ¥6Software for risk evaluation system.............................................................................................. 166Others ............................................................................................................................................ 8

111112

Total ........................................................................................................................................ ¥180111112111112

9. INCOME TAXES

Reconciliation between the statutory income tax rate and the effective income tax rate is as follows:

Percentage11111111112

2008 200711111 11111

Statutory tax rate .................................................................................................... 40.7% 40.7%Expenses not deductible for tax purposes .............................................................. (0.0) (0.1)Tax loss carryforwards ............................................................................................ (42.8) (11.9)Valuation allowance ................................................................................................ 2.1 (37.2)Others ...................................................................................................................... (0.0) 0.0

11111 11111

Effective income tax rate ........................................................................................ 0.0 % (8.5)%11111 1111111111 11111

78


The components of deferred tax assets are as follows:


2008 200711111 11111

Deferred tax assets:Disallowed accrued expenses .............................................................................. ¥70 ¥173 Excess provision for retirement allowance .......................................................... 116 98 Excess depreciation.............................................................................................. 5 4 Loss on impairment of fixed assets...................................................................... 262Valuation of financial instruments ...................................................................... 1,423 1,899Deferred hedge losses .......................................................................................... 124Tax loss carryforwards ........................................................................................ 6,732 695Less valuation allowance .................................................................................... (8, 608) (2,993)

11111 11111

Total deferred tax assetsDeferred tax liabilities – Deferred hedge gains ...................................................... (161)

11111 11111

Net deferred tax liabilities ...................................................................................... ¥ (161)11111 1111111111 11111

10. NOTES PAYABLE

The Company has issued notes in the aggregate principal amount of ¥22,610 million during 2008, and¥57,181 million during 2007, under a program for the issuance of debt instruments. Notes with embeddedderivative instruments, such as equity options, credit default swaps or various interest rate swaps arestructured and utilized as an integral part of the Company’s business strategies and activities. The interestrates to be paid, and in some cases the principal to be repaid, are subject to change based on multiple factors.All notes are unsecured.

The following is a summary of the notes and maturities at December 31, 2008 and 2007:


As of December 31, 2008:Equity linked notes, 0.00% to 4.30% (average 1.178%) .................................................... ¥6,500Reverse floater notes, 0.00% to 2.600% (average1.000%).................................................. 26,600CMS floater notes, 0.0940% to 3.026% (average 1.688%) ................................................ 18,740Fixed rate notes, 0.30% to 2.35% (average 1.404%) .......................................................... 32,551Power reverse dual currency notes, 0.00% to 8.00% (average 1.994%) ............................ 29,850Snowball notes, 0.00% to 4.7975% (average1.909%) ........................................................ 15,200FX linked coupon notes, 0.00% to 12.00% (average 1.180%)............................................ 66,500Credit linked notes, 1.4375% to 1.9375% (average 1.602%).............................................. 2,100Other notes .......................................................................................................................... 1,000

111112

Total ........................................................................................................................................ ¥199,041111112111112

As of December 31, 2007:Equity linked notes, 0.00% to 5.00% (average 3.099%) .................................................... ¥4,881Reverse floater notes, 0.00% to 2.6025% (average 0.989%) .............................................. 32,500CMS floater notes, 0.10% to 3.115% (average 1.896%) .................................................... 19,240Fixed rate notes, 0.61% to 2.55% (average 1.146%) .......................................................... 41,144Power reverse dual currency notes, 1.80% to 13.00% (average 5.672%) .......................... 30,450Snowball notes, 0.00% to 5.845% (average 2.894%).......................................................... 17,200FX linked coupon notes, 0.00% to 20.314% (average 7.077%).......................................... 55,020Other notes .......................................................................................................................... 1,000

111112

Total ........................................................................................................................................ ¥201,435111112111112

79


Maturities of notes payable at December 31, 2008 were as follows:


2009 ........................................................................................................................................ ¥2,6002010 ........................................................................................................................................ 3,3742011 ........................................................................................................................................ 13,4812012 ........................................................................................................................................ 3,0002013 ........................................................................................................................................ 10,6752014 and thereafter .................................................................................................................. 165,911

111112

Total ........................................................................................................................................ ¥199,041111112111112

11. LONG-TERM BORROWINGS

Borrowings at December 31, 2008 and 2007 consisted of the following:


2008 200711111 11111

Loans, principally from insurance companies and finance companies,with interest ranging from 0.500% to 3.022% per annum ............................ ¥32,000

Loans, principally from insurance companies and finance companies,with interest ranging from 0.500% to 4.364% per annum ............................ ¥37,500

Maturities of borrowings at December 31, 2008 were as follows:


2010 ........................................................................................................................................ ¥ 1,0002012 ........................................................................................................................................ 5,0002013 ........................................................................................................................................ 5,0002015 ........................................................................................................................................ 5,0002020 ........................................................................................................................................ 11,0002025 ........................................................................................................................................ 5,000

111112

Total ........................................................................................................................................ ¥32,000111112111112

12. RELATED PARTY TRANSACTIONS

In the ordinary course of business, the Company enters into derivative contracts with, and sells tradingsecurities to related parties. All such transactions are conducted under the same terms and conditions astransacted with non-related parties. The notional value of derivatives transacted with related partiesaccounted for approximately 6 % and 7% of the total notional value of contracts outstanding at December31, 2008 and 2007, respectively.

The Company entered into a support agreement dated December 26, 1997 with Tokio Marine &Nichido. Under the support agreement, Tokio Marine & Nichido has covenanted to ensure that the Companyhas a minimum adjusted net worth of $10,000 thousand and to provide liquidity to the Company as neededto meet the Company’s obligations on a timely basis.

The Company also pays related parties for certain services for operations support, research, riskmanagement, etc., and receives from related parties fee income for derivative transactions, etc.

80


As of December 31, 2008 and 2007, such transactions consisted of the following:


2008 200711111 11111

Transactions:Service fee expenses ............................................................................................ ¥ 175 ¥ 166Service fee income .............................................................................................. 27 81

13. COMMITMENTS AND GUARANTEES

Commitments

In connection with lending activities, the Company had commitments for PFI transactions.Contractual amounts of these commitments at December 31, 2008 and 2007 were as follows:


2008 200711111 11111

Loan commitments for PFI transactions ................................................................ ¥ 4,721 ¥ 2,318

In connection with the PFI transactions, the Company had entered into a loan commitment contract,which arises only in case the other lenders’ loan shall not be executed. The contractual amounts of loancommitments at December 31, 2008 and 2007 were ¥11,627 million and ¥27,432 million, respectively.

Guarantees

The Company enters into guarantee contracts to provide default protection for collateral debtobligations and for trusted loans.

The following table sets forth certain information about the Company’s guarantees as of December31, 2008 and 2007:


2008 200711111 11111

Maximum MaximumPayout Payout

11111 11111

Guarantees for collateral debt obligations .............................................................. ¥ 99,014 ¥147,099Guarantees for trusted loans.................................................................................... 1,697 988

Cash collateral or securities collateral is required under certain conditions, if met, for the contracts ofguarantees for collateral debt obligations.

The Company pledged cash collateral of ¥15,253 million for the contracts of guarantees for collateraldebt obligations as of December 31, 2008.

In addition, trading securities of ¥9,986 million were pledged on January 20, 2009 as collateral for thecontracts of guarantees for collateral debt obligations.

Management of the Company has made investigation regarding the possibility of guarantee paymentunder the contracts of guarantees for collateral debt obligations, and believes that the possibility of thepayment is remote.

81


The maximum payout of guarantees by maturity at December 31, 2008 was as follows:


2010- 2012- 2014 and2009 2011 2013 Thereafter Total

1111 1111 1111 1111 1111

Guarantees for collateral debtobligations .......................................... ¥ 8,814 ¥ 90,200 ¥ 99,014

Guarantees for trusted loans .................. ¥ 49 ¥ 334 101 1,213 1,697

82


83


MANAGEMENT OF TOKIO MARINE FINANCIAL SOLUTIONS LTD.

MANAGING BOARD Tokio Marine Financial Solutions, Ltd.

Kyoichi Katsuda Chief Executive Officer (CEO)Masayuki MurakamiJimpei YamaguchiYoshinobu MaeHidenori Tomioka

Mr. Kyoichi Katsuda

As the CEO, Kyoichi Katsuda is responsible for the complete control of the company and for thesupervision of all the departments of the company.

Additional Functions/ commissionership

General Manager of Tokyo Branch

Mr. Masayuki Murakami

Masayuki Murakami is responsible for the overall corporate planning and supervises the CorporatePlanning Department, Human Resources and General Administration Department, Accounting Departmentand Systems Department of the company.

Additional Functions/ commissionership

Deputy Head of Tokyo Branch

Mr. Jimpei Yamaguchi

Jimpei Yamaguchi is the Director of Tokio Marine & Nichido Fire Insurance Co., Ltd. and TokioMarine Holdings, Inc., the General Manager of the Investment Department 1 of Tokio Marine & NichidoFire Insurance Co., Ltd. and the Financial Planning Department of Tokio Marine Holdings, Inc..

Mr. Yoshinobu Mae

Yoshionobu Mae is the General Manager of the Investment Department 1 of Tokio Marine & NichidoFire Insurance Co., Ltd. and the General Counsellor of the Financial Plannning Department of Tokio MarineHoldings, Inc..

Mr. Hidenori Tomioka

Hidenori Tomioka is the Deputy General Manager of the Risk Management Department of TokioMarine Holdings, Inc..

The business address of Messrs. Kyoichi Katsuda and Masayuki Murakami is as follows:Tokio Marine Financial Solutions Ltd.Tokyo Club Building2-6 Kasumigaseki 3-chome, Chiyoda-ku,Tokyo 100-0013Japan

The business address of Messrs. Jimpei Yamaguchi and Yoshinobu Mae is as follows:

Tokio Marine & Nichido Fire Insurance Co., Ltd.6-4 Sanbancho, Chiyoda-ku, Tokyo 102-0075Japan

The business address of Mr. Hidenori Tomioka is as follows:

Tokio Marine & Nichido Fire Insurance Co., Ltd.Tokio Marie & Nichido Fire New Building2-1 Marunouchi 1-chome, Chiyoda-ku, Tokyo 100-8050Japan

No potential conflicts of interest exist between duties to the Issuer of the persons on the ManagingBoards, as listed above, and their private interests or other duties.

84


TOKIO MARINE & NICHIDO FIRE INSURANCE CO., LTD.

History

Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine & Nichido”), as the successor ofThe Tokio Marine and Fire Insurance Company, Limited (“Tokio Marine”) which was originallyincorporated in Japan in 1879, is one of Japan’s oldest and largest non-life insurance companies. It wasincorporated for an unlimited duration as a property and casualty insurer and writes marine, fire and casualty,automobile and allied lines of insurance principally covering risks located in Japan, and hull and cargo risksfor Japanese businesses.

As at 31 March 2009, Tokio Marine & Nichido’s consolidated total assets and net assets amounted toJPY 9,578 billion and JPY 1,419 billion, respectively. These figures have been prepared in accordance withthe generally accepted accounting principles in Japan. The net premiums written by Tokio Marine & Nichidoand its consolidated subsidiaries totaled JPY1,943 billion for the year from 1 April 2008 to 31 March 2009.Tokio Marine & Nichido has a worldwide network in approximately 40 countries/areas to meet itscustomers’ various demands. As at the date hereof, its issued and outstanding shares consist of 1,549,692,481ordinary shares. Its principal place of business and registered head office are at 2-1 Marunouchi 1-chome,Chiyoda-ku, Tokyo 100-8050, Japan.

For the purpose of providing its customers with the best products and services by creating aninsurance group with life and non-life insurance businesses, Tokio Marine formed Millea Holdings, Inc.(“Millea Holdings”) in April 2002 with The Nichido Fire and Marine Insurance Company, Limited.(“Nichido Fire”). On 1 October 2004 Tokio Marine and Nichido Fire merged under the name of TokioMarine & Nichido Fire Insurance Co., Ltd. and commenced operations as a new property and casualtyinsurance company. In addition, to further develop the alliance between Tokio Marine & Nichido and TheNisshin Fire & Marine Insurance Co., Ltd. (“Nisshin Fire”), with which Tokio Marine & Nichido hadmaintained a close relationship, Millea Holdings and Nisshin Fire agreed to integrate management of the twocompanies by way of a stock-for-stock exchange, effective on 30 September 2006, resulting in Nisshin Firebecoming a wholly-owned subsidiary of Millea Holdings. Millea Holdings changed its name to TokioMarine Holdings, Inc. (“TMHD”, and TMHD and its subsidiaries together as the “Tokio Marine Group”) asof 1 July 2008. With regard to the domestic insurance business, Tokio Marine & Nichido has beenimplementing the “Business Renovation Project” involving such activities as streamlining products andback-office work processes and promoting the introduction of “TNet”, a new agency system. With regard tothe overseas insurance business, the Tokio Marine Group completed two large strategic acquisitions in 2008– acquisition of Kiln Group and Philadelphia Consolidated Holding Group.

The activities of Tokio Marine & Nichido are supervised by the Japanese Financial Services Agency.It is regulated by the Insurance Business Law, as well as by cabinet orders and ministerial ordinances passedunder such Law.

Tokio Marine & Nichido has, at the date hereof, been assigned a credit rating of “AA” from Standard& Poor’s Ratings Group and “Aa2” from Moody’s Investors Service Inc. in respect of its claims paymentability and AAA and AA+ from Japan Credit Rating Agency, Ltd. and Rating and Investment Information,Inc in respect of its long term debt.

The English version of the audited consolidated financial statements of Tokio Marine & Nichidoprepared in accordance with Japanese GAAP is an accurate and direct translation from Japanese and isreproduced hereafter from pages 87 to 146.

85


86


87


Financial Statements of Tokio Marine & Nichido and its Consolidated Subsidiaries

Consolidated Balance Sheets

(USD in(Yen in millions except percentages) thousands)

1111111111111114411 1111

As of 31 March, 2009 As of 31 March, 2008As of

111111113 111111113 31 March,Notes No. Amount Ratio Amount Ratio 2009

1111 1111 1111 1111 1111

% %AssetsCash and deposits .................................................. 4 272,867 2.85 545,510 4.56 2,777,838Call loans .............................................................. 322,923 3.37 152,443 1.27 3,287,417Receivables under resale agreement ...................... 302,893 3.16 42,951 0.36 3,083,508Monetary receivables bought ................................ 289,147 3.02 1,511,778 12.63 2,943,571Money trusts .......................................................... 8,688 0.09 39,215 0.33 88,445Securities................................................................ 2,4,6 5,881,610 61.40 7,795,500 65.11 59,875,903Loans...................................................................... 3,7 540,585 5.64 604,779 5.05 5,503,258Tangible fixed assets .............................................. 1 285,575 2.98 290,746 2.43 2,907,208

Land .............................................. 133,538 - - - 1,359,442Buildings........................................ 121,432 - - - 1,236,201Construction in progress................ 10,244 - - - 104,286Other tangible fixed assets ............ 20,359 - - - 207,258

Intangible fixed assets............................................ 422,016 4.41 44,234 0.37 4,296,203Software ........................................ 2,849 - - - 29,003Goodwill ........................................ 286,418 - - - 2,915,789Other intangible fixed assets.......... 132,747 - - - 1,351,390

Other assets ............................................................ 4 1,001,925 10.46 854,256 7.14 10,199,786Deferred tax assets ................................................ 156,755 1.64 3,819 0.03 1,595,796Customers’ liabilities under acceptances and

guarantees .......................................................... 106,125 1.11 97,688 0.82 1,080,373Valuation allowances for bad debts ...................... (12,544) (0,13) (10,217) (0.09) (127,700)

1111 1111 1111 1111 1111

Total assets ............................................................ 9,578,570 100.00 11,972,706 100.00 97,511,6561111 1111 1111 1111 1111

LiabilitiesUnderwriting funds ................................................ 6,431,307 67,14 6,446,692 53.84 65,471,923

Outstanding claims ............................................ 4 1,108,895 - 999,039 - 11,288,761Underwriting reserves........................................ 4 5,322,411 - 5,447,653 - 54,183,152

Short-term corporate bonds .................................. 67,953 0.71 99,965 0.83 691,774Corporate bonds .................................................... 4 299,922 3.13 333,123 2.78 3,053,263Other liabilities ...................................................... 975,533 10.18 2,001,575 16.72 9,931,111

Payable under securities lending transactions .. 114,355 - 1,312,059 - 1,164,156Other liabilities .................................................. 4 861,178 - 689,516 - 8,766,955

Reserve for retirement benefits.............................. 146,584 1.53 137,426 1.15 1,492,253Reserve for retirement benefits for directors

and corporate auditors........................................ 14 0.00 8 0.00 143Reserve for employees’ bonuses............................ 16,753 0.17 21,640 0.18 170,549Reserve for retirement of fixed assets .................. 3,359 0.04 3,773 0.03 34,195Reserve under the special law................................ 53,462 0.56 115,628 0.97 544,253

Reserve for price fluctuation ............................ 53,462 - 115,628 - 544,253Deferred tax liabilities .......................................... 40,769 0.43 324,611 2.71 415,036Negative goodwill .................................................. 16,988 0.18 17,937 0.15 172,941Acceptances and guarantees .................................. 106,125 1.11 97,688 0.82 1,080,373

1111 1111 1111 1111 1111

Total liabilities ...................................................... 8,158,775 85,18 9,600,071 80.18 83,057,8741111 1111 1111 1111 1111

Net assetsShareholder’s equity

Common stock .................................................. 101,994 1.06 101,994 0.85 1,038,318Capital surplus .................................................. 123,521 1.29 123,521 1.03 1,257,467Retained earnings .............................................. 560,912 5.86 603,481 5.04 5,710,190

Total Shareholder’s equity ............................ 786,428 8.21 828,997 6.92 8,005,986Valuation and translation adjustments

Unrealized gains on securities, net of taxes ...... 691,436 7.22 1,528,215 12.76 7,038,949Deferred gains and losses on hedge transactions 17,347 0.18 13,074 0.11 176,596Foreign currency translation adjustments .......... (82,197) (0.86) (8,209) (0.07) (836,781)

Total valuation and translation adjustments .. 626,585 6.54 1,533,080 12.80 6,378,754Minority interest ................................................ 6,782 0.07 10,557 0.09 69,042Total net assets .................................................. 1,419,795 14.82 2,372,634 19.82 14,453,782

1111 1111 1111 1111 1111

Total liabilities and net assets ............................ 9,578,570 100.00 11,972,706 100.00 97,511,6561111 1111 1111 1111 1111

1111 1111 1111 1111 1111

The accompanying notes are an integral part of the financial statements.

88


Consolidated Statements of Income(USD in

(Yen in millions except percentages) thousands)1111111111111114411 1111

As of 31 March, 2009 As of 31 March, 2008As of

111111113 111111113 31 March,Notes No. Amount Ratio Amount Ratio 2009

1111 1111 1111 1111 1111

% %Ordinary income .................................................. 2,569,117 100.00 2,589,588 100.00 26,154,098Underwriting income .......................................... 2,321,561 90.36 2,309,893 89.20 23,633,931

Net premiums written ........................................ 1943,639 - 2,014,105 - 19,786,613Deposit premiums from policyholders .............. 156,983 - 190,715 - 1,598,117Investment income on deposited premiums from

policyholders.................................................. 68,365 - 71,764 - 695,969Life insurance premiums .................................. 37,164 - 33,216 - 378,337Reversal of outstanding claims .......................... 9,883 - - - 100,611Reversal of underwriting reserve ...................... 105,385 - - - 1,072,839Other underwriting income................................ 138 - 92 - 1,405

Investment income .............................................. 220,804 8,59 258,289 9.97 2,247,827Interest and dividends ........................................ 178,466 - 227,593 - 1,816,818Gains on money trusts ...................................... 38 - 517 - 387Gains on trading securities ................................ - - 5,269 - -Gains on sales of securities................................ 73,486 - 57,318 - 748,101Gains on redemption of securities .................... 418 - 2,992 - 4,255Gains on derivatives .......................................... 34,875 - 23,650 - 355,034Other investment income .................................. 1,884 - 12,711 - 19,179Transfer of investment income on deposited

premiums........................................................ (68,365) - (71,764) - (695,969)Other ordinary income........................................ 26,751 1.04 21,406 0.83 272,330

Equity in earnings of affiliates .......................... 1,010 - - - 10,282Other ordinary income ...................................... 25,740 - 21,406 - 262,038

Ordinary expenses .............................................. 2,499,285 97.28 2,376,682 91.78 25,443,195Underwriting expenses ........................................ 1,905,082 74.15 1,954,548 75.48 19,394,095

Net claims paid .................................................. 1,194,699 - 1,137,524 - 12,162,262Loss adjustment expenses.................................. 1 79,237 - 77,113 - 806,648Agency commissions and brokerage ................ 1 348,332 - 338,108 - 3,546,086Maturity refunds to policyholders .................... 253,506 - 272,345 - 2,580,739Dividends to policyholders ................................ 308 - 26 - 3,135Life insurance claims ........................................ 18,142 - 20,398 - 184,689Provision for outstanding claims ...................... - - 44,258 - -Provision for underwriting reserves .................. - - 59,285 - -Other underwriting expenses ............................ 10,855 - 5,486 - 110,506

Investment expenses ............................................ 193,718 7.54 44,853 1.73 1,972,086Losses on money trusts...................................... 2,619 - 4,178 - 26,662Losses on trading securities .............................. 1,133 - - - 11,534Losses on sales of securities .............................. 27,697 - 10,926 - 281,961Impairment losses on securities ........................ 90,887 - 13,730 - 925,247Losses on redemption of securities.................... 8,601 - 822 - 87,560Other investment expenses ................................ 62,779 - 15,196 - 639,102

Underwriting and general administrative expenses 1 377,393 14.69 344,452 13.30 3,841,932Other ordinary expenses .................................... 23,091 0.90 32,827 1.27 235,071

Interest paid........................................................ 10,697 - 17,997 - 108,897Increase in valuation allowances for bad debts .... 3,330 - - - 33,900Losses on bad debts .......................................... 288 - 103 - 2,932Equity in losses of affiliates .............................. 3 - - 3,511 - -Other ordinary expenses .................................... 8,775 - 11,214 - 89,331

Ordinary profit .................................................... 69,831 2.72 212,906 8.22 710,8931111 1111 1111 1111 1111

Extraordinary gains ............................................ 66,691 2.60 29,598 1.14 678,927Gains on sales of fixed assets ............................ 3,283 - 3,034 - 33,422Gains on changes in equity of affiliates ............ - - 5 - -Reversal of reserve under special law .............. 62,165 - - - 632,851

Reversal of reserve for price fluctuation ...... 62,165 - - - 632,851Other extraordinary gains .................................. 2 1,242 - 26,557 - 12,644

Extraordinary losses ............................................ 13,920 0.54 28,068 1.08 141,708Losses on sales of fixed assets .......................... 1,765 - 1,672 - 17,968Impairment losses on fixed assets...................... 3 1,158 - 2,481 - 11,789Reserve under special law ................................ - - 7,930 - -

Reserve for price fluctuation ........................ - - 7,930 - -Losses on deduction of fixed assets .................. - - 9 - -Other extraordinary losses ................................ 4 10,996 - 15,974 - 111,941

