I hereby promulgate the Shipowners'Mutual Insurance Association Law. Signed:HIROHITO, Seal of the Emperor This eleventh day of the fifth month of the twenty-fifth year of Showa (May 11, 1950) Prime Minister YOSHIDA Shigeru Law No.177 Shipowners'Mutual Insurance Association Law Contents Chapter I General Provisions (Articles 1-11) Chapter II Incorporation (Articles 12-20) Chapter III Membership (Articles 21-29) Chapter IV Organs (Articles 30-40) Chapter V Accounts (Articles 41-44) Chapter VI Dissolution and Liquidation (Articles 45-48) Chapter VII Supervision (Articles 49-54) Chapter VIII Miscellaneous Provisions (Article 55) Chapter IX Penal Provisions (Articles 56-61) Supplementary Provisions CHAPTER I General Provisions

(Purpose) Article 1. The purpose of this Law is to secure the sound management of the business of nonlife insurance under mutual insurance carried on by a shipowners'mutual insurance association and to protect the interests of members and general creditors of the said association.

(Definition) Article 2. "Shipowners'mutual insurance association" (hereinafter referred to as "association" ) as used in this Law shall mean a wooden vessel mutual insurance association and a shipowners'liability mutual insurance association. 2 "Wooden vessel mutual insurance association" as used in this Law shall mean an association incorporated in compliance with this Law by owners or charterers of wooden vessels other than fishing boats-which mean fishing boats as specified in Article 1 paragraph 2 of the Fishing Boat Insurance Law (Law No.23 of 1937);hereinafter the same in Article 7 paragraph 1-to carry on the business of non-life insurance under mutual insurance in regard to the vessels owned or chartered by them and expenses and legal liabilities of shipowners (including charterers;hereinafter called "shipowners" ) incidental to the operation thereof. 3 "Shipowners'liability mutual insurance association" as used in this Law shall mean an association incorporated in compliance with this Law by owners or charterers of vessels other than wooden vessels to carry on the business of insurance under mutual insurance in regard to expenses and legal liabilities of shipowners incidental to the operation of vessels owned or chartered by them. 4 "Expenses and legal liabilities of shipowners arising from the operation of the vessels" as used in this Law shall mean those as mentioned in any one of the following items: (1) Liabilities of shipowners against any damage done to buoy, pier, dock, submarine cable, fishing apparatus of other objects by the vessel incidental to the operation thereof; (2) Expenses for life salvage of any person or medical treatment for personal injury or sickness incurred incidental to the operation of the vessel for which shipowners shall be liable or shall have to indemnify; (3) In the case where infectious disease breaks out any expenses incurred for disinfection or other measures taken for which shipowners shall be liable in accordance with the provisions of Article 9 paragraph 2 of the Sea-Port Quarantine Law (Law No.19 of 1899); (4) In addition to those mentioned in any one of the above items, any expenses arising from the operation of the vessels for which shipowners shall be liable and legal liabilities of shipowners in respect of the damage arising from the operation of the vessels.

(Minimum Amount of Contribution Fund) Article 3. The total amount of the contribution fund of an association to be shared by its members shall be not less than two million (2,000,000) yen.

(Prohibition of Carrying on Other Business Concurrently) Article 4. No wooden vessel mutual insurance association shall carry on business other than non-life insurance business as provided for in Article 2 paragraph 2, nor shall shipowners'liability mutual insurance association carry on business other than non-life insurance business as provided for in paragraph 3 of the same Article.

(Restriction on Solicitation) Article 5. No association shall entrust, paying commissions, remunerations or any other considerations, any persons other than its officers, members and employees with solicitation of memberships.

(Prohibition of Transfer, etc. of Insurance Contract) Article 6. No association shall transfer its insurance contract or assign its business.

(Qualifications for Membership) Article 7. Persons qualified for the membership of a wooden vessel mutual insurance association shall be confined to owners or charterers of wooden vessels other than fishing boats as are prescribed in its Articles of Association. 2 Persons qualified for the membership of a shipowners'liability mutual insurance association shall be confined to owners or charterers of vessels other than wooden vessels as are prescribed in its Articles of Association.

(Restriction on Proprietor of Business) Article 8. No person other than an association incorporated in compliance with this Law shall carry on the business of non-life insurance as provided for in Article 2 paragraph 2 or 3, provided;however, that, where he does so in accordance with the provisions of Article 1 paragraph 1 (License for Insurance Business) of the Insurance Business Law (Law No.41 of 1939) or Article 3 paragraph 1 (License) of the Law concerning Foreign Insurers (Law No.184 of 1949)

(Name) Article 9. An association shall include the following words in its name: (1) "Wooden Vessel Mutual Insurance Association" ;in the case of a wooden vessel mutual insurance association; (2) "Shipowners'Liability Mutual Insurance Association" in the case of a shipowners'liability mutual insurance association. 2 No person other than an association incorporated in compliance with this Law shall use the words mentioned in the preceding paragraph or analogous words in his name.

(Juridical Personality and Domicile) Article 10. An association shall be a juridical person. 2 The domicile of an association shall be the place where its principal office is located.

(Registration) Article 11. An association shall have itself registered in accordance with the provisions of the Cabinet Order. 2 Matters required to be registered in accordance with the provisions of the preceding paragraph can not be set up against a third party unless and until they have been registered.

CHAPTER II Incorporation

(Promotors and Members) Article 12. In order to incorporate an association it is required that there shall be not less than seven (7) promoters who intend to become its members. 2 No association shall be incorporated unless it has at least fifteen (15) members and one hundred (100) vessels, as subject matter of insurance, owned or chartered by such members (in case the subject matter of insurance contract is shipowners'expenses and legal liabilities incidental to the operation of vessels, such vessels;hereinafter the same).

(Matters to be Stated in the Articles of Association) Article 13. The promotors shall prepare the Articles of Association and shall state therein the following matters and affix their signatures thereto: (1) Name; (2) Location of the offices; (3) Provisions regarding qualifications for the membership; (4) Provisions regarding accession and secession of members; (5) Provisions regarding notification or demand notice to members; (6) Amount of one (1) share in the contribution fund, and time of its payment; (7) Causes for which insurance money is to be payable; (8) Provisions regarding reduction of the amount of insurance money and collection of additional premium; (9) In addition to the preceding two items, provisions regarding insurance contract; (10) Provisions regarding a general meeting of members (hereinafter referred to as "general meeting" ); (11) Provisions regarding the officers and "Sanji" (manager); (12) Provisions regarding distribution of surplus and disposition of loss; (13) Business year; (14) Method of public notification; (15) Amount of incorporation expenses to be borne by the association and remunerations to be received by its promotors; (16) If the period of its existence or the cause for its dissolution are determined, such period or cause.

