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					Annual Report

2006
For the year ended March 31, 2006
Offer ing value that goes beyond life insurance —
to “Lifeplanner Value ® ”
         Breakthrough Insurance
           Creating new value in life insurance

The roles of life insurance aren’t simply to protect you against
unforeseen events and illness or to provide for you in old age.
Life insurance gives you and your family a chance to rethink
           your dreams and help them come true.
 We stand by you throughout your life, propose appropriate
  solutions at life’s various stages and help you realize your
    dreams. That is the mission of the Lifeplanner ® sales
  employees of Sony Life. We are the bridge to the dreams
                you and your family hold dear.




        Who is your Lifeplanner®?
                  r
    Aiming to become each customer’s “own agent”


     A long life visits numerous changes on each of us.
                      ”
   As your “own agent,” we help you meet these changes
        flexibly and with the best possible solutions.
It is the mission of our Lifeplanner ® sales employees to do so.
   The face that you see in happy times and sad, in good
          times and bad—that is your Lifeplanner ®.
                           ur Lifeplanner ®?
                  Who is your L




                                    Note: “Lifeplanner” and “Lifeplanner Value” are registered trademarks of Sony Life.
    Profile


    Sony Life Insurance Co., Ltd., is a wholly owned subsidiary of Sony Financial Holdings Inc.* and a prominent

    member of the Sony Group. Sony Life’s philosophy of providing tailor-made solutions to the specific insurance

    needs of each customer has supported annual growth every year since operations commenced in 1981. A sound

    operational and financial structure is demonstrated by financial strength ratings from overseas and domestic

    rating agencies, including Standard & Poor’s, which has assigned Sony Life an A+ rating (as of June 2006) and

    describes the Company as offering “strong” insurer financial strength. Sony Life fosters a sales force with

    a high level of financial planning knowledge through its exclusive Lifeplanner® sales employee system and

    an independent agent system. Sony Life was the first company in Japan to introduce tailor-made insurance

    products based on consulting expertise, and its needs-based marketing methods are rapidly becoming the

    de facto industry standard.


    *Sony Financial Holdings Inc. is the financial holding company of Sony Life Insurance Co., Ltd., Sony Assurance Inc. (“Sony Assurance”) and Sony Bank Inc. (“Sony Bank”), and
     is 100% owned by Sony Corporation.




    CONTENTS
2   Financial Highlights                                                           3

    Key Performance Measures                                                       3

    Message from Management                                                        4

    The Sony Financial Holdings Group                                              6

    Tie-ups within the SFH Group and the Sony Group                                7

    Working as Our Customers’ “Own Agents”                                         8

    Acting as a Good Corporate Citizen                                            11

    Financial Review                                                              20

    Balance Sheets                                                                28

    Statements of Income                                                          30

    Notes to Financial Statements                                                 31

    Details of Operating Income (Core Profit)                                     33

    Investment Summary of General Account Assets                                  34

    Organization                                                                  38

    Corporate History                                                             39

    Directors and Statutory Auditors                                              40

    Corporate Data                                                                41
Financial Highlights
Fiscal Years Ended March 31

                                                                                                                                        Thousands of
                                                                           Millions of yen                                           U.S. dollars (Note 1)
                                              2006               2005               2004               2003                 2002                 2006
Insurance premiums                    ¥ 579,267          ¥ 550,304         ¥ 512,700           ¥ 489,548            ¥ 503,871            $ 4,951,001
Investment income                         108,438              50,089            64,767             31,493                33,112             926,828
Ordinary revenues                         696,426            604,093            580,972           524,089             539,699              5,952,366
Ordinary profit                            24,359              17,070            30,478             18,557                19,898             208,201
Core profit                                28,564              24,333            22,821             22,460                26,754             244,145
Net income                                   9,616             10,102            13,932             11,269                12,004              82,196
Common stock                               65,000              65,000            65,000             65,000                65,000             555,556
Total assets                           3,103,241           2,617,266         2,375,828          1,981,897            1,729,077            26,523,429
 Assets in separate account               280,682            200,996            164,461           118,189             106,150              2,398,992
Policy reserve                         2,739,264           2,395,060         2,095,565          1,831,100            1,600,130            23,412,515
Loans                                      86,918              79,914            71,629             65,574                54,463             742,896
Securities                             2,132,216           1,704,663         1,563,605          1,265,650            1,046,054            18,224,075
Solvency margin ratio                     1,547.0%                   %
                                                              1,317.1.          1,453.3.
                                                                                       %                  %
                                                                                                   1,354.2.                      %
                                                                                                                          1,493.5.                   —
Number of employees                          5,250              5,528              5,538               5,569               5,721                     —
Notes: 1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥117=U.S.$1.00, the approximate Tokyo Foreign
          Exchange Market rate as of March 31, 2006.
       2. U.S. dollar figures are based on non-truncated yen amounts.




Key Performance Measures
Insurance in Force
                                                                                                 Billions of yen               Percentage change
As of March 31                                                                                 2006                2005         2006             2005         3
Individual life insurance in force                                                           ¥28,909        ¥27,680                +4.4           +6.0
Individual annuities in force                                                                   176                143         +22.7            +19.6
Group life insurance in force                                                                   923                816         +13.1              –1.4
Group annuities in force                                                                         71                 69             +3.5           +2.8
Notes: 1. Individual annuities in force is the sum of annuity assets at the time annuity payments commence and policy reserves after annuity
          payments commence.
       2. Group annuities in force is the amount of policy reserves.


New Insurance Sales
                                                                                                 Billions of yen
                                                                   New insurance sales                                                         Net increase
                                                        + Net increase from conversion              New insurance sales                    from conversion
Fiscal years ended March 31                                  2006            2005              2006                2005         2006             2005
Individual life insurance sales                            ¥3,361          ¥3,700             ¥3,361         ¥3,700                ¥—              ¥—
Individual annuity sales                                        31               24              31                 24               —               —
Group life insurance sales                                        9                7               9                 7               —               —
Group annuity sales                                               2              —                 2                 —               —               —
Notes: 1. Individual annuity sales (New insurance sales + Net increase from conversion) equals the amount of annuity assets at the time annuity
          payments commence.
       2. Group annuity sales is equal to the first premium income.
    Message from Management




4


                           Taro Okuda,                             Kunitake Ando,
                           President and Representative Director   Chairman and Director




    Sony Life commenced operations in 1981 with the                low, improving 0.51 percentage point, to 5.88%. We
    philosophy of meeting individual needs by “providing           believe these favorable results were derived from the
    optimum life insurance products and services of the            satisfaction of customers with the consulting-based
    highest quality.” Thanks to the support and trust our          sales approach by Lifeplanner® sales employees and
    customers have placed in us, in April 2006 we cel-             Partners (independent agencies), the Company’s
    ebrated our 25th anniversary of operations. We will            method of tailoring products to provide ample protec-
    continue to do our utmost to merit this support by             tion to each customer and its increasing focus on
    raising the level of services we provide.                      after-sale follow-up.


    Operating Results in Fiscal 2005                               A Management Style that Emphasizes
    During the year, the Japanese life insurance industry          Listening and Providing Ongoing Protection
    showed signs of recovery, helped by increased sales            to Customers
    of tertiary-sector products and variable individual            The life insurance business involves the protection of
    annuities, but the industry’s total insurance in force         customers over a long period of time. In addition to
    continued to decline. In this environment, Sony Life           communicating face to face through its Lifeplanner®
    posted a 4.5% increase in insurance in force, to               sales employees, Sony Life considers earning the
    ¥29,084.5 billion, buoyed by protection products,              ongoing trust of customers and society as a whole
    and continuing the steady increase that Sony Life has          to be one of its most important missions. We have
    achieved in each of the 25 years since its start of            introduced a number of initiatives to propel ourselves
    operations. Our lapse and surrender rate remained              toward this goal.
  For example, in a move designed to enhance cus-          address a variety of issues. Through this sort of
tomer convenience, in June 2005 we commenced               service, Sony Life’s Lifeplanner ® sales employees act
holiday operations at our customer center. Along with      as each customer’s “own agent,” guiding them past
the Notice of Coverage that we send out each year to       life’s milestones.
policyholders, we included a Customer Request Card           Lifeplanner Value ® is what customers experience
to elicit requests from customers. We also conducted       as a result of their communications with Lifeplanner®
a customer opinion survey to try to uncover custom-        sales employees. In a sense, this value derives from
ers’ true feelings about Sony Life. Through such           the customer’s realization that their Lifeplanner® is a
broad-ranging activities, we seek out valued customer      person who will remain by their side throughout life.
thoughts and opinions, which we then incorporate into
our management and use to enhance our services.            The Sony Financial Holdings Group
  To protect customers and fulfill the vital public role   Working to Provide Higher Quality Financial Services
that the life insurance industry plays in society, we      Since its inception in April 2004, the Sony Financial
accord compliance a high priority among our man-           Holdings Group has worked to enhance group syner-
agement policies. However, I believe this particular       gies. Sony Life’s Lifeplanner ® sales employees now
area still requires a keen individual focus from each      sell Sony Assurance’s products; Sony Life’s individual
of Sony Life’s employees and executives.                   annuities are offered for sale on Sony Bank’s web site;
                                                           and a host of other measures are in place to offer higher
Sony Life’s Mission and Lifeplanner Value®                 quality financial services and to raise corporate value.
Creating New Value in Life Insurance and                     Previously available only in certain regions, from
Aiming to Become Each Customer’s “Own Agent”               April 1, 2005, Sony Life’s Lifeplanner® sales employ-
Through its consulting-based sales approach, Sony          ees have begun introducing Sony Bank’s mortgage             5
Life has taken on the challenge of changing the very       loans nationwide throughout Japan.
face of life insurance. We see it as our mission to          Sony Life will continue to strengthen its ties with
provide the life insurance that is most appropriate for    other companies under the SFH umbrella. As we
each of our customers, whose satisfaction from this        increase group synergy, we will promote comprehen-
approach has enabled us to continue expanding our          sive financial services, working to provide customers
business each year since the time we began opera-          with even higher value-added products and services.
tions. Rather than simply resting on our laurels,
though, we take our mission as an ongoing challenge.       In Conclusion
  We also consider exactly what kind of value cus-         To guarantee our ability to protect customers for
tomers expect Sony Life to deliver after concluding        many years to come, we will strive to heighten our
insurance contracts, as clients may have unstated          compliance, financial soundness and profitability.
needs of which they are themselves unaware. Sony           Furthermore, by enhancing the security and added
Life believes in remaining closely in tune with its cus-   value that we provide our customers, we aim to earn
tomers, serving as a trusted advisor in time of need.      increasing levels of trust and confidence and remain
Such approaches enable us to provide value to cus-         their life insurance company of choice. I thank you for
tomers who take out Sony Life policies, and envision-      your support and encouragement of Sony Life in
ing that value is the first step toward making changes.    these endeavors.
We seek to understand our customers’ goals and
work to develop life plans to ensure that these
develop beyond the state of mere dreams. Naturally,
a customer’s life plan undergoes many changes even
after their insurance policy commences. To maintain
optimum levels of protection, we review these levels       Taro Okuda
as their situations change. Aiming to do the best          President and Representative Director
for our customers, we work together with them to           Sony Life Insurance Co., Ltd.
    The Sony Financial Holdings Group


    One Team, One Dream
    Aiming to Become One of the Most Trusted Financial Services Groups


    With the establishment of the financial holding com-                      in the Sony Group, which provides diverse products
    pany Sony Financial Holdings Inc. in April 1, 2004,                       and services. We also will keep delivering value-
    Sony Life, together with Sony Assurance and Sony                          added products and services that are innovative
    Bank, became subsidiaries of this holding company.                        and that match customers’ needs.
       In terms of history and scale of business, Sony Life                      Sony Financial Holdings is preparing for a future
    accounts for the major portion of the Sony Financial                      initial public offering (IPO), with the goal of diversifying
    Holdings Group (SFH Group). To provide high-value-                        financing opportunities to promote the further growth
    added products and quality services to each of our                        of the SFH Group and to enhance the group’s corpo-
    customers in a swift and more precise manner, we                          rate value. By reinforcing the business fundamentals
    have reinforced tie-ups with Sony Assurance and                           and increasing transparency, the SFH Group will
    Sony Bank, two highly distinctive financial institutions.                 continue to secure the trust of customers.
    In fiscal 2005, collaboration within the SFH Group
    continued to expand steadily. For example, the volume
    of new mortgage loans handled by our Lifeplanner®
    sales employees accounted for more than 10% of the
    total increase in Sony Bank’s mortgage loans during
    the year. Lifeplanner® sales employees also made
    steady progress in sales of Sony Assurance’s auto-
    mobile insurance. The number of policies sold by
6
    Lifeplanner® sales employees accounted for approxi-
    mately 10% of the total number of new automobile
    insurance policies for Sony Assurance during the year.
       In addition to tie-ups within the SFH Group, we will
    further strengthen cooperation with other companies



    SFH Group Management




         Shigeru Ishii            Teruhisa Tokunaka                   Taro Okuda              Shinichi Yamamoto
        President and                President and                  President and                President and
    Representative Director     Representative Director        Representative Director       Representative Director
       Sony Bank Inc.         Sony Financial Holdings Inc.   Sony Life Insurance Co., Ltd.    Sony Assurance Inc.
Tie-ups within the SFH Group and the Sony Group




Tie-ups with Sony Assurance                                    ● Sony Life’s Individual Annuities Sold by Sony Bank
● Lifeplanner® Sales Employees Sell Sony                       In June 2004, Sony Bank started selling single-
   Assurance’s Products                                        premium individual annuities developed by Sony Life.
In March 2001, Sony Life obtained authorization to                With this launch, Sony Bank expanded its product
act as an agent for Sony Assurance, and in May                 lineup beyond those of a bank primarily focused on
2001 our Lifeplanner® sales employees started selling          asset management, consequently responding to
non-life insurance products.                                   diverse customer needs in a more effective manner.
   Sales of non-life insurance products are handled by         At the same time, Sony Life has also benefited in
Lifeplanner® sales employees with relevant qualifica-          terms of expanded sales channels, which further
tions. In fiscal 2005, the number of policies sold by          enhanced customer convenience.
our Lifeplanner ® sales employees accounted for
approximately 10% of the total number of new auto-             ● Lifeplanner® Sales Employees Introduce Sony
mobile insurance policies issued by Sony Assurance.               Bank’s Mortgage Loans
   By extending our offerings beyond life insurance to         In December 2004, Sony Life’s Lifeplanner® sales
include non-life insurance products that cover various         employees began introducing Sony Bank’s mortgage
risks in our daily lives, Sony Life will continue to provide   loans in certain regions of Japan, with these activities
comprehensive risk management for its customers.               expanding nationwide in April 2005. This offering
                                                               enabled our Lifeplanner® sales employees to consult
Tie-ups with Sony Bank                                         with customers in a more concrete way on their requests
                                                                                                                          7
● Underwriting Group Credit Life Insurance for                 or inquiries regarding home-purchasing funds.
   Sony Bank’s Mortgage Loans                                     In fiscal 2005, the volume of new mortgage
In March 2002, Sony Life began underwriting group              loans handled by our Lifeplanner ® sales employees
credit life insurance for mortgage loans extended by           accounted for more than 10% of the total increase
Sony Bank. This insurance applies to customers                 of Sony Bank’s mortgage loans.
taking out mortgage loans, and claims on this insur-
ance are used to repay mortgage loans when unfore-             Tie-ups among the Sony Group’s Four
seen events prevent customers from making                      Financial Companies
mortgage repayments.                                           ● Initiation of Benefit Provision to ANA Mileage
                                                                  Club Card Members
                                                               Sony Life (from late April 2006), jointly with Sony
                                                               Assurance and Sony Bank (both from March 2006),
                                                               started offering members of the ANA eLIO Card—
                                                               which Sony Finance International Inc. issues in
                                                               affiliation with All Nippon Airways Co., Ltd. (ANA)—
                                                               ANA airline mileage and other cardmember benefits.
                                                               By cooperating with Sony Group companies, we will
                                                               continue to enhance our services and respond to
                                                               customers’ needs.
    Working as Our Customers’ “Own Agents”


    With Our Customers. For Our Customers.
    Helping People Fulfill Their Lifelong Dreams.
      Working Together with Customers as                              Educational Systems, Reciprocal Studies
      Their “Own Agents”                                              and Self-Development

    Since its establishment, Sony Life has worked to                Educational System for Lifeplanner ® Sales
    provide optimal life insurance products tailored to             Employees and Partners
    the specific needs of each and every customer.                  Sony Life provides a diverse range of educational
       To assist in this process, first we work together            programs designed to enable Lifeplanner ® sales
    with customers to formulate individualized life plans           employees and Partners to fulfill their roles as insur-
    based on their specific circumstances and dreams.               ance and financial professionals in responding to
    These plans consider such factors as age, family                the confidence that customers place in them.
    composition, financial condition and children’s higher
    education plans. We then calculate the level of insur-          ● Basic Training Program (BTP) for Lifeplanner ®
    ance coverage needed over time to help customers                   Sales Employees
    fulfill their plans, and create an optimal insurance port-      This program equips Lifeplanner® sales employees
    folio accordingly. These tailor-made solutions are pro-         with the basic knowledge, attitudes, skills and behav-
    vided by our Lifeplanner® sales employees and Partners          ioral habits required to become life insurance profes-
    (independent agencies), who possess advanced                    sionals. It comprises various sub-programs based on
    financial knowledge and abundant experience.                    Sony Life’s needs-based marketing approach. These
       Lifeplanner ® sales employees and Partners seek to           include a subprogram to acquire basic Lifeplanner®
8
    become customers’ exclusive providers of insurance              skills and another covering joint activities, in which
    and financial services, or their “own agents,” in build-        Lifeplanner® sales employees visit customers together
    ing strong relationships of trust and helping them              with their sales office managers.
    fulfill their lifelong dreams. Even after signing the initial
    insurance agreement, Lifeplanner ® sales employees              ● Partner Training Program (PTP) for Partners
    and Partners regularly review the content of coverage           This program is designed to help Partners succeed
    according to the customer’s changing lifestyle. We              in the life insurance business. In the program, Part-
    also offer peace of mind in the form of comprehen-              ners learn about our products and needs-based
    sive follow-up services, including swift payment of             sales approaches derived from expertise we have
    hospitalization benefits and claims when unforeseen             accumulated over the years.
    events occur.
Enhancing Education for Managers                               MDRT Sony Chapter
Our branch managers, sales office managers and                 The MDRT Sony Chapter comprises Lifeplanner®
other managers who oversee sales staff have an                 sales employees and Partners of Sony Life who have
important responsibility to carefully nurture selected         become MDRT members. The chapter holds training
individuals into Lifeplanner® sales employees. To help         sessions several times a year to exchange the latest
managers fulfill this responsibility, Sony Life continues      information and build their skills, with the aim of pro-
to upgrade its educational system, which includes              viding top-quality consulting and other services to
training to deepen understanding of the essence                customers. Chapter members, representing our most
of life insurance, develop character and acquire               successful Lifeplanner ® sales employees and Partners,
leadership skills.                                             also promote various volunteer activities, demonstrating
                                                               their passion as conveyors of the MDRT spirit.
● Sony Life Academy
The Company opened its Sony Life Academy in fiscal
2003 to train its branch general managers and the
heads of its independent Agency Sales Division, as
well as its head office general managers. After one
year of basic training, followed by ongoing coursework,
participants emerge as accomplished life insurance
professionals with the guidance and leadership skills
required of effective managers.