1111 1111 1111 1111 1111

Income or losses before income taxes .................. 122,603 4.77 214,435 8.28 1,248,122Income taxes - current .......................................... 28,989 1.13 83,389 3.22 295,114Income taxes - deferred ........................................ 16,404 0.64 (7,912) (0.31) 166,996Total income taxes ................................................ 45,394 1.77 75,477 2.91 462,120Minority interest .................................................... (1,254) (0.05) 1,143 0.04 (12,766)

1111 1111 1111 1111 1111

Net income ............................................................ 78,462 3.05 137,814 5.32 798,7581111 1111 1111 1111 1111

1111 1111 1111 1111 1111


Consolidated Statements of Changes in Shareholder’s Equity(Yen in millions (USD in

(except percentages) thousands)1111111111 11111

For the year endedFor the

1111111111 year ended31 March 31 March 31 March

2009 2008 200911111 11111 11111

Shareholder’s equityCommon stock

Beginning balance .......................................................................... 101,994 101,994 1,038,318Changes during the year

Total changes during the year .................................................... - - -Ending balance .............................................................................. 101,994 101,994 1,038,318

Capital surplusBeginning balance .......................................................................... 123,521 123,521 1,257,467Changes during the year

Total changes during the year .................................................... - - -Ending balance .............................................................................. 123,521 123,521 1,257,467

Retained earningsBeginning balance .......................................................................... 603,481 533,707 6,143,551Changes due to the changes in accounting treatment by

foreign subsidiaries .................................................................... 1,584 - 16,125Changes during the year

Dividends .................................................................................... (126,532) (67,520) (1,288,120)Net income .................................................................................. 78,462 137,814 798,758Changes in the scope of consolidation........................................ 2,589 - 26,357Changes in the scope of equity method ...................................... 1,997 - 20,330Others (Note) .............................................................................. (670) (520) (6,821)Total change during the year ...................................................... (44,153) 69,774 (449,486)

Ending balance .............................................................................. 560,912 603,481 5,710,190Total shareholder’s equity

Beginning balance .......................................................................... 828,997 759,223 8,439,346Changes due to the changes in accounting treatment by foreign

subsidiaries .................................................................................. 1,584 - 16,125Changes during the year

Dividends .................................................................................... (126,532) (67,520) (1,288,120)Net income .................................................................................. 78,462 137,814 798,758Changes in the scope of consolidation........................................ 2,589 - 26,357Changes in the scope of equity method ...................................... 1,997 - 20,330Others (Note) .............................................................................. (670) (520) (6,821)Total changes during the year .................................................... (44,153) 69,774 (449,486)

Ending balance .............................................................................. 786,428 828,997 8,005,98611111 11111 11111

Valuation and translation adjustmentsUnrealized gains on securities, net of taxes

Beginning balance .......................................................................... 1,528,215 2,341,694 15,557,518Changes during the year

Net changes in items other than shareholder’s equity ................ (836,779) (813,478) (8,518,569)Total changes during the year .................................................... (836,779) (813,478) (8,518,569)

Ending balance .............................................................................. 691,436 1,528,215 7,038,949Deferred gains and losses on hedge transactions

Beginning balance .......................................................................... 13,074 9,562 133,096Changes during the year

Net changes in items other than shareholder’s equity ................ 4,273 3,511 43,500Total changes during the year .................................................... 4,273 3,511 43,500

Ending balance .............................................................................. 17,347 13,074 176,596Foreign currency translation adjustments

Beginning balance .......................................................................... (8,209) (1,062) (83,569)Changes during the year

Net changes in items other than shareholder’s equity ................ (73,988) (7,146) (753,212)Total changes during the year .................................................... (73,988) (7,146) (753,212)

Ending balance .............................................................................. (82,197) (8,209) (836,781)Minority interest

Beginning balance .......................................................................... 10,557 9,328 107,472Changes during the year

Net changes in items other than shareholder’s equity ................ (3,775) 1,228 (38,430)Total changes during the year .................................................... (3,775) 1,228 (38,430)

Ending balance .............................................................................. 6,782 10,557 69,042

89


Consolidated Statements of Changes in Shareholder’s Equity (continued)(Yen in millions (USD in

(except percentages) thousands)1111111111 11111


1111111111 year ended31 March, 31 March, 31 March,

2009 2008 200911111 11111 11111

Total net assetsBeginning balance .......................................................................... 2,372,634 3,118,745 24,153,863Changes due to the changes in accounting treatment by foreign

subsidiaries .................................................................................. 1,584 - 16,125Changes during the year

Dividends .................................................................................... (126,532) (67,520) (1,288,120)Net income .................................................................................. 78,462 137,814 798,758Changes in the scope of consolidation........................................ 2,589 - 26,357Changes in the scope of equity method ...................................... 1,997 - 20,330Others (Note) .............................................................................. (670) (520) (6,821)Net changes in items other than shareholder’s equity ................ (910,269) (815,884) (9,266,711)Total changes during the year .................................................... (954,422) (746,110) (9,716,197)

Ending balance .................................................................................. 1,419,795 2,372,634 14,453,782

(Note)

“Others” for the fiscal year ended March 31, 2008 includes valuation adjustments of assets in accordance with accounting standards of foreigncountries where consolidated subsidiaries or equity method affiliates are located.

“Others” for the fiscal year ended March 31, 2009 includes valuation adjustments of assets in accordance with accounting standards of foreigncountries where equity method affiliates are located.


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Consolidated Statements of Cash Flows(USD in

(Yen in millions) thousands)1111111111 11111



2009 2008 200911111 11111 11111

I. Cash flows from operating activities:Income before income taxes .............................................................. 122,603 214,435 1,248,122Depreciation ........................................................................................ 17,560 17,606 178,764Extraordinary depreciation of fixed assets.......................................... - 5,692 -Impairment losses on fixed assets ...................................................... 1,158 2,481 11,789Amortization of goodwill.................................................................... 3,778 509 38,461Amortization of negative goodwill .................................................... (948) (972) (9,651)Increase in outstanding claims ............................................................ 7,631 45,648 77,685(Decrease) increase in underwriting reserves .................................... (105,065) 61,877 (1,069,582)Increase (decrease) in valuation allowances for bad debts ................ 2,759 (3,153) 28,087Increase in reserve for retirement benefits.......................................... 9,430 6,602 95,999Increase in reserve for retirement benefits for directors and

corporate auditors............................................................................ 5 4 51Decrease in reserve for retirement benefits due to transfer to

defined-contribution pension plan .................................................. - (26,151) -(Decrease) increase in reserve for employees’ bonuses...................... (3,689) 154 (37,555)(Decrease) increase in reserve for retirement of fixed assets ............ (414) 3,773 (4,215)(Decrease) increase in reserve for price fluctuation .......................... (62,165) 7,930 (632,851)Interest and dividends ........................................................................ (178,466) (227,593) (1,816,818)Net losses (gains) on securities .......................................................... 63,590 (40,484) 647,358Interest expenses ................................................................................ 10,697 17,997 108,897(Gains) on foreign exchange .............................................................. (12,790) (2,841) (130,205)(Gains) related to tangible fixed assets .............................................. (1,517) (1,352) (15,443)Equity in (earnings) losses of affiliates .............................................. (1,010) 3,511 (10,282)(Increase) in other assets

(other than investing and financing activities) ................................ (90,935) (91,243) (925,736)Decrease in other liabilities

(other than investing and financing activities) ................................ 63,940 60,530 650,921Others .................................................................................................. 45,842 2,325 466,680

Subtotal............................................................................................ (108,008) 57,290 (1,099,542)Interest and dividends ........................................................................ 197,992 221,713 2,015,596Interest paid ........................................................................................ (10,480) (17,314) (106,688)Income taxes paid................................................................................ (95,441) (78,263) (971,607)

Net cash (used in) provided by operating activities........................ (15,937) 183,425 (162,242)11111 11111 11111

II. Cash flows from investing activities:Net (increase) in deposits.................................................................... (210,903) (26,886) (2,147,032)Purchases of monetary receivables bought ........................................ (416,676) (1,119,993) (4,241,841)Proceeds from sales and redemption of monetary receivables

bought.............................................................................................. 717,418 951,241 7,303,451Increase in money trusts...................................................................... (2,000) (810) (20,360)Decrease in money trusts .................................................................... 29,896 40,023 304,347Purchases of securities ........................................................................ (1,837,915) (2,277,136) (18,710,323)Proceeds from sales and redemption of securities.............................. 2,412,273 1,838,563 24,557,396Loans made ........................................................................................ (160,476) (240,127) (1,633,676)Proceeds from collection of loans ...................................................... 218,333 210,114 2,222,671(Increase) decrease in cash received under securities lending

transactions...................................................................................... (1,197,704) 686,840 (12,192,854)Others .................................................................................................. 2,393 (588) 24,361

II (a) Subtotal ............................................................................ (445,360) 61,242 (4,533,849)I, II (a) ...................................................................................... (461,298) 244,667 (4,696,101)

Purchases of tangible fixed assets ...................................................... (19,354) (14,373) (197,027)Proceeds from sales of tangible fixed assets ...................................... 6,286 13,382 63,993Payments related to acquisition of consolidated subsidiaries ............ 3 (467,160) (41,922) (4,755,777)Payments related to capital injection to existing consolidated

subsidiaries ...................................................................................... (57) (135) (580)Net cash (used in) provided by investing activities ........................ (925,647) 18,194 (9,423,262)

11111 11111 11111

91



92

Consolidated Statements of Cash Flows (continued)(USD in

(Yen in millions) thousands)1111111111 11111



2009 2008 200911111 11111 11111

III. Cash flows from financing activities:Proceeds from borrowing.................................................................... 250,000 2,153 2,545,047Repayments of borrowing .................................................................. (5,626) (14) (57,274)Proceeds from issuance of short-term corporate bonds...................... 263,713 451,841 2,684,648Redemption of short-term corporate bonds ........................................ (296,000) (352,000) (3,013,336)Proceeds from issuance of corporate bonds........................................ 22,125 84,380 225,237Redemption of corporate bonds .......................................................... (54,793) (41,791) (557,803)Proceeds from issuance of commercial paper .................................... - 692,989 -Redemption of commercial paper ...................................................... (16,654) (780,355) (169,541)Dividends paid .................................................................................... (126,532) (67,520) (1,288,120)Dividends paid to minority shareholders ............................................ (0) (133) (0)Others .................................................................................................. (2,368) (2,459) (24,107)

Net cash provided by (used in) financing activities........................ 33,863 (12,910) 344,73211111 11111 11111

IV. Effect of exchange rate changes on cash and cash equivalents (44,469) (5,749) (452,703)11111 11111 11111

V. Net (decrease) increase in cash and cash eqivalents .................. (952,191) 182,959 (9,693,485)11111 11111 11111

VI. Cash and cash equivalents at beginning of period .................... 1,521,176 1,338,217 15,485,86011111 11111 11111

VII. Cash and cash equivalents at end of period .............................. 1. 568,985 1,521,176 5,792,37511111 11111 1111111111 11111 11111


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1. Basis of Presenting Consolidated Financial Statements

The accompanying consolidated financial statements have been prepared from the accountsmaintained by Tokio Marine & Nichido Fire Insurance Co., Ltd. (“Tokio Marine & Nichido”) and itsconsolidated subsidiaries in accordance with the Regulations Concerning Terminology, Formats andPreparation Methods of Consolidated Financial Statements (Ministry of Finance Ordinance No. 28, 1976,hereinafter the “Consolidated Statements Regulations”). The consolidated financial statements have beenalso prepared in conformity with the Enforcement Regulations for the Insurance Business Law (Ministry ofFinance Ordinance No. 5, 1996, hereinafter the “Insurance Law Enforcement Regulations”), as stipulatedunder Articles 46 and 68 of the Consolidated Statements Regulations.

In more specific terms, the consolidated financial statements for the previous consolidated fiscal year(April 1, 2007 – March 31, 2008) were prepared in accordance with but prior to the amendment of both theConsolidated Statements Regulations and the Insurance Law Enforcement Regulations. On the other hand,the consolidated financial statements for the consolidated fiscal year under review (April 1, 2008 – March31, 2009) have been prepared in accordance with the amended Consolidated Statements Regulations and theInsurance Law Enforcement Regulations.

The Company and its domestic consolidated subsidiaries maintain their accounts and records inaccordance with the provisions set forth in the Corporate Law of Japan and the Securities and Exchange Lawof Japan, and in conformity with accounting principles generally accepted in Japan, which are different incertain respects as to application and disclosure requirements of International Financial Reporting Standards.

Amounts less than ¥1 million (or ¥1 thousand) have been omitted. As a result, the total shown in theconsolidated financial statements and notes thereto do not necessarily agree with the sum of the individualaccount balances.

2. Certification of Audit

Pursuant to Article 193-2, Paragraph 1 of the Financial Instruments and Exchange Law of Japan,Tokio Marine & Nichido’s consolidated financial statements for the consolidated fiscal year ended March31, 2008 and March 31, 2009 and individual financial statements for the fiscal year ended March 31, 2008and March 31, 2009 have been audited and certified by PricewaterhouseCoopers Aarata.

3. U.S. Dollar Equivalents

The accompanying financial statements are expressed in Yen and, solely for the convenience ofreaders, have been translated into United States dollars at the rate of 98.23 yen = U.S.$1, the appropriateexchange rate prevailing on the Tokyo foreign exchange market as of 31 March 2009. Each amount in U.S.dollars shown in the Consolidated Balance Sheets, Consolidated Statements of Income, ConsolidatedStatements of Changes in Shareholder’s Equity and Consolidated Statements of Cash Flows is calculated bydividing the corresponding amount in yen in millions by 98.23, the resultant figure rounded to U.S. dollarsin thousands, and accordingly, this translation should not be construed as a representation that all theamounts shown could be converted, realized or settled into U.S. dollars at that rate.

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Basis of Presentation and Significant Accounting Policies

(A) For the year ended 31 March 2009

1. Scope of consolidation

(1) Number of consolidated subsidiaries – 46 companies(Name of Company)Philadelphia Consolidated Holding Corp.Philadelphia Indemnity Insurance CompanyTokio Marine Global Ltd.Kiln Group LimitedKiln Underwriting LimitedAsia General Holdings LimitedTokio Marine Insurance Singapore Ltd.TM Asia Life Singapore Ltd.TM Asia Life Malaysia Bhd.Tokio Millennium Re Ltd.Tokio Marine Financial Solutions Ltd.Other 35 companies

Philadelphia Consolidated Holding Corp., Philadelphia Indemnity Insurance Company and 10other companies are included in the consolidation from the fiscal year ended March 31, 2009due to these entities having become subsidiaries of the Company through an acquisition ofshares and for other reasons.

Vetra Finance Corporation (“Vetra”) and one other company are excluded from theconsolidation from the fiscal year ended March 31, 2009 because Vetra ceased to operate itsbond investment business and redeemed the non-collateralized subordinated bonds.

Kiln Ltd and Kiln Reinsurance Ltd are excluded from the consolidation from the fiscal yearended March 31, 2009 because these companies have been dissolved.

Additionally, there were following name changes of subsidiaries during the fiscal year endedMarch 31, 2009. TM Asia Insurance Singapore Ltd. changed its name to Tokio MarineInsurance Singapore as of July 1, 2008, and Kiln (UK) Holdings Limited changed its name toKiln Group Limited as of January 19, 2009.

(2) Names of major non-consolidated subsidiaries

Tokio Marine & Nichido Adjusting Service Co., Ltd. and Tokio Marine Capital, Co. Ltd arenon-consolidated subsidiaries of the Company. Each non-consolidated subsidiary is small inscale in terms of total assets, sales, net income or loss for the period and retained earnings. Assuch non-consolidated subsidiaries are not considered to materially affect any reasonabledetermination as to the Group’s financial condition and results of operations, these companiesare excluded from the consolidation.

2. Application of the equity method

(1) Number of affiliates accounted for by the equity method – 6 companies

(Names of major affiliates accounted for by the equity method)

First Insurance Company of Hawaii, Ltd.

From the fiscal year ended March 31, 2009, IBEX Insurance Services Limited is accounted forby the equity method due to it having become an affiliate of the Company through anacquisition of shares.

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International Marine Insurance Managers SA (Pty) Ltd (“IMIM”) is no longer an affiliateaccounted for by the equity method because the Company increased its equity interest in IMIMand IMIM became a subsidiary of the Company during the fiscal year ended March 31, 2009.

Tianan Insurance Company Limited (“Tianan”) is no longer an affiliate accounted for by theequity method because the Company’s equity interest in Tianan has been diluted as a result ofTianan’s issuance of new shares to third parties during the fiscal year ended March 31, 2009.

(2) The non-consolidated subsidiaries (Tokio Marine & Nichido Adjusting Service Co., Ltd., TokioMarine Capital Co., Ltd., etc.) and other affiliates (Tokio Marine Nichido Atradius CreditManagement Co., Ltd, etc.) have not been accounted for under the equity method because thesecompanies have had a minor effect on the Company’s consolidated net income or loss andretained earnings for the fiscal year ended March 31, 2009.

(3) The Company owns 27.0% of the total voting rights of Japan Earthquake Reinsurance Co., Ltd.However, the Company does not consider Japan Earthquake Reinsurance Co., Ltd. to be itsaffiliate since it believes that it can not exert a significant influence on any policy makingdecisions of Japan Earthquake Reinsurance’s operations given the highly public nature of thecompany.

(4) With regard to any company accounted for by the equity method that has a different closingdate from that of the consolidated financial statements, the financial statements of thatcompany for its fiscal year are used for presentation in the consolidated financial results.

3. Closing date of consolidated subsidiaries

The closing date of the fiscal year for 45 of overseas consolidated subsidiaries is December 31. Sincethe differences in the closing dates do not exceed three months, the financial statements of theconsolidated subsidiaries as of December 31 are used for presentation in the accompanyingconsolidated financial statements. As for any significant transactions taking place during the periodbetween the subsidiaries’ closing dates and the consolidated closing date, necessary adjustments aremade for the purpose of consolidation.

4. Accounting policies

(1) Valuation of securities

a. Trading securities are valued by the mark-to-market method, with the costs of their salesbeing calculated based on the moving-average method.

b. Held-to-maturity debt securities are recorded by using the amortized cost method basedon the moving-average method (straight-line depreciation method).

c. Other securities with fair value are recorded by the mark-to-market method based uponthe market price on the closing date. The total amount of unrealized gains/losses onother securities is included in net assets, net income taxes and costs of sales sold arecalculated using the moving-average method.

d. Other securities with no fair value are either stated at cost or amortized cost under thestraight-line method, cost being determined by the moving average-method.

e. Investments in non-consolidated subsidiaries and affiliates that are not subject to theequity method are stated at cost determined by the moving-average method.

f. Securities held in individually managed money trusts that are mainly invested insecurities for trading are accounted for under the mark-to-market method.

(2) Valuation of derivative financial instruments

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Derivative financial instruments are accounted for by the mark-to-market method.

(3) Depreciation method of tangible fixed assets

a. Tangible fixed assets

Depreciation of tangible fixed assets owned by the Company and its domesticconsolidated subsidiaries is computed using the declining balance method.

However, depreciation of buildings (excluding auxiliary facilities attached to suchbuildings, etc.) that were acquired on or after April 1, 1998 is computed using thestraight-line method.

b. Intangible fixed assets

Depreciation of intangible fixed assets procured through acquisitions of overseassubsidiaries is recorded over the period of time for which the Company expects suchsubsidiaries to contribute to the Company, and in accordance with the form of suchcontribution.

(4) Reserves

a. Reserve for bad debts

In order to provide reserves for losses from bad debts, a general allowance is madepursuant to the rules of asset self-assessment and the rules of asset write-off. Allowancesare made by domestic consolidated insurance subsidiaries as follows:

For claims to any debtor who has legally, or practically, become insolvent (due tobankruptcy, special liquidation or suspension of transactions with banks based on therules governing clearing houses, etc.) and for receivables from any debtor who hassubstantially become insolvent, reserves are provided based on the amount of any suchclaim minus the amount expected to be collectible calculated based on the disposal ofcollateral or execution of guarantees.

For claims to any debtor who is likely to become insolvent in the near future, reservesare provided based on the overall solvency assessment of the relevant debtor, the netamount of such claims considered to be collectible through the disposal of collateral orexecution of guarantee is deducted from such claims.

For claims other than those described above, the amount of claims is multiplied by thedefault rate, which is computed based on historical loan loss experience in certainprevious periods, and is included in the accompanying consolidated financialstatements.

For specified overseas claims, any estimated losses arising from political or economicsituations in the relevant countries are accounted for as reserves for specified overseasclaims in the accompanying consolidated financial statements.

In addition, all claims are assessed by the asset accounting department and the assetmanagement department in accordance with the rules for self-assessment of assetquality. Subsequently, the asset auditing departments, which are independent from otherasset-related departments, conduct audits of the assessment results of the other asset-related departments. Reserves for bad debts are accounted for based on such assessmentresults as stated above.

b. Reserve for retirement benefits

To provide for employees’ retirement benefits, the Company and its domesticconsolidated subsidiaries have recorded the amount expected to be incurred at the end

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of the fiscal year ended March 31, 2009 based on the projected retirement benefitobligations and related pension assets at the end of the fiscal year ended March 31, 2009.

Prior service costs are charged to expenses in each subsequent consolidated fiscal yearby using the straight-line method with costs based on a certain term (fourteen years) thatis based on the average remaining service years of the employees when costs wereincurred.

Actuarial differences are charged to expenses in the subsequent consolidated fiscal yearby using the straight-line method based on a certain term (fourteen years) that is basedon the average remaining service years of the employees when amounts were incurred.

c. Reserve for retirement benefits for directors and corporate auditors

Some domestic consolidated subsidiaries set aside a reserve for retirement benefits fortheir directors and corporate auditors as of the end of the fiscal year ended March 31,2009, in accordance with their internal remuneration regulations.

d. Reserve for employees’ bonuses

To provide for payment of bonuses to employees, the Company and its consolidateddomestic subsidiaries maintain reserves for employees’ bonuses based on the expectedamount to be paid.

e. Reserve for retirement of fixed assets

To provide for payment of expenses related to dismantling a building, the Companyprovided a reserve for retirement of fixed assets based on the projected amount to bepaid for dismantling the building.

f. Reserve for price fluctuation

Domestic consolidated insurance subsidiaries maintain reserves under Article 115 of theInsurance Business Law in order to provide for possible losses or damages arising fromprice fluctuation of stock, etc.

(5) Consumption tax

For the Company and its domestic consolidated subsidiaries, consumption tax is accounted forby the tax-excluded method. However, underwriting and general administrative costs incurredby domestic consolidated insurance subsidiaries are accounted for by the tax-included method.In addition, any non-deductible consumption taxes, in respect of assets, are included in otherassets (as suspense payments) and are amortized over five years using the straight-line method.

(6) Lease transactions

Among the transactions of ownership non-transferable finance lease, the transactions withlease periods commencing prior to April 1, 2008 are accounted under the accounting policyapplied to normal lease transactions.

