Japan Post : (Update on the Previous Disclosure) Progress of the Business Improvement Plan

UNOFFICIAL TRANSLATION

Although the Company pays close attention to provide English translation of the information disclosed in Japanese, the Japanese original prevails over its English translation in the case of any discrepancy.

	September 15, 2022
Company name:	Japan Post Holdings Co., Ltd.
Representative:	MASUDA Hiroya
	Director and Representative Executive Officer,
	President & CEO
	(Code number: 6178, Prime Market of the
	Tokyo Stock Exchange)
Contact:	IR Office (Phone: [phone])

(Update on the Previous Disclosure) Progress of the Business Improvement Plan

JAPAN POST HOLDINGS Co., Ltd. ("Japan Post Holdings"; Chiyoda-ku, Tokyo; MASUDA Hiroya, Director and Representative Executive Officer, President & CEO), JAPAN POST Co., Ltd. ("Japan Post"; Chiyoda-ku, Tokyo; KINUGAWA Kazuhide, President and CEO) and JAPAN POST INSURANCE Co., Ltd. ("Japan Post Insurance"; Chiyoda-ku, Tokyo; SENDA Tetsuya, Director and President, CEO, Representative Executive Officer) hereby announce that the companies reported today the progress of the business improvement plan (as of the end of August 2022), based on "Administrative Dispositions against Japan Post Insurance" dated December 27, 2019, to the Ministry of Internal Affairs and Communications and the Financial Services Agency of Japan.

The business improvement plan will continue to be the highest priority of the Japan Post Group, and all officers and employees are making Group-wide efforts to achieve it.

The progress of the business improvement plan is described in the following pages.

1

Status of progress of policy investigations in order to regain customers' trust

Figure 1

	Investigations of specified rewriting cases/
1
	Investigations of all insurance policies

1. 【Investigation of specified rewriting cases】

In regard to the investigations of specified rewriting, we finished responding

to customers as of the end of March 2020. * We will continue responding to customer requests sincerely, including cases that could not be finished due to reasons attributable to customers.

In regard to the sales personnel investigations in connection with the investigations of specified rewriting cases, we have identified 415 sales personnel who had violated laws and regulations and 2,215 sales personnel who had violated internal rules, except for cases which we cannot investigate due to reasons such as salesperson's sick leave.

1. 【Investigations of multiple policies】

In regard to the investigations of multiple policies, we have confirmed 2,821 customers who request compensation for their policies and 2,819 customer's policies were compensated as of August 31, 2022.

In regard to sales personnel investigations of multiple policies which have been implemented from 2019*, we finished and identified 86 sales personnel who had violated laws and regulations as of August 31, 2022.

* Refer to the press release dated June 27, 2019.

1. 【Investigations of all insurance policies】

In the investigations of all insurance policies, we received 1,039 thousand replies as of August 31, 2022, and we completed responding to customers by

the end of August 2020. * We will continue responding to customer requests sincerely, including cases that could not be finished due to reasons attributable to customers.

• Additional investigations of all insurance policies

In regard to the additional investigations of all insurance policies, we

completed responding to customers. * We will continue responding to customer requests sincerely, including cases that could not be finished due to reasons attributable to customers.

In regard to the sales personnel investigations of additional investigations

of all insurance policies and other investigations, we have completed except for cases which we cannot investigate due to reasons such as salesperson's sick leave.

We have identified 920 sales personnel who had violated laws and regulations and 230 sales personnel who had violated internal rules as of August 31, 2022.

In addition, we executed for investigations to 292 sales personnel who have problems that they are related to cases including serious complaint. Of this number, we have identified 39 sales personnel who had violated laws and regulations and 9 sales personnel who had violated internal rules as of August 31, 2022.

We now consecutively investigate a cumulative total of 18,697 sales personnel by letters who are not included in prior investigations, and executed for investigations to 44 sales personnel who answered that their sales process had problems. Of this number, we have identified 21 sales personnel who had violated laws and regulations and 2 sales personnel who had violated internal rules as of August 31, 2022.

【Investigations other than the investigations of

1. multiple policies】

In regard to the investigations other than the investigations of multiple policies, we have contacted customers in proportion to the amount of premiums and the number of times policies were rewritten through visiting by staff of Japan Post Insurance or sending letters to confirm customer intentions. In regard to visiting investigation, we have confirmed 2,855 customers who request compensation for their policies and 2,850 customer's policies were compensated as of August 31, 2022. In regard to letter investigation, we have confirmed 2,533 customers who request compensation for their policies and 2,530 customer's policies were compensated.

Status of progress of policy investigations in order to regain customers' trust

Figure 1

3 Follow-up support activities

In regard to activities to regain customers' trust and to confirm policy coverage, we confirmed customers who experienced policy rewriting since April 2019, customers with whole life insurance where the customer and the insured are different, and customers with policies that were cancelled and rewritten after the payment period had ended and completed responding to

customers. * We will continue responding to customer requests sincerely, including cases that could not be finished due to reasons attributable to customers.

