10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2015

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-07434

Aflac Incorporated

_________________________________________________________________________________________________________________________________________________________________________________________________________________________________________

(Exact name of registrant as specified in its charter)



Georgia		58-1167100
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1932 Wynnton Road, Columbus, Georgia		31999
(Address of principal executive offices)		(ZIP Code)

706.323.3431

(Registrant's telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer þ		Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)		Smaller reporting company ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨ Yes þ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.



Class		October 26, 2015
Common Stock, $.10 Par Value		426,738,679

Aflac Incorporated and Subsidiaries

Quarterly Report on Form 10-Q

For the Quarter Ended September 30, 2015

Table of Contents



		Page
PART I.	FINANCIAL INFORMATION:

Item 1.	Financial Statements (Unaudited)

	Review by Independent Registered Public Accounting Firm	1

	Report of Independent Registered Public Accounting Firm	2

	Consolidated Statements of Earnings Three Months Ended September 30, 2015, and 2014 Nine Months Ended September 30, 2015 and 2014	3

	Consolidated Statements of Comprehensive Income (Loss) Three Months Ended September 30, 2015, and 2014 Nine Months Ended September 30, 2015 and 2014	4

	Consolidated Balance Sheets September 30, 2015 and December 31, 2014	5

	Consolidated Statements of Shareholders' Equity Nine Months Ended September 30, 2015, and 2014	7

	Consolidated Statements of Cash Flows Nine Months Ended September 30, 2015, and 2014	8

	Notes to the Consolidated Financial Statements	9

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	67

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	104

Item 4.	Controls and Procedures	104

PART II.	OTHER INFORMATION:	105

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	105

Item 6.	Exhibits	106

Items other than those listed above are omitted because they are not required or are not applicable.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Review by Independent Registered Public Accounting Firm

The September 30, 2015, and 2014, consolidated financial statements included in this filing have been reviewed by KPMG LLP, an independent registered public accounting firm, in accordance with established professional standards and procedures for such a review.

The report of KPMG LLP commenting upon its review is included on the following page.

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Aflac Incorporated:

We have reviewed the accompanying consolidated balance sheet of Aflac Incorporated and subsidiaries (the Company) as of September 30, 2015, and the related consolidated statements of earnings and comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2015, and 2014, and the related consolidated statements of shareholders' equity and cash flows for the nine-month periods ended September 30, 2015 and 2014. These consolidated financial statements are the responsibility of the Company's management.

We conducted our review in accordance with the standards of the Public Company Accounting Oversight Board (United States). A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States), the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our review, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with U.S. generally accepted accounting principles.

We have previously audited, in accordance with standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheet of Aflac Incorporated and subsidiaries as of December 31, 2014, and the related consolidated statements of earnings, comprehensive income (loss), shareholders' equity and cash flows for the year then ended (not presented herein); and in our report dated February 26, 2015, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2014, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG LLP

Atlanta, Georgia

November 3, 2015

Aflac Incorporated and Subsidiaries

Consolidated Statements of Earnings



	Three Months Ended September 30,								Nine Months Ended September 30,
(In millions, except for share and per-share amounts - Unaudited)	2015				2014				2015					2014
Revenues:
Net premiums, principally supplemental health insurance		$	4,380			$	4,841			$	13,176				$	14,583
Net investment income		784				841				2,343					2,511
Realized investment gains (losses):
Other-than-temporary impairment losses realized		(137		)		0				(143		)			(31		)
Sales and redemptions		26				33				186					171
Derivative and other gains (losses)		(3		)		(17		)		(17		)			(68		)
Total realized investment gains (losses)		(114		)		16				26					72
Other income (loss)		(10		)		38				8					48
Total revenues		5,040				5,736				15,553					17,214
Benefits and expenses:
Benefits and claims, net		2,927				3,355				8,816					9,868
Acquisition and operating expenses:
Amortization of deferred policy acquisition costs		258				271				790					841
Insurance commissions		326				361				981					1,096
Insurance expenses		554				566				1,634					1,637
Interest expense		67				77				224					238
Other expenses		44				32				356			⁽¹⁾		118
Total acquisition and operating expenses		1,249				1,307				3,985					3,930
Total benefits and expenses		4,176				4,662				12,801					13,798
Earnings before income taxes		864				1,074				2,752					3,416
Income taxes		297				368				949					1,168
Net earnings		$	567			$	706			$	1,803				$	2,248
Net earnings per share:
Basic		$	1.32			$	1.56			$	4.17				$	4.96
Diluted		1.32				1.56				4.14					4.93
Weighted-average outstanding common shares used in computing earnings per share (In thousands):
Basic		428,735				451,246				432,540					452,833
Diluted		431,102				453,981				435,064					455,674
Cash dividends per share		$	.39			$	.37			$	1.17				$	1.11

⁽¹⁾ Includes expense of $230 for the make-whole payment associated with the early extinguishment of debt

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)



	Three Months Ended September 30,								Nine Months Ended September 30,
(In millions - Unaudited)	2015				2014				2015				2014
Net earnings		$	567			$	706			$	1,803			$	2,248
Other comprehensive income (loss) before income taxes:
Unrealized foreign currency translation gains (losses) during period		186				(904		)		25				(459		)
Unrealized gains (losses) on investment securities:
Unrealized holding gains (losses) on investment securities during period		(401		)		774				(2,266		)		3,656
Reclassification adjustment for realized (gains) losses on investment securities included in net earnings		138				(27		)		20				(18		)
Unrealized gains (losses) on derivatives during period		(1		)		(9		)		(3		)		(8		)
Pension liability adjustment during period		0				3				1				2
Total other comprehensive income (loss) before income taxes		(78		)		(163		)		(2,223		)		3,173
Income tax expense (benefit) related to items of other comprehensive income (loss)		(99		)		(57		)		(772		)		1,110
Other comprehensive income (loss), net of income taxes		21				(106		)		(1,451		)		2,063
Total comprehensive income (loss)		$	588			$	600			$	352			$	4,311

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Consolidated Balance Sheets



(In millions)	September 30, 2015 (Unaudited)			December 31, 2014
Assets:
Investments and cash:
Securities available for sale, at fair value:
Fixed maturities (amortized cost $56,363 in 2015 and $55,365 in 2014)		$	60,565		$	61,407
Fixed maturities - consolidated variable interest entities (amortized cost $3,651 in 2015 and $3,020 in 2014)		4,541			4,166
Perpetual securities (amortized cost $1,802 in 2015 and $2,035 in 2014)		1,897			2,240
Perpetual securities - consolidated variable interest entities (amortized cost $287 in 2015 and $405 in 2014)		269			429
Equity securities (cost $119 in 2015 and $19 in 2014)		131			28
Securities held to maturity, at amortized cost:
Fixed maturities (fair value $36,868 in 2015 and $38,413 in 2014)		33,646			34,159
Fixed maturities - consolidated variable interest entities (fair value $80 in 2015 and $84 in 2014)		83			83
Other investments		248			171
Cash and cash equivalents		3,520			4,658
Total investments and cash		104,900			107,341
Receivables		762			842
Accrued investment income		733			762
Deferred policy acquisition costs		8,451			8,273
Property and equipment, at cost less accumulated depreciation		430			429
Other ⁽¹⁾		2,179			2,120
Total assets		$	117,455		$	119,767

⁽¹⁾Includes $106 in 2015 and 2014 of derivatives from consolidated variable interest entities

See the accompanying Notes to the Consolidated Financial Statements.

(continued)

Aflac Incorporated and Subsidiaries

Consolidated Balance Sheets (continued)



(In millions, except for share and per-share amounts)	September 30, 2015 (Unaudited)				December 31, 2014
Liabilities and shareholders’ equity:
Liabilities:
Policy liabilities:
Future policy benefits		$	68,971			$	65,646
Unpaid policy claims		3,809				3,630
Unearned premiums		8,121				8,626
Other policyholders’ funds		6,284				6,031
Total policy liabilities		87,185				83,933
Income taxes		4,474				5,293
Payables for return of cash collateral on loaned securities		907				2,193
Notes payable		5,009				5,282
Other ⁽²⁾		2,625				4,719
Total liabilities		100,200				101,420
Commitments and contingent liabilities (Note 11)
Shareholders’ equity:
Common stock of $.10 par value. In thousands: authorized 1,900,000 shares in 2015 and 2014; issued 669,509 shares in 2015 and 668,132 shares in 2014		67				67
Additional paid-in capital		1,807				1,711
Retained earnings		23,451				22,156
Accumulated other comprehensive income (loss):
Unrealized foreign currency translation gains (losses)		(2,533		)		(2,541		)
Unrealized gains (losses) on investment securities		3,214				4,672
Unrealized gains (losses) on derivatives		(28		)		(26		)
Pension liability adjustment		(125		)		(126		)
Treasury stock, at average cost		(8,598		)		(7,566		)
Total shareholders’ equity		17,255				18,347
Total liabilities and shareholders’ equity		$	117,455			$	119,767

⁽²⁾Includes $343 in 2015 and $318 in 2014 of derivatives from consolidated variable interest entities

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Consolidated Statements of Shareholders’ Equity



	Nine Months Ended September 30,
(In millions - Unaudited)		2015			2014
Common stock:
Balance, beginning of period		$	67		$	67
Balance, end of period		67			67
Additional paid-in capital:
Balance, beginning of period		1,711			1,644
Exercise of stock options		41			24
Share-based compensation		27			27
Gain (loss) on treasury stock reissued		28			31
Balance, end of period		1,807			1,726
Retained earnings:
Balance, beginning of period		22,156			19,885
Net earnings		1,803			2,248
Dividends to shareholders		(508		)	(505		)
Balance, end of period		23,451			21,628
Accumulated other comprehensive income (loss):
Balance, beginning of period		1,979			(563		)
Unrealized foreign currency translation gains (losses) during period, net of income taxes		8			(300		)
Unrealized gains (losses) on investment securities during period, net of income taxes and reclassification adjustments		(1,458		)	2,367
Unrealized gains (losses) on derivatives during period, net of income taxes		(2		)	(5		)
Pension liability adjustment during period, net of income taxes		1			1
Balance, end of period		528			1,500
Treasury stock:
Balance, beginning of period		(7,566		)	(6,413		)
Purchases of treasury stock		(1,081		)	(698		)
Cost of shares issued		49			43
Balance, end of period		(8,598		)	(7,068		)
Total shareholders’ equity		$	17,255		$	17,853

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Consolidated Statements of Cash Flows



	Nine Months Ended September 30,
(In millions - Unaudited)	2015					2014
Cash flows from operating activities:
Net earnings		$	1,803				$	2,248
Adjustments to reconcile net earnings to net cash provided by operating activities:
Change in receivables and advance premiums		98					(2		)
Increase in deferred policy acquisition costs		(152		)			(135		)
Increase in policy liabilities		2,696					2,674
Change in income tax liabilities		(43		)			(270		)
Realized investment (gains) losses		(26		)			(72		)
Other, net		394			⁽¹⁾		134
Net cash provided (used) by operating activities		4,770					4,577
Cash flows from investing activities:
Proceeds from investments sold or matured:
Securities available for sale:
Fixed maturities sold		1,829					1,773
Fixed maturities matured or called		705					723
Perpetual securities sold		0					60
Perpetual securities matured or called		394					0
Equity securities sold		1					0
Securities held to maturity:
Fixed maturities matured or called		678					8,456
Costs of investments acquired:
Available-for-sale fixed maturities acquired		(3,919		)			(8,959		)
Available-for-sale equity securities acquired		(67		)			0
Held-to-maturity fixed maturities acquired		0					(3,564		)
Other investments, net		(27		)			(3,690		)
Settlement of derivatives, net		(2,242		)			(367		)
Cash received (pledged or returned) as collateral, net		(1,404		)			1,414
Other, net		(31		)			10
Net cash provided (used) by investing activities		(4,083		)			(4,144		)
Cash flows from financing activities:
Purchases of treasury stock		(1,081		)			(698		)
Proceeds from borrowings		998					0
Principal payments under debt obligations		(1,272		)			(335		)
Dividends paid to shareholders		(489		)			(486		)
Change in investment-type contracts, net		213					1,166
Treasury stock reissued		28					25
Other, net		(223		)	⁽¹⁾		6
Net cash provided (used) by financing activities		(1,826		)			(322		)
Effect of exchange rate changes on cash and cash equivalents		1					12
Net change in cash and cash equivalents		(1,138		)			123
Cash and cash equivalents, beginning of period		4,658					2,543
Cash and cash equivalents, end of period		$	3,520				$	2,666
Supplemental disclosures of cash flow information:
Income taxes paid		$	996				$	1,412
Interest paid		188					171
Noncash interest		36					66
Impairment losses included in realized investment losses		143					31
Noncash financing activities:
Capital lease obligations		2					0
Treasury stock issued for:
Associate stock bonus		26					26
Shareholder dividend reinvestment		19					19
Share-based compensation grants		4					4

⁽¹⁾ Operating activities excludes and financing activities includes a cash outflow of $230 for the make-whole payment associated with the early extinguishment of debt

See the accompanying Notes to the Consolidated Financial Statements.

Aflac Incorporated and Subsidiaries

Notes to the Consolidated Financial Statements

(Interim period data – Unaudited)


1.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business

Aflac Incorporated (the Parent Company) and its subsidiaries (collectively, the Company) primarily sell supplemental health and life insurance in the United States and Japan. The Company's insurance business is marketed and administered through American Family Life Assurance Company of Columbus (Aflac), which operates in the United States (Aflac U.S.) and as a branch in Japan (Aflac Japan). American Family Life Assurance Company of New York (Aflac New York) is a wholly owned subsidiary of Aflac. Most of Aflac's policies are individually underwritten and marketed through independent agents. Additionally, Aflac U.S. markets and administers group products through Continental American Insurance Company (CAIC), branded as Aflac Group Insurance. Our insurance operations in the United States and our branch in Japan service the two markets for our insurance business. Aflac Japan's revenues, including realized gains and losses on its investment portfolio, accounted for 70% and 74% of the Company's total revenues in the nine-month periods ended September 30, 2015, and 2014, respectively. The percentage of the Company's total assets attributable to Aflac Japan was 83% at September 30, 2015, compared with 82% at December 31, 2014.

Basis of Presentation

We prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP). These principles are established primarily by the Financial Accounting Standards Board (FASB). In these Notes to the Consolidated Financial Statements, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification^TM (ASC). The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates when recording transactions resulting from business operations based on currently available information. The most significant items on our balance sheet that involve a greater degree of accounting estimates and actuarial determinations subject to changes in the future are the valuation of investments, deferred policy acquisition costs, liabilities for future policy benefits and unpaid policy claims, and income taxes. These accounting estimates and actuarial determinations are sensitive to market conditions, investment yields, mortality, morbidity, commission and other acquisition expenses, and terminations by policyholders. As additional information becomes available, or actual amounts are determinable, the recorded estimates will be revised and reflected in operating results. Although some variability is inherent in these estimates, we believe the amounts provided are adequate.

The unaudited consolidated financial statements include the accounts of the Parent Company, its subsidiaries and those entities required to be consolidated under applicable accounting standards. All material intercompany accounts and transactions have been eliminated.

In the opinion of management, the accompanying unaudited consolidated financial statements of the Company contain all adjustments, consisting of normal recurring accruals, which are necessary to fairly present the consolidated balance sheets as of September 30, 2015 and December 31, 2014, the consolidated statements of earnings and comprehensive income (loss) for the three- and nine-month periods ended September 30, 2015, and 2014, and the consolidated statements of shareholders' equity and cash flows for the nine-month periods ended September 30, 2015 and 2014. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, these financial statements should be read in conjunction with the financial statements and notes thereto included in our annual report to shareholders for the year ended December 31, 2014.

New Accounting Pronouncements

Recently Adopted Accounting Pronouncements

Income Statement - Extraordinary and Unusual Items - Simplifying income statement presentation by eliminating the concept of extraordinary items: In January 2015, the FASB issued updated guidance that eliminates from U.S. GAAP the concept of extraordinary items. Although the amendments will eliminate the requirements for reporting entities to consider whether an underlying event or transaction is extraordinary, the presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. The amendments in this updated guidance are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. We adopted this guidance as of

January 1, 2015. The adoption of this guidance did not have a significant impact on our financial position or results of operations.

Transfers and Servicing, Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures: In June 2014, the FASB issued updated guidance for repurchase agreement and security lending transactions to change the accounting for repurchase-to-maturity transactions and linked repurchase financings to be accounted for as secured borrowings, consistent with the accounting for other repurchase agreements. The amendments also require new disclosures to increase transparency about the types of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings. We adopted accounting changes for the new guidance as of January 1, 2015, and adopted the required disclosures as of April 1, 2015. The adoption of this guidance did not have a significant impact on our financial position or results of operations.

Accounting Pronouncements Pending Adoption

Financial Services - Insurance - Disclosures about Short-Duration Contracts: In May 2015, the FASB issued updated guidance requiring enhanced disclosures by all insurance entities that issue short-duration contracts. The amendments require insurance entities to disclose for annual reporting periods information about the liability for unpaid claims and claim adjustment expenses. The amendments also require insurance entities to disclose information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements. In addition, the amendments require insurance entities to disclose for annual and interim reporting periods a roll-forward of the liability for unpaid claims and claim adjustment expenses. For health insurance claims, the amendments require the disclosure of the total of incurred-but-not-reported liabilities and expected development on reported claims included in the liability for unpaid claims and claim adjustment expenses. The amendments are effective for public business entities for annual periods beginning after December 15, 2015, and interim periods within annual periods beginning after December 15, 2016. Early application of the amendments is permitted. The adoption of this guidance will not have a significant impact on our financial position or results of operations; however, we are evaluating whether the adoption of this guidance will have an impact on our disclosures.

Fair Value Measurement - Disclosures for investments in certain entities that calculate net asset value per share (or its equivalent): In May 2015, the FASB issued updated guidance that removes the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share practical expedient. The amendments also remove the requirement to make certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practical expedient. Rather, those disclosures are limited to investments for which the entity has elected to measure the fair value using that practical expedient. The amendments are effective for public business entities for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. The amendments should be applied retrospectively to all periods presented whereby an investment for which fair value is measured using the net asset value per share practical expedient be removed from the fair value hierarchy in all periods presented in an entity’s financial statements. Earlier application is permitted. The adoption of this guidance will not have a significant impact on our financial position or results of operations.

Interest - Imputation of Interest - Simplifying the presentation of debt issuance costs: In April 2015, the FASB issued updated guidance to simplify presentation of debt issuance costs. The updated guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by this amendment. In August 2015, the FASB issued updated SEC Staff guidance pertaining to the presentation of debt issuance costs related to line-of-credit arrangements. The guidance states that an entity may defer and present debt issuance costs as an asset, subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. The amendment is effective for annual periods and interim periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance will not have a significant impact on our financial position or results of operations.

Consolidation - Amendments to the consolidation analysis: In February 2015, the FASB issued updated guidance that affects evaluation of whether limited partnerships and similar legal entities (limited liability corporations and securitization structures, etc.) are variable interest entities (VIEs), evaluation of whether fees paid to a decision maker or a service provider are a variable interest, and evaluation of the effect of fee arrangements and the effect of related parties on the determination of the primary beneficiary under the VIE model for consolidation. The updated guidance eliminates the presumption that a general partner should consolidate a limited partnership. Limited partnership and similar legal

entities that provide partners with either substantive kick-out rights or substantive participating rights (representing the partners’ controlling financial interest in the entity) over the general partner will now be evaluated under the voting interest model rather than the VIE model for consolidation. In regard to the fees paid to a decision maker or a service provider, the updated guidance eliminates three of the six criteria that an entity’s decision makers or service providers must meet for them to conclude that the fees do not represent a variable interest in that entity and, thus, should be excluded from the assessment for determining the primary beneficiary. Finally, in situations where no single party has a controlling financial interest in a VIE, the related party relationships under common control should be considered in their entirety in determining whether that common control group has a controlling financial interest in the VIE. However, if substantially all of the activities of the VIE are conducted on behalf of a single variable interest holder (excluding the decision maker) in a related party group that has the characteristics of a primary beneficiary, that single variable interest holder must consolidate the VIE as the primary beneficiary. The amendments in the updated guidance are effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early application is permitted, including adoption in an interim period. We are evaluating whether the adoption of this guidance will have an impact on our financial position, results of operations or disclosures.

Derivatives and Hedging - Determining whether the host contract in a hybrid financial instrument issued in the form of a share is more akin to debt or equity: In November 2014, the FASB issued guidance to clarify how to evaluate the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. The guidance also clarifies that an entity should assess the substance of the relevant terms and features when considering how to weight those terms and features. The guidance is effective for annual periods and interim periods beginning after December 15, 2015. The adoption of this guidance will not have a significant impact on our financial position or results of operations.

Presentation of Financial Statements - Going Concern - Disclosure of uncertainties about an entity’s ability to continue as a going concern: In August 2014, the FASB issued this amendment that provides U.S. GAAP guidance on management’s responsibility in evaluating whether there is substantial doubt about a company’s ability to continue as a going concern and about related footnote disclosures. For each reporting period, management will be required to evaluate whether there are conditions or events that raise substantial doubt about a company’s ability to continue as a going concern within one year from the date the financial statements are issued. The amendment is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning after December 15, 2016. Early application is permitted for annual or interim reporting periods for which the financial statements have not previously been issued. The adoption of this guidance will not have a significant impact on our financial position or results of operations.

Compensation - Stock Compensation - Accounting for share-based payments when the terms of an award provide that a performance target could be achieved after the requisite service period: In June 2014, the FASB issued this amendment that provides guidance on certain share-based payment awards that require a specific performance target that affects vesting and that could be achieved after the requisite service period be treated as a performance condition. A reporting entity should apply existing guidance to awards with performance conditions that affect vesting to account for such awards. The performance target should not be reflected in estimating the grant-date fair value of the award. Compensation cost should be recognized in the period in which it becomes probable that the performance target will be achieved and should represent the compensation cost attributable to the period(s) for which the requisite service has already been rendered. If the performance target becomes probable of being achieved before the end of the requisite service period, the remaining unrecognized compensation cost should be recognized prospectively over the remaining requisite service period. The total amount of compensation cost recognized during and after the requisite service period should reflect the number of awards that are expected to vest and should be adjusted to reflect those awards that ultimately vest. The requisite service period ends when the employee can cease rendering service and still be eligible to vest in the award if the performance target is achieved. The guidance is effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Early adoption is permitted. The adoption of this guidance will not have a significant impact on our financial position or results of operations.

Revenue from contracts with customers: In May 2014, the FASB issued updated guidance that affects any entity that either enters into contracts with customers to transfer goods or services or enters into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards (e.g., insurance contracts or lease contracts). The core principle of the guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In August 2015, the FASB deferred the effective date for this standard to annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period. Early application is not permitted. The adoption of this guidance will not have a significant impact on our financial position or results of operations.

Recent accounting guidance not discussed above is not applicable, did not have, or is not expected to have a material impact to our business.

For additional information on new accounting pronouncements and recent accounting guidance and their impact, if any, on our financial position or results of operations, see Note 1 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.


2.	BUSINESS SEGMENT INFORMATION

The Company consists of two reportable insurance business segments: Aflac Japan and Aflac U.S., both of which sell supplemental health and life insurance. Operating business segments that are not individually reportable and business activities not included in Aflac Japan or Aflac U.S. are included in the "Other business segments" category.

We do not allocate corporate overhead expenses to business segments. We evaluate and manage our business segments using a financial performance measure called pretax operating earnings. Our definition of operating earnings includes interest cash flows associated with notes payable and excludes the following items from net earnings on an after-tax basis: realized investment gains/losses (securities transactions, impairments, and the impact of derivative and hedging activities), nonrecurring items and other non-operating income (loss). We then exclude income taxes related to operations to arrive at pretax operating earnings. Information regarding operations by segment follows:



	Three Months Ended September 30,							Nine Months Ended September 30,
(In millions)	2015				2014			2015				2014
Revenues:
Aflac Japan:
Net earned premiums	$	2,980			$	3,534		$	9,036			$	10,672
Net investment income	606				676			1,824				2,019
Other income	8				9			23				25
Total Aflac Japan	3,594				4,219			10,883				12,716
Aflac U.S.:
Net earned premiums	1,345				1,306			4,016				3,910
Net investment income	173				162			507				484
Other income	2				0			6				2
Total Aflac U.S.	1,520				1,468			4,529				4,396
Other business segments	67				11			159				29
Total business segment revenues	5,181				5,698			15,571				17,141
Realized investment gains (losses) ⁽¹⁾	(136		)		6			(36		)		42
Corporate	73				43			242				194
Intercompany eliminations	(51		)		(38		)	(185		)		(170		)
Other non-operating income (loss)	(27		)	⁽²⁾	27			(39		)	⁽²⁾	7
Total revenues	$	5,040			$	5,736		$	15,553			$	17,214

⁽¹⁾Excluding a gain of $22 and $10 for the three-month periods and $62 and $30 for the nine-month periods ended September 30, 2015, and 2014, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable which is classified as an operating gain when analyzing segment operations

⁽²⁾Includes a loss of $14 for the three- and nine-month periods ended September 30, 2015, related to the change in value of yen repatriation received in advance of settlement of certain foreign currency derivatives. This loss was offset by derivative gains included in realized investment gains (losses).



	Three Months Ended September 30,							Nine Months Ended September 30,
(In millions)	2015				2014			2015				2014
Pretax earnings:
Aflac Japan	$	789			$	828		$	2,365			$	2,688
Aflac U.S.	286				269			864				872
Other business segments	5				0			10				0
Total business segment pretax operating earnings	1,080				1,097			3,239				3,560
Interest expense, noninsurance operations	(30		)		(49		)	(117		)		(150		)
Corporate and eliminations	(23		)		(7		)	(64		)		(43		)
Pretax operating earnings	1,027				1,041			3,058				3,367
Realized investment gains (losses) ⁽¹⁾	(136		)		6			(36		)		42
Other non-operating income (loss)	(27		)	⁽²⁾	27			(270		)	^(2),(3)	7
Total earnings before income taxes	$	864			$	1,074		$	2,752			$	3,416
Income taxes applicable to pretax operating earnings	$	355			$	356		$	1,057			$	1,151
Effect of foreign currency translation on operating earnings	(58		)		(19		)	(175		)		(80		)

⁽³⁾Includes a cash outflow of $230 for the make-whole payment associated with the early extinguishment of debt

Assets were as follows:



(In millions)	September 30, 2015				December 31, 2014
Assets:
Aflac Japan		$	97,158			$	98,525
Aflac U.S.		18,687				18,383
Other business segments		176				128
Total business segment assets		116,021				117,036
Corporate		22,676				24,636
Intercompany eliminations		(21,242		)		(21,905		)
Total assets		$	117,455			$	119,767


3.	INVESTMENTS

Investment Holdings

The amortized cost for our investments in debt and perpetual securities, the cost for equity securities and the fair values of these investments are shown in the following tables.



	September 30, 2015
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	16,799		$	1,544		$	1		$	18,342
Municipalities		88			6			0			94
Mortgage- and asset-backed securities		330			31			0			361
Public utilities		1,613			202			17			1,798
Sovereign and supranational		795			185			0			980
Banks/financial institutions		2,463			271			118			2,616
Other corporate		3,354			399			32			3,721
Total yen-denominated		25,442			2,638			168			27,912
Dollar-denominated:
U.S. government and agencies		111			12			0			123
Municipalities		927			154			9			1,072
Mortgage- and asset-backed securities		201			29			0			230
Public utilities		5,437			742			129			6,050
Sovereign and supranational		332			109			0			441
Banks/financial institutions		2,952			707			14			3,645
Other corporate		24,612			2,016			995			25,633
Total dollar-denominated		34,572			3,769			1,147			37,194
Total fixed maturities		60,014			6,407			1,315			65,106
Perpetual securities:
Yen-denominated:
Banks/financial institutions		1,798			149			140			1,807
Other corporate		184			18			0			202
Dollar-denominated:
Banks/financial institutions		107			51			1			157
Total perpetual securities		2,089			218			141			2,166
Equity securities		119			12			0			131
Total securities available for sale		$	62,222		$	6,637		$	1,456		$	67,403



	September 30, 2015
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	20,115		$	2,876		$	0		$	22,991
Municipalities		345			64			0			409
Mortgage- and asset-backed securities		38			2			0			40
Public utilities		3,108			151			131			3,128
Sovereign and supranational		2,569			164			47			2,686
Banks/financial institutions		4,539			141			136			4,544
Other corporate		3,015			191			56			3,150
Total yen-denominated		33,729			3,589			370			36,948
Total securities held to maturity		$	33,729		$	3,589		$	370		$	36,948



	December 31, 2014
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	17,341		$	1,740		$	0		$	19,081
Municipalities		88			9			0			97
Mortgage- and asset-backed securities		351			35			0			386
Public utilities		1,691			226			5			1,912
Sovereign and supranational		799			163			0			962
Banks/financial institutions		2,752			325			189			2,888
Other corporate		3,479			531			48			3,962
Total yen-denominated		26,501			3,029			242			29,288
Dollar-denominated:
U.S. government and agencies		100			17			0			117
Municipalities		961			201			2			1,160
Mortgage- and asset-backed securities		185			31			0			216
Public utilities		5,061			960			36			5,985
Sovereign and supranational		343			111			0			454
Banks/financial institutions		2,943			775			8			3,710
Other corporate		22,291			2,682			330			24,643
Total dollar-denominated		31,884			4,777			376			36,285
Total fixed maturities		58,385			7,806			618			65,573
Perpetual securities:
Yen-denominated:
Banks/financial institutions		2,132			223			92			2,263
Other corporate		183			48			0			231
Dollar-denominated:
Banks/financial institutions		125			50			0			175
Total perpetual securities		2,440			321			92			2,669
Equity securities		19			9			0			28
Total securities available for sale		$	60,844		$	8,136		$	710		$	68,270



	December 31, 2014
(In millions)	Cost or Amortized Cost			Gross Unrealized Gains			Gross Unrealized Losses			Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Yen-denominated:
Japan government and agencies		$	20,023		$	3,195		$	0		$	23,218
Municipalities		346			71			0			417
Mortgage- and asset-backed securities		43			3			0			46
Public utilities		3,342			281			20			3,603
Sovereign and supranational		2,556			272			14			2,814
Banks/financial institutions		4,932			231			78			5,085
Other corporate		3,000			326			12			3,314
Total yen-denominated		34,242			4,379			124			38,497
Total securities held to maturity		$	34,242		$	4,379		$	124		$	38,497

The methods of determining the fair values of our investments in fixed-maturity securities, perpetual securities and equity securities are described in Note 5.

During the third quarter of 2015, we began investing in yen-denominated exchange traded funds (ETFs) holding Japan real estate investment trusts. These ETFs are publicly traded on a national stock exchange and are reported as equity securities on our consolidated balance sheets. These ETFs are classified as available for sale and carried on our balance sheet at fair value. As of September 30, 2015, our investment in these ETFs was $103 million at fair value.

During the first nine months of 2015, we did not reclassify any investments from the held-to-maturity category to the available-for-sale category.

During the third quarter of 2014, we reclassified one investment from the held-to-maturity category to the available-for-sale category as a result of the issuer being downgraded to below investment grade. At the time of transfer, the security had an amortized cost of $233 million and an unrealized loss of $18 million. During the second quarter of 2014, we reclassified one investment from the held-to-maturity category to the available-for-sale category as a result of the issuer being downgraded to below investment grade. At the time of transfer, the security had an amortized cost of $128 million and an unrealized loss of $28 million. During the first quarter of 2014, we reclassified one investment from the held-to-maturity category to the available-for-sale category as a result of the issuer being downgraded to below investment grade. At the time of transfer, the security had an amortized cost of $63 million and an unrealized loss of $8 million.

Contractual and Economic Maturities

The contractual maturities of our investments in fixed maturities at September 30, 2015, were as follows:



	Aflac Japan						Aflac U.S.
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Available for sale:
Due in one year or less		$	246		$	262		$	85		$	86
Due after one year through five years		2,340			2,722			641			717
Due after five years through 10 years		11,299			11,576			2,033			2,140
Due after 10 years		33,384			36,760			9,069			9,851
Mortgage- and asset-backed securities		381			432			36			45
Total fixed maturities available for sale		$	47,650		$	51,752		$	11,864		$	12,839
Held to maturity:
Due in one year or less		$	318		$	324		$	0		$	0
Due after one year through five years		1,593			1,675			0			0
Due after five years through 10 years		1,730			1,825			0			0
Due after 10 years		30,050			33,084			0			0
Mortgage- and asset-backed securities		38			40			0			0
Total fixed maturities held to maturity		$	33,729		$	36,948		$	0		$	0

At September 30, 2015, the Parent Company and other business segments had portfolios of available-for-sale fixed-maturity securities totaling $500 million at amortized cost and $515 million at fair value, which are not included in the table above.

Expected maturities may differ from contractual maturities because some issuers have the right to call or prepay obligations with or without call premiums or prepayment penalties.

The majority of our perpetual securities are subordinated to other debt obligations of the issuer, but rank higher than the issuer's equity securities. Perpetual securities have characteristics of both debt and equity investments, along with unique features that create economic maturity dates for the securities. Although perpetual securities have no contractual maturity date, they have stated interest coupons that were fixed at their issuance and subsequently change to a floating short-term interest rate after some period of time. The instruments are generally callable by the issuer at the time of changing from a fixed coupon rate to a new variable rate of interest, which is determined by the combination of some market index plus a fixed amount of basis points. The net effect is to create an expected maturity date for the instrument. The economic maturities of our investments in perpetual securities, which were all reported as available for sale at September 30, 2015, were as follows:



	Aflac Japan						Aflac U.S.
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Due in one year or less		$	261		$	254		$	0		$	0
Due after one year through five years		449			453			0			0
Due after 10 years		1,340			1,401			39			58
Total perpetual securities available for sale		$	2,050		$	2,108		$	39		$	58

Investment Concentrations

Our process for credit-related investments begins with an independent approach to underwriting each issuer's fundamental credit quality. We evaluate independently those factors which we believe could influence an issuer's ability to make payments under the contractual terms of our instruments. This includes a thorough analysis of a variety of items including the issuer's country of domicile (including political, legal, and financial considerations); the industry in which the issuer competes (with an analysis of industry structure, end-market dynamics, and regulation); company specific issues (such as management, assets, earnings, cash generation, and capital needs); and contractual provisions of the instrument (such as financial covenants and position in the capital structure). We further evaluate the investment

considering broad business and portfolio management objectives, including asset/liability needs, portfolio diversification, and expected income.