(Application for Membership) Article 14. Persons who intend to accede to an association shall state in the application for membership, in duplicate, the number of shares in the contribution fund, and the matters specified in the document showing the method of business under Article 16 paragraph 2 item (2) regarding vessel which is subject matter of insurance, and subject matter of insurance contract and the amount to be insured, and shall affix their signatures thereto. 2 The application for membership at the time of incorporation shall be prepared by the promotors and shall contain the following matters: (1) Matters listed in the Articles of Association; (2) Names or trade names and domiciles of the promotors; (3) Method, term and place of payment of the share in the contribution fund and the premium; (4) That the application for membership may be cancelled in case the inaugural general meeting has not been concluded by a certain fixed time. 3 The application for membership after the incorporation of an association shall be prepared by "Riji" (directors) and shall contain the following matters: (1) The date on which the incorporation has been approved; (2) Matters listed in the Articles of Association; (3) Names and domiciles of the officers; (4) Method, term and place of payment of the share in the contribution fund and the premium.

(Inaugural General Meeting) Article 15. The promotors shall, after having prepared the Articles of Association, solicit the persons who intend to become members, and, when both the number of members who have completed the payment of the full amount of their subscribed shares in the contribution fund and of the whole or a part of the premium and that of vessels owned or chartered by them which are subject matter of insurance have attained to, or exceeded, the number under Article 12 paragraph 2, they shall convene an inaugural general meeting without delay after the lapse of the term of payment of the share in the contribution fund and the premium prescribed in the application for membership. 2 The approval of the Articles of Association, appointment of the directors and auditors, and decision of other matters necessary for the incorporation shall be made by the resolution of the inaugural general meeting. 3 At the inaugural general meeting, the Articles of Association may be amended;provided, however, that this shall not necessarily hold good with regard to the provisions relating to the qualifications for membership. 4 The directors and auditors shall be appointed from among the persons who intend to become members (in case of members being juridical persons, executive officers of such juridical persons). 5 Business at the inaugural general meeting shall be decided, when not less than one-half (1/2) of the persons who intend to become members (but confined to those who have completed the payment of the full amount of their shares in the contribution fund and of the whole or a part of the premium;hereinafter the same in paragraph 6) are present, by a majority of not less than two-thirds (2/3) of the voting rights of those present. 6 Each person who intends to become a member is entitled to one (1) voting right at the inaugural general meeting. 7 The provisions of Article 33, the proviso to paragraph 2 of Article 35, and Article 239 paragraph 4 and Article 240 (Voting Right of a Person having Particular Interest), Article 244 (Minutes of General Meeting of Shareholders) and Articles 247 to 253 inclusive (Rescission of the Resolution of General Meeting of Shareholders) of the Commercial Code (Law No.48 of 1899) shall apply mutatis mutandis to the inaugural general meeting. In this case, "Article 343" in Article 247 paragraph 1 of the Commercial Code shall read "Article 15 paragraph 5 of the Shipowners'Mutual Insurance Association Law" .

(Application for Approval of Incorporation) Article 16. The promotors shall, without delay after the conclusion of an inaugural general meeting, file with the competent Minister an application for approval of the incorporation and obtain his approval. 2 In the case of the preceding paragraph, the promotors shall submit the following documents attached to the application for approval of the incorporation to the competent Minister: (1) Articles of Association; (2) A document showing the method of business; (3) A document showing the basis of calculating premiums and liability reserve; (4) Application for membership; (5) A document showing that the payment of the share in the contribution fund and the premium has been made; (6) A document stating the names and domiciles of officers and showing their qualifications; (7) List of members as prescribed in Article 38 paragraph 2; (8) Minutes of the inaugural general meeting; (9) A business plan for three (3) years following the commencement of business; (10) Such other documents as deemed necessary by the competent Minister. 3 Matters to be stated in the documents under items (2) and (3) of the preceding paragraph shall be determined by the competent ministerial ordinance. 4 When an association intends to alter the matters stated in the documents under items (1) to (3) inclusive of paragraph 2 it shall obtain an approval of the competent Minister.

(Approval of Incorporation) Article 17. The competent Minister shall, upon receipt of the application under paragraph 1 of the preceding Article approve, except a case that comes under any one of the following items, such incorporation in the case where he finds the business will be carried on soundly and not adverse to the public interest: (1) In case the procedures of incorporation or the contents of the documents under paragraph 2 of the preceding Article be in contravention of any laws and orders of disposition made in accordance with the laws and orders by the administrative organs; (2) In case there be false statements relating to important matters, or omission of statements relating to important matters, in any one of the documents under paragraph 2 of the preceding Article; (3) In case there be any person among the promotors, directors and auditors who comes under any one of the following sub-items; (a) A bankrupt who is not yet rehabilitated; (b) A person who has been sentenced to a heavier punishment than confinement or to a fine under this Law and of whom five (5) years have not elapsed since the termination of execution or from the date on which he became free of the execution; (c) In case where an association has the approval for incorporation revoked in accordance with the provisions of this Law, a person who was a director or auditor of such association thirty (30) days prior to the date on which such disposition was made and for whom five (5) years have not elapsed from the date on which the association was subjected to such disposition of revocation of the approval; (d) An officer who was dismissed in accordance with the provision of Article 53 paragraph 1 and of whom five (5) years have not elapsed from the date on which such disposition was made; (e) Statutory guardian of a minor or an incompetent who has no same legal capacity as a major in regard to business, coming under any one of the preceding sub-items. 2 The provisions of Article 2 (Deposit at the Time of Issuance of License) of the Insurance Business Law shall apply mutatis mutandis to the case where it is intended to give an approval for incorporation under the preceding paragraph. 3 The competent Minister shall, in case he has approved or disapproved the incorporation under the preceding paragraph, without delay, notify the applicant for an approval of incorporation to that effect in writing.