(7) Hedge accounting

a. Interest rate

To mitigate interest rate fluctuation risks associated with long-term insurance policies,the Company implemented an Asset Liability Management framework designed tomanage such risks by evaluating and analyzing financial assets and insurance liabilitiessimultaneously.

As for some of interest rate swap transactions that are utilized to manage such risks, theCompany has applied deferred hedge treatment and evaluated hedge effectiveness based

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upon the Industry Audit Committee Report No.26, “Accounting and AuditingTreatments related to Adoption of Accounting for Financial Instruments in the InsuranceIndustry” (issued by the Japanese Institute of Certified Public Accountant (“JICPA”), onSeptember 3, 2002 “Report No. 26”).

Hedge effectiveness is evaluated by examining the interest rate conditions which affectthe calculation of a theoretical value of both the hedged items and the hedginginstruments. As for any deferred hedge gains based on the Industry Audit Committee’sReport No.16, “Accounting and Auditing Treatments related to Adoption of Accountingfor Financial Instruments in the Insurance Industry” (issued by the JICPA, March 31,2000) prior to the application of Report No. 26, the Company has amortized suchdeferred hedge gains as of the end of March 2003, over the remaining period of hedgingtools (1-17 years) using the straight-line method.

The amount of deferred hedge gains under this transitional treatment as of March 31,2009 is 33,087 million yen and the amount allocated to gains or losses for the fiscal yearended March 31, 2009 is 7,294 million yen.

In addition, the Company applies deferred hedge accounting for interest rate swaptransactions which are used to hedge the interest rate risk related to corporate bondsissued by the Company. Hedge effectiveness is not evaluated, since the critical terms ofhedged terms and hedging instruments are identical and thus believed to be highly hedgeeffective.

b. Foreign exchange

With regard to some currency swap and forward contract transactions, which are utilizedto reduce the future foreign exchange risk associated with assets denominated in foreigncurrencies, the Company applies deferred hedge accounting and/or fair value hedgeaccounting. The effectiveness of these hedging treatments is evaluated by assessing theprice fluctuation of both hedging instruments and hedged items. However, hedgeeffectiveness is not evaluated for hedging treatments that are believed to be highlyeffective, such as in cases where hedging instruments and hedged items are identical.

5. Valuation of assets and liabilities of consolidated subsidiaries

The full valuation method is adopted in valuing assets and liabilities of consolidated subsidiaries atthe initial consolidation date.

6. Amortization of goodwill and negative goodwill

Negative goodwill recognized as a liability on the consolidated balance sheets is amortized over 20years using the straight-line method.

Goodwill recognized as an asset on the consolidated balance sheets is amortized in the followingmanner. The goodwill in connection with Philadelphia Consolidated Holding Corp., TM Asia LifeMalaysia Bhd and Kiln Group Limited is amortized over 20 years, 15 years and 10 years, respectively,using the straight-line method. Other goodwill and negative goodwill in small amounts are amortizedat one time.

7. Scope of cash and cash equivalents for consolidated statements of cash flows

Cash and cash equivalents for consolidated statements of cash flows consist of cash on-hand, demanddeposits and short-term investments with original maturities or redemption of 3 months or less at thedate of acquisition.

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(B) For the year ended 31 March 2008

1. Scope of consolidation

(1) Number of consolidated subsidiaries – 38 companies(Name of Company)Tokio Marine Global Ltd.Tokio Marine Europe Insurance Limited Kiln Ltd.Kiln (UK) Holdings LimitedKiln Reinsurance Ltd.Kiln Underwriting LimitedAsia General Holdings LimitedTM Asia Insurance Singapore Ltd.TM Asia Life Singapore Ltd.TM Asia Life Malaysia Bhd.Tokio Millennium Re Ltd.Tokio Marine Financial Solutions Ltd.Vetra Finance CorporationOther 25 companies

Kiln Ltd, Kiln (UK) Holdings Limited, Kiln Reinsurance Ltd, Kiln Underwriting Limited and20 other companies are included in the consolidation from the fiscal year ended March 31,2008 due to these entities having become subsidiaries through an acquisition of shares duringthe fiscal year ended March 31, 2008. In addition, Vetra Finance Inc. was included in the scopeof consolidation during the period due to increase in importance.

(2) Names of major non-consolidated subsidiaries

Tokio Marine & Nichido Adjusting Service Co., Ltd. and Tokio Marine Management, Inc. arenon-consolidated subsidiaries of the Company. Each non-consolidated subsidiary is small inscale in terms of total assets, sales, net income or loss for the period and retained earnings. Assuch non-consolidated subsidiaries are not considered to materially affect any reasonabledetermination as to the Group’s financial condition and results of operations, these companiesare excluded from the consolidation.

2. Application of the equity method

(1) Number of equity method-accounted affiliates – 7 companies(Names of major equity method-accounted affiliates)Tianan Insurance Company Limited

International Marine Insurance Managers SA (Pty) Ltd. and other 4 companies are accountedfor by the equity method from the fiscal year ended March 31, 2008 due to these entities havingbecome affiliates through an acquisition of shares during the fiscal year ended March 31, 2008.

(2) The non-consolidated subsidiaries (Tokio Marine & Nichido Adjusting Service Co., Ltd., TokioMarine Management, Inc. etc.) and other affiliates (Japan Real Estate Asset Management Co.,Ltd., etc.), which are not subject to the equity method, have not been accounted for under theequity method because these companies have had a minor effect on the Company’sconsolidated net income or loss and retained earnings for the fiscal year ended March 31, 2008.

(3) The Company owns 27.0% of the total voting rights of Japan Earthquake Reinsurance Co., Ltd.However, the Company does not consider Japan Earthquake Reinsurance Co., Ltd. to be itsaffiliate since it believes that it can not exert a significant influence on any policy makingdecisions of Japan Earthquake Reinsurance’s operations given the highly public nature of thecompany.

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(4) With regard to any company accounted for by the equity method that has a different closingdate from that of the consolidated financial statements, the financial statements of thatcompany for its fiscal year are used for presentation in the consolidated financial results.

3. Closing date of consolidated subsidiaries

The closing date of the fiscal year for 35 of overseas consolidated subsidiaries is December 31. Theclosing date of the fiscal year for two of the overseas consolidated subsidiaries is January 31. Sincethe differences in the closing dates do not exceed three months, the financial statements of theconsolidated subsidiaries as of December 31 and January 31, respectively, are used for presentationin the accompanying consolidated financial statements. As for any significant transactions takingplace during the period between the subsidiaries’ closing dates and the consolidated closing date,necessary adjustments are made for the purpose of consolidation.

4. Accounting policies

(1) Valuation of securities

a. Trading securities are valued by the mark-to-market method, with the costs of their salesbeing calculated based on the moving-average method.

b. Held-to-maturity debt securities are recorded by using the amortized cost method basedon the moving-average method (straight-line depreciation method).

c. Other securities with fair value are recorded by the mark-to-market method based uponthe market price on the closing date. The total amount of unrealized gains/losses onother securities is included in net assets, net income taxes and costs of sales sold arecalculated using the moving-average method.

d. Other securities with no fair value are either stated at cost or amortized cost under thestraight-line method, cost being determined by the moving average method.

e. Investments in non-consolidated subsidiaries and affiliates that are not subject to theequity method are stated at cost determined by the moving-average method.

f. Securities held in individually managed money trusts that are mainly invested insecurities for trading are accounted for under the mark-to-market method.

(2) Valuation of derivative financial instruments

Derivative financial instruments are accounted for by the mark-to-market method.

(3) Depreciation method of tangible fixed assets

Depreciation of tangible fixed assets owned by the Company and its domestic consolidatedsubsidiaries is computed using the declining balance method.

However, depreciation of buildings (excluding auxiliary facilities attached to such buildings,etc.) that were acquired on or after April 1, 1998 is computed using the straight-line method.

(Change in accounting policies)

For the fiscal year ended March 31, 2008, the Company and its domestic consolidatedsubsidiaries have adopted a depreciation method for tangible fixed assets acquired on or afterApril 1, 2007, in accordance with the amended Corporate Tax Law of Japan. As a result, incomparison with the previous method, ordinary gains and income before income taxes for thefiscal year ended March 31, 2008, decreased in the amount of 377 million yen respectively.

(Additional Information)

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For the fiscal year ended March 31, 2008, the Company and its domestic consolidatedsubsidiaries have adopted a new depreciation method for tangible fixed assets acquired on orbefore March 31, 2007, which is defined under the amended Corporate Tax Law of Japan.Under the new depreciation method, the difference between the amount equivalent to 5% of theacquisition costs and the residual value of an applicable asset is depreciated using the straight-line method over the five years following the fiscal year in which the asset has been depreciatedto reach the 5% value. Such depreciation is allocated to “Loss adjustment expenses” and“Underwriting and general administrative expenses” on the consolidated statements of income.Also under the new depreciation method, the Company’s ordinary income and income beforeincome taxes both decreased by 640 million yen compared with those under the previousdepreciation method.

The Company recognized an extraordinary depreciation by changing the useful life andresidual value of its buildings, which became inadequate due to a probability of a newrebuilding plan. Increase of accumulated depreciation due to this change, which amounted to5,692 million yen, is included in “Other extraordinary expenses”. As a result, income beforeincome taxes decreased by the same amount compared to the amount before the change.

(4) Reserves

a. Reserve for bad debts

In order to provide reserves for losses from bad debts, a general allowance is madepursuant to the rules of asset self-assessment and the rules of asset write-off. Allowancesare made by domestic consolidated insurance subsidiaries as follows:

For claims to any debtor who has legally, or practically, become insolvent (due tobankruptcy, special liquidation or suspension of transactions with banks based on therules governing clearing houses, etc.) and for receivables from any debtor who hassubstantially become insolvent, reserves are provided based on the amount of any suchclaim minus the amount expected to be collectible calculated based on the disposal ofcollateral or execution of guarantees.

For claims to any debtor who is likely to become insolvent in the near future, reservesare provided based on the overall solvency assessment of the relevant debtor, the netamount of such claims considered to be collectible through the disposal of collateral orexecution of guarantee is deducted from such claims.

For claims other than those described above, the amount of claims is multiplied by thedefault rate, which is computed based on historical loan loss experience in certainprevious periods, and is included in the accompanying consolidated financialstatements.

For specified overseas claims, any estimated losses arising from political or economicsituations in the relevant countries are accounted for as reserves for specified overseasclaims in the accompanying consolidated financial statements.

In addition, all claims are assessed by the asset accounting department and the assetmanagement department in accordance with the rules for self-assessment of assetquality. Subsequently, the asset auditing departments, which are independent from otherasset-related departments, conduct audits of the assessment results of the other asset-related departments. Reserves for bad debts are accounted for based on such assessmentresults as stated above.

b. Reserve for retirement benefits

To provide for employees’ retirement benefits, the Company and its domesticconsolidated subsidiaries have recorded the amount expected to be incurred at the end

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of the fiscal year ended March 31, 2008 based on the projected retirement benefitobligations and related pension assets at the end of the fiscal year ended March 31, 2008.

Prior service costs are charged to expenses in each subsequent consolidated fiscal yearby using the straight-line method with costs based on a certain term that is based on theaverage remaining service years of the employees when costs were incurred.

Actuarial differences are charged to expenses in the subsequent consolidated fiscal yearby using the straight-line method based on a certain term that is based on the averageremaining service years of the employees when amounts were incurred.


Pursuant to the Defined Contribution Pension Law of Japan, the Company transferred aportion of its corporate pension fund to a defined contribution pension plan as of July 2,2007, in accordance with “Accounting Standard for Transfer between RetirementBenefit Plans”(Accounting Standards Board of Japan, hereinafter “ASBJ”, GuidanceNo.1. January 31, 2002) . This resulted in an extraordinary gain amounting to 26,151million yen for the fiscal year ended March 31, 2008.

c. Reserve for retirement benefits for directors and corporate auditors

Some domestic consolidated subsidiaries set aside a reserve for retirement benefits fortheir directors and corporate auditors as of the end of the fiscal year ended March 31,2008, in accordance with their internal remuneration regulations.

d. Reserve for employees’ bonuses

To provide for payment of bonuses to employees, the Company and its consolidateddomestic subsidiaries maintain reserves for employees’ bonuses based on the expectedamount to be paid.

e. Reserve for retirement of fixed assets

To provide for payment of expenses related to dismantling a building, the Companyprovided a reserve for retirement of fixed assets based on the projected amount to bepaid for dismantling the building.

f. Reserve for price fluctuation

Domestic consolidated insurance subsidiaries maintain reserves under Article 115 of theInsurance Business Law in order to provide for possible losses or damages arising fromprice fluctuation of stock, etc.

(5) Consumption tax

For the Company and its domestic consolidated subsidiaries, consumption tax is accounted forby the tax-excluded method. However, underwriting and general administrative costs incurredby domestic consolidated insurance subsidiaries are accounted for by the tax-included method.

In addition, any non-deductible consumption taxes, in respect of assets, are included in otherassets (as suspense payments) and are amortized over five years using the straight-line method.

(6) Lease transactions

The Company and its domestic consolidated subsidiaries account for finance lease transactions,other than those that are deemed to transfer the ownership of the leased properties to lesseesunder a method similar to that applicable to ordinary operating leases.

(7) Hedge accounting

102


a. Interest rate

To mitigate interest rate fluctuation risks associated with long-term insurance policies,the Company implements the Asset Liability Management designed to manage suchrisks by evaluating and analyzing financial assets and insurance liabilitiessimultaneously.

As for some of interest rate swap transactions that are utilized to manage such risks, theCompany has applied deferred hedge treatment and evaluated hedge effectiveness basedupon the Industry Audit Committee Report No.26, “Accounting and AuditingTreatments related to Adoption of Accounting for Financial Instruments in the InsuranceIndustry” (issued by the Japanese Institute of Certified Public Accountant (“JICPA”), onSeptember 3, 2002 “Report No. 26”).

Hedge effectiveness is evaluated by examining the interest rate conditions which affectthe calculation of a theoretical value of both the hedged items and the hedginginstruments. As for any deferred hedge gains based on the Industry Audit Committee’sReport No.16, “Accounting and Auditing Treatments related to Adoption of Accountingfor Financial Instruments in the Insurance Industry” (issued by the JICPA, March 31,2000) prior to the application of Report No. 26, the Company has amortized suchdeferred hedge gains as of the end of March 2003, over the remaining period of hedgingtools (1-17 years) using the straight-line method.

The amount of deferred hedge gains under this transitional treatment as of March 31,2008 is 40,382 million yen and the amount allocated to gains or losses for the fiscal yearended March 31, 2008 is 7,489 million yen.

In addition, the Company applies deferred hedge accounting for interest rate swaptransactions which are used to hedge the interest rate risk related to corporate bondsissued by the Company. Hedge effectiveness is not evaluated, since the critical terms ofhedged terms and hedging instruments are identical and thus believed to be highly hedgeeffective.

b. Foreign exchange

With regard to some currency swap and forward contract transactions, which are utilizedto reduce the future foreign exchange risk associated with assets denominated in foreigncurrencies, the Company applies deferred hedge accounting and/or fair value hedgeaccounting and/or matching treatment. As for deferred hedge accounting and fair valuehedge accounting, hedge effectiveness is not evaluated, since critical terms of hedgeditems and hedging instruments are identical and thus believed to be highly hedgeeffective.

(8) Accounting Standards of overseas subsidiaries

The Company complies with accounting standards of the region or country in which therelevant consolidated subsidiaries are located.

5. Valuation of assets and liabilities of consolidated subsidiaries

The full valuation method is adopted in valuing assets and liabilities of consolidated subsidiaries atthe initial consolidation date.

6. Amortization of goodwill and negative goodwill

Negative goodwill recognized as a liability on the consolidated balance sheets is amortized over 20years using the straight-line method.

103


Goodwill recognized as an asset on the consolidated balance sheets is amortized in the followingmanner. As for the goodwill in connection with TM Asia Life Malaysia Bhd., the goodwill isamortized over 15 years using the straight-line method. As for the goodwill in connection with KilnLtd, the goodwill is amortized over 10 years using the straight-line method. Other goodwill andnegative goodwill in small amounts are amortized at one time.

7. Scope of cash and cash equivalents for consolidated statements of cash flows

Cash and cash equivalents for consolidated statements of cash flows consist of cash on-hand, demanddeposits and short-term investments with original maturities or redemption of 3 months or less at thedate of acquisition.

Changes in the basis of presenting consolidated financial statements


Application of “Practical Solution on Unification of Accounting Policies Applied to ForeignSubsidiaries for Consolidated Financial Statements”

The Company has adopted “Practical Solution on Unification of Accounting Policies Applied toForeign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No.18, May 17, 2006) for the fiscal year ended March 31, 2009 and implemented adjustments requiredfor the consolidated financial reporting. As a result, for the fiscal year ended March 31, 2009, ordinaryprofit and net income before income taxes increased by, 4,423 million yen, respectively. The impactof the above change on the Company’s segment information is detailed in “Segment information”section.

Accounting policies applied to lease transactions

The transactions of ownership non-transferable finance lease were accounted under the accountingpolicy similar to that applicable to lease transaction. However, from the fiscal year ended March 31,2009, the Company has adopted “Accounting Standard for Lease Transactions” (ASBJ Statement No.13, ASBJ 1st Division, June 17, 1993, revised as of March 30, 2007) and “Guidance on AccountingStandard for Lease Transactions” (ASBJ, Guidance No. 16, The Japanese Institute of Certified PublicAccountants, Accounting Practice Committee, January 18, 1994, revised as of March 30, 2007).Accordingly, the transactions of owner ship non-transferable lease with lease periods commencingprior to April 1, 2008 are accounted under the accounting policy applied to normal sales transactions.The impact of the changes described above on ordinary profit and net income before income taxes forthe fiscal year ended March 31, 2009 is considered immaterial.


Not applicable

Change to Basis of Presentation


Consolidated balance sheets

From the fiscal year ended March 31, 2009, in accordance with the amendments to the EnforcementRegulations of Insurance Business Law of Japan, it is required to present “Land”, “Buildings”,“Construction in progress” and “Other tangible fixed assets” in the breakdown of “Tangible fixedassets”, and “Software”, “Goodwill” and “Other intangible fixed assets” in the breakdown of“Intangible fixed assets”.

The breakdown of tangible fixed assets and intangible fixed assets for the fiscal year ended March 31,2009 was as follows:

104


Land: 138,312 million yen, Buildings: 128,716 million yen, Construction in progress: 2,629 millionyen, Other tangible fixed assets: 21,088 million yen, Software: 1,638 million yen, Goodwill: 36,733million yen and Other intangible fixed assets: 5,861 million yen.


Consolidated balance sheets

In accordance with the amendment of the Enforcement Regulations of the Insurance Business Law ofJapan, the reserve for retirement benefits for directors and corporate auditors that was included in“reserve for retirement benefits” as of the end of the year ended March 31, 2007 is presented as“reserve for retirement benefits for directors and corporate auditors” as of the end of the year endedMarch 31, 2008. The amount of the reserve for retirement benefits for directors and corporate auditorsincluded in “reserve for retirement benefits” as of the end of the year ended March 31, 2007 was 4million yen.

Consolidated statements of cash flows

In accordance with the revision of the Enforcement Regulations of the Insurance Business Law ofJapan, the increase in reserve for retirement benefits for directors and corporate auditors that wasincluded in “Increase in reserve for retirement benefits” for the year ended March 31, 2007 ispresented as “Increase in reserve for retirement benefits for directors and corporate auditors” for theyear ended March 31, 2008.

105


NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Notes to Consolidated Balance Sheets

(A) As of March 31, 2009

1. Accumulated depreciation of tangible fixed assets is 334,673 million yen and advanced depreciationof such assets is 18,358 million yen.

2. Securities of non-consolidated subsidiaries and affiliates, etc. are provided as follows:

(Yen inmillions)

11112

Securities (equity) .............................................................................................................. 37,181Securities (partnership) ...................................................................................................... 27,670

3. Of loans, the total amount of loans to borrowers in bankruptcy, past due loans, loans contractually pastdue for three months or more and restructured loans is 6,207 million yen. The breakdown is as setforth below.

(1) The amount of loans to borrowers in bankruptcy is 603 million yen.

Loans that are past due for a certain period, or for other reasons, are generally placed on non-accrual status when substantial doubt is considered to exist as to the ultimate collectibilityeither of principal or interest (“Non-accrual states loans”). However, any part of bad debtwritten-off is excluded. Loans to borrowers in bankruptcy represent non-accrual loans after apartial charge-off of claims deemed uncollectible, which are defined in Article 96, paragraph1, subparagraph 3 (a) to (e) (maximum amount transferable to reserve for bad debts) andsubparagraph 4 of the Enforcement Ordinance of the Corporation Tax Law (Ordinance No. 97,1965).

(2) The amount of past due loans is 4,555 million yen.

Past due loans are non-accrual status loans, other than loans to borrowers in legal bankruptcyand loans on which interest payments are deferred in order to assist business restructuring orfinancial recovery of the borrowers.

(3) The amount of loans contractually past due for three months or more is 107 million yen. Loanscontractually past due for three months or more are defined as loans on which any principal orinterests payments are delayed for three months or more from the date following the due date.Loans classified as loans to borrowers in bankruptcy and past due loans are excluded.

(4) The amount of restructured loans is 941 million yen.

Restructured loans are loans on which concessions (e.g. reduction of the stated interest rate,deferral of interest payment, extension of the maturity date, forgiveness of debt) are granted toborrowers in financial difficulties to assist them in their corporate restructuring or financialrecovery by improving their ability to repay creditors. Restructured loans do not include loansclassified as loans to borrowers in bankruptcy, past due loans or loans past due for three monthsor more.

4. The value of assets pledged as collateral totals 328,937 million yen in securities and 8,582 million yenin deposits. Among those assets, securities pledged for margin under futures tradings are 35,295million yen, and securities pledged for the gross-settlement system of the Bank of Japan currentaccount and Japanese government bond settlement are 136,145 million yen. Collateralized debtobligations are held to the value of 65,233 million yen in outstanding claims, 51,724 million yen inunderwriting reserve and 58,312 million yen in other debts (e.g. overseas reinsurance payables).

5. Securities received from derivative transactions have a market value of 28,197 million yen.

106


6. Securities include securities lent under loan agreements of 114,791 million yen.

7. The outstanding balance of undrawn committed loans is as follows:

(Yen inmillions)

11112

Total loan commitments.................................................................................................... 100,627Balance of drawn committed loans .................................................................................. 15,594

11112

Undrawn loan commitments ............................................................................................ 85,0331111211112

8. Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The balance of theguarantee to its subsidiaries as of March 31, 2009 is as follows:

(Yen inmillions)

11112

TNUS Insurance Company ................................................................................................ 22Tokio Marine Compania de Seguros, S.A. de C.V. .......................................................... 4,880Tokio Marine Pacific Insurance Limited............................................................................ 1,876The Tokio Marine & Nichido Fire Insurance Company (China) Limited ........................ 6,088

11112

Total.................................................................................................................................... 12,8681111211112

(B) As of March 31, 2008

1. Accumulated depreciation of tangible fixed assets is 328,201 million yen and advanced depreciationof such assets is 18,939 million yen. The advanced depreciation of 9 million yen was deducted fromthe acquisition costs for the tangible fixed assets acquired using government and other subsidiesduring the year ended March 31, 2008.