Banks and Financial Institutions

One of our largest investment sector concentrations as of September 30, 2015, was banks and financial institutions. Within the countries we approve for investment opportunities, we primarily invest in financial institutions that are strategically crucial to each approved country's economy. The bank and financial institution sector is a highly regulated industry and plays a strategic role in the global economy.

Our total investments in the bank and financial institution sector, including those classified as perpetual securities, were as follows:



	September 30, 2015						December 31, 2014
	Total Investments in Banks and Financial Institutions Sector (in millions)			Percentage of Total Investment Portfolio			Total Investments in Banks and Financial Institutions Sector (in millions)			Percentage of Total Investment Portfolio
Fixed maturities:
Amortized cost		$	9,954		10	%		$	10,627		11	%
Fair value		10,805			10			11,683			11
Perpetual securities:
Upper Tier II:
Amortized cost		$	1,337		1	%		$	1,554		2	%
Fair value		1,369			1			1,645			1
Tier I:
Amortized cost		568			1			703			1
Fair value		595			1			793			1
Total:
Amortized cost		$	11,859		12	%		$	12,884		14	%
Fair value		12,769			12			14,121			13

Realized Investment Gains and Losses

Information regarding pretax realized gains and losses from investments is as follows:



	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2015			2014			2015			2014
Realized investment gains (losses) on securities:
Fixed maturities:
Available for sale:
Gross gains from sales	$	20		$	17		$	124		$	144
Gross losses from sales	(6		)	0			(6		)	(1		)
Net gains (losses) from redemptions	12			16			38			27
Other-than-temporary impairment losses	(136		)	0			(142		)	(31		)
Held to maturity:
Net gains (losses) from redemptions	0			0			0			1
Total fixed maturities	(110		)	33			14			140
Perpetual securities:
Available for sale:
Net gains (losses) from redemptions	0			0			30			0
Total perpetual securities	0			0			30			0
Equity securities:
Other-than-temporary impairment losses	(1		)	0			(1		)	0
Total equity securities	(1		)	0			(1		)	0
Derivatives and other:
Derivative gains (losses)	(3		)	(17		)	(17		)	(67		)
Other	0			0			0			(1		)
Total derivatives and other	(3		)	(17		)	(17		)	(68		)
Total realized investment gains (losses)	$	(114	)	$	16		$	26		$	72

Other-than-temporary Impairment

The fair values of our debt and perpetual security investments fluctuate based on changes in interest rates, foreign exchange, and credit spreads in the global financial markets. Fair values can also be heavily influenced by the values of the assets of the issuer and expected ultimate recovery values upon default, bankruptcy or other financial restructuring. Credit spreads are most impacted by the general credit environment and global market liquidity. Interest rates are driven by numerous factors including, but not limited to, supply and demand, governmental monetary actions, expectations of inflation and economic growth. We believe that fluctuations in the fair values of our investment securities related to general changes in the level of credit spreads or interest rates have little bearing on underlying credit quality of the issuer, and whether our investment is ultimately recoverable. Generally, we consider such declines in fair values to be temporary even in situations where an investment remains in an unrealized loss position for an extended period of time.

However, in the course of our review process, we may determine that it is unlikely that our investment will recover in value within an acceptable time frame. Factors which may influence this determination include the severity of the price decline, the length of time the price has been impaired, if the price decline was driven by issuer credit deterioration, and our view of the likelihood of the security defaulting or otherwise being subject to an unfavorable restructuring. In those cases where we believe the security will not recover in price within an acceptable period of time, we consider such a decline in the investment's fair value, to the extent it is below the investment's cost or amortized cost, to be an other-than-temporary impairment of the investment and reduce the book value of the investment to its fair value.

The perpetual securities we hold were largely issued by banks that are integral to the financial markets of the sovereign country of the issuer. As a result of the issuer's position within the economy of the sovereign country, our perpetual securities may be subject to a higher risk of nationalization of their issuers in connection with capital injections from an issuer's sovereign government. We cannot be assured that such capital support will extend to all levels of an issuer's capital structure. In addition, certain governments or regulators may consider imposing interest and principal payment restrictions on issuers of hybrid securities to preserve cash and preserve the issuer's capital. Beyond the cash

flow impact that additional deferrals would have on our portfolio, such deferrals could result in ratings downgrades of the affected securities, which in turn could result in a reduction of fair value of the securities and increase our regulatory capital requirements. We consider these factors in our credit review process.

When determining our intention to sell a security prior to recovery of its fair value to amortized cost, we evaluate facts and circumstances such as, but not limited to, future cash flow needs, decisions to reposition our security portfolio, and risk profile of individual investment holdings. We perform ongoing analyses of our liquidity needs, which includes cash flow testing of our policy liabilities, debt maturities, projected dividend payments and other cash flow and liquidity needs. Our cash flow testing includes extensive duration analysis of our investment portfolio and policy liabilities. Based on our analyses, we have concluded that we have sufficient excess cash flows to meet our liquidity needs without selling any of our investments prior to their maturity.

The following table details our pretax other-than-temporary impairment losses by investment category that resulted from our impairment evaluation process.



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2015		2014		2015		2014
Corporate bonds	$	5	$	0	$	7	$	31
Bank/financial institution bonds	131		0		135		0
Equity securities	1		0		1		0
Total other-than-temporary impairment losses realized ⁽¹⁾	$	137	$	0	$	143	$	31

⁽¹⁾Includes $6 and $0 for the three-month periods and $12 and $31 for the nine-month periods ended September 30, 2015 and 2014, respectively, from change in intent to sell securities; and $131 for the three- and nine-month periods ended September 30, 2015, for credit-related impairments

Unrealized Investment Gains and Losses

Effect on Shareholders’ Equity

The net effect on shareholders’ equity of unrealized gains and losses from investment securities was as follows:



(In millions)	September 30, 2015				December 31, 2014
Unrealized gains (losses) on securities available for sale		$	5,181			$	7,426
Deferred income taxes		(1,967		)		(2,754		)
Shareholders’ equity, unrealized gains (losses) on investment securities		$	3,214			$	4,672

Gross Unrealized Loss Aging

The following tables show the fair values and gross unrealized losses of our available-for-sale and held-to-maturity investments that were in an unrealized loss position, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position.



	September 30, 2015
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed Maturities:
Japan government and agencies:
Yen-denominated		$	92		$	1		$	92		$	1		$	0		$	0
Municipalities:
Dollar-denominated		44			9			44			9			0			0
Public utilities:
Dollar-denominated		1,955			129			1,499			79			456			50
Yen-denominated		1,451			148			1,039			102			412			46
Sovereign and supranational:
Yen-denominated		728			47			535			32			193			15
Banks/financial institutions:
Dollar-denominated		307			14			304			14			3			0
Yen-denominated		2,809			254			1,762			72			1,047			182
Other corporate:
Dollar-denominated		12,285			995			9,940			597			2,345			398
Yen-denominated		1,237			88			437			5			800			83
Total fixed maturities		20,908			1,685			15,652			911			5,256			774
Perpetual securities:
Dollar-denominated		6			1			0			0			6			1
Yen-denominated		739			140			215			27			524			113
Total perpetual securities		745			141			215			27			530			114
Total		$	21,653		$	1,826		$	15,867		$	938		$	5,786		$	888



	December 31, 2014
	Total						Less than 12 months						12 months or longer
(In millions)	Fair Value			Unrealized Losses			Fair Value			Unrealized Losses			Fair Value			Unrealized Losses
Fixed Maturities:
Municipalities:
Dollar-denominated		$	75		$	2		$	53		$	1		$	22		$	1
Public utilities:
Dollar-denominated		1,001			36			164			7			837			29
Yen-denominated		805			25			98			1			707			24
Sovereign and supranational:
Yen-denominated		359			14			0			0			359			14
Banks/financial institutions:
Dollar-denominated		205			8			53			5			152			3
Yen-denominated		1,828			267			166			0			1,662			267
Other corporate:
Dollar-denominated		8,072			330			1,901			62			6,171			268
Yen-denominated		1,151			60			122			2			1,029			58
Total fixed maturities		13,496			742			2,557			78			10,939			664
Perpetual securities:
Yen-denominated		783			92			194			5			589			87
Total perpetual securities		783			92			194			5			589			87
Total		$	14,279		$	834		$	2,751		$	83		$	11,528		$	751

Analysis of Securities in Unrealized Loss Positions

The unrealized losses on our investments have been primarily related to general market changes in interest rates, foreign exchange rates, and/or the levels of credit spreads rather than specific concerns with the issuer's ability to pay interest and repay principal.

For any significant decline in fair value, we perform a more focused review of the related issuer's credit profile. For corporate issuers, we evaluate their assets, business profile including industry dynamics and competitive positioning, financial statements and other available financial data. For non-corporate issuers, we analyze all sources of credit support, including issuer-specific factors. We utilize information available in the public domain and, for certain private placement issuers, from consultations with the issuers directly. We also consider ratings from the Nationally Recognized Statistical Rating Organizations (NRSROs), as well as the specific characteristics of the security we own including seniority in the issuer's capital structure, covenant protections, or other relevant features. From these reviews, we evaluate the issuers' continued ability to service our investment through payment of interest and principal.

The following table provides more information on our unrealized loss positions.



		September 30, 2015									December 31, 2014
(In millions)	Investments in an Unrealized Loss Position			Gross Unrealized Losses			Gross Unrealized Losses that are Investment Grade			Investments in an Unrealized Loss Position			Gross Unrealized Losses			Gross Unrealized Losses that are Investment Grade
Fixed Maturities:
Public utilities		16	%		15	%		95	%		13	%		7	%		100	%
Sovereign and supranational		3			3			100			3			2			100
Banks/financial institutions		14			15			60			14			33			31
Other corporate		63			59			86			65			47			88
Total fixed maturities		96	%		92	%					95	%		89	%
Perpetual securities		4			8			100			5			11			100
Total		100	%		100	%					100	%		100	%

Assuming no credit-related factors develop, unrealized gains and losses are expected to diminish as investments near maturity. Based on our credit analysis, we believe that the issuers of our investments in the sectors shown in the table above have the ability to service their obligations to us.

Perpetual Securities

The majority of our investments in Upper Tier II and Tier I perpetual securities were in highly-rated global financial institutions. Upper Tier II securities have more debt-like characteristics than Tier I securities and are senior to Tier I securities, preferred stock, and common equity of the issuer. Conversely, Tier I securities have more equity-like characteristics, but are senior to the common equity of the issuer. They may also be senior to certain preferred shares, depending on the individual security, the issuer's capital structure and the regulatory jurisdiction of the issuer.

Details of our holdings of perpetual securities were as follows:

Perpetual Securities



		September 30, 2015										December 31, 2014
(In millions)	Credit Rating	Amortized Cost			Fair Value			Unrealized Gain (Loss)				Amortized Cost			Fair Value			Unrealized Gain (Loss)
Upper Tier II:
	A		$	61		$	87		$	26			$	61		$	87		$	26
	BBB		1,112			1,056			(56		)		1,330			1,333			3
	BB or lower		164			226			62				163			225			62
Total Upper Tier II			1,337			1,369			32				1,554			1,645			91
Tier I:
	BBB		522			524			2				519			556			37
	BB or lower		46			71			25				184			237			53
Total Tier I			568			595			27				703			793			90
Other subordinated - non-banks:
	BB or lower		184			202			18				183			231			48
Total			$	2,089		$	2,166		$	77			$	2,440		$	2,669		$	229

Assuming no credit-related factors develop, as investments near maturity, the unrealized gains or losses are expected to diminish. Based on our credit analysis, we believe that the issuers of our investments in these sectors have the ability to service their obligations to us. Perpetual securities that had an amortized cost of $361 million and fair value of $387 million at December 31, 2014 matured or were called during the nine-month period ended September 30, 2015.

Variable Interest Entities (VIEs)

As a condition of our involvement or investment in a VIE, we enter into certain protective rights and covenants that preclude changes in the structure of the VIE that would alter the creditworthiness of our investment or our beneficial interest in the VIE.

Our involvement with all of the VIEs in which we have an interest is passive in nature, and we are not the arranger of these entities. We have not been involved in establishing these entities, except as it relates to our review and evaluation of the structure of these VIEs in the normal course of our investment decision-making process. Further, we are not, nor have we been, required to purchase any securities issued in the future by these VIEs.

Our ownership interest in the VIEs is limited to holding the obligations issued by them. All of the VIEs in which we invest are static with respect to funding and have no ongoing forms of funding after the initial funding date. We have no direct or contingent obligations to fund the limited activities of these VIEs, nor do we have any direct or indirect financial guarantees related to the limited activities of these VIEs. We have not provided any assistance or any other type of financing support to any of the VIEs we invest in, nor do we have any intention to do so in the future. The weighted-average lives of our notes are very similar to the underlying collateral held by these VIEs where applicable.

Our risk of loss related to our interests in any of our VIEs is limited to our investment in the debt securities issued by them.

VIEs - Consolidated

The following table presents the amortized cost, fair value and balance sheet caption in which the assets and liabilities of consolidated VIEs are reported.

Investments in Consolidated Variable Interest Entities



	September 30, 2015						December 31, 2014
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Assets:
Fixed maturities, available for sale		$	3,651		$	4,541		$	3,020		$	4,166
Perpetual securities, available for sale		287			269			405			429
Fixed maturities, held to maturity		83			80			83			84
Other assets		106			106			106			106
Total assets of consolidated VIEs		$	4,127		$	4,996		$	3,614		$	4,785
Liabilities:
Other liabilities		$	343		$	343		$	318		$	318
Total liabilities of consolidated VIEs		$	343		$	343		$	318		$	318

We are substantively the only investor in the consolidated VIEs listed in the table above. As the sole investor in these VIEs, we have the power to direct the activities of a variable interest entity that most significantly impact the entity's economic performance and are therefore considered to be the primary beneficiary of the VIEs that we consolidate. We also participate in substantially all of the variability created by these VIEs. The activities of these VIEs are limited to holding debt and perpetual securities and foreign currency and/or credit default swaps (CDS), as appropriate, and utilizing the cash flows from these securities to service our investment. Neither we nor any of our creditors are able to obtain the underlying collateral of the VIEs unless there is an event of default or other specified event. For those VIEs that contain a swap, we are not a direct counterparty to the swap contracts and have no control over them. Our loss exposure to these VIEs is limited to our original investment. Our consolidated VIEs do not rely on outside or ongoing sources of funding to support their activities beyond the underlying collateral and swap contracts, if applicable. With the exception of our investment in senior secured bank loans (bank loans) through unit trust structures, the underlying collateral assets and funding of our consolidated VIEs are generally static in nature and the underlying collateral and the reference corporate entities covered by any CDS contracts were all investment grade at the time of issuance.

We invest in bank loans through unit trust structures in which we are the only investor, requiring us to consolidate these trusts. These bank loans are classified as available-for-sale fixed-maturity securities in the financial statements. As of September 30, 2015, the amortized cost and fair value of our bank loan investments was $1.3 billion. As of December 31, 2014, the amortized cost and fair value of our bank loan investments was $501 million and $579 million, respectively.

We are exposed to credit losses within our consolidated collateralized debt obligation (CDO) that could result in principal losses to our investment. However, we have mitigated the risk of credit loss through the structure of the VIE, which contractually requires the subordinated tranches within the VIE to absorb the majority of the expected losses from the underlying credit default swaps. We currently own only senior mezzanine CDO tranches. Based on our statistical analysis models and the current subordination levels in our CDO, the VIE can sustain a reasonable number of defaults in the underlying reference entities in the CDS with no loss to our investment.

VIEs-Not Consolidated

The table below reflects the amortized cost, fair value and balance sheet caption in which our investment in VIEs not consolidated are reported.

Investments in Variable Interest Entities Not Consolidated



	September 30, 2015						December 31, 2014
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Assets:
Fixed maturities, available for sale		$	5,792		$	6,367		$	6,104		$	6,937
Perpetual securities, available for sale		250			243			324			330
Fixed maturities, held to maturity		2,491			2,578			2,564			2,829
Total investments in VIEs not consolidated		$	8,533		$	9,188		$	8,992		$	10,096

The VIEs that we are not required to consolidate are investments that are in the form of debt obligations from the VIEs that are irrevocably and unconditionally guaranteed by their corporate parents or sponsors. These VIEs are the primary financing vehicles used by their corporate sponsors to raise financing in the capital markets. The variable interests created by these VIEs are principally or solely a result of the debt instruments issued by them. We do not have the power to direct the activities that most significantly impact the entity's economic performance, nor do we have (1) the obligation to absorb losses of the entity or (2) the right to receive benefits from the entity. As such, we are not the primary beneficiary of these VIEs and are therefore not required to consolidate them. These VIE investments comprise securities from 175 separate issuers with an average credit rating of BBB.

Loans and Loan Receivables

We invest in middle market loans through participation rights that are accounted for as loan receivables and recorded at amortized cost on the acquisition date. Since we have the intent and ability to hold these loan receivables for the foreseeable future or until they mature, they are considered held-for-investment and are carried at adjusted amortized cost in the other investments line on our consolidated balance sheets. The adjusted amortized cost of the loan receivables reflects allowances for expected incurred losses estimated based on past events and current economic conditions as of each reporting date. We also recognize a liability for all unfunded commitments associated with existing loan originations, with a corresponding recognition of an invested asset. As of September 30, 2015, our investment in these loan receivables was $66 million, of which $49 million was unfunded, while the associated allowance for expected losses was immaterial. As of September 30, 2015, we have commitments of $233 million to fund potential future loan originations related to this investment program. These commitments are contingent upon the availability of middle market loans that meet our underwriting criteria.

Securities Lending and Pledged Securities

We lend fixed-maturity securities to financial institutions in short-term security-lending transactions. These short-term security-lending arrangements increase investment income with minimal risk. Our security lending policy requires that the fair value of the securities and/or unrestricted cash received as collateral be 102% or more of the fair value of the loaned securities. These securities continue to be carried as investment assets on our balance sheet during the terms of the loans and are not reported as sales. We receive cash or other securities as collateral for such loans. For loans involving

unrestricted cash or securities as collateral, the collateral is reported as an asset with a corresponding liability for the return of the collateral.

Details of our securities lending activities were as follows:



Securities Lending Transactions Accounted for as Secured Borrowings
September 30, 2015
Remaining Contractual Maturity of the Agreements
(In millions)	Overnight and Continuous⁽¹⁾		Up to 30 days		Total
Securities lending transactions:
Japan government and agencies	$	145	$	309	$	454
Public utilities	119		0		119
Sovereign and supranational	3		0		3
Banks/financial institutions	13		0		13
Other corporate	318		0		318
Total borrowings	$	598	$	309	$	907
Gross amount of recognized liabilities for securities lending transactions					$	907
Amounts related to agreements not included in offsetting disclosure in Note 4					$	0

⁽¹⁾These securities are pledged as collateral under our U.S. securities lending program and can be called at our discretion; therefore, they are classified as Overnight and Continuous.



Securities Lending Transactions Accounted for as Secured Borrowings
December 31, 2014
Remaining Contractual Maturity of the Agreements
(In millions)	Overnight and Continuous⁽¹⁾		Up to 30 days		Total
Securities lending transactions:
Japan government and agencies	$	0	$	1,720	$	1,720
Public utilities	80		0		80
Sovereign and supranational	1		0		1
Banks/financial institutions	64		0		64
Other corporate	328		0		328
Total borrowings	$	473	$	1,720	$	2,193
Gross amount of recognized liabilities for securities lending transactions					$	2,193
Amounts related to agreements not included in offsetting disclosure in Note 4					$	0

⁽¹⁾These securities are pledged as collateral under our U.S. securities lending program and can be called at our discretion; therefore, they are classified as Overnight and Continuous.

We did not have any repurchase agreements or repurchase-to-maturity transactions outstanding as of September 30, 2015 and December 31, 2014.

Certain fixed-maturity securities have been pledged as collateral as part of derivative transactions. For additional information regarding pledged securities related to derivative transactions, see Note 4.


4.	DERIVATIVE INSTRUMENTS

Our freestanding derivative financial instruments consist of: (1) foreign currency swaps and credit default swaps that are associated with investments in special-purpose entities, including VIEs where we are the primary beneficiary; (2) foreign currency forwards and options used in hedging foreign exchange risk on U.S. dollar-denominated securities in Aflac Japan's portfolio; (3) foreign currency forwards and options used to hedge foreign exchange risk from our net investment in Aflac Japan and economically hedge certain portions of forecasted cash flows denominated in yen; (4) swaps associated with our notes payable, consisting of cross-currency interest rate swaps, also referred to as foreign currency swaps, associated with certain senior notes and our subordinated debentures; and (5) options on interest rate swaps (or interest rate swaptions) and futures used to hedge interest rate risk for certain available-for-sale securities. We do not use derivative financial instruments for trading purposes, nor do we engage in leveraged derivative transactions. Some of our derivatives are designated as cash flow hedges, fair value hedges or net investment hedges; however, other derivatives do not qualify for hedge accounting or we elect not to designate them as an accounting hedge. We utilize a net investment hedge to mitigate foreign exchange exposure resulting from our net investment in Aflac Japan. In addition to designating derivatives as hedging instruments, we have designated our yen-denominated Samurai and Uridashi notes as nonderivative hedging instruments for this net investment hedge.

Derivative Types

We enter into foreign currency swaps pursuant to which we exchange an initial principal amount in one currency for an initial principal amount of another currency, with an agreement to re-exchange the currencies at a future date at an agreed upon exchange rate. There may also be periodic exchanges of payments at specified intervals based on the agreed upon rates and notional amounts. Foreign currency swaps are used primarily in the consolidated VIEs in our Aflac Japan portfolio to convert foreign-denominated cash flows to yen, the functional currency of Aflac Japan, in order to minimize cash flow fluctuations. We also use foreign currency swaps to economically convert certain of our dollar-denominated senior note and subordinated debenture principal and interest obligations into yen-denominated obligations.

Foreign currency forwards and options with short-term maturities are executed for the Aflac Japan segment in order to hedge the currency risk on the fair value of certain fixed-maturity dollar-denominated securities. In forward transactions, Aflac Japan agrees with another party to buy a fixed amount of yen and sell a corresponding amount of U.S. dollars at a specified future date. Aflac Japan also executes foreign currency option transactions in a collar strategy, where Aflac Japan agrees with another party to simultaneously purchase a fixed amount of U.S. dollar put options and sell U.S. dollar call options. The combination of these two actions results in no net premium being paid (i.e. a costless or zero-cost collar). The foreign currency forwards and options are used in fair value hedging relationships to mitigate the foreign exchange risk associated with dollar-denominated investments supporting yen-denominated liabilities.

Foreign currency forwards and options are also used to hedge the currency risk associated with the net investment in Aflac Japan. In these forward transactions, Aflac agrees with another party to buy a fixed amount of U.S. dollars and sell a corresponding amount of yen at a specified future date. In the option transactions, we use a combination of foreign

currency options to protect expected future cash flows by simultaneously purchasing yen put options (options that protect

against a weakening yen) and selling yen call options (options that limit participation in a strengthening yen). The

combination of these two actions results in no net premium being paid (i.e. a costless or zero-cost collar).

The only CDS that we currently hold relates to components of an investment in a VIE and is used to assume credit risk related to an individual security. This CDS contract entitles the consolidated VIE to receive periodic fees in exchange for an obligation to compensate the derivative counterparties should the referenced security issuer experience a credit event, as defined in the contract.

Interest rate swaps involve the periodic exchange of cash flows with other parties, at specified intervals, calculated using agreed upon rates or other financial variables and notional principal amounts. Typically, at the time a swap is entered into, the cash flow streams exchanged by the counterparties are equal in value. No cash or principal payments are exchanged at the inception of the contract. Interest rate swaps are primarily used to convert interest receipts on floating-rate fixed-maturity securities contracts to fixed rates. These derivatives are predominantly used to better match cash receipts from assets with cash disbursements required to fund liabilities.

Interest rate swaptions are options on interest rate swaps. Interest rate collars are combinations of two swaption positions and are executed in order to hedge certain dollar-denominated available-for-sale securities that are held in the Aflac Japan segment. We use collars to protect against significant changes in the fair value associated with interest rate changes of our dollar-denominated available-for-sale securities. In order to maximize the efficiency of the collars while minimizing cost, we set the strike price on each collar so that the premium paid for the ‘payer leg’ is offset by the premium

received for having sold the ‘receiver leg’.

Periodically, depending on general economic conditions, we may enter into other derivative transactions.

Credit Risk Assumed through Derivatives

For the foreign currency and credit default swaps associated with our VIE investments for which we are the primary beneficiary, we bear the risk of foreign exchange loss due to counterparty default even though we are not a direct counterparty to those contracts. We are a direct counterparty to the foreign currency swaps that we have entered into in connection with certain of our senior notes, subordinated debentures, and Samurai notes; foreign currency forwards; foreign currency options; and interest rate swaptions, and therefore we are exposed to credit risk in the event of nonperformance by the counterparties in those contracts. The risk of counterparty default for our VIE swaps, foreign currency swaps, certain foreign currency forwards, foreign currency options and interest rate swaptions is mitigated by collateral posting requirements that counterparties to those transactions must meet. As of September 30, 2015, there were 17 counterparties to our derivative agreements, with four comprising 56% of the aggregate notional amount. The counterparties to these derivatives are financial institutions with the following credit ratings:



	September 30, 2015										December 31, 2014
(In millions)	Notional Amount of Derivatives			Asset Derivatives Fair Value			Liability Derivatives Fair Value				Notional Amount of Derivatives			Asset Derivatives Fair Value			Liability Derivatives Fair Value
Counterparties' credit rating:
AA		$	2,277		$	175		$	(41	)		$	1,098		$	39		$	(36	)
A		21,079			702			(343		)		22,564			763			(2,387		)
Total		$	23,356		$	877		$	(384	)		$	23,662		$	802		$	(2,423	)

We engage in derivative transactions directly with unaffiliated third parties under International Swaps and Derivatives Association, Inc. (ISDA) agreements and other documentation. Most of the ISDA agreements also include Credit Support Annex (CSA) provisions, which generally provide for two-way collateral postings, in certain cases at the first dollar of exposure and in other cases once various rating and exposure threshold levels are triggered. We mitigate the risk that counterparties to transactions might be unable to fulfill their contractual obligations by monitoring counterparty credit exposure and collateral value while generally requiring that collateral be posted at the outset of the transaction or that additional collateral be posted upon the occurrence of certain events or circumstances. In addition, a significant portion of the derivative transactions have provisions that require collateral to be posted upon a downgrade of our long-term debt ratings or give the counterparty the right to terminate the transaction upon a downgrade of Aflac’s financial strength rating. The actual amount of collateral required to be posted to counterparties in the event of such downgrades, or the aggregate amount of payments that we could be required to make, depends on market conditions, the fair value of outstanding affected transactions, and other factors prevailing at and after the time of the downgrade.

The fair value of collateral posted by us to third parties for derivative transactions of $7 million at September 30, 2015 consisted entirely of cash. The fair value of collateral posted by us to third parties for derivative transactions of $1.6 billion at December 31, 2014 consisted entirely of securities. This collateral can generally be repledged or resold by the counterparties. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that were in a net liability position by counterparty was approximately $7 million and $2.1 billion as of September 30, 2015 and December 31, 2014, respectively. If the credit-risk-related contingent features underlying these agreements had been triggered on September 30, 2015, the amount of collateral we would be required to post to these derivative counterparties would be immaterial. Collateral obtained by us from third parties for derivative transactions was $622 million and $619 million at September 30, 2015 and December 31, 2014, respectively. We are generally allowed to sell or repledge collateral obtained from our derivative counterparties, although we do not typically exercise such rights.

Accounting for Derivative Financial Instruments

Freestanding derivatives are carried at estimated fair value in our consolidated balance sheets either as other assets or as other liabilities. See Note 5 for a discussion on how we determine the fair value of our derivatives. Accruals on derivatives are recorded in accrued investment income or within other liabilities in the consolidated balance sheets.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported within derivative and other gains

(losses), which is a component of realized investment gains (losses). The fluctuations in estimated fair value of derivatives that have not been designated for hedge accounting can result in volatility in net earnings.

Hedge Documentation and Effectiveness Testing

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. At the inception of the hedging relationship for hedges we elect to designate for hedge accounting treatment, we formally document all relationships between hedging instruments and hedged items, as well as our risk-management objective and strategy for undertaking each hedge transaction. We document the designation of each hedge as either (i) a hedge of the variability of cash flows to be received or paid related to a recognized asset or liability or the hedge of a forecasted transaction ("cash flow hedge"); (ii) a hedge of the estimated fair value of a recognized asset or liability ("fair value hedge"); or (iii) a hedge of a net investment in a foreign operation. The documentation process includes linking derivatives and nonderivatives that are designated as hedges to specific assets or groups of assets or liabilities on the statement of financial position or to specific forecasted transactions and defining the effectiveness and ineffectiveness testing methods to be used. At the hedge's inception and on an ongoing quarterly basis, we also formally assess whether the derivatives that are used in hedging transactions have been, and are expected to continue to be, highly effective in offsetting their designated risk. Hedge effectiveness is assessed using qualitative and quantitative methods.

For assessing hedge effectiveness of cash flow hedges, qualitative methods may include the comparison of critical terms of the derivative to the hedged item, and quantitative methods may include regression or other statistical analysis of changes in cash flows associated with the hedge relationship. Hedge ineffectiveness of the hedge relationships on our VIE cash flow hedges is measured each reporting period using the “Hypothetical Derivative Method.” For derivative instruments that are designated and qualify as cash flow hedges, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge ineffectiveness are recognized in current earnings within derivative and other gains (losses). All components of each derivative's gain or loss are included in the assessment of hedge effectiveness.

For assessing hedge effectiveness of fair value hedges, qualitative methods may include the comparison of critical terms of the derivative to the hedged item, and quantitative methods may include regression or other statistical analysis of changes in fair value associated with the hedge relationship. Hedge ineffectiveness of the hedge relationships is measured each reporting period using the dollar offset method. For derivative instruments that are designated and qualify as fair value hedges, changes in the estimated fair value of the derivative, including amounts measured as ineffectiveness, and changes in the estimated fair value of the hedged item related to the designated risk being hedged, are reported in current earnings within derivative and other gains (losses).

For the hedge of our net investment in Aflac Japan, we have designated Parent Company yen-denominated liabilities as non-derivative hedging instruments and have designated certain foreign currency forwards and options as derivative hedging instruments. We make our net investment hedge designation at the beginning of each quarter. For assessing hedge effectiveness of net investment hedges, if the total of the designated Parent Company non-derivative and derivatives notional is equal to or less than our net investment in Aflac Japan, the hedge is deemed to be effective. If the hedge is effective, the related exchange effect on the yen-denominated liabilities is reported in the unrealized foreign currency component of other comprehensive income. For derivatives designated as net investment hedges, Aflac follows the forward-rate method. According to that method, all changes in fair value, including changes related to the forward-rate component of foreign currency forward contracts and the time value of foreign currency options, are reported in the unrealized foreign currency component of other comprehensive income. Should these designated net investment hedge positions exceed our net investment in Aflac Japan, the foreign exchange effect on the portion that exceeds our investment in Aflac Japan would be recognized in current earnings within derivative and other gains (losses).

Discontinuance of Hedge Accounting

We discontinue hedge accounting prospectively when (1) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated cash flows or fair value of a hedged item; (2) the derivative is de-designated as a hedging instrument; or (3) the derivative expires or is sold, terminated or exercised.

When hedge accounting is discontinued on a cash flow hedge or fair value hedge, the derivative is carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized in current period earnings. For discontinued cash flow hedges, including those where the derivative is sold, terminated or exercised, amounts previously deferred in other comprehensive income (loss) are reclassified into earnings when earnings are impacted by the cash flow of the hedged item.

Derivative Balance Sheet Classification

The tables below summarize the balance sheet classification of our derivative fair value amounts, as well as the gross asset and liability fair value amounts. The fair value amounts presented do not include income accruals. The notional amount of derivative contracts represents the basis upon which pay or receive amounts are calculated. Notional amounts are not reflective of credit risk.



		September 30, 2015
(In millions)	Net Derivatives							Asset Derivatives			Liability Derivatives
Hedge Designation/ Derivative Type	Notional Amount			Fair Value				Fair Value			Fair Value
Cash flow hedges:
Foreign currency swaps		$	75		$	(18	)		$	0		$	(18	)
Total cash flow hedges		75			(18		)		0			(18		)
Fair value hedges:
Foreign currency forwards		12,714			239				248			(9		)
Foreign currency options		1,250			0				1			(1		)
Total fair value hedges		13,964			239				249			(10		)
Net investment hedge:
Foreign currency forwards		1,455			5				19			(14		)
Foreign currency options		168			(3		)		4			(7		)
Total net investment hedge		1,623			2				23			(21		)
Non-qualifying strategies:
Foreign currency swaps		6,604			270				604			(334		)
Foreign currency forwards		1,007			0				1			(1		)
Credit default swaps		83			0				0			0
Total non-qualifying strategies		7,694			270				605			(335		)
Total derivatives		$	23,356		$	493			$	877		$	(384	)
Balance Sheet Location
Other assets		$	16,776		$	877			$	877		$	0
Other liabilities		6,580			(384		)		0			(384		)
Total derivatives		$	23,356		$	493			$	877		$	(384	)



		December 31, 2014
(In millions)	Net Derivatives							Asset Derivatives			Liability Derivatives
Hedge Designation/ Derivative Type	Notional Amount			Fair Value				Fair Value			Fair Value
Cash flow hedges:
Foreign currency swaps		$	75		$	(15	)		$	0		$	(15	)
Total cash flow hedges		75			(15		)		0			(15		)
Fair value hedges:
Foreign currency forwards		12,388			(1,791		)		0			(1,791		)
Foreign currency options		697			(32		)		0			(32		)
Interest rate swaptions		2,502			(159		)		0			(159		)
Total fair value hedges		15,587			(1,982		)		0			(1,982		)
Net investment hedge:
Foreign currency forwards		1,307			54				56			(2		)
Total net investment hedge		1,307			54				56			(2		)
Non-qualifying strategies:
Foreign currency swaps		5,765			443				746			(303		)
Foreign currency forwards		784			(119		)		0			(119		)
Foreign currency options		53			(1		)		0			(1		)
Credit default swaps		83			0				0			0
Interest rate swaptions		8			(1		)		0			(1		)
Total non-qualifying strategies		6,693			322				746			(424		)
Total derivatives		$	23,662		$	(1,621	)		$	802		$	(2,423	)
Balance Sheet Location
Other assets		$	6,531		$	802			$	802		$	0
Other liabilities		17,131			(2,423		)		0			(2,423		)
Total derivatives		$	23,662		$	(1,621	)		$	802		$	(2,423	)

Cash Flow Hedges

Certain of our consolidated VIEs have foreign currency swaps that qualify for hedge accounting treatment. For those that have qualified, we have designated the derivative as a hedge of the variability in cash flows of a forecasted transaction or of amounts to be received or paid related to a recognized asset (“cash flow” hedge). We expect to continue this hedging activity for a weighted-average period of approximately 10 years. The remaining derivatives in our consolidated VIEs that have not qualified for hedge accounting have been designated as held for other investment purposes (“non-qualifying strategies”).