     Four Pillars of Sony Life Academy Education

 ● Acquire knowledge, beliefs and convictions worthy of life
   insurance professionals                                     MDRT ® Sony Chapter training                               9
 ● Help people convey the business and sales philosophies      (Fukuoka, April 2006)
   of Sony Life to others
 ● Train people to acquire management skills
                                                               ● Japan Association of Insurance and Financial
 ● Help people hone their sensitivities as human beings
                                                                  Advisors (JAIFA)
                                                               JAIFA was established in 1962 with the purpose of
                                                               enhancing the status of life insurance salespeople
Reciprocal Studies
                                                               through the reciprocal education of members. As
Sony Life’s employees have embraced a culture of
                                                               a forum for mutual training, the association hosts a
mutual assistance in their quest to serve customers.
                                                               variety of proactive initiatives. Our Lifeplanner® sales
To this end, they have taken the initiative of hosting
                                                               employees, sales office managers, branch managers
independent training forums around the nation.
                                                               and Partners participate in JAIFA events, and JAIFA
                                                               Sony regional chapters have been set up in regional
● Million Dollar Round Table (MDRT)
                                                               areas to spearhead various activities.
MDRT, based in Chicago, is an international asso-
ciation of the world’s best life insurance and finance
professionals. Based on the concept of reciprocal
training and contribution to society, MDRT seeks to
help improve the capabilities of its members, with top
priority on providing the best returns for clients. As
of June 1, 2006, there were 35,000 MDRT members
worldwide, of whom 563 were Lifeplanner ® sales
employees and Partners of Sony Life.




                                                               JAIFA Sony regional chapter training
                                                               (Chiba, April 2006)
     Nurturing Financial Planners                                   Providing Optimal Protection through
     Our socioeconomic environment is undergoing major              the Life Planning Support Service (LiPSS)
     changes, owing to the advent of the information-
     oriented society, reforms to the social security sys-        When proposing protection products, Sony Life first
     tem, diversification of financial products and a             asks customers about their lifestyle and future life
     demographic shift to an older population. In these           plans. By envisioning the life plans of customers and
     circumstances, it is vital for individuals to conduct        their families, Lifeplanner® sales employees and Part-
     comprehensive asset planning and risk manage-                ners can map out simulations of their future financial
     ment—or financial planning—geared to their specific          needs. Sony Life has developed its own simulation,
     life plans. Financial planners are professionals quali-      called LiPSS, to explain funding complexities easily
     fied to meet the financial planning needs of custom-         to its customers.
     ers. A large number of Lifeplanner® sales employees             Sony Life puts the many events that people com-
     study financial planning to achieve higher levels of         monly experience throughout their lives into 11 major
     needs-based sales capabilities. In fact, Sony Life is        categories* from a financial standpoint, and it provides
     an industry leader in terms of its number of qualified       estimates based on these categories. For example,
     financial planners.                                          after listening to parents, Lifeplanner® sales employees
                                                                  and Partners can design plans to help parents finance
                                                                  their children’s education. In addition, Sony Life might
                                                                  help a family determine the timing of purchasing, the
            Affiliated Financial Planners (AFPs)                  type of house they can afford or even provide advice
          Affiliated Financial Planners: 1,940                    on the advance repayment of mortgage loans.
                        (As of June 1, 2006)                         Every person has different circumstances, dreams
     The Japan Association for Financial Planners is the          and concerns. By analyzing the details, Sony Life can
     sole issuing authority for the AFP license. This qualifi-    help customers envision their future. In this way,
10
     cation certifies that the licensee possesses the knowl-      Lifeplanner® sales employees and Partners help cus-
     edge required of a financial planner and is competent        tomers see how they should respond to different
     to offer advice and make proposals in response to            situations and what level of financing will be required,
     client needs.                                                and then they propose protection plans that are
                                                                  tailored to each customer’s needs.

          Certified Financial Planners® (CFPs ®)
          Certified Financial Planners®: 129                      *Eleven Categories of Financial Needs throughout Life

                        (As of June 1, 2006)                       ● Rent or loans             ● Reserve for long-term
     The CFP® license is an international qualification            ● Reserve for education       healthcare
     conferred by the Certified Financial Planner® Board of        ● Reserve for marriage      ● Reserve to reconfigure life
     Standards, Inc., of the United States. This is an authori-    ● Reserve for emergencies   ● Living expenses for
                                                                   ● Funds for home              bereaved family members
     tative qualification given only to financial planners who       purchases                 ● Reserve for funeral and
     demonstrate sophisticated financial planning abilities        ● Living expenses after       subsequent arrangements
     and sound work ethics.                                          retirement                ● Funds for inheritance
                                                                                                 measures

     Certified Skilled Workers of Financial Planning
       1st Grade Certified Skilled Workers in
              Financial Planning: 104
       2nd Grade Certified Skilled Workers in
             Financial Planning: 1,933
                       (As of June 1, 2006)
     Through the Human Resources Development Promo-
     tion Law, the Japanese government has introduced
     a proficiency certification system to certify levels of
     expertise in various fields, including financial planning.
     This law recognizes three levels of financial planning
     expertise.
Acting as a Good Corporate Citizen


Fulfilling Our Social Responsibilities
                                                                                             Furthermore, we have often held the Risk Manage-
  Risk Management                                                                         ment Committee, which is composed of general
                                                                                          managers of the several divisions responsible for the
Amid the rapid liberalization and internationalization                                    Company’s risk management, to discuss various
of financial markets, the activities of life insurance                                    Companywide risk management issues.
companies are becoming increasingly diverse and                                              We have been conducting stress tests and report-
complex. For such companies, the optimal manage-                                          ing the results to the Executive Officers Board to
ment of various risks—such as investment risk, insur-                                     check the possible impacts of future unprofitability on
ance underwriting risk, operational risk, system risk                                     our financial soundness and take additional manage-
and legal risk—becomes more and more important                                            ment and/or financial measurers as the need arises.
every year. The various transactions executed by life                                     As one aspect of our investment risk management,
insurance companies generally carry risks, which                                          we conduct stress tests based on a worst-case
cannot be avoided completely. Moreover, minimizing                                        scenario that exceeds normal market fluctuations,
such risks is insufficient. Instead, we must grasp the                                    whereby interest rates, share prices and currency
nature of each type of risk, implement suitable con-                                      exchange rates all are at historic lows. For insurance
trols and make preparations to ensure returns that                                        underwriting risk management, we also perform
are reasonable and in proportion to the risks. We                                         stress tests during new product development,
must also respond flexibly to the evolution of risk                                       assuming income and expense fluctuations.
management techniques.                                                                       In its Risk Management Manual, the Company sets
   Sony Life works continuously to enhance its risk                                       forth its fundamental approach to risk management
management organization. In fiscal 2005, we                                               and the methods for applying its risk management
                                                                                                                                                                                                            11
strengthened the management conditions of claims                                          policies, with full consideration for the specific
payment and risk management conditions of our                                             characteristics of each type of risk.
overseas subsidiary, Sony Life Insurance (Philippines)
Corporation.                                                                                         Sony Life’s Basic Risk Management Policy
   We also set up the Investment Committee to
                                                                                            By strengthening our risk management capabilities and
realize stable investment profits over the medium
                                                                                            executing optimal risk controls, we aim to ensure the sound-
to long term by securing our soundness as a life                                            ness and appropriateness of our operations and protect the
insurance company.                                                                          interests of policyholders. In this way, we will improve our
                                                                                            reputation as a trustworthy and credible life insurance
                                                                                            company and thus fulfill our responsibility to society.


                                                       Risk Management Organization                                                                                       (As of July 1, 2006)


                                       General Meeting of Shareholders



                                             Board of Directors                                                      Board of Auditors



     Chief Actuary                        Executive Officers Board

                                                                                                                Internal Inspections Division

                                        Risk Management Committee
                                                                                                                    Risk Management
                                                                                                                Corporate Planning Division


   Investment Risk    Liquidity Risk     Insurance Underwriting Risk         Operational Risk                  System Risk
     ALM Division     ALM Division              ALM Division             Operations Administration       Operations Administration              Other Management Risks
                                                                                 Division                        Division

                                                                                                                                                       Office Risk
                                                                                                                                                  General Affairs Division
     Market Risk
                                                                                                                                                       Personnel Risk
                                                                                                                                                     Personnel Division
                                                                                                                                                Sales Administration Division
      Credit Risk
                                                                                                                                                       Legal Risk
                                                                                                                                                    Compliance Division
      Real Estate
    Investment Risk                                                                                                                                  Reputation Risk
                                                                                                                                                Corporate Communications
                                                                                                                                                         Division
                                                                                                                                                    Management Risk
                                                                                                                                                Corporate Planning Division

                                                                                                                                                 Insurance Subsidiary Risk        Sony Life Insurance
                                                                                                                                                  New Business Promotion        (Philippines) Corporation
                                                                                                                                                         Division


                                                                                             Business Offices
       Personal Information Protection and                                Compliance (MCC) Guidelines. In these ways, we are
       Information Security                                               taking a comprehensive approach to protecting per-
                                                                          sonal information and guaranteeing customer privacy.
     Amid rapid innovations in information technology in
     recent years, computer networks have become more                     ● Gathering Personal Information
     advanced and complex, while services are growing                     Our policy is to gather only information that is neces-
     more diversified. Companies can now use sophisti-                    sary for our business, based on clear disclosure of
     cated networks to store and handle confidential data                 our intentions. When collecting information, we obtain
     about their customers. Protecting private information                consent from customers and strictly adhere to the
     is thus becoming more important than ever.                           Insurance Business Law, the Law Concerning the
        To conduct their business properly, life insurance                Protection of Personal Information and other regula-
     companies need confidential information about their                  tions. We use fair and appropriate means to gather
     individual customers. To enhance convenience for                     information.
     customers, Sony Life uses networks as part of its
     policy of delivering the most advanced services. The                 ● Using and Managing Personal Information
     Company places high priority on effectively managing                 We limit the use of personal information to the scope
     customer information and implementing measures to                    required to conduct our business, and only people in
     ensure information security.                                         authorized departments are allowed to handle such
                                                                          information. Customer data is not disclosed to out-
     Protecting Personal Information                                      side parties, except in certain circumstances, such as
     ● Information Management System                                      when specific consent has been obtained from the
     Sony Life has appointed information managers and                     customer, legislation mandates disclosure, the cus-
     security managers to each department that handles                    tomer benefits from disclosure or disclosure is
     personal customer information. We have also estab-                   deemed necessary in the public interest. Sony Life
12
     lished protocols to ensure effective protection of                   has appropriate mechanisms in place to update and
     personal information and upgrade regularly our train-                accurately maintain its personal information data-
     ing system for employees. In addition, we have for-                  base. We are also working to create systems that
     mulated a set of Customer Data Protection Rules, as                  address various threats to such information, including
     well as a Compliance Manual and Market Conduct                       unauthorized access, loss, duplication, destruction,
                                                                          tampering or leakage.

                                           System for Protecting Personal Information


                                                          Customer Data




                                                              Gathering


                                                       Use fair and appropriate
                                                      means to gather information.




                                  Managing                                                      Using


                               Ensure information                                          Limit usage to
                                remains accurate                                        the scope required
                                  and up to date.                                         by our business.



                                                                Storing


                                             Prevent unauthorized access, loss, duplication,
                                            destruction, tampering or leakage of information.
   When we entrust the handling—inputting, storing                 ● Security Measures for Protecting Personal
and saving—of personal information to our business                    Information
partners, we enter consignment contracts with those                Standards for the Safe Management of
parties. The contracts specify various items for main-             Personal Information
taining and handling personal information, including               Sony Life has established standards for the safe
secrecy obligations and prohibition of duplication. We             management of personal information at each stage,
also perform comprehensive prior checks to confirm                 including the gathering, use, storage and disposal of
the security level of business partners.                           this information. The Company thoroughly trains all
                                                                   executives and employees, including temporary staff,
● Disclosure and Revision of Personal Information                  on these standards.
When a customer makes a request to disclose infor-
mation he or she has supplied, or to correct or delete             Measures to Counter the Theft of Notebook Personal
erroneous information, we first confirm that the person            Computers (PCs) and Other Property
making the request and the customer are one and                    To prevent notebook PCs containing personal cus-
the same. Special circumstances notwithstanding,                   tomer information from being stolen in a car break-in
our policy is to grant such requests. In principle, we             or other type of theft, employees who take these PCs
insist that the requester and the policyholder be the              outside the Company are required to keep them
same person.                                                       nearby at all times. Customer data that is copied onto
                                                                   electronic storage media is protected with a special
● Law Concerning the Protection of Personal                        electronic encryption key. Password-protected inte-
    Information                                                    grated circuit (IC) cards double this security.
Sony Life’s Information Security Policies is a docu-
ment outlining the Company’s stance with respect to                Office Security Measures
personal information, centering on our customers.                  Only authorized employees are allowed access to
                                                                                                                            13
Based on these policies, we seek to ensure proper                  office areas where personal information is handled,
management, usage and protection of information.                   and counterfeit-resistant IC cards are used to monitor
Following the enactment of the Law Concerning the                  entries and exits. As a further countermeasure, the
Protection of Personal Information, we established a               Company restricts personal items that can be brought
Privacy Policy, as well as a Committee to Promote                  into insurance business departments, which handle
the Security of Personal Information. Together, these              large amounts of personal customer information.
address the gathering and use of personal informa-
tion, as well as methods of assembling and managing
it. The Company will strive more rigorously than ever
to protect all personal information in its possession.

