Millea Holdings, Inc. (President: Kunio Ishihara; hereinafter referred to as the "Company") and Tokio Marine & Nichido Fire Insurance Co., Ltd. (President: Kunio Ishihara; hereinafter referred to as "Tokio Marine & Nichido") hereby announce that, at the meeting of the Board of Directors of each company held today, the Company and Tokio Marine & Nichido resolved to, subject to the approval of the relevant authorities, effect a corporate separation and transfer of the business management functions of Tokio Marine & Nichido with respect to The Nisshin Fire & Marine Insurance Co., Ltd. (hereinafter referred to as "Nisshin Fire") to the Company (such separation and transfer, hereinafter referred to as "separation") and entered into a Separation Agreement with each other.
1. Objective of the Separation
Tokio Marine & Nichido, a wholly-owned subsidiary of the Company, owned more than 30% of the voting shares of Nisshin Fire as of March 31, 2005 as a consequence of the acquisition of shares of Nisshin Fire through several steps pursuant to the Business Alliance and Capital Tie-Up Agreement as of March 19, 2003. As a result, Nisshin Fire became an affiliate of the Company by equity method.
In light of these circumstances, given that:
(a) the Company's business management functions are available for the management
of Nisshin Fire; and
(b) the Company has so far been directly participating in the management of all of its
insurance subsidiaries operating in the domestic insurance business, the core line of
business of the Group,
the Company and Tokio Marine & Nichido determined that Nisshin Fire should be managed under the initiative of the Company upon the inclusion of Nisshin Fire as an affiliate of the Company by equity method.
There will be no change in the business alliance in insurance business activities already in force between Tokio Marine & Nichido and Nisshin Fire, and both parties will continue to cooperate with each other in the same manner.
2. Summary of the Separation
(1) Schedule of the Separation
Meetings of the Board of Directors to approve the Separation Agreement
(the Company and Tokio Marine & Nichido) December 15, 2005
Signing of the Separation Agreement
(the Company and Tokio Marine & Nichido) December 15, 2005
General shareholders meeting to approve the Separation Agreement
(Tokio Marine & Nichido) January 12, 2006
(subject to change)
Effective date of the separation April 1, 2006
(subject to change)
Registration of the separation April 3, 2006
(subject to change)
(2) Method of Separation
(a) Method of Separation
This corporate separation and succession involve the Company as the successor
company and Tokio Marine & Nichido as the separating company.
Since this separation and succession fulfill the requirements for the implified
separation stipulated in Article 374-23, paragraph 1 of the Commercial Code of
Japan (hereinafter referred to as the "Commercial Code"), the Company will succeed
the business management functions without obtaining the approval of the General
Meeting of Shareholders stipulated in Article 374-17, paragraph 1 of the Commercial
Code.
(b) Reason for Adopting this Method
This method of separation and succession, by which the Company shall succeed the
business management functions with respect to Nisshin Fire through separation from
Tokio Marine & Nichido, was chosen so that the Company will be able to directly
manage Nisshin Fire, which is currently managed by Tokio Marine & Nichido.
(3) Allocation of Shares
No shares will be issued upon the separation, since all outstanding shares of
Tokio Marine & Nichido (separating company) are held by the Company (successor
company).
(4) Increase in Capital due to the Separation
There will be no increase in the stated capital and additional paid-in capital upon the
separation.
(5) Cash Payment upon the Separation
There will be no cash payment by the Company upon the separation.
(6) Rights and Obligations to be succeeded by the Company
The Company will succeeded the assets, liabilities, rights and obligations and status
under all contracts related to the business management functions with respect to
Nisshin Fire currently under the control of Tokio Marine & Nichido.
The liabilities and obligations referred to above shall be succeeded by the Company
in a manner whereby the transferor shall be released from the transferred liabilities
and obligations.
(7) Prospects of Paying Debt Obligations
With respect to debt obligations to be paid after the separation by Tokio Marine &
Nichido (separating company) and/or the Company (successor company), the
Company and Tokio Marine & Nichido believe that they have the ability to satisfy
such debt obligations that will become payable after the separation.