2. Securities of non-consolidated subsidiaries and affiliates, etc. are provided as follows:

(Yen inmillions)

11112

Securities (equity) .............................................................................................................. 43,894Securities (partnership) ...................................................................................................... 30,400

3. Of loans, the total amount of loans to borrowers in bankruptcy, past due loans, loans contractually pastdue for three months or more and restructured loans is 6,735 million yen. The breakdown is as setforth below.

(1) The amount of loans to borrowers in bankruptcy is 200 million yen.

Loans that are past due for a certain period, or for other reasons, are generally placed on non-accrual status when substantial doubt is considered to exist as to the ultimate collectibilityeither of principal or interest (“Non-accrual states loans”). However, any part of bad debtwritten-off is excluded. Loans to borrowers in bankruptcy represent non-accrual loans after apartial charge-off of claims deemed uncollectible, which are defined in Article 96, paragraph1, subparagraph 3 (a) to (e) and subparagraph 4 of the Enforcement Ordinance of theCorporation Tax Law (Ordinance No. 97, 1965).

(2) The amount of past due loans is 5,216 million yen.

Past due loans are non-accrual status loans, other than loans to borrowers in legal bankruptcyand loans on which interest payments are deferred in order to assist business restructuring orfinancial recovery of the borrowers.

(3) There are no loans contractually past due for three months or more.

107


Loans contractually past due for three months or more are defined as loans on which anyprincipal or interests payments are delayed for three months or more from the date followingthe due date. Loans classified as loans to borrowers in bankruptcy and past due loans areexcluded.

(4) The amount of restructured loans is 1,317 million yen.

Restructured loans are loans on which concessions (e.g. reduction of the stated interest rate,deferral of interest payment, extension of the maturity date, forgiveness of debt) are granted toborrowers in financial difficulties to assist them in their corporate restructuring or financialrecovery by improving their ability to repay creditors. Restructured loans do not include loansclassified as loans to borrowers in bankruptcy, past due loans or loans past due for three monthsor more.

4. The value of assets pledged as collateral totals 358,592 million yen in securities, 32,437 million yenin deposits and 60 million yen in other assets. Among those assets, securities pledged for margin underfutures tradings are 56,535 million yen, and securities pledged for the gross-settlement system of theBank of Japan current account and Japanese government bond settlement are 143,143 million yen.Collateralized debt obligations are held to the value of 59,995 million yen in outstanding claims,61,809 million yen in underwriting reserve, 29,363 million yen in corporate bonds and 66,259 millionyen in other debts (e.g. overseas reinsurance payables).

5. Securities received from derivative transactions have a market value of 12,527 million yen.

6. Securities include securities lent under loan agreements of 1,406,376 million yen.

7. The outstanding balance of undrawn committed loans is as follows:

(Yen inmillions)

11112

Total loan commitments.................................................................................................... 123,120Balance of drawn committed loans .................................................................................. 14,296

11112

Undrawn loan commitments ............................................................................................ 108,8241111211112

8. Tokio Marine & Nichido guarantees the liabilities of some of its subsidiaries. The balance of theguarantee to its subsidiaries as of March 31, 2008 is as follows.

(Yen inmillions)

11112

TNUS Insurance Company ................................................................................................ 870Tokio Marine Compania de Seguros, S.A. de C.V. .......................................................... 4,727Tokio Marine Pacific Insurance Limited .......................................................................... 1,818

11112

Total.................................................................................................................................... 7,4161111211112

108


Notes to Consolidated Statements of Income

(A) For the year ended March 31, 2009

1. Major components of business expenses(Yen in

millions)11112

Agency commissions, etc................................................................................................... 319,207Salaries .............................................................................................................................. 131,227

Business expenses consist of “Loss adjustment expenses”, “Underwriting and general administrativeexpenses” and “Agency commissions and brokerage” as shown in the accompanying consolidatedstatements of income.

2. The main components of other extraordinary gains are the gains on sales of shares of affiliatesamounting to 828 million yen, and the gains on provision for reserve for retirement of tangible fixedassets of 414 million yen.

3. The Company recognized impairment losses on the following properties during the year endedMarch 31, 2009.

Impairment loss (Yen in millions)1112311111111211

Purpose of use Category Location Land Building Others Total1111112211 112111121 11111112111 12221 12221 12221 12221

– 253 211 465

Properties for rent Land and buildings 22 71 – 93

347 241 10 599

12221 12221 12221 12221

Total ............................................................................................................ 370 566 221 1,15812221 12221 12221 1222112221 12221 12221 12221

Properties are classified as follows: (a) properties used for insurance businesses are grouped as awhole and (b) other properties including properties for rent and idle or potential disposal propertiesare classified on an individual basis.

The total amount of projected future cash flow generated from the derivative business fell below thebook values of the properties used for these businesses. Consequently, the Company wrote off theexcess of the book values of such properties over the recoverable values and recognized such write-offs as impairment losses in extraordinary losses. The Company calculated the recoverable value ofthe relevant property by discounting projected future cash flows at a rate of 1.4%.

Due mainly to decline in the real estate market, book values of some properties for rent and idle orpotential disposal properties fell below the recoverable values. Consequently, the Company wrote offthe excess of the book values of such properties over the recoverable values and recognized any suchwrite-off as impairment losses in extraordinary losses. Recoverable values are either the higher of thenet sales price or the utility values of each property. Net sales price is the market value assessed byreal estate appraisers minus anticipated expenses for disposal of the relevant properties. The Companycalculated the utility values of the relevant properties by discounting the projected future cash flowsat a rate of 7.7%.

4. The main components of other extraordinary losses are 6,143 million yen losses on revaluation ofshares of affiliates, 3,139 million yen losses on redemption of shares of affiliates and 1,587 millionyen losses on liquidation of affiliates.

Land, buildingsand others

A building in Iwaki-shi,Fukushima Pref.

Properties forbusiness use(derivativebusiness)

Buildings andothers

21 properties including abuilding in YamaguchiCity, Yamaguchi Pref.

Idle or potentialdisposal properties

3 properties including abuilding in Chiyoda-ku,Tokyo.

109


(B) For the year ended March 31, 2008

1. Major components of business expenses(Yen in

millions)11112

Agency commissions, etc................................................................................................... 317,673Salaries .............................................................................................................................. 129,584

Business expenses consist of “Loss adjustment expenses”, “Underwriting and general administrativeexpenses” and “Agency commissions and brokerage” as shown in the accompanying consolidatedstatements of income.

2. The main component of other extraordinary gains is 26,151 million yen attributable to the partialintroduction of a defined contribution pension plan in the Company’s corporate pension fund scheme.

3. The Company recognized impairment losses on the following properties during the year ended March31, 2008.

Impairment loss (Yen in millions)1112311111111211

Purpose of use Category Location Land Building Others Total1111112211 112111121 11111112111 12221 12221 12221 12221

Properties for rent Land and buildings 40 62 – 103

Land and buildings 1,624 715 37 2,377

12221 12221 12221 12221

Total ............................................................................................................ 1,665 778 37 2,48112221 12221 12221 1222112221 12221 12221 12221

Properties are classified as follows: (a) properties used for insurance businesses are grouped as awhole and (b) other properties including properties for rent and idle or potential disposal propertiesare classified on an individual basis.

As to properties for rent and idle or potential disposal properties that depreciated in value mainly dueto the fall in the real estate market, the Company wrote off the excess of the carrying values of suchproperties over the recoverable values and recognized any such write-off as an impairment loss (2,481million yen), in extraordinary item.

The Company determined the recoverable value of a property by selecting the higher of the net saleprice or the utility value. The net sale prices were calculated as the assessed values established by areal estate appraiser, minus the anticipated expenses for disposing of the relevant properties. Theutility values were calculated by discounting the future cash flows to net present values at a rate of8.7% to 8.8%.

In addition to the above, the Company recognized and posted an impairment loss of 2,140 million yenon the goodwill related to Tianan Insurance in “Equity in losses of affiliates”, a component of “Otherordinary expenses”.

4. The main components of other extraordinary losses are extraordinary depreciation of tangible fixedassets of 5,692 million yen, provision for reserve for retirement of tangible fixed assets of 3,773million yen and prior period adjustments of earnings and expenses in connection with the hedgeaccounting of 4,855 million yen.

26 properties includingbuildings in UtsunomiyaCity, Tochigi Pref.

Idle or potentialdisposal properties

2 properties includingbuildings in Imabari City,Ehime Pref.

110


Notes to Consolidated Statements of Changes in Shareholder’s Equity


1. Class and number of issued shares and treasury stock (unit: thousand shares)

Increase DecreaseNumber of during the during the Number of

shares as of year ended year ended shares as ofMarch 31 March 31 March 31 March 31

2008 2009 2009 200911211 11211 11211 11211

Issued sharesCommon stock .............................................................. 1,549,692 – – 1,549,692Total................................................................................ 1,549,692 – – 1,549,692

Class and number of issued shares of treasury stock: None.

2. Stock acquisition rights (including those owned by the Company)

None.

3. Dividends

(1) Amount of dividends

Amount ofClass of dividends Dividends Record Effective

Resolution stock paid per share date date111111111111 112111 11211 12111 11121 11211

Common stock 42.92 yen

Common stock 20.33 yen –



(2) Dividends of which the record date falls within the year ended March 31, 2009 and the effectivedate falls after March 31, 2009

Amount ofClass of dividends Source of Dividends Record Effective

Resolution stock paid dividends per share date date11112121 112111 11211 11211 12111 11121 11211

Common stock 14.52 yenMeeting of theboard of directorsheld on May 19,2009

22,501million

yen

Retainedearnings

March 31,2009

June 1,2009

Meeting of the board of directors

held on March 16, 2009

24,004million

yen

March 17,2009


held on November 18, 2008

4,509million

yen

December1, 2008


held on September 16, 2008

31,505million

yen

September17, 2008

Meeting of the board of directorsheld on May 20, 2008

66,512million

yen

March 31,2008

June 20,2008

111



1. Class and number of issued shares and treasury stock (unit: thousand shares)

Increase DecreaseNumber of during the during the Number of

shares as of year ended year ended shares as ofMarch 31 March 31 March 31 March 31

2007 2008 2008 200811211 11211 11211 11211

Issued sharesCommon stock .............................................................. 1,549,692 – – 1,549,692

11211 11211 11211 11211

Total................................................................................ 1,549,692 – – 1,549,69211211 11211 11211 1121111211 11211 11211 11211

Class and number of issued shares of treasury stock: None.

2. Stock acquisition rights (including those owned by the Company)

None.

3. Dividends

(1) Amount of dividendsAmount of

Class of dividends Dividends Record EffectiveResolution stock paid per share date date111111111111 112111 11211 12111 11121 11211




(2) Dividends of which the record date falls within the year ended March 31, 2008 and the effectivedate falls after March 31, 2008

Amount ofClass of dividends Source of Dividends Record Effective

Resolution stock paid dividends per share date date11112121 112111 11211 11211 12111 11121 11211


March 31,2007

June 20,2008

March 31,2008

Retainedearnings

66,512million

yen

Meeting of theboard of directorsheld on May 20,2008

March 3,2008

9,003million

yen

Meeting of the board of directorsheld on February 29, 2008

December 3,2007

30,513million

yen

Meeting of the board of directorsheld on November 30, 2007

June 21,2007

28,002million

yen

Meeting of the board of directorsheld on May 23, 2007

112


Notes to Consolidated Statement of Cash Flows


1. Reconciliation of cash and cash equivalents at the end of the year to the amounts disclosed in theconsolidated balance sheets is provided as follows:

(As ofMarch 31,

2009)11112

(Yen inmillions)

Cash and deposits .............................................................................................................. 272,867Call loans............................................................................................................................ 322,923Monetary receivables bought ............................................................................................ 289,147Securities ............................................................................................................................ 5,881,610Time deposits with initial term over three months to maturity ........................................ (37,541)Monetary receivables bought not included in cash equivalents ........................................ (289,147)Securities not included in cash equivalents ...................................................................... (5,870,874)

11112

Cash and cash equivalents.................................................................................................. 568,9851111211112

2. Cash flows from investing activities include cash flows arising from asset management relating to theinsurance business.

3. Breakdown of assets and liabilities of newly consolidated subsidiaries

The breakdown of assets and liabilities of newly consolidated subsidiary, Philadelphia ConsolidatedHolding Corp. (“PHLY”), at the commencement of the consolidation is as follows. The following alsoshows the acquisition cost of the shares of PHLY and amounts paid (net) for the acquisition of suchshares.

(Yen inmillions)

11112

Assets ................................................................................................................................ 511,852Securities ............................................................................................................................ 225,405Goodwill ............................................................................................................................ 253,611Liabilities............................................................................................................................ (291,926)Underwriting funds ............................................................................................................ (226,859)

11112

Acquisition costs of the shares of PHLY .......................................................................... 473,537Cash and cash equivalents of PHLY .................................................................................. (6,377)

11112

Net amounts for the acquisition of the shares of PHLY.................................................... 467,1601111211112

113



1. Reconciliation of cash and cash equivalents at the end of the year to the amounts disclosed in theconsolidated balance sheets is provided as follows:

(As ofMarch 31,

2008)11112

(Yen inmillions)

Cash and deposits .............................................................................................................. 545,510Call loans............................................................................................................................ 152,443Monetary receivables bought ............................................................................................ 1,511,778Securities ............................................................................................................................ 7,795,500Time deposits with initial term over three months to maturity ........................................ (92,022)Monetary receivables bought not included in cash equivalents ........................................ (639,147)Securities not included in cash equivalents ...................................................................... (7,752,885)

11112

Cash and cash equivalents.................................................................................................. 1,521,1761111211112

2. Cash flows from investing activities include cash flows arising from asset management relating to theinsurance business.

3. Breakdown of assets and liabilities of newly consolidated subsidiaries

The breakdown of assets and liabilities of newly consolidated subsidiary, Kiln Ltd at thecommencement of the consolidation is as follows. The following also shows the acquisition cost ofthe shares of Kiln Ltd and amounts paid (net) for the acquisition of such shares.

(Yen inmillions)

11112

Assets ................................................................................................................................ 207,439Securities ............................................................................................................................ 79,196Goodwill ............................................................................................................................ 29,596Liabilities............................................................................................................................ (142,914)Underwriting funds ............................................................................................................ (82,746)

11112

Acquisition costs of the shares of Kiln Ltd ...................................................................... 94,122Cash and cash equivalents of Kiln Ltd .............................................................................. (52,199)

11112

Net amounts for the acquisition of the shares of Kiln Ltd ................................................ 41,9221111211112

114


Lease Transactions

(A) For the year ended 31 March, 2009

1. Finance leases

The transactions of ownership non-transferable finance lease which are accounted under theaccounting policy similar to that applicable to normal lease transaction.

(1) Amount equivalent to acquisition cost, accumulated depreciation, accumulated loss onimpairment of leased assets and year end balance are as follows:

Acquisition Accumulated Year endcost depreciation balance

211111 211111 211111

Tangible fixed assets .................................... ¥2,891 million ¥1,989 million ¥901 million

Acquisition cost includes interest payable thereon because the future lease payment balance atthe end of the fiscal year accounts for a small portion of the balance of tangible fixed assets atthe end of the fiscal year.

(2) Balance of future lease payments at the end of fiscal year

Due within one year .......................................................................................... ¥585 millionDue over one year .............................................................................................. ¥316 million

2121111

Total.................................................................................................................... ¥901 million21111212111112

Future lease payment includes interest payable thereon because the future lease paymentbalance at the end of the fiscal year accounts for a small portion of the balance of tangible fixedassets at the end of the fiscal year.

(3) Lease payment paid, reversal of loss on impairment of leased assets, depreciation equivalentand loss on impairment of leased assets

Lease payment paid .......................................................................................... ¥888 millionDepreciation equivalent .................................................................................... ¥888 million

(4) Depreciation equivalent is determined based on the straight-line method over the lease periodwith no residual value.

2. Operating leases

Future lease payments related to noncancelable leases

Due within one year .......................................................................................... ¥1,811 millionDue over one year .............................................................................................. ¥5,128 million

2111112

Total.................................................................................................................... ¥6,939 million

(Loss on impairment of fixed assets)There is no loss on impairment of fixed assets allocated to the leased assets.

115



1. Finance leases other than those which are deemed to transfer the ownership of the leased assets tolessees

(1) Amount equivalent to acquisition cost, accumulated depreciation, accumulated loss onimpairment of leased assets and year end balance are as follows:

Acquisition Accumulated Year endcost depreciation balance

211111 211111 211111

Movables ...................................................... ¥4,627 million ¥2,848 million ¥1,778 million

Acquisition cost includes interest payable thereon because the future lease payment balance atthe end of the fiscal year accounts for a small portion of the balance of tangible fixed assets.

(2) Balance of future lease payments at the end of fiscal year

Due within one year .......................................................................................... ¥894 millionDue over one year .............................................................................................. ¥883 million

2111112

Total.................................................................................................................... ¥1,778 million21111122111112

Future lease payment includes interest payable thereon because the future lease paymentbalance at the end of the fiscal year accounts for a small portion of the balance of tangible fixedassets at the end of fiscal year.

(3) Lease payment paid, reversal of loss on impairment of leased assets, depreciation equivalentand loss on impairment of leased assets

Lease payment paid .......................................................................................... ¥1,182 millionDepreciation equivalent .................................................................................... ¥1,182 million

(4) Depreciation equivalent is determined based on the straight-line method over the lease periodwith no residual value.

2. Operating leases

Future lease paymentsDue within one year .......................................................................................... ¥723 millionDue over one year .............................................................................................. ¥4,089 million

2111112

Total.................................................................................................................... ¥4,813 million21111122111112

(Loss on impairment of fixed assets)There is no loss on impairment of fixed assets allocated to the leased assets.

116


Securities

1. Trading Securities

As of 31 March, 2009 As of 31 March, 2008111111234111111 111111234111111

Valuation losses Valuation gainsAmount shown recognised on Amount shown recognised on

on consolidated consolidated on consolidated consolidatedbalance statements of balance statements of

Type sheets income sheets income11 111111 111111 111111 111111

(Yen in millions)

Trading securities ........................ 282,866 (3,326) 296,014 1,443

Notes:

For the year ended 31 March 2009

1. As of March 31, 2009, the above figures include amounts related to foreign mortgage backed securities, etc. (carrying amount1,659 million yen and valuation losses recognized on the consolidated statements of income 90 million yen), which are presentedas “Monetary receivables bought” on the consolidated balance sheets.


1. As of March 31, 2008, the above figures include amounts related to commercial paper (carrying amount 172 million yen andvaluation gain recognized on statement of income 0 million yen), which are presented as “Monetary receivables bought” on thebalance sheets.

2. Bonds held to maturity with fair value

As of 31 March 2009 As of 31 March 2008111112311111111 111112311111111

Carrying Fair Carrying Fair Type amount value Difference amount value Difference11 1111 1111 1111 1111 1111 1111

(Yen in millions)

Market value Bonds .... 120,716 124,213 3,497 113,032 115,304 2,271is more than Foreigncarrying amount securities 11,107 11,402 295 12,180 12,287 107

1111 1111 1111 1111 1111 1111

Sub Total 131,823 135,616 3,793 125,212 127,591 2,3781111 1111 1111 1111 1111 1111

Market value is Bonds .... – – – 7,811 7,760 (51)not more than Foreigncarrying amount securities 11,738 11,315 (422) 19,239 18,819 (419)

1111 1111 1111 1111 1111 1111

Sub Total 11,738 11,315 (422) 27,050 26,579 (471)1111 1111 1111 1111 1111 1111

Total .................................... 143,562 146,932 3,370 152,263 154,170 1,9071111 1111 1111 1111 1111 11111111 1111 1111 1111 1111 1111

117


3. Other securities (available for sale) with fair value


Original Carrying Original CarryingType cost amount Difference cost amount Difference11 1111 1111 1111 1111 1111 1111

(Yen in millions)

Gross Bonds ................ 1,690,691 1,745,362 54,670 1,775,894 1,823,772 47,877unrealized Stocks................ 754,620 1,845,738 1,091,118 909,123 3,268,174 2,359,050gains Foreign securities 257,625 295,242 37,617 486,126 570,005 83,879

Others(*1) ............ 14,874 17,291 2,416 71,882 83,120 11,2371111 1111 1111 1111 1111 1111

Sub Total .......... 2,717,812 3,903,635 1,185,823 3,243,027 5,745,073 2,502,0451111 1111 1111 1111 1111 1111

Gross Bonds ................ 406,113 389,768 (16,344) 608,646 587,836 (20,809)unrealized Stocks................ 171,442 152,022 (19,420) 69,992 63,003 (6,989)losses Foreign securities 658,854 618,599 (40,254) 642,684 605,869 (36,815)

Others(*2) ............ 304,982 272,852 (32,130) 269,455 232,504 (36,951)1111 1111 1111 1111 1111 1111

Sub Total .......... 1,541,392 1,433,242 (108,150) 1,590,778 1,489,213 (101,565)1111 1111 1111 1111 1111 1111

Total .................................... 4,259,205 5,336,878 1,077,673 4,833,806 7,234,286 2,400,4801111 1111 1111 1111 1111 11111111 1111 1111 1111 1111 1111

Notes:

For the year ended 31 March, 2009

1 The amount includes foreign mortgage backed securities (acquisition cost 6,771 million yen, carrying amount 6,936 million yen,difference 165 million yen) which are presented as “Monetary receivables bought” on the consolidated balance sheets.

2. The amount includes foreign mortgage backed securities (acquisition cost 277,432 million yen, carrying amount 248,216 millionyen, difference (-) 29,215 million yen) which are presented as “Monetary receivables bought” on the consolidated balance sheets.

3. Impairment losses amounting to 111,184 million yen are recognized for “Other Securities” with fair values. This includes theimpairment losses related to foreign mortgage backed securities in the amount of 38,436 million yen, which is included in “Otherinvestment expenses” on the consolidated statements of income. Impairment losses are in principle recognized on securities forwhich the fair values have declined 30% or more versus their book values as at the end of the period.


1. The amount includes foreign mortgage backed securities (acquisition cost 43,443 million Yen, carrying amount 46,196 millionYen, difference 2,753 million Yen) which are presented as “Monetary receivables bought” on the balance sheets.

2. The amount includes foreign mortgage backed securities (acquisition cost 213,621 million Yen, carrying amount 180,453 millionYen, difference (-) 33,168 million Yen) which are presented as “Monetary receivables bought” on the balance sheets.

3. Impairment losses amounting to 8,575 million Yen are recognized for “Other Securities” with fair values. Impairment losses arein principle recognized on securities for which the fair values have declined 30% or more versus their book values as at the endof the period.

4. Bonds held to maturity sold in this period

None

118


5. Other securities sold in this period

For the year ended 31 March, 2009 For the year ended 31 March, 20081111112311111111 1111112311111111

Sale Realized Realized Sale Realized RealizedType proceeds gain loss proceeds gain loss11 1111 1111 1111 1111 1111 1111

(Yen in millions)Othersecurities ................ 1,352,490 73,499 28,069 1,357,959 57,376 12,374

Notes:


The above figures include amounts related to certificates of deposit (sale amount 394 million yen, gains on sale 0 million yen, losseson sale 0 million yen) and commercial papers, etc. (sale amount 45,171 million yen, gains on sale 11 million yen, losses on sale 372million yen) which are presented as “Cash and deposits” and “Monetary receivables bought”, respectively, on the consolidatedbalance sheets.