             Policy Content Storage System

 To ensure the stable operation of the life insurance system,
 insurance companies are required to register with the Life
 Insurance Association of Japan information on all policies
 and riders that involve claims and benefit payments, includ-
 ing hospitalization benefits, for death (severe injury) protec-
 tion insurance and accidental death (accidental severe
 injury) protection insurance.
   The association uses this information as a reference for
 writing policies and disbursing claims payments and hospi-
 talization benefits, but for no other purposes. Furthermore,
 the Life Insurance Association of Japan and each life insur-
 ance company is prohibited from publicizing information
 that has been received in this manner.
     First Company in Industry to Obtain Information                    ● Maintaining and Improving Information Security
     Security Management System (ISMS) Certification                    Our administrative departments constantly assess
     On June 27, 2003, Sony Life became the first com-                  the danger of leaks and breakdowns affecting all of our
     pany in Japan’s life insurance industry to obtain                  information assets, including customer information, and
     BS7799–Part 2: 2002 and ISMS (Ver. 2.0)—two ISMS                   formulate and take measures designed to minimize
     certifications conferred by the Japan Audit                        such dangers. To earn certification, we implemented
     and Certification Association for Information Security.            those measures on schedule, regularly confirmed that
     The certifications were bestowed on the Company’s                  the measures had the desired effect and built frame-
     departments related to insurance business adminis-                 works for enforcing all of the improvements required
     tration. In addition, on June 22, 2006, we received                for certification.
     ISO 27001 certification and shifted to this interna-
     tional standard for information security management                Main Initiatives
     systems. Going forward, we will continue to maintain               ● Ensure understanding among all employees,
     and improve our information security systems and                     including temporary staff, about the importance of
     upgrade protection of our information assets, including              the Company’s information security policies and
     the personal information of our customers.                           provide training to ensure widespread acceptance
                                                                          of such policies.
            Information Security Management System                      ● Assess the dangers of leakage and destruction
                                                                          of all information assets and take measures to
      ISMS certification indicates the reliability of a company’s
                                                                          minimize such dangers.
      information security systems. This certification is provided to
      companies that have systems to determine the appropriate          ● Constantly improve our information systems based
      level of security based on risk self-assessments, and that          on regular system audits by external specialists.
      have concrete plans and resources allocated to ensure the
      effective management of such systems. The principal con-
                                                                                                ISMS Cycle
14    cept of ISMS is for a company to maintain and improve the
      secrecy, completeness and accessibility of its information
                                                                         ISMS targets improvements in information security through
      assets in a well-balanced manner.
                                                                         repeated implementation of the cycle described below:
      ● Secrecy:         The guarantee that information can
                                                                         ● Plan: Formulate specific plans and policies for
                         only be accessed by authorized people
                                                                                   information security
      ● Completeness: The guarantee that information and
                                                                         ● Do:     Implement measures outlined in the security plans
                         information-processing methods are
                                                                         ● Check: Monitor the results of implementation
                         accurate and complete
                                                                         ● Act:    Undertake regular reassessments and
      ● Accessibility: The guarantee that authorized people
                                                                                   improvements
                         can have timely access to required
                         information and related assets                                             Plan

                                                                                                 Ongoing
     ● Obtaining Certification                                                    Act         improvements              Do
     Sony Life has positioned the maintenance and
     improvement of information security as a central                                             Check
     management priority. For this reason, we have built
     and are operating a framework for guaranteeing
     information security by our administrative depart-
     ments (Insurance Administration Department, Infor-
     mation System Department and Customer Center)
     that gather customer data and other information.
                                                                                                     Compliance Programs
   Compliance
                                                                                   ● Every fiscal year, we compile a Compliance Program,
                                                                                     which serves as an action plan for implementing compli-
Compliance means conformity with relevant laws,                                      ance initiatives. Based on the program, we adopt various
regulations and rules. This is a crucial issue for com-                              measures.
                                                                                   ● We work to ensure all members of the Company are
panies seeking to fulfill their social responsibilities.
                                                                                     familiar with our Compliance Manual. We modify the manual
Life insurance companies need to reinforce their                                     as necessitated by changes to our compliance system,
compliance systems to maintain the long-term trust                                   as well as enactment or revision of relevant laws.
of customers. Sony Life has positioned compliance                                  ● We publish a booklet, called MCC Guidelines, which
                                                                                     contains 15 principles and serves as a compliance
as a central management priority to protect customers
                                                                                     manual covering our sales activities. We use the booklet
and earn their confidence.                                                           for continuous training at agency offices and indepen-
                                                                                     dent agency sales divisions. We are also improving the
Compliance Framework                                                                 MCC training curriculum for Partners.
                                                                                   ● We conduct regular checks of each head office and sales
Sony Life has established a Compliance Committee,
                                                                                     division to confirm legal compliance status, and routinely
which reports to the Executive Officers Board, to                                    reassess and augment checking and confirmation
spearhead Companywide compliance programs.                                           procedures.
In addition, our compliance officers and supervisors                               ● The efficacy of our compliance programs is verified
                                                                                     through a number of means, including internal audits,
conduct routine checks of compliance status and
                                                                                     surveys of employee awareness and practices and con-
create plans and systems for improving overall                                       firmation of the status of compliance of each division.
compliance. In May 2005, we also established the                                     As required, we take concrete measures to improve and
Market Conduct Compliance (MCC) Committee                                            strengthen compliance programs.
                                                                                   ● If violations or suspected violations of laws or regulations
to strengthen the compliance of sales activities. In
                                                                                     are discovered, they are investigated and reported. We
these ways, we are striving to build a more effective                                swiftly devise appropriate processes to prevent the reoc-
compliance framework.                                                                currence of violations; these are added to the Compliance
                                                                                     Manual and circulated throughout the Company.                    15
                       Compliance Framework
                                                                                                  Adapting to Changing Laws

                              Board of Directors                                   ● The Law on Sales of Financial Products and the Con-
                                                                                     sumer Contract Act came into force in April 2001. In
                                                                                     response, Sony Life established its MCC Guidelines, a
                           Executive Officers Board
                                                                                     booklet that sets forth the Company’s solicitation policy in
                                                                                     the form of 15 principles. Customers are kept informed
                   Compliance Committee/                                             of changes to compliance laws through posters, the Com-
         Market Conduct Compliance (MCC) Committee
                                                                                     pany web site and other means, and employees through
                                                                                     education and training. In May 2004, we modified the
                                                                                     guidelines to reflect revisions of relevant laws and recent
                                                   Compliance Officers
                                                                                     changes in the environment pertaining to compliance.
                                                                                   ● In August 2003, we reinforced our systems in response
                                                                                     to legislation designed to prevent the concealment of
                                                                                     funds for terrorism purposes and money laundering. Mea-
                                Independent                                          sures included more rigorous confirmation of customers’
                                                           Headquarter
 Agency Offices                    Agency                                            identity based on the Law Concerning the Confirmation of
                                                             Divisions
                               Sales Divisions                                       Customer Identity and the Prevention of Improper Deposit
  Compliance Manager           Compliance Manager         Compliance Manager         Accounts, as well as the reporting of suspicious transac-
   (Agency Manager)          (Sales General Manager)       (General Manager)
Compliance Administrator     Compliance Administrator   Compliance Administrator
                                                                                     tions under the Law for Punishment of Organized Crimes,
                                                                                     Control of Crime Proceeds and Other Matters.
                                                                                   ● To fulfill our social and public service responsibilities as a
                                                                                     life insurance company and conduct our business in a fair
                                                                                     manner, we have formulated a set of behavioral guide-
                                                                                     lines to serve as basic rules for directors and employees
                                                                                     to observe. In February 2004, we compiled an upgraded
                                                                                     version called the Sony Life Activity Charter.
                                                                                   ● Full-scale enforcement of the Law Concerning the Pro-
                                                                                     tection of Personal Information began in April 2005. This
                                                                                     law places obligations on private sector enterprises
                                                                                     handling personal information. We have established the
                                                                                     Committee to Promote the Protection of Personal Infor-
                                                                                     mation, which spearheads Companywide measures to
                                                                                     address the new legislation.
                                                                                Acquisition of ISO 14001 Certification
       Environmental Protection Initiatives                                     and Implementation of the Green Power
                                                                                Certification System
     Environmental Management System                                            In March 2001, Sony Life acquired ISO 14001 certifi-
     Sony Life has mounted a number of initiatives to                           cation, the international standard for environmental
     reduce the burden it places on the environment. We                         management systems, for its head office, and has
     have established environmental goals and objectives,                       since kept its certification up to date. In fiscal 2005,
     and put programs in place to lead us toward these                          as part of plans to reduce our consumption of fuels
     aims, and will continue with such environmentally                          that emit carbon dioxide and accelerate global warm-
     conscious activities and initiatives.                                      ing, we set up a Green Power Certification system,
                                                                                whereby the purchase of electrical power originating
                        Environmental Policy                                    from wind-powered generators is certified. This sys-
                                                                                tem facilitates electric-power swaps, ensuring that
      Core Philosophy
                                                                                our electrical power is wind generated, even if the
      We believe that preservation of the global environment is
      a vital topic for all people of the world. As a member of the             power originates at locations far from where it is
      Sony Group, we adhere to the Sony Group Environmental                     used. During the term, we purchased 250,000 kilo-
      Vision and make every effort to preserve the environment                  watts of “green-certified” electric power, thereby
      in all aspects of our operations.
                                                                                reducing our CO 2 consumption by the equivalent of
      Performance Indicators                                                    92.5 tonnes per year. Protection of the global envi-
      1. Based on the Sony Group’s Global Environmental Man-                    ronment is a top-priority issue for the Company.
         agement System (GEMS), we enact thorough environ-                      Through our environmental management system, we
         mental compliance, seek to enhance our environmental
                                                                                are working constantly to protect the environment in
         performance and minimize environmental risk.
      2. In line with our core philosophy of providing efficient life           all of our daily activities.
         insurance and high-quality services, we evaluate the impact
16       of our activities, products and services, and set and imple-                                What is ISO 14001?
         ment programs to achieve our environmental goals and
         objectives. We aim to ensure ongoing improvements in                    ISO 14001 is an international standard for environmental
         environmental preservation and reductions in pollution.                 management systems created by the International Organi-
      3. We employ the following environmental preservation activi-              zation for Standardization (ISO). Certification is given to
         ties Companywide and at every stage of our activities,                  entities that review their environmental management sys-
         products and services:                                                  tems annually, take action to address difficult and unprec-
         ● Use documents effectively and take paper quality into                 edented issues, and work continually to improve their
            consideration.                                                       environmental performance.
         ● Recycle paper documents and office supplies.
         ● Reduce electric power consumption.
         ● Prioritize the purchase of goods and products that have
            a low environmental impact. (Employ green purchasing.)
         ● Consider the development of environmentally conscious
            products and services.
      4. We continue to improve our environmental management
         system by conducting internal environmental audits.
      5. We conduct environmental training and other activities
         that raise employees’ environmental awareness.
      6. We communicate our environmental policy both inside
         and outside the Company.




                                                                                The Certificate of Green Power
                                                                                issued by Japan Natural Energy
                                                                                Company Limited




                                                                        Certificate documenting our ISO 14001
                                                                        compliance, issued by the certifying
                                                                        institution BVQI Japan Co., Ltd.
                                                               Support for Special Olympics Nippon
  Social Contribution Activities                               Since 1996, Sony Life has given financial support for
                                                               Special Olympics Nippon, a non-profit organization
“One Love, One Trust”                                          that provides people with intellectual disabilities with
In fiscal 2003, we established a Social Contributions          independence and opportunities to participate in the
Department to spearhead our social benefit initiatives.        community through sports. We also volunteer to run
We also set up a Volunteer Activity Coordination               the events.
Committee, with the aim of promoting the sharing of               In February 2005, Nagano Prefecture hosted the
information from various sources, enhancing our sup-           Special Olympics World Winter Games, which drew
port for volunteerism and broadening the scope of              2,500 athletes from 84 countries. Approximately 400
volunteer activities. Sony Life has designated August          Sony Life employees volunteered their time to work at
10, the anniversary of its founding, as Volunteer Day.         the Games, making ours one of the largest single
This is a special day when all employees are encour-           company volunteer groups.
aged to consider and implement activities that benefit            Sony Life also helps increase awareness and
the community. August has also been declared Vol-              understanding of Special Olympics Nippon’s activities
unteer Enrichment Month, in which all employees                by supporting charity concerts, movie screenings and
throughout Japan implement original social benefit             other initiatives. We plan to offer our full support for
activities in their respective communities. Our rallying       the National Summer Games Kumamoto, which are
cry is the phrase “one love, one trust,” reminding us          scheduled for November 2006. Through our support
that for each voluntary contribution, or “act of love,”        of Special Olympics Nippon, we hope to promote
our standing within the community increases.                   greater independence for people with intellectual
                                                               disabilities and help them become more active
Volunteer Leave Program                                        members of society.
In fiscal 2003, Sony Life introduced a volunteer leave
                                                                                                                                    17
program, designed to facilitate the efforts of employ-                           Special Olympics Nippon
ees to participate actively in volunteer activities. The
                                                                Special Olympics Nippon is a specified non-profit organiza-
leave program applies to the following activities:
                                                                tion that provides people with intellectual disabilities with
                                                                ongoing year-round sports training opportunities and holds
 ● Social welfare           ● Disaster relief                   athletic competitions to demonstrate their accomplishments
 ● Environmental protection ● International exchange            and give them an opportunity to participate in society.
 ● Community activities       and aid                             One section of the Special Olympics Nippon home page
                                                                introduces Sony Life’s social contributions through this society.
                                                                For further details, see the following web site:
Leave Program for Bone Marrow Donors                            http://www.son.or.jp/tokutoku/sonylife/index.html
On April 1, 2002, Sony Life became the first life insur-        (Japanese only)

ance company to introduce a special leave program
for bone marrow donors, offering employees com-
pensated time off, independent of their regular holi-
days, for the period necessary to donate bone
marrow for transplants.

             Japan Marrow Donor Program

 Established in December 1991 under the auspices of the
 Ministry of Health and Welfare (now called the Ministry of
 Health, Labour and Welfare), this organization handles bone
 marrow donor registrations and operates a bone marrow
 bank that is used for transplants.



                                                               Alpine ski competition at the Special Olympics World Winter Games
                                                               in Nagano
     Eye Mate Fund                                                      Sony Life Volunteers’ Club
     Sony Life has contributed to the Eye Mate Fund since               The Sony Life Volunteers’ Club was established by its
     1997, with the aim of helping visually impaired people             employees at the time of the Kobe earthquake in 1995,
     participate in society. The Company donates an                     and has continued its activities to the present day. The
     amount each year that matches the total raised by                  club operates using funds collected from employee
     employees during the year. In fiscal 2005, ¥9.72                   donations, and is managed by individual employees.
     million in employee donations and matching funds                      The club promotes a variety of volunteer activities
     were given to Eye Mate, Inc. (formerly the Tokyo                   that center on providing ongoing support to the eld-
     Guide Dog Association). Since 1997, Sony Life has                  erly victims of the Kobe earthquake. The club also
     donated more than ¥100 million in contributions,                   provides ongoing support to elderly people affected
     which are used in training guide dogs.                             by the Niigata Chuetsu earthquake in 2004. In March
        Sony Life will continue providing Eye Mate with sup-            2006, the club organized a hot springs bus tour for
     port to help more visually impaired people participate             these people, to help keep their spirits up.
     in society.                                                           The club also conducts voluntary activities at care
                                                                        facilities, as well as youth educational support activi-
                              Eye Mate, Inc.                            ties that are designed to protect children from drugs.
                                                                        The Sony Life Volunteers’ Club, whose primary mem-
      Since its introduction of the first guide dogs to Japan, this
                                                                        bership is Lifeplanner® sales employees, actively
      organization has been responsible for training numerous
      guide dogs. The assistance of properly trained Eye Mate           conducts a wide range of social contribution activities
      guide dogs helps people with visual impairment participate        to put employees into direct contact, conduct ongo-
      in society by enabling them to walk about on their own.           ing activities and create trust-based relationships with
                                                                        people in regional communities.

                                                                              Some Sony Life Volunteers’ Club Activities
18
                                                                         ● Support for people affected by the Kobe earthquake
                                                                           in 1995 (Hyogo Prefecture)
                                                                         ● Support for people affected by the Niigata Chuetsu
                                                                           earthquake (Niigata Prefecture)
                                                                         ● Care facility support (Tokyo and Kanagawa prefectures)
                                                                         ● Operational support for the Yokohama Handy Tennis
                                                                           Competition (Kanagawa Competition)
                                                                         ● Bone marrow donor registrations and activities to support
                                                                           the Munakata Yurix 24-hour EKIDEN marathon (Fukuoka
                                                                           Prefecture)
                                                                         ● Operational support for the Oita International Wheelchair
                                                                           Marathon (Oita Prefecture)
                                                                         ● Operational support and everyday training support for
             A Sony Life employee’s son experiencing walking practice
                                                                           Special Olympics Nippon (nationwide)
                                                                         ● Blood donor activities (nationwide)




                                                                               Providing meals for people affected by the Niigata
                                                                               Chuetsu earthquake
               A hot springs bus tour for some of the people
               affected by the Kobe earthquake
                                     Sony Life Cup All Japan Ladies Tennis Tournament


   Since 2002, Sony Life has provided support to the
   Sony Life Cup All Japan Ladies Tennis Tournament,
   one of the largest amateur events for women
   tennis players in Japan, through sponsorship and
   volunteer activities.
         The tournament has been held since 1979 to
   promote the development of tennis as a sport with
   mass appeal that also helps improve women’s
   health. This year marks the 28th staging of this
   traditional event, which has attracted a cumulative
   total of approximately 27,000 players. The event
   features a series of strongly contested tourna-
   ments that are held in various prefectures through-
   out Japan. Our Lifeplanner® sales employees
   support as volunteers at the event, working along-
   side players to ensure its smooth operation and to
   cheer the athletes. We will continue to support the
   Sony Life Cup All Japan Ladies Tennis Tournament
   as part of our efforts to foster better communica-
   tion with local communities.