Fair Value Hedges

We designate and account for certain foreign currency forwards and options as fair value hedges when they meet the requirements for hedge accounting. These foreign currency forwards and options hedge the foreign currency exposure of certain dollar-denominated fixed maturity securities within the investment portfolio of our Aflac Japan segment. We recognize gains and losses on these derivatives and the related hedged items in current earnings within derivative and other gains (losses). The change in the fair value of the foreign currency forwards related to the changes in the difference between the spot rate and the forward price is excluded from the assessment of hedge effectiveness. The change in fair value of the foreign currency option related to the time value of the option is excluded from the assessment of hedge effectiveness.

We designate and account for interest rate swaptions as fair value hedges when they meet the requirements for hedge accounting. These interest rate swaptions hedge the interest rate exposure of certain dollar-denominated fixed maturity securities within the investment portfolio of our Aflac Japan segment. We recognize gains and losses on these derivatives and the related hedged items in current earnings within derivative and other gains (losses). The change in the fair value of the interest rate swaptions related to the time value of the option is excluded from the assessment of hedge effectiveness.

The following table presents the gains and losses on derivatives and the related hedged items in fair value hedges.

Fair Value Hedging Relationships



(In millions)		Hedging Derivatives									Hedged Items
Hedging Derivatives	Hedged Items	Total Gains (Losses)			Gains (Losses) Excluded from Effectiveness Testing			Gains (Losses) Included in Effectiveness Testing			Gains (Losses)			Ineffectiveness Recognized for Fair Value Hedge
Three Months Ended September 30, 2015:
Foreign currency forwards	Fixed-maturity securities	$	247		$	(28	)	$	275		$	(267	)	$	8
Foreign currency options	Fixed-maturity securities	(1		)	(1		)	0			0			0
Nine Months Ended September 30, 2015:
Foreign currency forwards	Fixed-maturity securities	$	17		$	(60	)	$	77		$	(62	)	$	15
Foreign currency options	Fixed-maturity securities	(4		)	3			(7		)	7			0
Interest rate swaptions	Fixed-maturity securities	(95		)	19			(114		)	99			(15		)
Three Months Ended September 30, 2014:
Foreign currency forwards	Fixed-maturity securities	$	(1,094	)	$	(1	)	$	(1,093	)	$	1,097		$	4
Foreign currency options	Fixed-maturity securities	(9		)	(9		)	0			0			0
Interest rate swaptions	Fixed-maturity securities	(34		)	2			(36		)	37			1
Nine Months Ended September 30, 2014:
Foreign currency forwards	Fixed-maturity securities	$	(631	)	$	(36	)	$	(595	)	$	624		$	29
Foreign currency options	Fixed-maturity securities	(8		)	(8		)	0			0			0
Interest rate swaptions	Fixed-maturity securities	(160		)	(20		)	(140		)	150			10

Net Investment Hedge

Our primary exposure to be hedged is our net investment in Aflac Japan, which is affected by changes in the yen/dollar exchange rate. To mitigate this exposure, we have designated the Parent Company's yen-denominated liabilities (Samurai and Uridashi notes - see Note 7) as nonderivative hedges and designated foreign currency forwards and options as derivative hedges of the foreign currency exposure of our net investment in Aflac Japan.

We used foreign exchange forwards to hedge foreign exchange risk on 30.0 billion yen, 102.5 billion yen and 25.0 billion yen of profit repatriation received from Aflac Japan in February 2015, July 2015 and September 2015, respectively. As of September 30, 2015, we had entered into foreign exchange forwards and options as part of a hedge on 194.6 billion yen of future profit repatriation.

Our net investment hedge was effective during the three- and nine-month periods ended September 30, 2015 and 2014, respectively.

Non-qualifying Strategies

For our derivative instruments in consolidated VIEs that do not qualify for hedge accounting treatment, all changes in their fair value are reported in current period earnings within derivative and other gains (losses). The amount of gain or loss

recognized in earnings for our VIEs is attributable to the derivatives in those investment structures. While the change in value of the swaps is recorded through current period earnings, the change in value of the available-for-sale fixed-maturity or perpetual securities associated with these swaps is recorded through other comprehensive income.

We have cross-currency interest rate swap agreements related to our $400 million senior notes due February 2017, $550 million senior notes due March 2020, $350 million senior notes due February 2022, $700 million senior notes due June 2023, $750 million senior notes due November 2024, $450 million senior notes due March 2025, and $500 million subordinated debentures due September 2052. Changes in the values of these swaps are recorded through current period earnings.

For additional information regarding these swaps, see Note 7 in this report and Note 9 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.

Impact of Derivatives and Hedging Instruments

The following table summarizes the impact to realized investment gains (losses) and other comprehensive income (loss) from all derivatives and hedging instruments.



	Three Months Ended September 30,																Nine Months Ended September 30,
	2015								2014								2015								2014
(In millions)	Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾				Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾				Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾				Realized Investment Gains (Losses)				Other Comprehensive Income (Loss)⁽¹⁾
Qualifying hedges:
Cash flow hedges:
Foreign currency swaps		$	0			$	(1	)		$	(1	)		$	(9	)		$	0			$	(3	)		$	(2	)		$	(8	)
Total cash flow hedges		0				(1		)		(1		)		(9		)		0				(3		)		(2		)		(8		)
Fair value hedges:
Foreign currency forwards⁽²⁾		(20		)		0				3				0				(45		)		0				(7		)		0
Foreign currency options ⁽²⁾		(1		)		0				(9		)		0				3				0				(8		)		0
Interest rate swaptions⁽²⁾		0				0				3				0				4				0				(10		)		0
Total fair value hedges		(21		)		0				(3		)		0				(38		)		0				(25		)		0
Net investment hedge:
Non- derivative hedging instruments		0				(4		)		0				32				0				1				0				4
Foreign currency forwards		0				(35		)		0				11				0				(1		)		0				(2		)
Foreign currency options		0				(3		)		0				0				0				(3		)		0				(3		)
Total net investment hedge		0				(42		)		0				43				0				(3		)		0				(1		)
Non-qualifying strategies:
Foreign currency swaps		2				0				44				0				0				0				48				0
Foreign currency forwards		17				0				0				0				16				0				0				0
Credit default swaps		(1		)		0				(1		)		0				0				0				2				0
Interest rate swaps		0				0				(2		)		0				5				0				(1		)		0
Futures		0				0				(54		)		0				0				0				(89		)		0
Total non- qualifying strategies		18				0				(13		)		0				21				0				(40		)		0
Total		$	(3	)		$	(43	)		$	(17	)		$	34			$	(17	)		$	(6	)		$	(67	)		$	(9	)

⁽¹⁾Cash flow hedge items are recorded as unrealized gains (losses) on derivatives and net investment hedge items are recorded in the unrealized foreign currency translation gains (losses) line in the consolidated statement of comprehensive income (loss).

⁽²⁾ Impact shown net of effect of hedged items (see Fair Value Hedges section of this Note 4 for further detail)

There was no gain or loss reclassified from accumulated other comprehensive income (loss) into earnings related to our designated cash flow hedges and net investment hedge for the three- and nine-month periods ended September 30, 2015 and 2014, respectively. As of September 30, 2015, deferred gains and losses on derivative instruments recorded in

accumulated other comprehensive income that are expected to be reclassified to earnings during the next twelve months were immaterial.

Offsetting of Financial Instruments and Derivatives

Some of the Company's derivative instruments are subject to enforceable master netting arrangements that provide for the net settlement of all derivative contracts between the Parent Company or Aflac and its respective counterparty in the event of default or upon the occurrence of certain termination events. Collateral support agreements with certain of the master netting arrangements provide that the Company will receive or pledge financial collateral in the event either minimum thresholds, or in certain cases ratings levels, have been reached.

We have securities lending agreements with unaffiliated financial institutions that post collateral to us in return for the use of our fixed maturity securities (see Note 3). When we have entered into securities lending agreements with the same counterparty, the agreements generally provide for net settlement in the event of default by the counterparty. This right of set-off allows us to keep and apply collateral received if the counterparty failed to return the securities borrowed from us as contractually agreed.

The tables below summarize our derivatives and securities lending transactions, and as reflected in the tables, in accordance with U.S. GAAP, our policy is to not offset these financial instruments in the Consolidated Balance Sheets.

Offsetting of Financial Assets and Derivative Assets



September 30, 2015
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Carrying Value of Financial Instruments			Collateral Received					Net Amount
Derivative assets:
Foreign currency swaps		$	604		$	0		$	604		$	0		$	(331	)			$	273
Foreign currency forwards		268			0			268			0			(290		)			(22		)
Foreign currency options		5			0			5			0			(1		)			4
Total derivative assets, subject to a master netting arrangement or offsetting arrangement		877			0			877			0			(622		)	⁽¹⁾		255
Securities lending and similar arrangements		885			0			885			0			(885		)			0
Total		$	1,762		$	0		$	1,762		$	0		$	(1,507	)			$	255

⁽¹⁾ Consists of $272 of pledged securities and $350 of cash.



December 31, 2014
										Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Assets			Gross Amount Offset in Balance Sheet			Net Amount of Assets Presented in Balance Sheet			Carrying Value of Financial Instruments			Collateral Received					Net Amount
Derivative assets:
Foreign currency swaps		$	746		$	0		$	746		$	0		$	(568	)			$	178
Foreign currency forwards		56			0			56			0			(51		)			5
Total derivative assets, subject to a master netting arrangement or offsetting arrangement		802			0			802			0			(619		)	⁽¹⁾		183
Securities lending and similar arrangements		2,149			0			2,149			0			(2,149		)			0
Total		$	2,951		$	0		$	2,951		$	0		$	(2,768	)			$	183

⁽¹⁾ Consists of $153 of pledged securities and $466 of cash.

Offsetting of Financial Liabilities and Derivative Liabilities



September 30, 2015
												Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Liabilities				Gross Amount Offset in Balance Sheet			Net Amount of Liabilities Presented in Balance Sheet				Carrying Value of Financial Instruments			Collateral Pledged				Net Amount
Derivative liabilities:
Foreign currency swaps		$	(352	)		$	0		$	(352	)		$	0		$	0			$	(352	)
Foreign currency forwards		(24		)		0			(24		)		0			5				(19		)
Foreign currency options		(8		)		0			(8		)		0			2				(6		)
Total derivative liabilities, subject to a master netting arrangement or offsetting arrangement		(384		)		0			(384		)		0			7		⁽¹⁾		(377		)
Securities lending and similar arrangements		(907		)		0			(907		)		885			0				(22		)
Total		$	(1,291	)		$	0		$	(1,291	)		$	885		$	7			$	(399	)

⁽¹⁾ Consists entirely of cash.



December 31, 2014
												Gross Amounts Not Offset in Balance Sheet
(In millions)	Gross Amount of Recognized Liabilities				Gross Amount Offset in Balance Sheet			Net Amount of Liabilities Presented in Balance Sheet				Carrying Value of Financial Instruments			Collateral Pledged				Net Amount
Derivative liabilities:
Foreign currency swaps		$	(318	)		$	0		$	(318	)		$	0		$	0			$	(318	)
Foreign currency forwards		(1,912		)		0			(1,912		)		0			1,439				(473		)
Foreign currency options		(33		)		0			(33		)		0			24				(9		)
Interest rate swaptions		(160		)		0			(160		)		0			158				(2		)
Total derivative liabilities, subject to a master netting arrangement or offsetting arrangement		(2,423		)		0			(2,423		)		0			1,621		⁽¹⁾		(802		)
Securities lending and similar arrangements		(2,193		)		0			(2,193		)		2,149			0				(44		)
Total		$	(4,616	)		$	0		$	(4,616	)		$	2,149		$	1,621			$	(846	)

⁽¹⁾ Consists entirely of pledged securities.

For additional information on our financial instruments, see the accompanying Notes 1, 3 and 5 and Notes 1, 3 and 5 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.


5.	FAIR VALUE MEASUREMENTS

Fair Value Hierarchy

U.S. GAAP specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. These two types of inputs create three valuation hierarchy levels. Level 1 valuations reflect quoted market prices for identical assets or liabilities in active markets. Level 2 valuations reflect quoted market prices for similar assets or liabilities in an active market, quoted market prices for identical or similar assets or liabilities in non-active markets or model-derived valuations in which all significant valuation inputs are observable in active markets. Level 3 valuations reflect valuations in which one or more of the significant inputs are not observable in an active market.

The following tables present the fair value hierarchy levels of the Company's assets and liabilities that are measured and carried at fair value on a recurring basis.



	September 30, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies		$	17,920		$	545		$	0		$	18,465
Municipalities		0			1,166			0			1,166
Mortgage- and asset-backed securities		0			371			220			591
Public utilities		0			7,848			0			7,848
Sovereign and supranational		0			1,421			0			1,421
Banks/financial institutions		0			6,235			26			6,261
Other corporate		0			29,354			0			29,354
Total fixed maturities		17,920			46,940			246			65,106
Perpetual securities:
Banks/financial institutions		0			1,964			0			1,964
Other corporate		0			202			0			202
Total perpetual securities		0			2,166			0			2,166
Equity securities		122			6			3			131
Other assets:
Foreign currency swaps		0			498			106			604
Foreign currency forwards		0			268			0			268
Foreign currency options		0			5			0			5
Total other assets		0			771			106			877
Other investments		182			0			0			182
Cash and cash equivalents		3,520			0			0			3,520
Total assets		$	21,744		$	49,883		$	355		$	71,982
Liabilities:
Foreign currency swaps		$	0		$	9		$	343		$	352
Foreign currency forwards		0			24			0			24
Foreign currency options		0			8			0			8
Total liabilities		$	0		$	41		$	343		$	384



	December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies		$	18,683		$	515		$	0		$	19,198
Municipalities		0			1,257			0			1,257
Mortgage- and asset-backed securities		0			379			223			602
Public utilities		0			7,897			0			7,897
Sovereign and supranational		0			1,416			0			1,416
Banks/financial institutions		0			6,572			26			6,598
Other corporate		0			28,605			0			28,605
Total fixed maturities		18,683			46,641			249			65,573
Perpetual securities:
Banks/financial institutions		0			2,289			149			2,438
Other corporate		0			231			0			231
Total perpetual securities		0			2,520			149			2,669
Equity securities		19			6			3			28
Other assets:
Foreign currency swaps		0			640			106			746
Foreign currency forwards		0			56			0			56
Total other assets		0			696			106			802
Other investments		171			0			0			171
Cash and cash equivalents		4,658			0			0			4,658
Total assets		$	23,531		$	49,863		$	507		$	73,901
Liabilities:
Foreign currency swaps		$	0		$	0		$	318		$	318
Foreign currency forwards		0			1,912			0			1,912
Foreign currency options		0			33			0			33
Interest rate swaptions		0			160			0			160
Total liabilities		$	0		$	2,105		$	318		$	2,423

The following tables present the carrying amount and fair value categorized by fair value hierarchy level for the Company's financial instruments that are not carried at fair value.



	September 30, 2015
(In millions)	Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies		$	20,115		$	22,991		$	0		$	0		$	22,991
Municipalities		345			0			409			0			409
Mortgage and asset-backed securities		38			0			13			27			40
Public utilities		3,108			0			3,128			0			3,128
Sovereign and supranational		2,569			0			2,686			0			2,686
Banks/financial institutions		4,539			0			4,544			0			4,544
Other corporate		3,015			0			3,150			0			3,150
Other investments		66			0			0			66			66
Total assets		$	33,795		$	22,991		$	13,930		$	93		$	37,014
Liabilities:
Other policyholders’ funds		$	6,284		$	0		$	0		$	6,156		$	6,156
Notes payable (excluding capital leases)		4,993			0			0			5,277			5,277
Total liabilities		$	11,277		$	0		$	0		$	11,433		$	11,433



	December 31, 2014
(In millions)	Carrying Value			Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Assets:
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies		$	20,023		$	23,218		$	0		$	0		$	23,218
Municipalities		346			0			417			0			417
Mortgage and asset-backed securities		43			0			15			31			46
Public utilities		3,342			0			3,603			0			3,603
Sovereign and supranational		2,556			0			2,814			0			2,814
Banks/financial institutions		4,932			0			5,085			0			5,085
Other corporate		3,000			0			3,314			0			3,314
Total assets		$	34,242		$	23,218		$	15,248		$	31		$	38,497
Liabilities:
Other policyholders’ funds		$	6,031		$	0		$	0		$	5,905		$	5,905
Notes payable (excluding capital leases)		5,268			0			0			5,835			5,835
Total liabilities		$	11,299		$	0		$	0		$	11,740		$	11,740

Fair Value of Financial Instruments

U.S. GAAP requires disclosure of the fair value of certain financial instruments including those that are not carried at fair value. The carrying amounts for cash and cash equivalents, other investments, receivables, accrued investment income, accounts payable, cash collateral and payables for security transactions approximated their fair values due to the nature of these instruments. Liabilities for future policy benefits and unpaid policy claims are not financial instruments as defined by U.S. GAAP.

Fixed maturities, perpetual securities, and equity securities

We determine the fair values of our fixed maturity securities, perpetual securities, and public and privately issued equity securities using the following approaches or techniques: price quotes and valuations from third party pricing vendors (including quoted market prices readily available from public exchange markets) and non-binding price quotes we obtain from outside brokers.

A third party pricing vendor has developed valuation models to determine fair values of privately issued securities to reflect the impact of the persistent economic environment and the changing regulatory framework. These models are discounted cash flow (DCF) valuation models, but also use information from related markets, specifically the CDS market to estimate expected cash flows. These models take into consideration any unique characteristics of the securities and make various adjustments to arrive at an appropriate issuer-specific loss adjusted credit curve. This credit curve is then used with the relevant recovery rates to estimate expected cash flows and modeling of additional features, including illiquidity adjustments, if necessary, to price the security by discounting those loss adjusted cash flows. In cases where a credit curve cannot be developed from the specific security features, the valuation methodology takes into consideration other market observable inputs, including: 1) the most appropriate comparable security(ies) of the issuer; 2) issuer-specific CDS spreads; 3) bonds or CDS spreads of comparable issuers with similar characteristics such as rating, geography, or sector; or 4) bond indices that are comparative in rating, industry, maturity and region.

The pricing data and market quotes we obtain from outside sources, including third party pricing services, are reviewed internally for reasonableness. If a fair value appears unreasonable, we will re-examine the inputs and assess the

reasonableness of the pricing data with the vendor. Additionally, we may compare the inputs to relevant market indices and other performance measurements. The output of this analysis is presented to the Company's Valuation and Classifications Subcommittee (VCS). Based on the analysis provided to the VCS, the valuation is confirmed or may be revised if there is evidence of a more appropriate estimate of fair value based on available market data. We have performed verification of the inputs and calculations in any valuation models to confirm that the valuations represent reasonable estimates of fair value.

The fixed maturities classified as Level 3 consist of securities for which there are limited or no observable valuation inputs. For Level 3 securities that are investment grade, we estimate the fair value of these securities by obtaining non-binding broker quotes from a limited number of brokers. These brokers base their quotes on a combination of their knowledge of the current pricing environment and market conditions. We consider these inputs to be unobservable. For Level 3 investments that are below-investment-grade securities, we consider a variety of significant valuation inputs in the valuation process, including forward exchange rates, yen swap rates, dollar swap rates, interest rate volatilities, credit spread data on specific issuers, assumed default and default recovery rates, and certain probability assumptions. In obtaining these valuation inputs, we have determined that certain pricing assumptions and data used by our pricing sources are difficult to validate or corroborate by the market and/or appear to be internally developed rather than observed in or corroborated by the market. The use of these unobservable valuation inputs causes more subjectivity in the valuation process for these securities.

For the periods presented, we have not adjusted the quotes or prices we obtain from the pricing services and brokers we use.

The following tables present the pricing sources for the fair values of our fixed maturities, perpetual securities, and equity securities.



	September 30, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	17,920		$	545		$	0		$	18,465
Total government and agencies		17,920			545			0			18,465
Municipalities:
Third party pricing vendor		0			1,166			0			1,166
Total municipalities		0			1,166			0			1,166
Mortgage- and asset-backed securities:
Third party pricing vendor		0			371			0			371
Broker/other		0			0			220			220
Total mortgage- and asset-backed securities		0			371			220			591
Public utilities:
Third party pricing vendor		0			7,848			0			7,848
Total public utilities		0			7,848			0			7,848
Sovereign and supranational:
Third party pricing vendor		0			1,421			0			1,421
Total sovereign and supranational		0			1,421			0			1,421
Banks/financial institutions:
Third party pricing vendor		0			6,235			0			6,235
Broker/other		0			0			26			26
Total banks/financial institutions		0			6,235			26			6,261
Other corporate:
Third party pricing vendor		0			29,304			0			29,304
Broker/other		0			50			0			50
Total other corporate		0			29,354			0			29,354
Total fixed maturities		17,920			46,940			246			65,106
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			1,964			0			1,964
Total banks/financial institutions		0			1,964			0			1,964
Other corporate:
Third party pricing vendor		0			202			0			202
Total other corporate		0			202			0			202
Total perpetual securities		0			2,166			0			2,166
Equity securities:
Third party pricing vendor		122			6			0			128
Broker/other		0			0			3			3
Total equity securities		122			6			3			131
Total securities available for sale		$	18,042		$	49,112		$	249		$	67,403



	September 30, 2015
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	22,991		$	0		$	0		$	22,991
Total government and agencies		22,991			0			0			22,991
Municipalities:
Third party pricing vendor		0			409			0			409
Total municipalities		0			409			0			409
Mortgage- and asset-backed securities:
Third party pricing vendor		0			13			0			13
Broker/other		0			0			27			27
Total mortgage- and asset-backed securities		0			13			27			40
Public utilities:
Third party pricing vendor		0			3,128			0			3,128
Total public utilities		0			3,128			0			3,128
Sovereign and supranational:
Third party pricing vendor		0			2,686			0			2,686
Total sovereign and supranational		0			2,686			0			2,686
Banks/financial institutions:
Third party pricing vendor		0			4,544			0			4,544
Total banks/financial institutions		0			4,544			0			4,544
Other corporate:
Third party pricing vendor		0			3,123			0			3,123
Broker/other		0			27			0			27
Total other corporate		0			3,150			0			3,150
Total securities held to maturity		$	22,991		$	13,930		$	27		$	36,948



	December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities available for sale, carried at fair value:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	18,683		$	515		$	0		$	19,198
Total government and agencies		18,683			515			0			19,198
Municipalities:
Third party pricing vendor		0			1,257			0			1,257
Total municipalities		0			1,257			0			1,257
Mortgage- and asset-backed securities:
Third party pricing vendor		0			379			0			379
Broker/other		0			0			223			223
Total mortgage- and asset-backed securities		0			379			223			602
Public utilities:
Third party pricing vendor		0			7,897			0			7,897
Total public utilities		0			7,897			0			7,897
Sovereign and supranational:
Third party pricing vendor		0			1,416			0			1,416
Total sovereign and supranational		0			1,416			0			1,416
Banks/financial institutions:
Third party pricing vendor		0			6,514			0			6,514
Broker/other		0			58			26			84
Total banks/financial institutions		0			6,572			26			6,598
Other corporate:
Third party pricing vendor		0			28,605			0			28,605
Total other corporate		0			28,605			0			28,605
Total fixed maturities		18,683			46,641			249			65,573
Perpetual securities:
Banks/financial institutions:
Third party pricing vendor		0			2,289			0			2,289
Broker/other		0			0			149			149
Total banks/financial institutions		0			2,289			149			2,438
Other corporate:
Third party pricing vendor		0			231			0			231
Total other corporate		0			231			0			231
Total perpetual securities		0			2,520			149			2,669
Equity securities:
Third party pricing vendor		19			6			0			25
Broker/other		0			0			3			3
Total equity securities		19			6			3			28
Total securities available for sale		$	18,702		$	49,167		$	401		$	68,270



	December 31, 2014
(In millions)	Quoted Prices in Active Markets for Identical Assets (Level 1)			Significant Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)			Total Fair Value
Securities held to maturity, carried at amortized cost:
Fixed maturities:
Government and agencies:
Third party pricing vendor		$	23,218		$	0		$	0		$	23,218
Total government and agencies		23,218			0			0			23,218
Municipalities:
Third party pricing vendor		0			417			0			417
Total municipalities		0			417			0			417
Mortgage- and asset-backed securities:
Third party pricing vendor		0			15			0			15
Broker/other		0			0			31			31
Total mortgage- and asset-backed securities		0			15			31			46
Public utilities:
Third party pricing vendor		0			3,603			0			3,603
Total public utilities		0			3,603			0			3,603
Sovereign and supranational:
Third party pricing vendor		0			2,814			0			2,814
Total sovereign and supranational		0			2,814			0			2,814
Banks/financial institutions:
Third party pricing vendor		0			5,085			0			5,085
Total banks/financial institutions		0			5,085			0			5,085
Other corporate:
Third party pricing vendor		0			3,287			0			3,287
Broker/other		0			27			0			27
Total other corporate		0			3,314			0			3,314
Total securities held to maturity		$	23,218		$	15,248		$	31		$	38,497

The following is a discussion of the determination of fair value of our remaining financial instruments.

Derivatives

We use derivative instruments to manage the risk associated with certain assets. However, the derivative instrument may not be classified in the same fair value hierarchy level as the associated asset. Inputs used to value derivatives include, but are not limited to, interest rates, credit spreads, foreign currency forward and spot rates, and interest volatility.

The fair values of the foreign currency forwards, options, and interest rate swaptions associated with certain fixed-maturity securities; the foreign currency forwards and options used to hedge foreign exchange risk from our net investment in Aflac Japan and economically hedge certain portions of forecasted cash flows denominated in yen; and the foreign currency swaps associated with certain senior notes and our subordinated debentures are based on the amounts we would expect to receive or pay. The determination of the fair value of these derivatives is based on observable market inputs, therefore they are classified as Level 2.

For derivatives associated with VIEs where we are the primary beneficiary, we are not the direct counterparty to the swap contracts. As a result, the fair value measurements incorporate the credit risk of the collateral associated with the VIE. We receive valuations from a third party pricing vendor for these derivatives. Based on an analysis of these derivatives and a review of the methodology employed by the pricing vendor, we determined that due to the long duration of these swaps and the need to extrapolate from short-term observable data to derive and measure long-term inputs, certain inputs, assumptions and judgments are required to value future cash flows that cannot be corroborated by current inputs or current observable market data. As a result, the derivatives associated with our consolidated VIEs are classified as Level 3 of the fair value hierarchy.

Other policyholders' funds

The largest component of the other policyholders' funds liability is our annuity line of business in Aflac Japan. Our annuities have fixed benefits and premiums. For this product, we estimated the fair value to be equal to the cash surrender value. This is analogous to the value paid to policyholders on the valuation date if they were to surrender their policy. We periodically check the cash value against discounted cash flow projections for reasonableness. We consider our inputs for this valuation to be unobservable and have accordingly classified this valuation as Level 3.

Notes payable

The fair values of our publicly issued notes payable classified as Level 3 were obtained from a limited number of independent brokers. These brokers base their quotes on a combination of their knowledge of the current pricing environment and market conditions. We consider these inputs to be unobservable. The fair values of our yen-denominated loans approximate their carrying values.

Transfers between Hierarchy Levels and Level 3 Rollforward

There were no transfers between Level 1 and 2 for the three- and nine-month periods ended September 30, 2015 and 2014, respectively.

The following tables present the changes in fair value of our available-for-sale investments and derivatives classified as Level 3.



Three Months Ended September 30, 2015
	Fixed Maturities										Perpetual Securities		Equity Securities		Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities		Public Utilities		Sovereign and Supranational		Banks/ Financial Institutions		Other Corporate		Banks/ Financial Institutions				Interest Rate Swaps		Foreign Currency Swaps			Credit Default Swaps			Total
Balance, beginning of period	$	214	$	0	$	0	$	25	$	0	$	0	$	3	$	0	$	(223	)	$	1		$	20
Realized investment gains (losses) included in earnings	0		0		0		0		0		0		0		0		(13		)	(1		)	(14		)
Unrealized gains (losses) included in other comprehensive income (loss)	6		0		0		1		0		0		0		0		(1		)	0			6
Purchases, issuances, sales and settlements:
Purchases	0		0		0		0		0		0		0		0		0			0			0
Issuances	0		0		0		0		0		0		0		0		0			0			0
Sales	0		0		0		0		0		0		0		0		0			0			0
Settlements	0		0		0		0		0		0		0		0		0			0			0
Transfers into Level 3	0		0		0		0		0		0		0		0		0			0			0
Transfers out of Level 3	0		0		0		0		0		0		0		0		0			0			0
Balance, end of period	$	220	$	0	$	0	$	26	$	0	$	0	$	3	$	0	$	(237	)	$	0		$	12
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	(14	)	$	(1	)	$	(15	)

⁽¹⁾ Derivative assets and liabilities are presented net



Three Months Ended September 30, 2014
	Fixed Maturities											Perpetual Securities		Equity Securities		Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Sovereign and Supranational		Banks/ Financial Institutions		Other Corporate		Banks/ Financial Institutions				Interest Rate Swaps			Foreign Currency Swaps			Credit Default Swaps			Total
Balance, beginning of period	$	266		$	0	$	0	$	25	$	0	$	0	$	3	$	(1	)	$	11		$	0		$	304
Realized investment gains (losses) included in earnings	0			0		0		0		0		0		0		1			(93		)	(1		)	(93		)
Unrealized gains (losses) included in other comprehensive income (loss)	(18		)	0		0		0		0		0		0		0			(9		)	0			(27		)
Purchases, issuances, sales and settlements:
Purchases	0			0		0		0		0		0		0		0			0			0			0
Issuances	0			0		0		0		0		0		0		0			0			0			0
Sales	0			0		0		0		0		0		0		0			0			0			0
Settlements	(3		)	0		0		0		0		0		0		0			0			0			(3		)
Transfers into Level 3	0			0		0		0		0		0		0		0			0			0			0
Transfers out of Level 3	0			0		0		0		0		0		0		0			0			0			0
Balance, end of period	$	245		$	0	$	0	$	25	$	0	$	0	$	3	$	0		$	(91	)	$	(1	)	$	181
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses)	$	0		$	0	$	0	$	0	$	0	$	0	$	0	$	1		$	(93	)	$	(1	)	$	(93	)

⁽¹⁾ Derivative assets and liabilities are presented net



Nine Months Ended September 30, 2015
	Fixed Maturities											Perpetual Securities			Equity Securities		Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Sovereign and Supranational		Banks/ Financial Institutions		Other Corporate		Banks/ Financial Institutions					Interest Rate Swaps		Foreign Currency Swaps			Credit Default Swaps		Total
Balance, beginning of period	$	223		$	0	$	0	$	26	$	0	$	149		$	3	$	0	$	(212	)	$	0	$	189
Realized investment gains (losses) included in earnings	0			0		0		0		0		0			0		0		(38		)	0		(38		)
Unrealized gains (losses) included in other comprehensive income (loss)	(1		)	0		0		0		0		(2		)	0		0		(3		)	0		(6		)
Purchases, issuances, sales and settlements:
Purchases	0			0		0		0		0		0			0		0		0			0		0
Issuances	0			0		0		0		0		0			0		0		0			0		0
Sales	0			0		0		0		0		(147		)	0		0		0			0		(147		)
Settlements	(2		)	0		0		0		0		0			0		0		16			0		14
Transfers into Level 3	0			0		0		0		0		0			0		0		0			0		0
Transfers out of Level 3	0			0		0		0		0		0			0		0		0			0		0
Balance, end of period	$	220		$	0	$	0	$	26	$	0	$	0		$	3	$	0	$	(237	)	$	0	$	12
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses)	$	0		$	0	$	0	$	0	$	0	$	0		$	0	$	0	$	(39	)	$	0	$	(39	)

⁽¹⁾ Derivative assets and liabilities are presented net



Nine Months Ended September 30, 2014
	Fixed Maturities											Perpetual Securities			Equity Securities		Derivatives ⁽¹⁾
(In millions)	Mortgage- and Asset- Backed Securities			Public Utilities		Sovereign and Supranational		Banks/ Financial Institutions		Other Corporate		Banks/ Financial Institutions					Interest Rate Swaps			Foreign Currency Swaps			Credit Default Swaps			Total
Balance, beginning of period	$	369		$	0	$	0	$	23	$	0	$	52		$	3	$	1		$	(99	)	$	(3	)	$	346
Realized investment gains (losses) included in earnings	0			0		0		0		0		0			0		(1		)	(79		)	2			(78		)
Unrealized gains (losses) included in other comprehensive income (loss)	(115		)	0		0		2		0		8			0		0			(8		)	0			(113		)
Purchases, issuances, sales and settlements:
Purchases	0			0		0		0		0		0			0		0			0			0			0
Issuances	0			0		0		0		0		0			0		0			0			0			0
Sales	0			0		0		0		0		(60		)	0		0			0			0			(60		)
Settlements	(9		)	0		0		0		0		0			0		0			95			0			86
Transfers into Level 3	0			0		0		0		0		0			0		0			0			0			0
Transfers out of Level 3	0			0		0		0		0		0			0		0			0			0			0
Balance, end of period	$	245		$	0	$	0	$	25	$	0	$	0		$	3	$	0		$	(91	)	$	(1	)	$	181
Changes in unrealized gains (losses) relating to Level 3 assets and liabilities still held at the end of the period included in realized investment gains (losses)	$	0		$	0	$	0	$	0	$	0	$	0		$	0	$	(1	)	$	(79	)	$	2		$	(78	)

⁽¹⁾ Derivative assets and liabilities are presented net

Fair Value Sensitivity

Level 3 Significant Unobservable Input Sensitivity

The following tables summarize the significant unobservable inputs used in the valuation of our Level 3 available-for-sale investments and derivatives. Included in the tables are the inputs or range of possible inputs that have an effect on the overall valuation of the financial instruments.