As of August 31, 2022

		Customers who	Customers with	Customers with
		experienced	whole life	policies that were
		policy rewriting	insurance where	cancelled and
		since April 2019	the customer and	rewritten after the
			the insured are	payment period
			different	had ended
		Number of	Number of	Number of
		applicable	applicable	applicable
		customers（％）	customers（％）	customers（％）
Customers whose policy	12,103 (100)	34,201 (100)	9,907 (100)
coverage and intentions have
been confirmed ・・・A
	Customers who request	4,266 (35)	1,614 (5)	413 (4)
	compensation for their
	policies ・・・B
	Customers whose
	compensation for their	4,254 (100)	1,613 (100)	413 (100)
	policies have been
	finished ・・・C
	Total	12,104	34,201	9,907

We will continue to strive to ensure that customer's life insurance policies are useful to them while being suited to customers' intentions and changes in their life styles, through continuing initiatives to ensure that we hear our customers' voices in a wide range of situations.

Concerning the sales personnel investigations of follow-up support activities, we have completed except for cases which we cannot investigate due to reasons such as salesperson's sick leave. We have identified 2 sales personnel who had violated laws and regulations and 5 sales personnel who had violated internal rules, as of August 31, 2022.

*Ratio of customers who request compensation for their policies is calculated as B/A. Ratio of customers whose compensation for their policies have been finished is calculated as C/B.

*Number of A include customers to whom we resent letters for reconfirming.

We constantly review the details of the annual documentation "Notification of Policy Coverage" which we send to each customer. From October 2020, we have improved descriptions in order to make each policy coverage easier to understand. Furthermore, from May 2021, we have added the past cancellation histories to the status of policy enrollment in this notification and started sending in accordance with the month prior to his/her birthday. (We have started sending the customers whose month of birth are July). We have progressed the confirmation activities through visits and explanation by staff to policyholders who receive "Notification of Policy Coverage" documentation.

Directors, and establish a Group Liaison Meeting for internal controls to conduce in-depthdiscussions

Strengthen the Board of Directors, etc. of each company by utilizing the insight of Outside

(2) Strengthen governance on companies and the Group

Overview of the Primary Measures Under the Business Improvement Plan	Figure 2

Establishing an appropriate sales promotion scheme

I. Creating a healthy corporate culture and establishing an appropriate

sales promotion scheme

Foster a customer-first mindset throughout the organization, and build a system in which the practice of insurance policy solicitation based on this mindset is appropriately evaluated.

(1) Review the code of conduct reflect the customer-first philosophy

Establishment of a code of conduct (solicitation policy, Basic Policies for Customer-first Business Operations) based on the principle of "providing insurance coverage founded on high ethical standards which take the original roles and mission of life insurance into account" (February 2020)

Embodiment

(2) Set the Standard of Japan Post Insurance Sales

Formulation of a standard sales model, whereby "products are proposed upon accurately identifying true coverage needs based on customers' concerns for the future and their current situations using a survey form, etc." (February 2020)

First line (post offices, call centers, service centers, etc.)

II. Checks and controls

Prevent the occurrence of policies that are not in line with the intentions of customers

1. Implement multi-layered checks from policy applications to the conclusion of a policy

1. Check at post offices

1. (Pre-application /post office) Expand the pre-checking function for underwriting (Added to the scope in April 2020)
2. (Post-application /post office) Conduct verification of customers' intentions by post office managers (Added to the scope in April 2020)

(Going forward, establish a system environment that enables utilization of enhanced customer information (New function added in October 2020))

1. Check at Japan Post Insurance

1. (Post-application /Japan Post Insurance) Conduct verification of customers' intentions by the application call center (January 2020)
   Conduct verification of customers' intentions by the call center for cancellations (January 2020)
2. (Conclusion of a policy / Japan Post Insurance) Conduct verification of customers' intentions at the time of the underwriting process through checking of all policies (Added to the scope in April 2020)

Instill among all employees

(3) Instill a code of conduct based on the customer-first philosophy

• Training for all employees

Continuously conduct training for the understanding and establishment of the code of conduct based on the customer-first philosophy, including the training for instilling the "Standard of Japan Post Insurance sales" (started in February 2020)

• Implementation of coaching-based management training

Conduct managerial training for shifting from the sales promotion management-driven management method to a management/guidance method using coaching-based approach (Training implemented from June 2020 onward)

• Establishment of system for promoting comprehensive consulting (April 2020)

1)Renamed Financial Services Division of post offices as "Financial Consulting Division" and established a new "Financial Consulting Administration Division" at each branch

2)Renamed the Sales Capabilities Development Institute as the "Consultant Training Center," which now reports directly to the head office

3)Newly appointed "Consulting Advisors," instructors capable of providing instruction on comprehensive consulting

Consistent
(4) Revision of the system including (5)	Improvement of the mechanisms for
sales targets	reviewing coverage

Control

Second line (head office, etc.)

