September 19, 2002 Mitsui Sumitomo CitiInsurance Launched - First Japanese-Foreign Joint Venture Life Insurance Firm Focused on Variable Annuities in Japan Mitsui Sumitomo CitiInsurance, a joint venture established by Mitsui Sumitomo Insurance Co., Ltd. (President and CEO: Hiroyuki Uemura) and CitiInsurance International Holdings Inc. (President and CEO: Michael Froman), an affiliate of Citigroup, received its life insurance business license on September, 19 2002. This firm will commence operations in the variable annuity insurance market in Japan. Mitsui Sumitomo CitiInsurance is dedicated to contributing to the healthy development of the insurance business in Japan. * * * Note: We advised you earlier, in our News Release dated September 20, 2001, of the creation of Mitsui Sumitomo CitiInsurance. Sets forth below are details of this new venture. 1. Outline of the New Company Corporate Name: Mitsui Sumitomo CitiInsurance Life Insurance Co., Ltd. (Mitsui Sumitomo CitiInsurance) Management setup: Representative Director, Co-CEO Fumio Yamamoto Representative Director Co-CEO Mitsuru Imoto Headquarters: 2-1-1, Marunouchi, Chiyoda-ku, Tokyo. 4F Kishimoto Building. Capitalization: 3 billion yen (to be increased to approximately 6 billion yen by the launching date) Equity ownership: While equity is 51% owned by Mitsui Sumitomo Insurance Co., Ltd. And 49% owned by CitiInsurance International Holdings Inc., contractually, all major corporate actions must be approved by both parties and the board is evenly split between Mitsui Sumitomo Insurance and CitiInsurance. No. of Directors & Employees: 61 persons Corporate Vision: Mitsui Sumitomo CitiInsurance's corporate vision is client-centered, providing the finest products and services to its clients. It strives to be the company with the highest moral and ethical standards and, in so doing, it expects to earn the trust of the communities it serves. Putting MSI's and Citigroup's power together, Mitsui Sumitomo CitiInsurance will promote innovative ideas, products and services. 2. Purpose in Founding a Joint Venture Company Changes in the Financial Business Environment: Many changes are taking place in the Japanese personal financial market, which reportedly totals 1,400 trillion yen in assets. Continuing low interest rates on bank deposits and Postal Savings accounts over a long period of time; implementation of the Deposit Insurance Cap; introduction of a defined contribution annuity plan and short fall of reserves for corporate pension funds, as well as consumers' insecurity regarding public-funded pension plans have created an environment for encouraging the purchase of investment products as well as diversification of financial products. It is expected that a substantial volume of funds will switch over from deposit and savings accounts to marketable securities such as mutual funds and, at the same time, investors' interests in financial services and products are likely to expand further. Under such circumstances, we are convinced that variable individual annuity insurance products that enable holders to invest in a portfolio of mutual funds set up as a separate account will become a product that attracts investors' interests. Changes in Consumer Life Styles: According to the Simplified Life Expectancy Chart for the Year 2001 prepared by the Ministry of Health and Labor the average life expectancy was 84.93 years for Japanese females and 78.07 years for Japanese males, both renewing the world's highest records. In addition to the desire to live post-retirement life affluently, the need for adequate personal pension income to supplement public pensions in order to prepare for expenses resulting from a long life is increasing. Expectation on Individual Annuity Life Insurance Plan: Growing needs accompanying changes in consumer life styles, as well as changes in the investment environment, suggest the need to create an annuity product that enables customers to enjoy investment returns while carrying risks on their own. The variable individual annuity insurance plan enables clients to make selective investments by offering a number of diversified funds and allowing comparison of risks against returns as well as switching investment portfolios. It is our opinion that, by enabling our customers to understand through the disclosure of asset management results and processes at all times, we aim to realize reasonable management with diversified investment by individuals. In this manner we will be able to remove any potential apprehension our customers may entertain on products that are subject to self-discipline, thereby facilitating the sound development of the variable individual annuity insurance market. Furthermore, it provides a big incentive for life insurance policyholders to be eligible for a variety of tax breaks, such as reduced inheritance tax on death benefits or deferral of income tax on investment gains until they begin to collect pension payments. Demonstration of Synergy by Combining Strengths of Both Partners: In light of the above potential, Mitsui Sumitomo Insurance Group and Citigroup have agreed to launch joint operations and have established a company dedicated to the variable individual annuity insurance business. Furthermore, by adopting a joint venture operations style of management, we will demonstrate synergy by mutually taking advantage of each company's strengths: such as long years of operating experience and knowledge in the domestic insurance market nurtured by Mitsui Sumitomo Insurance Group and world-class performance records and expertise in the variable individual annuity business carried by the Travelers Life & Annuity Company, a Citigroup affiliate and one of the largest life insurance concerns in the U.S. market. Through the utilization of both groups' competitive advantages we intend to respond to customers' needs accurately and provide them with relevant and adequate information, while disseminating widely and correctly the attractive features of variable individual annuity insurance products, thereby contributing to the sound development of that particular market, which is still in its infancy. 3. Marketing Plan Launching Date: Scheduled for October 1, 2002 (sale of insurance products at bank tellers' windows deregulated on that date) Marketing Outlets: For the time being we plan to contract only with financial institutions experienced in marketing investment products such as brokerage houses and banks as agents to promote marketing of this product. Products: We will endeavor to offer products that will adequately satisfy customer needs and contribute to the sound development of the variable individual annuity insurance market based on our specialty as a life insurance firm focused on variable individual life insurance operations as well as the solid performance records and experiences Citigroup has nurtured in the U.S. market. End