[English Translation] October 12, 2005 Status of Process of Follow-up Payments On September 20,2005,we at Mitsui Sumitomo Insurance Company(President and CEO Hiroyuki Uemura)(MSI) regretfully announced a result of an internal investigation on the claims cases settled in the past three years, whether or not certain expense-related payments due to customers were included in their payout amounts in each case. Simultaneously, we apologized deeply to those customers whom we should have informed of the payouts in question We immediately started paying specifically the outstanding amounts for the customers. The followed up adjustments for these compensable expenses and other applicable items totaled to 24,817 cases or 99 percent of the total unpaid and underpaid cases as of October 11, 2005. Regarding cusromers we have been unable to get contact for their moving and the like,. we will make our best effort to find them to pay outstanding amounts. We at MSI sincerely apologize, again, for these errors, which happened in the claims handling as a primary business of non-life insurance administration, resulting in losing trust from customers. We will do take preventive measures in the claims handling and tighten the internal control. We all at MSI have our hearts on restoring the customers’ trust lost. 1.Summarized status of the follow-up process (as of October 11, 2005) General Insurance Company of the Year, Asia Insurance Industry Awards 2005. Lines Expenses to be reimbursed for Followed up cases(#):A Followed up payments(mn yen) Accidents(#) : B Estimated follow-ups (cases) : C Error ratio (%) : C/B Follow- up ratio (%) :A/C Auto- mobile Vehicle Repair-related 1,883 73.335 1,681,119 1,899 0.11 99.2   Total loss-related 71 4.794 75 0.00 94.7   Fixed rate substitution car-related 9,651 314.998 9,703 0.58 99.5   Theft substitution car-related 968 77.722 980 0.06 98.8   Bodily injury liability Emergency expense 1,556 26.002 520,959 1,589 0.31 97.9   Injury Emergency expense 209 4.864 152,890 216 0.14 96.8   Single interest Care-related 1 2.000 11,814 1 0.01 100.0   Casualty (passenger) Casualty （passenger) 8,302 934.675 295,745 8,384 2.83 99.0   (subtotal) 22,641 1,438.390 2,662,527 22,847 0.86 99.1 Fire Emergency expense 609 28.171 317,291 628 0.20 97.0 Emergency expense 315 38.373 315 0.10 100.0 Extra expense 81 32.211 84 0.03 96.4 (subtotal) 1,005 98.755 317,291 1,027 0.32 97.9 Personal accident (PA) Doubled / higher limit clause-related 569 12.370 1,703,958 584 0.03 97.4 Hospitalization / discharge emergency money 279 10.312 287 0.02 97.2 PA / health insurance (others) 241 137.954 245 0.01 98.4 (subtotal) 1,089 160.636 1,703,958 1,116 0.07 97.6 Miscellaneous Emergency expense 70 5.320 661,771 72 0.01 97.2 Marine Emergency expense 12 0.728 77,629 12 0.02 100.0 Grand total 24,817 1,703.829 5,423,176 25,074 0.46 99.0 A customer-only dedicated desk has been opened.Please dial the number stated below for any question. [customer desk] Toll free : 0120-925-936 Open : 9.15 am to 5.00 pm Japan time except Saturdays, Sundays and holidays 2.Causes of the errors and the preventive measures to be taken It is revealed that those errors happened as failure to notify entitled customers of the relevant payments because of mishandlings in the process of those claims which satisfied certain specific clauses. The preventive measures to be taken include the followings; improving the the preventive function in the computerized procedures to detect those errors in question; introducing a systematic mechanism which tracks payout conditions of settled claims for reviewing and monitoring; enhancing the training program for employees in charge and revising the manual booklets for them as actions supplementary to these computerized preventive methods. By doing them all, we are committed to preventing such errors. (1) Computerized preventive measures [1] Improving the system program in the checking function a. We will strengthen the function of identifying compensable expense-related items, by matching information of filed claims with relevant insurance policy.   b. We will ensure that the claims handing process should more functionally be monitored in terms of whether or not the customers have been informed of the notice. Simultaneously, we will add a new function in the computer program which does not complete cliams process without an input confirming that the customers have been informed of the notice.   c. We will renew terminal screen display for administration and voucher form for authorization to make it sure on payment that the customers have been notified of the payments. [2] Computerized regular review on settled claims     We will construct a mechanism on the internal intranet to maintain payouts data of settled cases under the central control. The following jobs will be done throughout within this online mechanism; all claims completed during a previous month are automatically listed on a monthly basis; each service center reviews the listed claims , and reports the result in return.     [Note] Part of these computerized measures has been in place since August in advance to full implementation planned by the year end. (2) Actions supplementary to computerized measures [1] Revision of manual booklets and thoroughgoing staff training a. Procedures for customer notification will be stipulated more clearly and precisely in the claim handling manual booklet for ensuring completely processing. We will thus prevent similar mistakes from reoccurring.   b. A training scheme will be provided on the theme of the expense-related payments in question at all service centers. Also, the regular collective training in the claims handling department will additionally put it on its agenda. We are committed to disciplined claims handling services and compliance. [2] Strengthening internal review and control systems     Through the monthly internal review conducted at every service center and the inspection in which the HQ department examines operations of service centers, we will monitor and review the preventive measures, and issue instructions,if necessary. We will take these actions to seek for prevention in respect of internal control. In addition to the above-stated preventive measures, we are planning to prepare [a sheet of] material for customers on filing cliams that help them understand the extents of coverage and compensable items relevant to their cases.   Although we have to consider keeping periods of claims documents, we will try our best for the claims which were settled before the recent three years. 3.Returning portions of remuneration from responsible executives Takeo Inokuchi, Chairman and CEO, and Hiroyuki Uemura, President and CEO and four other executives in charge have decided to return portion of their remuneration with amounts ranging from a 10-percent to a 30-percent equivalence of the monthly pay, taking the responsibilities for not only so many delayed reimbursements and the improper handlings but also the troubles caused by the mishandlings.