September 30, 2015

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Assets:

Securities available for sale, carried at fair value:

Fixed maturities:

Mortgage- and asset-backed securities

220

Consensus pricing

Offered quotes

N/A

^(d)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(d)

Equity securities

Net asset value

Offered quotes

$1 - $680 ($7)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.00% - 2.52%

^(a)

Interest rates (JPY)

.51% - 1.36%

^(b)

CDS spreads

15 - 103 bps

Foreign exchange rates

20.16%

^(c)

102

Discounted cash flow

Interest rates (USD)

2.00% - 2.52%

^(a)

Interest rates (JPY)

.51% - 1.36%

^(b)

Foreign exchange rates

20.16%

^(c)

Total assets

355

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

(d) N/A represents securities where we receive unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs.

September 30, 2015

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

183

Discounted cash flow

Interest rates (USD)

2.00% - 2.52%

^(a)

Interest rates (JPY)

.51% - 1.36%

^(b)

CDS spreads

15 - 103 bps

Foreign exchange rates

20.16%

^(c)

142

Discounted cash flow

Interest rates (USD)

2.00% - 2.52%

^(a)

Interest rates (JPY)

.51% - 1.36%

^(b)

CDS spreads

67 - 251 bps

Discounted cash flow

Interest rates (USD)

2.00% - 2.52%

^(a)

Interest rates (JPY)

.51% - 1.36%

^(b)

Foreign exchange rates

20.16%

^(c)

Total liabilities

343

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

December 31, 2014

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Assets:

Securities available for sale, carried at fair value:

Fixed maturities:

Mortgage- and asset-backed securities

223

Consensus pricing

Offered quotes

N/A

^(d)

Banks/financial institutions

Consensus pricing

Offered quotes

N/A

^(d)

Perpetual securities:

Banks/financial institutions

149

Consensus pricing

Offered quotes

N/A

^(d)

Equity securities

Net asset value

Offered quotes

$1-$677 ($6)

Other assets:

Foreign currency swaps

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

CDS spreads

16 - 105 bps

Foreign exchange rates

20.50%

^(c)

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

Foreign exchange rates

20.50%

^(c)

Total assets

507

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

(d) N/A represents securities where we receive unadjusted broker quotes and for which there is no transparency into the providers' valuation techniques or unobservable inputs.

December 31, 2014

(In millions)

Fair Value

Valuation Technique(s)

Unobservable Input

Range
(Weighted Average)

Liabilities:

Foreign currency swaps

176

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

CDS spreads

16 - 105 bps

Foreign exchange rates

20.50%

^(c)

111

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

CDS spreads

13 - 145 bps

Discounted cash flow

Interest rates (USD)

2.28% - 2.70%

^(a)

Interest rates (JPY)

.53% - 1.34%

^(b)

Foreign exchange rates

20.50%

^(c)

Total liabilities

318

(a) Inputs derived from U.S. long-term rates to accommodate long maturity nature of our swaps

(b) Inputs derived from Japan long-term rates to accommodate long maturity nature of our swaps

The following is a discussion of the significant unobservable inputs or valuation techniques used in determining the fair value of securities and derivatives classified as Level 3.

Net Asset Value

We hold certain unlisted equity securities whose fair value is derived based on the financial statements published by the investee. These securities do not trade on an active market and the valuations derived are dependent on the availability of timely financial reporting of the investee. Net asset value is an unobservable input in the determination of fair value of equity securities.

Offered Quotes

In circumstances where our valuation model price is overridden because it implies a value that is not consistent with current market conditions, we will solicit bids from a limited number of brokers. We also receive unadjusted prices from brokers for our mortgage and asset-backed securities. These quotes are non-binding but are reflective of valuation best estimates at that particular point in time. Offered quotes are an unobservable input in the determination of fair value of mortgage- and asset-backed securities, certain banks/financial institutions, certain other corporate, and equity securities investments.

Interest Rates, CDS Spreads, Foreign Exchange Rates

The significant drivers of the valuation of the interest and foreign exchange swaps are interest rates, foreign exchange rates and CDS spreads. Our swaps have long maturities that increase the sensitivity of the swaps to interest rate fluctuations. Since most of our yen-denominated cross currency swaps are in a net liability position, an increase in interest rates will decrease the liabilities and increase the value of the swap.

Foreign exchange swaps also have a lump-sum final settlement of foreign exchange principal receivables at the termination of the swap. An increase in yen interest rates will decrease the value of the final settlement foreign exchange receivables and decrease the value of the swap, and an increase in USD interest rates will increase the swap value.

A similar sensitivity pattern is observed for the foreign exchange rates. When the spot U.S. dollar/Japanese yen (USD/JPY) foreign exchange rate decreases and the swap is receiving a final exchange payment in JPY, the swap value will increase due to the appreciation of the JPY. Most of our swaps are designed to receive payments in JPY at the termination and will thus be impacted by the USD/JPY foreign exchange rate in this way. In cases where there is no final foreign exchange receivable in JPY and we are paying JPY as interest payments and receiving USD, a decrease in the foreign exchange rate will lead to a decrease in the swap value.

The extinguisher feature in most of our swaps results in a cessation of cash flows and no further payments between the parties to the swap in the event of a default on the referenced or underlying collateral. To price this feature, we apply the survival probability of the referenced entity to the projected cash flows. The survival probability uses the CDS spreads and recovery rates to adjust the present value of the cash flows. For extinguisher swaps with positive values, an increase in CDS spreads decreases the likelihood of receiving the final exchange payments and reduces the value of the swap.

Due to the long duration of these swaps and the need to extrapolate from short-term observable data to derive and measure long-term inputs, certain inputs, assumptions and judgments are required to value future cash flows that cannot be corroborated by current inputs or current observable market data.

Interest rates, CDS spreads, and foreign exchange rates are unobservable inputs in the determination of fair value of foreign currency swaps.

Base Correlations, CDS Spreads, Recovery Rates

Our remaining CDO is a tranche on a basket of single-name credit default swaps. The risk in this synthetic CDO comes from the single-name CDS risk and the correlations between the single names. The valuation of synthetic CDOs is dependent on the calibration of market prices for interest rates, single name CDS default probabilities and base correlation using financial modeling tools. Since there is limited or no observable data available for this tranche, the base correlations must be obtained from commonly traded market tranches such as the CDX and iTraxx indices. From the historical prices of these indices, base correlations can be obtained to develop a pricing curve of CDOs with different seniorities. Since the reference entities of the market indices do not match those in the portfolio underlying the synthetic

CDO to be valued, several processing steps are taken to map the CDO in our portfolio to the indices. With the base correlation determined and the appropriate spreads selected, a valuation is calculated. An increase in the CDS spreads in the underlying portfolio leads to a decrease in the value due to higher probability of defaults and losses. The impact on the valuation due to base correlation depends on a number of factors, including the riskiness between market tranches and the modeled tranche based on our portfolio and the equivalence between detachment points in these tranches. Generally speaking, an increase in base correlation will decrease the value of the senior tranches while increasing the value of junior tranches. This may result in a positive or negative value change.

The CDO tranche in our portfolio is a senior mezzanine tranche and, due to the low level of credit support for this type of tranche, exhibits equity-like behavior. As a result, an increase in recovery rates tends to cause its value to decrease.

Base correlations, CDS spreads, and recovery rates are unobservable inputs in the determination of fair value of credit default swaps.

For additional information on our investments and financial instruments, see the accompanying Notes 1, 3 and 4 and Notes 1, 3 and 4 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.


6.	REINSURANCE

We enter into fixed quota-share coinsurance agreements with other companies in the normal course of business. For each of our reinsurance agreements, we determine whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Reinsurance premiums and benefits paid or provided are accounted for on bases consistent with those used in accounting for the original policies issued and the terms of the reinsurance contracts. Premiums and benefits are reported net of insurance ceded.

Effective March 31, 2015, we entered into a coinsurance transaction whereby we ceded 30.0% of the sickness hospital benefit of one of Aflac Japan’s closed in-force blocks of business. Effective April 1, 2015, we entered into a retrocession coinsurance transaction whereby we assumed 27.0% of the sickness hospital benefit of one of Aflac Japan’s closed in-force blocks of business through our subsidiary CAIC.

For our reinsurance transactions to date, we have recorded a deferred profit liability related to the reinsurance transactions. The remaining deferred profit liability of $776 million, as of September 30, 2015, included in future policy benefits in the consolidated balance sheet, is being amortized into income over the expected lives of the policies. We also have recorded a reinsurance recoverable for reinsurance transactions, which is included in other assets in the consolidated balance sheet and had a remaining balance of $803 million as of September 30, 2015.

The following table reconciles direct premium income and direct benefits and claims to net amounts after the effect of reinsurance.



	Three Months Ended September 30,								Nine Months Ended September 30,
(In millions)	2015				2014				2015				2014
Direct premium income		$	4,464			$	4,918			$	13,426			$	14,820
Ceded to other companies:
Ceded Aflac Japan closed blocks		(130		)		(70		)		(352		)		(215		)
Other		(10		)		(10		)		(28		)		(30		)
Assumed from other companies:
Retrocession activities		54				0				124				0
Other		2				3				6				8
Net premium income		$	4,380			$	4,841			$	13,176			$	14,583

Direct benefits and claims		$	3,000			$	3,425			$	9,037			$	10,075
Ceded benefits and change in reserves for future benefits:
Ceded Aflac Japan closed blocks		(119		)		(63		)		(320		)		(192		)
Other		8				(9		)		12				(22		)
Assumed from other companies:
Retrocession activities		50				0				116				0
Other		(12		)		2				(29		)		7
Benefits and claims, net		$	2,927			$	3,355			$	8,816			$	9,868

These reinsurance transactions are considered indemnity reinsurance that do not relieve us from our obligations to policyholders. In the event that the reinsurer is unable to meet their obligations, we remain liable for the reinsured claims.


7.	NOTES PAYABLE

A summary of notes payable follows:



(In millions)	September 30, 2015				December 31, 2014
3.45% senior notes paid August 2015		$	0			$	300
2.65% senior notes due February 2017		652		⁽¹⁾		653		⁽¹⁾
8.50% senior notes due May 2019		0		⁽²⁾		850
2.40% senior notes due March 2020		550				0
4.00% senior notes due February 2022		350		⁽³⁾		350		⁽³⁾
3.625% senior notes due June 2023		700				700
3.625% senior notes due November 2024		749		⁽³⁾		749		⁽³⁾
3.25% senior notes due March 2025		448		⁽³⁾		0
6.90% senior notes due December 2039		397		⁽³⁾		397		⁽³⁾
6.45% senior notes due August 2040		448		⁽³⁾		448		⁽³⁾
5.50% subordinated debentures due September 2052		500				500
Yen-denominated Uridashi notes:
2.26% notes due September 2016 (principal amount 8 billion yen)		67				66
Yen-denominated Samurai notes:
1.84% notes due July 2016 (principal amount 15.8 billion yen)		132				131
Yen-denominated loans:
3.60% loan paid July 2015 (principal amount 10 billion yen)		0				83
3.00% loan paid August 2015 (principal amount 5 billion yen)		0				41
Capitalized lease obligations payable through 2022		16				14
Total notes payable		$	5,009			$	5,282

⁽¹⁾Principal amount plus an issuance premium that is being amortized over the life of the notes

⁽²⁾Redeemed in April 2015

⁽³⁾Principal amount net of an issuance discount that is being amortized over the life of the notes

In March 2015, the Parent Company issued two series of senior notes totaling $1.0 billion through a U.S. public debt offering. The first series, which totaled $550 million, bears interest at a fixed rate of 2.40% per annum, payable semi-annually, and has a five-year maturity. The second series, which totaled $450 million, bears interest at a fixed rate of 3.25% per annum, payable semi-annually, and has a ten-year maturity. We have entered into cross-currency swaps that convert the dollar-denominated principal and interest on the senior notes into yen-denominated obligations which results in lower nominal net interest rates on the debt. By entering into these cross-currency swaps, we economically converted our $550 million liability into a 67.0 billion yen liability and reduced the interest rate on this debt from 2.40% in dollars to .24% in yen, and we economically converted our $450 million liability into a 55.0 billion yen liability and reduced the interest rate on this debt from 3.25% in dollars to .82% in yen. In April 2015, the Parent Company used the proceeds from the March 2015 issuance of its fixed-rate senior notes to redeem $850 million of our 8.50% fixed-rate senior notes due May 2019 and to pay a portion of the corresponding $230 million make-whole premium due to the investors of these notes.

reference to the London Interbank Offered Rate (LIBOR) for the interest period relevant to such borrowing adjusted for certain additional costs or (b) a base rate determined by reference to the highest of (1) the federal funds effective rate plus ½ of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate and (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin. The applicable margin ranges between .79% and 1.275% for eurocurrency rate borrowings and 0.0% and .275% for base rate borrowings, depending on the Parent Company’s debt ratings as of the date of determination. In addition, the Parent Company and Aflac are required to pay a facility fee on the commitments ranging between .085% and .225%, also based on the Parent Company’s debt ratings as of the date of determination. Borrowings under the amended and restated credit facility may be used for general corporate purposes, including a capital contingency plan for the operations of the Parent Company and Aflac. The amended and restated credit facility requires compliance with certain financial covenants on a quarterly basis and will expire on the earlier of (a) September 18, 2020, or (b) the date the commitments are terminated pursuant to an event of default, as such term is defined in the credit agreement. As of September 30, 2015, we did not have any borrowings outstanding under our 55.0 billion yen revolving credit agreement.

In February 2015, the Parent Company and Aflac jointly entered into an uncommitted bilateral line of credit with a third party that provides for borrowings in the amount of $50 million. Borrowings will bear interest at the rate quoted by the bank and agreed upon at the time of making such loan and will have a three-month maturity period. There are no related facility fees, upfront expenses or financial covenant requirements. Borrowings under this credit agreement may be used for general corporate purposes. As of September 30, 2015, we did not have any borrowings outstanding under our $50 million credit agreement.

The Parent Company and Aflac have an uncommitted bilateral line of credit that provides for borrowings in the amount of $100 million. Borrowings will bear interest at the rate quoted by the bank and agreed upon at the time of making such loan and will have a three-month maturity period. There are no related facility fees, upfront expense or financial covenant requirements. Borrowings under this credit agreement may be used for general corporate purposes. Borrowings under the financing agreement will mature no later than three months after the last drawdown date of October 15, 2015. As of September 30, 2015, we did not have any borrowings outstanding under our $100 million credit agreement.

We were in compliance with all of the covenants of our notes payable and lines of credit at September 30, 2015. No events of default or defaults occurred during the nine-month period ended September 30, 2015.

For additional information, see Notes 4 and 9 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.


8.	SHAREHOLDERS’ EQUITY

The following table is a reconciliation of the number of shares of the Company's common stock for the nine-month periods ended September 30.



(In thousands of shares)	2015		2014
Common stock - issued:
Balance, beginning of period	668,132		667,046
Exercise of stock options and issuance of restricted shares	1,377		921
Balance, end of period	669,509		667,967
Treasury stock:
Balance, beginning of period	225,687		207,633
Purchases of treasury stock:
Open market	17,421		11,070
Other	241		132
Dispositions of treasury stock:
Shares issued to AFL Stock Plan	(919	)	(930	)
Exercise of stock options	(375	)	(316	)
Other	(113	)	(121	)
Balance, end of period	241,942		217,468
Shares outstanding, end of period	427,567		450,499

Outstanding share-based awards are excluded from the calculation of weighted-average shares used in the computation of basic earnings per share (EPS). The following table presents the approximate number of share-based awards to purchase shares, on a weighted-average basis, that were considered to be anti-dilutive and were excluded from the calculation of diluted earnings per share for the following periods.



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2015		2014		2015		2014
Anti-dilutive share-based awards		2,126		1,486		1,798		903

Share Repurchase Program

During the first nine months of 2015, we repurchased 17.4 million shares of our common stock in the open market for $1.1 billion as part of our share repurchase program. During the first nine months of 2014, we repurchased 11.1 million shares of our common stock in the open market for $690 million as part of our share repurchase program. In August 2015, our board of directors authorized the purchase of an additional 40 million shares of our common stock. As of September 30, 2015, a remaining balance of 52.1 million shares of our common stock was available for purchase under share repurchase authorizations by our board of directors.

Reclassifications from Accumulated Other Comprehensive Income

The tables below are reconciliations of accumulated other comprehensive income by component for the following periods.

Changes in Accumulated Other Comprehensive Income



Three Months Ended September 30, 2015
(In millions)	Unrealized Foreign Currency Translation Gains (Losses)				Unrealized Gains (Losses) on Investment Securities				Unrealized Gains (Losses) on Derivatives				Pension Liability Adjustment				Total
Balance, beginning of period		$	(2,725	)		$	3,384			$	(27	)		$	(125	)		$	507
Other comprehensive income before reclassification		192				(260		)		(1		)		0				(69		)
Amounts reclassified from accumulated other comprehensive income		0				90				0				0				90
Net current-period other comprehensive income		192				(170		)		(1		)		0				21
Balance, end of period		$	(2,533	)		$	3,214			$	(28	)		$	(125	)		$	528

All amounts in the table above are net of tax.



Three Months Ended September 30, 2014
(In millions)	Unrealized Foreign Currency Translation Gains (Losses)				Unrealized Gains (Losses) on Investment Securities				Unrealized Gains (Losses) on Derivatives				Pension Liability Adjustment				Total
Balance, beginning of period		$	(1,216	)		$	2,915			$	(11	)		$	(82	)		$	1,606
Other comprehensive income before reclassification		(589		)		505				(6		)		1				(89		)
Amounts reclassified from accumulated other comprehensive income		0				(18		)		0				1				(17		)
Net current-period other comprehensive income		(589		)		487				(6		)		2				(106		)
Balance, end of period		$	(1,805	)		$	3,402			$	(17	)		$	(80	)		$	1,500

All amounts in the table above are net of tax.



Nine Months Ended September 30, 2015
(In millions)	Unrealized Foreign Currency Translation Gains (Losses)				Unrealized Gains (Losses) on Investment Securities				Unrealized Gains (Losses) on Derivatives				Pension Liability Adjustment				Total
Balance, beginning of period		$	(2,541	)		$	4,672			$	(26	)		$	(126	)		$	1,979
Other comprehensive income before reclassification		8				(1,471		)		(2		)		0				(1,465		)
Amounts reclassified from accumulated other comprehensive income		0				13				0				1				14
Net current-period other comprehensive income		8				(1,458		)		(2		)		1				(1,451		)
Balance, end of period		$	(2,533	)		$	3,214			$	(28	)		$	(125	)		$	528

All amounts in the table above are net of tax.



Nine Months Ended September 30, 2014
(In millions)	Unrealized Foreign Currency Translation Gains (Losses)				Unrealized Gains (Losses) on Investment Securities				Unrealized Gains (Losses) on Derivatives				Pension Liability Adjustment				Total
Balance, beginning of period		$	(1,505	)		$	1,035			$	(12	)		$	(81	)		$	(563	)
Other comprehensive income before reclassification		(300		)		2,379				(5		)		2				2,076
Amounts reclassified from accumulated other comprehensive income		0				(12		)		0				(1		)		(13		)
Net current-period other comprehensive income		(300		)		2,367				(5		)		1				2,063
Balance, end of period		$	(1,805	)		$	3,402			$	(17	)		$	(80	)		$	1,500

All amounts in the table above are net of tax.

The tables below summarize the amounts reclassified from each component of accumulated other comprehensive income based on source for the following periods.

Reclassifications Out of Accumulated Other Comprehensive Income



(In millions)	Three Months Ended September 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line Item in the Statements of Earnings
Unrealized gains (losses) on available-for-sale securities		$	(1	)	Sales and redemptions
		(137		)	Other-than-temporary impairment losses realized
		(138		)	Total before tax
		48			Tax (expense) or benefit⁽¹⁾
		$	(90	)	Net of tax
Amortization of defined benefit pension items:
Actuarial gains (losses)		$	(4	)	Acquisition and operating expenses⁽²⁾
Prior service (cost) credit		4			Acquisition and operating expenses⁽²⁾
		0			Tax (expense) or benefit⁽¹⁾
		$	0		Net of tax
Total reclassifications for the period		$	(90	)	Net of tax

⁽¹⁾Based on 35% tax rate

⁽²⁾These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 10 for additional details).



(In millions)	Three Months Ended September 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line Item in the Statements of Earnings
Unrealized gains (losses) on available-for-sale securities		$	27		Sales and redemptions
		0			Other-than-temporary impairment losses realized
		27			Total before tax
		(9		)	Tax (expense) or benefit⁽¹⁾
		$	18		Net of tax
Amortization of defined benefit pension items:
Actuarial gains (losses)		$	(5	)	Acquisition and operating expenses⁽²⁾
Prior service (cost) credit		4			Acquisition and operating expenses⁽²⁾
		0			Tax (expense) or benefit⁽¹⁾
		$	(1	)	Net of tax
Total reclassifications for the period		$	17		Net of tax

⁽¹⁾Based on 35% tax rate

⁽²⁾These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 10 for additional details).



(In millions)	Nine Months Ended September 30, 2015
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line Item in the Statements of Earnings
Unrealized gains (losses) on available-for-sale securities		$	123		Sales and redemptions
		(143		)	Other-than-temporary impairment losses realized
		(20		)	Total before tax
		7			Tax (expense) or benefit⁽¹⁾
		$	(13	)	Net of tax
Amortization of defined benefit pension items:
Actuarial gains (losses)		$	(13	)	Acquisition and operating expenses⁽²⁾
Prior service (cost) credit		12			Acquisition and operating expenses⁽²⁾
		0			Tax (expense) or benefit⁽¹⁾
		$	(1	)	Net of tax
Total reclassifications for the period		$	(14	)	Net of tax

⁽¹⁾Based on 35% tax rate

⁽²⁾These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 10 for additional details).



(In millions)	Nine Months Ended September 30, 2014
Details about Accumulated Other Comprehensive Income Components	Amount Reclassified from Accumulated Other Comprehensive Income				Affected Line Item in the Statements of Earnings
Unrealized gains (losses) on available-for-sale securities		$	21		Sales and redemptions
		(3		)	Other-than-temporary impairment losses realized
		18			Total before tax
		(6		)	Tax (expense) or benefit⁽¹⁾
		$	12		Net of tax
Amortization of defined benefit pension items:
Actuarial gains (losses)		$	(11	)	Acquisition and operating expenses⁽²⁾
Prior service (cost) credit		13			Acquisition and operating expenses⁽²⁾
		(1		)	Tax (expense) or benefit⁽¹⁾
		$	1		Net of tax
Total reclassifications for the period		$	13		Net of tax

⁽¹⁾Based on 35% tax rate

⁽²⁾These accumulated other comprehensive income components are included in the computation of net periodic pension cost (see Note 10 for additional details).

9. SHARE-BASED COMPENSATION

As of September 30, 2015, the Company had outstanding share-based awards under two long-term incentive compensation plans.

The first plan, which expired in February 2007, is a stock option plan which allowed grants for incentive stock options (ISOs) to employees and non-qualifying stock options (NQSOs) to employees and non-employee directors. The options have a term of 10 years. The exercise price of options granted under this plan is equal to the fair market value of a share of the Company's common stock at the date of grant. Options granted before the plan's expiration date remain outstanding in accordance with their terms.

The second long-term incentive compensation plan allows awards to Company employees for ISOs, NQSOs, restricted stock, restricted stock units, and stock appreciation rights. Non-employee directors are eligible for grants of NQSOs, restricted stock, and stock appreciation rights. The ISOs and NQSOs have a term of 10 years, and the share-based awards generally vest based upon time-based conditions or time- and performance-based conditions. Time-based vesting generally occurs after three years. Performance-based vesting conditions generally include the attainment of goals related to Company financial performance. As of September 30, 2015, approximately 10.0 million shares were available for future grants under this plan, and the only performance-based awards issued and outstanding were restricted stock awards.

Share-based awards granted to U.S.-based grantees are settled with authorized but unissued Company stock, while those issued to Japan-based grantees are settled with treasury shares.

The following table provides information on stock options outstanding and exercisable at September 30, 2015.



	Stock Option Shares (in thousands)		Weighted-Average Remaining Term (in years)		Aggregate Intrinsic Value (in millions)			Weighted-Average Exercise Price Per Share
Outstanding		8,303		4.6		$	71		$	50.82
Exercisable		6,374		3.5		67			48.35

We received cash from the exercise of stock options in the amount of $53 million during the first nine months of 2015, compared with $30 million in the first nine months of 2014. The tax benefit realized as a result of stock option exercises

and restricted stock releases was $24 million in the first nine months of 2015, compared with $14 million in the first nine months of 2014.

As of September 30, 2015, total compensation cost not yet recognized in our financial statements related to restricted stock awards was $50 million, of which $20 million (831 thousand shares) was related to restricted stock awards with a performance-based vesting condition. We expect to recognize these amounts over a weighted-average period of approximately 1.3 years. There are no other contractual terms covering restricted stock awards once vested.

For additional information on our long-term share-based compensation plans and the types of share-based awards, see Note 12 of the Notes to the Consolidated Financial Statements included in our annual report to shareholders for the year ended December 31, 2014.


10.	BENEFIT PLANS

We have funded defined benefit plans in Japan and the United States, which cover substantially all of our full-time employees. Additionally, we maintain non-qualified, unfunded supplemental retirement plans that provide defined pension benefits in excess of limits imposed by federal tax law for certain Japanese, U.S. and former employees. Effective October 1, 2013, the U.S. tax-qualified defined benefit plan was frozen to new employees hired on or after October 1, 2013 and to employees rehired on or after October 1, 2013. U.S. employees who are not participants in the defined benefit plan receive a nonelective 401(k) employer contribution. Additionally, effective January 1, 2015, the U.S. non-qualified supplemental retirement plan was frozen to new participants.

We provide certain health care benefits for eligible U.S. retired employees, their beneficiaries and covered dependents ("other postretirement benefits"). The health care plan is contributory and unfunded. On October 1, 2013, a change was made to postretirement medical benefits to limit the eligibility for the benefits beginning January 1, 2014 to include the following: (1) active employees whose age plus service, in years, equals or exceeds 80 (rule of 80); (2) active employees who are age 55 or older and have met the 15 years of service requirement; (3) active employees who will meet the rule of 80 in the next five years; (4) active employees who are age 55 or older and who will meet the 15 years of service requirement within the next five years; and (5) current retirees. Effective October 1, 2013, this change was accounted for as a negative plan amendment and resulted in a reduction to the postretirement benefit obligation of approximately $51 million, with an offset to accumulated other comprehensive income (AOCI). Starting in the fourth quarter of 2013, this reduction is being amortized as a reduction to net periodic benefit cost over three years. The postretirement plan obligation was remeasured using a discount rate of 4.75% as of October 1, 2013. For certain employees and former employees, additional coverage is provided for all medical expenses for life.

Pension and other postretirement benefit expenses, included in acquisition and operating expenses in the consolidated statement of earnings, included the following components:



	Three Months Ended September 30,
	Pension Benefits																Other
	Japan								U.S.								Postretirement Benefits
(In millions)	2015				2014				2015				2014				2015				2014
Components of net periodic benefit cost:
Service cost		$	4			$	3			$	5			$	5			$	1			$	0
Interest cost		1				1				7				(4		)		0				0
Expected return on plan assets		(1		)		(1		)		(5		)		(5		)		0				0
Amortization of net actuarial loss		0				1				4				3				0				1
Amortization of prior service cost (credit)		0				0				0				0				(4		)		(4		)
Net periodic (benefit) cost		$	4			$	4			$	11			$	(1	)		$	(3	)		$	(3	)



	Nine Months Ended September 30,
	Pension Benefits																Other
	Japan								U.S.								Postretirement Benefits
(In millions)	2015				2014				2015				2014				2015				2014
Components of net periodic benefit cost:
Service cost		$	11			$	11			$	17			$	15			$	1			$	1
Interest cost		4				5				23				11				1				1
Expected return on plan assets		(3		)		(3		)		(16		)		(15		)		0				0
Amortization of net actuarial loss		1				1				11				8				1				2
Amortization of prior service cost (credit)		0				0				0				0				(12		)		(13		)
Net periodic (benefit) cost		$	13			$	14			$	35			$	19			$	(9	)		$	(9	)

During the nine months ended September 30, 2015, Aflac Japan contributed approximately $15 million (using the weighted-average yen/dollar exchange rate for the nine-month period ending September 30, 2015) to the Japanese funded defined benefit plan, and Aflac U.S. contributed $10 million to the U.S. funded defined benefit plan.

For additional information regarding our Japanese and U.S. benefit plans, see Note 14 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.


11.	COMMITMENTS AND CONTINGENT LIABILITIES

Effective for 2015, we entered into an outsourcing agreement with a technology and consulting corporation to provide mainframe computer operations, distributed mid-range server computer operations, and related support for Aflac Japan. As of September 30, 2015, the agreement has a remaining term of 5.3 years and an aggregate remaining cost of 37.9 billion yen ($316 million using the September 30, 2015, exchange rate).

We are a defendant in various lawsuits considered to be in the normal course of business. Members of our senior legal and financial management teams review litigation on a quarterly and annual basis. The final results of any litigation cannot be predicted with certainty. Although some of this litigation is pending in states where large punitive damages, bearing little relation to the actual damages sustained by plaintiffs, have been awarded in recent years, we believe the outcome of pending litigation will not have a material adverse effect on our financial position, results of operations, or cash flows.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

FORWARD-LOOKING INFORMATION

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” to encourage companies to provide prospective information, so long as those informational statements are identified as forward-looking and are accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those included in the forward-looking statements. We desire to take advantage of these provisions. This report contains cautionary statements identifying important factors that could cause actual results to differ materially from those projected herein, and in any other statements made by Company officials in communications with the financial community and contained in documents filed with the Securities and Exchange Commission (SEC). Forward-looking statements are not based on historical information and relate to future operations, strategies, financial results or other developments. Furthermore, forward-looking information is subject to numerous assumptions, risks and uncertainties. In particular, statements containing words such as “expect,” “anticipate,” “believe,” “goal,” “objective,” “may,” “should,” “estimate,” “intends,” “projects,” “will,” “assumes,” “potential,” “target” or similar words as well as specific projections of future results, generally qualify as forward-looking. Aflac undertakes no obligation to update such forward-looking statements.

We caution readers that the following factors, in addition to other factors mentioned from time to time, could cause actual results to differ materially from those contemplated by the forward-looking statements:


•	difficult conditions in global capital markets and the economy


•	governmental actions for the purpose of stabilizing the financial markets


•	defaults and credit downgrades of securities in our investment portfolio


•	exposure to significant financial and capital markets risk


•	fluctuations in foreign currency exchange rates


•	significant changes in investment yield rates


•	credit and other risks associated with Aflac's investment in perpetual securities


•	differing judgments applied to investment valuations


•	significant valuation judgments in determination of amount of impairments taken on our investments


•	limited availability of acceptable yen-denominated investments


•	concentration of our investments in any particular single-issuer or sector


•	concentration of business in Japan


•	decline in creditworthiness of other financial institutions


•	deviations in actual experience from pricing and reserving assumptions


•	subsidiaries' ability to pay dividends to Aflac Incorporated


•	ineffective risk management policies and procedures


•	changes in law or regulation by governmental authorities


•	ability to attract and retain qualified sales associates and employees


•	decreases in our financial strength or debt ratings


•	ability to continue to develop and implement improvements in information technology systems


•	interruption in telecommunication, information technology and other operational systems, or a failure to maintain the security, confidentiality or privacy of sensitive data residing on such systems


•	changes in U.S. and/or Japanese accounting standards


•	failure to comply with restrictions on patient privacy and information security


•	level and outcome of litigation


•	ability to effectively manage key executive succession


•	catastrophic events including, but not necessarily limited to, epidemics, pandemics, tornadoes, hurricanes, earthquakes, tsunamis, acts of terrorism and damage incidental to such events


•	ongoing changes in our industry


•	events that damage our reputation


•	increased expenses for pension and other postretirement plans


•	failure of internal controls or corporate governance policies and procedures

MD&A OVERVIEW

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to inform the reader about matters affecting the financial condition and results of operations of Aflac Incorporated and its subsidiaries for the three- and nine-month periods ended September 30, 2015 and 2014, respectively. Results of operations for interim periods are not necessarily indicative of results for the entire year. As a result, the following discussion should be read in conjunction with the consolidated financial statements and notes that are included in our annual report to shareholders for the year ended December 31, 2014. This MD&A is divided into the following sections:


•	Our Business


•	Performance Highlights


•	Critical Accounting Estimates


•	Results of Operations, consolidated and by segment


•	Analysis of Financial Condition, including discussion of market risks of financial instruments


•	Capital Resources and Liquidity, including discussion of availability of capital and the sources and uses of cash

OUR BUSINESS

PERFORMANCE HIGHLIGHTS

Yen-denominated income statement accounts are translated to U.S. dollars using a weighted-average Japanese yen/U.S. dollar foreign exchange rate, while yen-denominated balance sheet accounts are translated to U.S. dollars using a spot Japanese yen/U.S. dollar foreign exchange rate. The spot yen/dollar exchange rate at September 30, 2015 was 119.96, or .5% stronger than the December 31, 2014 spot yen/dollar exchange rate of 120.55. The weighted-average yen/dollar exchange rate for the three-month period ended September 30, 2015 was 122.15, or 14.9% weaker than the weighted-average yen/dollar exchange rate of 103.92 for the same period in 2014. The weighted-average yen/dollar exchange rate for the nine-month period ended September 30, 2015 was 120.81, or 14.8% weaker than the weighted-average yen/dollar exchange rate of 102.89 for the same period in 2014.

Reflecting the weaker yen/dollar exchange rate, revenues were $5.0 billion in the third quarter of 2015, compared with $5.7 billion in the third quarter of 2014. Net earnings were $567 million, or $1.32 per diluted share, compared with $706 million, or $1.56 per diluted share, in the third quarter of 2014.