The above figures include amounts relating to foreign mortgage securities, etc. which are presented as “Monetary receivables bought”on the balance sheets. (Sale amount: 228,141 million Yen, gains on sale: 58 million Yen, losses on sale: 1,447 million Yen.)

6. Principal securities not stated at fair value

(1) Bonds held to maturity

None

(2) Other securitiesAs of As of

31 March, 31 March,Type 2009 200811 11112 11112

(Yen in millions)

Bonds ............................................................................................................ 0 0Stocks............................................................................................................ 195,315 149,492Foreign securities.......................................................................................... 90,289 90,885Others............................................................................................................ 38,884 1,312,951

Notes:

As of 31 March, 2009

“Others” includes certificates of deposit (8,112 million yen) and foreign mortgage backed securities, etc. (6,112 million yen) whichare presented as “Cash and deposits” and “Monetary receivables bought”, respectively, on the consolidated balance sheets.


“Others” include certificates of deposit (72,319 million Yen) and commercial paper, etc. (1,215,545 million Yen) which are presentedas “Cash and deposits” and “Monetary receivables bought”, respectively, on the balance sheets.

7. Changes in purpose of holding securities during the fiscal year

None

119


8. Maturity Schedule of “Other securities” with contractual maturity and held-to-maturity debtsecurities


Within 1 Over 1 to Over 5 to Over 10 Within 1 Over 1 to Over 5 to Over 10Type year 5 years 10 years years year 5 years 10 years years12 1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)

Government bonds 23,228 245,120 342,067 798,387 126,943 333,069 331,645 750,371Municipal bonds.... 6,379 54,722 120,504 – 8,938 52,328 133,621 –Corporate bonds .... 89,245 374,849 154,978 46,363 174,390 386,169 191,846 43,129Stocks .................... 100 – – – – 100 – –Foreign securities .. 155,593 242,043 157,132 135,922 372,439 319,830 136,777 30,601Others .................... 22,393 33,924 46,461 166,599 1,288,969 46,364 41,108 138,073

1112 1112 1112 1112 1112 1112 1112 1112

Total ...................... 296,941 950,660 821,145 1,147,272 1,971,680 1,137,861 834,999 962,1761112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Notes:


“Others” includes certificates of deposit (“Within 1 year”: 6,931 million yen, “1 to 5 years”: 1,181 million yen) and foreign mortgagebacked securities, etc. (“Within 1 year”:15,462 million yen, “1 to 5 years”: 32,743 million yen, “5 to 10 years”: 46,461 million yen,“Over 10 years”: 166,599 million yen) which are presented as “Cash and deposits” and “Monetary receivables bought”, respectively,on the consolidated balance sheets.


“Others” include certificates of deposit (“Within 1 year”: 70,095 million Yen, “1 to 5 years”: 1,534 million Yen, “5 to 10 years”: 690million Yen) and commercial paper, etc. (“Within 1 year”:1,218,874 million Yen, “1 to 5 years”: 44,830 million Yen, “5 to 10 years”:40,418 million Yen, “Over 10 years”: 138,073 million Yen) which are included in “Cash and deposits” and “Monetary receivablesbought”, respectively, on the balance sheets.

Money trusts

1. Money trusts held for trading purposesAs of 31 March, 2009 As of 31 March, 2008

11112111121 11112111112

Valuation Valuationlosses losses

recognized on recognized onconsolidated consolidated

Carrying statements Carrying statementsType amount of income amount of income11 11112 11112 11112 11112

(Yen in millions)

Money trusts ...................................................... 7,493 (593) 34,028 (732)

2. Money trusts held to maturity

None

3. Money trusts other than that held to maturity or that held for trading purposes

None

Notes:


1. There are no individually managed money trusts valued at fair value.

2. Jointly managed money trust is included in the consolidated balance sheets at the acquisition cost of 1,195 million Yen.


1. There are no individually managed money trusts valued at fair value.

2. Jointly managed money trust is included in the balance sheets at the acquisition cost of 5,186 million Yen.

120


Information on derivatives

1. Derivative transactions


(1) Details of transactions

Tokio Marine & Nichido and its consolidated subsidiaries are mainly engaged in the followingderivative transactions;

a. Currency-related transactions: Forward contracts, currency swaps, currency options, etc.

b. Interest rate-related transactions: Interest rate futures, interest rate options, interest rate swaps,etc.

c. Equity-related transactions: Equity index futures, equity index options, etc.

d. Bond-related transactions: Bond futures, etc.

e. Other transactions: Credit derivatives

(2) Objectives and policies of transactions

The main purposes of the derivative transactions are as follows:

a. Risk management related to assets and liabilities held by the Tokio Marine & Nichido and itsconsolidated subsidiaries;

Tokio Marine & Nichido and its consolidated subsidiaries engage in various derivativetransactions in order to adequately manage risks related to assets and liabilities held by theconsolidated subsidiaries (ALM: Asset Liability Management) and reduce losses arising fromthe future fluctuations in interest rates, exchange rates and stock prices.

b. Investment activities;

Tokio Marine & Nichido and its consolidated subsidiaries engage in various derivativetransactions in order to maximize interest gains within a certain risk limit.

c. Response to customer needs;

Tokio Marine & Nichido and its consolidated subsidiaries carry out various derivativetransactions in order to provide a wide range of financial instruments that meet customers’hedging needs as well as their diverse and complex investment/funding style.

The actual transactions are carried out in accordance with the “Investment Guidelines” underwhich types of financial instruments, specific risk limits, and actions taken against any lossesarising from such transactions, etc. are classified and prescribed according to each investmentstyle.

Accounting policies for significant hedging activities are as follows:

– Interest rate

To mitigate interest rate fluctuation risks associated with long-term insurance policies,Tokio Marine & Nichido implements the Asset Liability Management designed tomanage such risks by evaluating and analyzing financial assets and insurance liabilitiessimultaneously.

As for some of interest rate swap transactions that are utilized to manage such risks,Tokio Marine & Nichido has applied deferral hedge treatment and evaluated hedge

121


effectiveness based upon the Industry Audit Committee Report No. 26, “Accounting andAuditing Treatments related to Adoption of Accounting for Financial Instruments in theInsurance Industry” (issued by the Japanese Institute of Certified Public Accountant(“JICPA”) on September 3, 2002 - hereinafter called “Report No. 26”).

Hedge effectiveness is evaluated by examining the interest rate conditions which affectcalculation of theoretical value of both the hedged items and the hedging instruments.As for any deferred hedge gains based on the Industry Audit Committee’s Report No.16,“Accounting and Auditing Treatments related to Adoption of Accounting for FinancialInstruments in the Insurance Industry” (issued by the JICPA, on March 31, 2000) priorto application of the Report No. 26, Tokio Marine & Nichido has amortized suchdeferred hedge gains as of the end of March 2003 over the remaining period of hedgingtools (1-17 years) by using the straight-line method, in accordance with the transitionalmeasures in the Report No. 26.

Deferred gains under this transitional treatment as of March 31, 2009 was 33,087million yen and the amount accounted for in the consolidated financial statements forthe fiscal year ended March 31, 2009 was 7,294 million yen.

In addition, Tokio Marine & Nichido applies the deferred hedge accounting for interestrate swap transactions which are used to hedge the interest rate risk related to bondsissued by Tokio Marine & Nichido. Hedge effectiveness is not evaluated since thecritical terms of hedged items and hedging instruments are same and thus believed to behighly hedge effective.

– Foreign exchange

With regard to some currency swap and forward contract transactions, which are utilizedto reduce the future foreign exchange risk associated with assets denominated in foreigncurrencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair valuehedge accounting. The effectiveness of these hedging treatments is evaluated byassessing the price fluctuation of both hedging tools and hedged instruments. However,hedge effectiveness is not evaluated for hedging treatments that are believed to have highhedge effectiveness, such as in cases where hedging tools and hedged instruments sharethe same important characteristics.

(3) Details of risks related derivative transactions

Derivative transactions involve market risks and credit risks.

Market risks include risks that the consolidated subsidiaries may incur losses arising from futurefluctuation in prices of the relevant financial instruments (interest rates, exchange rates and stockprices). Tokio Marine & Nichido and its major consolidated subsidiaries have established riskmanagement systems, under which such consolidated subsidiaries comprehensively manage risksrelating to derivative transactions as well as assets and liabilities, and quantify such market risks byway of VaR method, etc.

Credit risks include risks that such consolidated subsidiaries may incur losses when their counter-parties in derivative transactions fail to perform obligations set forth in the initial agreements due toinsolvency or otherwise, other than any losses arising from deterioration of the credit standing of tradereference stated in credit derivative agreements, etc. Tokio Marine & Nichido and its majorconsolidated subsidiaries manage such credit risks by periodically computing credit risks based onmarket values. If such counter-parties are financial institutions, etc., with which transactions havebeen frequently carried out, such consolidated subsidiaries adopt necessary actions to reduce creditrisks (e.g. conclusion of netting agreements).

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(4) Risk management system

The Risk Management Department of Tokio Marine & Nichido, a department in charge of riskmanagement which is independent of transaction-related departments, first reconciles transactioninformation and requests for managerial decisions to transaction reports provided by financialinstitutions and brokers, and then approves such transaction data. Any risk position determined basedupon such approved data are evaluated at fair value as needed, and the Risk Management Departmentdetermines interest income and risk volume related to derivative transactions together with balancesheets transactions such as securities and loans, and reports them to a director in charge on a monthlybasis.

In addition, as for the risk position of derivative transactions, the Risk Management Departmentthoroughly reviews whether such position is determined in accordance with types of financialinstruments, specific risk limits and actions taken against any losses arising from such derivativetransactions classified and expressly stated by investment style in the “Investment Guidelines” andthen reports the results of such review to a director in charge on a monthly basis. The department alsoconfirms by each transaction whether details of such risk position falls within the authority oftransaction related departments.

Other consolidated subsidiaries have also established similar risk management structures as describedabove.

(5) Supplemental explanation with regard to fair value, etc.

a. Notional amount (contract amount)

“Contract amount” as shown in the tables set forth in the following section is a nominalcontract amount or notional principal of derivative transactions. The amount itself does notrepresent market risk or credit risk of derivative transactions.

b. Unrealized gains/losses

Derivative transactions utilized for the purpose other than investment gains are used for thepurpose of managing the market risk of financial assets from an ALM point of view. It istherefore necessary to evaluate assets and liabilities as a whole, rather than to focus solely onunrealized gains/losses of derivative transactions, to assess the profitability and financialsoundness.

(B) For the year ended 31 March, 2008

(1) Details of transactions

Tokio Marine & Nichido and its consolidated subsidiaries are mainly engaged in the followingderivative transactions;

a. Currency-related transactions: Forward contracts, currency swaps, currency options, etc.

b. Interest rate-related transactions: Interest rate futures, interest rate options, interest rate swaps,interest rate swaptions, etc.

c. Equity-related transactions: Equity index futures, equity index options, etc.

d. Bond-related transactions: Bond futures, over-the-counter bond options, etc.

e. Other transactions: Credit derivatives

123


(2) Objectives and policies of transactions

The main purposes of the derivative transactions are as follows:

a. Risk management related to assets and liabilities held by the Tokio Marine & Nichido and itsconsolidated subsidiaries;

Tokio Marine & Nichido and its consolidated subsidiaries engage in various derivativetransactions in order to adequately manage risks related to assets and liabilities held by theconsolidated subsidiaries (ALM: Asset Liability Management) and reduce losses arising fromthe future fluctuations in interest rates, exchange rates and stock prices.

b. Investment activities;

Tokio Marine & Nichido and its consolidated subsidiaries engage in various derivativetransactions in order to maximize interest gains within a certain risk limit.

c. Response to customer needs;

Tokio Marine & Nichido and its consolidated subsidiaries carry out various derivativetransactions in order to provide a wide range of financial instruments that meet customers’hedging needs as well as their diverse and complex investment/funding style.

The actual transactions are carried out in accordance with the “Investment Guidelines” underwhich types of financial instruments, specific risk limits, and actions taken against any lossesarising from such transactions, etc. are classified and prescribed according to each investmentstyle.

Accounting policies for significant hedging activities are as follows:

– Interest rate

To mitigate interest rate fluctuation risks associated with long-term insurance policies,Tokio Marine & Nichido implements the Asset Liability Management designed tomanage such risks by evaluating and analyzing financial assets and insurance liabilitiessimultaneously.

As for some of interest rate swap transactions that are utilized to manage such risks,Tokio Marine & Nichido has applied deferral hedge treatment and evaluated hedgeeffectiveness based upon the Industry Audit Committee Report No. 26, “Accounting andAuditing Treatments related to Adoption of Accounting for Financial Instruments in theInsurance Industry” (issued by the Japanese Institute of Certified Public Accountant(“JICPA”) on September 3, 2002 - hereinafter called “Report No. 26”).

Hedge effectiveness is evaluated by examining the interest rate conditions which affectcalculation of theoretical value of both the hedged items and the hedging instruments.As for any deferred hedge gains based on the Industry Audit Committee’s Report No.16,“Accounting and Auditing Treatments related to Adoption of Accounting for FinancialInstruments in the Insurance Industry” (issued by the JICPA, on March 31, 2000) priorto application of the Report No. 26, Tokio Marine & Nichido has amortized suchdeferred hedge gains as of the end of March 2003 over the remaining period of hedgingtools (1-17 years) by using the straight-line method, in accordance with the transitionalmeasures in the Report No. 26.

In addition, Tokio Marine & Nichido applies the deferred hedge accounting for interestrate swap transactions which are used to hedge the interest rate risk related to bondsissued by Tokio Marine & Nichido. Hedge effectiveness is not evaluated since thecritical terms of hedged items and hedging instruments are same and thus believed to behighly hedge effective.

124


– Foreign exchange

With regard to some currency swap and forward contract transactions, which are utilizedto reduce the future foreign exchange risk associated with assets denominated in foreigncurrencies, Tokio Marine & Nichido applies deferred hedge accounting and/or fair valuehedge accounting and/or matching treatment. As for deferred hedge accounting and fairvalue hedge accounting, hedge effectiveness is not evaluated, since critical terms ofhedged items and hedging instruments are the same and thus believed to be highly hedgeeffective.

(3) Details of risks related derivative transactions

Derivative transactions involve market risks and credit risks.

Market risks include risks that the consolidated subsidiaries may incur losses arising from futurefluctuation in prices of the relevant financial instruments (interest rates, exchange rates and stockprices). Tokio Marine & Nichido and its major consolidated subsidiaries have established riskmanagement systems, under which such consolidated subsidiaries comprehensively manage risksrelating to derivative transactions as well as assets and liabilities, and quantify such market risks byway of VaR method, etc.

Credit risks include risks that such consolidated subsidiaries may incur losses when their counter-parties in derivative transactions fail to perform obligations set forth in the initial agreements due toinsolvency or otherwise, other than any losses arising from deterioration of the credit standing of tradereference stated in credit derivative agreements, etc. Tokio Marine & Nichido and its majorconsolidated subsidiaries manage such credit risks by periodically computing credit risks based onmarket values. If such counter-parties are financial institutions, etc., with which transactions havebeen frequently carried out, such consolidated subsidiaries adopt necessary actions to reduce creditrisks (e.g. conclusion of netting agreements).

(4) Risk management system

The Risk Management Department of Tokio Marine & Nichido, a department in charge of riskmanagement which is independent of transaction-related departments, first reconciles transactioninformation and requests for managerial decisions to transaction reports provided by financialinstitutions and brokers, and then approves such transaction data. Any risk position determined basedupon such approved data are evaluated at fair value as needed, and the Risk Management Departmentdetermines interest income and risk volume related to derivative transactions together with balancesheets transactions such as securities and loans, and reports them to a director in charge on a monthlybasis.

In addition, as for the risk position of derivative transactions, the Risk Management Departmentthoroughly reviews whether such position is determined in accordance with types of financialinstruments, specific risk limits and actions taken against any losses arising from such derivativetransactions classified and expressly stated by investment style in the “Investment Guidelines” andthen reports the results of such review to a director in charge on a monthly basis. The department alsoconfirms by each transaction whether details of such risk position falls within the authority oftransaction related departments.

Other consolidated subsidiaries have also established similar risk management structures as describedabove.

125


(5) Supplemental explanation with regard to fair value, etc.

a. Notional amount (contract amount)

“Contract amount” as shown in the tables set forth in the following section is a nominalcontract amount or notional principal of derivative transactions. The amount itself does notrepresent market risk or credit risk of derivative transactions.

b. Unrealized gains/losses

Derivative transactions utilized for the purpose other than investment gains are used for thepurpose of managing the market risk of financial assets from an ALM point of view. It istherefore necessary to evaluate assets and liabilities as a whole, rather than to focus solely onunrealized gains/losses of derivative transactions, to assess the profitability and financialsoundness.

126


2. Contract amount, fair value and unrealized gains and losses of derivative financialinstruments

(1) Foreign currency-related instruments


Contract Over Fair Unrealized Contract Over Fair UnrealizedAmount 1 year value Gain/(Loss) Amount 1 year value Gain/(Loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Over-the-counter transactions:Foreign exchange forwardsShort

USD ................................ 403,455 4,272 (7,896) (7,896) 378,031 13,039 1,066 1,066EUR ................................ 66,100 – (3,380) (3,380) 116,293 – (1,085) (1,085)GBP ................................ 11,148 – (658) (658) 14,683 – 293 293AUD ................................ 9,746 – (133) (133) 19,793 – 325 325 CAD ................................ 5,310 – (302) (302) 7,200 – 880 880HKD ................................ 24 – (0) (0) 899 – (26) (26)JPY .................................. 1,144 – (74) (74) 1,255 – (1) (1)

LongUSD ................................ 93,890 – 1,401 1,401 12,422 – 215 215EUR ................................ 18,885 – 35 35 13,582 – 78 78GBP ................................ 284 – (4) (4) 24,256 – (317) (317)AUD ................................ 11,296 – (177) (177) 695 – 11 11CAD ................................ 801 – (22) (22) 1,060 – (33) (33)SGD ................................ 1,033 – 63 63 – – – –

Currency swapsPay Foreign/ Rec. Yen

USD ................................ 803,162 607,213 24,609 24,609 1,006,691 893,520 (2,436) (2,436)EUR ................................ 21,315 15,931 1,461 1,461 47,528 47,528 (3,411) (3,411)AUD ................................ 25,239 17,609 4,501 4,501 26,243 25,945 (2,607) (2,607)

Pay Yen/ Rec.ForeignUSD ................................ 282,144 205,544 (26,915) (26,915) 249,589 188,359 6,416 6,416EUR ................................ 15,728 14,202 (1,847) (1,847) 27,011 27,011 3,574 3,574AUD ................................ 820 820 (226) (226) 1,013 1,013 46 46Pay Foreign/ Rec. ForeignPay EUR/Rec. USD ...... 1,525 – (126) (126) 1,990 1,990 23 23Pay USD/Rec. EUR ...... 484 – 26 26 647 647 16 16Pay USD/Rec. AUD ........ – – – – 1,377 – 48 48Pay USD/Rec. NZD ........ – – – – 2,105 – (14) (14)

Currency optionsShortCall

USD ................................ 33,227 22,018 – – 32,258 7,700 – –Option premiums(*4) ........ 1,639 1,302 924 715 912 271 482 429

PutUSD ................................ 37,153 25,863 – – 41,866 15,380 – –Option premiums(*4) ........ 1,929 1,584 5,826 (3,896) 1,345 705 1,499 (153)

LongCall

USD ................................ 56,021 52,421 – – 61,783 57,372 – –Option premiums(*4) ........ 4,158 3,979 4,216 57 4,408 4,272 5,147 739

PutUSD ................................ 54,133 50,540 – – 52,327 43,906 – –Option premiums(*4) ........ 4,173 4,017 7,238 3,064 4,009 3,800 2,694 (1,315)

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 1,954,082 1,016,439 8,536 (9,727) 2,142,610 1,323,414 12,886 2,7621112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Notes:

1. The fair value of the foreign exchange forwards agreements at end of period is based on the futures’ market price.

2. The fair value of currency swap transactions is calculated by discounting future cash flows to the present value based on the interest rateat year end.

3. The fair value of foreign currency options contracts is based on an option pricing model.

4. For option contracts, option premiums at the inception are shown below the respective contractual amount.

5. Those instruments to which hedge accounting is applied are not included in the table.

127


(2) Interest rate-related instruments


Market/ Market/Contract Over Fair Unrealized Contract Over Fair UnrealizedAmount 1 year Value gain/(loss) Amount 1 year Value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Market transactions:Interest futures

Short ................................ – – – – 15,000 – 0 0Long .............................. 87,679 – 129 129 55,892 – 46 46

Over-the-counter transactions:Interest rate forwards

Short ................................ – – – – 57,125 – 13 13Long ................................ – – – – 15,424 – (2) (2)

Interest rate optionsShortCap ................................ 45,570 40,612 – – 45,387 39,387 – –Option premiums(*4) ...... 814 729 173 641 839 770 374 465Swaption........................ 79,148 69,848 – – 87,687 84,687 – –Option premiums(*4) ...... 786 445 2,109 (1,323) 786 786 1,356 (570)

LongCap ................................ 24,785 14,600 – – 33,596 28,596 – –Option premiums(*4) ...... 426 135 27 (398) 431 402 75 (355)Swaption........................ 37,974 33,974 41,974 39,974Option premiums(*4) ...... 447 357 425 (21) 129 129 89 (39)

Interest rate swapPay float/Rec. fix ............ 5,517,444 4,205,035 186,497 186,497 7,534,181 5,546,475 136,056 136,056Pay fix/Rec. float ............ 5,118,983 3,772,252 (124,231) (124,231) 7,017,398 4,879,349 (87,978) (87,978)Pay float/Rec. float.......... 689,241 451,341 19,514 19,514 767,364 461,064 10,694 10,694Pay fix/Rec. fix................ 123,864 45,667 (42,670) (42,670) 155,218 138,218 (2,741) (2,741)

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 11,724,692 8,633,331 41,976 38,136 15,826,252 11,217,754 57,985 55,5891112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Notes:

1. The fair value of the interest rate future is based on the closing price at major stock exchanges.

2. The fair value of the interest forward and the interest rate swap transactions is calculated by discounting future cash flows to thepresent value based on the interest rate at year end.

3. The fair value of interest rate options transactions is based on an option pricing model.

4. For option contracts, option premiums at the inception are shown below the respective contractual amount.

5. Interest rate swaps to which hedge accounting is applied are as follows. The amounts of deferred hedge gains and losses are presentedbefore tax basis.