   For more information about this tournament,
   please visit:
   http://zenkokuladies.jp/
   (Japanese only)



                                                                                                                              19




  Expanding Operations in Southeast Asia


Sony Life Insurance (Philippines) Corporation                      Tailoring its activities to local conditions, Sony Life
Owing to the deregulation of financial markets in the           Insurance (Philippines) Corporation is expanding its
Philippines, the life insurance market in that nation is        operations using consulting methods cultivated in
expected to expand significantly. Sony Life Insurance           Japan, and is steadily building a high-quality marketing
(Philippines) Corporation was established in 1998               organization. The Company also responds steadily to
with capital participation from the Sony Group and              diverse local needs, as indicated by the start of its sales
commenced operations in November 1999. To rein-                 of dollar-denominated products. Fulfilling its social
force its business foundation, Sony Life increased              responsibilities as a life insurance company, Sony Life
that company’s capital in December 2003, before                 Insurance (Philippines) Corporation places importance
transforming it into a wholly owned subsidiary in               on compliance with all regulations and is upgrading
March 2004.                                                     its control systems to minimize business risk.
     Financial Review



       Growth and Profitability


     ● New Insurance Sales                                                                             New Insurance Sales
     New insurance sales totaled ¥3,392.1 billion.                                     (Individual life insurance + Individual annuities)

     In fiscal 2005, ended March 31, 2006, the total value of new life           (Billions of yen)
                                                                                 5,000
     insurance policies sold—the sum of individual life insurance and
     individual annuities—was ¥3,392.1 billion. This represented an 8.9%                            3,916.6
                                                                                 4,000                                    3,732.0    3,724.2
     decrease from the preceding year, affected by an April 2005 rise in                                       3,537.3
                                                                                                                                                3,392.1
     variable life insurance premiums. Of this total, individual life insur-
                                                                                 3,000
     ance sales fell 9.1%, to ¥3,361.2 billion, while individual annuities
     sales expanded 26.4%, to ¥30.8 billion. At the same time, group life        2,000
     insurance sales surged 23.1%, to ¥9.0 billion. Total sales of indi-
     vidual life insurance, individual annuities and group life insurance        1,000
     was therefore ¥3,401.2 billion, down 8.9%. The number of new
     individual life insurance and individual annuity policies sold during            0
                                                                                                     2002       2003      2004       2005        2006
     the year was 512,947, down 4.1%.                                                                                                    (Years ended March 31)



     ● Insurance in Force                                                                                Insurance in Force
     We have maintained consistent growth since our                             (Individual life insurance + individual annuities in force)

     establishment, with insurance in force up 4.5% in                          (Billions of yen)
                                                                                                                                                29,084.5
     fiscal 2005.                                                               30,000
                                                                                                                                     27,823.4
                                                                                                                          26,242.6
     At the end of fiscal 2005, total insurance in force—including individual                                  24,792.9
                                                                                24,000              23,496.6
     life insurance and individual annuities—was ¥29,084.5 billion, up
20
     4.5% from a year earlier. Of this amount, individual life insurance in
                                                                                18,000
     force expanded 4.4%, to ¥28,908.8 billion, and individual annuities
     in force grew 22.7%, to ¥175.7 billion. We believe that these figures
                                                                                12,000
     reflect the high level of trust we received from our policyholders, as
     well as high acclaim for our after-sales services.
                                                                                 6,000
         Group life insurance in force was ¥923.2 billion, up 13.1%. Con-
     sequently, the total of individual life insurance, individual annuities          0
                                                                                                     2002       2003      2004        2005        2006
     and group life insurance in force was ¥30,007.8 billion, up 4.8%.
                                                                                                                                                (As of March 31)



     ● Ratio of Operating Expenses to Insurance Premiums                                  Ratio of Operating Expenses to
     Our ratio of operating expenses to insurance premiums continues                           Insurance Premiums
     to improve each year, thanks to efficient management.
                                                                                    (%)
     Selling new policies, maintaining existing policies, making insurance
                                                                                    25
     payouts and other tasks incur various costs, such as personnel and
     administrative expenses. We refer to costs necessary to conduct                20
     our business as a life insurance company as operating expenses.                                 16.5
                                                                                                                15.9       15.3
        In fiscal 2005, Sony Life held its ratio of operating expenses to                                                             14.5        14.2
                                                                                    15
     insurance premiums to 14.2%. This reflects ongoing cost reductions
     and management rationalization efforts. Going forward, we will                 10

     continue working to raise our management efficiency.
                                                                                      5


                                                                                      0
                                                                                                     2002       2003      2004       2005        2006
                                                                                                                                         (Years ended March 31)
● Lapse and Surrender Rate and Persistency Rates
We continued to               Lapse and Surrender Rate                                                               Persistency Rates
maintain a low lapse                   (Individual life insurance on a policy amount basis)   (Individual life insurance on a policy amount basis)

and surrender rate and                  (%)
                                        10
                                                                                              (%)
                                                                                              100                                                                      95.5
                                                                                                              93.9          93.7           93.7          94.6
solid persistency rates.
In fiscal 2005, our lapse                 7.99                                                                                                                         89.3
                                8  7.74          7.56                                          80             85.7          87.0           86.4          87.6

rate for individual life insur-                       6.39
                                                                   5.88
ance on a policy amount         6                                                              60
basis continued to improve,
declining 0.51 percentage       4                                                              40

point, to 5.88%.
   The persistency rates        2                                                              20

for individual life insurance
                                0                                                                0
policies, on a policy              2002  2003   2004  2005        2006                                       2002           2003          2004           2005          2006
amount basis, remained                                   (Years ended March 31)                             13th month                                      (Years ended March 31)
                                                                                                            25th month
high. The 13-month rate
was 95.5%, up from 94.6% in fiscal 2004, and the 25-month rate
was 89.3%, up from 87.6%.
Note: The lapse and surrender rate is expressed as a ratio of cancellations or lapses that
      is modified due to the reduction, increase or reinstatement of the total amount of
      insurance in force.


● Product Mix
Sales of term life insurance (non-smoker preferred risk                                               New Insurance Sales by Type
insurance) and living benefit life insurance were favorable.                                                 (Policy amount basis, fiscal 2005)
                                                                                                                                                                                     21
In fiscal 2005, more than 80% of new policies, on a policy amount                                                             Other
basis, were death protection products. Sales were strong for such                                                             3.3%
                                                                                                          Variable life
                                                                                                          9.9%
mainstay term life insurance products as non-smoker preferred risk
                                                                                                                                          Whole life
insurance. Sales of living benefit life insurance also expanded, reflecting                   Endowment/                                  15.5%
steadily increasing demand for insurance to cover three major diseases                        Educational
                                                                                              11.0%
(cancer, acute myocardial infarctions and cerebral embolisms).
                                                                                                                                    Term life
                                                                                                                                    60.3%
● Insurance Premiums and Claims
Both insurance premiums and insurance payments increased
in line with the rise in in force.
Owing to the growth in insurance in force, insurance premiums in
fiscal 2005 rose to ¥579.2 billion, from ¥550.3 billion in fiscal 2004.
   Insurance claims, annuity payments and insurance benefits
totaled ¥114.4 billion, up from ¥88.0 billion in fiscal 2004, indicating
                                                                                                                     Payments by Type
our assistance to policyholders. By payment type, claims totaled
¥86.4 billion (up from ¥62.1 billion), benefits were ¥23.5 billion (up
                                                                                              (Billions of yen)
from ¥22.6 billion) and annuity payments amounted to ¥4.4 billion                             125
(up from ¥3.1 billion).                                                                                                                                                       4.4
                                                                                              100                                                                         23.5
● Asset Management                                                                                                                                               3.1
                                                                                                                                                   2.4
Our policy is to invest assets efficiently, while responding                                   75
                                                                                                                                                  19.8
                                                                                                                                                                22.6

flexibly to changes in the investment environment.                                                                                  2.0
                                                                                               50                     1.1          19.1
Sony Life’s fundamental policy on investing assets in general account                                                16.6                                                 86.4
is to maintain the soundness of assets and to build an investment                                                                                 59.2          62.1
                                                                                               25
portfolio capable of ensuring stable medium- and long-term returns,                                                  34.0          40.2

taking into account expected returns and investment risks and respond-
                                                                                                0
ing deftly to changes in financial conditions and the investment envi-                                      2002            2003          2004           2005          2006
                                                                                                         Death and other claims                             (Years ended March 31)
ronment. The Company places emphasis on risk management to                                               Hospitalization and other benefits
ensure stable returns.                                                                                   Pension and annuity payments
        In fiscal 2005, Sony Life followed its strategy of investing in                         General Account Assets
                                                                                                      (As of March 31, 2006)
     response to changes in the investment environment. During the first
     half of the fiscal year, when the equity markets were lackluster, the                          Real estate 2.7%
                                                                                  Cash and call loans              Other assets 2.1%
     Company invested mainly in convertible bonds. When interest rates                          2.5%
     trended upward in the second half, we shifted our investments to
     longer-term Japanese government bonds.                                                                        Japanese
                                                                                                     Monetary      government,
                                                                                                     trusts        municipal,
                                                                                                     23.3%         and Japanese
     Investment Performance                                                                                        corporate
                                                                                 Policy loans                      bonds
     As of March 31, 2006, general account assets totaled ¥2,822.5 billion,      3.1%                              53.1%
     up 16.8%, or ¥406.2 billion, from one year earlier. Within the general      Other securities
                                                                                 0.6%
     account, positions of Japanese government, municipal and Japanese
                                                                                    Foreign stocks           Foreign government and
     corporate bonds totaled ¥1,499.5 billion (accounting for 53.1% of              and others 0.5%          corporate bonds 3.2%
     general account assets), foreign government and corporate bonds                                    Japanese stocks 8.9%

     ¥89.0 billion (3.2%), Japanese stocks ¥250.7 billion (8.9%), policy loans
     ¥86.9 billion (3.1%), monetary trusts ¥658.3 billion (23.3%), cash and
     call loans ¥71.5 billion (2.5%), and real estate ¥75.5 billion (2.7%).

     ● Core Profit
                                                                                                Core profit of ¥28.5 billion
     Core profit reached ¥28.5 billion.
     Core profit is an indicator of the profit-earning capacity of the pri-
     mary insurance business over a one-year period. The term “primary
                                                                                           Net capital gains of ¥21.4 billion
     insurance business” refers to the management of insurance premi-
     ums received from policyholders, along with investment income to
     pay insurance claims, annuities and benefits and to make policy
22                                                                                Net other operating expenses of ¥25.6 billion
     reserve provisions for future payments.
        Adding capital gains or losses, such as on sales of securities, and
     one-time gains and losses to core profit produces ordinary profit,                     Ordinary profit of ¥24.3 billion
     which appears on the statements of income. In fiscal 2005, Sony Life’s
                                                                                 Note: Like most other life insurers that are organized as
     core profit increased 17.4% year-on-year, to ¥28.5 billion, owing to an           joint stock corporations, Sony Life sells life insur-
                                                                                       ance that is non-profit. As no policyholder dividend
     improvement in gains and losses from general account investments.                 is added, we are able to offer services to policy-
                                                                                       holders for lower premiums. Mutual corporations,
                                                                                       on the other hand, typically offer for-profit policies;
     ● Ordinary Profit and Net Income                                                  their insurance premiums include a portion of fi-
                                                                                       nancial resources for policyholder dividends; and,
     Ordinary profit was ¥24.3 billion; net income came to                             financial resources for these dividends are included
     ¥9.6 billion.                                                                     in core profits. For this reason, mutual corporations
                                                                                       tend to show higher core profits than joint stock
                                                                                       corporations that operate on the same scale.
     Ordinary Profit
     Ordinary profit—the difference between ordinary revenues and
     ordinary expenses—represents income derived from operating
     activities during the fiscal year. The principal sources of revenue for
     life insurance companies are insurance premiums and investment
     income. The main expenses are death and other claims, hospitaliza-
     tion and other benefits, annuity payments, provision for policy
     reserves, investment expenses and operating expenses.
         In fiscal 2005, ordinary profit expanded 42.7%, to ¥24.3 billion.
     This rise resulted from the steady growth in insurance premiums and
     higher investment income.

     Net Income
     Net income is calculated by adding extraordinary gains to ordinary
     profit, then subtracting extraordinary losses, such as provision for
     reserve for price fluctuations, provision for policyholders’ dividend
     reserve and income taxes. In fiscal 2005, net income fell 4.8%, to
     ¥9.6 billion, as we expanded our reserves for price fluctuations in
     tandem with changes in our composition of assets.
  Financial Stability and Soundness


● Total Assets                                                                                       Total Assets
As of the end of fiscal 2005, total assets amounted to
¥3.1 trillion.                                                           (Billions of yen)
                                                                         3,500
Total assets, comprising the capital received from shareholders and                                                                3,103.2
premiums paid by policyholders, are invested in securities, property
                                                                         2,800                                           2,617.2
and equipment and other assets. These assets are held in prepara-                                              2,375.8
tion for future insurance claims and benefit payments, as well as to     2,100                       1,981.8
maintain the soundness of the Company’s insurance business. As                           1,729.0

of March 31, 2006, Sony Life’s total assets reached ¥3,103.2 billion,    1,400
up 18.6% from a year earlier, exceeding ¥3 trillion for the first time
since operations began 25 years ago.                                       700



● Policy Reserve                                                               0
                                                                                             2002     2003     2004       2005      2006
We maintained sufficient policy reserve to cover future                                                                            (As of March 31)

insurance claim payments.
Policy reserve is a fund derived from insurance premiums and                                        Policy Reserve
investments, held in reserve to ensure life insurance companies are
able to pay future insurance claims. Policy reserve is mandatory         (Billions of yen)
                                                                         3,000
under the Insurance Business Law of Japan.                                                                                         2,739.2

   Since attaining standard policy reserve at the end of fiscal 2000,    2,400
                                                                                                                         2,395.0

Sony Life has used the “net level premium method” to build up its                                              2,095.5
                                                                                                     1,831.1
                                                                                                                                                      23
reserves. Under this method, we calculate operating expenses             1,800
                                                                                         1,600.1
assuming a constant, or “net level,” throughout the premium pay-
ment period. Our policy reserve at the end of fiscal 2005 totaled        1,200
¥2,739.2 billion, which we consider sufficient.
                                                                           600

● Solvency Margin Ratio
We maintained a high solvency margin ratio, of 1,547.0%.                       0
                                                                                             2002     2003      2004      2005      2006
The solvency margin ratio indicates a company’s “ability to pay.”                                                                  (As of March 31)

Life insurance companies accumulate policy reserves against the
future payment of insurance claims so they can respond sufficiently                          Solvency Margin Ratio
to ordinarily anticipated events. However, unforeseen events some-
                                                                         (%)
times occur as a result of changes in the environment, such as a         2,500
major disaster or a cataclysmic fall in the stock market. The sol-
vency margin ratio is one administrative control indicator used to       2,000
judge if an insurer has the ability to pay in response to such
                                                                                         1,493.5                                   1,547.0
unpredictable events.                                                    1,500                       1,354.2
                                                                                                               1,453.3
                                                                                                                         1,317.1
   As of March 31, 2006, Sony Life had a high solvency margin
ratio of 1,547.0%, up 229.9 percentage points from the end of            1,000

the previous fiscal year.
                                                                           500


                                                                               0
                                                                                         2002        2003      2004      2005       2006
                                                                                                                                   (As of March 31)
     ● Unrealized Gains on Securities
     Unrealized gains on our securities holdings amounted to
     ¥202.8 billion.
     Unrealized gains and losses refers to the differences between the
     book values and fair values of securities. If fair value exceeds book
     value, a gain on sales of securities would be realized by liquidating
     them at market prices. For this reason, such securities act as a provi-
     sion against various risks. Part of the unrealized gains and losses on
     securities and real estate is included in the total solvency margin—the
     numerator of the formula for calculating the solvency margin ratio.
         Unrealized gains on securities in the general account stood at ¥202.8
     billion as of March 31, 2006, up from ¥88.0 billion a year earlier.
     (Reference: As of March 31, 2006, Sony Life assumed unrealized gains on shares to
     be zero when the Nikkei Stock Average is approximately ¥9,171 and the TOPIX index
     is 929 points.)


     ● Non-Performing Assets
     Sony Life has no non-performing assets.
     Life insurance companies make loans as investment assets and
     earn interest from such loans. These comprise policy loans offered
     as a service to policyholders and other loans made to third parties.
     A company’s total loan balance represents the sum of these two
     loan balances.
        Sony Life’s loan balance at the end of fiscal 2005 was ¥86.9 bil-
24   lion. Because the Company does not engage in commercial lending,
     its loan balance is derived solely from policy loans, which are limited
     to the value of recoverable surrender cash.
        As a consequence, the Company has no risk-monitored loans
     (loans where repayment circumstances are not ordinary). Moreover,
     all figures listed in loans by debtor category are classified as
     performing loans.

     ● Credit Rating
     Sony Life has been rated highly by credit rating agencies.
     Sony Life has requested ratings from several agencies to help policy-
     holders and potential customers make objective decisions concerning
     its ability to finance insurance and pay claims and benefits.


