Nihon Kousei Kyousaikai, Co., Ltd.
Nihon Kousei Kyousaikai
Millea Holdings, Inc.
Tokio Marine & Nichido Fire Insurance Co., Ltd.
Millea Holdings, Inc. (President: Shuzo Sumi; hereinafter, the “Company”) and Nihon Kousei Kyousaikai, Co., Ltd. (Note 1) (President: Takeshi Kurata; hereinafter, “Nihon Kousei (Co.)”) have agreed to the Company making Nihon Kousei (Co.) its subsidiary, subject to the fulfillment of necessary requirements and the completion of the preparation for commencing operations including the registration of Nihon Kousei (Co.) as a Small-Amount & Short-Term Insurer (Note 2) with the Finance Bureau.
| (Note1) | A preparatory entity that is slated to assume operations of “Nihon Kousei Kyousaikai” (Director: Takeshi Kurata, hereinafter “Nihon Kousei (Org.),” a private organization (specified insurer) that provides Kyousai (mutual) insurance products for tenants through real estate companies. |
| (Note2) | An insurer that engages in the underwriting of insurance in which the total insured amount is no more than 10 million yen (in the case of Nihon Kousei (Co.), 50 million yen until the end of March 2013 pursuant to the transition provision) and the insured period no more than two years, upon registration with the Prime Minister (in case of fire insurance). |
1. Background and purpose of making Nihon Kousei (Co.) a subsidiary of the Company
Tokio Marine & Nichido Fire Insurance Co., Ltd. (President: Shuzo Sumi; hereinafter, “Tokio Marine & Nichido”), a wholly-owned subsidiary of the Company, and Nihon Kousei (Org.) had come to a business alliance agreement on November 24, 2005 with the aim of expanding business operations in the insurance market related to real estate centered on residential lease market. Since then, both entities have been making collaborative efforts in their respective operations, Nihon Kousei (Org.) making preparations to become a small-amount short-term insurer, and Tokio Marine & Nichido examining its plan to take an approximately 10% stake in Nihon Kousei (Co.).
Meanwhile, in accordance with the amendment of the Insurance Business Law in April 2006, the current specified insurers including Nihon Kousei (Org.) are required to become an insurance company or a small-amount short-term insurer, or wind up its business in a specified time period, which would promote changes in the real estate lease-related insurance market.
It was determined that the best option would be to make Nihon Kousei (Co.) a subsidiary of the Company and further enhance the solid business operations in the fire insurance market for the leased real estate residents which have been developed by Nihon Kousei (Org.). This would be done by building upon the alliance over the past years, and we will exploit the evolving new markets in the aforesaid environment, which we view as business opportunity.
Combining the competitive business model of Nihon Kousei (Co.) with the expertise of Millea Group, we will expand our sales channels and provide products and services that can respond to the diverse needs and trust of our resident customers and also of the property leasing and management companies.
2. Future Schedule
| (1) | Upon fulfillment of necessary requirements and completion of preparations for commencing operations including the registration of Nihon Kousei (Co.) with the Finance Bureau as a small-amount short-term insurer, the Company will make Nihon Kousei (Co.) its subsidiary through the purchase of shares from the existing shareholders of Nihon Kousei (Co.) and the subscription of new shares of Nihon Kousei (Co.) to the Company by way of third party allotment. (The percentage of voting rights will be slightly more than 85%.) |
| (2) | Upon registration with the Finance Bureau, Nihon Kousei (Co.) will commence operations before the end of this year. Nihon Kousei (Co.) intends to receive a comprehensive transfer of all the insurance contracts held by Nihon Kousei (Org.) before the end of this fiscal year, subject to the approval of the annual meeting of Nihon Kousei (Org.) and the approvals from the relevant authorities. |
| (3) | The Company plans to take over the entire remaining shares of Nihon Kousei (Co.) from its existing shareholders, with a view to making Nihon Kousei (Co.) its wholly-owned subsidiary within a two year time frame. |
| (4) | The sum of the share purchase price and the subscription value of the third party allotment will be approximately 3 billion yen. |
3. Proposed outline of Nihon Kousei (Co.) after becoming a wholly-owned subsidiary of the Company
Nihon Kousei (Co.) plans to change its name after the registration as small-amount short-term insurer and the equity transaction by the Company. Proposed outline is as follows:
Corporate name: “Millea Nihon Kosei SS Insurance Co., Ltd.”
Address: 2-2-1-1 Minatomirai Nishi-ku, Yokohama City, Kanagawa Prefecture
President: Takeshi Kurata