Also reflecting the weaker yen/dollar exchange rate, revenues were $15.6 billion in the first nine months of 2015, compared with $17.2 billion in the first nine months of 2014. Net earnings were $1.8 billion, or $4.14 per diluted share, compared with $2.2 billion, or $4.93 per diluted share, for the first nine months of 2014.

Results in the third quarter of 2015 included pretax net realized investment losses of $114 million ($74 million after-tax), compared with net realized investment gains of $16 million ($10 million after-tax) in the third quarter of 2014. Net investment losses in the third quarter of 2015 included $137 million ($89 million after-tax) of other-than-temporary impairment losses; $26 million of net gains ($17 million after-tax) from the sale or redemption of securities and $3 million of net losses ($2 million after-tax) from valuing derivatives.

Results in the first nine months of 2015 included pretax net realized investment gains of $26 million ($17 million after-tax), compared with net realized investment gains of $72 million ($47 million after-tax) in the first nine months of 2014. Net investment gains in the first nine months of 2015 included $143 million ($93 million after-tax) of other-than-temporary impairment losses; $186 million of net gains ($121 million after-tax) from the sale or redemption of securities; and $17 million of net losses ($11 million after-tax) from valuing derivatives.

Shareholders’ equity included a net unrealized gain on investment securities and derivatives of $3.2 billion at September 30, 2015, compared with a net unrealized gain of $4.7 billion at December 31, 2014.

In August 2015, we paid off $300 million of 3.45% fixed-rate senior notes upon their maturity. In August 2015, we paid off a 5.0 billion yen loan at its maturity date (a total of approximately $41 million using the exchange rate at the maturity date). In July 2015, we paid off a 10.0 billion yen loan at its maturity date (a total of approximately $81 million using the exchange rate at the maturity date). In March 2015, the Parent Company issued $1.0 billion of senior notes through a U.S. public debt offering. We entered into cross-currency interest rate swaps to economically convert the dollar-denominated principal and interest on the senior notes we issued into yen-denominated obligations. In April 2015, the Parent Company used the proceeds from the March 2015 issuance of its fixed-rate senior notes to redeem all of our $850 million 8.50% fixed-rate senior notes due May 2019 and to pay a portion of the corresponding $230 million make-whole premium due to the investors of these notes.

In September 2015, the Parent Company and Aflac amended a 50 billion yen revolving credit facility, resulting in jointly entering into an unsecured revolving credit facility agreement with a syndicate of financial institutions that provides for borrowings in the amount of 55 billion yen. In February 2015, the Parent Company and Aflac jointly entered into an uncommitted bilateral line of credit with a third party that provides for borrowings in the amount of $50 million. For further information regarding these transactions, see Note 7 of the Notes to the Consolidated Financial Statements and the Capital Resources and Liquidity section of this MD&A.

In the first nine months of 2015, we repurchased 17.4 million shares of our common stock in the open market for $1.1 billion under our share repurchase program.

CRITICAL ACCOUNTING ESTIMATES

We prepare our financial statements in accordance with U.S. generally accepted accounting principles (GAAP). These principles are established primarily by the Financial Accounting Standards Board (FASB). In this MD&A, references to U.S. GAAP issued by the FASB are derived from the FASB Accounting Standards Codification^™ (ASC). The preparation of financial statements in conformity with U.S. GAAP requires us to make estimates based on currently available information when recording transactions resulting from business operations. The estimates that we deem to be most critical to an understanding of Aflac’s results of operations and financial condition are those related to the valuation of investments and derivatives, deferred policy acquisition costs (DAC), liabilities for future policy benefits and unpaid policy claims, and income taxes. The preparation and evaluation of these critical accounting estimates involve the use of various assumptions developed from management’s analyses and judgments. The application of these critical accounting estimates determines the values for which 94% of our assets and 77% of our liabilities are reported as of September 30, 2015, and thus has a direct effect on net earnings and shareholders’ equity. Subsequent experience or use of other assumptions could produce significantly different results.

There have been no changes in the items that we have identified as critical accounting estimates during the nine months ended September 30, 2015. For additional information, see the Critical Accounting Estimates section of MD&A included in our annual report to shareholders for the year ended December 31, 2014.

New Accounting Pronouncements

For information on new accounting pronouncements and the impact, if any, on our financial position or results of operations, see Note 1 of the Notes to the Consolidated Financial Statements.

RESULTS OF OPERATIONS

The following discussion includes references to our performance measures, operating earnings and operating earnings per diluted share, that are not based on U.S. GAAP. Operating earnings is the measure of segment profit or loss we use to evaluate segment performance and allocate resources. Consistent with U.S. GAAP accounting guidance for segment reporting, operating earnings is our measure of segment performance. Aflac believes that an analysis of operating earnings is vitally important to an understanding of our underlying profitability drivers and trends of our insurance business. Furthermore, because a significant portion of our business is conducted in Japan, we believe it is equally important to understand the impact of translating Japanese yen into U.S. dollars.

Aflac defines operating earnings (a non-GAAP financial measure) as the profits derived from operations. Operating earnings includes interest cash flows associated with notes payable but excludes items that cannot be predicted or that are outside of management's control, such as realized investment gains and losses from securities transactions, impairments, and derivative and hedging activities; nonrecurring items; and other non-operating income (loss) from net earnings. Aflac's derivative activities are primarily used to hedge foreign exchange and interest rate risk in our investment portfolio as well as manage foreign exchange risk for certain notes payable and forecasted cash flows

denominated in yen. Our management uses operating earnings to evaluate the financial performance of Aflac’s insurance operations because realized gains and losses from securities transactions, impairments, and derivative and hedging activities, as well as other and nonrecurring items, tend to be driven by general economic conditions and events or related to infrequent activities not directly associated with the Company’s insurance operations, and therefore may obscure the underlying fundamentals and trends in Aflac’s insurance operations.

The following table is a reconciliation of items impacting operating and net earnings and operating and net earnings per diluted share.

Reconciliation of Operating Earnings to Net Earnings



	In Millions								Per Diluted Share						In Millions								Per Diluted Share
	Three Months Ended September 30,														Nine Months Ended September 30,
	2015				2014				2015			2014			2015				2014				2015			2014
Operating earnings	$	672			$	685			$	1.56		$	1.51		$	2,001			$	2,216			$	4.60		$	4.86
Items impacting net earnings, net of tax:
Realized investment gains (losses):
Securities transactions and impairments	(72		)		21				(.16		)	.05			28				91				.06			.20
Impact of derivative and hedging activities:
Hedge costs related to foreign currency investments	(18		)		(1		)		(.04		)	.00			(39		)		(23		)		(.09		)	(.05		)
Other derivative and hedging activities	2			⁽¹⁾	(16		)	⁽¹⁾	.00			(.04		)	(12		)	⁽¹⁾	(40		)	⁽¹⁾	(.03		)	(.09		)
Other and non-recurring income (loss)	(17		)	⁽²⁾	17				(.04		)	.04			(175		)	⁽²⁾	4				(.40		)	.01
Net earnings	$	567			$	706			$	1.32		$	1.56		$	1,803			$	2,248			$	4.14		$	4.93

⁽¹⁾ Excludes a gain of $14 and $6, after tax, for the three-month periods and $40 and $19, after tax, for the nine-month periods ended September 30, 2015 and 2014, respectively, related to the interest rate component of the change in fair value of foreign currency swaps on notes payable which is classified as an operating gain when analyzing segment operations

⁽²⁾Includes a loss of $9, after tax, for the three- and nine-month periods ended September 30, 2015, related to the change in value of yen repatriation received in advance of settlement of certain foreign currency derivatives. This loss was offset by derivative gains included in other derivative and hedging activities.

Realized Investment Gains and Losses

Our investment strategy is to invest in fixed-maturity securities to provide a reliable stream of investment income, which is one of the drivers of the Company’s growth and profitability. This investment strategy incorporates asset-liability matching (ALM) to align the expected cash flows of the portfolio to the needs of the Company's liability structure. We do not purchase securities with the intent of generating capital gains or losses. However, investment gains and losses may be realized as a result of changes in the financial markets and the creditworthiness of specific issuers, tax planning strategies, and/or general portfolio management and rebalancing. The realization of investment gains and losses is independent of the underwriting and administration of our insurance products, which are the principal drivers of our profitability.

Securities Transactions and Impairments

During the three-month period ended September 30, 2015, we realized pretax investment gains, net of losses, of $26 million ($17 million after-tax) from sales and redemptions of securities. We realized pretax investment losses of $137 million ($89 million after-tax) as a result of the recognition of other-than-temporary impairment losses on certain securities. Investment losses for the quarter were primarily related to the impairment of a single holding.

During the nine-month period ended September 30, 2015, we realized pretax investment gains, net of losses, of $186 million ($121 million after-tax) from sales and redemptions of securities. We realized pretax investment losses of $143 million ($93 million after-tax) as a result of the recognition of other-than-temporary impairment losses on certain securities. Investment losses were primarily related to the impairment of a single holding.

During the three-month period ended September 30, 2014, we realized pretax investment gains, net of losses, of $33 million ($21 million after-tax) from sales and redemptions of securities.

During the nine-month period ended September 30, 2014, we realized pretax investment gains, net of losses, of $171 million ($111 million after-tax) from sales and redemptions of securities. We realized pretax investment losses of $31 million ($20 million after-tax) as a result of the recognition of other-than-temporary impairment losses on certain securities.

See Note 3 of the Notes to Consolidated Financial Statements for a more detailed discussion of these investment activities.

The following table details our pretax impairment losses by investment category.



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2015		2014		2015		2014
Corporate bonds	$	5	$	0	$	7	$	31
Bank/financial institution bonds	131		0		135		0
Equity securities	1		0		1		0
Total other-than-temporary impairment losses realized ⁽¹⁾	$	137	$	0	$	143	$	31

Impact of Derivative and Hedging Activities

Our derivative activities include foreign currency swaps and credit default swaps held in consolidated variable interest entities (VIEs); foreign currency forwards and options, interest rate swaptions and futures on certain fixed-maturity securities; foreign currency forwards and options that hedge certain portions of forecasted cash flows denominated in yen; and foreign currency swaps associated with certain senior notes and our subordinated debentures. During the three-month period ended September 30, 2015, we realized pretax investment losses, net of gains, of $3 million ($2 million after-tax), compared with pretax investment losses, net of gains, of $17 million ($11 million after-tax) for the same period in 2014, as a result of valuing these derivatives, net of the effects of hedge accounting. During the nine-month period ended September 30, 2015, we realized pretax investment losses, net of gains, of $17 million ($11 million after-tax), compared with pretax investment losses, net of gains, of $68 million ($44 million after-tax) for the same period in 2014, as a result of valuing these derivatives, net of the effects of hedge accounting. For a description of other items that could be included in the Impact of Derivative and Hedging Activities, see the Hedging Activities subsection of MD&A and Note 4 of the accompanying Notes to the Consolidated Financial Statements.

For additional information regarding realized investment gains and losses, see Notes 3 and 4 of the Notes to the Consolidated Financial Statements.

Non-recurring Items

During the second quarter of 2015, the make-whole premium paid to the investors of our 8.50% fixed-rate senior notes for the early redemption of those notes was recorded as a $230 million pretax non-operating loss ($150 million after-tax, or $.35 per diluted share) and is reflected in our financials in the nine-month period ended September 30, 2015.

Foreign Currency Translation

Aflac Japan’s premiums and most of its investment income are received in yen. Claims and expenses are paid in yen, and we have yen-denominated assets that support yen-denominated policy liabilities. These and other yen-denominated financial statement items are translated into dollars for financial reporting purposes. We translate Aflac Japan’s yen-denominated income statement into dollars using an average exchange rate for the reporting period, and we translate its yen-denominated balance sheet using the exchange rate at the end of the period.

Due to the size of Aflac Japan, where our functional currency is the Japanese yen, fluctuations in the yen/dollar exchange rate can have a significant effect on our reported results. In periods when the yen weakens, translating yen into dollars results in fewer dollars being reported. When the yen strengthens, translating yen into dollars results in more dollars being reported. Consequently, yen weakening has the effect of suppressing current period results in relation to the comparable prior period, while yen strengthening has the effect of magnifying current period results in relation to the comparable prior period. As a result, we view foreign currency translation as a financial reporting issue for Aflac rather than an economic event to our Company or shareholders. Because changes in exchange rates distort the growth rates of our operations, management evaluates Aflac’s financial performance excluding the impact of foreign currency translation.

Income Taxes

Our combined U.S. and Japanese effective income tax rate on pretax earnings was 34.5% for the three-month period ended September 30, 2015, compared with 34.3% for the same period in 2014. Our combined U.S. and Japanese effective income tax rate on pretax earnings was 34.5% for the nine-month period ended September 30, 2015, compared with 34.2% for the same period in 2014.

Earnings Guidance

Our revised objective for 2015, as previously disclosed, is to increase operating earnings per diluted share by 4% to 7% compared with 2014, excluding the effect of foreign currency translation. In April 2015, we executed a make-whole transaction to enhance our consolidated capital position (see the Capital Resources and Liquidity section of this MD&A for further discussion). As a result of this transaction, we incurred a non-operating charge of $.35 to operating earnings per diluted share in the second quarter of 2015. However, operating earnings per diluted share will benefit by approximately $.07 for the full year 2015 due to a net reduction in interest expense. If we achieve our objective for 2015, the following table shows the likely results for operating earnings per diluted share, including the impact of foreign currency translation using various yen/dollar exchange rate scenarios.

2015 Operating Earnings Per Diluted Share Scenarios⁽¹⁾



Weighted-Average Yen/Dollar Exchange Rate		Operating Earnings Per Diluted Share		% Growth Over 2014					Yen Impact
	100	$	6.47 - 6.77	5.0	-	9.9		%		$	.18
	105.46⁽²⁾		6.29 - 6.59	2.1	-	7.0					.00
	115		6.01 - 6.31	(2.4)	-	2.4					(.28	)
	125		5.77 - 6.07	(6.3)	-	(1.5	)				(.52	)
	135		5.56 - 5.86	(9.7)	-	(4.9	)				(.73	)

⁽¹⁾Excludes realized investment gains/losses (securities transactions, impairments, and the impact of derivative and hedging activities), nonrecurring items, and other non-operating income (loss) in 2015 and 2014

⁽²⁾Actual 2014 weighted-average exchange rate

Assuming we achieve our revised earnings objective and the yen/dollar exchange rate averages 120 to 125 for the fourth quarter of the year, we would expect to report operating earnings for the fourth quarter of 2015 to be in the range of $1.36 to $1.56 per diluted share. Under the same scenario, we would expect full year of 2015 operating earnings of $5.96 to $6.16 per diluted share.

INSURANCE OPERATIONS

Aflac's insurance business consists of two segments: Aflac Japan and Aflac U.S. Aflac Japan, which operates as a branch of Aflac, is the principal contributor to consolidated earnings. U.S. GAAP financial reporting requires that a company report financial and descriptive information about operating segments in its annual and interim period financial statements. Furthermore, we are required to report a measure of segment profit or loss, certain revenue and expense items, and segment assets.

We evaluate our sales efforts using new annualized premium sales, an industry operating measure. New annualized premium sales, which include both new sales and the incremental increase in premiums due to conversions, represent the premiums that we would collect over a 12-month period, assuming the policies remain in force. For Aflac Japan, new annualized premium sales are determined by applications submitted during the reporting period. For Aflac U.S., new

annualized premium sales are determined by applications that are issued during the reporting period. Premium income, or earned premiums, is a financial performance measure that reflects collected or due premiums that have been earned ratably on policies in force during the reporting period.

AFLAC JAPAN SEGMENT

Aflac Japan Pretax Operating Earnings

Changes in Aflac Japan’s pretax operating earnings and profit margins are primarily affected by morbidity, mortality, expenses, persistency and investment yields. The following table presents a summary of operating results for Aflac Japan.

Aflac Japan Summary of Operating Results



	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2015		2014		2015		2014
Net premium income	$	2,981	$	3,534	$	9,037	$	10,672
Net investment income:
Yen-denominated investment income	299		367		924		1,096
Dollar-denominated investment income	307		309		900		923
Net investment income	606		676		1,824		2,019
Other income (loss)	7		9		22		25
Total operating revenues	3,594		4,219		10,883		12,716
Benefits and claims, net	2,139		2,633		6,538		7,752
Operating expenses:
Amortization of deferred policy acquisition costs	144		159		434		491
Insurance commissions	178		212		540		654
Insurance and other expenses	344		387		1,006		1,131
Total operating expenses	666		758		1,980		2,276
Total benefits and expenses	2,805		3,391		8,518		10,028
Pretax operating earnings⁽¹⁾	$	789	$	828	$	2,365	$	2,688
Weighted-average yen/dollar exchange rate	122.15		103.92		120.81		102.89



	In Dollars								In Yen
Percentage change over previous period:	Three Months Ended September 30,				Nine Months Ended September 30,				Three Months Ended September 30,				Nine Months Ended September 30,
Percentage change over previous period:	2015		2014		2015		2014		2015		2014		2015		2014
Net premium income	(15.7	)%	(5.4	)%	(15.3	)%	(6.0	)%	(.8	)%	(.7	)%	(.6	)%	.1	%
Net investment income	(10.4	)	2.7		(9.7	)	1.6		5.4		7.8		6.1		8.2
Total operating revenues	(14.8	)	(4.2	)	(14.4	)	(5.0	)	.3		.6		.5		1.2
Pretax operating earnings⁽¹⁾	(4.7	)	(2.1	)	(12.0	)	(3.1	)	12.1		2.8		3.3		3.1

⁽¹⁾See the Insurance Operations section of this MD&A for our definition of segment operating expenses.

Annualized premiums in force increased 1.5% to 1.61 trillion yen as of September 30, 2015, compared with 1.59 trillion yen as of September 30, 2014. The increase in annualized premiums in force in yen reflects the sales of new policies combined with the high persistency of Aflac Japan's business. Annualized premiums in force, translated into dollars at respective period-end exchange rates, were $13.4 billion at September 30, 2015, compared with $14.5 billion a year ago.

Aflac Japan's investment portfolios include dollar-denominated securities and reverse-dual currency securities (yen-denominated debt securities with dollar coupon payments). Dollar-denominated investment income from these assets accounted for approximately 51% of Aflac Japan’s investment income in the first nine months of 2015, compared with 46% a year ago. In years when the yen strengthens in relation to the dollar, translating Aflac Japan's dollar-denominated investment income into yen lowers growth rates for net investment income, total operating revenues, and pretax operating earnings in yen terms. In years when the yen weakens, translating dollar-denominated investment income into yen

magnifies growth rates for net investment income, total operating revenues, and pretax operating earnings in yen terms. Excluding foreign currency changes from the prior period, dollar-denominated investment income accounted for approximately 45% of Aflac Japan’s investment income during the first nine months of 2015, compared with 44% a year ago.

The following table illustrates the effect of translating Aflac Japan’s dollar-denominated investment income and related items into yen by comparing certain segment results with those that would have been reported had yen/dollar exchange rates remained unchanged from the comparable period in the prior year.

Aflac Japan Percentage Changes Over Previous Period

(Yen Operating Results)

For the Periods Ended September 30,



	Including Foreign Currency Changes								Excluding Foreign Currency Changes⁽²⁾
	Three Months				Nine Months				Three Months					Nine Months
	2015		2014		2015		2014		2015			2014		2015			2014
Net investment income	5.4	%	7.8	%	6.1	%	8.2	%	(2.6	)	%	5.3	%	(1.7	)	%	5.2	%
Total operating revenues	.3		.6		.5		1.2		(1.0	)		.2		(.7	)		.7
Pretax operating earnings⁽¹⁾	12.1		2.8		3.3		3.1		5.8			.9		(2.3	)		1.1

⁽¹⁾See the Insurance Operations section of this MD&A for our definition of segment operating earnings.

⁽²⁾Amounts excluding foreign currency changes on dollar-denominated items were determined using the same yen/dollar exchange rate for the current period as the comparable period in the prior year.

The following table presents a summary of operating ratios in yen terms for Aflac Japan.



	Three Months Ended September 30,				Nine Months Ended September 30,
Ratios to total revenues:	2015		2014		2015		2014
Benefits and claims, net	59.5	%	62.4	%	60.1	%	61.0	%
Operating expenses:
Amortization of deferred policy acquisition costs	4.0		3.8		4.0		3.9
Insurance commissions	5.0		5.0		5.0		5.1
Insurance and other expenses	9.6		9.2		9.2		8.9
Total operating expenses	18.6		18.0		18.2		17.9
Pretax operating earnings⁽¹⁾	21.9		19.6		21.7		21.1

⁽¹⁾See the Insurance Operations section of this MD&A for our definition of segment operating earnings.

In the three- and nine-month periods ended September 30, 2015, the benefit ratio decreased compared to the same respective period in the prior year, resulting from the impact of reinsurance; changes in foreign currency; and favorable claims experience and an associated reserve adjustment. The three reinsurance agreements that we entered into since the end of the third quarter of 2013 reduced the benefit ratio by approximately 112 basis points for the three-month period and by 96 basis points for the nine-month period ended September 30, 2015. In the three- and nine-month periods ended September 30, 2015, the operating expense ratio increased primarily due to higher sales promotion and sales incentive expenses, expenses related to system upgrades, and software development costs. In total, the pretax operating profit margin improved in the three- and nine-month periods ended September 30, 2015, compared with the same periods in 2014. For the full year of 2015, we anticipate the pretax operating expense ratio to be similar to 2014. Likewise, for the full year of 2015, we anticipate the pretax operating profit margin to be approximately the same as 2014.

Aflac Japan Sales

The following table presents Aflac Japan’s new annualized premium sales for the periods ended September 30.



	In Dollars												In Yen
	Three Months						Nine Months						Three Months				Nine Months
(In millions of dollars and billions of yen)	2015			2014			2015			2014			2015		2014		2015		2014
New annualized premium sales	$	259		$	247		$	737		$	789		31.6		25.6		89.2		81.2
Increase (decrease) over prior period	5.0		%	(24.6		)%	(6.6		)%	(34.9		)%	23.4	%	(20.8	)%	9.9	%	(30.3	)%

The following table details the contributions to new annualized premium sales by major insurance product for the periods ended September 30.



	Three Months				Nine Months
	2015		2014		2015		2014
Medical	28.9	%	33.6	%	26.4	%	34.7	%
Cancer	37.9		27.7		40.1		22.8
Ordinary life:
Child endowment	7.7		11.6		8.5		11.0
WAYS	18.1		15.0		16.2		15.9
Other ordinary life	5.9		8.6		6.4		9.0
Other	1.5		3.5		2.4		6.6
Total	100.0	%	100.0	%	100.0	%	100.0	%

The foundation of Aflac Japan's product portfolio has been, and continues to be, our third sector cancer and medical products. Sales of third sector products increased 34.5% during the third quarter of 2015 and increased 27.1% in the first nine months of 2015, compared with the same periods in 2014. We have been focusing more on promotion of our cancer and medical products in this low-interest-rate environment. These products are less interest-rate sensitive and more profitable compared to first sector products.

Sales of cancer insurance continued to be strong following the introduction at the end of the third quarter of 2014 of New Cancer DAYS, which includes an exclusive policy sold through Japan Post. Cancer insurance sales were up 68.9% during the third quarter of 2015, compared with the same period in 2014. Aflac Japan enhanced its medical product with new riders in June 2015. This revision provides better protection against critical diseases such as cancer, heart attack and stroke. With continued cost pressure on Japan’s health care system, we expect the need for third sector products will continue to rise in the future, and we remain convinced that the medical and cancer products Aflac Japan provides will continue to be an important part of our product portfolio.

Aflac Japan’s first sector product sales, which include WAYS and child endowment, were up 5.9% in the third quarter of 2015, compared to the same period in the prior year.

We remain committed to selling through our traditional channels. These channels, consisting of affiliated corporate agencies, independent corporate agencies and individual agencies, accounted for 84.7% of total new annualized premium sales for Aflac Japan in the third quarter of 2015. During the three-month period ended September 30, 2015, we recruited 90 new sales agencies. At September 30, 2015, Aflac Japan was represented by approximately 13,500 sales agencies and more than 114,300 licensed sales associates employed by those agencies.

At September 30, 2015, we had agreements to sell our products at 373 banks, or more than 90% of the total number of banks in Japan. Bank channel sales accounted for 15.3% of new annualized premium sales in the third quarter of 2015 for Aflac Japan, compared with 21.1% during the third quarter of 2014.

Aflac Japan and Japan Post Holdings entered into a new agreement in July 2013, further expanding a partnership that was established in 2008 (see Japanese Regulatory Environment). At the end of June 2014, Japan Post Insurance (Kampo) received Financial Services Agency (FSA) regulatory approval to enter into an agency contract with Aflac Japan to begin distributing Aflac Japan's cancer insurance products at all of Kampo's 79 directly managed sales offices. Aflac Japan has developed a unique Aflac-branded cancer product for Japan Post and Kampo that was introduced on October 1, 2014. In the fourth quarter of 2014, the number of postal outlets selling our cancer products expanded to approximately 10,000, and starting July 1, 2015, Japan Post expanded the number of post offices that offer Aflac's cancer products to 20,000 postal outlets. We believe this alliance with Japan Post will further benefit our cancer insurance sales.

We believe that there is still a continued need for our products in Japan. Our sales target and focus in 2015 will continue to be centered around the sale of Aflac Japan's third sector products, including cancer and medical. Although our traditional channels remain key to our success, we have developed partnerships with new channels to help increase our overall sales growth. These channels include Japan Post, and we are making steady progress with our sales through postal outlets. Given the sales growth in the first nine months and our expectation for production for the remainder of the year, we are upwardly revising our sales growth target for third sector products from a range of 7% to 10% to a range of 10% to 13% for the full year of 2015.

Japanese Economy

The Bank of Japan's October 2015 Monthly Report of Recent Economic and Financial Developments indicated the following about the Japanese economy. Japan's economy continues to recover moderately, although exports and production have been effected by the deceleration in emerging economies. Public investment has declined moderately, although it remains at a high level, while housing investment has been increasing. Private consumption has remained resilient due to steady improvement in employment and income. The report projected that Japan's economy is expected to recover moderately, while exports are expected to remain relatively flat. For additional information, see the Japanese Economy subsection of MD&A in our annual report to shareholders for the year ended December 31, 2014.

Japanese Regulatory Environment

In 2005, legislation aimed at privatizing Japan's postal system (Japan Post) was enacted into law. The privatization laws split Japan Post into four operating entities that began operations in October 2007. In 2007, one of these entities selected Aflac Japan as its provider of cancer insurance to be sold through its post offices, and, in 2008, we began selling cancer insurance through these post offices. Japan Post has historically been a popular place for consumers to purchase insurance products. Legislation to reform the postal system passed the Diet in April 2012 and resulted in the merger of two of the postal operating entities (the one that delivers the mail and the one that runs the post offices) on October 1, 2012. In July 2013, Aflac Japan entered into a new agreement with Japan Post Holdings to further expand a partnership that was established in 2008 (see Aflac Japan Sales).

On January 16, 2014, Japan’s FSA issued a reporting order pursuant to the Insurance Business Law to all insurance companies, including Aflac Japan, entitled “Regarding the Rectification, etc. of Insurance Agency Employees.” Companies were ordered to ascertain conditions on the ground regarding sales agents, facilitate the discontinuation of the practice of subcontracting (i.e., the use of non-employee contractors to sell insurance on behalf of insurance agencies), and report to the FSA. Pursuant to the reporting order, Aflac submitted its final report to the FSA on April 30, 2015. In light of the Company's current mix of distribution channels, the use of non-employee contractors is not a major channel for the Company in Japan.

In June 2013, a revision to the Financial Instruments and Exchange Act established a post-funded Orderly Resolution Regime for financial institutions to prevent a financial crisis in the event of a financial institution’s failure. This regime came into effect in March 2014, but is not expected to have a material impact on the Company's operations in Japan.

Aflac Japan Investments

The level of investment income in yen is affected by available cash flow from operations, the timing of investing the cash flow, yields on new investments, the effect of yen/dollar exchange rates on dollar-denominated investment income, and other factors.

In order to address our challenge of investing in Japan's low-interest-rate environment, Aflac Japan has invested in higher-yielding U.S. dollar-denominated publicly-traded investment grade corporate fixed-maturity securities, and has entered into foreign currency forwards and options to hedge the currency risk on the fair value of the U.S. dollar securities. We started this program as part of our strategic review of portfolio allocation, maintain it as part of our on-going portfolio allocation, and will allocate new money into the program based on multiple factors including market conditions, overall portfolio make-up, investment alternatives, needs of the business, and other factors.

In the first nine months of 2015, as part of our normal portfolio management and asset allocation process, Aflac Japan increased the allocation of investments to a senior secured bank loan program by approximately $850 million and to a high yield corporate bond program by approximately $650 million, all of which had been funded as of September 30, 2015. During the third quarter of 2015, we began investing in yen-denominated exchange traded funds (ETFs) holding

Japan real estate investment trusts. These ETFs are publicly traded on a national stock exchange and are reported as equity securities on our consolidated balance sheets. The ETFs are classified as available for sale and carried on our balance sheet at fair value. As of September 30, 2015, our investment in these ETFs was $103 million. See the Analysis of Financial Condition section of this MD&A for further discussion of these investment programs.

The following table presents the results of Aflac Japan’s investment yields for the periods ended September 30.



	Three Months				Nine Months
	2015	⁽¹⁾	2014	⁽¹⁾	2015	⁽¹⁾	2014	⁽¹⁾
New money yield	2.76	%	1.91	%	3.23	%	2.13	%
Return on average invested assets, net of investment expenses	2.92		2.76		2.89		2.79
Portfolio book yield, including dollar-denominated investments, end of period	2.82	%	2.83	%	2.82	%	2.83	%

⁽¹⁾Yields are reported before the cost of foreign currency forwards that hedge foreign exchange risk of U.S. dollar-denominated publicly

traded corporate bonds.

The new money yield in the table above excludes the reinvestment of sales proceeds that were used to fund the purchase of the senior secured bank loans and high yield corporate bonds. The increase in the Aflac Japan new money yield in the three- and nine-month periods ended September 30, 2015 was primarily due to a large allocation of 2015 new money being allocated to dollar-denominated investments rather than relatively low-yielding Japanese government bonds (JGBs).

See Notes 3, 4 and 5 of the Notes to the Consolidated Financial Statements and the Analysis of Financial Condition section of this MD&A for additional information on our investments and hedging strategies.

AFLAC U.S. SEGMENT

Aflac U.S. Pretax Operating Earnings

Changes in Aflac U.S. pretax operating earnings and profit margins are primarily affected by morbidity, mortality, expenses, persistency and investment yields. The following table presents a summary of operating results for Aflac U.S.

Aflac U.S. Summary of Operating Results



	Three Months Ended September 30,						Nine Months Ended September 30,
(In millions)	2015			2014			2015				2014
Net premium income	$	1,346		$	1,306		$	4,016			$	3,910
Net investment income	173			162			507				484
Other income	1			0			6				2
Total operating revenues	1,520			1,468			4,529				4,396
Benefits and claims	735			722			2,161				2,116
Operating expenses:
Amortization of deferred policy acquisition costs	114			112			355				350
Insurance commissions	148			149			441				443
Insurance and other expenses	237			216			708				615
Total operating expenses	499			477			1,504				1,408
Total benefits and expenses	1,234			1,199			3,665				3,524
Pretax operating earnings⁽¹⁾	$	286		$	269		$	864			$	872
Percentage change over previous period:
Net premium income	3.0		%	1.1		%	2.7			%	1.1		%
Net investment income	7.2			1.6			4.8				2.2
Total operating revenues	3.6			1.0			3.0				1.2
Pretax operating earnings⁽¹⁾	6.2			.3			(.9		)		4.7

⁽¹⁾See the Insurance Operations section of this MD&A for our definition of segment operating earnings.

Annualized premiums in force increased 1.9% to $5.6 billion at September 30, 2015, compared with $5.5 billion at September 30, 2014.

The following table presents a summary of operating ratios for Aflac U.S.



	Three Months Ended September 30,				Nine Months Ended September 30,
Ratios to total revenues:	2015		2014		2015		2014
Benefits and claims	48.4	%	49.2	%	47.7	%	48.1	%
Operating expenses:
Amortization of deferred policy acquisition costs	7.5		7.7		7.8		8.0
Insurance commissions	9.7		10.2		9.7		10.1
Insurance and other expenses	15.6		14.5		15.7		14.0
Total operating expenses	32.8		32.4		33.2		32.1
Pretax operating earnings⁽¹⁾	18.8		18.4		19.1		19.8

⁽¹⁾See the Insurance Operations section of this MD&A for our definition of segment operating earnings.

The benefit ratio in the three- and nine-month periods ended September 30, 2015, decreased compared with the same periods in 2014 due to mix of business changes; general improvements in claims trends; and increased revenue from improved business practices associated with premium payments that benefited the third quarter. The expense ratio increased during these periods primarily due to increased spending associated with changes in the Aflac U.S. sales structure. In total, the pretax operating profit margin improved in the three-month period but declined in the nine-month period ended September 30, 2015, compared with the same relative periods in 2014. We expect the benefit ratio to be relatively stable and the expense ratio to be lower in the fourth quarter of 2015, compared with 2014.

Aflac U.S. Sales

The following table presents Aflac's U.S. new annualized premium sales for the periods ended September 30.



	Three Months							Nine Months
(In millions)	2015			2014				2015			2014
New annualized premium sales	$	330		$	328			$	990		$	979
Increase (decrease) over prior period	.4		%	(.6		)	%	1.1		%	(4.5		)	%

The following table details the contributions to new annualized premium sales by major insurance product category for the periods ended September 30.



	Three Months				Nine Months
	2015		2014		2015		2014
Income-loss protection:
Short-term disability	24.4	%	23.1	%	24.1	%	22.4	%
Life	5.5		6.0		5.7		6.2
Asset-loss protection:
Accident	30.4		29.1		29.7		28.2
Critical care⁽¹⁾	20.4		20.1		20.8		20.5
Supplemental medical:
Hospital indemnity	13.6		15.3		14.0		16.2
Dental/vision	5.7		6.4		5.7		6.5
Total	100.0	%	100.0	%	100.0	%	100.0	%

⁽¹⁾Includes cancer, critical illness, and hospital intensive care products

New annualized premium sales for accident insurance, our leading product category, increased 5.1%, short-term disability sales increased 6.2%, critical care insurance sales (including cancer insurance) increased 2.2%, and hospital indemnity insurance sales decreased 11.2% in the third quarter of 2015, compared with the same period in 2014.