                                                                       Credit Rating                                              (Ratings as of June 2006)



      A.M. Best Company, Inc.                    Financial strength rating                A+            Superior

                                                                                                        A very high degree of capacity for payment
      Rating and Investment Information, Inc.    Insurance claim paying ability           AA            of insurance claims
                                                                                                        A very high level of capacity to honor
      Japan Credit Rating Agency, Ltd.           Ability to pay insurance claim           AA            the financial commitment on the obligation

      Moody’s Investors Service, Inc.            Insurance financial strength rating      Aa3           Offering excellent financial security

      Standard & Poor’s                          Insurer financial strength rating        A+            Strong

     Note: The above ratings were assigned at Sony Life’s request. They are not evaluations of insurance companies overall, nor are they a guarantee of
           claim payments in the future. The ratings are the opinions of the respective rating agencies, based on the figures and information available to
           them at that time. Please refer to each agency’s web site for more details.
● Negative Spread                                                              Formula for Calculating Negative Spread
The negative spread for fiscal 2005 was ¥33.1 billion.
                                                                                          Yield on investment on core profit 1
Life insurance companies retain a portion of premiums received from
policyholders as policy reserves in anticipation of future payments.
                                                                                             Average assumed interest rate
These policy reserves are maintained by investing under the assump-                         (for calculating policy reserves) 2
tion that they will yield a certain rate of interest every year. This inter-
est rate is called the “assumed interest rate (for calculating policy
reserves).” Negative spread arises when, owing to the deterioration                        General account policy reserves 3
of the investment environment or other factors, the actual yield on
investment for a portion of the policies falls below the assumed
interest rate (for calculating policy reserves).                                                         Negative spread
   Our negative spread in fiscal 2005 was ¥33.1 billion, down from             Notes: 1. “Investment yield for core profit” is the
                                                                                         investment income from general account that
¥34.5 billion in the previous fiscal year. The Company has adequate                      is included in core profit, less the provision for
other income sources to cover its negative spread, however. (See                         policyholder dividend reserves, divided by policy
                                                                                         reserve in general account.
the analysis on core profit on page 22.) Sony Life will continue work-                2. The “average assumed interest rate (for cal-
                                                                                         culating policy reserve)” is the average of
ing to streamline operations to maintain and generate sufficient                         the assumed interest rates used to calculate
income to cover the negative spread.                                                     policy reserve in general account.
                                                                                      3. “Policy reserve in general account” is policy
                                                                                         reserve in general account, excluding the
                                                                                         contingency reserve, calculated as follows:
● Capital                                                                                (Policy reserves at beginning of term +
Sony Life’s capital was ¥65.0 billion.                                                   Policy reserves at end of term –
                                                                                         Expected interest*) x 1/2
Capital is the minimum standard amount of shareholders’ equity
                                                                                             * “Expected interest” is the amount of interest
a company must hold to protect its creditors, and Article 6 of the                             calculated by discounting the amount using
Insurance Business Law of Japan prescribes a minimum of ¥1.0                                   the assumed interest rate every year.

billion. Other regulations have also been established to ensure
                                                                                                                                                      25
adequate capitalization. As of March 31, 2006, Sony Life had total
capital of ¥65.0 billion (wholly provided by Sony Financial Holdings
since April 1, 2004).

● Real Net Worth                                                                                         Real Net Worth
Real net worth totals ¥614.9 billion.
                                                                                  (Billions of yen)
Real net worth refers to the net asset amount that results from sub-
                                                                                  750
tracting real liabilities—excluding such factors as policy reserves and
                                                                                                                                    614.9
capital—from the fair market value of such real assets as securities              600
and real estate. If this number is negative, the regulating authorities
may judge a company to have real liabilities in excess of assets and              450                                      426.9
                                                                                                                   381.5
order a company to halt operations.
                                                                                                           319.4
                                                                                                 296.5
   As of March 31, 2006, Sony Life had real net worth of ¥614.9                   300

billion, up 44.0% from one year earlier.
                                                                                  150


                                                                                    0
                                                                                                 2002      2003    2004    2005     2006
                                                                                                                                   (As of March 31)




                                                                    life insurance company. Sony Life discloses EV at fiscal
  Embedded Value
                                                                    year-end as an indicator of the value of its business.
                                                                        The value of in-force business is the present value of
● Meaning of Embedded Value                                         future after-tax profits on existing business minus the
Embedded value (EV) is calculated as the sum of the                 cost of capital. Cost of capital is the spread between
“value of in-force business” and “adjusted net worth.” In           the investment yield and the discount rate applied to
Europe and Canada, EV is regarded as a valuable source              the amounts of capital and surplus that will be required
of information for assessing the corporate value of a               to maintain the assumed level of solvency margin ratio.
        Adjusted net worth is calculated as (a) Total equity                              profits on existing business, while EV indicates the
     in the balance sheets, excluding net unrealized gain                                 present value of future profits on existing business,
     on bonds except for convertible bonds + (b) Reserve                                  together with the Company’s adjusted net worth. For
     for price fluctuations + (c) Contingency reserve +                                   this reason, EV serves as a valuable supplement to
     (d) Reserve for possible loan losses + (e) Net unrealized                            the financial information provided under Japanese
     gains on land – (f) Unfunded employees’ retirement                                   GAAP and is a helpful indicator used to evaluate
     benefits liability – (g) Deferred tax assets for (b), (c),                           corporate value. However, EV covers only existing
     (d), (e) and (f).                                                                    in-force business as of the date of valuation, and
        Under generally accepted accounting principles in                                 excludes the potential value of future new business,
     Japan (Japanese GAAP), which applies to life insurance                               which is considered a constituent of the economic
     companies in Japan, the balance sheets exclude future                                value of an insurance company.

     ● EV as of March 31, 2006
     EV as of March 31, 2006, and changes in EV compared with one year earlier, are                                             Embedded Value
     indicated below.
                                                                                                       (Billions of yen)
                                                                                                                           of yen)
      March 31                                                 2004         2005        2006      Increase (Decrease)
      EV                                                       492.0       539.3        776.1            236.8
        Value of in-force business                             381.7       409.6        499.8             90.2
        Adjusted net worth                                     110.2       129.7        276.3            146.6
      Value of new business in the fiscal year                  38.9        38.1         34.2              (3.8)                              539.3
                                                                                                                                492.0
     ■ The value of in-force business as follows:
       Value of in-force business = Present value of future after-tax profits on existing business – Cost of capital.
       Cost of capital is the spread between the investment yield and the discount rate applied to the amounts
       of capital and surplus that will be required to maintain the assumed level of solvency margin ratio.
     ■ Adjusted net worth is calculated as follows:
       Adjusted net worth = (a) Total equity in the balance sheets* + (b) Reserve for price fluctuations +
       (c) Contingency reserve + (d) Reserve for possible loan losses + (e) Net unrealized gains on land –
26     (f) Unfunded employees’ retirement benefits liability – (g) Deferred tax assets for (b), (c), (d), (e) and (f).
       * Total equity in the balance sheets excludes net unrealized gain on bonds except for convertible bonds.
     ■ “Value of new business in the fiscal year” refers only to that portion of EV derived from new policies
       concluded during each fiscal year.                                                                                       2004          2005                 2
     ■ In calculating “value of in-force business,” the present value of future after-tax profits and adjusted net                            (Years ended March 31)
       worth use balance sheet and reserve figures, based on Japanese GAAP.
     ■ Assumptions and methods of computing EV differ for March 31, 2004, 2005 and 2006.


     ● Principal Assumptions
     Below are the principal assumptions used to compute EV as of March 31, 2006.
      Category                                                 Method of Establishing
      1. Discount rate                                         6.5%
      2. Investment yield on new investments                   Investment yield is based on implied forward rates, assuming Sony Life
                                                               makes all new investments only in Japanese government bonds.
      3. Mortality and morbidity rates                         Based on the Company’s experience over the three most recent fiscal years
      4. Lapse and surrender rate                              Based on the Company’s experience over the three most recent fiscal years
      5. Operating expenses (unit cost)                        The unit cost for the maintenance and administration of policies and for
                                                               payments of claims is based on Sony Life’s experience during the most
                                                               recent fiscal year.
      6. Effective tax rate                                    Based on the most recent effective tax rate
      7. Required solvency margin ratio                        For the purpose of calculating cost of capital, the required solvency margin
                                                               ratio of 600% was assumed.
     1. Discount rate
        The discount rate was set by adding the Company’s assumed risk premium (4.5%) to the risk-free rate (the yield on 10-year Japanese government
        bonds: approximately 1.77%), as of the end of the fiscal year.
     2. Investment yield
        (1) Investment yield on new investments:
            Investment yield on new investments was calculated based on the implied forward rates computed from the yield curve of Japanese govern-
            ment bonds as of March 31, 2006, and assuming that the Company invests only in Japanese government bonds every year. Sony Life sets the
            assumed investment yield on new investments at the end of each fiscal year with the assumption that future market conditions will be neutral.
            This assumption is made to avoid potential complications arising from the fact that the more Sony Life invests in assets with higher expected
            returns, the higher is the calculated EV. Sony Life believes such assets contain higher risks and should be adjusted when calculating EV.
        (2) Investment yield on existing assets:
            Investment yield on existing assets was calculated separately for each asset with the following assumptions:
            ■ For existing bonds other than convertible bonds, Sony Life assumes holdings to maturity.
            ■ For convertible bonds, Sony Life’s calculations assume that the Company will conduct rebalancing as of the date of evaluation as follows:
               After taking unrealized gains from convertible bonds into account when adjusting net worth, Sony Life purchases straight bonds corresponding
               to the marked-to-market bond portions while immediately reinvesting the remaining amount into Japanese government bonds.
            ■ For stocks and other assets (policyholder loans, real estate, private equity funds, etc.), Sony Life is assumed to maintain a balance at the end
               of the fiscal year within the limits of its internal holdings.
                   Interest, dividends and proceeds from redemptions are calculated with the assumption that Sony Life reinvests these proceeds into
               Japanese government bonds.
● Breakdown of Changes in EV
The change in EV from March 31, 2005, to March 31, 2006, is split into the following components:
                                                                                                                                     (Billions of yen)
 Item                                                                                                                             Amount
 1. EV as of March 31, 2005                                                                                                        539.3
 2. Shareholder dividends                                                                                                            (6.5)
 3. Release from the value of existing policies in force*                                                                           24.7
 4. EV of new policies for the year ended March 31, 2006                                                                            34.2
 5. Difference between assumptions and actual experience for the year ended March 31, 2006                                         137.2
 6. Differences from changes in assumptions                                                                                         47.2
 7. EV as of March 31, 2006 (Total of items 1 through 6)                                                                           776.1
Notes: Reversal of discount rate on the value of in-force business for the year:
       The amount in item 5 includes an ¥87.8 billion increase in unrealized gains on securities other than bonds.
       The amount in item 6 includes a ¥25.9 billion increase due to changes in the method of valuing convertible bonds.


● Impact of Changing Assumptions (Sensitivities)
The impact of changing the underlying assumptions on EV at March 31, 2006, is as follows:
                                                                                                                                      (Billions of yen)
                                                                                           Amount of Increase (Decrease)         EV Amount
 Discount rate                                                     6.5%→5.5%                              57.1                     833.2
                                                                   6.5%→7.5%                             (47.1)                    729.0
 Solvency margin ratio                                             600%→500%                              11.6                     787.7
                                                                   600%→700%                             (12.9)                    763.2
 Investment yield: +0.25%*                                         On total assets                        48.3                     824.4
                                                                   On new assets                          30.3                     806.4
 Investment yield: –0.25%                                          On total assets                       (49.7)                    726.4
                                                                   On new assets                         (30.6)                    745.5
 Mortality and morbidity                                           Assumption x 1.1                      (52.4)                    723.7
 Lapse and surrender rate                                          Assumption x 1.1                      (15.9)                    760.1
 Operating expenses (unit cost of ongoing policies)                Assumption x 1.1                        (4.0)                   772.1                  27
* The impact of changes in investment yield assumptions is also reflected in policyholders’ dividends.


● Notes
Regulations require that certain reserves be set aside for minimum guarantee benefit features on variable life
insurance and annuity contracts issued in fiscal 2005 and thereafter. In calculating EV as of March 31, 2006, while
setting aside the reserve for guaranteed minimum death benefits (GMDB) based on Japanese GAAP, Sony Life
evaluated the future cash flow on GMDB for all existing variable life insurance policies using the stochastic method.
This evaluation reduced EV by ¥3.2 billion.
   For calculating EV as of March 31, 2006, Sony Life changed the method of accounting for existing convertible
bonds at fiscal year-end. In calculating EV as of March 31, 2005, Sony Life assumed that convertible bonds would
be held to maturity with stock prices remaining unchanged from March 31, 2005. As is described above, Sony Life
calculated EV as of March 31, 2006, assuming the rebalancing of convertible bonds as of the date of evaluation.
This increased EV by ¥25.9 billion.

● Opinion of Outside Specialist
Sony Life has obtained an opinion letter from Milliman, Inc., an independent actuarial firm that possesses insurance
actuarial expertise. The opinion letter can be found on Sony Life’s web site (http://www.sonylife.co.jp/).

Disclaimer
Statements made in this section of the annual report contain calculations based on assumptions regarding future projections that are subject to risks
and uncertainties. It should be noted that actual future results might materially differ from the assumptions used in the EV calculations. Therefore,
readers are advised to be cautious and not place undue reliance on EV calculations.
     Balance Sheets
     As of March 31

                                                                                                                                                              Thousands of
                                                                                                     Millions of yen                                       U.S. dollars (Note 1)
     Assets                                                              2006              2005               2004              2003              2002                 2006
     Cash and deposits
       Cash on hand                                              ¥         63      ¥        167      ¥        104       ¥        124      ¥        192      $          542
       Cash in banks                                                   31,370            51,443            66,276            130,025           226,583             268,124
                                                                       31,433            51,611            66,381            130,149           226,775             268,666


     Call loans                                                        55,900           176,100           175,000            135,100            77,800             477,778


     Monetary trusts                                                  658,351           515,229           419,224            320,941           248,750           5,626,935


     Securities
       Japanese government bonds                                     1,054,410           712,158           397,522            127,767            73,228          9,012,059
       Municipal bonds                                                  53,252            54,504           167,941            199,989           214,794            455,153
       Japanese corporate bonds                                        487,933           629,561           660,699            665,179           532,471          4,170,375
       Japanese stocks                                                 278,860            74,249            57,939             41,658            40,908          2,383,427
       Foreign securities                                              164,092           179,239           235,443            219,601           180,853          1,402,497
       Other securities                                                 93,665            54,949            44,058             11,455             3,798            800,564
                                                                     2,132,216         1,704,663         1,563,605          1,265,650         1,046,054         18,224,075


     Loans
       Policy loans                                                    86,918            79,914            71,629             65,574            54,463             742,896
       Other loans                                                         —                 —                 —                  —                  0                  —
                                                                       86,918            79,914            71,629             65,574            54,463             742,896

28   Property and equipment
      (net of accumulated depreciation)
       Land                                                            32,855            32,855            32,855             32,780            32,707             280,820
       Buildings                                                       11,869            12,159            12,281             12,819            13,106             101,452
       Furniture and equipment                                            160               161               161                189               188               1,369
       Construction in progress                                        30,853             5,586             1,145                500               280             263,707
                                                                       75,739            50,763            46,444             46,289            46,283             647,348


     Due from agencies                                                       0                 5                   0                2                 3                     2


     Due from reinsurers                                                  335               184                 960              730               654                2,866


     Other assets
       Other receivables                                               23,910            19,746            18,354              1,591             6,406             204,366
       Prepaid expenses                                                   703               749               730                973               992               6,012
       Accrued income                                                  22,244            13,225             8,823              7,850             8,856             190,120
       Money on deposits                                               11,938             2,835             3,122              3,118             2,744             102,042
       Derivative assets                                                   39                —                 —                  —                 —                  338
       Advance payments                                                 1,484               351               334                320               222              12,688
       Others                                                           2,067             2,028             1,323              1,426             1,690              17,675
                                                                       62,389            38,936            32,688             15,281            20,912             533,241


     Deferred tax assets                                                    —                 —                   —            2,330             7,540                     —


     Allowance for doubtful accounts                                       (44)             (142)              (107)             (153)             (163)                (378)