Market/ Deferred Market/ DeferredContract Over Fair hedge Contract Over Fair hedgeAmount 1 year Value gain/(loss) Amount 1 year Value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Deferred hedge accounting in

accordance with ReportNo. 26.............................. 379,300 302,800 22,901 8,484 247,300 247,300 6,412 5,913

Unamortized portion ofdeferred hedge gains andlosses in accordancewith Report No.16 areshown below “Deferredhedge gains / (losses) ...... – – – 6,117 – – – 1,086

Other deferred hedgeaccounting ...................... 96,748 46,448 894 844 107,287 102,287 693 649

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 476,048 349,248 23,795 15,447 354,587 349,587 7,106 7,6501112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

128


6. Deferred hedge gains and losses relating to the interest rate swap transactions to which hedgeaccounting is not applied are as follows. The amount of deferred gains and losses arepresented before tax basis.

As of As of31 March, 31 March,

2009 2008111 111

Deferred Deferredhedge hedgegains gains

(losses) (losses)111 111

(Yen in millions)Unamortized portion of deferred hedge gains and losses in accordance with Report in No. 16 relating

to interest rate swaps which are not covered by Report No. 26.................................................................. 26,969 39,295111 111

Other deferred hedge accounting .................................................................................................................... (15,213) (26,393)111 111

Total ................................................................................................................................................................ 11,756 12,901111 111111 111

Report No. 16: Tentative Accounting and Auditing Treatments related to Adoption of Accounting forFinancial Instruments in the Insurance Industry (Japanese Institute of Certified Public Accountants,31 March, 2000).

Report No. 26: Accounting and Auditing Treatments related to Adoption of Accounting for FinancialInstruments in the Insurance Industry (Japanese Institute of Certified Public Accountants, 3 September2002).

(3) Equity-related instruments


Market/ Market/Contract Over Fair Unrealized Contract Over Fair UnrealizedAmount 1 year value gain/(loss) Amount 1 year value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Market transactions:Equity index futures

Short .............................. 10,454 – (57) (57) 22,030 – (41) (41)Long ................................ 2,269 – 114 114 26,008 – 567 567

Equity index optionsShort

Call .............................. – – – – 5,800 – – –Option premiums(*3)) .... – – – - 70 – 0 70

LongPut ................................ – – – – 11,900 – –Option premiums(*3) ...... – – – – 819 – 175 (644)

1112 1112 1112 1112 1112 1112 1112 1112

Over-the-counter transactions:Equity swap transactions

Rec. floating rate /Pay. Floating equity price 199 – 56 56 380 – 4 4Rec. floating equity price/Pay. floating rate ............ 199 – (56) (56) 380 – (4) (4)

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 13,124 – 57 57 66,501 – 702 (47)1112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Notes:

1. The fair values of equity index futures and equity index options(market transaction) are based on the quoted closing price of theprimary stock exchanges.

2. The fair values of equity swap transactions of over-the-counter transactions are based on quotation from financialinstitutions(counterparties).

3. For option contracts, the option premiums at the inception are shown below the respective contractual amount.

4. The synthetic options are classified into such as short or long positions by the receiving or paying option premiums at the timetransactions started.

129


(4) Bond-related instruments


Market/ Market/Contract Over Fair Unrealized Contract Over Fair UnrealizedAmount 1 year value gain/(loss) Amount 1 year value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Market transactions:Bond futures

Short .............................. 5,726 – (48) (48) 21,966 – (182) (182)Long ................................ 23,547 – 421 421 49,281 – 235 235

Over-the-counter transactions:Bonds over-the-counter-

optionsShortCall - - ................ – – – – 31,253 – – –Option premiums(*3) ...... – – – – 46 – 75 (29)Put - - .................. – – – – 10,499Option premiums(*3) ...... – – – – 44 – 34 9

LongCall ................................ – – – – 10,499 – – –Option premiums(*3) ...... – – – – 37 – 20 (16)Put.................................. – – – – 10,460Option premiums(*3) ...... – – – – 39 – 11 (27)

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 29,274 – 373 373 133,959 – 194 (11)1112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Notes:

1. The fair values of bond futures are based on the closing price at the primary stock exchanges.

2. The fair values of bond future options of over-the -counter are based on quotation from financial institutions (counterparties) or pricescalculated by the internal evaluation model.

3. For option contracts, the option premiums at the inception are shown below the respective contractual amount.

(5) Credit-related instruments


Contract Over Fair Unrealized Contract Over Fair UnrealizedAmount 1 year value gain/(loss) amount 1 year value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Over-the-counter transactions:Credit derivativesSell protection .................... 678,171 473,254 (22,703) (22,703) 892,488 892,212 (10,944) (10,944)Buy protection .................... 47,107 45,379 1,588 1,588 46,855 43,579 714 714

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 725,189 518,633 (21,114) (21,114) 939,343 935,792 (10,229) (10,229) 1112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Note:

The fair value of the credit derivatives is calculated using the internal valuation model.

130


(6) Commodity-related instruments


Contract Over Fair Unrealized Contract Over Fair Unrealizedamount 1 year value gain/(loss) amount 1 year value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Over-the-counter transactions:Commodity swaps

Pay Commodity indices/Rec. fixed price .............. 4,307 4,157 (6,139) (6,139) 10,828 10,492 (24,402) (24,042)Pay fixed price/Rec. Commodity indices 3,863 3,817 4,369 4,369 9,802 9,555 20,329 20,329Pay variable indices/Rec. Commodity indices 5,212 5,212 (221) (221) 19,351 19,351 (437) (437)

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 13,383 13,187 (1,990) (1,990) 39,983 39,400 (4,510) (4,510)1112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Note:

The fair value of commodity swaps is calculated using the internal valuation model.

(7) Others


Contract Over Fair Unrealized Contract Over Fair Unrealizedamount 1 year value gain/(loss) amount 1 year value gain/(loss)

1112 1112 1112 1112 1112 1112 1112 1112

(Yen in millions)Natural disaster derivatives:

Short .............................. 18,442 400 – – – – – –396 17 396

Long .............................. 27,912 – – – – – – –Others .................................. 1,593 – 1,593

Short ................................ 123 123 – – – – –9 9 9

1112 1112 1112 1112 1112 1112 1112 1112

Total .................................... 46,478 523 1,998 – – – – –1112 1112 1112 1112 1112 1112 1112 11121112 1112 1112 1112 1112 1112 1112 1112

Notes:

1. The option premiums of natural disaster derivatives and other options are shown below the respective contractual amount.

2. The fair value of natural disaster derivatives and other options is calculated based on options premiums.

131


Retirement benefits

1. Outline of the Retirement and Severance Benefit Plans


The Company and one domestic consolidated subsidiary have an unfunded lump-sum paymentretirement plan covering substantially all employees. The Company has a corporate pension fundsystem and an approved retirement annuity plan.

The benefits of the corporate pension fund system and lump-sum payment retirement plan under theCompany’s plans are mainly based on the points which each employee acquired through service. Thepayment amounts of the lump-sum payment plan under the domestic consolidated subsidiary’s plansare determined by reference to salary upon retirement, length of service and reason for retirement.

Additionally, some of overseas subsidiaries also have such retirement plans.

The Company transferred a portion of its corporate pension fund to a defined-contribution pensionplan as of July 2, 2007.


The Company and one domestic consolidated subsidiary have an unfunded lump-sum paymentretirement plan covering substantially all employees. The Company has a corporate pension fundsystem and an approved retirement annuity plan.

The benefits of the corporate pension fund system and lump-sum payment retirement plan under theCompany’s plans are based on the points which each employee acquired through service. Thepayment amounts of the lump-sum payment plan under the domestic consolidated subsidiary’s plansare determined by reference to salary upon retirement, length of service and reason for retirement.

Additionally, some of overseas subsidiaries also have such retirement plans.

The Company transferred a portion of its corporate pension fund to a defined-contribution pensionplan as of July 2, 2007.

132


2. Breakdown of Retirement Benefit Liabilities

As of As of 31 March, 31 March,

2009 200811112 11112

(Yen in millions)

a. Retirement benefit liabilities ........................................................................ (348,597) (361,201)b. Pension assets .............................................................................................. 142,691 170,931 c. Unaccrued retirement benefit liabilities (a+b).............................................. (205,905) (190,269)d. Unrecognized actuarial difference................................................................ 81,063 77,858 e. Unrecognized prior service costs ................................................................ (21,586) (25,015)f. Net amount in the consolidated balance sheets (c+d+e).............................. (146,428) (137,426)g. Prepaid pension expenses ............................................................................ 156 –h. Reserve for retirement benefits (f-g) ............................................................ (146,584) (137,426)

Notes:


1. The subsidiaries excluding the Company adopt the simple method in calculation of retirement benefit liabilities.


1. The subsidiaries excluding the Company adopt the simple method in calculation of retirement benefit liabilities.

2. The changes that resulted from the transfer of a portion of the Company corporate pension fund to its defined contribution pensionplan are detailed below.

(Yen in millions)1111112

Decrease in retirement benefit liabilities ...................................................................................................................... 60,163Decrease in pension assets ............................................................................................................................................ (32,984)Unrecognized actuarial difference ................................................................................................................................ (8,185)Unrecognized prior service costs .................................................................................................................................. 7,157

1111112

Decrease in reserve for retirement benefit .................................................................................................................... 26,151

3. Breakdown of retirement expensesAs of As of

31 March, 31 March,2009 2008

11112 11112

(Yen in millions)

a. Service cost .................................................................................................. 15,056 14,582b. Interest cost .................................................................................................. 6,902 7,216c. Expected investment income ........................................................................ (4,812) (6,054)d. Actuarial differences accounted for as expense .......................................... 8,128 7,457e. Amortisation of prior service cost accounted for as expense ...................... (2,681) (2,910)f. Retirement benefit expenses (a+b+c+d+e) .................................................. 22,593 20,291g. Amount transferred to the defined contribution pension plan .................... 1,639 933h. Gains and losses resulted from the transfer to the defined contribution

pension plan.................................................................................................. – (26,151)11112 11112

i. Total (f+g+h) ................................................................................................ 24,232 (4,926)11112 1111211112 11112

Notes:

Year ended 31 March, 2009

1. Employee contributions to the corporate pension fund are deducted from “a. service cost”.

2. Retirement expenses for companies using simple method are recorded as “a. service cost”.

Year ended 31 March, 2008

1. Employee contributions to the corporate pension fund are deducted from “a. service cost”.

2. Retirement expenses for companies using simple method are recorded as “a. service cost”.

3. The item “h. Gains and losses resulted from the transfer to the defined contribution pension plan” is the gain recognized in connectionwith the transfer some part of corporate pension fund system to the defined contribution pension plan, and included in “Otherextraordinary gains”.

133


4. Accounting for Retirement Benefit Liabilities

The factors which are the bases of the calculation of Retirement benefit liabilities under the principlemethod adopted by Tokio Marine & Nichido are as follows:

Year ended Year ended31 March 2009 31 March 20081111111111 11111111111

a. Distribution method for estimated retirementbenefits ..........................................................

b. Discount rate .................................................. 2.0% 2.0%

c. Expected rate of return on investments.......... 3.0% 3.1%

d. Years to amortize prior service costs ............

e. Years to amortize actuarial differences ..........

Stock options

(A) For the year ended 31 March, 2009(Yen in

millions)1. The account title and the amount related to stock options;

Loss adjustment expenses .................................................................................................. 70Underwriting and general administrative expenses .......................................................... 214

11112

Total.................................................................................................................................... 2841111211112

2. Outline of stock options

Tokio Marine Holdings, which is the parent of the Company, granted stock options the type of whichis stock-linked compensation to the Company’s directors, corporate auditors and officers. The Companyrecorded the amount born by it accrued up to March 31, 2009 as remuneration expenses.

(No change) 14 (Expenses areaccounted for in thefollowing fiscal year usingthe straight-line methodover a certain number ofyears and within theaverage remaining workperiod of employees at thetime of occurrence)

(No change) 14 (Expenses areaccounted for using thestraight-line method overa certain number of yearsand within the averageremaining work period ofemployees at the time ofoccurrence)

The lump-sumretirement benefit systemand the contributorypension fund systemmainly employ the pointstandard.

The lump-sum retirementbenefit system and thecontributory pension fundsystem employ the pointstandard, while theapproved retirementannuity plan employs thefixed-period straight-linestandard.

134


(B) For the year ended 31 March 2008(Yen in

millions)1. The account title and the amount related to stock options;

Loss adjustment expenses .................................................................................................. 63Underwriting and general administrative expenses .......................................................... 225

11112

Total.................................................................................................................................... 2891111211112

2. Outline of stock options

Millea Holdings., which is the parent of the Company, granted stock options the type of which isstock-linked compensation to the Company’s directors, corporate auditors and officers. The Companyrecorded the amount born by it accrued up to March 31, 2008 as remuneration expenses.

Deferred tax accountingAs of As of

31 March, 31 March,2009 2008

11112 11112

(Yen in millions)1. Significant portion of deferred tax assets and deferred tax liabilitiesDeferred tax assets

Underwriting reserves ........................................................................................ 370,903 369,204Outstanding claims ............................................................................................ 55,380 52,396Reserve for retirement benefits .......................................................................... 53,087 49,379Reserve for price fluctuation .............................................................................. 19,299 41,741Loss on revaluation of securities ........................................................................ 45,511 28,636Deferred hedge losses.......................................................................................... 11,480 15,550Others .................................................................................................................. 76,195 58,582

11112 11112

Subtotal .................................................................................................................. 631,859 615,491Valuation allowance ................................................................................................ (32,978) (4,202)

11112 11112

Total deferred tax assets .......................................................................................... 598,881 611,289

Deferred tax liabilitiesDifference from revaluation of other securities .................................................. (391,766) (867,212)Deferred hedge gains .......................................................................................... (21,157) (22,984)Unrealized gains on consolidated subsidiaries.................................................... (10,011) (13,547)Reserve for additional depreciation deduction adjustment on properties .......... (7,914) (9,493)

11112 11112

Others ................................................................................................................ (52,045) (18,841)11112 11112

Total deferred tax liabilities .................................................................................. (482,895) (932,080)

Net deferred tax assets (liabilities) ........................................................................ 115,985 (320,791)2. Reconciliation between the effective tax rate and the Japanese statutory

income tax rateJapanese statutory tax rate ...................................................................................... 36.1% 36.1%(Adjustment)

Permanent differences such as dividends received ............................................ (11.0)% (6.0)%Permanent differences such as entertainment expenses...................................... 1.6% 0.5%Valuation allowance ............................................................................................ 23.5% 1.9%Income tax equivalents related to the reserve for policyholders dividendsincurred by overseas subsidiaries ........................................................................ – 3.1%

Reversal of deferred tax liabilities of earnings retained by foreign subsidiariesdue to amendments of Corporation Tax Act of Japan .......................................... (8.9)% –Effect of tax rate applied to subsidiaries................................................................ (3.0)% –Others .................................................................................................................... (1.3)% (0.4)%

11112 11112

Effective tax rate .................................................................................................... 37.0% 35.2%11112 1111211112 11112

135


Business Combinations and other matters


As of December 1, 2008, the Company acquired Philadelphia Consolidated Holding Corp. (“PHLY”),a property and casualty insurance group in the U.S., and made it a subsidiary. In connection with theaccounting for the acquisition, the Company has applied the purchase method as described below.

(1) The outline of the business combination to which the purchase method was applied

(a) Acquired company

Philadelphia Consolidated Holding Corp.

(b) Business

A holding company for subsidiaries operating insurance and insurance-relatedbusinesses

(c) Reasons for the business combination

The Company intends to strengthen its operational platform for local commercialbusinesses in the U.S. and expand its overall insurance business in the U.S. insurancemarket.

(d) Date of the business combination

December 1, 2008

(e) Form of the business combination

Reverse triangular merger under business combination laws in the U.S.

(f) Ratio of voting rights acquired through the business combination

100%

(2) Period for which the operating results of the acquired company are included in the consolidatedfinancial statements of the Company.

For accounting purposes, the business combination date is deemed to be the last day of PHLY’sfiscal year ended December 31, 2008. Consequently, the results of operation of the acquiredcompany are not reflected in the consolidated statements of income of the Company for thefiscal year ended March 31, 2009.

(3) Acquisition cost

473,537 million yen

(4) Amount, basis, amortization method and amortization period of goodwill

(a) Amount of goodwill

253,611 million yen

(b) Basis

The acquisition cost of the acquired company, which was calculated by taking intoaccount the projected future revenues as of the valuation date, exceeded the value of theassets and liabilities of the acquired company as of the date of the business combination.This difference was recognized as goodwill.

(c) Amortization method and period

To be amortized over 20 years using the straight-line method

136


(5) Assets and liabilities assumed on the date of the business combination and their maincomponents.

Amount AmountItem (million yen) Item (million yen)11 11112 11 11112

Total assets.............................................. 511,852 Total liabilities .................................. 291,926Securities included in total assets .......... 225,405 Underwriting funds included in total

liabilities ............................................ 226,859

(6) Approximate impact on the consolidated statements of income, assuming that the businesscombination took place at the beginning of the fiscal year ended March 31, 2009.

The ordinary income, ordinary profit and net income would have increased by 166,851 millionyen, 4,393 million yen and 143 million yen, respectively.

These amounts represent the difference between the actual figures and the estimates of thefigures for ordinary income, ordinary profit and net income calculated based on the assumptionthat the business combination was completed at the beginning of the fiscal year ended March31, 2009. The amortized amount of goodwill was calculated assuming that the goodwillrecognized at the time of the business combination had arisen at the beginning of the fiscal yearended March 31, 2009.

The above amounts are un-audited.


1. As of March 10, 2008, the Company acquired Kiln Ltd, a global insurance player with its primarybase in the U.K. insurance market of Lloyd’s, and made Kiln a subsidiary. In connection with theaccounting for the acquisition, the Company has applied the purchase method as described below.

(1) The outline of the business combination to which the purchase method was applied

(a) Acquired company

Kiln Ltd

(b) Business

A holding company for subsidiaries operating insurance and insurance-relatedbusinesses

(c) Reasons for the business combination

The Company intends to expand the scale of its operations and earnings of its overseasinsurance business and to establish a position as a major player in Lloyd’s of the U.K.,one of the world’s leading insurance markets.

(d) Date of the business combination

March 10, 2008

(e) Ratio of voting rights acquired through the business combination

100%

(2) Period for which the operating results of the acquired company are included in the consolidatedfinancial statements of the Company.

For accounting purposes the business combination date is deemed to be the last day of the fiscalyear ended March 31, 2008. Consequently, the results of operation of the acquired company arenot reflected in the consolidated financial statements of the Company for the fiscal year endedMarch 31, 2008.

137


(3) Acquisition cost

94,122 million yen

(4) Amount, basis, amortization method and amortization period of goodwill

(a) Amount of goodwill

29,596 million yen

(b) Basis

The acquisition cost of the acquired company, which was calculated by taking intoaccount the projected future revenues as of the valuation date, exceeded the market valueof the net assets of the acquired company as of the date of the business combination.This difference was recognized as goodwill.

(c) Amortization method and period

To be amortized over 10 years using the straight-line method

(5) Assets and liabilities assumed on the date of the business combination and their maincomponents.

Amount AmountItem (million yen) Item (million yen)11 11112 11 11112

Total assets.............................. 207,439 Total liabilities ........................ 142,914Securities included in total Underwriting funds includedassets ...................................... 79,167 in total liabilities .................... 82,746

(6) Approximate impact on the consolidated statement of income, assuming that the businesscombination took place at the beginning of the fiscal year ended March 31, 2008.

The ordinary income, ordinary profit and net income would have increased by 81,167 millionyen, 9,566 million yen and 5,050 million yen, respectively.

These amounts represent the difference between the actual figures and the estimates of thefigures for ordinary income, ordinary profit and net income calculated based on the assumptionthat the business combination was completed at the beginning of the fiscal year ended March31, 2008. The amortized amount of goodwill was calculated assuming that the goodwillrecognized at the time of the business combination had arisen at the beginning of the fiscal yearended March 31, 2008.

The above amounts are un-audited.

138


Segment Information

Segment Information by Business Lines

For the years ended 31 March, 2009

Property andcasualty Life Others Total Elimination Consolidated

11211 11211 11211 11211 11211 11211

(Yen in millions)I. Ordinary income and

ordinary profit/lossOrdinary income

(1) Ordinary income fromtransactions withexternal customers ........ 2,505,809 49,514 32,922 2,588,246 (19,129) 2,569,117

(2) Ordinary incomearising from inter-segment transactions .... 619 17 512 1,149 (1,149) –

11211 11211 11211 11211 11211 11211

Total ...................................... 2,506,429 49,532 33,434 2,589,396 (20,278) 2,569,11711211 11211 11211 11211 11211 1121111211 11211 11211 11211 11211 11211

Ordinary expenses ................ 2,417,730 57,248 44,773 2,519,752 (20,466) 2,499,285Ordinary profit/loss .............. 88,699 (7,716) (11,339) 69,643 188 69,831

II. Assets / Depreciation / impairment losses on fixedassets and Capitalexpenditure Assets ................ 8,876,675 233,276 473,996 9,583,949 (5,379) 9,578,570Depreciation ........................ 17,070 223 267 17,560 – 17,560Impairment losses onfixed assets.......................... 693 – 465 1,158 – 1,158

Capital expenditure .............. 23,058 305 463 23,827 – 23,827

Notes:

1. The segments are classified based on the characteristics of operations of Tokio Marine & Nichido and its consolidated subsidiaries.

2. Major operations of each segment are as follows:

(1) Property and casualty: Underwriting property and casualty insurance and related investment activities

(2) Life: Underwriting life insurance and related investment activities

(3) Others: Securities investment advisory, securities investment trusts business and derivatives business

3. The major components of “Elimination” for “Ordinary income from transactions with external customers” are due to transferringamount of (1) 9,257 million yen from “Foreign exchange gain”, which is included in ordinary income related to “Property andcasualty” segment, to "Other investment expense" in “Ordinary expenses” in the consolidated statements of income and (2) 5,648million yen from “Provision of underwriting reserves”, which is included in ordinary expense relating to "Life" segment, to “Reversalfor underwriting reserves" in the consolidated statements of income.

4. As noted in “Changes to Basis of Significant Accounting Policies”, Tokio Marine & Nichido has adopted “Practical Solution onUnification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical IssuesTask Force No. 18, May 17, 2006) for the fiscal year ended March 31, 2009 and implemented adjustments required for theconsolidated financial reporting. As a result, in the property and casualty insurance segment, ordinary income increased by 1,932million yen, ordinary expenses decreased by 2,490 million yen and ordinary profit increased by 4,423 million yen.


Segment information by business lines is omitted because the non-life insurance business accounts formore than 90% of the consolidated ordinary income, ordinary profit and total assets. Investment is part ofnon-life insurance business and is not an independent segment.