(Time of Coming Into Existence) Article 18. An association shall come into existence by the approval for incorporation under paragraph 1 of the preceding Article.

(Handing-over of Business to Directors) Article 19. The promotors shall, when the approval of incorporation under Article 17 paragraph 1 is given hand-over without delay their business to the directors.

(Application mutatis mutandis of the Commercial Code) Article 20. The provisions of Article 193, Article 194 and Article 196 (Liability of Promotors) and Article 197 (Action against Promotors) of the Commercial Code shall apply mutatis mutandis to the promotors of an association. In this case, "Article 343" in Article 196 shall read "Article 32 paragraph 4 of the Shipowners'Mutual Insurance Association Law" and "shareholders holding shares representing not less than one-tenth (1/10) of the capital" in Article 197 shall read "persons of not less than one-fifth (1/5) in number of the whole members" .

CHAPTER III Membership

(Accession and Conclusion of Insurance Contract) Article 21. As to any person who intends to become a member at the time of incorporation of an association and has completed the payment of the full amount of his subscribed shares in the contribution fund and of the whole or a part of the premium, insurance contract between such person and the association shall become effective at the time of the association having come into existence, and he shall become its member. 2 As to any person who intends to become a member at the time of incorporation of an association who has not completed the payment under the preceding paragraph by the time of the association coming into existence, an application for accession of such person shall be deemed to have been cancelled. 3 In case any person who intends to accede to an association after the association came into existence has obtained the consent for accession of the association in accordance with the provisions of the Articles of Association, and completed the payment of the full amount of his subscribed shares in the contribution fund or received the transfer of the whole or a part of the shares of members, and has completed the payment of the whole or a part of the premium, insurance contract between such person and the association shall become effective and such person shall become its member. 4 No member shall effect an insurance contract with the association making any person who is not its member an insured thereof. 5 In case any person qualified for membership intends to accede to an association, the association shall not refuse his accession without justifiable reason.

(Contribution Fund) Article 22. Each member shall hold not less than one (1) share in the contribution fund. 2 Any person who intends to accede to an association shall pay, in a lump sum, the full amount of the share in the contribution fund he has subscribed. 3 No contribution fund of the association shall be paid by property other than money. 4 The amount of one (1) share in the contribution fund shall be equal. 5 Holding of shares in the contribution fund of one (1) member shall not exceed ten (10) per cent of the total number of shares in the contribution fund. 6 Each member shall, irrespective of the number of his shares in the contribution fund, have one (1) voting right at a general meeting. 7 The responsibility of each member concerning the liabilities of the association shall, unless otherwise provided in this Law, be limited to the extent of the amount of his shares in the contribution fund and the amount of his premium. 8 No member shall pit himself against the association with an offset with regard to the payment of the share in the contribution fund and the premium.

(Transfer of Shares and Subject Matter of Insurance, etc.) Article 23. A member may transfer, upon approval of the association, the whole or a part of his shares, to other members or the persons who are qualified for membership. 2 If, in the case under the preceding paragraph, the transferee is a person who is qualified for membership, he shall, upon approval of the association in regard to his accession, pay without delay the whole or a part of the premium in accordance with the provisions of the Articles of Association;provided, however, that where he has received the transfer of, or succeeded to, the vessel which is subject matter of insurance and succeeded to the rights and duties based upon the insurance contract of the transferor or assignor in respect of such vessels, this shall not necessarily hold good. 3 Each transferee of shares shall succeed to the rights and duties of the transferor in respect of such shares. 4 If, in the case where a member has transferred the vessel which is subject matter of insurance, the transferee is a member, he shall succeed to the rights and duties based upon the insurance contract of the transferor in respect of such vessel. In this case, the transferee shall without delay notify the association to that effect. 5 If, in the case under the preceding paragraph, the transferee is a person qualified for membership, he may, upon approval for accession of the association, succeed to the rights and duties based upon the insurance contract of the transferor in respect of the vessel which is subject matter of insurance. In this case, the transferee shall pay without delay, in accordance with the provisions of the Articles of Association, the full amount of his subscribed shares in the contribution fund;provided however, that, where he has received the transfer of the shares, or succeeded thereto, this shall not necessarily hold good. 6 If, in the cases under the preceding two paragraphs, the transferee is a person other than the member or a person who is not qualified for membership, the provisions of Article 650 paragraph 1 (Transfer of Subject Matter of Insurance) of the Commercial Code shall not apply mutatis mutandis.

(Succession of Shares and Subject Matter of Insurance, etc.) Article 24. If, in the case where a member has died or has been dissolved by amalgamation, his heir or legatee or a juridical person who continues to exist after amalgamation, is a member, such person shall succeed to the shares of his ancestor or predecessor and to the rights and duties pertaining to such shares. In this case, such heir or legatee or juridical person shall without delay notify the association to that effect. 2 If, in the case under the preceding paragraph, the heir or legatee or the juridical person who continues to exist after, or was incorporated by, amalgamation is a person qualified for membership, he may, upon approval for accession of the association, succeed to the shares of the ancestor or predecessor and the rights and duties pertaining to such shares. In this case, the successor shall pay without delay, in accordance with the provisions of the Articles of Association, the whole or a part of the premium;provided, however, that, where he has received the transfer of the vessel or succeeded thereto, and succeeded to the rights and duties based upon the insurance contract of the transferor or assignor in respect of the vessel which is subject matter of insurance, this shall not necessarily hold good. 3 If, in the case under paragraph 1, the heir or legatee or the juridical person who continues to exist after, or was incorporated by, amalgamation, who has succeeded to the vessel which is subject matter of insurance is not a member, the successor may, upon approval for accession of the association, become a member. In this case he shall pay without delay, in accordance with the provisions of the Articles of Association, the full amount of his subscribed shares in the contribution fund;provided, however, that, where he has received, or succeeded to, the whole or a part of such shares, this shall not necessarily hold good. 4 In the cases under the preceding two paragraphs, the successor shall be deemed to have become a member at the time of death or dissolution of the ancestor or predecessor. 5 If, in the case under paragraph 3, the successor has not become a member, the insurance contract in respect of the transferred vessel which is subject matter of insurance shall terminate at the time of death or dissolution of the ancestor or predecessor.

