2nd ASEAN Insurance Summit 2016 Asia Pacific Financial Forum (APFF) Key issues in expanding the Asia Pacific region’s long term investor base Makoto Okubo, Nippon Life Insurance Company Sherpa, APFF Insurance and Retirement Income Work Stream Yogyakarta, Indonesia, 23 November 2016

APFF: Public-private collaboration in developing financial systems APFF (Asia Pacific Financial Forum) 1 APFF: Public-private collaboration in developing financial systems Importance of regional public-private collaboration: Legal and regulatory frameworks Financial market infrastructure Financial market integration APFF: informal, inclusive and advisory public-private platform for collaboration in the development of common strategies for developing sound, efficient and integrated Asia-Pacific financial markets Governments and regulatory bodies Private sector International organizations (IFIs, SSBs, others)

Finance Ministers’ Process (FMP) The APFF within the APEC Process 2 Finance Ministers’ Process (FMP) 21 APEC Finance Ministries Advisory Functions: ADB, IMF, OECD, WBG, ABAC Finance Ministers Heads of Delegation of International Organizations and ABAC Deputy Finance Ministers/Deputy CB Governors Representatives of International Organizations and ABAC Senior Finance Officials FMP Policy Initiatives Managed by ABAC (APEC Business Advisory Council) APEC Finance and Development Institute Financial Regulators Training Initiative APEC Financial Institutions Dealing with SMEs Asia-Pacific Forum on Financial Inclusion Asia-Pacific Financial Forum (APFF) Asia-Pacific Infrastructure Partnership (APIP) APEC PPP Experts Advisory Panel Asia Region Funds Passport (ARFP)

The APFF Network 3 Over 150 organizations Over 300 individual experts Firms Investment / commercial banks Insurers and pension funds Non-bank lenders Asset managers Law, accounting, consultancy firms Corporates Credit rating agencies Credit bureaus International / domestic industry associations Government agencies Finance ministries Justice ministries Trade ministries Development assistance agencies Foreign affairs ministries Regulatory bodies International organizations ADB BIS IMF OECD World Bank/IFC UNCITRAL Academic / research institutions Securities industry Banking (general, trade finance, secured lending, factoring) Insurance and Pensions Asset management Business and consumer credit information Chambers of commerce Central banks Securities, banking, insurance regulators International regulatory organizations Over 150 organizations Over 300 individual experts

The APFF Structure Asia-Pacific Financial Forum (APFF) 4 APEC Finance Ministers Process (FMP) APEC Business Advisory Council (ABAC) Asia-Pacific Financial Forum (APFF) APFF Work Streams Financial Infrastructure Development Network Trade / Supply Chain Finance Capital Markets Financial Market Infrastructure / Cross-Border Practices Insurance / Retirement Income Linkages / Structural Issues Credit Information Classic repo markets Retirement /Long-Term Investment Secured Transactions Derivatives Disaster Risk Financing /Insurance Accounts Receivables Finance Information for Investors Asia Region Funds Passport

2016 APEC Joint Finance Ministerial Statement 5 2016 APEC JOINT FINANCE MINISTERIAL STATEMENT issued on 15 October 2016 in Lima includes the following paragraph, which is important to us. "We commend ABAC for its contributions in 2016 for the implementation of the CAP, including the activities undertaken in the Asia-Pacific Financial Forum (APFF) and the Asia-Pacific Forum on Financial Inclusion. We welcome ABAC’s report and recommendations on access to finance, infrastructure investment, capital markets, and health and disaster risk financing. We encourage relevant authorities to collaborate with the private sector in advancing them in 2017."

The Cebu Action Plan (CAP) 6 A Ten-Year Roadmap for the APEC Finance Ministers’ Process FOUR PILLARS FINANCIAL INTEGRATION Financing MSMEs Financial inclusion and literacy Facilitating remittances Financial services liberalization Capital accounts liberalization Asia Region Funds Passport FISCAL TRANSPARENCY Fiscal reforms Open Data Initiative Exchange of financial account information Base erosion profit shifting Tax and crime FINANCIAL RESILIENCE Macroeconomic policy Disaster risk financing and insurance Capital market development INFRAST5RUCTURE Knowledge portal Standardization of terms and practices Maximizing PPPs in infrastructure investment Long-term investors Urban development Regional connectivity

Expanding the Region’s Long-Term Investor Base APFF Insurance and Retirement Income Work Stream 7 APFF Progress Report 2016 Expanding the Region’s Long-Term Investor Base Pension/Protection Infrastructure/Investment Regulatory/Accounting Strengthening Financial Resilience Disaster Risk Financing Micro-Insurance

Roadmap for the Sustainable Development 8 Liabilities ALM Assets Infrastructure Projects Long Term Investments Long Term Returns CONSUMERS INSURERS AND PENSION FUNDS Capital Market Regulation Accounting Disaster Risk Financing GOVERNMENT Addressing the Aging Tsunami Retirement Income & Longevity Solutions Capital Market and Long Term Investments Promote Sustainable Economic Development & Resilient Infrastructure Enhance Disaster Risk Financing Enhance Financial Inclusion Reduce Fiscal Liabilities Enhance Sovereign Rating

Mandatory provisions and scalable retirements systems Pension/Protection 9 Mandatory provisions and scalable retirements systems Tax incentives to promote long-term saving products Product innovation and financial awareness

Promotion of infrastructure as a defined asset class Infrastructure/investment 10 Promotion of infrastructure as a defined asset class Increased fiscal spending on infrastructure projects Adoption of financing vehicles within PPP framework

Bank-centric regulations Short-term oriented economic regime Regulation/Accounting 11 Regulatory issues Bank-centric regulations Short-term oriented economic regime “One-size-fits-all” model Remaining key accounting issues Unit of account Scope for “variable fee approach”

2017 work plan on Retirement/Long-Term Investment 12 Retirement/Protection: Case Study on selected APEC economies and examine gap and potential solutions on retirement income and longevity solutions Coordination with pension industry (i.e. APIC) and dialogue with pension authorities Infrastructure/Investment: Case study on selected APEC economies and examine possible improvements to attract pension and insurance long term investors Coordination with global initiatives (i.e. GIH, IISS) and securities industry (i.e. ASIFMA) and dialogue with securities authorities Establish Islamic Infrastructure Investment Platform (I3P) Regulation/Accounting Case study on selected APEC economies and examine possible implementation support Continue a dialogue and participate in conferences with regulators/supervisors/accounting standard setters to discuss relevant issues, and to coordinate with other stakeholders

Makoto Okubo (m-okubo@nipponlifeglobal.com) Asia Pacific Financial Forum (APFF) Insurance and Retirement Income Work Stream 13 For more details on the APFF, visit mackglobe.com or email Makoto Okubo (m-okubo@nipponlifeglobal.com) 13