139


Segment Information by Location


Japan Americas Others Total Elimination Consolidated11211 11211 11211 11211 11211 11211


ordinary profit(1) Ordinary income from

transactions withexternal customers ........ 2,372,330 78,708 162,405 2,613,443 (44,326) 2,569,117

(2) Ordinary income arisingfrom inter-segmenttransactions .................. 221 38 93 353 (353) –

11211 11211 11211 11211 11211 11211

Total.......................................... 2,372,551 78,746 162,499 2,613,797 (44,680) 2,569,11711211 11211 11211 11211 11211 1121111211 11211 11211 11211 11211 11211

Ordinary expenses .................. 2,304,936 79,093 160,124 2,544,154 (44,868) 2,499,285Ordinary profit/loss ................ 67,614 (346) 2,375 69,643 188 69,831

II. Assets .................................. 7,657,351 1,383,645 546,244 9,587,241 (8,670) 9,578,570

Notes:

1. Countries and regions are classified into groups based on geographic proximity.

2. Major countries and regions included in each group are as follows:

(1) Americas: Bermuda

(2) Others: United Kingdom, Singapore and Malaysia

3. The major components of “Elimination” for “Ordinary income from transactions with external customers” are due to transferringamount of (1) 15,550 million yen from “Foreign exchange gain”, which is included in ordinary income relating to “Other” segment,to "Other investment expenses" in “Ordinary expenses” in the consolidated statements and (2) 12,967 million yen from “Provisionfor outstanding claims”, which is included in ordinary expenses of “Other” segment, to “Reversal of outstanding claims” in "Ordinaryincome" in the consolidated statements of income.

4. As noted in “Changes to Basis of Significant Accounting Policies”, Tokio Marine & Nichido has adopted “Practical Solution onUnification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical IssuesTask Force No. 18, May 17, 2006) for the fiscal year ended March 31, 2009 and implemented adjustments required for theconsolidated financial reporting. As a result, in “Americas” segment, ordinary expenses decreased by 41 million yen and ordinary lossdecreased by 41 million yen. In addition, in “Others” segment, ordinary income increased by 1,854 million yen, ordinary expensesdecreased by 2,528 million yen, and ordinary profit increased by 4,382 million yen.

140



Japan Americas Others Total Elimination Consolidated11211 11211 11211 11211 11211 11211


ordinary profit(1) Ordinary income from

transactions withexternal customers ........ 2,396,395 72,358 130,982 2,599,735 (10,147) 2,589,588

(2) Ordinary income arisingfrom inter-segmenttransactions .................. 1,433 38 (2,910) (1,438) 1,438 –

11211 11211 11211 11211 11211 11211

Total.......................................... 2,397,828 72,396 128,071 2,598,297 (8,708) 2,589,58811211 11211 11211 11211 11211 1121111211 11211 11211 11211 11211 11211

Ordinary expenses .................. 2,217,936 57,027 112,140 2,387,105 (10,423) 2,376,682Ordinary profit ........................ 179,891 15,368 15,930 211,191 1,714 212,906

II. Assets .................................. 10,588,895 635,330 765,487 11,989,714 (17,007) 11,972,706

Notes:



(1) Americas: Bermuda


3. A major component of “Elimination” for “Ordinary income from external customers” is due to transferring the amount of 8,964million yen from “Reversal of outstanding claims”, which is included in ordinary income relating to Americas, to “Provision foroutstanding claims” in “Ordinary expenses” in the consolidated statements of income.

Segment information by Overseas Sales


Americas Others Total11211 11211 11211

(Yen in millions)

I. Overseas sales ........................................................................ 138,107 213,599 351,706II. Consolidated ordinary income ................................................ – – 2,569,117III. Ratio of I to II (%) .................................................................. 5.4 8.3 13.7

Notes:



(1) Americas: North America and Bermuda


3. “Overseas sales” consists of the sum of overseas sales of Tokio Marine & Nichido and ordinary income of overseas consolidatedsubsidiaries.


Americas Others Total11211 11211 11211

(Yen in millions)

I. Overseas sales ........................................................................ 150,004 159,428 309,433II. Consolidated ordinary income ................................................ – – 2,589,588III. Ratio of I to II (%) .................................................................. 5.8 6.2 11.9

Notes:



(1) Americas: North America and Bermuda


3. “Overseas sales” consists of the sum of overseas sales of Tokio Marine & Nichido and ordinary income of overseas consolidatedsubsidiaries

141


Related Party Transactions


1. Related party transactions

No significant transactions with related parties.

2. Notes on the parent company and important related parties.

(1) Parent information

Tokio Marine Holdings, Inc. (listed on the Tokyo Stock Exchange and Osaka Stock Exchange)

(2) Summarized financial information of important related parties

No significant information of related parties.


Tokio Marine & Nichido has applied “Accounting Standard for Related Party Disclosures” (ASBJStatement No. 11, October 17, 2006) and “Guidance on Accounting Standard for Related Party Disclosures”(ASBJ Guidance No. 13, October 17, 2006) from the fiscal year ended March 31, 2009.


No significant transactions with related parties.

Per Share Information

For the year ended 31 March, 2009 For the year ended 31 March, 20081111111111111111111 111111111111111111

Net assets per share...................... ¥911.80 Net assets per share .................... ¥1,524.22

Net income per share – Basic .... ¥50.63 Net income per share – Basic .... ¥88.93

Notes:

1. Net income per share adjusted for dilution is not presented because the securities which would have dilutive effect have not beenissued.

2. The calculation of Net income per share is based on the following figures:

For the year For the ended year ended

31 March, 2009 31 March, 200811111111 11111111

Net Income .................................................................. ¥ 78,462 million ¥ 137,814 millionNet Income not attributable to shareholder ofcommon stock ............................................................ – –

Net Income attributable to common stock .................. ¥ 78,462 million ¥ 137,814 millionAverage number of shares of common stock .............. 1,549,692 thousand 1,549,692 thousand

shares shares

(Subsequent Events)


No significant subsequent events.


1. The Company agreed to acquire 100% of the outstanding shares of Philadelphia ConsolidatedHolding Corp. (“Philadelphia Consolidated”), a U.S. property & casualty (“P&C”) insurancegroup (hereinafter: “the Acquisition”) amounting to US$4,705million (505.09billion yen) on

142


July 23, 2008. The purpose of the acquisition and overview of Philadelphia Consolidated areas follows:

(1) Purpose of the Acquisition

The acquisition of Philadelphia Consolidated enables us to significantly enhance ourU.S. platform for local commercial business and to fully realize this key internationalmarket.

(2) Overview of Philadelphia Consolidated

a. Name of the Company

Philadelphia Consolidated Holdings Corp.

b. Head office

Philadelphia, Pennsylvania, the U.S.

c. Business

A holding company which owns insurance companies and insurance relatedcompanies.

d. Gross premiums written (2007)

US$1,692million (181.66 billion yen)

e. Total assets (as of Dec.31, 2007)

US$4,099million (4,401.28 billion yen)

(3) Financing

The acquisition will be financed through the utilization of Tokio Marine Group cash onhand, together with borrowings, including non-convertible bond issuance.

(4) Acquisition process

Under and in accordance with applicable laws and regulations in the U.S., theAcquisition will be implemented by first establishing the Company's owned specialpurpose company in Pennsylvania, and then merging Philadelphia Consolidated and thespecial purpose company. The merger requires a majority approval of PhiladelphiaConsolidated's shareholder's present at a special meeting called to vote on theAcquisition, and the approval of the shareholder of the special purpose company.Through this process, the Company will purchase the entire outstanding shares in returnfor consolidation to Philadelphia Consolidated's shareholder's. The Acquisition issubject to approval of various regulatory authorities of Japan and the U.S.

(5) Closing

The Company intends to proceed expeditiously and expects to complete the process bythe fourth quarter of 2008.

Note:

The Japanese yen amounts which described above have been translated at the exchange rate as of July 23, 2008.

143


V Related Information to the Consolidated Financial Statements

a. Bonds

Amount Amount

outstanding outstanding Coupon

Issuer Series Issue Date 31 March 08 31 March 09 (%) Collateral Maturity1111111 112111 11141 1111 1111 1111 1111 1111

(Yen in (Yen in

millions) millions)

50,000

1 Unsecured 2 Dec 99 50,000 [50,000] 1.96 None 2 Dec 09

15,000

1-2 Unsecured 28 Feb 00 15,000 [15,000] 1.95 None 26 Feb 10

3 Unsecured 20 Sep 00 20,000 20,000 2.14 None 20 Sep 10

4 Unsecured 20 Sep 00 10,000 10,000 2.78 None 18 Sep 20

China Class-A

Equity Linked

Note

13 Aug 08

–

28 Nov 08

380

[380]

199

[199]

0.00 None 14 Aug 09

–

30 Nov 09

Credit Linked

Note

14 Jul 08

–

30 Jul 08

– 2,100

[1,000]

1.44–

1.94

None 29 Jun 09

–

28 Sep 11

FX Linked

Coupon Note

12 Jul 05

–

23 Oct 08

53,770 65,250 0.00–

12.00

None 11 Jan 17

–

24 Oct 38

Snow Ball Note 16 Jun 05

–

26 Oct 06

17,200 15,200

[800]

0.00

–

4.80

None 13 Jan 09

–

27 Oct 26

FX Linked

Digital

Coupon Note

1 Dec 04

–

23 Oct 06

1,250 1,250 0.10 None 2 Dec 24

–

24 Oct 36

Reverse Floater

Note

1 Feb 05

–

8 Nov 06

32,500 26,600 0.00

–

2.60

None 20 Dec 11

–

30 Mar 26

CMS Floater

Note

16 Sep 04

–

28 Sep 06

20,240 19,740 0.09

–

3.03

None 28 Sep 11

–

20 Feb 26

Nikkei Average

Linked Note

6 Feb 06

–

2 Dec 08

4,500 6,300 0.00

–

4.30

None 13 Sep 27

–

3 Dec 38

Power Reverse

Dual Currency

Note

18 Aug 03

–

3 Jul 08

30,450 29,850

[300]

0.00

–

8.00

None 20 Jan 09

–

5 Jul 38

Straight Bond in

Euro

31 Mar 06 165

(EUR

1,000,000)

127

(EUR

1,000,000)

2.35 None 31 Mar 11

Tokio Marine

Financial

Solutions Ltd.

Straight Bond 7 Apr 04

–

30 Jul 08

40,978

[5,000]

32,424

[300]

0.30

–

2.17

None 13 Jan 09

–

19 May 21

Kiln Group Limited Subordinated

Bond in USD

11 Oct 06

–

20 Nov 06

7,325

($63,974,000)

5,881

($64,247,000)

4.53 None 11 Oct 36

–

20 Nov 36

Tokio Marine & Nichido Short-term

corporate bonds

11 Mar 08

–

2 Mar 09

99,965

[99,965]

67,953

[67,953]

0.40

–

0.71

None 11 Apr 08

–

2 Jun 09

144


Amount Amount

outstanding outstanding Coupon

Issuer Series Issue Date 31 March 08 31 March 09 (%) Collateral Maturity1111111 112111 11141 1111 1111 1111 1111 1111

(Yen in (Yen in

millions) millions)

Total 433,088 367,876 – – –

Notes:

1. The figures shown in the parenthesis ( ) are the principal amount in foreign currencies.

2. The figures shown in the brackets [ ] are the principal amount to mature within 1 year.

3. Principal amounts to mature within 5 years of 31 March 2009 are as follows:

Over 1 to Over 2 Over 3 to Over 4 to Within 1 year 2 years to 3 years 4 years 5 years121111 12111 12111 12111 12111

(Yen in millions)

135,553 23,373 13,481 3,000 10,675

b. BorrowingsAmount Amount Average

outstanding outstanding InterestType 31 Mar 08 31 Mar 09 rate Maturity11 12111 12111 12111 12111

(Yen in (Yen inmillions) millions)

Short term borrowings.................................................. 153 – – –Long term borrowings to be repaid within 1 year ...... 2 11,887 1.3% –Obligations under lease transactions to be repaidwithin 1 year .............................................................. – 2,100 – –

Long term borrowings other than above ...................... 37,544 282,041 0.9% 30 May 10–

20 Mar 32Obligations under lease transactions other than above – 3,227 – 30 Apr 10

–31 Mar 13

Other liabilitiesCommercial paper (to be repaid within 1 year) .......... 16,009 – – –

12111 12111 12111 12111

Total.............................................................................. 53,711 299,258 – –12111 12111 12111 1211112111 12111 12111 12111

Notes:

1. Average interest rate is calculated based on the interest rate as of the end of this fiscal year and principal amount outstanding.2. The amount of borrowings, lease obligations and commercial paper above is included in “Other liabilities” of the consolidated balance

sheets.3. As lease obligations are posted on the consolidated balance sheets in amounts prior to the elimination of an amount equivalent to

interest, including interest on the total lease amount, lease obligations are not stated in the “Average Rate” column.4. Principal amount of long term borrowings and lease obligations (other than that which is to be repaid within 1 year) to be repaid

within 5 years is as follows:

–

Straight Bond in

NZD

27 Jul 07 2,091

(NZD24,988,000)

[2,091]

– 8.74 Yes 28 Jul 08

Straight Bond in

AUD

17 Jul 07 1,428

(AUD14,994,000)

[1,428]

– 7.17 Yes 17 Jul 08

Straight Bond in

GBP

20 Mar 07

–

12 Jul 07

13,559

(GBP64,010,000)

[13,559]

– 5.50

–

6.12

Yes 20 Mar 08

–

14 Jul 08

Vetra Finance Corporation Straight Bond in

USD

29 May 07

–

20 Jun 07

12,284

($115,451,000)

[12,284]

– 5.04

–

5.43

Yes 29 May 08

–

20 Jun 08

145


Over 1 to Over 2 Over 3 to Over 4 to 2 years to 3 years 4 years 5 years

12111 12111 12111 12111

(Yen in millions)

Long term debt 1,002 250,002 5,002 5,002Lease obligations 1,886 928 412 –

(2) Others:

None

146


Directors and Officers of Tokio Marine & Nichido

The affairs of Tokio Marine & Nichido are managed by its Board of Directors. The following is a listof Tokio Marine & Nichido’s Directors (including its senior officers):

Kunio Ishihara ChairmanShuzo Sumi PresidentTakashi Ienaka Executive Vice-PrresidentHiroshi Amemiya Senior Managing DirectorMasami Suzuki Senior Managing DirectorTakaaki Yano Senior Managing DirectorShinichiro Okada Senior Managing DirectorTakaaki Tamai Managing DirectorTsuyoshi Nagano Managing DirectorKunihiko Fukao Managing DirectorTadahiko Miyazaki Managing DirectorMasahide Konno Managing DirectorKoji Iwai Managing DirectorHajime Inoue Managing DirectorNaoki Uno Managing DirectorTadashi Kunihiro DirectorHideo Nagatomo Standing Corporate AuditorHiroshi Mitsunaga Standing Corporate AuditorNobuyuki Maejima Standing Corporate AuditorHideyuki Sakai Statutory AuditorMasahiro Sakata Statutory AuditorKaori Sasaki Statutory Auditor

The business address of the above Directors, save for Messrs. Tadashi Kunihiro, Hideyuki Sakai,Masahiro Sakata and Kaori Sasaki, is as follows:

Tokio Marine & Nichido Fire Insurance Co., Ltd.2-1 Marunouchi 1-chome, Chiyoda-ku,Tokyo 100-8050Japan

The business address of Mr. Tadashi Kunihiro is as follows

2nd Floor, Sanshi Kaikan9-4 Yurakucho 1-chome, Chiyoda-kuTokyo 100-0006Japan

The business address of Hideyuki Sakai is as follows

Bingham McCutchen Murase, Sakai Mimura Aizawa4-3-13 Toranomon, 4th floorMinato -ku,Tokyo 105-0001Japan

The business address of Masahiro Sakata is as follows

Anderson Mori & TomotsuneIzumi Garden Tower6-1 Roppongi 1-chome, Minato -ku,Tokyo 106-6036Japan

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The business address of Kaori Sasaki is as follows

1-2 Minami-Aoyama 5-chome, Minato -ku,Tokyo 107-0062Japan

There are no potential conflicts of interest between any duties of the above Directors to Tokio Marine& Nichido and their private interests or other duties.

Litigation

In the previous twelve months there have been no governmental, legal or arbitration proceedings(including any such proceedings which are pending or threatened of which Tokio Marine & Nichido isaware) , which may have, or have had in the recent past, significant effects on Tokio Marine & Nichido’s orany of its subsidiaries’ respective financial position or profitability. Tokio Marine & Nichido and itssubsidiaries are, from time to time, the subject of routine legal proceedings relating to insurance claims.However, the management of Tokio Marine & Nichido is not aware of any proceedings which if decidedagainst it or any of Tokio Marine & Nichido’s subsidiaries, may have significant effects on Tokio Marine &Nichido or such subsidiaries’ financial position or profitability.

Principal Subsidiaries

The following subsidiaries are Tokio Marine & Nichido’s principal subsidiaries. Tokio Marine hasother subsidiaries; however, management does not consider these to be material in terms of the size of theirrespective assets, liabilities, revenues and expenses.

Philadelphia Consolidated Holding Corp.

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of PhiladelphiaConsolidated Holding Corp.. The company is based in Pennsylvania, U.S.A., and is principally engaged innon-life insurance business.

Philadelphia Indemnity Insurance Company

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of PhiladelphiaIndemnity Insurance Company. The company is based in Pennsylvania, U.S.A., and is principally engagedin non-life insurance business.

Tokio Marine Global Ltd.

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of Tokio MarineGlobal Ltd. The company is based in London and is principally engaged in non-life insurance business.

Kiln Group Ltd.

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of Kiln Group Ltd.The company is based in London and is principally engaged in non-life insurance business.

Kiln Underwriting Limited

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of Kiln UnderwritingLimited. The company is based in London and is principally engaged in non-life insurance business.

Asia General Holdings Limited

Tokio Marine & Nichido, as at the date hereof holds 92.4% of the voting rights of Asia GeneralHoldings Limited. The company is based in Singapore and is principally engaged in non-life insurancebusiness.

148


Tokio Marine Insurance Singapore Ltd.

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of Tokio MarineInsurance Singapore Ltd.. The company is based in Singapore and is principally engaged in non-lifeinsurance business.

TM Asia Life Singapore Ltd.

Tokio Marine & Nichido, as at the date hereof holds 85.2% of the voting rights of TM Asia LifeSingapore Ltd.. The company is based in Singapore and is principally engaged in life insurance business.

TM Asia Life Malaysia Bhd.

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of TM Asia LifeMalaysia Bhd.. The company is based in Malaysia and is principally engaged in life insurance business.

Tokio Millennium Re Ltd.

Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of Tokio MillenniumRe Ltd.. The company is based in Bermuda and is principally engaged in non-life insurance business.


Tokio Marine & Nichido, as at the date hereof holds 100% of the voting rights of Tokio MarineFinancial Solutions Ltd. The company is based in Cayman Islands and is principally engaged in derivativesbusiness.

149


MANAGEMENT OF TOKIO MARINE & NICHIDO

MANAGING BOARD OF TOKIO MARINE & NICHIDO

• Kunio Ishihara Chairman• Shuzo Sumi President• Takashi Ienaka Executive Vice President• Hiroshi Amemiya Senior Managing Director• Masami Suzuki Senior Managing Director• Takaaki Yano Senior Managing Director• Shinichiro Okada Senior Managing Director• Takaaki Tamai Managing Director• Tsuyoshi Nagano Managing Director• Kunihiko Fukao Managing Director• Tadahiko Miyazaki Managing Director• Masahide Konno Managing Director• Koji Iwai Managing Director• Hajime Inoue Managing Director• Naoki Uno Managing Director• Tadashi Kunihiro Director• Hideo Nagatomo Standing Corporate Auditor• Hiroshi Mitsunaga Standing Corporate Auditor• Nobuyuki Maejima Standing Corporate Auditor• Hideyuki Sakai Statutory Auditor• Masahiro Sakata Statutory Auditor• Kaori Sasaki Statutory Auditor

Kunio Ishihara

Kunio Ishihara is the chairman of the Board.

Additional functions/commissionerships

• Chairman of Tokio Marine Holdings, Inc.

Shuzo Sumi

As the President, Shuzo Sumi is responsible for the complete control of the company.


• President of Tokio Marine Holdings, Inc.

Takashi Ienaka

As the Executive Vice President, Takashi Ienaka is responsible for the management of CorporateAdministration Dept., Corporate Marketing & Planning Dept. and Personal Lines Marketing Dept..

Hiroshi Amemiya

As the Senior Managing Director, Hiroshi Amemiya is responsible for the management of InvestmentDept. 1, Investment Dept. 2 and Investment Dept. 3.


• Senior Managing Director of Tokio Marine Holdings, Inc.

150


Masami Suzuki

As the Senior Managing Director, Masami Suzuki is responsible for the management of PersonalLines Underwriting Dept., Commercial Lines Underwriting Dept. and Production & Service PromotionDept..

Takaaki Yano

As the Senior Managing Director, Takaaki Yano is responsible for the management of Internal AuditDept.and Compliance Dept..

Shinichiro Okada

As the Senior Managing Director, Shinichiro Okada is responsible for the management ofCommercial Lines Marketing Dept. Global Division and U.S. Branch.


• Senior Managing Director of Tokio Marine Holdings, Inc.

Takaaki Tamai

As the Managing Director, Takaaki Tamai is responsible for the management of Personnel PlanningDept., Corporate Accounting Dept. and Risk Management Dept..

Tsuyoshi Nagano

As the Managing Director, Tsuyoshi Nagano is responsible for the management of QualityManagement Dept., Corporate Planning Dept., Legal Dept. and Corporate Communications Dept..

Kunihiko Fukao

As the Managing Director, Kunihiko Fukao is responsible for the management of MarketingPromotion Dept.(Governmental), Government Sector Dept. 1, Government Sector Dept. 2, Health Care &Welfare Sector Dept., Group Account Marketing Dept., Financial Institutions Dept., Banking ChannelsBusiness Promotion Dept. and 401k Plan Marketing Promotion Dept..

Tadahiko Miyazaki

As the Managing Director, Tadahiko Miyazaki is responsible for the management of Ibaraki Branch.,Tochigi Branch., Gunma Branch., Saitama Branch., Saitama-Chuo Branch., Nigata Branch., YamanashiBranch. and Nagano Branch.

Masahide Konno

As the Managing Director, Masahide Konno is responsible for the management of Tokyo AutomobileIndustry Production Dept. 1, Tokyo Automobile Industry Production Dept. 2, Tokyo Automobile IndustryProduction Dept. 3, Tokyo Automobile Industry Production Dept. 4, Tokyo Automobile Claims ServiceDept. and Auto Business Promotion Dept..

Koji Iwai

As the Managing Director, Koji Iwai is responsible for the management of Tokyo Corporate BusinessSupport Division, Aerospace Dept., General Production Dept. 1, General Production Dept. 2, Travel &Tourism Production Dept., Telecommunication & Broadcasting Dept., Marine Industry Production Dept.,Production Dept. 5, Sapporo Branch, Marine Underwriting Dept. and Commercial Lines MarketingDept.(except Global Division).

151


Hajime Inoue

As the Managing Director, Hajime Inoue is responsible for the management of Claims Service Dept.,Kita-Kanto Shinetsu Claims Service Dept., Saitama Claims Service Dept., Higashi-Kanto Claims ServiceDept., Tokyo Metropolitan Claims Service Dept., Kanagawa Claims Service Dept., Keiji Hokuriku ClaimsService Dept., Kansai Claims Service Dept. 1, Kansai Claims Service Dept. 2, Osaka Automobile ClaimsService Dept., Kobe Claims Service Dept., Claims Management Dept. and Commercial Lines Claims Dept..