     Total assets                                                ¥3,103,241        ¥2,617,266        ¥2,375,828         ¥1,981,897        ¥1,729,077        $26,523,429
     Notes: 1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥117=U.S.$1.00, the approximate Tokyo Foreign Exchange Market rate as
               of March 31, 2006.
            2. U.S. dollar figures are based on non-truncated yen amounts.
                                                                                                                                     Thousands of
                                                                                Millions of yen                                   U.S. dollars (Note 1)
Liabilities and shareholders’ equity                    2006            2005             2004             2003            2002                2006
Policy reserve and others
  Reserve for outstanding claims                ¥      18,415   ¥      17,705   ¥      17,913     ¥      13,260   ¥      10,082    $      157,399
  Policy reserve                                    2,739,264       2,395,060       2,095,565         1,831,100       1,600,130        23,412,515
  Reserve for policyholders’ dividends                  1,584             735             783               709             720            13,542
                                                    2,759,264       2,413,501       2,114,262         1,845,070       1,610,933        23,583,456
Due to agencies                                         1,415           1,155           1,038               786             754            12,102
Due to reinsurers                                         782             625             524               432             419             6,686
Other liabilities
  Accrued income taxes                                 1,586           1,272           2,168               105              64            13,562
  Other payables                                      30,279          14,504          81,287            14,020           6,091           258,800
  Accrued expenses                                     9,170           8,751           8,658             7,515           8,139            78,382
  Unearned income                                        250             244             158               221             232             2,137
  Deposits received                                      308             323             334               333             627             2,636
  Deposits received for guarantees                     2,252           2,153           2,018             2,851           2,791            19,255
  Borrowed securities                                  9,764              —               —                 —               —             83,459
  Derivative liabilities                                  —                0              —                 —               —                 —
  Policy suspense and other suspense                   2,089           4,824           1,327             2,810           3,179            17,860
                                                      55,702          32,075          95,953            27,858          21,126           476,091
Reserve for employees’ retirement benefits            10,632          10,204           8,366             6,720           4,981            90,874
Reserve for directors’ and auditors’
 retirement benefits                                      109              77              46                —               —                937
Reserve for price fluctuations                         20,109          12,666          12,225             5,960           5,632           171,873
Deferred tax liabilities                               36,685           5,817          10,933                —               —            313,548
Deferred tax liabilities for land revaluation             706              —               —                 —               —              6,041
  Total liabilities                                 2,885,408       2,476,124       2,243,350         1,886,829       1,643,847        24,661,608
                                                                                                                                                          29
Common stock                                          65,000          65,000          65,000            65,000              —            555,556
Capital surplus                                          865             865             865               865              —              7,393
  Capital reserve                                        865             865             865               865              —              7,393
Retained earnings
  Earned reserve                                       4,478           3,178           1,878                —               —             38,278
  General reserves                                        —               40               3                 4              —                 —
    Special depreciation reserve                          —               40               3                 4              —                 —
  Unappropriated retained earnings                    18,055          16,197          13,932            11,269              —            154,320
    Net income                                         9,616          10,102          13,932            11,269              —             82,196
                                                      22,533          19,417          15,814            11,274              —            192,598
Land revaluation                                      (1,475)           (768)           (768)             (768)             —            (12,612)
Net unrealized gain on other securities,
 net of taxes                                         130,909          56,629          51,567            18,697             —           1,118,886
  Total shareholders’ equity                          217,833         141,142         132,478            95,068             —           1,861,821
  Total liabilities and shareholders’ equity        3,103,241       2,617,266       2,375,828         1,981,897             —          26,523,429

Common stock                                              —               —                  —               —          65,000                    —
Additional paid-in capital                                —               —                  —               —          25,625                    —
Land revaluation                                          —               —                  —               —            (768)                   —
Retained earnings (Accumulated deficit)
  General reserves                                        —               —                  —               —               5                    —
    Special depreciation reserve                          —               —                  —               —               5                    —
  Unappropriated retained earnings
   (Undisposed deficit)                                   —               —                  —              —         (24,761)                    —
                                                          —               —                  —              —         (24,755)                    —
Unrealized gain on securities                             —               —                  —              —          20,128                     —
  Total shareholders’ equity                              —               —                  —              —          85,230                     —
  Total liabilities and shareholders’ equity    ¥         —     ¥         —     ¥            —    ¥         —     ¥1,729,077       $              —
     Statements of Income
     Fiscal Years Ended March 31

                                                                                                                                                              Thousands of
                                                                                                     Millions of yen                                       U.S. dollars (Note 1)
                                                                         2006              2005               2004             2003               2002                 2006
     Ordinary revenues:
     Income from insurance premiums and others
        Insurance premiums                                           ¥579,267           ¥550,304          ¥512,700          ¥489,548          ¥503,871           $4,951,001
        Reinsurance income                                              1,249              1,306             2,125             2,034             2,062               10,679
                                                                      580,516            551,610           514,825           491,582           505,934            4,961,680
     Investment income
        Interest and dividends                                          26,581            25,595             24,377            23,746            25,021             227,190
           Interest on bank deposits                                        10                 9                 16                34                57                  92
           Interest and dividends on securities                         19,640            19,349             17,202            17,600            20,352             167,871
           Interest on loans                                             3,607             3,357              3,141             2,820             2,350              30,831
           Rental income from real estate                                3,313             2,828              3,966             3,246             2,225              28,324
           Other interest and dividends                                      8                51                 50                44                36                  72
        Income from monetary trusts, net                                19,558             7,170              7,951               891               733             167,170
        Income from trading securities, net                                 —              3,962                154                —                 —                   —
        Gain on sales of securities                                      6,546             3,339              2,343             2,289             4,262              55,953
        Gain on redemption of securities                                 5,342             2,393              3,991             4,560             2,931              45,661
        Gain from derivatives, net                                         825                —               2,245                 3               109               7,058
        Foreign exchange gain, net                                          59                —                  —                 —                  3                 508
        Other investment income                                              0                 4                  0                 1                50                   2
        Gain on separate accounts, net                                  49,524             7,623             23,702                —                 —              423,286
                                                                       108,438            50,089             64,767            31,493            33,112             926,828
     Other ordinary income
       Income for annuity riders                                         5,466             1,037               251                96                195              46,724
       Income for deferred payment of claims                             1,401               729               878               373                344              11,981
       Reversal of reserves for outstanding claims                          —                207                —                 —                  —                   —
       Others                                                              602               418               249               543                112               5,153
                                                                         7,471             2,392             1,379             1,013                653              63,858
        Total ordinary revenues                                        696,426           604,093           580,972           524,089            539,699           5,952,366
     Ordinary expenses:
     Insurance claims and other payments
        Insurance claims                                                86,477            62,136            59,210            40,291             34,052             739,121
        Annuity payments                                                 4,437             3,173             2,435             2,016              1,177              37,931
        Insurance benefits                                              23,582            22,698            19,836            19,188             16,608             201,557
        Surrender payments                                             113,637           101,649           105,227           104,435             74,991             971,259
        Refund to policyholders                                          1,663             2,046             2,370             2,620              1,696              14,217
        Reinsurance premiums                                             2,083             2,436             2,462             2,353              2,800              17,810
                                                                       231,881           194,141           191,542           170,905            131,327           1,981,895
     Provision for policy reserve and others
30      Provision for reserve for outstanding claims
        Provision for policy reserve
                                                                           709
                                                                       344,204
                                                                                              —
                                                                                         299,494
                                                                                                             4,652
                                                                                                           264,464
                                                                                                                               3,177
                                                                                                                             230,970
                                                                                                                                                    970
                                                                                                                                                285,515
                                                                                                                                                                      6,068
                                                                                                                                                                  2,941,915
        Interest on policyholders’ dividend reserves                         1                 0                 0                 0                  0                  12
                                                                       344,915           299,494           269,117           234,148            286,486           2,947,995
     Investment expenses
        Interest expenses                                                    9               133                  4                 2                 3                  77
        Losses on trading securities, net                                  647                —                  —                149               388               5,533
        Loss on sales of securities                                        267               330                928               465                43               2,284
        Devaluation losses on securities                                    —                217                 —              2,538             7,309                  —
        Losses on redemption of securities                                 212             1,146                704               797             1,130               1,818
        Losses from derivatives, net                                        —                342                 —                 —                 —                   —
        Foreign exchange losses, net                                        —                 59                 21                 3                —                   —
        Provision for doubtful accounts                                      6               118                 24                —                 —                   52
        Depreciation of real estate for rent and others                    523               558                612               723               592               4,476
        Other investment expenses                                        2,895             2,208              1,308             1,358               902              24,746
        Losses on separate accounts, net                                    —                 —                  —              8,894               851                  —
                                                                         4,561             5,116              3,605            14,933            11,221              38,986
     Operating expenses                                                 82,040            79,729             78,254            77,875            82,989             701,200
     Other ordinary expenses
       Payments of deferred claims                                         647               486               399               213                126               5,533
       Taxes other than income taxes                                     5,517             5,425             5,199             4,944              5,092              47,162
       Depreciation                                                        789               704               672               769                888               6,744
       Provision for retirement benefits                                 1,681             1,837             1,646             1,739              1,668              14,373
       Provision for directors’ retirement benefits                         31                31                46                —                  —                  272
       Others                                                                0                55                10                 0                  0                   5
                                                                         8,668             8,541             7,973             7,667              7,776              74,089
       Total ordinary expenses                                         672,067           587,023           550,493           505,531            519,800           5,744,165
     Ordinary profit                                                    24,359            17,070            30,478            18,557             19,898             208,201
     Extraordinary gains:
       Gain on sales of properties                                           —                 0                   2                0                 0                    —
       Reversal of reserve for possible loan losses                          —                 —                   —                3                76                    —
                                                                             —                 0                   2                3                76                    —
     Extraordinary losses:
       Loss on sales of properties                                          72                 74                 67               40                36                  617
       Impairment loss                                                       5                 —                  —                —                 —                    44
       Provision for reserve for price fluctuations                      7,442                441              6,264              327               281               63,614
       Others                                                               —                  —                   1               —                 18                   —
                                                                         7,520                515              6,332              368               335               64,275
     Provision for policyholders’ dividend reserve                       1,491                519                644              583               601               12,751
     Income before income taxes                                         15,347            16,035             23,504            17,609            19,038             131,175
     Income taxes—current                                               17,027            13,922             14,966               317                64             145,534
     Income taxes—deferred                                             (11,296)            (7,989)            (5,394)           6,023             6,969              (96,555)
     Net income                                                          9,616            10,102             13,932            11,269            12,004               82,196
     Earning (Deficit) at beginning of the year                          8,438             6,095                 —                 —            (36,766)              72,124
     Unappropriated retained earnings at the end of the year
      (Accumulated deficit at the end of the year)                   ¥ 18,055           ¥ 16,197          ¥ 13,932          ¥ 11,269          ¥ (24,761)         $ 154,320
     Notes: 1. U.S. dollar amounts have been translated from yen, for convenience only, at the rate of ¥117=U.S.$1.00, the approximate Tokyo Foreign Exchange Market rate as
               of March 31, 2006.
            2. U.S. dollar figures are based on non-truncated yen amounts.
Notes to Financial Statements
As of March 31