In the third quarter of 2015, our traditional U.S. sales forces included more than 8,900 U.S. associates who were actively producing business on a weekly basis. We believe that the average weekly producing sales associates metric allows our sales management to actively monitor progress and needs on a real-time basis. Beyond expanding the size

and capabilities of our traditional sales force, we remain encouraged about establishing and developing relationships with insurance brokers that typically handle the larger-case market.

The addition of group products has expanded our reach and enabled us to generate more sales opportunities with larger employers, brokers, and our traditional sales agents. We anticipate that the appeal of our group products will continue to enhance our opportunities to connect with larger businesses and their employees. Our portfolio of group and individual products offers businesses the opportunity to give their employees a more valuable and comprehensive selection of benefit options.

Beginning in the third quarter and continuing into the fourth quarter of 2014, Aflac U.S. implemented tactical initiatives centered around providing competitive compensation to our sales hierarchy and positioning us to more effectively and consistently execute on the U.S. sales strategy across all states. These measures are designed to more effectively link sales management's success to Aflac's success. For example, we enhanced compensation through an incentive bonus for the first level of our sales management, district sales coordinators, who are primarily responsible for selling Aflac products and training new sales associates. Additionally, we eliminated the commission-based position of state sales coordinator. To better manage our state operations, we introduced the new position of market director, effective October 1, 2014. Market directors are salaried with the opportunity to earn sales-related bonuses. We believe these changes have enhanced and will continue to enhance performance management and better align compensation with new business results.

One Day Pay^SMis a claims initiative that we have focused on at Aflac U.S. to process, approve and pay eligible claims in just one day. We believe that along with our brand and relevant products, this claims practice will help Aflac stand out from competitors.

With the evolving business market and the coverage standardization that will result from health care reform in the United States, we believe Aflac's voluntary products will become more relevant than ever. Our products provide cash benefits that can be used to help with increasing out-of-pocket medical expenses, help cover household costs, or protect against income and asset loss. Our group products and relationships with insurance brokers that handle the larger-case market are helping us as we expand our reach selling to larger businesses. We are regularly evaluating the marketplace to identify opportunities to bring the most relevant, cost-effective products to our customers. We believe the need for our products remains very strong, and we continue to work on enhancing our distribution capabilities to access employers of all sizes, including initiatives that benefit our field force and the broker community. At the same time, we are seeking opportunities to leverage our brand strength and attractive product portfolio in the evolving health care environment. For 2015, our objective is for Aflac U.S. new annualized premium sales to increase at the lower end of a 3% to 7% range for the year.

U.S. Regulatory Environment

The Affordable Care Act (ACA) is intended to give Americans of all ages and income levels access to comprehensive major medical health insurance. The major elements of the bill became effective on January 1, 2014. The primary subject of the legislation is major medical insurance; as enacted, the ACA does not materially affect the design of our insurance products. However, indirect consequences of the legislation and regulations, including uncertainty related to implementation, could present challenges and/or opportunities that could potentially have an impact on our sales model, financial condition and results of operations. Our experience with Japan’s national health care environment leads us to believe that the need for supplemental insurance will only increase over the coming years.

The Dodd-Frank Act created, among other things, a Financial Stability Oversight Council (the Council). In April 2012, the Council released a final rule describing the general process it will follow in determining whether to designate a nonbank financial company for supervision by the Board of Governors of the U.S. Federal Reserve System (the Board). The Council may designate by a two-thirds vote whether certain nonbank financial companies, including certain insurance companies and insurance holding companies, could pose a threat to the financial stability of the United States, in which case such nonbank financial companies would become subject to prudential regulation by the Board. On April 3, 2013, the Board published a final rule that establishes the requirements for determining when a nonbank financial company is "predominantly engaged in financial activities" - a prerequisite for designation by the Council. Prudential regulation by the Board includes supervision of capital requirements, leverage limits, liquidity requirements and examinations. The Board may limit such company’s ability to enter into mergers, acquisitions and other business combination transactions, restrict its ability to offer financial products, require it to terminate one or more activities, or impose conditions on the manner in which it conducts activities. The Council designated two insurers in 2013 and an additional insurer in 2014 as a Systemically Important Financial Institution (SIFI). On December 18, 2014, President Obama signed the Insurance Capital Standards Clarification Act into law. This legislation will clarify the Board’s authority to apply insurance-based capital standards for insurance companies subject to federal supervision. Although Aflac is a nonbank financial company

predominantly engaged in financial activities as defined in the Dodd-Frank Act, we do not believe Aflac will be considered a company that poses a threat to the financial stability of the United States.

Title VII of the Dodd-Frank Act and regulations issued thereunder may have an impact on Aflac's derivative activity, including activity on behalf of Aflac Japan, in particular rules and rule proposals to require central clearing and collateral for certain types of derivatives. In 2014, the five U.S. banking regulators and the U.S. Commodity Futures Trading Commission (CFTC) re-proposed for comment their rules regarding collateral for uncleared swaps, and on October 22, 2015, final rules were issued by the five U.S. banking regulators. Such rules may result in increased collateral requirements for Aflac.

The Dodd-Frank Act also established a Federal Insurance Office (FIO) under the U.S. Treasury Department to monitor all aspects of the insurance industry and of lines of business other than certain health insurance, certain long-term care insurance and crop insurance. Traditionally, U.S. insurance companies have been regulated primarily by state insurance departments. In December 2013, the FIO released a report entitled "How To Modernize And Improve The System Of Insurance Regulation In The United States." The report was required by the Dodd-Frank Act, and included 18 recommended areas of near-term reform for the states, including addressing capital adequacy and safety/soundness issues, reform of insurer resolution practices, and reform of marketplace regulation. The report also listed nine recommended areas for direct federal involvement in insurance regulation. Some of the recommendations outlined in the FIO report released in December 2013 have been implemented. Of the nine recommended areas for direct federal involvement in insurance regulation that are applicable to Aflac, President Obama signed the National Association of Registered Agents and Brokers Reform Act into law in January 2015, which simplifies the agent and broker licensing process across state lines. The FIO has also engaged with the supervisory colleges to monitor financial stability and identify regulatory gaps for large national and internationally active insurers.

On December 10, 2013, five U.S. financial regulators adopted a final rule implementing the "Volcker Rule," which was created by Section 619 of the Dodd-Frank Act. The Volcker Rule generally prohibits "banking entities" from engaging in "proprietary trading" and making investments and conducting certain other activities with "private equity funds and hedge funds." The final rule became effective April 1, 2014; however, at the time the agencies released the final Volcker Rule, the Federal Reserve announced an extension of the conformance period for all banking entities until July 21, 2015. In response to industry questions regarding the final Volcker Rule, the five U.S. financial regulators, which included the Office of the Comptroller of the Currency (OCC); the Federal Reserve; the Federal Deposit Insurance Corporation (FDIC); the SEC and the U.S. CFTC, issued a clarifying interim final rule on January 14, 2014 that permits banking entities to retain interests in certain collateralized debt obligations (CDOs) backed by trust preferred securities if the CDO meets certain requirements.

On December 18, 2014, the Federal Reserve announced a second extension to the Volcker Rule conformance period, to give banking entities until July 21, 2016, to conform investments in and relationships with covered funds and foreign funds that were in place prior to December 31, 2013 (legacy covered funds). The Federal Reserve also announced its intention to act in the future to grant banking entities an additional one-year extension of the conformance period until July 21, 2017, to conform ownership interests in and relationships with these legacy covered funds. The Federal Reserve did not act to extend the conformance period for proprietary trading activities.

Nonbank financial companies such as Aflac that are not affiliated with an insured depository institution or otherwise brought within the definition of "banking entity" generally will not be subject to the Volcker Rule's prohibitions. However, the prohibitions of the Volcker Rule could impact financial markets generally, for example, through reduced liquidity in certain markets or the exiting of positions by banking entities as the end of the conformance period approaches.

The process of implementing the Dodd-Frank Act is ongoing and continues to involve additional rulemaking from time to time. At the current time, it is not possible to predict with any degree of certainty what impact, if any, the Dodd-Frank Act will have on our U.S. business, financial condition, or results of operations.

Under state insurance guaranty association laws and similar laws in international jurisdictions, we are subject to assessments, based on the share of business we write in the relevant jurisdiction, for certain obligations of insolvent insurance companies to policyholders and claimants. In the United States, some states permit member insurers to recover assessments paid through full or partial premium tax offsets. The Company's policy is to accrue assessments when the entity for which the insolvency relates has met its state of domicile's statutory definition of insolvency, the amount of the loss is reasonably estimable and the related premium upon which the assessment is based is written. In most states, the definition is met with a declaration of financial insolvency by a court of competent jurisdiction. In certain states there must also be a final order of liquidation.

Penn Treaty Network Company and its subsidiary American Network Insurance Company (collectively referred to as Penn Treaty) were placed in rehabilitation on January 6, 2009, and remain in rehabilitation as of September 30, 2015. As of September 30, 2015, we are currently unable to estimate when or to what extent Penn Treaty will ultimately be declared insolvent, or the amount of the insolvency. As such, we have not established any accruals for guaranty fund assessments associated with Penn Treaty as of September 30, 2015.

Aflac U.S. Investments

The level of investment income is affected by available cash flow from operations, the timing of investing the cash flow, yields on new investments, and other factors. Aflac U.S. has invested primarily in investment grade corporate bonds.

The following table presents the results of Aflac's U.S. investment yields for the periods ended September 30.



	Three Months				Nine Months
	2015		2014		2015		2014
New money yield	4.65	%	4.36	%	4.38	%	4.34	%
Return on average invested assets, net of investment expenses	5.26		5.49		5.25		5.53
Portfolio book yield, end of period	5.79	%	5.92	%	5.79	%	5.92	%

The increase in the Aflac U.S. new money yield for the three-month period ended September 30, 2015 was primarily due to wider credit spreads achieved in portfolio investing activities. See Notes 3 and 5 of the Notes to the Consolidated Financial Statements and the Analysis of Financial Condition section of this MD&A for additional information on our investments.

ANALYSIS OF FINANCIAL CONDITION

Our financial condition has remained strong in the functional currencies of our operations. The yen/dollar exchange rate at the end of each period is used to translate yen-denominated balance sheet items to U.S. dollars for reporting purposes.

The following table demonstrates the effect of the change in the yen/dollar exchange rate by comparing select balance sheet items as reported at September 30, 2015, with the amounts that would have been reported had the exchange rate remained unchanged from December 31, 2014.

Impact of Foreign Exchange on Balance Sheet Items



(In millions)	As Reported			Exchange Effect			Net of Exchange Effect
Yen/dollar exchange rate⁽¹⁾		119.96						120.55
Investments and cash		$	104,900		$	314		$	104,586
Deferred policy acquisition costs		8,451			26			8,425
Total assets		117,455			353			117,102
Policy liabilities		87,185			379			86,806
Total liabilities		100,200			404			99,796

⁽¹⁾The exchange rate at September 30, 2015, was 119.96 yen to one dollar, or .5% stronger than the December 31, 2014, exchange rate of 120.55.

Market Risks of Financial Instruments

Our investment philosophy is to fulfill our fiduciary responsibility to invest assets in a prudent manner to meet the present and future needs of our policyholders’ contractual obligations while maximizing the long-term financial return on assets consistent with the company goal of maximizing long-term shareholder value within defined risk appetites, limits, and maintaining adequate liquidity.

The following table details investment securities by segment.

Investment Securities by Segment



		Aflac Japan						Aflac U.S.
(In millions)	September 30, 2015			December 31, 2014			September 30, 2015				December 31, 2014
Securities available for sale, at fair value:
Fixed maturities		$	51,752		$	52,196		$	12,839	⁽¹⁾		$	12,940	⁽¹⁾
Perpetual securities		2,108			2,609			58				60
Equity securities		126			23			5				5
Total available for sale		53,986			54,828			12,902				13,005
Securities held to maturity, at amortized cost:
Fixed maturities		33,729			34,242			0				0
Total held to maturity		33,729			34,242			0				0
Total investment securities		$	87,715		$	89,070		$	12,902			$	13,005

⁽¹⁾Excludes available-for-sale fixed-maturity securities held by the Parent Company and other business segments of $515 in 2015 and $437 in 2014.

Because we invest in fixed-maturity securities, our financial instruments are exposed primarily to three types of market risks: currency risk, interest rate risk, and credit risk.

Currency Risk

The functional currency of Aflac Japan's insurance operations is the Japanese yen. All of Aflac Japan's premiums, claims and commissions are received or paid in yen, as are most of its other expenses. Most of Aflac Japan's cash and liabilities are yen-denominated. Aflac Japan's investments consisted primarily of yen-denominated securities of $61.3 billion, at amortized cost, at September 30, 2015. However, Aflac Japan also owns dollar-denominated securities of $14.5 billion, at amortized cost, whose fair value is hedged against currency risk as well as $7.8 billion of securities, at amortized cost, that are not hedged as of September 30, 2015. Due to this investment allocation, yen-denominated investment income accounted for 49% of Aflac Japan's investment income during the three-month period and 51% during the nine-month periods ended September 30, 2015, with the remainder denominated in U.S. dollars. In addition, Aflac Incorporated has yen-denominated debt obligations.

We are exposed to currency risk as an economic event only when yen funds are actually converted into dollars. This occurs when we repatriate yen-denominated funds from Aflac Japan to Aflac U.S. The exchange rates prevailing at the time of repatriation will differ from the exchange rates prevailing at the time the yen profits were earned. A portion of the yen repatriation may be used to service Aflac Incorporated's yen-denominated notes payable with the remainder converted into dollars. In order to hedge foreign exchange risk for a portion of the profit repatriation received in yen from Aflac Japan, we had foreign exchange forwards as part of a hedging strategy on 30.0 billion yen, 102.5 billion yen and 25.0 billion yen received in February 2015, July 2015 and September 2015, respectively. As of September 30, 2015, we had foreign exchange forwards and options to economically hedge foreign exchange risk on 194.6 billion yen of future profit repatriation from Aflac Japan.

In addition to profit repatriation, certain investment activities for Aflac Japan expose us to economic currency risk when yen are converted into dollars. As noted above, we invest a portion of our yen cash flows in dollar-denominated assets. This requires that we convert the yen cash flows to U.S. dollars before investing. As previously discussed, for certain of our U.S. dollar-denominated securities, we enter into foreign currency forward and option contracts to hedge the currency risk on the fair value of the securities. The dollar coupon payments received on these investments are not hedged and are subject to foreign exchange fluctuations, which are realized in earnings. Also, Aflac Japan has invested in reverse-dual currency securities (RDCs, or yen-denominated debt securities with dollar coupon payments), which exposes Aflac to changes in foreign exchange rates. The foreign currency effect on the yen-denominated securities is accounted for as a component of unrealized gains or losses on available-for-sale securities in accumulated other comprehensive income, while the foreign currency effect on the dollar coupons is realized in earnings. The RDCs provided a higher yield at the time of purchase than those available on Japanese government or other public corporate bonds, while still adhering to our investment standards at the time of the transaction. The yen/dollar exchange rate would

have to strengthen to approximately 29 before the yield on these instruments would equal that of a comparable JGB instrument.

Aside from the activities discussed above, we generally do not convert yen into dollars; however, we do translate financial statement amounts from yen into dollars for financial reporting purposes. Therefore, reported amounts are affected by foreign currency fluctuations. We report unrealized foreign currency translation gains and losses in accumulated other comprehensive income. In periods when the yen weakens against the dollar, translating yen into dollars causes fewer dollars to be reported. When the yen strengthens, translating yen into dollars causes more dollars to be reported. The weakening of the yen relative to the dollar will generally adversely affect the value of our yen-denominated investments in dollar terms. We attempt to minimize the exposure of shareholders' equity to foreign currency. We accomplish this by investing a portion of Aflac Japan's investment portfolio in dollar-denominated securities and by the Parent Company's issuance of yen-denominated debt (for additional information, see the discussion under the Hedging Activities subsection of MD&A). As a result, the effect of currency fluctuations on our net assets is reduced.

The following table demonstrates the effect of foreign currency fluctuations by presenting the dollar values of our yen-denominated assets and liabilities, and our consolidated yen-denominated net asset exposure at selected exchange rates.

Dollar Value of Yen-Denominated Assets and Liabilities

at Selected Exchange Rates



(In millions)	September 30, 2015									December 31, 2014
Yen/dollar exchange rates	104.96			119.96⁽¹⁾			134.96			105.55			120.55⁽¹⁾			135.55
Yen-denominated financial instruments:
Assets:
Securities available for sale:
Fixed maturities⁽²⁾	$	30,897		$	27,033		$	24,029		$	32,178		$	28,174		$	25,056
Fixed maturities - consolidated variable interest entities⁽³⁾	1,005			879			781			1,273			1,114			992
Perpetual securities	2,086			1,827			1,623			2,458			2,153			1,914
Perpetual securities - consolidated variable interest entities⁽³⁾	208			182			162			390			341			304
Equity securities	137			120			107			19			17			15
Securities held to maturity:
Fixed maturities	38,454			33,646			29,906			39,013			34,159			30,379
Fixed maturities - consolidated variable interest entities⁽³⁾	95			83			74			95			83			74
Cash and cash equivalents	255			223			198			370			324			288
Derivatives	2,658			877			1,141			596			802			1,266
Other financial instruments	175			153			136			159			139			124
Subtotal	75,970			65,023			58,157			76,551			67,306			60,412
Liabilities:
Notes payable	236			207			183			372			325			290
Derivatives	735			384			1,802			992			2,423			3,881
Subtotal	971			591			1,985			1,364			2,748			4,171
Net yen-denominated financial instruments	74,999			64,432			56,172			75,187			64,558			56,241
Other yen-denominated assets	8,160			7,139			6,346			8,212			7,190			6,394
Other yen-denominated liabilities	94,051			82,291			73,145			92,902			81,342			72,341
Consolidated yen-denominated net assets (liabilities) subject to foreign currency fluctuation⁽²⁾	$	(10,892	)	$	(10,720	)	$	(10,627	)	$	(9,503	)	$	(9,594	)	$	(9,706	)

⁽¹⁾Actual period-end exchange rate

⁽²⁾Does not include the U.S. dollar-denominated corporate bonds for which we have entered into foreign currency forwards as discussed in the Aflac Japan Investment subsection of MD&A

⁽³⁾ Does not include U.S. dollar-denominated bonds that have corresponding cross-currency swaps in consolidated VIEs

We are required to consolidate certain VIEs. Some of the consolidated VIEs in Aflac Japan's portfolio use foreign currency swaps to convert foreign denominated cash flows to yen, the functional currency of Aflac Japan, in order to minimize cash flow fluctuations. Foreign currency swaps exchange an initial principal amount in two currencies, agreeing to re-exchange the currencies at a future date, at an agreed upon exchange rate. There may also be periodic exchanges of payments at specified intervals based on the agreed upon rates and notional amounts. Prior to consolidation, our beneficial interest in these VIEs was a yen-denominated available-for-sale fixed maturity security. Upon consolidation, the original yen-denominated investment was derecognized and the underlying fixed-maturity or perpetual securities and cross-currency swaps were recognized. The combination of a U.S. dollar-denominated investment and cross-currency swap economically creates a yen-denominated investment and has no impact on our net investment hedge position.

Similarly, the combination of the U.S. corporate bonds and the foreign currency forwards and options that we have entered into, as discussed in the Aflac Japan Investment subsection of MD&A, economically creates a yen-denominated investment that qualifies for inclusion as a component of our investment in Aflac Japan for net investment hedge purposes.

For additional information regarding our Aflac Japan net investment hedge, see the Hedging Activities subsection of MD&A.

Interest Rate Risk

Our primary interest rate exposure is to the impact of changes in interest rates on the fair value of our investments in debt and perpetual securities. We estimate that the reduction in the fair value of debt and perpetual securities we own resulting from a 100 basis point increase in market interest rates, based on our portfolios at September 30, 2015, and December 31, 2014, would be as follows:



(In millions)	September 30, 2015				December 31, 2014
Effect on yen-denominated debt and perpetual securities		$	(8,781	)		$	(9,379	)
Effect on dollar-denominated debt and perpetual securities		(3,207		)		(3,427		)
Effect on total debt and perpetual securities		$	(11,988	)		$	(12,806	)

There are various factors that affect the fair value of our investment in debt and perpetual securities. Included in those factors are changes in the prevailing interest rate environment, which directly affect the balance of unrealized gains or losses for a given period in relation to a prior period. Decreases in market yields generally improve the fair value of debt and perpetual securities, while increases in market yields generally have a negative impact on the fair value of our debt and perpetual securities. However, we do not expect to realize a majority of any unrealized gains or losses because we generally have the intent and ability to hold such securities until a recovery of value, which may be maturity. For additional information on unrealized losses on debt and perpetual securities, see Note 3 of the Notes to the Consolidated Financial Statements.

We perform extensive analysis on the duration of our assets and liabilities. Currently, when debt and perpetual securities we own mature, the proceeds may be reinvested at a yield below that of the interest required for the accretion of policy benefit liabilities on policies issued in earlier years. However, adding riders to our older policies has helped offset negative investment spreads on these policies. Overall, adequate profit margins exist in Aflac Japan’s aggregate block of business because of changes in the mix of business and favorable experience from mortality, morbidity and expenses.

Periodically, depending on general economic conditions, we may enter into other derivative transactions to hedge interest rate risk.

For further information on our interest rate derivatives, see Note 4 of the accompanying Notes to the Consolidated Financial Statements and the Interest Rate Risk subsection of MD&A in our annual report to shareholders for the year ended December 31, 2014.

Credit Risk

A significant portion of our investment portfolio consists of debt securities or perpetual securities that expose us to the credit risk of the underlying issuer. We carefully evaluate this risk on every new investment and closely monitor the credit risk of our existing investment portfolio. We incorporate the needs of our products and liabilities, the overall requirements of the business, and other factors in addition to our underwriting of the credit risk for each investment in the portfolio.

Evaluating the underlying risks in our credit portfolio involves a multitude of factors including but not limited to our assessment of the issuers business activities, assets, products, market position, financial condition, and future prospects. We also must incorporate the assessment of the Nationally Recognized Statistical Rating Organizations (NRSROs) in assigning credit ratings to our specific portfolio holdings. We employ a team of experienced credit investment professionals to perform extensive internal assessments of the credit risks for all our portfolio holdings and potential new investments.

The ratings of our securities referenced in the two tables below are based on the ratings designations provided by major NRSROs (Moody's, S&P and Fitch) or, if not rated, are determined based on our internal analysis of such securities. For investment-grade securities where the ratings assigned by the major credit agencies are not equivalent, we use the second lowest rating that is assigned. For a description of the ratings methodology that we use when a security is split-rated, see "Market Risks of Financial Instruments - Below-Investment-Grade and Split-Rated Securities" in the Analysis of Financial Condition section of this MD&A.

The distributions by credit rating of our purchases of debt securities, based on acquisition cost, were as follows:

Composition of Purchases by Credit Rating



	Nine Months Ended September 30, 2015			Twelve Months Ended December 31, 2014			Nine Months Ended September 30, 2014
AAA		2.0	%		7.6	%		8.4	%
AA		2.6			74.5			75.6
A		17.3			8.0			6.4
BBB		31.7			8.3			8.7
BB or lower		46.4			1.6			.9
Total		100.0	%		100.0	%		100.0	%

Purchases of securities from period to period are determined based on multiple objectives including appropriate portfolio diversification, the relative value of a potential investment and availability of investment opportunities, liquidity, credit and other risk factors while adhering to our investment policy guidelines. We did not purchase any perpetual securities during the periods presented in the table above. Total purchases comprise new money investments as well as the reinvestment of proceeds from investment disposals. The relatively higher purchases of AA rated securities in 2014 were primarily due to the purchase of JGBs. The increase in purchases of A rated and BBB rated securities in the first nine months of 2015 was due primarily to the purchase of U.S. dollar-denominated corporate fixed-income publicly traded securities for the Aflac Japan portfolio. The significant increase in purchases of BB or lower rated securities in 2015 was due to increased investment in senior secured bank loans to U.S. and Canadian corporate borrowers, most of which have below-investment-grade ratings, and investment in high yield corporate bonds. The bank loan investment program is managed externally by third party firms specializing in this asset class. This mandate requires a minimum average credit quality of BB-/Ba3, prohibits loans rated below B/B2, and restricts exposure to any individual credit to less than 3% of the program’s assets. The objectives of this program include enhancing the yield on invested assets, achieving further diversification of credit risk, and mitigating the risk of rising interest rates through the acquisition of floating rate assets. The objective of the high yield corporate bond investments is to enhance yield on invested assets and further diversify our credit risk. All investments must have a minimum rating of low BB using our above described rating methodology and are managed by our internal credit portfolio management team.

The distributions of debt and perpetual securities we own, by credit rating, were as follows:

Composition of Portfolio by Credit Rating



		September 30, 2015						December 31, 2014
	Amortized Cost			Fair Value			Amortized Cost			Fair Value
AAA		1.3	%		1.3	%		1.3	%		1.3	%
AA		5.5			5.6			5.7			5.8
A		61.8			63.4			64.1			65.1
BBB		26.5			25.0			25.0			23.9
BB or lower		4.9			4.7			3.9			3.9
Total		100.0	%		100.0	%		100.0	%		100.0	%

As of September 30, 2015, our direct and indirect exposure to securities in our investment portfolio that were guaranteed by third parties was immaterial both individually and in the aggregate.

Subordination Distribution

The majority of our total investments in debt and perpetual securities was senior debt at September 30, 2015, and December 31, 2014. We also maintained investments in subordinated financial instruments that primarily consisted of Lower Tier II, Upper Tier II, and Tier I securities, listed in order of seniority. The Lower Tier II securities are debt instruments with fixed maturities. Our Upper Tier II and Tier I investments consisted of debt instruments with fixed maturities and perpetual securities, which have an economic maturity as opposed to a stated maturity.

The following table shows the subordination distribution of our debt and perpetual securities.

Subordination Distribution of Debt and Perpetual Securities



		September 30, 2015						December 31, 2014
(In millions)	Amortized Cost			Percentage of Total			Amortized Cost			Percentage of Total
Senior notes		$	90,519		94.4	%		$	89,308		93.9	%
Subordinated securities:
Fixed maturities (stated maturity date):
Lower Tier II		2,682			2.8			2,751			2.9
Tier I⁽¹⁾		105			.1			131			.1
Surplus notes		301			.3			301			.3
Trust preferred - non-banks		85			.1			85			.1
Other subordinated - non-banks		51			.1			51			.1
Total fixed maturities		3,224			3.4			3,319			3.5
Perpetual securities (economic maturity date):
Upper Tier II		1,337			1.4			1,554			1.6
Tier I		568			.6			703			.8
Other subordinated - non-banks		184			.2			183			.2
Total perpetual securities		2,089			2.2			2,440			2.6
Total debt and perpetual securities		$	95,832		100.0	%		$	95,067		100.0	%

⁽¹⁾Includes trust preferred securities

Portfolio Composition

For information regarding the amortized cost for our investments in debt and perpetual securities, the cost for equity securities and the fair values of these investments, refer to Note 3 of the Notes to the Consolidated Financial Statements.

Investment Concentrations

One of our largest investment concentrations as of September 30, 2015, was banks and financial institutions. Approximately 12% and 14% of our total portfolio of debt and perpetual securities, on an amortized cost basis, was in the bank and financial institution sector at September 30, 2015 and December 31, 2014, respectively. Within the countries we approve for investment opportunities, we primarily invest in financial institutions that are strategically crucial to each approved country's economy. The bank and financial institution sector is a highly regulated industry and plays a strategic role in the global economy. Within this sector, our credit risk by geographic region or country of issuer at September 30, 2015, based on amortized cost, was: Europe, excluding the United Kingdom (29%); United States (26%); Australia (8%); Japan (8%); United Kingdom (8%); and other (21%).

Our 15 largest global investment exposures as of September 30, 2015, were as follows:

Largest Global Investment Positions

Amortized

% of

Ratings

(In millions)

Cost

Total

Seniority

Moody’s

S&P

Fitch

Japan National Government⁽¹⁾

36,527

38.12

Senior

A+

Republic of South Africa

500

.52

Senior

Baa2

BBB-

BBB

Bank of America NA

379

.40

Bank of America Corp.

208

.23

Senior

Baa1

A-

Bank of America Corp.

167

.17

Lower Tier II

Baa3

BBB+

A-

Bank of America NA

.00

Senior

A+

Bank of Tokyo-Mitsubishi UFJ Ltd.

375

.39

BTMU Curacao Holdings NV

375

.39

Lower Tier II

—

A-

Investcorp SA

358

.37

Investcorp Capital Limited

358

.37

Senior

Ba2

—

JP Morgan Chase & Co.

334

.35

JPMorgan Chase & Co. (including Bear Stearns Companies Inc.)

296

.31

Senior

A+

JPMorgan Chase & Co. (Bank One Corp.)

.02

Lower Tier II

Baa1

A-

JPMorgan Chase & Co. (NBD Bank)

.01

Lower Tier II

JPMorgan Chase & Co. (FNBC)

.01

Senior

Aa1

A+

—

Banobras

308

.32

Senior

BBB+

Sultanate of Oman

292

.30

Senior

A-

—

Petroleos Mexicanos (Pemex)

292

.30

Pemex Proj FDG Master TR

251

.26

Senior

BBB+

Pemex Finance Ltd.

.04

Senior

A+

Koninklijke Ahold NV

290

.30

Koninklijke Ahold NV

275

.28

Senior

Baa2

BBB

Ahold USA Lease

.02

Senior

Baa2

BBB

—

Nordea Bank AB

281

.29

Nordea Bank AB

214

.22

Tier I

Baa3

BBB

—

Nordea Bank Finland

.07

Upper Tier II

Baa2

—

Nordea Bank AB

.00

Senior

Aa3

AA-

German Agency Banks

280

.29

Landwirtschaftliche Rentenbank

209

.22

Lower Tier II

Aaa

AAA

KFW

.07

Senior

Aaa

AAA

AXA

276

.29

AXA-UAP

225

.24

Upper Tier II

BBB

AXA

.05

CC FNB

BBB

BBB+

Deutsche Teleom AG

272

.28

Deutsche Telekom AG

250

.26

Senior

Baa1

BBB+

Deutsche Telekom International Finance

.02

Senior

Baa1

BBB+

CFE

267

.28

Senior

Baa1

BBB+

Subtotal

41,031

42.80

Total debt and perpetual securities

95,832

100.00

⁽¹⁾JGBs or JGB-backed securities

^*If aggregated, our total exposure under the Berkshire Hathaway family of companies would have placed it among our top 15 exposures. However, we consider Berkshire Hathaway Energy Company and Burlington Northern Santa Fe, LLC holdings distinct from those of the parent company and believe it appropriate to report them separately.

As previously disclosed, we own long-dated debt instruments in support of our long-dated policyholder obligations. Some of our largest global investment holdings are positions that were purchased many years ago and increased in size due to merger and consolidation activity among the issuing entities. In addition, many of our largest holdings are yen-denominated, therefore strengthening of the yen can increase our position in dollars, and weakening of the yen can decrease our position in dollars. Our global investment guidelines establish concentration limits for our investment portfolios.

Geographical Exposure

The following table indicates the geographic exposure of our investment portfolio.



	September 30, 2015				December 31, 2014
(In millions)	Amortized Cost		% of Total		Amortized Cost		% of Total
Japan	$	39,183	40.9	%	$	39,804	41.9	%
United States and Canada ⁽¹⁾	31,212		32.6		28,884		30.4
United Kingdom	2,721		2.8		3,121		3.3
Germany	2,522		2.6		2,657		2.8
France	1,756		1.8		1,747		1.8
Peripheral Eurozone	2,773		2.9		2,925		3.1
Portugal	201		.2		200		.2
Italy	1,517		1.6		1,674		1.8
Ireland	333		.3		332		.3
Spain	722		.8		719		.8
Nordic Region	2,124		2.2		2,198		2.2
Sweden	894		.9		973		1.0
Norway	515		.5		513		.5
Denmark	333		.4		332		.3
Finland	382		.4		380		.4
Other Europe	2,642		2.8		2,711		2.8
Netherlands	1,503		1.6		1,497		1.6
Switzerland	228		.2		225		.2
Czech Republic	417		.5		415		.4
Austria	116		.1		184		.2
Belgium	183		.2		224		.2
Poland	167		.2		166		.2
Luxembourg	28		.0		0		.0
Asia excluding Japan	3,560		3.7		3,575		3.8
Africa and Middle East	2,131		2.2		2,121		2.2
Latin America	2,606		2.7		2,622		2.8
Australia	2,162		2.3		2,262		2.4
All Others	440		.5		440		.5
Total debt and perpetual securities	$	95,832	100.0	%	$	95,067	100.0	%

⁽¹⁾ Includes total exposure to Puerto Rico of $1 million of required deposits, of which 86% has insurance of principal and interest.

European sovereign debt crisis

Since 2008, many countries in Europe, and specifically Greece, Ireland, Italy, Portugal, and Spain (collectively the "peripheral Eurozone" countries), have experienced a debt crisis. Collective action by multiple parties including the European Central Bank (ECB), International Monetary Fund (IMF), European Council, and individual member states' governments had largely improved market perception of the situation across Europe. In exchange for this support, affected countries generally agreed to implement a series of measures to improve their fiscal situation in exchange for

loans and other aid. Most countries continue to implement the prescribed austerity measures and have seen improvement in their economies, which in turn has seen their creditworthiness improve or stabilize.

The resolve to maintain the European Monetary Union (EMU) was tested earlier this year following the election of a new government in Greece, who rejected the requirements imposed in exchange for their previous support packages. After a period of tense negotiations which threatened Greece’s ability to remain in the EMU, agreements were made which provided Greece additional aid in exchange for updated set of requirements. These actions have stabilized the situation currently.

Although recent economic indicators show improvement from the depths of the crisis across most of the Eurozone, overall economic activity remains subdued throughout the region. To support the return to sustainable economic growth, the ECB has launched a quantitative easing (QE) stimulus program.

