Annual Report of the Agricultural and Fishery Co-operative Savings Insurance Corporation FY2015 August 2016 Agricultural and Fishery Co-operative Savings Insurance Corporation Table of Contents Chapter 1 Overview for FY2015 Introduction ······································································································· 1 I. Outline of Operations by Savings Insurance Corporation ·················································· 3 1. Collection of insurance premiums ····································································· 3 2. Savings insurance operations ·········································································· 3 3. On-site inspections ······················································································· 3 4. Verification of data of depositors ·············································································· 4 5. Development / Optimization of SIC’s system for failure resolution and simulation tests ······························································································· 4 6. Briefings on savings insurance system ······························································· 4 7. Practical training sessions on administrator system ················································· 5 8. Briefings on maintaining data of depositors ························································· 5 9. PR, survey and research activity ······································································· 5 10. Special operations concerning earthquake disaster ················································· 5 11. Support for Revitalization of Businesses Affected by the Great East Japan Earthquake6 12. Amendment to the Savings Insurance Act, etc ······························································ 6 II. General Affairs ······················································································ 6 1. Policy Board meetings, etc. ············································································ 6 2. Change in the executives, etc. ········································································ 7 III. Profit and Loss Situation ·················································································· 7 1. General Account ························································································· 7 2. Special Earthquake Account ··········································································· 7 3. Revitalizing earthquake-affected business account ················································· 8 (Table 1) FY2015 Profit and Loss for ································································· 9 (Table 2) Balance Sheet and Profit and Loss Statement················································ 9 Chapter 2 Outline of Savings Insurance System and SIC I. Purpose of Savings Insurance System ········································································· 13 II. Outline of Savings Insurance System ········································································· 13 1. Cooperatives covered by the system ·································································· 13 2. Savings and others covered by insurance ································································ 14 3. The scope of protection under savings insurance system ·········································· 14 4. Insurance premiums ····················································································· 16 5. Cooperative failure proceedings ······································································· 17 6. On-site inspections ······················································································· 26 (Figure 1) Flowchart of bankruptcy proceedings under the financial assistance method (example) ················································································ 28 (Figure 2) Flowchart of insurance payouts ····························································· 29 III. Organization, etc., of Savings Insurance Corporation ····················································· 30 1. Establishment ···························································································· 30 2. Capital ···································································································· 30 3. Policy reserves ··························································································· 30 4. Borrowings and government guarantees ···························································· 30 5. Policy Board ································································································ 30 6. Executives ································································································· 32 7. Financial affairs ·························································································· 32 [Annexes] 1 (1) History of expansion and development of savings insurance system ·························· 33 (2) Main amendments to the Savings Insurance Act, etc. ··········································· 34 (3) History of expansion and development of special measures related to the Great East Japan Earthquake ····································································· 35 2 FY2015 (43rd Fiscal Year) Record of Principal Operations ······································ 36 3 (1) Situation of repayment of specific preferred equity investment by special earthquake-affected cooperatives ······················································· 39 (2) Present measures for the disposition of specific preferred equity investment, etc. in the special insured cooperatives, etc. in accordance with the Act n Enhancement and Restructuring of Credit Business Conducted by the Norinchukin Bank and Specified Agricultural and Fishery Cooperatives, etc. ······················································ 41 4 List of Financial Assistances ··········································································· 42 5 Record of Financial Assistances ······································································ 47 6 Implementation Status of On-Site Inspections (FY2015) ············································ 59 7 Implementation Status of Verification Project of Data of Depositors (FY2015) ················· 61 8 Number of Cooperatives, Total Savings, Insured Savings and Premiums (by Fiscal Year) ····························································································· 66 9 FY2015 Insurance Premiums (by Prefecture) ···························································· 69 10 State of Income and Expenditure by Fiscal Year ··················································· 70 11 Transition of Insured Savings and Liability Reserves ············································· 72 12 List of Policy Board Members, Executives, etc. ···················································· 74 13 Organization Chart of the Agricultural and Fishery Co-operative Savings Insurance Corporation ······································································· 75 Chapter 1 Overview for FY2015 Introduction The mission of the Agricultural and Fishery Co-operative Savings Insurance Corporation (hereinafter “SIC”) is “to protect depositors and others and to ensure settlement of funds, thereby contributing to maintaining the orderly credit conditions by the following measures: Paying necessary insurance benefits and purchasing savings and other receivables when agricultural and fishery cooperatives suspend reimbursement of savings; and Providing appropriate financial assistance for mergers, conducting operations as administrators and taking measures in response to financial crises against agricultural and fishery cooperatives facing business difficulty.” While there has been no case of failure resolution of agricultural and fishery cooperatives (hereinafter “AFCs”) since 2003, but in the present economic and financial situation, the environment for the AFC has been adverse. In the meantime, due to the outbreak of the Great East Japan Earthquake, appropriate responses are necessary for operations related to the Act for Partial Amendment of the Act on Enhancement and Restructuring of Credit Business Conducted by the Norinchukin Bank and Specified Agricultural and Fishery Cooperatives, etc. (hereinafter “Amended Enhancement and Restructuring Act”) and the Act on the Corporation for Revitalizing Earthquake-Affected Business (hereinafter “Business Revitalizing Corporation Act”). Under these circumstances SIC has been tackling issues identified in the Medium- Term Business Targets (FY2013-FY2015) and the business operation plans for each fiscal year, with the aim of serving as a safety net for protecting depositors and maintaining orderly credit conditions. In FY2015 SIC provided briefings on the savings insurance system for those concerned at the government agencies, and practical training on affairs for the administrator system, etc. for relevant staff in prefectural oranizations, in order to prepare for appropriate action on failure resolution proceedings under the limited coverage scheme. SIC also conducted simulation tests on the three cooperatives under the new basic system changed into a server method. In addition, so as to maintain and improve the data of depositors, the SIC substantially increased the subjects of its verification projects from 24 cooperatives in FY2014 to 152 in FY2015 and conducted on-site inspections on the name-based aggregation