(Prohibition of Holding Shares in Common) Article 25. No member shall hold a share in common. 2 If, in the case under paragraph 1 or 2 of the preceding Article, there be more than one heir or legatee the provision of paragraph 1 or 2 of the preceding Article shall apply only to one (1) heir or legatee appointed with the consent of such heirs or legatees.

(Prohibition of Acquisition of Shares by the Association) Article 26. No association shall acquire or take as a subject of pledge any shares of members;provided, however, that, where it is necessary for the association to do so to exercise its rights, this shall not necessarily hold good. 2 The association shall, in case it has acquired or taken as a subject of pledge any shares of members in accordance with the provision of the proviso to the preceding paragraph, dispose of them as soon as practicable.

(Secession from Membership) Article 27. Each member may secede from the association at the end of the business year by giving an advance notice of three (3) months or more. 2 The period of an advance notice under the preceding paragraph may be extended by the Articles of Association;provided, however, that such period shall not exceed one (1) year. 3 A member shall, in addition to the cases as provided for in paragraph 1 and Article 29 paragraph 1, secede due to any of the following causes: (1) Forfeiture of the qualifications for membership as prescribed in the Articles of Association; (2) Expulsion; (3) Death or dissolution; (4) Transfer of the whole shares; (5) Termination of the whole insurance contract due to the expiration of insurance period or the occurrence of the risks insured against or the transfer of the vessel which is subject matter of insurance. 4 Expulsion shall be made by the resolution of a general meeting under the provision of Article 32 paragraph 4 in respect of a member who has causes therefor as listed in the Articles of Association. In this case, the association shall notify the member concerned to that effect ten (10) days or more prior to the opening of its general meeting and shall give him an opportunity to plead. 5 Expulsion shall not be set up against any expelled member unless it is notified to him. 6 In the case where a member has seceded from membership in accordance with the provision of paragraph 1 or 3 (excluding the case of secession due to the cause listed in item (5) and Article 29 paragraph 1, the insurance contract of such member shall terminate;provided, however, that, where there is a successor of the rights and duties of such member in the case of secession due to the cause listed in paragraph 3 item (3), this shall not necessarily hold good.

(Refund of Shares) Article 28. A member who has seceded from membership is entitled to receive, in accordance with the provisions of the Articles of Association, the refund of the amount of his shares. 2 The amount of the shares under the preceding paragraph shall be determined on the basis of the assets of the association at the end of the business year to which the date of secession belongs. 3 In calculating the amount of the shares under the preceding paragraph, if the assets of the association be found insufficient to fully satisfy its liabilities, the association may, in accordance with the provisions of the Articles of Association, require the member who has seceded from membership to pay the amount of loss to be born by him. 4 The claim provided for in paragraphs 1 and 3 shall lapse by prescription when two (2) years have elapsed after the secession. 5 In case a member who has seceded from membership bears to the association liabilities which are not due yet, the association may suspend the refund of the amount of shares of such member until his liabilities become due.

(Secession by Attachment of Shares) Article 29. A creditor who has levied an attachment on the shares of a member may make him secede at the end of the business year, in this case the creditor shall give the association and such member an advance notice of three (3) months or more. 2 The provisions of Article 90 (Attachment of Shares) and Article 91 paragraph 2 (Invalidation of Advance Notice) of the Commercial Code shall apply mutatis mutandis to the case under the preceding paragraph.

CHAPTER IV Organs

(Convening of a General Meeting) Article 30. The directors shall, in accordance with the provisions of the Articles of Association, convene an ordinary general meeting once each business year. 2 In case the directors deem it necessary, they may, in accordance with the provisions of the Articles of Association, convene an extraordinary general meeting at any time. 3 In case members of not less than one-fifth (1/5) in number of the whole have demanded the convening of a general meeting, submitting the directors a document which contains the subject matters to be considered thereat and the reason for convening a general meeting, the directors shall convene an extraordinary general meeting within twenty (20) days from the day on which such demand was made. 4 If, in the case under the preceding paragraph, the directors fail, without any justifiable reason, to take the procedure for convening an extraordinary general meeting within the period under the same paragraph, the auditors shall forthwith take the procedure. 5 In case the auditors fail, without any justifiable reason, to take the procedure under the preceding paragraph, the members under paragraph 3 may, upon, approval of the competent Minister, convene an extraordinary general meeting. 6 The convening of a general meeting shall be notified, stating the matters to be considered thereat, to the members ten (10) days or more prior to the day on which it is called;provided, however, that such period in the cases of paragraphs 2 to 5 inclusive may be shortened by the Articles of Association.

(Matters to be Resolved at a General Meeting) Article 31. In addition to the matters provided for in this Law and the Articles of Association, the following matters shall be decided by a resolution at a general meeting: (1) Alterations in the matters to be stated in the documents as listed in Article 16 paragraph 2 items (1) to (3) inclusive; (2) Reduction of the amount of insurance money and collection of additional premium; (3) Dissolution; (4) An inventory, balance sheet, profit and loss account, business report, and proposals for distribution of surplus and for disposition of loss.

(Procedures for Resolutions of a General Meeting) Article 32. Resolutions at a general meeting shall, except as otherwise specially provided in this Law or the Articles of Association, be adopted by a majority of the voting rights of the members present, and, in case of a tie, by the decision of the Chairman. 2 The Chairman shall be elected at a general meeting. 3 The Chairman shall have no right to participate as a member in the resolutions at a general meeting. 4 Alterations in the matters listed in the Articles of Association, and the matters listed in items (2) and (3) of the preceding Article shall be decided upon by a resolution of a majority of not less than two-thirds (2/3) of the voting rights when at least one-half (1/2) of all members are present.

(Exercise of Voting Right by Proxy) Article 33. A member may in accordance with the provisions of the Articles of Association, exercise his voting right by a proxy. 2 A person who exercises the voting right in accordance with the provision of the preceding paragraph shall be deemed a person present in case of adopting resolutions at a general meeting. 3 The proxy under paragraph 1 shall be a member. 4 The proxy under the preceding paragraph shall submit the association a document showing his power of representation.

