[English Translation] October 5, 2005   Notice Concerning the Incident of Embezzlement at the Subsidiary of Mitsui Sumitomo Insurance Co., Ltd. in U.S.A. Mitsui Sumitomo Insurance Co., Ltd. ("Company")(Hiroyuki Uemura, President and CEO) announced on October 8, 2004 that the alleged incident of embezzlement by the locally hired former employee ("Employee") at MSI Claims (USA), Inc. ("MSIC")(**), a subsidiary of the Company was discovered in September 2004.Now the outline of the incident has been determined and the Company hereby makes an additional announcement as follows: (**) MSI Claims (USA), Inc., founded in New York State, U.S.A in 1989, is a wholly- owned subsidiary of the Company , with 25 employees and capitalized at $150,000. MSI Claims (USA), Inc. adjusts losses of product liability insurance, overseas travelers insurance and ocean cargo insurance. The total embezzlement has been finally determined to be in the amount of JPY423 million. The Employee embezzled checks payable to MSIC, deposited them into the bank accounts he opened illegally with the names very similar to the name of MSIC, and converted the funds to his personal use. It is expected that the full amount of the loss will be recovered by early next year. As to the disciplinary punishment, the Employee was terminated (he was found guilty of mail fraud), and five persons who were responsible for the supervision of MSIC were either demoted or reprimanded. The ingenious tactics used by the Employee delayed the discovery of this incident. Upon detecting the embezzlement, MSIC immediately reviewed the status of its internal controls, reinforced the functions of the board of directors and its internal controls, started an internal audit, reinforced its compliance program and made the improvements in various procedures such as procedures for mail processing, revision of the computer system to improve the monitoring of the subrogation claims to prevent a recurrence. In addition, the Company has strengthened its oversight function through a more comprehensive annual audit. We will strengthen the internal controls for the overseas subsidiaries and will work on preventing similar incidents from recurring.