 Significant Accounting Policies—As of March 31, 2006                                  The retirement benefit system for internal employees has
                                                                                    been revised. Whereas the previous system was according to
1. Basis of Presentation of Financial Statements                                    base salary, the new system is based on the number of points
   The accompanying financial statements have been prepared                         received through certain qualifications. In line with this revision,
   based on the accounts maintained by Sony Life Insurance Co.,                     the periodic disbursement method for the expected accrued
   Ltd. (“the Company”), in accordance with the provisions set forth in             benefit amount was changed from a fixed amount over a
   the Insurance Business Law of Japan, and in conformity with                      specific period of time to point-based standard. This revision
   accounting principles and practices generally accepted in Japan,                 caused a ¥1,291 million decrease in past service obligations
   which are different in certain respects as to the application and                (reduction of obligation), which will be amortized over a 10-year
   disclosure requirements of International Accounting Standards.                   period beginning with the year under review.
2. Valuation of Securities (Including Securities Managed as Trust               (3) Reserve for Directors’ and Auditors’ Retirement Benefits
   Assets of Monetary Trusts)                                                       The Company provides a reserve for directors’ and auditors’
   Trading securities are stated at market value, and sales cost is                 retirement benefits based on amounts necessary at the end
   determined by the moving-average method. Shares of subsidiaries                  of the year according to internal rules. This is an allowance
   (shares issued by subsidiaries that fall under Article 2–12 of the               defined by Article 43 of the Japanese Commercial Code
   Insurance Business Law of Japan) are stated at cost. Other securities            Enforcement Regulations.
   for which market prices are available are stated at market value based   7. Basis for Reserve for Price Fluctuations
   on market prices as of March 31, and sales cost is determined by            Reserve for price fluctuations is provided for according to Article
   the moving-average method. Other securities for which market                115 of the Insurance Business Law.
   prices are unavailable, such as public and corporate bonds (including
   foreign bonds) for which the difference between acquisition cost         8. Others
   and face amount is due to adjustment of interest to maturity, are           (1) Accounting for consumption taxes and regional consumption tax
   stated at amortized cost (straight-line method) determined by the               Consumption taxes are excluded from expenses. Regarding
   moving-average method. Remaining other securities are stated at                 consumption taxes relative to assets, deferred consumption taxes
   cost determined by the moving-average method. Unrealized gains                  under Japanese income tax regulations are included in prepaid
   or losses on other securities are reported as a separate component              expenses and amortized over five years based on the straight-line
   of shareholders’ equity.                                                        method, and others are charged to expenses as incurred.
                                                                               (2) Method for calculating policy reserve
3. Standards of Valuation of Derivatives                                           Policy reserve is provided for according to Article 116 of the
   Derivatives are stated at market value.                                         Insurance Business Law and calculated as follows.
4. Depreciation of Property and Equipment                                          a. Reserves for policies subject to standard policy reserves
   Depreciation of property and equipment is computed by the                          are calculated in accordance with the method determined
   declining balance method, except for buildings acquired after                      by the Financial Services Agency (Ministry of Finance
   April 1, 1998, which are computed by the straight-line method.                     Directive 48, 1996).
                                                                                   b. Other reserves are calculated in accordance with the net
5. Translation of Foreign Currencies
   Assets and liabilities denominated in foreign currency (excluding
                                                                                      level premium method.                                                31
                                                                               (3) Amortization of software
   shares of subsidiaries) are translated into Japanese yen using                  Amortization of software for internal use, which is included in
   exchange rates at the balance sheet date. Shares of subsidiaries                other assets (others), is calculated by the straight-line method
   are translated into Japanese yen using exchange rates at the time               over the useful lives.
   of acquisition.
                                                                            9. Accounting Standards for the Impairment of Fixed Assets
6. Basis for Recording Allowances                                              Beginning with the fiscal year under review, the Company adopted
   (1) Allowance for doubtful accounts                                         accounting for the impairment of fixed assets according to the
       Allowance for doubtful accounts is calculated as follows based          Opinions on Accounting Standards for the Impairment of Fixed
       on the self-assessment rule for assets and the rules for write-off      Assets by the Business Accounting Council on August 9, 2002, and
       and allowance.                                                          the Guidance for the Application of the Impairment of Fixed Assets
          For debt in which the debtors are legally and formally bank-         (Business Accounting Standards Guidance No. 6, October 31, 2003).
       rupt by such measures as filing under the Civil Rehabilitation          This resulted in a decrease of ¥5 million in net income before income
       Law or the Bankruptcy Law and are substantially bankrupt in             taxes. Accumulated impairment losses are written off directly from
       terms of their business operations, for debt in which the debtors       the values of the relevant assets.
       are actually bankrupt and for such debt as deposited money,
       of which the collectible amount has remarkably decreased, the
                                                                            Balance Sheets—As of March 31, 2006
       allowance amount is calculated as the principal balance less
       the amounts collectible from foreclosing collateral and from the     1. Loans
       loan’s third-party guarantors.                                          Loans do not include any loans to borrowers under bankruptcy
          For other kinds of debt, the reserve amount is calculated in         proceedings, loans past due for three months or more, or
       accordance with historical credit loss ratios and other factors.        restructured loans.
          For debt in which debtors are currently not bankrupt in terms
                                                                            2. Land Revaluation
       of their business operations but have been determined to have
                                                                               Based on the Land Revaluation Law (Law No. 34, promulgated on
       a high likelihood of going into bankruptcy (hereinafter, “debtors
                                                                               March 31, 1998—the “Law”), the Company revalued its business-
       in danger of bankruptcy”), the amount remaining after deduct-
                                                                               use land. Regarding valuation differences, in the event of revalua-
       ing the amount of collateral that is expected to be recoverable
                                                                               tion losses the tax-equivalent portion is recognized in the valuation
       and guarantee amounts that are determined to be recoverable,
                                                                               reserve. In the event of revaluation gains, the tax-equivalent portion
       the necessary allowance amount is calculated by taking into
                                                                               of the revaluation is recorded in the “deferred tax liabilities for land
       consideration overall ability of the debtor to pay. For debt other
                                                                               revaluation” in liabilities. After excluding these amounts, the net
       than that described above, the reserve amount is calculated in
                                                                               revaluation difference is reported as “land revaluation” in
       accordance with historical credit loss ratios over a specific
                                                                               stockholders’ equity.
       period of time.
                                                                                  The date of the revaluation was March 31, 2002, and the
          For all debt, the allowance amount is calculated in accor-
                                                                               revaluation method as stipulated by Article 3, Clause 3 of the Law
       dance with the self-assessment rule for assets and rules for
                                                                               was based on an appraisal as stipulated by Article 2, Clause 5 of
       write-off and allowance conducted by the appropriate division
                                                                               the Law Enforcement Order related to the Law (Government
       and audited by an independent audit division.
                                                                               Ordinance No. 119, effective from March 31, 1998).
   (2) Reserve for Employees’ Retirement Benefits
       Based on the accounting standards for retirement benefits            3. Accumulated Depreciation of Property and Equipment
       (Opinion Concerning the Establishment of Accounting Standard            Accumulated depreciation of property and equipment amounted
       for Retirement Benefits, Business Accounting Council, June 16,          to ¥4,240 million.
       1998), reserve for employees’ retirement benefits is provided
                                                                            4. Separate Accounts
       based on the estimated amount of retirement benefit liabilities
                                                                               The amount of total assets for separate accounts was ¥280,682
       at the balance sheet date.
                                                                               million. The amount of total liabilities was the same.
     5. Net Assets                                                                       (2) The effective tax rate for the year under review was 36.21%.
        Net assets, as defined by Paragraph 1–3 of Article 17–3 of the                       The difference between the legal effective tax rate and the
        Insurance Business Law Enforcement Regulations, totaled                              actual tax burden after the application of tax effect accounting
        ¥136,853 million.                                                                    was minimal.
                                                                                         (3) Sony Life is treated for tax purposes as a consolidated entity
     6. Receivables and Payables Due to/from Majority Shareholders
                                                                                             with Sony Corporation as its consolidated parent company.
        Total receivables due from majority shareholders amounted to
        ¥129 million, and total payables were ¥13,226 million.                       16. The amount of ¥278 million is set forth as a reinsurance provision
                                                                                         against a corresponding portion of claims for outstanding reserves,
     7. Receivables and Payables Due to/from Subsidiaries
                                                                                         as set forth in Item 3, Provision 73 of the Insurance Business Law
        Total payables due to subsidiaries amounted to ¥0 million. There
                                                                                         and as set forth in Item 1, Provision 71. Furthermore, the corre-
        were no total receivables due from subsidiaries.
                                                                                         sponding policy reserve is ¥955 million, as set forth in Item 1,
     8. Leased Computer Equipment                                                        Provision 71 of this same law.
        The Company has computer equipment taken on lease contracts
                                                                                     17. Units smaller than those stated herein have been rounded off.
        that is not included in property and equipment on the balance sheets.
     9. Reserve for Policyholders’ Dividends                                         Statements of Income—From April 1, 2005 to March 31, 2006
        The movement of reserve for policyholders’ dividends was as follows:
        Balance at the beginning of the year                 ¥ 735 million           1. Total income from transactions with majority shareholders was ¥63
        Payments made in the year                            ¥ 644 million              million, while total expenses amounted to ¥2,115 million.
        Increase by interest earned                          ¥     1 million         2. Gain on sales of securities consisted of ¥231 million from Japanese
        Provision for reserves made in the year              ¥1,491 million             government bonds and other securities and ¥6,314 million from
        Balance at the end of the year                       ¥1,584 million             stocks and others.
     10. Assets Pledged as Collateral                                                3. Loss on sales of securities consisted of ¥105 million from Japanese
         The amount of assets pledged as collateral was ¥14,067 million.                government bonds and other securities and ¥161 million from
         There was no debt with collateral.                                             stocks and others.
     11. Assets and Liabilities Denominated in Foreign Currencies                    4. When calculating the provision for outstanding claims, the amount
         Assets denominated in foreign currencies amounted to ¥105,753                  deducted as the ceded provision for outstanding claims was ¥252
         million, which mainly comprised US$494 million, EUR162 million                 million, and when calculating the provision for policy reserves, the
         and GBP77 million. Liabilities denominated in foreign currencies               added amount of the returned portion of ceded policy reserves
         amounted to ¥4 million (US$0 million, PHP0 million).                           was ¥108 million.
     12. Policyholder Protection Fund and Organization                               5. Losses on trading securities, net, was the net result of gain on
         (1) The Company’s estimated future contribution to the former Policy-          sales of ¥130 million and valuation loss of ¥778 million.
             holder Protection Fund, which has been superseded by the Life
             Insurance Policyholder Protection Corporation, in accordance with       6. Income from monetary trusts included ¥3,907 million in valuation gains.
32           Paragraph 5, Article 140 of the Financial Reconstruction Law was        7. Gain from derivatives, net, includes a valuation loss of ¥11 million.
             ¥461 million at March 31, 2006. The contribution will be recorded
             in operating expenses in the year in which it is paid.                  8. Other investment expenses mainly consisted of ¥2,590 million in
         (2) The Company’s estimated future contribution to the Life Insur-             expenses related to real estate for investment purposes.
             ance Policyholder Protection Corporation, as provided in Article        9. Net income per share was ¥147.95. The basis for this calculation
             259 of the Insurance Business Law, was ¥6,289 million at                   is net income of ¥9,616 million, of which the entire portion is appli-
             March 31, 2006. The contribution will be recorded in operating             cable to shares of common stock, and an average of 65,000,000
             expenses in the year in which it is paid.                                  shares of common stock outstanding during the period.
     13. Retirement Benefit Obligation                                               10. Retirement benefit cost totaled ¥2,011 million, and consisted of
         (1) Breakdown of retirement benefit obligation                                  the following:
             Retirement benefit obligation                     ¥(14,478) million         Service cost                                         ¥1,608 million
             Pension assets                                    ¥ 1,264 million           Interest cost                                        ¥ 190 million
             Funded status                                     ¥(13,213) million         Expected investment income                           ¥ — million
             Unrecognized transition obligation                ¥ 3,729 million           Amortization of transition obligation                ¥ 414 million
             Unrecognized actuarial gain                       ¥      (14) million       Amortization of actuarial gain                       ¥ (72) million
             Unrecognized prior service obligations            ¥( 1,162) million         Amortization of prior service obligations            ¥ (129) million
             Reserve for employees’ retirement benefits        ¥(10,632) million
         (2) Basis for calculation of retirement benefit obligation                  11. During the year under review, the Company recorded impairment
             Allocation of projected retirement benefits                                 losses on fixed assets, as described below.
                Point standard for internal employees                                    (1) Method of grouping assets
                Period definition standard for sales employees                               Real estate that is dedicated to use in the insurance business
             Discount rate                                     1.4%                          constitutes a single asset group. In rental real estate and idle
             Amortization period of transition obligation      15 years                      assets, each individual property constitutes a single asset group.
             Expected rate of investment return                       —                  (2) Recognition of impairment losses
             Amortization period of actuarial differences:                                   In the fiscal year under review, the book value of idle assets for
                Sales employees                                  7 years                     which no future use is expected was written down to their recov-
                Internal employees                             10 years                      erable value. The resulting decreases in value were accounted for
             The processing period for prior service obligations is 10 years                 as impairment losses and considered an extraordinary loss.
             for internal employees.                                                     (3) Breakdown of asset groups and types for which impairment
                                                                                             losses were recognized
     14. Shares of Subsidiaries                                                              Use                      Category                  Impairment loss
         Shares of subsidiaries amounted to ¥3,047 million.                                  Idle assets              Buildings, etc.           ¥5 million
     15. Taxes                                                                           (4) Method of computing recoverable value
         (1) Deferred tax assets totaled ¥38,368 million and deferred tax                    The recoverable value is considered to be the net sale value
             liabilities were ¥74,887 million. Valuation allowance totaling                  of idle assets, as estimated by a third party.
             ¥165 million was excluded from deferred tax assets. Deferred            12. Units smaller than those stated herein have been rounded off.
             tax assets consisted mainly of insurance reserves of ¥24,198
             million, reserve for price fluctuations of ¥7,281 million and
             reserve for employees’ retirement benefits of ¥3,849 million.
             Deferred tax liabilities arose mainly due to unrealized gain on
             other securities of ¥74,310 million.
Details of Oridnary Profit (Core Profit)
Fiscal Years Ended March 31


                                                                                                                                                   Millions of yen
                                                                                                                                                  2006                 2005
Core profit                                                            (A)                                                                    ¥28,564                ¥24,333
Capital gains                                                                                                                                   22,316                10,555
   Income from monetary trusts, net                                                                                                             14,884                 3,253
   Income from trading securities, net                                                                                                               —                 3,962
   Gain on sales of securities                                                                                                                   6,546                 3,339
   Gain from derivatives, net                                                                                                                      825                    —
   Foreign exchange gain, net                                                                                                                        59                   —
   Others                                                                                                                                            —                    —
Capital losses                                                                                                                                     914                  949
   Loss from monetary trusts, net                                                                                                                    —                    —
   Losses on trading securities, net                                                                                                               647                    —
   Loss on sales of securities                                                                                                                     267                  330
   Devaluation losses                                                                                                                                —                  217
   Losses from derivatives, net                                                                                                                      —                  342
   Foreign exchange losses, net                                                                                                                      —                   59
   Others                                                                                                                                            —                    —
Net capital gains                                                      (B)                                                                      21,401                 9,605
Core profit + capital gains                                            (A + B)                                                                  49,966                33,939
Other operating income                                                                                                                               —                    —
   Reinsurance income                                                                                                                                —                    —
   Reversal of risk                                                                                                                                  —                    —
   Others                                                                                                                                            —                    —
Other operating expenses                                                                                                                        25,606                16,868
                                                                                                                                                                                 33
   Reinsurance payments                                                                                                                              —                    —
   Provision for contingency reserves                                                                                                           22,090                16,750
   Provision for individual doubtful accounts                                                                                                          5                118
   Write-off of loans                                                                                                                                —                    —
   Others                                                                                                                                        3,511                    —
Net other operating loss                                               (C)                                                                     (25,606)              (16,868)
Ordinary profit                                                        (A + B + C)                                                            ¥24,359                ¥17,070
Notes: 1. In fiscal 2005, core profit (A) includes an income gain of ¥4,674 million in income from monetary trusts. Other operating expenses include a ¥3,511 million increase
          in policy reserve.
       2. Core profit (A) for fiscal 2005 includes income gains of ¥3,917 million income from monetary trusts.
     Investment Summary of General Account Assets


     1. Breakdown of Assets                                                                                                     Millions of yen / Percentage
                                                                                                                      Amount                              Percentage of total
     As of March 31                                                                                              2006               2005                  2006                  2005
     Cash and call loans                                                                                 ¥     71,598       ¥ 214,266                        2.5                  8.9
     Repurchase agreement account                                                                                    —                  —                     —                    —
     Purchased monetary trusts                                                                                       —                  —                     —                    —
     Trading securities                                                                                              —                  —                     —                    —
     Monetary trusts                                                                                          658,351           515,229                    23.3                  21.3
     Securities                                                                                              1,870,288         1,517,858                   66.3                  62.8
       Japanese government and corporate bonds                                                               1,499,591         1,321,447                   53.1                  54.7
       Stocks                                                                                                 250,718             53,248                     8.9                  2.2
       Foreign securities                                                                                     102,720           131,068                      3.6                  5.4
          Public and corporate bonds                                                                           89,095           122,782                      3.2                  5.1
          Stocks and others                                                                                    13,624               8,285                    0.5                  0.3
       Other securities                                                                                        17,257             12,093                     0.6                  0.5
     Loans                                                                                                     86,918             79,914                     3.1                  3.3
       Policy loans                                                                                            86,918             79,914                     3.1                  3.3
       Other loans                                                                                                   —                  —                     —                    —
     Property and equipment                                                                                    75,579             50,602                     2.7                  2.1
     Deferred tax assets                                                                                             —                  —                     —                   —
     Other assets                                                                                              59,866             38,541                     2.1                  1.6
     Provision for possible loan losses                                                                            (44)              (142)                  (0.0)                (0.0)
     Total assets                                                                                        ¥2,822,559         ¥2,416,269                   100.0                  100.0
34     (Foreign currency assets)                                                                               46,973             46,240                     1.7                  1.9
     Note: Monetary trusts for investment and securities held for trading purposes and other securities are posted at a price equivalent to present market value.



     2. Change in Assets                                                                                                                                    Millions of yen
                                                                                                                                                              Amount
     Years ended March 31                                                                                                                                 2006                  2005
     Cash and call loans                                                                                                                           ¥(142,668)            ¥ (17,845)
     Repurchase agreement account                                                                                                                             —                    —
     Purchased monetary trusts                                                                                                                                —                    —
     Trading securities                                                                                                                                       —                    —
     Monetary trusts                                                                                                                                  143,121                  96,005
     Securities                                                                                                                                       352,430                 108,780
       Government and corporate bonds                                                                                                                 178,143                 163,017
       Stocks                                                                                                                                         197,470                  14,486
       Foreign securities                                                                                                                              (28,347)               (68,640)
          Public and corporate bonds                                                                                                                   (33,686)               (71,081)
          Stocks and others                                                                                                                              5,339                  2,441
       Other securities                                                                                                                                  5,164                    (83)
     Loans                                                                                                                                               7,004                  8,284
       Policy loans                                                                                                                                      7,004                  8,284
       Other loans                                                                                                                                            —                    —
     Property and equipment                                                                                                                             24,977                  4,319
     Deferred tax assets                                                                                                                                      —                    —
     Other assets                                                                                                                                       21,325                  5,395
     Provision for possible loan losses                                                                                                                       98                  (35)
     Total assets                                                                                                                                  ¥ 406,289             ¥204,902
       (Foreign currency assets)                                                                                                                            733                 4,268
     Note: Monetary trusts for investment and securities held for trading purposes and other securities are posted at a price equivalent to present market value.
3. Investment Income (General Account)
                                                        Millions of yen
Years ended March 31                                   2006                 2005
Interest and dividends                            ¥26,581                 ¥25,595
  Interest on bank deposits                               10                   9
  Interest and dividends on securities             19,640                  19,349
  Interest on loans                                    3,607                3,357
  Rental income from real estate                       3,313                2,828
  Other interest and dividends                              8                 51
Gain on sales of securities owned                         —                    —
Investment income from securities owned                   —                    —
Income from monetary trusts, net                   19,558                   7,170
Income from trading securities, net                       —                 3,962
Gain on sales of securities                            6,546                3,339
  Gain on sales of government bonds and others          231                  482
  Gain on sales of stocks and others                   6,314                2,497
  Gain on sales of foreign securities                     —                  359
  Gain on sales of other securities                       —                    —
Gain on redemption of securities                       5,342                2,393
Gain from derivatives, net                              825                    —
Foreign exchange gain, net                                59                   —
Other investment income                                     0                  4
Total                                             ¥58,914                 ¥42,466

                                                                                    35
4. Investment Expenses (General Account)
                                                        Millions of yen
Years ended March 31                                   2006                 2005
Interest expense                                   ¥        9              ¥ 133
Loss on sales of securities owned                         —                    —
Investment loss on securities owned                       —                    —
Loss on monetary trusts, net                              —                    —
Losses on trading securities, net                       647                    —
Loss on sales of securities                             267                  330
  Loss on sales of government bonds and others          105                    4
  Loss on sales of stocks and others                    161                  326
  Loss on sales of foreign securities                     —                    —
  Loss on sales of other securities                       —                    —
Devaluation losses on securities                          —                  217
  Valuation loss on government bonds and others           —                    —
  Valuation loss on stocks and others                     —                  217
  Valuation loss on foreign securities                    —                    —
Losses on redemption of securities                      212                 1,146
Losses from derivatives, net                              —                  342
Foreign exchange loss                                     —                   59
Provision for possible loan losses                          6                118
Write-off of loans                                        —                    —
Depreciation of properties for lease                    523                  558
Other investment expenses                              2,895                2,208
Total                                              ¥4,561                  ¥5,116
     5. Yields on Investment Assets

     (a) Yield by Asset Class (General Account)
                                                                                                                                                              Percentage
     Years ended March 31                                                                                                                                  2006                  2005
     Cash and call loans                                                                                                                                    0.01                  0.01
     Securities                                                                                                                                                —                     —
     Monetary trusts                                                                                                                                        3.51                  1.59
     Government and corporate bonds                                                                                                                         1.19                  1.31
     Stocks                                                                                                                                               11.05                 17.57
     Foreign securities                                                                                                                                     5.67                  3.14
     Loans                                                                                                                                                  4.39                  4.43
     Property and equipment                                                                                                                                 0.33                  0.39
       Total assets in general account                                                                                                                      2.22                  1.70
     Notes: 1. The denominator of yield calculations is the daily average balance on a book value basis. The numerator is the yield calculated by subtracting investment
               expenses from investment income in operating income (expenses).
            2. The above yield calculations do not include valuation gains in accordance with Article 112 of the Insurance Business Law.



     (b) Yield on Overseas Investments (General Account)
                                                                                                                                                              Percentage
     Years ended March 31                                                                                                                                  2006                  2005
     Yield on overseas investments                                                                                                                          5.67                  3.13
     Note: Overseas investments is the sum of foreign-currency and yen-denominated assets.