Naoki Uno

As the Managing Director, Hajime Inoue is responsible for the management of Business ProcessInnovation Dept., IT Planning Dept. and Service Promotion Dept..

Tadashi Kunihiro

Tadashi Kunihiro is the Outside Director.

The business address of the above Directors except Mr. Tadashi Kunihiro is as follows:

Tokio Marine & Nichido Fire Insurance Co., Ltd.2-1 Marunouchi 1-chome, Chiyoda-ku,Tokyo 100-8050Japan

The business address of Mr. Tadashi Kunihiro is as follows:

2nd Floor, Sanshi Kaikan9-4 Yurakucho 1-chome, Chiyoda-ku,Tokyo 100-0006Japan

There are no potential conflicts of interest between any duties of the above Directors to Tokio Marine& Nichido and their private interests or other duties.

152


TAXATION

Cayman Islands Taxation

The following is a general description of certain Cayman Islands tax considerations relating to theInstruments. It does not purport to be a complete analysis of all tax considerations relating to the Instruments.Prospective purchasers of the Instruments should consult their tax advisers as to the consequences under thetax laws of the country of which they are resident for tax purposes and the tax laws of the Cayman Islandsof acquiring, holding and disposing of Instruments and receiving payments of interest, principal and/ or otheramounts under the Instruments. This summary is based upon the law as in effect on the date of this BaseProspectus and is subject to any change in law that may take effect after such date.

Under existing Cayman Islands laws:

(i) payments in respect of the Instruments or Coupons will not be subject to taxation in theCayman Islands (the “Islands”) and no withholding will be required on such payment to anyholder of an Instrument or Coupon. Gains derived from the sale of Instruments or Coupons willnot be subject to income or corporation tax in the Islands. The Islands currently have noincome, corporation or capital gains tax and no estate duty, inheritance tax or gift tax; and

(ii) the holder of any Instrument or Coupon (or the legal or personal representative of such holder)whose Instrument or Coupon is brought into the Islands may, in certain circumstances, be liableto pay stamp duty imposed under the laws of the Islands in respect of such Instruments orCoupon.

The Issuer has been incorporated under the laws of the Islands as an exempted company and, as such,has obtained an undertaking from the Governor-in-Council of the Islands in accordance with Section 6 of theTax Concessions Law (1995 Revision):

(a) that no Law which is hereunder enacted in the Islands imposing any tax to be levied on profits,income, gains or appreciations shall apply to the Issuer or its operations; and

(b) in addition, that no tax to be levied on profits, income gains or appreciations or which is in thenature of estate duty or inheritance tax shall be payable;

(i) on or in respect of the shares debentures or other obligations of the Issuer; or

(ii) by way of the withholding in whole or in part of any relevant payment as defined inSection 6(3) of the Tax Concessions Law (1995 Revision).

These concessions shall apply for a period of twenty years from the 16 day of December 1997, subjectto the payment of an annual fee (with effect from January 2010).

European Union Savings Tax Directive

Under EC Council Directive 2003/48/EC on the taxation of savings income, each Member State isrequired to provide to the tax authorities of another Member State details of payments of interest or othersimilar income paid by a person within its jurisdiction to, or collected by such a person for, an individualresident or certain limited types of entity established in that other Member State; however, for a transitionalperiod, Austria, Belgium and Luxembourg may instead apply a withholding system in relation to suchpayments, deducting tax at rates rising over time to 35 per cent. The transitional period is to terminate at theend of the first full fiscal year following agreement by certain non-EU countries to the exchange ofinformation relating to such payments. Belgium will replace this withholding tax with a regime of exchangeof information to the Member State of residence as from 1 January 2010.

A number of non-EU countries, and certain dependent or associated territories of certain MemberStates, have adopted similar measures (either provision of information or transitional withholding) in relationto payments made by a person within its jurisdiction to, or collected by such a person for, an individual

153


resident in a Member State. In addition, the Member States have entered into reciprocal provision ofinformation or transitional withholding arrangements with certain dependent or associated territories inrelation to payments of interest or similar income made by a person in a Member State to, or collected bysuch a person for, an individual resident or certain limited types of entity established in one of thoseterritories.

On 13 November 2008 the European Commission published a proposal for amendments to theDirective, which included a number of suggested changes which, if implemented, would broaden the scopeof the requirements described above. The European Parliament approved an amended version of thisproposal on 24 April 2009. Investors who are in any doubt as to their position should consult theirprofessional advisers.

154


SUBSCRIPTION AND SALE

Instruments may be sold from time to time by the Issuer to any one or more of Citigroup GlobalMarkets Limited, Daiwa Securities SMBC Europe Limited, Deutsche Bank AG, London Branch, GoldmanSachs International, J.P. Morgan Securities Ltd., Merrill Lynch International, Mitsubishi UFJ SecuritiesInternational plc, Morgan Stanley & Co. International plc and Nomura International plc (the “Dealers”). Thearrangements under which Instruments may from time to time be agreed to be sold by the Issuer to, andpurchased by, the Dealers are set out in a dealership agreement dated 27 August 1998 as supplemented by asupplemental dealership agreement dated 3 December 1999, a second supplemental dealership agreementdated 28 August 2001, an amended and restated dealership agreement dated 1 September 2003, a secondamended and restated dealership agreement dated 9 November 2005, a third amended and restated dealershipagreement dated 6 November 2006, a fourth amended and restated dealership agreement dated 2 November2007, a fifth amended and restated dealership agreement dated 30 October 2008 and a sixth amended andrestated dealership agreement dated 29 October 2009 (as amended, supplemented or replaced from time totime, the “Dealership Agreement”) and made between the Issuer and the Dealers. Any such agreement will,inter alia, make provision for the form and terms and conditions of the relevant Instruments, the price atwhich such Instruments will be purchased by the Dealers and the commissions or other agreed deductibles(if any) payable or allowable by the Issuer in respect of such purchase. The Dealership Agreement makesprovision for the resignation or termination of existing Dealers and for the appointment of additional or otherDealers either generally in respect of the Programme or in relation to a particular Tranche of Instruments.

United States of America: Regulation S Category 2; TEFRA D, unless TEFRA C is specified asapplicable in the relevant Final Terms.

Instruments have not been and will not be registered under the United States Securities Act of 1933,as amended (the “Securities Act”) and may not be offered or sold within the United States or to, or for theaccount or benefit of, U.S. persons except in certain transactions exempt from, or not subject to, theregistration requirements of the Securities Act. Terms used in the preceding sentence have the meaningsgiven to them by Regulation S under the Securities Act.

Instruments in bearer form are subject to U.S. tax law requirements and may not be offered, sold ordelivered within the United States or its possessions or to U.S. persons, except in certain transactionspermitted by U.S. tax regulations. Terms used in the preceding sentence have the meanings given to them bythe United States Internal Revenue Code and regulations thereunder.

Each Dealer has agreed that, except as permitted by the Dealership Agreement, it will not offer, sellor deliver Instruments, (i) as part of their distribution at any time or (ii) otherwise until forty days after thelater of the date of issue of the identifiable Tranche of Instruments of which such Instruments are a part andthe completion of the distribution of such identifiable Tranche, as certified to the Issue and Paying Agent orthe Issuer by such Dealer (or, in the case of a sale of a Tranche of Instruments to or through more than oneDealer, by each of such Dealers as to Instruments of such Tranche purchased by or through it, in which casethe Issue and Paying Agent or the Issuer shall notify each such Dealer when all such Dealers have socertified) within the United States or to or for the account or benefit of, U.S. persons, and such Dealer willhave sent to each dealer to which it sells Instruments during the restricted period relating thereto aconfirmation or other notice setting forth the restrictions on offers and sales of the Instruments within theUnited States or to or for the account or benefit of U.S. persons.

In addition, until forty days after the commencement of the offering of Instruments comprising anyTranche, any offer or sale of Instruments within the United States by any dealer (whether or not participatingin the offering) may violate the registration requirements of the Securities Act.

European Economic Area

In relation to each Member State of the European Economic Area which has implemented theProspectus Directive (each, a “Relevant Member State”), each Dealer has represented and agreed, and eachfurther Dealer appointed under the Programme will be required to represent and agree, that with effect fromand including the date on which the Prospectus Directive is implemented in that Relevant Member State (the

155


“Relevant Implementation Date”) it has not made and will not make an offer of Instruments which are thesubject of the offering contemplated by this Prospectus as completed by the final terms in relation thereto tothe public in that Relevant Member State except that it may, with effect from and including the RelevantImplementation Date, make an offer of such Instruments to the public in that Relevant Member State:

(a) if the final terms in relation to the Instruments specify that an offer of those Instruments maybe made other than pursuant to Article 3(2) of the Prospectus Directive in that RelevantMember State (a “Non-exempt Offer”), following the date of publication of a prospectus inrelation to such Instruments which has been approved by the competent authority in thatRelevant Member State or, where appropriate, approved in another Relevant Member State andnotified to the competent authority in that Relevant Member State, provided that any suchprospectus has subsequently been completed by the final terms contemplating such Non-exempt Offer, in accordance with the Prospectus Directive, in the period beginning and endingon the dates specified in such prospectus or final terms, as applicable;

(b) at any time to legal entities which are authorised or regulated to operate in the financial marketsor, if not so authorised or regulated, whose corporate purpose is solely to invest in securities;

(c) at any time to any legal entity which has two or more of (1) an average of at least 250employees during the last financial year; (2) a total balance sheet of more than €43,000,000;and (3) an annual net turnover of more than €50,000,000, as shown in its last annual orconsolidated accounts;

(d) at any time to fewer than 100 natural or legal persons (other than qualified investors as definedin the Prospectus Directive) subject to obtaining the prior consent of the relevant Dealer orDealers nominated by the Issuer for any such offer; or

(e) at any time in any other circumstances falling within Article 3(2) of the Prospectus Directive,

provided that no such offer of Instruments referred to in (b) to (e) above shall require the Issuer or anyDealer to publish a prospectus pursuant to Article 3 of the Prospectus Directive or supplement a prospectuspursuant to Article 16 of the Prospectus Directive.

For the purposes of this provision, the expression an “offer of Instruments to the public” in relationto any Instruments in any Relevant Member State means the communication in any form and by any meansof sufficient information on the terms of the offer and the Instruments to be offered so as to enable an investorto decide to purchase or subscribe the Instruments, as the same may be varied in that Member State by anymeasure implementing the Prospectus Directive in that Member State and the expression “ProspectusDirective” means Directive 2003/71/EC and includes any relevant implementing measure in each RelevantMember State.

Selling Restrictions Addressing Additional United Kingdom Securities Laws

In relation to each Tranche of Instruments, each Dealer has represented, warranted and agreed andeach further Dealer appointed under the Programme will be required to represent and agree that:

(a) No deposit-taking: in relation to any Instruments having a maturity of less than one year:

(i) it is a person whose ordinary activities involve it in acquiring, holding, managing ordisposing of investments (as principal or agent) for the purposes of its business; and:

(ii) it has not offered or sold and will not offer or sell any Instruments other than to persons(a) whose ordinary activities involve them in acquiring, holding, managing or disposingof investments (as principal or agent) for the purposes of their businesses; or (b) who itis reasonable to expect will acquire, hold, manage or dispose of investments (as principalor agent) for the purposes of their businesses,

where the issue of the Instruments would otherwise constitute a contravention of Section 19 ofthe FSMA by the Issuer;

156


(b) Financial promotion: it has only communicated or caused to be communicated and will onlycommunicate or cause to be communicated any invitation or inducement to engage ininvestment activity (within the meaning of section 21 of the FSMA) received by it inconnection with the issue or sale of any Instruments in circumstances in which section 21(1)of the FSMA does not apply to the Issuer; and

(c) General compliance: it has complied and will comply with all applicable provisions of theFSMA with respect to anything done by it in relation to any Instruments in, from or otherwiseinvolving the United Kingdom.

Japan

The Instruments have not been and will not be registered under the Financial Instruments andExchange Law of Japan (Law No. 25 of 1948, as amended; the “FIEL”). Each of the Dealers haverepresented and agreed that they have not offered or sold and will not offer or sell any Instruments, directlyor indirectly, in Japan or to, or for the benefit of, any resident of Japan (which term as used herein means anyperson resident in Japan, including any corporation or other entity organised under the laws of Japan) or toothers for re-offering or resale, directly or indirectly, in Japan or to, or for the benefit of a resident of Japan,except pursuant to an exemption from the registration requirements of, and otherwise in compliance with,the FIEL and any other applicable laws, regulations and ministerial guidelines of Japan.

The Cayman Islands

No invitation to subscribe for Instruments may be made to members of the public in the CaymanIslands (and no invitation will be made to members of the public in the Cayman Islands to subscribe for theInstruments unless the Instruments are listed on the Cayman Islands Stock Exchange).

General

Each Dealer has represented, warranted and agreed that it has complied and will comply with allapplicable laws and regulations in each country or jurisdiction in or from which it purchases, offers, sells ordelivers Instruments or possesses, distributes or publishes this Base Prospectus or any Final Terms or anyrelated offering material, in all cases at its own expense. Other persons into whose hands the Base Prospectusor any Final Terms comes are required by the Issuer and the Dealers to comply with all applicable laws andregulations in each country or jurisdiction in or from which they purchase, offer, sell or deliver Instrumentsor have in their possession or distribute such offering material, in all cases at their own expense.

The Dealership Agreement provides that the Dealers shall not be bound by any of the restrictionsrelating to any specific jurisdiction (set out above) to the extent that such restrictions shall, as a result ofchange(s) or change(s) in official interpretation, after the date hereof, in applicable laws and regulations, nolonger be applicable but without prejudice to the obligations of the Dealers described in the paragraphheaded “General” above.

Selling restrictions may be supplemented or modified with the agreement of the Issuer. Any suchsupplement or modification will be set out in the relevant Final Terms (in the case of a supplement ormodification relevant only to a particular Tranche of Instruments) or (in any other case) in a supplement tothis document.

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GENERAL INFORMATION

Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on theharmonisation of transparency requirements in relation to information about issuers whose securities areadmitted to trading on a regulated market and amending Directive 2001/34/EC (the “TransparencyDirective”) entered into force on 20 January 2005. It requires Member States to take measures necessary tocomply with the Transparency Directive by 20 January 2007. If, as a result of the Transparency Directive orany legislation implementing the Transparency Directive, the Issuer could be required to publish financialinformation either more regularly than it otherwise would be required to or according to accountingprinciples which are materially different from the accounting principles which it would otherwise use toprepare its published financial information, the Issuer may seek an alternative admission to listing, tradingand/or quotation for the Notes on a different section of the London Stock Exchange or by such othercompetent authority, stock exchange and/or quotation system inside or outside the European Union as it maydecide.

The admission of the Programme to trading on the London Stock Exchange is expected to take effecton 3 November 2009. The price of the Instruments on the price list of the London Stock Exchange will beexpressed as a percentage of their principal amount (exclusive of accrued interest). Any Tranche ofInstruments intended to be admitted to trading on the London Stock Exchange will be so admitted to tradingupon submission to the London Stock Exchange of the relevant Final Terms and any other informationrequired by the London Stock Exchange, subject to the issue of the relevant Instruments. Prior to admissionto trading, dealings will be permitted by the London Stock Exchange in accordance with its rules.Transactions will normally be effected for delivery on the third working day in London after the day of thetransaction. Instruments may be issued pursuant to the Programme which will not be admitted to listing,trading and/or quotation by the FSA and/or the London Stock Exchange or any other listing authority, stockexchange and/or quotation system or will be admitted to listing, trading and/or quotation on any other listingauthority, stock exchange and/or quotation system as the Issuer and the relevant Dealer(s) agree.

However, Instruments may be issued pursuant to the Programme which will not be admitted to listing,trading and/or quotation by the London Stock Exchange or any other listing authority, stock exchange and/orquotation system or which will be admitted to listing, trading and/or quotation by such other or further listingauthorities, stock exchanges and/or quotation systems as the Issuer and the relevant Dealer(s) may agree.

1. The establishment of the Programme was authorised by unanimous written consent of theBoard of Directors of the Issuer passed/given on 23 June 1998. This was supplemented by aBoard Resolution of the Issuer and the consent of Tokio Marine & Nichido given on 12 October2006, authorising the Issuer to have outstanding at any time Instruments in the aggregateprincipal amount of ¥400,000,000,000 (or its equivalent in any other currency). The Issuer hasobtained or will obtain from time to time all necessary consents, approvals and authorisationsin connection with the issue and performance of the Instruments.

2. The Instruments have been accepted for clearance through Euroclear and Clearstream,Luxembourg. The appropriate common code and the International Securities IdentificationNumber in relation to the Instruments of each Series will be specified in the Final Termsrelating thereto. The relevant Final Terms shall specify any other clearing system as shall haveaccepted the relevant Instruments for clearance together with any further appropriateinformation.

3. Instruments (other than Temporary Global Instruments) and any Coupon appertaining theretowill bear a legend substantially to the following effect: “Any United States person who holdsthis obligation will be subject to limitations under the United States income tax laws, includingthe limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue Code.” Thesections referred to in such legend provide that a United States person who holds a BearerInstrument or Coupon generally will not be allowed to deduct any loss realised on the sale,exchange or redemption of such Bearer Instrument or Coupon and any gain (which might

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otherwise be characterised as capital gain) recognised on such sale, exchange or redemptionwill be treated as ordinary income.

4. Neither the Issuer, Tokio Marine & Nichido nor any member of its group is or has beeninvolved in any governmental, legal or arbitration proceedings (including any such proceedingswhich are pending or threatened of which the Issuer or Tokio Marine & Nichido, respectively,is aware) during the 12 months before the date of this Base Prospectus which may have or havehad in the recent past, significant effects on the financial position or profitability of the Issueror Tokio Marine & Nichido and any of their respective subsidiaries taken as a whole.

5. Since 31 December 2008, the last day of the financial period in respect of which the mostrecent audited financial statements of the Issuer have been prepared, no interim financialstatements of the Issuer have been prepared and there has been no significant change in thefinancial or trading position nor any material adverse change in the prospects of the Issuer.

6. Since 31 March 2009, the last day of the financial period in respect of which the most recentaudited consolidated financial statements of Tokio Marine & Nichido have been prepared, nointerim financial statements of Tokio Marine & Nichido have been prepared and there has beenno significant change in the financial or trading position nor any material adverse change in theprospects of Tokio Marine & Nichido and its subsidiaries taken as a whole.

7. Deloitte Touche Tohmatsu LLC, a member of the Japanese Institute of Certified PublicAccountants, were independent public auditors to the Issuer in respect of the Issuer’s financialstatements for the fiscal years ended 31 December 2001 up to and including the fiscal yearended 31 December 2008. PricewaterhouseCoopers Aarata, a member ofPricewaterhouseCoopers and the Japanese Institute of Certified Public Accountants, have beenappointed as independent public auditors to the Issuer in respect of the Issuer’s financialstatements from the fiscal year ending 31 December 2009.

8. Since 21 July 2006, PricewaterhouseCoopers Aarata, a member of PricewaterhouseCoopersand the Japanese Institute of Certified Public Accountants, has been appointed as independentpublic auditors of Tokio Marine & Nichido and have audited the annual financial statements ofTokio Marine & Nichido for the years ended 31 March 2008 and 31 March 2009.

9. For so long as the Programme remains in effect or any Instruments shall be outstanding, copieswill be available and may be inspected during normal business hours at the specified office ofthe Issue and Paying Agent and from the Tokyo Branch of the Issuer, namely:

(a) the constitutional documents of the Issuer and Tokio Marine & Nichido;

(b) the current listing particulars in relation to the Programme, together with anyamendments and all documents incorporated by reference herein;

(c) the Issue and Paying Agency Agreement;

(d) the Deed of Covenant;

(e) the Dealership Agreement;

(f) the Support Agreement;

(g) the most recently publicly available audited non-consolidated (and consolidated, if andwhen the Issuer has any subsidiary) financial statements of the Issuer beginning withsuch financial statements for the years ended 31 December 2007 and 31 December2008;

(h) the most recently publicly available audited consolidated annual financial statements ofTokio Marine & Nichido beginning with such financial statements for the years ended31 March 2009 and 31 March 2008; and

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(i) any Final Terms relating to Instruments which are admitted to listing, trading and/orquotation on any listing authority, stock exchange and/or quotation system. (In the caseof any Instruments which are not admitted to listing, trading and/or quotation on anylisting authority, stock exchange and/or quotation system, copies of the relevant FinalTerms will only be available for inspection by a Holder of such Instruments).

10. Certain of the Dealers and their affiliates have engaged, and may in the future engage, ininvestment banking and/or commercial banking transactions and may perform services for theIssuer, Tokio Marine & Nichido and their respective affiliates in the ordinary course ofbusiness.

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REGISTERED OFFICE REGISTERED OFFICE OFOF THE ISSUER TOKIO MARINE & NICHIDO

Tokio Marine Tokio Marine & Nichido Fire InsuranceFinancial Solutions Ltd. Co., Ltd.

P.O. Box 309 2-1 Marunouchi 1-ChomeGeorge Town Chiyoda-ku

Grand Cayman Tokyo 100-8050Cayman Islands Japan

DEALERS

Citigroup Global Markets Limited Daiwa Securities SMBC Europe LimitedCitigroup Centre 5 King William StreetCanada Square London EC4N 7AXCanary Wharf

London E14 5LB

Deutsche Bank AG, London Branch Goldman Sachs InternationalWinchester House Peterborough Court

1 Great Winchester Street 133 Fleet StreetLondon EC2N 2DB London EC4A 2BB

J.P. Morgan Securities Ltd. Merrill Lynch International125 London Wall Merrill Lynch Financial Centre

London EC2Y 5AJ 2 King Edward StreetLondon EC1A 1HQ

Mitsubishi UFJ Securities International plc Morgan Stanley & Co. International plc6 Broadgate 25 Cabot Square

London EC2M 2AA Canary WharfLondon E14 4QA

Nomura International plcNomura House

1 St Martin’s-le-GrandLondon EC1A 4NP

2001-2008 2009 (onwards)AUDITORS OF THE ISSUER AUDITORS OF THE ISSUER

Deloitte Touche Tohmatsu LLC PricewaterhouseCoopers Aarata13-23, Shibaura 4-Chome Shin-Marunouchi Bldg.

Minato-ku 32nd Floor, 151-MarunouchiTokyo 108-8530 Shin-Marunouchi Bldg.

Japan Chiyoda-kuTokyo 100-6532

Japan

AUDITORS OF TOKIO MARINE & NICHIDO

PricewaterhouseCoopers Aarata32nd Floor, 151-Marunouchi

Chiyoda-kuTokyo 100-6532

Japan


ISSUE AND PAYING AGENT

The Bank of New York Mellon acting through its London BranchOne Canada Square

Canary WharfLondon E14 5AL

LEGAL ADVISERS

To the Issuer as to Cayman Islands Law: To the Dealers as to English law:

Maples and Calder Clifford Chance LLPP.O. Box 309 10 Upper Bank StreetGeorge Town London E14 5JJ

Grand CaymanCayman Islands

British West Indies



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TOKIO MARINE FINANCIAL SOLUTIONS LTD.

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