(Application is mutatis mutandis of the Commercial Code) Article 34. The provisions of Article 239 paragraph 4 and Article 240 (Voting Right of a Person having Particular Interests), Article 244 (Minutes of General Meeting), Article 245 (but excluding items (1) to (3) inclusive of the paragraph 1;Special Resolution for release of Directors or Auditors from Liability) and Articles 247 to 253 inclusive (Rescission and Invalidation of Resolutions at a General Meeting of Shareholders) of the Commercial Code shall apply mutatis mutandis to a general meeting. In this case, "Article 343" in Article 245 paragraph 1 and Article 247 paragraph 1 of the Commercial Code shall read "Article 32 paragraph 4 of the Shipowners'Mutual Insurance Association Law" , and "any shareholder who has been holding shares representing not less than one-tenth (1/10) of the capital" in Article 268 and Article 279 which apply mutatis mutandis in Article 245 paragraph 2 of the same Code shall read "any persons of not less than one-fifth (1/5) in number of the whole members" .

(Officers) Article 35. An association shall have not less than three (3) directors and not less than one (1) auditor as its officers. 2 The officers shall, in accordance with the provisions of the Articles of Association, be elected at a general meeting from among the members (in the case of a member who is a juridical person, its executive officers);provided, however, that, upon approval of the competent Minister, persons other than the members may be elected as such. 3 The term of office of the officers shall be provided for in the Articles of Association;provided, however, that the term of office of the directors shall not exceed three (3) years and that of the auditors shall not exceed two (2) years. 4 When the association has elected or dismissed its officers, it shall without delay notify the competent Minister their names and domiciles.

(Prohibition of the Officer Concurrently Holding an Additional Office and Business) Article 36 No director shall concurrently be an auditor or an employee of the association, nor shall auditor concurrently be a director or an employee of the association. 2 The provision of Article 6 (Principle for an Executive Officer to Attend Solely to His Company's Business) of the Insurance Business Law shall apply mutatis mutandis to the officer who is engaged in regular business of an association.

(Prohibition of Self-contract, etc. of the Director) Article 37. In case an association effects a contract with its director, an auditor shall represent the association. The same shall apply to the case of an action in the court between the association and its director.

(Duty to Keep Documents such as Articles of Association, etc.) Article 38. The director shall keep the Articles of Association and the minutes of a general meeting in each of its offices and keep the list of members in its principal office. 2 The list of members shall state the following matters in respect of each member: (1) Name or trade name and domicile of the member; (2) The date on which the member acceded the association; (3) The number of shares and the amount of shares of the member in the contribution fund, the amount insured and the premium. 3 Any member or general creditor of the association may, at any time during the business hours of the association, request perusal of the documents under paragraph 1.

(Manager) Article 39. The association may, with the resolution by a majority in number of the directors, appoint a manager and cause him to engage in business at its principal office or subordinate office.

(Application mutatis mutandis of the Commercial Code, etc.) Article 40. The provisions of Article 254 paragraph 2 (Relations between the Company and the Directors), Article 266 (Joint Liability of Directors) and Article 284 (Release of Directors and Auditors from their Liability) of the Commercial Code shall apply mutatis mutandis to the directors and auditors of the association, and Article 55 (Mandate of the Power of Representation) of the Civil Code (Law No.89 of 1896), and the provisions of Articles 260 to 262 inclusive (Execution of Business and Representation of a Company by the Director), Article 267 and Article 268 (Action against the Directors) and Article 269 (Remuneration for Directors) of the Commercial Code shall apply mutatis mutandis to the directors, and the provisions of Article 274 and Article 275 (Collection of Report and Examination of Documents, etc.), Article 278 (Joint Liability of the Directors and Auditors) and Article 279 (Action against the Auditors) of the same Code shall apply mutatis mutandis to the auditors, and the provisions of Article 38 paragraphs 1 and 3, Article 39, Article 41 and Article 42 (Manager) of the same Code shall apply mutatis mutandis to the "Sanji" (Manager). In this case, "any shareholder who has been holding shares representing not less than one-tenth (1/10) of the capital" in Article 268 and Article 279 of the Commercial Code shall read "any persons of not less than one-fifth (1/5) in number of the whole members" .

CHAPTER V Accounts

(Filing of Documents regarding Settlement of Accounts) Article 41. The association shall close its books at the end of March each year and shall, without delay after the conclusion of a general meeting, submit the competent Minister an inventory, balance sheet, business report, profit and loss account and resolutions relating to the distribution of surplus or disposition of loss. 2 The forms of the documents under the preceding paragraph shall be determined by the competent ministerial ordinance.

(Distribution of Surplus) Article 42. Distribution of surplus shall not be made unless and until the expenses for incorporation and the whole amount of business expenditures for the first five business years have been fully repaid, all losses made good and the reserve prescribed in Article 63 (Reserve to Make Up Losses) of the Insurance Business Law which applies mutatis mutandis in Article 44 paragraph 2 deducted therefrom. 2 Distribution of surplus shall be made, in accordance with the provisions of the Articles of Association, in proportion to the amount of shares in the contribution fund paid by a member within the limit of six (6) per cent per annum and, in case there still remains any more surplus, it shall be distributed in proportion to the volume a member has availed himself of the facilities of the association.

(Reduction of the Insurance Money and Collection of Additional Premium) Article 43. In case an association effects a reduction of insurance money or collection of additional premium, it shall obtain the approval of the competent Minister.

(Application mutatis mutandis of the Commercial Code) Article 44. The provisions of Articles 281 to 285 inclusive (Accounts of the Company) of the Commercial Code shall apply mutatis mutandis to the accounts of the association. In this case, "Proposals relating to the reserve fund and the distribution of profits or interest" in Article 281 item (5) of the Commercial Code shall read "Proposals relating to distribution of surplus or disposition of loss" . 2 The provisions of Article 63 (Reserve to Make Up Losses), Article 66 (Persons Entitled to Receive Distribution of Surplus) and Article 85 paragraph 1, Article 88 and Article 91 (Accounting of Insurance Company) of the Insurance Business Law shall apply mutatis mutandis to the accounts of an association. In this case "insurance company" or "company" and "Kansayaku" (auditor) in these provisions shall read "association" and "Kanji" (auditor) respectively.