     (c) Valuation Gain (Loss) on Securities Held for Trading Purposes
                                                                                                                                     Millions of yen
36                                                                                                                                                                   Valuation gain (loss)
                                                                                                                    Amount in balance sheets           included in statements of income
     Years ended March 31                                                                                       2006               2005                    2006                  2005
     Securities held for trading purposes                                                                    ¥59,649           ¥87,370                  ¥3,907              ¥(1,042)
     Note: “Securities held for trading purposes” includes monetary trusts and other items.
(d) Market Value Information for Listed Marketable Securities
                                                                                                      Millions of yen
                                                                                                 Gain or loss                                                          Gain or loss
                                               Book          Market      Net gain                                        Book        Market   Net gain
                                               value          value       or loss         Gain          Loss             value        value    or loss        Gain            Loss
As of March 31, 2006 and 2005                                                                         2006                                                                  2005
Bonds to be held until
 maturity                                        —               —            —             —            —                 —            —          —            —              —
Bonds corresponding to
 policy reserves                                 —               —            —             —            —                 —            —          —            —              —
Shares of subsidiaries and
 affiliated companies                            —               —            —             —            —                 —            —          —            —              —
Other securities                     ¥2,186,863 ¥2,389,702 ¥202,839 ¥222,866 ¥20,026 ¥1,766,699 ¥1,854,708 ¥88,009 ¥91,180                                               ¥3,170
   Government and
    corporate bonds                    1,927,403       1,968,806        41,402        60,193 18,790             1,591,361        1,651,629    60,268      62,312           2,044
   Stocks                                160,589         311,061       150,471      150,848            376          38,253         57,863     19,609      20,221             611
   Foreign securities                      90,694          93,820         3,125        3,984           859        128,909         133,944      5,034         5,549           514
        Government and
         corporate bonds                   90,622          93,577         2,955        3,814           859        128,836         133,746      4,910         5,424           514
        Stocks and others                       72             242          169           169            —                72          197        124          124              —
   Other securities                         8,175          16,015         7,839        7,839             —              8,175      11,272      3,097         3,097             —
        Total                        ¥2,186,863 ¥2,389,702 ¥202,839 ¥222,866 ¥20,026 ¥1,766,699 ¥1,854,708 ¥88,009 ¥91,180                                               ¥3,170
Government and
 corporate bonds                       1,927,403       1,968,806        41,402        60,193 18,790             1,591,361        1,651,629    60,268      62,312           2,044
Stocks                                   160,589         311,061       150,471      150,848            376          38,253         57,863     19,609      20,221             611
Foreign securities                         90,694          93,820         3,125        3,984           859        128,909         133,944      5,034         5,549           514      37
   Government and
    corporate bonds                        90,622          93,577         2,955        3,814           859        128,836         133,746      4,910         5,424           514
   Stocks and others                            72             242          169           169            —                72          197        124          124              —
Other securities                            8,175          16,015         7,839        7,839             —              8,175      11,272      3,097         3,097             —
Notes: 1. The above table includes securities such as CDs which are regarded appropriate to treat as securities defined by Securities and Exchange Law.
       2. The above table includes monetary trusts except securities held for trading purposes. Its book value for the fiscal year ended March 31, 2006 was ¥499,575 million
          and net gain was ¥35,591 million.
       3. The book value represents the value after accounting for depreciation and impairment losses, but before determining the fair market value.


The following table shows book value of securities without market value at March 31, 2006 and 2005:
                                                                                                                                                     Millions of yen
As of March 31, 2006 and 2005                                                                                                                       2006                   2005
Bonds to be held until maturity                                                                                                                          —                    —
   Unlisted foreign bonds                                                                                                                                —                    —
   Other                                                                                                                                                 —                    —
Bonds corresponding to policy reserves                                                                                                                   —                    —
Shares of subsidiaries and affiliated companies                                                                                                 ¥ 3,047                 ¥3,047
Other securities                                                                                                                                 10,326                   5,101
   Unlisted domestic stock, excluding over-the-counter stocks                                                                                            5                      5
   Unlisted foreign stock, excluding over-the-counter stocks                                                                                         159                    116
   Unlisted foreign bonds                                                                                                                          1,125                      —
   Others                                                                                                                                          9,036                  4,980
Total                                                                                                                                           ¥13,374                 ¥8,149
     Organization
     As of July 1, 2006



                                               General Meeting of Shareholders

                                                      Board of Directors                                 Board of Auditors

                          Compensation Advisory Committee                                                  Chief Actuary

        Executive Management Board                 Executive Officers Board

                                                                    Compliance Committee
                                                                    Market Conduct Compliance (MCC) Committee
                                                                    Protection of Personal Information Promotion Committee
                                                                    Risk Management Committee
                                                                    Disciplinary Committee
                                                                    Environment Committee
                                                                    Personnel Development Committee
                                                                    SLQ Committee
                                                                    Investment Committee


                                                                    Lifeplanner Sales Group 1                                Agency Office
                                                                    Lifeplanner Sales Group 2                                Agency Office
                                                                    Lifeplanner Sales Group 3                                Agency Office
                                                                    Lifeplanner Sales Group 4                                Agency Office

                                                                    Independent Agency Sales Group                           Independent Agency Sales Division
                                                                                                                             Independent Agents Planning Division
                                                                                                                             Independent Agents Sales Promotion Division
                                                                                                                             Market Development Division

                                                                    Sales Administration Group                               Sales Administration Division
                                                                                                                             Sales Education & Training Administration Division
                                                                                                                             Product Development Division
                                                                                                                             Office Administration Division

                                                                    Total Administration Control Group                       Business Administration Control Division
                                                                                                                             Compliance Division
38                                                                                                                           Operations Administration Division

                                                                    Investment Group                                         Investment Division

                                                                    Business Process Reengineering Group                     Information System Division 1
                                                                                                                             Information System Division 2
                                                                                                                             Operations Planning Division
                                                                                                                             General Operation Division

                                                                                                                             Lifeplanner Planning & Promotion Division
                                                                                                                             Lifeplanner Education & Training Division
                                                                                                                             Marketing Division
                                                                                                                             Knowledge Management Division
                                                                                                                             Underwriting Division
                                                                                                                             Policyholders’ Service Division
                                                                                                                             Claims & Benefits Division
                                                                                                                             Real Estate Division
                                                                                                                             Chief Medical Officer
                                                                                                                             Medical Division
                                                                                                                             Corporate Communications Division
                                                                                                                             International & Business Development Division
                                                                                                                             Actuarial Division
                                                                                                                             ALM Division
                                                                                                                             Corporate Planning Division
                                                                                                                             Customer Relation Planning Division
                                                                                                                             Accounting Division
                                                                                                                             Investment Administration Division
                                                                                                                             Customer Center
                                                                                                                             Internal Audit Division
                                                                                                                             Personnel Division
                                                                                                                             General Affairs Division
                                                                                                                             Health Promotion Center Division
                                                                                                                               Representative Office for East Asia
Corporate History


1979   June   Preliminary authorization obtained from the           2000   Jan    Individual life insurance in force exceeded
              Ministry of Finance                                                 ¥18 trillion
       Aug    Sony Prudential Life Insurance Co., Ltd.,                    Feb    Sales of Global Wrap mutual fund launched
              established with capital of ¥400 million as a joint                 through Lifeplanner® marketing channel
              venture between Sony Corporation and Prudential              Sept   Whole-Life Insurance launched
              Insurance Company of America                                        Cancer rider launched
       Sept   Head office established at 1-1, Minami Aoyama                Oct    Individual life insurance in force exceeded
              1-chome, Minato-ku, Tokyo                                           ¥20 trillion
       Dec    Capital increased to ¥1.2 billion                     2001   Mar    Standard policy reserves achieved by increasing
1980   Sept   Capital increased to ¥3.0 billion                                   capital by ¥50.0 billion
1981   Feb    Business license obtained from the Ministry                         Capital increased to ¥65.0 billion
              of Finance                                                          ISO 14001 certification acquired
1982   Feb    Capital increased to ¥4.5 billion                            Apr    Long-term comprehensive medical insurance
1986   Sept   Capital increased to ¥5.5 billion                                   launched
       Oct    Variable life insurance launched                             May    Sales of Sony Assurance’s products started
1987   July   Agreement reached with Prudential to terminate                      through Lifeplanner® sales employees
              joint venture contract                                       June   Sales structure for mutual funds expanded
       Sept   Corporate name changed to Sony Pruco Life                           through Lifeplanner®
              Insurance Co., Ltd.                                          July   Individual life insurance in force exceeded
              Equity interest: Sony Corporation 50%; Pruco Inc.                   ¥22 trillion
              30%; Career Development International Co., Ltd.              Sept   Comprehensive long-term medical insurance
              10%; Mitsui Bank, Ltd. 5%; The Mitsui Trust &                       coverage launched, including features for
              Banking Co., Ltd. 5%                                                hospitalization and surgical procedures
1988   Oct    Capital increased to ¥11.0 billion                    2002   Mar    Commenced group credit life insurance service for
1989   Apr    Cancer insurance launched                                           mortgage loan borrowers from Sony Bank Inc.
       June   Individual life insurance in force exceeded                  Apr    Nursing needs rider launched
              ¥1 trillion                                                  May    Registration of legal entity for management of
       Aug    Tenth anniversary of founding                                       defined contribution plans completed
       Oct    Independent agency system introduced                         July   Variable life term insurance product launched
1990   Dec    Capital increased to ¥18.0 billion                                  Separate accounts associated with variable life
1991   Apr    Corporate name changed to Sony Life Insurance                       insurance product, proliferated with Japan Equity
              Co., Ltd.                                                           Growth Fund and World Core Equity Fund              39
       June   Individual life insurance in force exceeded                  Sept   Individual life insurance in force exceeded
              ¥2 trillion                                                         ¥24 trillion
       July   Began handling group annuity insurance                       Oct    Began selling insurance products through bank
       Nov    Capital increased to ¥22.0 billion                                  channels
1992   Apr    Comprehensive medical insurance launched              2003   Jan    Increasing term life insurance product Excellent
1993   Feb    Individual life insurance in force exceeded                         Value Plan launched
              ¥3 trillion                                                  May    Sony Life Academy for executive training opened
       Sept   Equity interest: Sony Corporation 50%; Sony                         Total assets exceeded ¥2 trillion
              Corporation of America 30%; Career Development                      The Book 1 completed
              International Co., Ltd. 10%; The Sakura Bank,                June   ISMS certification obtained
              Ltd. 5%; The Mitsui Trust & Banking Co., Ltd. 5%             July   Rider to cover initial period of hospitalization
1994   Sept   Equity interest: Sony Corporation 60%; Sony                         launched
              Corporation of America 30%; Career Development                      Individual life insurance in force exceeded
              International Co., Ltd. 10%                                         ¥25 trillion
       Dec    Individual life insurance in force exceeded                  Nov    The Book 2 completed
              ¥5 trillion                                           2004   Mar    Individual life insurance in force exceeded
1995   Dec    All sales employees provided with personal                          ¥26 trillion
              computers                                                    Apr    Sony Corporation established Sony Financial
1996   Mar    Individual life insurance in force exceeded                         Holdings Inc.
              ¥8 trillion                                                         Sony Life became 100% subsidiary of Sony
              Equity interest: Sony Corporation 100%                              Financial Holdings Inc.
       Dec    Individual life insurance in force exceeded                  May    Insurance with special exemption from payment of
              ¥10 trillion                                                        premiums launched
1997   Feb    Total assets exceeded ¥500.0 billion                         June   Sony Bank began selling Sony Life’s individual
       July   Capital increased to ¥50.0 billion                                  annuities
1998   Jan    Individual life insurance in force exceeded                  Dec    Individual life insurance in force exceeded
              ¥13 trillion                                                        ¥27 trillion
       Aug    Sony Life Insurance (Philippines) Corporation                       Commenced introduction of Sony Bank mortgage
              established                                                         loans through Lifeplanner® sales channel
       Nov    Total assets exceeded ¥800 billion                    2005   June   Individual life insurance in force exceeded
1999   Mar    Individual life insurance in force exceeded                         ¥28 trillion
              ¥16 trillion                                                 July   “Lifeplanner Value® ” registered as a trademark
       Apr    Mutual fund launched                                         Nov    Commenced sales of Long-Term, Level Term Life
       Aug    Twentieth anniversary of founding                                   Insurance (Disability Compensation, Non-Profit)
       Sept   Cumulative deficit cleared                            2006   Jan    Total assets exceeded ¥3 trillion
              Capital decreased to ¥40.0 billion                           Feb    Commenced sales of Increasing Term Life Insurance
       Nov    Variable annuity insurance launched                                 (Low Surrender Payments, Non-Profit)
              Non-smoker preferred risk insurance launched
       Dec    Total assets exceeded ¥1 trillion
     Directors and Statutory Auditors
     As of July 1, 2006




     FOUNDER                              Taro Okuda                           Hiromichi Fujikata                   STANDING STATUTORY
     Akio Morita                          President,                           Executive Vice President,            AUDITOR
                                          Representative Director,             Representative Director,             Fumio Mitani
     BOARD OF DIRECTORS                   Sony Life Insurance Co., Ltd.        Sony Financial Holdings Inc.
     Kunitake Ando                        Director,                            Director,                            STATUTORY AUDITORS
     Chairman,                            Sony Financial Holdings Inc.         Sony Assurance Inc.                  Yoshiaki Yamauchi
     Sony Life Insurance Co., Ltd.                                                                                  Hiroshi Sano
     Chairman and Representative          Akihiko Nakamura
     Director,                            Executive Deputy President,
     Sony Financial Holdings Inc.         Sony Life Insurance Co., Ltd.
     Director,
     Sony Assurance Inc.                  Masamitsu Shimaoka
                                          Senior Executive Vice President,
                                          Sony Life Insurance Co., Ltd.




     OFFICERS
40   Taro Okuda                           Shigeru Arakawa                      Hirotoshi Watanabe                   Yoshihiko Kaiya
     President                            Executive Vice President,            Executive Vice President             Senior Vice President,
     and Representative Director          Independent Agency Sales             Corporate Communications             Lifeplanner Sales Group 3
                                          Group, Chairman of the               Division, International & Business
     Akihiko Nakamura                     Board of Sony Life Insurance         Development Division,                Yuichiro Sumimoto
     Executive Deputy President,          (Philippines) Corporation            Representative Office                Senior Vice President,
     Total Administration Control                                              for East Asia                        Independent Agency Sales
     Group, Investment Group              Tohru Hanatsuya                                                           Group
                                          Executive Vice President,            Tominaga Ozawa
     Hisakazu Takeuchi                    Chief Actuary,                       Senior Vice President,               Kiyoshi Watanabe
     Senior Executive Vice President,     Actuarial Division, ALM Division     Real Estate Division                 Senior Vice President,
     Lifeplanner Sales Group,                                                                                       Total Administration Control
     Lifeplanner Planning & Promotion     Hideki Yamada                        Toshirou Maeda                       Group
     Division, Lifeplanner Education &    Executive Vice President,            Senior Vice President,
     Training Division, Marketing         Underwriting Division,               Chief Medical Officer,               Jun Shirai
     Division, Knowledge                  Policyholders’ Service Division,     Medical Division                     Senior Vice President,
     Management Division                  Claims & Benefits Division,                                               Internal Audit Division
                                          Accounting Division, Investment      Kazuhiro Wakayama
     Takeshi Honda                        Administration Division,             Senior Vice President,               Tomohito Tsuchiya
     Senior Executive Vice President,     Customer Center                      Lifeplanner Sales Group 4            Senior Vice President, Customer
     Investment Group                                                                                               Relation Planning Division
                                          Taketoshi Nonaka                     Masao Hagiwara                       (Corporate Planning Department,
     Mitsuhiro Koizumi                    Executive Vice President,            Senior Vice President,               investment planning by request)
     Senior Executive Vice President,     Personnel Division, General          Lifeplanner Sales Group 1
     Sales Administration Group           Affairs Division, Health Promotion
                                          Center Division                      Mafumi Hashimoto
     Masamitsu Shimaoka                                                        Senior Vice President,
     Senior Executive Vice President,                                          Lifeplanner Sales Group 2
     Business Process Reengineering
     Group, Corporate Planning Division
Corporate Data
As of March 31, 2006




Sony Life Insurance Co., Ltd.                                   Representative Office for East Asia
Head Office                                                     Chief Representative Officer: Hiromitsu Onodera
1-1, Minami Aoyama 1-chome, Minato-ku, Tokyo 107-8585, Japan    35th Floor, PB Com Tower
E-mail: info-e@sonylife.co.jp                                   6795 Ayala Avenue Corner V.A. Rufino Street, 1226
                                                                Makati City, Philippines
Established:           August 1979                              Tel: +63-2-819-1801


Common Stock: ¥65,000 million                                   Sony Life Insurance (Philippines) Corporation
                                                                Chairman of the Board: Shigeru Arakawa
Employees:             5,250 (including 3,826 Lifeplanner ® )   President and Chief Executive Officer: Akira Yazawa
                                                                35th Floor, PB Com Tower
Total Assets:          ¥3,103,241 million                       6795 Ayala Avenue Corner V.A. Rufino Street, 1226
                                                                Makati City, Philippines
Fiscal Year:           April 1 to March 31                      Tel: +63-2-819-6001




                                                                                                                      41
Sony Financial Holdings Group

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