Since the crisis first began, we have taken steps to improve the risk profile of our portfolio by selling certain holdings throughout Europe, including the peripheral Eurozone countries.

The primary factor considered when determining the domicile of investment exposure is the legal country risk location of the issuer. However, other factors such as the location of the parent guarantor, the location of the company's headquarters or major business operations (including location of major assets), location of primary market (including location of revenue generation) and specific country risk publicly recognized by rating agencies can influence the assignment of the country (or geographic) risk location. When the issuer is a special financing vehicle or a branch or subsidiary of a global company, then we consider any guarantees and/or legal, regulatory and corporate relationships of the issuer relative to its ultimate parent in determining the proper assignment of country risk.

Investments in Certain European Countries - monitoring and mitigating exposure

During most of 2011, we saw the European sovereign crisis persist and escalate. During the crisis in 2011 and 2012, we undertook a derisking program to reduce significant concentrations within our investment portfolio, most notably perpetual securities issued by financial institutions and instruments issued by other peripheral Eurozone issuers. We remain diligent in monitoring our portfolio and continually evaluate opportunities to manage risk within our portfolio.

Our internal team of experienced credit professionals has continued to monitor the impact of the crisis on our individual investment holdings' overall credit quality. Our analysis includes factors beyond a baseline assessment of a company's assets, operations, financial statements, and credit metrics that may provide support for the instruments we own. Specifically, for our investments in European banks and financial institutions, we monitor the importance of the issuer to its local financial system, the likelihood of government support, and our investment's position in the capital structure of the issuer. For our investments in European utilities, we monitor the role of the issuer in its local economy as a provider of necessary infrastructure, and we monitor the value of the underlying assets owned by the issuer. For our investment in European corporates, industrials, and other commercial entities, we monitor the general credit quality of the issuer, the geographical mix of the issuer's customers (i.e. domestic vs. foreign), the geographical breakdown of the issuer's assets (i.e. domestic versus foreign), the value of the underlying assets owned by the issuer, capitalization of the issuer, and overall profitability and cash generation ability of the issuer. We monitor NRSRO actions and the likely actions for our investment exposures, as well as overall market conditions. By performing these analyses, we make a determination on the probability of timely payment of principal and interest of the issuers of our investments.

Some of our peripheral Eurozone fixed-maturity investments contain covenants that we believe mitigate our risk to the issuer. These covenants could include put options that allow us to return our holdings to the issuer at a predetermined price, usually par, should the issuer be downgraded to below investment grade by a rating agency. Additionally, these covenants may include restrictions on the ability of the issuer to incur additional debt, sell assets, or provide collateral for indebtedness. As of September 30, 2015, all of the issuers of our holdings from peripheral Eurozone countries were current on their obligations to us, and we believe they have the ability to meet their obligations to us.

As of September 30, 2015, our investments in peripheral Eurozone countries totaled $2.8 billion, or 2.9% of our total debt and perpetual securities, at amortized cost. We have no direct exposure to Greece. Apart from our direct investments in peripheral Eurozone sovereign debt totaling $264 million, our other exposures as of September 30, 2015 to the European sovereign debt crisis were investments in peripheral Eurozone banks and financial institutions of $493 million, peripheral Eurozone non-banks (excluding sovereigns) of $2.0 billion, core Eurozone¹banks and financial institutions of $1.8 billion, core Eurozone non-banks (excluding sovereigns) of $4.2 billion, core Eurozone sovereigns of $488 million, and non-Eurozone² holdings throughout the balance of Europe of $5.3 billion, all at amortized cost. Other investment risks stemming from the European sovereign debt crisis are not possible to measure and include the impact of slower economic activity throughout Europe and its impact on global economic growth and market disruption including illiquidity and impaired valuations due to heightened concerns and lack of investor confidence.

Although the situation had largely stabilized across Europe, the crisis in Greece that re-emerged in mid-2015 demonstrates certain risks remain as the area continues working to improve its economic footing. We continue to monitor the situation closely including the heightened interrelationship between political, monetary, fiscal, and economic forces; the pace of underlying structural reforms; the possibility of continued contagion to additional sovereigns and other entities; further stress on the banking systems throughout the region; and the impact on the underlying economic fundamentals throughout the Eurozone.

Securities by Type of Issuance

We have investments in both publicly and privately issued securities. Our ability to sell either type of security is a function of overall market liquidity which is impacted by, among other things, the amount of outstanding securities of a particular issuer or issuance, trading history of the issue or issuer, overall market conditions, and idiosyncratic events affecting the specific issue or issuer.

The following table details investment securities by type of issuance.

Investment Securities by Type of Issuance



		September 30, 2015						December 31, 2014
(In millions)	Amortized Cost			Fair Value			Amortized Cost			Fair Value
Publicly issued securities:
Fixed maturities		$	67,622		$	73,840		$	65,830		$	74,190
Perpetual securities		107			158			107			154
Equity securities		112			122			12			19
Total publicly issued		67,841			74,120			65,949			74,363
Privately issued securities:
Fixed maturities		26,121			28,214			26,797			29,880
Perpetual securities		1,982			2,008			2,333			2,515
Equity securities		7			9			7			9
Total privately issued		28,110			30,231			29,137			32,404
Total investment securities		$	95,951		$	104,351		$	95,086		$	106,767

¹Core Eurozone includes Germany, France, Netherlands, Austria, Belgium, Finland and Luxembourg.

²Non-Eurozone Europe includes the United Kingdom, Switzerland, Sweden, Norway, Denmark, Czech Republic and Poland.

The following table details our privately issued investment securities.

Privately Issued Securities



(Amortized cost, in millions)	September 30, 2015				December 31, 2014
Privately issued securities as a percentage of total debt and perpetual securities		29.3		%		30.6		%
Privately issued securities held by Aflac Japan		$	25,342			$	26,468
Privately issued securities held by Aflac Japan as a percentage of total debt and perpetual securities		26.4		%		27.8		%

Reverse-Dual Currency Securities⁽¹⁾



(Amortized cost, in millions)	September 30, 2015				December 31, 2014
Privately issued reverse-dual currency securities		$	5,987			$	6,196
Publicly issued collateral structured as reverse-dual currency securities		1,310				1,470
Total reverse-dual currency securities		$	7,297			$	7,666
Reverse-dual currency securities as a percentage of total debt and perpetual securities		7.6		%		8.1		%

⁽¹⁾Principal payments in yen and interest payments in dollars

Aflac Japan has invested in privately issued securities to better match liability characteristics and secure higher yields than those available on Japanese government or other public corporate bonds. All of the yen-denominated privately issued securities we have purchased were rated investment grade at the time of purchase. Aflac Japan’s investments in yen-denominated privately issued securities consist primarily of non-Japanese issuers and have longer maturities, thereby allowing us to improve our asset/liability matching and our overall investment returns. These securities were generally either privately negotiated arrangements or were issued under medium-term note programs and have standard documentation commensurate with credit ratings of the issuer, except when internal credit analysis indicates that additional protective and/or event-risk covenants were required. Many of these investments have protective covenants appropriate to the specific investment. These may include a prohibition of certain activities by the borrower, maintenance of certain financial measures, and specific conditions impacting the payment of our notes.

Below-Investment-Grade and Split-Rated Securities

We use specific criteria to judge the credit quality of both existing and prospective investments. The ratings referenced in the tables below are based on the ratings designations provided by the major credit rating agencies(Moody's, S&P, and Fitch) or, if not rated, are determined based on our internal credit analysis of such securities. When the ratings issued by the rating agencies differ, we utilize the second lowest rating, regardless of how many of the three rating agencies actually rated the instrument. Split-rated securities are those where the ratings are not equivalent and one or more of the ratings is investment grade and one or more is below investment grade. For these split-rated securities, if there are only two ratings assigned by the credit rating agencies, we take the lower below-investment-grade rating. If there are three ratings assigned, and two of the three are below investment grade, we consider it a below-investment grade security. If there are three ratings and two are investment grade, we consider it an investment grade security unless our evaluation and assessment shows a below-investment-grade rating is warranted despite two of the three rating agencies rating it investment grade.

Our portfolio of below-investment-grade securities includes debt securities purchased while the issuer was rated investment grade plus other loans and bonds purchased as part of an allocation to that segment of the market. The following is our below-investment-grade exposure in accordance with the above described rating methodology.

Below-Investment-Grade Securities



	September 30, 2015									December 31, 2014
(In millions)	Par Value		Amortized Cost		Fair Value		Unrealized Gain (Loss)			Par Value			Amortized Cost			Fair Value			Unrealized Gain(Loss)
Investcorp Capital Limited	$	358	$	358	$	325	$	(33	)	$	357		$	357		$	332		$	(25	)
Commerzbank AG (includes Dresdner Bank)	333		214		295		81			332			213			327			114
Republic of Tunisia	309		186		258		72			307			185			219			34
Navient Corp	280		149		149		0			278			278			178			(100		)
UPM-Kymmene	258		258		253		(5		)	257			257			251			(6		)
KLM Royal Dutch Airlines ⁽¹⁾	250		184		201		17			249			183			231			48
Barclays Bank PLC ⁽¹⁾	231		149		223		74			228			148			225			77
Deutsche Bank AG	200		200		179		(21		)	378		⁽¹⁾	332		⁽¹⁾	354		⁽¹⁾	22			⁽¹⁾
DEPFA Bank PLC	167		167		129		(38		)	*			*			*			*
Telecom Italia SpA	167		167		210		43			332			332			352			20
Generalitat de Catalunya	150		55		122		67			149			55			129			74
IKB Deutsche Industriebank AG	108		46		76		30			108			46			70			24
Alcoa, Inc.	100		78		90		12			76			77			102			25
Petrobras International Finance Company	92		88		63		(25		)	*			*			*			*
Societe Generale ⁽¹⁾	83		61		75		14			83			61			67			6
Teck Resources Ltd.	70		69		43		(26		)	*			*			*			*
Transocean Inc.	68		71		44		(27		)	*			*			*			*
Eskom Holdings Limited	50		50		47		(3		)	*			*			*			*
Kommunalkredit Austria	25		16		20		4			108			84			88			4
Bank of Ireland	*		*		*		*			166			166			125			(41		)
Energias de Portugal SA (EDP)	*		*		*		*			118			116			124			8
Other Issuers (below $50 million in par value) ⁽²⁾	308		291		277		(14		)	361			378			394			16
Subtotal ⁽³⁾	3,607		2,857		3,079		222			3,887			3,268			3,568			300
Senior secured bank loans ⁽⁴⁾	1,297		1,231		1,285		54			504			501			579			78
High yield corporate bonds ⁽⁵⁾	612		625		587		(38		)	0			0			0			0
Grand Total	$	5,516	$	4,713	$	4,951	$	238		$	4,391		$	3,769		$	4,147		$	378

* Investment grade at respective reporting date

⁽¹⁾ Includes perpetual security

⁽²⁾Includes 15 issuers in 2015 and 18 in 2014

⁽³⁾ Securities initially purchased as investment grade, but have subsequently been downgraded to below investment grade

⁽⁴⁾Includes 185 issuers in 2015 and 196 in 2014; all issuers below $25 million in par value

⁽⁵⁾ Includes 55 issuers in 2015; all issuers below $20 million in par value

We invest in senior secured bank loans primarily to U.S. corporate borrowers, most of which have below-investment-grade ratings. The program is managed externally by third party firms specializing in this asset class. This mandate requires a minimum average credit quality of BB-/Ba3, prohibits loans rated below B/B2, and restricts exposure to any individual credit to less than 3% of the program’s assets. The objectives of this program include enhancing the yield on invested assets, achieving further diversification of credit risk, and mitigating the risk of rising interest rates through the acquisition of floating rate assets. Our investments in this program totaled $1.3 billion at September 30, 2015, compared with $501 million at December 31, 2014, on an amortized cost basis.

In the first nine months of 2015, as part of our normal portfolio management and asset allocation process, we increased our allocation to higher yielding corporate bonds by approximately $650 million within the Aflac Japan portfolio and $110 million within the Aflac U.S. portfolio. Most of these securities were rated below-investment-grade at the time of purchase, but we also purchased several that are currently rated investment grade which, because of market pricing, offer yields commensurate with below-investment-grade risk profiles. The objective of this allocation is to enhance our yield on

invested assets and further diversify our credit risk. All investments must have a minimum rating of low BB using our above described rating methodology and are managed by our internal credit portfolio management team.

Excluding the senior secured bank loans and certain high yield corporate bonds discussed above that were rated below investment grade when initially purchased, below-investment-grade debt and perpetual securities represented 3.0% of total debt and perpetual securities at September 30, 2015, compared with 3.4% at December 31, 2014, on an amortized cost basis. Debt and perpetual securities classified as below investment grade at September 30, 2015 and December 31, 2014 were generally reported as available for sale and carried at fair value.

The following table shows the 10 largest holdings with a split rating, and includes the determination between investment grade and below investment grade based on the above methodology as of September 30, 2015.



Split-Rated Securities
(In millions)	Amortized Cost			Investment-Grade Status
Commerzbank AG (includes Dresdner Bank)		$	214	Below Investment Grade
Deutsche Bank AG⁽¹⁾		200		Below Investment Grade
DEPFA Bank PLC		167		Below Investment Grade
Telecom Italia SpA		167		Below Investment Grade
Bank of Ireland		167		Investment Grade
Energias de Portugal SA (EDP)		117		Investment Grade
Goldman Sachs Capital I		105		Investment Grade
Barclays Bank PLC ⁽¹⁾		103		Below Investment Grade
Petrobras International Finance Company		88		Below Investment Grade
Redes Energeticas Nacionais (REN)		88		Investment Grade

⁽¹⁾ Includes perpetual security

Split-rated securities, excluding the senior secured bank loan investments and high yield corporate bonds discussed above, totaled $2.0 billion and represented 2.1% of total debt and perpetual securities, at amortized cost, at September 30, 2015, compared with $2.2 billion and 2.3%, respectively, at December 31, 2014.

For the foreign currency and credit default swaps associated with our VIE investments for which we are the primary beneficiary, we bear the risk of foreign exchange and/or credit loss due to counterparty default even though we are not a direct counterparty to those contracts. We are a direct counterparty to the foreign currency swaps that we have on certain of our senior notes and subordinated debentures; foreign currency forwards; foreign currency options; and interest rate swaptions, therefore we are exposed to credit risk in the event of nonperformance by the counterparties in those contracts. The risk of counterparty default for our VIE and senior note and subordinated debenture swaps, foreign currency forwards and options, and swaptions is mitigated by collateral posting requirements the counterparty must meet. If collateral posting agreements are not in place, the counterparty risk associated with foreign currency forwards and foreign currency options is the risk that at expiry of the contract, the counterparty is unable to deliver the agreed upon amount of yen at the agreed upon price or delivery date, thus exposing the company to additional unhedged exposure to U.S. dollars in the Aflac Japan investment portfolio. See Note 4 of the Notes to the Consolidated Financial Statements for more information.

Other-than-temporary Impairment

See Note 3 of the Notes to the Consolidated Financial Statements for a discussion of our impairment policy.

Unrealized Investment Gains and Losses

The following table provides details on amortized cost, fair value and unrealized gains and losses for our investments in debt and perpetual securities by investment-grade status as of September 30, 2015.



(In millions)	Total Amortized Cost			Total Fair Value			Percentage of Total Fair Value			Gross Unrealized Gains			Gross Unrealized Losses
Available-for-sale securities:
Investment-grade securities		$	57,557		$	62,450		60.0	%		$	6,121		$	1,228
Below-investment-grade securities		4,546			4,822			4.6			504			228
Held-to-maturity securities:
Investment-grade securities		33,562			36,819			35.3			3,589			332
Below-investment-grade securities		167			129			.1			0			38
Total		$	95,832		$	104,220		100.0	%		$	10,214		$	1,826

The following table presents an aging of debt and perpetual securities in an unrealized loss position as of September 30, 2015.

Aging of Unrealized Losses



(In millions)	Total Amortized Cost		Total Unrealized Loss		Less than Six Months				Six Months to Less than 12 Months				12 Months or Longer
					Less than Six Months				Six Months to Less than 12 Months				12 Months or Longer
					Amortized Cost		Unrealized Loss		Amortized Cost		Unrealized Loss		Amortized Cost		Unrealized Loss
Available-for-sale securities:
Investment-grade securities	$	16,408	$	1,228	$	9,945	$	441	$	2,303	$	239	$	4,160	$	548
Below- investment-grade securities	1,921		228		944		54		152		27		825		147
Held-to-maturity securities:
Investment-grade securities	4,983		332		2,790		127		667		50		1,526		155
Below- investment-grade securities	167		38		0		0		0		0		167		38
Total	$	23,479	$	1,826	$	13,679	$	622	$	3,122	$	316	$	6,678	$	888

The following table presents a distribution of unrealized losses on debt and perpetual securities by magnitude as of September 30, 2015.

Percentage Decline From Amortized Cost



(In millions)	Total Amortized Cost		Total Unrealized Loss		Less than 20%				20% to 50%				Greater than 50%
(In millions)	Total Amortized Cost		Total Unrealized Loss		Amortized Cost		Unrealized Loss		Amortized Cost		Unrealized Loss		Amortized Cost		Unrealized Loss
Available-for-sale securities:
Investment-grade securities	$	16,408	$	1,228	$	15,532	$	991	$	876	$	237	$	0	$	0
Below- investment-grade securities	1,921		228		1,625		129		289		96		7		3
Held-to-maturity securities:
Investment-grade securities	4,983		332		4,983		332		0		0		0		0
Below- investment-grade securities	167		38		0		0		167		38		0		0
Total	$	23,479	$	1,826	$	22,140	$	1,452	$	1,332	$	371	$	7	$	3

The following table presents the 10 largest unrealized loss positions in our portfolio as of September 30, 2015.



(In millions)	Credit Rating		Amortized Cost			Fair Value			Unrealized Loss
Diamond Offshore Drilling Inc.		BBB		$	144		$	93		$	(51	)
Bank of America Corp		A		379			334			(45		)
DEPFA Bank PLC		BB		167			129			(38		)
Noble Holding International Ltd.		BBB		104			69			(35		)
Bank of Ireland		BBB		167			133			(34		)
Kommunal Lanspensjonskasse (KLP) ⁽¹⁾		BBB		204			170			(34		)
Investcorp Capital Limited		BB		358			325			(33		)
AXA ⁽¹⁾		BBB		276			244			(32		)
CFE		BBB		267			239			(28		)
Transocean Inc.		BB		71			44			(27		)

⁽¹⁾ Includes perpetual security

The declines in the fair values noted above were a result of changes in interest rates, movement in the yen/dollar exchange rate, and/or changes in credit spreads driven by the issuer’s underlying credit quality. As we believe these issuers have the ability to continue making timely payments of principal and interest, we view these changes in fair value to be temporary and do not believe it is necessary to impair the carrying value of these securities. See the Unrealized Investment Gains and Losses section in Note 3 of the Notes to the Consolidated Financial Statements for further discussions of unrealized losses related to financial institutions, including perpetual securities, and other corporate investments.

Investment Valuation and Cash

We estimate the fair values of our securities on a monthly basis. We monitor the estimated fair values obtained from our custodian, pricing vendors and brokers for consistency from month to month, while considering current market conditions. We also periodically discuss with our custodian and pricing brokers and vendors the pricing techniques they use to monitor the consistency of their approach and periodically assess the appropriateness of the valuation level assigned to the values obtained from them. If a fair value appears unreasonable, we will re-examine the inputs and assess the reasonableness of the pricing data with the vendor. Additionally, we may compare the inputs to relevant market indices and other performance measurements. The output of this analysis is presented to the Company's Valuations and Classifications Subcommittee, or VCS. Based on the analysis provided to the VCS, the valuation is confirmed or may be revised if there is evidence of a more appropriate estimate of fair value based on available market data. We have performed verification of the inputs and calculations in any valuation models to confirm that the valuations represent reasonable estimates of fair value.

As of September 30, 2015, we had a $66 million investment in middle market loans through participation rights that are accounted for as loan receivables, recorded at amortized cost on the acquisition date, and carried at adjusted amortized cost. The adjusted amortized cost of the loan receivables reflects allowances for expected incurred losses estimated based on past events and current economic conditions as of each reporting date. See the Loans and Loan Receivables section in Note 3 of the Notes to the Consolidated Financial Statements for further discussion of this investment.

Cash and cash equivalents totaled $3.5 billion, or 3.4% of total investments and cash, as of September 30, 2015, compared with $4.7 billion, or 4.3%, at December 31, 2014. For a discussion of the factors affecting our cash balance, see the Operating Activities, Investing Activities and Financing Activities subsections of this MD&A.

For additional information concerning our investments, see Notes 3, 4, and 5 of the Notes to the Consolidated Financial Statements.

Deferred Policy Acquisition Costs

The following table presents deferred policy acquisition costs by segment.



(In millions)	September 30, 2015			December 31, 2014			% Change
Aflac Japan		$	5,340		$	5,211		2.5	%	⁽¹⁾
Aflac U.S.		3,111			3,062			1.6
Total		$	8,451		$	8,273		2.2	%

⁽¹⁾Aflac Japan’s deferred policy acquisition costs increased 2.0% in yen during the nine months ended September 30, 2015.

See Note 1 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014 for a discussion of changes to the accounting policy for DAC which was effective January 1, 2012.

Policy Liabilities

The following table presents policy liabilities by segment.



(In millions)	September 30, 2015				December 31, 2014			% Change
Aflac Japan		$	78,143			$	74,575		4.8	%	⁽¹⁾
Aflac U.S.		9,699				9,356			3.7
Other		30				2			100.0
Intercompany eliminations⁽²⁾		(687		)		0			(100.0	)
Total		$	87,185			$	83,933		3.9	%

⁽¹⁾Aflac Japan’s policy liabilities increased 4.3% in yen during the nine months ended September 30, 2015.

⁽²⁾ Elimination entry necessary due to recapture of a portion of policy liabilities ceded externally, as a result of the reinsurance retrocession transaction as described in Note 6 of the Notes to the Consolidated Financial Statements.

Notes Payable

Notes payable totaled $5.0 billion at September 30, 2015, compared with $5.3 billion at December 31, 2014.

In August 2015, we paid off $300 million of 3.45% fixed-rate senior notes upon their maturity and paid off a 5.0 billion yen loan at its maturity date (a total of approximately $41 million using the exchange rate at the specific maturity date). In July 2015, we paid off a 10.0 billion yen loan at its maturity date (a total of approximately $81 million using the exchange rate at the specific maturity date).

In March 2015, the Parent Company issued two series of senior notes totaling $1.0 billion through a U.S. public debt offering. The first series, which totaled $550 million, bears interest at a fixed rate of 2.40% per annum, payable semi-annually, and has a five-year maturity. The second series, which totaled $450 million, bears interest at a fixed rate of 3.25% per annum, payable semi-annually, and has a ten-year maturity. We have entered into cross-currency swaps that convert the dollar-denominated principal and interest on the senior notes into yen-denominated obligations which results in lower nominal net interest rates on the debt. By entering into these cross-currency swaps, we economically converted our $550 million liability into a 67.0 billion yen liability and reduced the interest rate on this debt from 2.40% in dollars to .24% in yen, and we economically converted our $450 million liability into a 55.0 billion yen liability and reduced the interest rate on this debt from 3.25% in dollars to .82% in yen. In April 2015, the Parent Company used the proceeds from the March 2015 issuance of its fixed-rate senior notes to redeem all of our $850 million 8.50% fixed-rate senior notes due May 2019 and to pay a portion of the corresponding $230 million make-whole premium due to the investors of these notes.

See Note 7 of the accompanying Notes to the Consolidated Financial Statements for additional information on our notes payable.

Benefit Plans

Aflac Japan and Aflac U.S. have various benefit plans. For additional information on our Japanese and U.S. plans, see Note 10 of the accompanying Notes to the Consolidated Financial Statements and Note 14 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014.

Policyholder Protection Corporation

The Japanese insurance industry has a policyholder protection system that provides funds for the policyholders of insolvent insurers. Legislation enacted regarding the framework of the Life Insurance Policyholder Protection Corporation (LIPPC) included government fiscal measures supporting the LIPPC. On December 27, 2011, Japan's FSA announced the plans to enhance the stability of the LIPPC by extending the government's fiscal support of the LIPPC through March 2017. Accordingly, the FSA submitted legislation to the Diet on January 27, 2012 to extend the government's fiscal support framework, and the legislation was approved on March 30, 2012. Effective April 2014, the annual LIPPC contribution amount for the total life industry was lowered from 40 billion yen to 33 billion yen.

Hedging Activities

Net Investment Hedge

Our primary exposure to be hedged is our investment in Aflac Japan, which is affected by changes in the yen/dollar exchange rate. To mitigate this exposure, we have taken the following courses of action. First, Aflac Japan maintains certain unhedged dollar-denominated securities, which serve as an economic currency hedge of a portion of our investment in Aflac Japan. Second, we have designated the majority of the Parent Company’s yen-denominated liabilities (Samurai and Uridashi notes) as non-derivative hedging instruments and certain foreign currency forwards and options as derivative hedges of our net investment in Aflac Japan. We make our net investment hedge designation at the beginning of each quarter. If the total of the designated Parent Company non-derivative and derivatives notional is equal to or less than our net investment in Aflac Japan, the hedge is deemed to be effective, and the exchange effect on the yen-denominated liabilities and the change in estimated fair value of the derivatives are reported in the unrealized foreign currency component of other comprehensive income. We estimate that if the designated net investment hedge positions exceeded our net investment in Aflac Japan by 10 billion yen, we would report a foreign exchange gain/loss of approximately $1 million for every 1% yen weakening/strengthening in the end-of-period yen/dollar exchange rate. Our net investment hedge was effective during the three- and nine-month periods ended September 30, 2015 and 2014, respectively.

The yen net asset figure calculated for hedging purposes differs from the yen-denominated net asset position as discussed in the Currency Risk subsection of MD&A. As disclosed in that subsection, the consolidation of the underlying assets in certain VIEs requires that we derecognize our yen-denominated investment in the VIE and recognize the underlying fixed-maturity or perpetual securities and cross-currency swaps. While these U.S. dollar investments will create foreign currency fluctuations, the combination of the U.S. dollar-denominated investment and the cross-currency swap economically creates a yen-denominated investment that qualifies for inclusion as a component of our investment in Aflac Japan. Similarly, the combination of the U.S. corporate bonds and the foreign currency forwards and options that we have entered into, as discussed in the Aflac Japan Investment subsection of MD&A, economically creates a yen-denominated investment that qualifies for inclusion as a component of our investment in Aflac Japan.

The dollar values of our yen-denominated net assets, including economic yen-denominated investments for net investment hedging purposes as discussed above, are summarized as follows (translated at end-of-period exchange rates):



(In millions)	September 30, 2015				December 31, 2014
Aflac Japan net assets		$	13,726			$	14,665
Aflac Japan unhedged dollar-denominated net assets		(8,452		)		(8,672		)
Consolidated yen-denominated net assets (liabilities)		$	5,274			$	5,993

For the hedge of our net investment in Aflac Japan, we have designated certain of the Parent Company's yen-denominated liabilities, certain unhedged U.S. dollar investments and foreign currency forwards and options as a hedge of our net investment in Aflac Japan. Our consolidated yen-denominated net assets position was partially hedged at $2.0 billion as of September 30, 2015, compared with $1.6 billion as of December 31, 2014.

Cash Flow Hedges

We had freestanding derivative instruments related to our consolidated VIE investments that are reported in the consolidated balance sheet at fair value within other assets and other liabilities. As of September 30, 2015, two of the freestanding swaps that are used within VIEs to hedge the risk arising from changes in foreign currency exchange rates qualified for hedge accounting.

Fair Value Hedges

We have entered into foreign currency forwards and options to mitigate the foreign exchange risk associated with new investments in U.S. dollar-denominated fixed-maturities that support yen-denominated liabilities within our Aflac Japan segment.

We have entered into interest rate swaptions to mitigate the interest rate risk associated with our U.S. dollar-denominated fixed-maturities that support yen-denominated liabilities within our Aflac Japan segment.

See Note 4 of the Notes to the Consolidated Financial Statements for additional information on our hedging activities.

Off-Balance Sheet Arrangements

As of September 30, 2015, we had no material letters of credit, standby letters of credit, guarantees or standby repurchase obligations. See Note 15 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014, for information on material unconditional purchase obligations that are not recorded on our balance sheet.

CAPITAL RESOURCES AND LIQUIDITY

Aflac provides the primary sources of liquidity to the Parent Company through dividends and management fees. The following table presents the amounts provided for the nine-month periods ending September 30.

Liquidity Provided by Aflac to Parent Company



(In millions)	2015		2014
Dividends declared or paid by Aflac	$	1,431	$	1,473
Management fees paid by Aflac	224		185

The primary uses of cash by the Parent Company are shareholder dividends, the repurchase of its common stock and interest on its outstanding indebtedness. The Parent Company's sources and uses of cash are reasonably predictable and are not expected to change materially in the future. For additional information, see the Financing Activities subsection of this MD&A.

The Parent Company also accesses debt security markets to provide additional sources of capital. We filed a shelf registration statement with the SEC in May 2015 that allows us to issue an indefinite amount of senior and subordinated debt, in one or more series, from time to time until May 2018. In March 2014, we filed a shelf registration statement with Japanese regulatory authorities that allows us to issue up to 100 billion yen of yen-denominated Samurai notes in Japan through March 2016. If issued, these yen-denominated Samurai notes would not be available to U.S. persons. We believe outside sources for additional debt and equity capital, if needed, will continue to be available. For additional information, see Note 7 of the Notes to the Consolidated Financial Statements.

The principal sources of cash for our insurance operations are premiums and investment income. The primary uses of cash by our insurance operations are investments, policy claims, commissions, operating expenses, income taxes and payments to the Parent Company for management fees and dividends. Both the sources and uses of cash are reasonably predictable.

When making an investment decision, our first consideration is based on product needs. Our investment objectives provide for liquidity through the purchase of investment-grade debt securities. These objectives also take into account duration matching, and because of the long-term nature of our business, we have adequate time to react to changing cash flow needs.

As a result of policyholder aging, claims payments are expected to gradually increase over the life of a policy. Therefore, future policy benefit reserves are accumulated in the early years of a policy and are designed to help fund future claims payments. We expect our future cash flows from premiums and our investment portfolio to be sufficient to meet our cash needs for benefits and expenses.

In September 2015, we amended and restated our 50.0 billion yen senior unsecured revolving credit facility agreement, due to expire in March 2018, pursuant to which the Parent Company and Aflac jointly entered into a new five-year senior unsecured revolving credit facility agreement with a syndicate of financial institutions that provides for borrowings of up to 55.0 billion yen or the equivalent of yen in U.S. dollars on a revolving basis. This credit agreement provides for borrowings in Japanese yen or the equivalent of Japanese yen in U.S. dollars on a revolving basis. Borrowings bear interest at a rate per annum equal to, at our option, either (a) a eurocurrency rate determined by reference to the London Interbank Offered Rate (LIBOR) for the interest period relevant to such borrowing adjusted for certain additional costs or (b) a base rate determined by reference to the highest of (1) the federal funds effective rate plus ½ of 1%, (2) the rate of interest for such day announced by Mizuho Bank, Ltd. as its prime rate and (3) the eurocurrency rate for an interest period of one month plus 1.00%, in each case plus an applicable margin. The applicable margin ranges between .79% and 1.275% for eurocurrency rate borrowings and 0.0% and .275% for base rate borrowings, depending on the Parent Company’s debt ratings as of the date of determination. In addition, the Parent Company and Aflac are required to pay a facility fee on the commitments ranging between .085% and .225%, also based on the Parent Company’s debt ratings as of the date of determination. Borrowings under the amended and restated credit facility may be used for general corporate purposes, including a capital contingency plan for the operations of the Parent Company and Aflac. The amended and restated credit facility requires compliance with certain financial covenants on a quarterly basis and will expire on the earlier of (a) September 18, 2020, or (b) the date the commitments are terminated pursuant to an event of default, as such term is defined in the credit agreement. As of September 30, 2015, we did not have any borrowings outstanding under our 55.0 billion yen revolving credit agreement.

The Parent Company and Aflac have an uncommitted bilateral line of credit that provides for borrowings in the amount of $100 million. Borrowings will bear interest at the rate quoted by the bank and agreed upon at the time of making such loan and will have a three-month maturity period. There are no related facility fees, upfront expenses or financial covenant requirements. Borrowings under this credit agreement may be used for general corporate purposes. Borrowings under the financing agreement will mature no later than three months after the last drawdown date of October 15, 2015. As of September 30, 2015, we did not have any borrowings outstanding under our $100 million credit agreement.

Our financial statements convey our financing arrangements during the periods presented. We have not engaged in material intra-period short-term financings during the periods presented that are not otherwise reported in our balance sheet. We were in compliance with all of the covenants of our notes payable and lines of credit at September 30, 2015. We have not entered into transactions involving the transfer of financial assets with an obligation to repurchase financial assets that have been accounted for as a sale under applicable accounting standards, including securities lending transactions. See Notes 3 and 4 of the Notes to the Consolidated Financial Statements and Note 1 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014, for more information on our securities lending and derivatives activities. With the exception of disclosed activities in those referenced footnotes, we do not have a known trend, demand, commitment, event or uncertainty that would reasonably result in our liquidity increasing or decreasing by a material amount. Our cash and cash equivalents include unrestricted cash on hand, money market instruments, and other debt instruments with a maturity of 90 days or less when purchased, all of which has minimal market, settlement or other risk exposure.

Consolidated Cash Flows

We translate cash flows for Aflac Japan’s yen-denominated items into U.S. dollars using weighted-average exchange rates. In periods when the yen weakens, translating yen into dollars causes fewer dollars to be reported. When the yen strengthens, translating yen into dollars causes more dollars to be reported.

The following table summarizes consolidated cash flows by activity for the nine-month periods ended September 30.

100



(In millions)	2015			2014
Operating activities	$	4,770		$	4,577
Investing activities	(4,083		)	(4,144		)
Financing activities	(1,826		)	(322		)
Exchange effect on cash and cash equivalents	1			12
Net change in cash and cash equivalents	$	(1,138	)	$	123

Operating Activities

The following table summarizes operating cash flows by source for the nine-month periods ended September 30.



(In millions)	2015		2014
Aflac Japan	$	3,769	$	4,042
Aflac U.S. and other operations	1,001		535
Total	$	4,770	$	4,577

Investing Activities

Operating cash flow is primarily used to purchase debt securities to meet future policy obligations. The following table summarizes investing cash flows by source for the nine-month periods ended September 30.