CHAPTER VI Dissolution and Liquidation

(Dissolution) Article 45. An association shall be dissolved for any of the following causes;provided, however, that this shall not necessarily hold good, if the association, in a case that comes under item (5), with the approval of the competent Minister obtained, has made the amount of the contribution fund, or the number of members or vessels which are subject matter of insurance, up to or more than those provided for in Article 3 or Article 12 paragraph 2 within three (3) months from the time when it became to fall into the same item: (1) Expiration of the period of existence or occurrence of causes for dissolution prescribed in the Articles of Association; (2) Resolution of a general meeting; (3) Bankruptcy of the association; (4) Revocation of the approval of incorporation; (5) The fact that the total amount of the contribution fund has fallen below the amount prescribed in Article 3 or the number of members, or vessels which are subject matter of insurance has fallen below the number prescribed in Article 12 paragraph 2. 2 The resolution for dissolution provided for in item (2) of the preceding paragraph shall not take effect unless an approval of the competent Minister is obtained. 3 The provisions of Article 72 (Public Notification, etc. of Resolution for Dissolution) of the Insurance Business Law shall apply mutatis mutandis to the case where an association has passed a resolution for dissolution. 4 An association shall, if it has been dissolved or if, in the case under paragraph 1 item (5), it has taken such measures as provided for in the proviso to the same paragraph, notify without delay the competent Minister to that effect.

(Appointment of Liquidator) Article 46. In the case where an association was dissolved the directors shall become its liquidators except the case of dissolution by bankruptcy or revocation of the approval of incorporation;provided, however, that this shall not necessarily hold good in the case where some other persons have been appointed as such at a general meeting. 2 If, in the case under the preceding paragraph, there is not a person who is to become a liquidator or an association has been dissolved by revocation of the approval of incorporation, the competent Minister shall appoint a liquidator.

(Reduction of Insurance Money, and Collection of Additional Premium.) Article 47. The liquidator may, in case the assets possessed by an association are insufficient for the complete payment of its liabilities, effect, with the approval of the competent Minister obtained, a reduction of insurance money or collection of additional premium.

(Application mutatis mutandis of the Commercial Code, etc.) Article 48. The provisions of Article 116, Article 122, Article 124, Article 125, Article 128, Article 129 paragraphs 2 and 3 and Article 131 (Re Liquidation of a "Gomei-Kaisha" ), Articles 418 to 424 inclusive, Article 426 paragraph 1 and Article 427 (Re Liquidation of a Jointstock Company) of the Commercial Code, and Article 75, Article 76, Article 132 paragraphs 2 (confined only to the part related to Article 122 of the Commercial Code) to 5 inclusive and Articles 133 to 135 inclusive (Re Liquidation of an Insurance Company) of the Insurance Business Law shall apply mutatis mutandis to the liquidation of an association. In this case, "Article 94 item (4) or (6)" in Article 122 of the Commercial Code shall read "Article 45 paragraph 1 item (4) of the Shipowners'Mutual Insurance Association Law" . 2 The provisions of Article 30 and Articles 36 to 38 paragraph 1 inclusive of this Law, Article 244 paragraph 2 (Persons liable to Affix their Signatures to the Minutes), Article 245 paragraph 1 item (4)(confined only to the part related to release of director from his liability), Article 247 and Article 249 (Action of rescission of the Resolution at a General Meeting), Article 254 paragraph 2 (Re Relations between the Company and the Directors relating to Mandates), Article 261 (Power of Representation of the Directors), Articles 266 to 269 inclusive (Liabilities of the Directors and Action against them), Article 274 and Article 275 (Power of the Auditors for Investigation, etc.), Article 278 (Joint Liability of the Auditors and Directors) and Articles 282 to 284 inclusive (Duties of the Directors for Public Notification, or Submission to General Meeting, of the Documents relating to Accounts and Release of the Directors and Auditors from their Liability) of the Commercial Code shall apply mutatis mutandis to liquidators. In this case, "Article 343" in Article 245 paragraph 1 and Article 247 paragraph 1 of the Commercial Code shall read "Article 32 paragraph 4 of the Shipowners'Mutual Insurance Association Law" and "any shareholder who has been holding shares representing not less than one-tenth of the capital" in Article 268 of the same Code shall read "any persons of not less than one-fifth (1/5) in number of the whole members" .

CHAPTER VII Supervision

(Order for Reporting and Submission of Books and Documents) Article 49. The competent Minister may, when he deems it necessary for supervision of the business of the association, request in accordance with the provisions of the competent ministerial ordinance, an association for necessary reports in connection with the conditions of its business and assets, or order the submission of materials.

(Inspection) Article 50. The competent Minister may cause the personnel under his charge to inspect the conditions of business or assets of an association, when he deems it necessary to do so in order to secure the sound management of an association and to protect the interests of its members and general creditors. 2 In the case under the preceding paragraph, such personnel may, when he deems it necessary for the inspection, enter the office of an association, make questions to its officers or employees, or inspect its books, documents or other subjects related to its business. 3 In the case under the preceding paragraph, such personnel shall carry with him a certificate to show his status and shall show it to the persons concerned. 4 The power of inspectional entry under the provision of paragraph 2 shall not be construed to have been authorized in search of crimes.

(Order, etc. for Alteration of the Articles of Association, etc.) Article 51. The competent Minister may, when he deems it necessary to do so in order to secure the sound management of an association and protect the interests of its members and general creditors, in view of the conditions of business or assets of an association or changes in circumstances, order, in accordance with the provisions of the Cabinet Order, an association to effect alteration of the matters prescribed in the documents listed in Article 16 paragraph 2 items (1) to (3) inclusive or of the method of executing its business, or to make deposit of assets, or prohibit or restrict the disposal of its assets.

(Order for Suspension of Business and Compulsory Management) Article 52. The competent Minister may, when he deems it difficult to secure sound management of the business of an association in view of the conditions of its business and assets or when he deems it exceedingly improper to allow the business to be continued in order to protect members and general creditors of an association on account of the conditions of its business being exceedingly bad, order, in accordance with the provisions of the Cabinet Order, suspension of the business or issue order for management of the business and assets. 2 The provisions of Article 12 paragraphs 2 to 4 inclusive (Open Hearing) of the Insurance Business Law shall apply mutatis mutandis to the case where the competent Minister intends to give the order under the preceding paragraph and the provisions of Articles 101 to 103 inclusive, paragraph 1 and the former part of paragraph 3 of Article 104 and Article 106 (Re Management of Business and Assets) of the same Law shall apply mutatis mutandis to the case where an order for management of business and assets under the preceding two paragraphs was issued. In this case, "insurance company" or "company" in these provisions shall read "association" .