(8) Directors Transferring from the Separating Company
No directors will be newly appointed at the Company as a result of the separation.
3. Summary of Parties
(1) Summary of the parties involved in the separation
| (As of September 30, 2005) |
 | Successor Company | Separating Company |
| Company Name | Millea Holdings, Inc. | Tokio Marine & Nichido Fire Insurance Co., Ltd. |
| Line of Business | Insurance holding company | Non-life insurance business |
| Date of Incorporation | April 2, 2002 | March 20, 1944 |
| Registered Office | Chiyoda-ku, Tokyo | Chiyoda-ku, Tokyo |
| Representative Director | Kunio Ishihara, President | Kunio Ishihara, President |
| Capital | 150 billion yen | 101.9 billion yen |
| Issued Shares | 1,727,048.75 shares | 1,549,692,481 shares |
| Stockholders' Equity | 2,401.8 billion yen | 2,543.5 billion yen |
| Total Assets | 2,402.4 billion yen | 9,909.8 billion yen |
| Settlement of Accounts | March 31 | March 31 |
| Number of Employees | 173 | 16,130 |
| Major Shareholders and their Share Percentages | | - | The Master Trust Bank of Japan, Ltd. (Trust Account) (6.41%) | | - | Moxley & Co. (5.77%) | | - | Japan Trustee Services Bank, Ltd. (Trust Account) (5.64%) | | - | State Street Bank and Trust Company (2.32%) | | - | State Street Bank and Trust Company 505103 (2.29%) | | Millea Holdings, Inc. (100%) |
| Relations between the Parties | Millea Holdings, Inc. is the parent company owning a 100% equity stake in Tokio Marine & Nichido Fire Insurance Co., Ltd. |
(2) Results for the most recent three fiscal years
| Millea Holdings (Successor Company) | Tokio Marine & Nichido (Separating Company) |
| Fiscal year ended | March 2003 | March 2004 | March 2005 | March 2003 | March 2004 | March 2005 |
| Operating income/NPW | 52,928 | 233,617 | 113,490 | 1,469,685 | 1,503,111 | 1,690,060 |
| Ordinary profit | 49,964 | 231,431 | 111,270 | 158,128 | 152,187 | 148,380 |
| Net Income | 49,605 | 230,871 | 110,585 | 97,277 | 87,895 | 87,658 |
| Net income per share | 26,760.91 | 126,681.20 | 63,170.59 | 62.77 | 56.72 | 56.57 |
| Dividend per share | 10,000.00 | 11,000.00 | 11,000.00 | 92.81 | 98.10 | 30.72 |
| Stockholders' equity per share | 1,191,215.23 | 1,302,942.88 | 1,347,033.30 | 988.94 | 1,156.37 | 1,445.06 |
| (Note 1) | Data in the first row represent operating income for Millea Holdings and net premiums written for Tokio Marine & Nichido. |
| (Note 2) | Figures for net income per share, dividend per share and stockholders' equity per share are shown in yen. |
4. Description of the Operations to be Succeeded
(1) Description of the Management Functions with Respect to Nisshin Fire
Business management functions with respect to Nisshin Fire currently under the
control of Tokio Marine & Nichido.
(2) Items and Values of Assets and Liabilities to be Succeeded
| Assets | Liabilities |
| Item | Book Value | Item | Book Value |
| Current Assets | 0 | Current Liabilities | 1 |
| Fixed Assets | 24,386 | Fixed Liabilities | 1,737 |
| Total | 24,386 | Total | 1,738 |
5. Financial conditions of the Company Following the Separation (1) Total Assets 2,408,066 million yen (+ 5,607 million yen)
(Note) The number in parentheses represents an estimated increase due to the separation.
(2) Effects on the Business Results of the Company
There will be no change in our consolidated business forecast announced on November 22, 2005.