1. 1. Checks and controls
2. Strengthen systems to realize appropriate solicitation management

Reinforce staff in the areas of solicitation management, compliance, and customer services departments

1. 1. Reinforce the structure of solicitation quality instruction specialists (Organizational revision in April 2020)
   2. Strengthen and revise the investigation systems at the second line of the Japan Post Insurance head office (Organizational revision in April 2020) and branches
   3. Detection of complaints and in-depth analysis of the causes (In stages from December 2019 onward)
2. Controls including increasing the strictness of criteria for fact-finding and disciplinary action
3. 1. Conduct fact-finding that does not rely on confession (November 2019)
   2. Record and keep a voice record and a video record of the solicitation process (Expanded to all consultants from August 2020 for voice recording and keeping)
   3. Take disciplinary actions according to the condition and level of improper solicitation (Added suspension of solicitation and warning) (Implemented from April 2020 onward)
   4. Take rigorous disciplinary actions for managers of sales personnel found to have engaged in improper solicitation (from July 2020 onward)

Third line (Internal Audit Department）

1. Set sales targets involving higher solicitation quality (Starting from FY2022, net increase targets, etc. are set)
2. Increase the weight of various evaluation criteria for solicitation

quality

3)Review the ratio of basic salary to sales incentive for the sales personnel (April 2020)

4)Review the sales personnel commendation based on customer- first sales activities to put greater emphasis on solicitation quality

1. Conditional cancellation system (January 2020)
   Achieves seamless continuation of coverage under the system at the time of policy rewriting
2. Policy conversion system
   When adjusting coverage, allows for a payment of insurance benefit within the scope of coverage under the policy prior to the adjustment, even when insurance benefit is not payable under the policy after the adjustment (Introduced in April 2021)

1. 1. Checks and controls
2. Strengthen Internal Audit Department
3. 1. Reinforce the human resources and organizational structure, and audit with higher efficacy by strengthening risk assessment
      (Decided on organizational revision in February 2020)
   2. Strengthen coordination with the Audit Committee (Continuously implement from February 2020 onward)

Establishing an appropriate sales promotion scheme	Strengthening of the appropriate solicitation quality control scheme
(Instill customer-first sales)		(Prevention of policies that are not in line with customer intentions)
		Strengthening governance by the Board of
Oversight by management
		Directors, etc.

III. Information sharing and governance

Upon strengthening governance based on accurate information, thoroughly implement the PDCA cycle, and steadily carry out and instill improvement measures to prevent recurrence

(1) Thoroughly implement the PDCA cycle

Identify and analyze various information including customer complaints, as well as employee opinions received at the contact point for business consultation (February 2020) and the external point of contact exclusively for financial services (March 2020) with higher risk sensitivity, and verify the effectiveness of the improvement measures and make revisions upon in-depth discussions (Implemented in stages from April 2020 onward)

(3) Monitor improvement measures and regularly announce the progress

Establish a task force for implementing various improvement measures (January 2020), which is being monitored by a third party, and announce the status on a regular basis

	September 15, 2022
Company name:	Japan Post Holdings Co., Ltd.
Representative:	MASUDA Hiroya
	Director and Representative Executive
	Officer,
	President & CEO
	(Code number: 6178, Prime Market of the
	Tokyo Stock Exchange)
Contact:	IR Office (Phone: [phone])

(Update on the Previous Disclosure) Progress of the Business Improvement Plan

1. Results of the investigations of policies by Japan Post Insurance

1. Status of the investigations of specified rewriting cases

In regard to the investigations of specified rewriting cases, we confirmed solicitation circumstances at the time of enrollment and customers' intentions about reinstatement by letters, phone calls and home visit to approximately 156 thousand customers. We finished responding to customers as of the end of March 2020, except for cases that could not be finished due to reasons attributable to customers. We will continue responding to customer requests, including the above cases that could not be finished due to reasons attributable to customers.

1. Status of the sales personnel investigations in connection with the investigations of specified rewriting cases
   In regard to the sales personnel investigations in connection with the investigations of specified rewriting cases, we have completed the review of sales personnel investigations except for cases which we cannot investigate due to reasons such as salesperson's sick leave. We have identified 415 sales personnel who had violated laws and regulations and 2,215 sales personnel who had violated internal rules. Also, we have taken disciplinary actions in the form of termination of solicitation operations against 76 personnel (including 13 personnel* who are involved in other cases and 47 retired personnel subjected to penalties equivalent to termination of solicitation operations), suspension of solicitation operations of 1 month to 6 months against 1,002 personnel, suspension of solicitation for 2 weeks or 3 weeks against 1,550 personnel and undetermined disciplinary actions in order to allow for appeals against 2 personnel.

• 10 of 13 personnel who are involved in other cases, are involved in the portion of investigations of multiple policies which have been implemented since 2019 and the other 3 of 13 personnel are involved in the cases which have been found out from

1