(Disposition for Violation of Laws and Orders, etc.) Article 53. In the case where an association has violated this Law or the Insurance Business Law which applies mutatis mutandis in this Law or the Order of the competent Minister under Article 49, Article 51 or paragraph 1 of the preceding Article or any specially important matters prescribed in the documents listed in Article 16 paragraph 2 items (1) to (3) inclusive, or has committed an act to injure the public interest, if the competent Minister deems it necessary in order to secure the sound management of the business of an association or to protect members and general creditors of the association, he may order to dismiss a director or an auditor, or to suspend the business, or may revoke the approval of incorporation. 2 The provisions of Article 12 paragraphs 2 to 4 inclusive (Open Hearing) of the Insurance Business Law shall apply mutatis mutandis to the case where the competent Minister intends to make the disposition under the preceding paragraph. In this case, "insurance company" in paragraphs 3 and 4 of the same Article shall read "association" .

(Competent Minister and Mandate of His Power) Article 54. The "competent Minister" in this Law and the Insurance Business Law which applies mutatis mutandis in this Law shall, so far as a wooden vessel mutual insurance association is concerned, mean the Minister of Finance and the Minister of Transportation;provided, however, that the "competent Minister" in Article 16 paragraph 4 (confined only to the case of alterations in the matters prescribed in the documents listed in item (3) of paragraph 2 of the same Article), the proviso to paragraph 2 of Article 35 (including the case which applies mutatis mutandis in Article 15 paragraph 7), Article 41 paragraph 1, Article 50 paragraph 1 and Article 51 (confined only to the case of alterations in the matters prescribed in the documents listed in Article 16 paragraph 2 item (3)) shall mean the Minister of Finance. 2 The "competent Minister" in this Law and the Insurance Business Law which applies mutatis mutandis in this Law shall, so far as a shipowners'liability mutual insurance association is concerned, mean the Minister of Finance. 3 The Minister of Finance, in accordance with the provisions of the Cabinet Order, may cause the Chief of the Finance Bureau, or the Chief of the Finance Office, to exercise the whole or a part of his power prescribed in the preceding two paragraphs and the Minister of Transportation, in accordance with the provisions of the Cabinet Order, may cause the Director of the Maritime Transport Bureau or the Chief of its Local Branch Office to exercise the whole or a part of his power prescribed in paragraph 1. 4 The "competent ministerial ordinance" in this Law shall mean Ministry of Finance Ordinance and Ministry of Transportation Ordinance.

CHAPTER VIII Miscellaneous Provisions

(Relation with the Law concerning the Prohibition of Private Monopoly and the Methods of Preserving Fair Trade, etc.) Article 55. The provisions of this Law shall not be construed to exempt or alter the applications of the Law concerning the Prohibition of Private Monopoly and the Methods of Preserving Fair Trade (Law No.54 of 1947) and of the Trade Association Law (Law No.191 of 1948), or the power to be exercised by the Fair Trade Commission in accordance with these Laws or to affect these Laws;provided, however, that as to the application of the provisions of the Trade Association Law other than Article 3 thereof, it shall be limited to the cases where the conduct of the Shipowners'Mutual Insurance Association exceeds matters necessary to execute its legitimate particular functions and to cases wherein such association activities have the effect of decreasing competition among the members thereof.

CHAPTER IX Penal Provisions

Article 56. In case any officer of an association has made a loan, discounted a bill, or disposed of its property for a speculative transaction, irrespective of whose name he may have so acted in, beyond the limit of business of the association, he shall be liable to imprisonment not exceeding three (3) years or to a fine not exceeding two hundred thousand (200,000) yen, or to both imprisonment and fine. 2 The provision of paragraph 1 shall not apply in case there is any applicable provisions in the Criminal Code (Law No.45 of 1907).

Article 57. Any person who has violated the provision of Article 8 shall be liable to imprisonment not exceeding one (1) year or to a fine not exceeding one hundred thousand (100,000) yen or, to both imprisonment and fine. 2 In case any representative or any agent, employee or other person engaged in the business, of a juridical person (including any non-juridical "Shadan" (Associational entity) or "Zaidan" (Foundation) which provides for an appointment of its representative or administrator;hereinafter the same in this paragraph) has committed any of the offences under the preceding paragraph, in connection with the business of such juridical person, such juridical person shall be liable to a fine provided for in the same paragraph in addition to punishment imposed upon the person who has committed such offence, unless it is proved that due care and supervision has been exercised over the business in order to prevent the aforesaid violation committed by its agent, employee or other person engaged in the business. 3 In the case where a non-juridical "Shadan" or "Zaidan" is punishable under the provision of the preceding paragraph, its representative or administrator shall represent such "Shadan" or "Zaidan" in respect of its legal proceedings and also the provisions of the law relating to criminal procedures in which a juridical person is defendant shall apply mutatis mutandis thereto.

Article 58. Any person who comes under any one of the following items shall be liable to a fine not exceeding thirty thousand (30,000) yen: (1) Person who has failed to make the reports, or file the books ane documents, or made false statements or submitted the books and documents containing false statements, under the provision of Article 49; (2) Person who has refused, interrupted or evaded an inspection or made a false reply to the enquiry under the provision of Article 50 paragraph 2.

Article 59. In case of coming under any one of the following items, the promotor, director, auditor, counsellor or liquidator of an association or the insurance administrator appointed under the provision of Article 101 paragraph 1 of the Insurance Business Law which applies mutatis mutandis in Article 52 paragraph 2 shall be liable to an administrative penalty not exceeding thirty thousand (30,000) yen: (1) In case he has violated any order of the competent Minister under the provisions of this Law or the Insurance Business Law which applies mutatis mutandis in this Law; (2) In case he has violated the provision of Article 4; (3) In case he has violated the provision of Article 5; (4) In case he has violated the provision of Article 6; (5) In case, in contravention of the provision of Article 16 paragraph 4, he has altered any matter prescribed in the documents listed in items (1) to (3) inclusive of paragraph 2 of the same Article without obtaining any approval; (6) In case, in contravention of the provision of the proviso to paragraph 2 of Article 35 (including the case where it applies mutatis mutandis in Article 15 paragraph 7), he has appointed a director or auditor without obtaining an approval therefor; (7) In case, in contravention of the provision of Article 41 paragraph 1, he has failed to submit the documents; (8) In case, in contravention of the provision of Article 42 of this Law, Article 131 of the Commercial Code, Article 75 or Article 76 of the Insurance Business Law which applies mutatis mutandis in Article 48 paragraph 1 or the provisions of the Articles of Association, he has distributed the surplus, or the surplus assets remained for distribution, or has disposed of the assets of the association; (9) In case, in contravention of the provision of Article 43 or Article 47, he has reduced the amount of insurance money or collected additional premium without obtaining any approval; (10) In case, in contravention of the provision of Article 63 of the Insurance Business Law which applies mutatis mutandis in Article 44 paragraph 2, he has failed to set aside a reserve fund or has used it; (11) In case, in contravention of the provision of Article 88 of the Insurance Business Law which applies mutatis mutandis in Article 44 paragraph 2, he has failed to calculate the liability reserve or to effect entry thereof in the books; (12) In case, in contravention of the provision of Article 124 paragraph 3 of the Commercial Code which applies mutatis mutandis in Article 48 paragraph 1, he has failed to apply for an adjudication of bankruptcy; (13) In case, for the purpose of delaying the completion of liquidation, he has improperly determined the period under Article 421 paragraph 1 of the Commercial Code which applies mutatis mutandis in Article 48 paragraph 1; (14) In case, in contravention of the provision of Article 423 of the Commercial Code which applies mutatis mutandis in Article 48 paragraph 1, he has discharged any liabilities.

Article 60. In case of coming under any one of the following items, the promoter, director, auditor, counsellor, liquidator of an association or the insurance administrator appointed under the provision of Article 101 paragraph 1 of the Insurance Business Law which applies mutatis mutandis in Article 52 paragraph 2, shall be liable to an administrative penalty not exceeding ten thousand (10,000) yen: (1) In case he has failed to make a public notification or filing or has made an untrue public notification or filing as provided for in this Law or the Insurance Business Law or the Commercial Code which applies mutatis mutandis in this Law; (2) In case, in contravention of the Cabinet Order under the provision of Article 11 paragraph 1, he has failed to make a registration or has made an untrue registration; (3) In case, in contravention of the provision of Article 244 of the Commercial Code which applies mutatis mutandis in Article 15 paragraph 7 or Article 34, or Article 91 of the Insurance Business Law which applies mutatis mutandis in Article 44 paragraph 2, or Article 419 or Article 427 of the Commercial Code which applies mutatis mutandis in Article 48 paragraph 1, he has failed to prepare the documents or state the matters to be stated therein or has made a false statement therein; (4) In case he has violated the provision of Article 21 paragraph 5; (5) In case, in contravention of the provision of Article 26 paragraph 1, he has acquired any share of members or taken it as a subject of pledge; (6) In case, in contravention of the provision of Article 26 paragraph 2, he has failed to make a disposal; (7) In case, in contravention of the provision of Article 27 paragraph 4, he has failed to give any opportunity for pleading; (8) In case, in contravention of the provision of Article 30 paragraph 1 (including the case where it applies mutatis mutandis in Article 48 paragraph 2), he has failed to convene a general meeting; (9) In case he has violated the provision of Article 6 of the Insurance Business Law which applies mutatis mutandis in the provision of Article 36 paragraph 1 (including the case where it applies mutatis mutandis in Article 48 paragraph 2) or paragraph 2 of the same Article (including the case where it applies mutatis mutandis in Article 48 paragraph 2); (10) In case he has failed to keep the documents in contravention of the provision of Article 38 paragraph 1 (including the case where it applies mutatis mutandis in Article 48 paragraph 2), Article 282 paragraph 1 of the Commercial Code which applies mutatis mutandis in Article 44 paragraph 1 or Article 48 paragraph 2, or of Article 91 of the Insurance Business Law which applies mutatis mutandis in Article 44 paragraph 2; (11) In case, in contravention of the provision of Article 38 paragraph 2 (including the case where it applies mutatis mutandis in Article 48 paragraph 2), he has failed to state in the list of members the matters to be stated or made a false statements therein; (12) In case, in contravention of the provision of Article 38 paragraph 3 (including the case where it applies mutatis mutandis in Article 48 paragraph 2) or Article 282 paragraph 2 of the Commercial Code which applies mutatis mutandis in Article 44 paragraph 1 or Article 48 paragraph 2, he has refused, without justifiable reason, the perusal of the documents or the delivery of the certified copy or extract thereof. (13) In case, in contravention of the provision of Article 101 paragraph 2 of the Insurance Business Law which applies mutatis mutandis in Article 52 paragraph 2, he has without justifiable reason, refused to become an insurance administrator.

Article 61. Any person who has violated the provision of Article 9 paragraph 2 shall be liable to an administrative penalty not exceeding five thousand (5,000) yen.

Supplementary Provisions: 1. This Law shall come into force on the day of its promulgation. 2. The Trade Association Law (Law No.192 of 1948) shall be partially amended as follows: Next to Article 6 paragraph 1 item (4) sub-item E), the following one sub-item shall be added; F. Shipowners'Mutual Insurance Association established under the provisions of the Shipowners'Mutual Insurance Association Law (Law No.177 of 1950). 3. The Corporation Tax Law (Law No.28 of 1947) shall be partially amended as follows: In Article 9 paragraph 6, "Shipowners'Mutual Insurance Association," shall be added next to "Medium and Small Sized Enterprises Cooperative Associations (excluding Enterprises Associations)." 4. The Registration Tax Law (Law No.27 of 1896) shall be partially amended as follows: In Article 19 item (7), "Wooden Vessel Mutual Insurance Association," shall be added next to "Fisheries Cooperative," , and "Shipowners'Mutual Insurance Association Law," shall be added next to "Fisheries Cooperative Law," . Minister of Finance, pro tempore Minister of State UEDA Shunkichi Minister of Transportation OYA Shinzo Prime Minister YOSHIDA Shigeru