(In millions)	2015			2014
Aflac Japan	$	(3,479	)	$	(4,072	)
Aflac U.S. and other operations	(604		)	(72		)
Total	$	(4,083	)	$	(4,144	)

Prudent portfolio management dictates that we attempt to match the duration of our assets with the duration of our liabilities. Currently, when our fixed-maturity securities and perpetual securities mature, the proceeds may be reinvested at a yield below that required for the accretion of policy benefit liabilities on policies issued in earlier years. However, the long-term nature of our business and our strong cash flows provide us with the ability to minimize the effect of mismatched durations and/or yields identified by various asset adequacy analyses. When needed or when market opportunities arise, we dispose of selected fixed-maturity and perpetual securities that are available for sale to improve the duration matching of our assets and liabilities, improve future investment yields, and/or re-balance our portfolio. As a result, dispositions before maturity can vary significantly from year to year. Dispositions before maturity were approximately 3% of the year-to-date average investment portfolio of fixed maturities and perpetual securities available for sale during the nine-month periods ended September 30, 2015 and 2014, respectively.

Financing Activities

Consolidated cash used by financing activities was $1.8 billion in the first nine months of 2015, compared with consolidated cash used by financing activities of $322 million for the same period of 2014.

101

fixed-rate senior notes that were issued in March 2015 to redeem all of our $850 million 8.50% fixed-rate senior notes due May 2019 and to pay a portion of the corresponding $230 million make-whole premium due to the investors of these notes. We consider the make-whole payment a non-recurring transaction and therefore excluded this charge from operating earnings.

Cash returned to shareholders through dividends and treasury stock purchases was $1.6 billion during the nine-month period ended September 30, 2015, compared with $1.2 billion during the nine-month period ended September 30, 2014.

We were in compliance with all of the covenants of our notes payable and lines of credit at September 30, 2015.

The following tables present a summary of treasury stock activity during the nine-month periods ended September 30.

Treasury Stock Purchased



(In millions of dollars and thousands of shares)	2015		2014
Treasury stock purchases	$	1,081	$	698
Number of shares purchased:
Open market	17,421		11,070
Other	241		132
Total shares purchased	17,662		11,202

Treasury Stock Issued



(In millions of dollars and thousands of shares)	2015		2014
Stock issued from treasury:
Cash financing	$	28	$	25
Noncash financing	49		49
Total stock issued from treasury	$	77	$	74
Number of shares issued	1,407		1,367

During the first nine months of 2015, we repurchased 17.4 million shares of our common stock for $1.1 billion as part of our share repurchase program. In August 2015, Aflac's board of directors authorized the purchase of an additional 40 million shares of its common stock. As of September 30, 2015, a remaining balance of 52.1 million shares of our common stock was available for purchase under share repurchase authorizations by our board of directors. We currently plan to repurchase $1.3 billion of our common stock in 2015.

Cash dividends paid to shareholders were $.39 per share in the third quarter of 2015, compared with $.37 per share in the third quarter of 2014. The following table presents the dividend activity for the nine-month periods ended September 30.



(In millions)	2015		2014
Dividends paid in cash	$	489	$	486
Dividends through issuance of treasury shares	19		19
Total dividends to shareholders	$	508	$	505

In October 2015, the board of directors declared the fourth quarter cash dividend of $.41 per share, an increase of 5.1% compared with the same period in 2014. The dividend is payable on December 1, 2015, to shareholders of record at the close of business on November 18, 2015.

Regulatory Restrictions

Aflac is domiciled in Nebraska and is subject to its regulations. A life insurance company’s statutory capital and surplus is determined according to rules prescribed by the National Association of Insurance Commissioners (NAIC), as modified by the insurance department in the insurance company’s state of domicile. Statutory accounting rules are different from U.S. GAAP and are intended to emphasize policyholder protection and company solvency. The continued

102

long-term growth of our business may require increases in the statutory capital and surplus of our insurance operations. Aflac’s insurance operations may secure additional statutory capital through various sources, such as internally generated statutory earnings or equity contributions by the Parent Company from funds generated through debt or equity offerings. The NAIC’s risk-based capital (RBC) formula is used by insurance regulators to help identify inadequately capitalized insurance companies. The RBC formula quantifies insurance risk, business risk, asset risk and interest rate risk by weighing the types and mixtures of risks inherent in the insurer’s operations. As of September 30, 2015, Aflac’s RBC ratio remains high and reflects a strong capital and surplus position. The maximum amount of dividends that can be paid to the Parent Company by Aflac without prior approval of Nebraska's director of insurance is the greater of the net income from operations, which excludes net realized investment gains, for the previous year determined under statutory accounting principles, or 10% of statutory capital and surplus as of the previous year-end. Dividends declared by Aflac during 2015 in excess of $2.4 billion would require such approval.

In addition to limitations and restrictions imposed by U.S. insurance regulators, Japan’s FSA may not allow profit repatriations from Aflac Japan if the transfers would cause Aflac Japan to lack sufficient financial strength for the protection of policyholders. The FSA maintains its own solvency standard which is quantified through the solvency margin ratio (SMR). Aflac Japan's SMR is sensitive to interest rate and foreign exchange rate changes, therefore we continue to evaluate alternatives for reducing this sensitivity. In the event of a rapid change in interest rates, we have a senior unsecured revolving credit facility in the amount of 55 billion yen as a capital contingency plan. We have already undertaken various measures to mitigate the sensitivity of Aflac Japan's SMR. For example, we employ policy reserve matching (PRM) investment strategies, which is a Japan-specific accounting treatment that reduces SMR interest rate sensitivity since PRM-designated investments are carried at amortized cost consistent with corresponding liabilities. For U.S. GAAP, PRM investments are categorized as available-for-sale. In the first quarter of 2015, Aflac Japan entered into an additional quota share arrangement to cede a portion of hospital benefits of one of our closed products. Under this coinsurance indemnity type of reinsurance, Aflac Japan released approximately 130 billion yen of FSA reserves. (See Notes 3 and 4 of the Notes to the Consolidated Financial Statements in our annual report to shareholders for the year ended December 31, 2014 for additional information on our investment strategies and hedging activities.) As of September 30, 2015, Aflac Japan's SMR remains high and reflects a strong capital position.

Payments are made from Aflac Japan to the Parent Company for management fees and to Aflac U.S. for allocated expenses and remittances of earnings. The following table details Aflac Japan remittances for the nine-month periods ended September 30.

Aflac Japan Remittances



(In millions of dollars and billions of yen)	2015		2014
Aflac Japan management fees paid to Parent Company	$	36	$	31
Expenses allocated to Aflac Japan (in dollars)	78		57
Aflac Japan profit remittances to Aflac U.S. (in dollars)	1,436		1,288
Aflac Japan profit remittances to Aflac U.S. (in yen)	174.0		131.4

We entered into foreign exchange forwards as part of an economic hedge on foreign exchange risk on 30 billion yen of profit repatriation received in February 2015, resulting in $7 million of additional funds received when the yen was exchanged into dollars. In July 2015, Aflac Japan remitted profits to Aflac U.S. of 119.0 billion yen, or $979 million. We had entered into foreign exchange forwards as part of a hedging strategy on 102.5 billion yen of the July 2015 repatriation, resulting in $60 million of additional funds received when the yen was exchanged into dollars. We entered into foreign exchange forwards as part of an economic hedge on foreign exchange risk on 25.0 billion yen of profit repatriation received in September 2015, which reduced the amount of funds received by $1 million when the yen was exchanged into dollars. In the nine-month period ended September 30, 2015, we have repatriated a total of 174 billion yen, and we believe we are positioned to meet or exceed our full year 2015 repatriation target of approximately 200 billion yen.

For additional information on regulatory restrictions on dividends, profit repatriations and other transfers, see Note 13 of the Notes to the Consolidated Financial Statements and the Regulatory Restrictions subsection of MD&A, both in our annual report to shareholders for the year ended December 31, 2014.

Other

For information regarding commitments and contingent liabilities, see Note 11 of the Notes to the Consolidated Financial Statements.

103


Item 3.	Quantitative and Qualitative Disclosures about Market Risk

The information required by Item 3 is incorporated by reference from the Market Risks of Financial Instruments subsection of MD&A in Part I, Item 2 of this report.


Item 4.	Controls and Procedures

Disclosure Controls and Procedures

The Company’s management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this quarterly report (the “Evaluation Date”). Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that, as of the Evaluation Date, the Company’s disclosure controls and procedures are effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in the Company’s internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the third fiscal quarter of 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

104

PART II. OTHER INFORMATION


Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities

During the first nine months of 2015, we repurchased shares of Aflac common stock as follows:



Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
January 1 - January 31	3,326,084		$	58.64	3,325,300	26,224,824
February 1 - February 28	2,457,596		61.41		2,301,000	23,923,824
March 1 - March 31	4,205,408		62.82		4,201,000	19,722,824
April 1 - April 30	325,000		63.74		325,000	19,397,824
May 1 - May 31	1,990,000		63.07		1,990,000	17,407,824
June 1 - June 30	1,398,960		62.44		1,391,700	16,016,124
July 1 - July 31	110,745		64.15		110,000	15,906,124
August 1 - August 31	2,368,500		61.24		2,368,500	53,537,624
September 1 - September 30	1,410,706		57.52		1,408,300	52,129,324
Total	17,592,999	⁽²⁾	$	61.22	17,420,800	52,129,324	⁽¹⁾

⁽¹⁾The total remaining shares available for purchase at September 30, 2015, consisted of: (1) 12,129,324 shares related to a share repurchase authorization by the board of directors announced in 2013 and (2) 40,000,000 shares related to a share repurchase authorization by the board of directors announced in August 2015.

⁽²⁾During the first nine months of 2015, 172,199 shares were purchased in connection with income tax withholding obligations related to the vesting of restricted-share-based awards during the period.

105


Item 6.	Exhibits



(a)	EXHIBIT INDEX
	3.0	-	Articles of Incorporation, as amended – incorporated by reference from Form 10-Q for June 30, 2008, Exhibit 3.0 (File No. 001-07434).
	3.1	-	Bylaws of the Corporation, as amended – incorporated by reference from Form 10-K for December 31, 2014, Exhibit 3.1 (File No. 001-07434).
	4.0	-	There are no instruments with respect to long-term debt not being registered in which the total amount of securities authorized exceeds 10% of the total assets of Aflac Incorporated and its subsidiaries on a consolidated basis. We agree to furnish a copy of any long-term debt instrument to the Securities and Exchange Commission upon request.
	4.1	-	Indenture, dated as of May 21, 2009, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee – incorporated by reference from Form 8-K dated May 21, 2009, Exhibit 4.1 (File No. 001-07434).
	4.2	-	First Supplemental Indenture, dated as of May 21, 2009, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 8.500% Senior Note due 2019) – incorporated by reference from Form 8-K dated May 21, 2009, Exhibit 4.2 (File No. 001-07434).
	4.3	-	Second Supplemental Indenture, dated as of December 17, 2009, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 6.900% Senior Note due 2039) – incorporated by reference from Form 8-K dated December 14, 2009, Exhibit 4.1 (File No. 001-07434).
	4.4	-	Third Supplemental Indenture, dated as of August 9, 2010, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 6.45% Senior Note due 2040) - incorporated by reference from Form 8-K dated August 4, 2010, Exhibit 4.1 (File No. 001-07434).
	4.5	-	Fourth Supplemental Indenture, dated as of August 9, 2010, between Aflac Incorporated and The Bank of New York and Mellon Trust Company, N.A., as trustee (including the form of 3.45% Senior Note due 2015) – incorporated by reference from Form 8-K dated August 4, 2010, Exhibit 4.2 (File No. 001-07434).
	4.6	-	Fifth Supplemental Indenture, dated as of February 10, 2012, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 2.65% Senior Note due 2017) - incorporated by reference from Form 8-K dated February 8, 2012, Exhibit 4.1 (File No. 001-07434).
	4.7	-	Sixth Supplemental Indenture, dated as of February 10, 2012, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 4.00% Senior Note due 2022) - incorporated by reference from Form 8-K dated February 8, 2012, Exhibit 4.2 (File No. 001-07434).
	4.8	-	Seventh Supplemental Indenture, dated as of July 31, 2012, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 2.65% Senior Note due 2017) - incorporated by reference from Form 8-K dated July 27, 2012, Exhibit 4.1 (File No. 001-07434).
	4.9	-	Eighth Supplemental Indenture, dated as of June 10, 2013, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 3.625% Senior Note due 2023) - incorporated by reference from Form 8-K dated June 10, 2013, Exhibit 4.1 (File No. 001-07434).
	4.10	-	Ninth Supplemental Indenture, dated as of November 7, 2014, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 3.625% Senior Note due 2024) - incorporated by reference from Form 8-K dated November 4, 2014, Exhibit 4.1 (File No. 001-07434).
	4.11	-	Tenth Supplemental Indenture, dated as of March 12, 2015, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 2.40% Senior Note due 2020) - incorporated by reference from Form 8-K dated March 9, 2015, Exhibit 4.1 (File No. 001-07434).
	4.12	-	Eleventh Supplemental Indenture, dated as of March 12, 2015, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 3.25% Senior Note due 2025) - incorporated by reference from Form 8-K dated March 9, 2015, Exhibit 4.2 (File No. 001-07434).
	4.13	-	Subordinated Indenture, dated as of September 26, 2012, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee - incorporated by reference from Form 8-K dated September 26, 2012, Exhibit 4.1 (File No. 001-07434).

106



4.14	-	First Supplemental Indenture, dated as of September 26, 2012, between Aflac Incorporated and The Bank of New York Mellon Trust Company, N.A., as trustee (including the form of 5.50% Subordinated Debenture due 2052) - incorporated by reference from Form 8-K dated September 26, 2012, Exhibit 4.2 (File No. 001-07434).
10.0*	-	American Family Corporation Retirement Plan for Senior Officers, as amended and restated October 1, 1989 – incorporated by reference from 1993 Form 10-K, Exhibit 10.2 (File No. 001-07434).
10.1*	-	Amendment to American Family Corporation Retirement Plan for Senior Officers, dated December 8, 2008 – incorporated by reference from 2008 Form 10-K, Exhibit 10.1 (File No. 001-07434).
10.2*	-	Aflac Incorporated Supplemental Executive Retirement Plan, as amended and restated January 1, 2009 – incorporated by reference from 2008 Form 10-K, Exhibit 10.5 (File No. 001-07434).
10.3*	-	First Amendment to the Aflac Incorporated Supplemental Executive Retirement Plan, as amended and restated January 1, 2009 – incorporated by reference from 2012 Form 10-K, Exhibit 10.3 (File No. 001-07434).
10.4*	-	Second Amendment to the Aflac Incorporated Supplemental Executive Retirement Plan, as amended and restated January 1, 2009 - incorporated by reference from 2014 Form 10-K, Exhibit 10.4 (File No. 001-07434).
10.5*	-	Aflac Incorporated Executive Deferred Compensation Plan, as amended and restated, effective September 1, 2015.
10.6*	-	Aflac Incorporated 2013 Management Incentive Plan - incorporated by reference from the 2012 Proxy Statement, Appendix B (File No. 001-07434).
10.7*	-	1999 Aflac Associate Stock Bonus Plan, amended and restated as of January 1, 2013 - incorporated by reference from Form 10-Q for March 31, 2013, Exhibit 10.10 (File No. 001-07434).
10.8*	-	Aflac Incorporated 1997 Stock Option Plan – incorporated by reference from the 1997 Shareholders’ Proxy Statement, Appendix B (File No. 001-07434).
10.9*	-	Form of Officer Stock Option Agreement (Non-Qualifying Stock Option) under the Aflac Incorporated 1997 Stock Option Plan – incorporated by reference from Form 8-K dated January 28, 2005, Exhibit 10.5 (File No. 001-07434).
10.10*	-	Form of Officer Stock Option Agreement (Incentive Stock Option) under the Aflac Incorporated 1997 Stock Option Plan – incorporated by reference from Form 8-K dated January 28, 2005, Exhibit 10.6 (File No. 001-07434).
10.11*	-	Notice of grant of stock options and stock option agreement to officers under the Aflac Incorporated 1997 Stock Option Plan – incorporated by reference from Form 8-K dated January 28, 2005, Exhibit 10.7 (File No. 001-07434).
10.12*	-	2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from the 2012 Proxy Statement, Appendix A (File No. 001-07434).
10.13*	-	Form of Non-Employee Director Stock Option Agreement (NQSO) under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.16 (File No. 001-07434).
10.14*	-	Notice of grant of stock options to non-employee director under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.17 (File No. 001-07434).
10.15*	-	Form of Non-Employee Director Restricted Stock Award Agreement under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.18 (File No. 001-07434).
10.16*	-	Notice of restricted stock award to non-employee director under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.19 (File No. 001-07434).
10.17*	-	U.S. Form of Officer Restricted Stock Award Agreement under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.20 (File No. 001-07434).
10.18*	-	Japan Form of Officer Restricted Stock Award Agreement under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.21 (File No. 001-07434).
10.19*	-	Notice of time based restricted stock award to officers under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.22 (File No. 001-07434).
10.20*	-	Notice of performance based restricted stock award to officers under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.23 (File No. 001-07434).

107



10.21*	-	U.S. Form of Officer Stock Option Agreement (Non-Qualifying Stock Option) under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.24 (File No. 001-07434).
10.22*	-	Japan Form of Officer Stock Option Agreement (Non-Qualifying Stock Option) under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.25 (File No. 001-07434).
10.23*	-	U.S. Form of Officer Stock Option Agreement (Incentive Stock Option) under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.26 (File No. 001-07434).
10.24*	-	Japan Form of Officer Stock Option Agreement (Incentive Stock Option) under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.27 (File No. 001-07434).
10.25*	-	U.S. Notice of grant of stock options to officers under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.28 (File No. 001-07434).
10.26*	-	Japan Notice of grant of stock options to officers under the 2004 Aflac Incorporated Long-Term Incentive Plan, as amended and restated March 14, 2012 – incorporated by reference from Form 10-Q for June 30, 2013, Exhibit 10.29 (File No. 001-07434).
10.27*	-	Aflac Incorporated Retirement Plan for Directors Emeritus, as amended and restated, dated February 9, 2010 – incorporated by reference from 2009 Form 10-K, Exhibit 10.26 (File No. 001-07434).
10.28*	-	Amendment to Aflac Incorporated Retirement Plan for Directors Emeritus, as amended and restated, dated August 10, 2010 – incorporated by reference from Form 10-Q for September 30, 2010, Exhibit 10.27 (File No. 001-07434).
10.29*	-	Aflac Incorporated Employment Agreement with Daniel P. Amos, as amended and restated, dated August 20, 2015.
10.30*	-	Aflac Incorporated Employment Agreement with Kriss Cloninger III, as amended and restated, dated August 20, 2015.
10.31*	-	Aflac Incorporated Employment Agreement with Paul S. Amos II, as amended and restated, dated August 19, 2015.
10.32*	-	Aflac Incorporated Employment Agreement with Eric Kirsch, as amended and restated, dated August 21, 2015.
10.33*	-	Aflac Incorporated Employment Agreement with Frederick J. Crawford, effective June 30, 2015 – incorporated by reference from Form 8-K dated June 24, 2015, Exhibit 10.1 (File No. 001-07434).
11	-	Statement regarding the computation of per-share earnings for the Registrant.
12	-	Statement regarding the computation of ratio of earnings to fixed charges for the Registrant.
15	-	Letter from KPMG LLP regarding unaudited interim financial information.
31.1	-	Certification of CEO dated November 3, 2015, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
31.2	-	Certification of CFO dated November 3, 2015, required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934.
32	-	Certification of CEO and CFO dated November 3, 2015, pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	-	XBRL Instance Document.⁽¹⁾
101.SCH	-	XBRL Taxonomy Extension Schema.
101.CAL	-	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF	-	XBRL Taxonomy Extension Definition Linkbase.
101.LAB	-	XBRL Taxonomy Extension Label Linkbase.
101.PRE	-	XBRL Taxonomy Extension Presentation Linkbase.



₍₁₎	Includes the following materials contained in this Quarterly Report on Form 10-Q for the period ended September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Statements of Earnings, (ii) Consolidated Statements of Comprehensive Income (Loss), (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Shareholders’ Equity, (v) Consolidated Statements of Cash Flows, (vi) Notes to the Consolidated Financial Statements

*	Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 6 of this report

108

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



		Aflac Incorporated

November 3, 2015		/s/ Frederick J. Crawford
		(Frederick J. Crawford)
		Executive Vice President, Chief Financial Officer

November 3, 2015		/s/ June Howard
		(June Howard) Senior Vice President, Financial Services; Chief Accounting Officer

109

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 10.5

AFLAC INCORPORATED

EXECUTIVE DEFERRED COMPENSATION PLAN

As amended and restated

effective September 1, 2015

AFLAC INCORPORATED

EXECUTIVE DEFERRED COMPENSATION PLAN

Effective as of the 1st day of September, 2015, Aflac Incorporated (the “Controlling Company”) hereby amends and restates the Aflac Incorporated Executive Deferred Compensation Plan (the “Plan”).

BACKGROUND AND PURPOSE

A. Background. The Plan was initially adopted effective as of January 1, 1999, and was subsequently amended. Effective September 1, 2015, the Plan, as set forth in this document, is intended and should be construed as a restatement and continuation of the Plan as previously in effect.

B. Goal. The Controlling Company desires to provide to key management employees of the participating companies one or more of the following benefits: (i) an opportunity to defer the receipt and income taxation of a portion of such employees’ annual compensation; (ii) additional retirement benefits; and (iii) additional deferred compensation.

C. Purpose. The purpose of the Plan document is to set forth the terms and conditions pursuant to which these deferrals may be made and to describe the nature and extent of the employees’ rights to their deferred amounts.

D. Type of Plan. The Plan constitutes an unfunded, nonqualified deferred compensation plan that benefits certain designated employees who are within a select group of key management or highly compensated employees. It is intended that this Plan comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended.

STATEMENT OF AGREEMENT

To amend and restate the Plan with the purposes and goals as hereinabove described, the Controlling Company hereby sets forth the terms and provisions of the Plan as follows:

AFLAC INCORPORATED

EXECUTIVE DEFERRED COMPENSATION PLAN

TABLE OF CONTENTS



			Page

ARTICLE I DEFINITIONS				1
	1.1	Account		1
	1.2	Administrative Committee		1
	1.3	Affiliate		1
	1.4	Annual Bonus		1
	1.5	Annual Bonus Contributions		1
	1.6	Annual Bonus Election		1
	1.7	Annual Compensation		1
	1.8	Base Salary		2
	1.9	Base Salary Contributions		2
	1.10	Beneficiary		2
	1.11	Board		2
	1.12	Business Day		2
	1.13	Cause		2
	1.14	Change in Control		2
		(a) General Definition		2
		(b) Payment Definition Under Code Section 409A		3
	1.15	Code		6
	1.16	Company Stock		6
	1.17	Company Stock Fund		6
	1.18	Company Stock Unit		6
	1.19	Compensation Committee		6
	1.20	Controlling Company		6
	1.21	Deferral Contributions		6
	1.22	Director		6
	1.23	Disability or Disabled		7
	1.24	Discretionary Contributions		7
	1.25	Effective Date		7
	1.26	Eligible Employee		7
	1.27	ERISA		7
	1.28	Executive Employer Contribution		7
	1.29	FICA Tax		7
	1.30	Financial Hardship		7
	1.31	Investment Election		8
	1.32	Investment Funds		8
	1.33	Key Employee		8
	1.34	Matching Contributions		8
	1.35	Participant		8



	1.36	Participating Company	8
	1.37	Payment Date	8
	1.38	Plan	8
	1.39	Plan Year	8
	1.40	Post 409A Account	8
	1.41	Pre-409A Account	8
	1.42	Retirement Plans Investment Committee	9
	1.43	Salary Deferral Election	9
	1.44	Separate from Service or Separation from Service	9
		(a) Leaves of Absence	9
		(b) Status Change	9
		(c) Termination of Employment	9
	1.45	Surviving Spouse	10
	1.46	Trust or Trust Agreement	10
	1.47	Trust Fund	10
	1.48	Trustee	10
	1.49	Valuation Date	10
	1.50	Years of Employment	10
	1.51	Years of Participation	10

ARTICLE II ELIGIBILITY AND PARTICIPATION			11
	2.1	Eligibility for Deferral Contributions	11
		(a) Annual Participation	11
		(b) Interim Plan Year Participation	11
	2.2	Procedure for Admission	11
	2.3	Eligibility for Discretionary Contributions	11
	2.4	Eligibility for Executive Employer Contributions	11
	2.5	Cessation of Eligibility	11

ARTICLE III PARTICIPANTS’ ACCOUNTS; DEFERRALS AND CREDITING			13
	3.1	Participants’ Accounts	13
		(a) Establishment of Accounts	13
		(b) Nature of Contributions and Accounts	13
		(c) Several Liabilities	13
		(d) General Creditors	13
	3.2	Deferral Contributions	13
		(a) Effective Date	14
		(b) Term and Irrevocability of Election	14
		(c) Amount	15
		(d) Crediting of Deferral Contributions	15
	3.3	Matching Contributions	15
	3.4	Discretionary Contributions	16
	3.5	Executive Employer Contributions	16
	3.6	Debiting of Distributions	16
	3.7	Crediting of Earnings	16
		(a) General Rule	16
		(b) Cash Dividends	17



		(c) Adjustments for Stock Dividends and Splits	17
	3.8	Value of Account	17
		(a) General Rule	17
		(b) Value of Company Stock	17
	3.9	Vesting	18
		(a) General	18
		(b) Executive Employer Contributions	18
		(c) Change in Control	20
		(d) Other Vesting Schedules	20
	3.10	Notice to Participants of Account Balances	20
	3.11	Good Faith Valuation Binding	21
	3.12	Errors and Omissions in Accounts	21

ARTICLE IV INVESTMENT FUNDS			22
	4.1	Selection by Retirement Plans Investment Committee	22
	4.2	Participant Direction of Deemed Investments	22
		(a) Nature of Participant Direction	22
		(b) Investment of Contributions	22
		(c) Investment of Existing Account Balances	22
		(d) Administrative Committee Discretion	23

ARTICLE V PAYMENT OF POST-409A ACCOUNT BALANCES			24
	5.1	Amount of Benefit Payments for Post-409A Account	24
	5.2	Timing and Form of Distribution of Post-409A Account	24
		(a) Timing of Distributions	24
		(b) Form of Distribution for Post-409A Account Balances	24
		(c) Modifications of Form and Timing	25
		(d) Medium of Payment	26
		(e) Order of Distribution	26
		(f) Cash-out	26
	5.3	Change in Control	27
	5.4	Death Benefits	27
	5.5	Distribution of Post-409A Account Discretionary Contributions	27
		(a) Determination by Grantor	27
		(b) Participant Election in Absence of Designation by Grantor	27
		(c) Default Payment	28
	5.6	Distribution of Executive Employer Contributions	28
		(a) Generally	28
		(b) Installment Election	28
		(c) Change in Form of Payments	28
		(d) Other Distribution Rules	28
	5.7	Hardship Withdrawals	29
	5.8	Taxes	29
		(a) Amounts Payable Whether or Not Account is in Pay Status	29
		(b) Amounts Payable Only if Account is in Pay Status	29
	5.9	Offset of Post-409A Account by Amounts Owed to the Affiliates	29
	5.10	No Acceleration of Post-409A Account Payments	30

iii



ARTICLE VI PAYMENT OF PRE-409A ACCOUNT BALANCES			31
	6.1	Benefit Payments of Pre-409A Accounts Upon Termination of Service for
Reasons Other than Death			31
		(a) General Rule Concerning Benefit Payments	31
		(b) Timing of Distribution	31
	6.2	Form of Distribution for Pre-409A Account	32
		(a) Single-Sum Payment	32
		(b) Annual Installments	32
		(c) Multiple Forms of Distribution	32
		(d) Change in Control	32
		(e) Form of Assets	33
		(f) Order of Distribution	33
	6.3	Death Benefits	33
	6.4	In-Service Distributions	33
		(a) Hardship Distributions	33
		(b) Distributions with Forfeiture	33
	6.5	Taxes	34

ARTICLE VII CLAIMS			35
	7.1	Rights	35
	7.2	Claim Procedure	35
		(a) Initial Claim	35
		(b) Appeal	35
	7.3	Satisfaction of Claims	36

ARTICLE VIII SOURCE OF FUNDS; TRUST			37
	8.1	Source of Funds	37
	8.2	Trust	37
		(a) Establishment	37
		(b) Distributions	37
		(c) Status of the Trust	37
		(d) Change in Control	37
	8.3	Funding Prohibition under Certain Circumstances	38

ARTICLE IX ADMINISTRATIVE AND RETIREMENT PLANS INVESTMENT
COMMITTEES			39
	9.1	Action of Administrative Committee	39
	9.2	Rights and Duties of Administrative Committee	39
	9.3	Compensation, Indemnity and Liability	40
	9.4	Retirement Plans Investment Committee	40
		(a) Appointment	40
		(b) Duties	40
	9.5	Delegation and Discretion	40
		(a) Delegation	40
		(b) Discretion	40



ARTICLE X AMENDMENT AND TERMINATION			42
	10.1	Amendments	42
	10.2	Termination of Plan	42
		(a) Freezing	42
		(b) Termination	42

ARTICLE XI MISCELLANEOUS			43
	11.1	Beneficiary Designation	43
		(a) General	43
		(b) No Designation or Designee Dead or Missing	43
	11.2	Distribution Pursuant to Domestic Relations Order	43
	11.3	Taxation	43
	11.4	Elections Prior to 2009	44
	11.5	No Employment Contract	44
	11.6	Headings	44
	11.7	Gender and Number	44
	11.8	Assignment of Benefits	44
	11.9	Legally Incompetent	44
	11.10	Governing Law	45



EXHIBIT A				A-1

ARTICLE I

DEFINITIONS

For purposes of the Plan, the following terms, when used with an initial capital letter, will have the meaning set forth below unless a different meaning plainly is required by the context.

1.1 Account means, with respect to a Participant or Beneficiary, the total dollar amount or value evidenced by the last balance posted in accordance with the terms of the Plan to the account record established for such Participant or Beneficiary. As determined by the Administrative Committee, an Account may be divided into separate subaccounts.

1.2 Administrative Committee means the committee designated by the Compensation Committee to act on behalf of the Controlling Company to administer the Plan. If at any time the Compensation Committee has not designated an Administrative Committee, the Compensation Committee will serve as the Administrative Committee. Subject to the limitation in Section 9.1 relating to decisions that affect solely their own benefits under the Plan, individuals who are management level employees and/or Participants may serve as members of the Administrative Committee. The Administrative Committee will act on behalf of the Controlling Company to administer the Plan, all as provided in Article IX.

1.3 Affiliate means the Controlling Company and any corporation or other entity that is required to be aggregated with the Controlling Company under Code Sections 414(b) or (c). Notwithstanding the foregoing, for purposes of determining whether a Separation from Service has occurred with any Participating Company, the term “Affiliate” will include such Participating Company and all entities that would be treated as a single employer with such Participating Company under Code Sections 414(b) or (c), but substituting “at least 50 percent” instead of “at least 80 percent” each place it appears in applying such rules.

1.4 Annual Bonus means, for a Participant for any Plan Year, that portion of an Eligible Employee’s compensation for that Plan Year payable before the Participant’s Separation from Service as an annual bonus under (i) the Aflac Management Incentive Plan or any successor plan thereto; and (ii) any annual sales-based bonus plan.

1.5 Annual Bonus Contributions means, for a Participant for any Plan Year, that portion of such Participant’s Annual Bonus deferred under the Plan pursuant to Section 3.2.

1.6 Annual Bonus Election means a written, electronic or other form of election permitted by the Administrative Committee, pursuant to which a Participant may elect to defer under the Plan all or a portion of his Annual Bonus.

1.7 Annual Compensation means, for purposes of the Executive Employer Contributions, the amount earned by a Participant from the Affiliates for services performed as an employee (but not as a consultant) during a relevant calendar year as wages, salaries for professional services, and cash bonuses. For clarification, “Annual Compensation” for a relevant calendar year will include all such earned compensation whether or not paid to the Participant, including (i) such earned compensation contributed by the Affiliates on behalf of a Participant

pursuant to a salary reduction agreement which is not includable in the gross income of the Participant under Code Sections 125, 402(a)(8) or 402(h); (ii) such earned compensation deferred by the Affiliates under the Plan either (A) on behalf of a Participant pursuant to a salary reduction agreement, or (B) as a result of the Affiliates’ specific decision to make a deferral of base salary in lieu of paying current cash compensation to the Participant; and (iii) such earned compensation that is comprised of bonuses that would have been paid in cash to the Participant if he had not voluntarily waived them.

1.8 Base Salary means, for a Participant for any Plan Year, the total of such Participant’s base salary, prior to any deductions, for such Plan Year payable before the Participant’s Separation from Service.

1.9 Base Salary Contributions means, for a Participant for each Plan Year, the portion of such Participant’s Base Salary deferred under the plan pursuant to Section 3.2.

1.10 Beneficiary means, with respect to a Participant, the person(s) designated in accordance with Section 11.1 to receive any death benefits that may be payable under the Plan upon the death of the Participant.

1.11 Board means the Board of Directors of the Controlling Company.

1.12 Business Day means each day on which the Trustee operates, and is open to the public, for its business.

1.13 Cause means a Participant’s involuntary termination of employment by the Affiliates, or a Participant’s voluntary termination of employment with the Affiliates in anticipation that the Participant will be terminated, in any case, for what the Compensation Committee or the Controlling Company’s Chief Executive Officer determines is due to the Participant’s: (i) continued failure to substantially perform his duties with the Affiliates (other than due to his incapacity due to physical or mental illness) after a written demand to do so by the Board, the Controlling Company’s Chief Executive Officer, or the Controlling Company’s Senior Human Resources Officer; (ii) engaging in conduct that is injurious to the Controlling Company or any Affiliate; or (iii) conviction of, or plea of guilty or no contest to, a felony or a crime of moral turpitude.

1.14 Change in Control.

(a) General Definition. For purposes of a Participant’s Pre-409A Account, Change in

Control means the occurrence of any of the following events:

(i) Any Person is or becomes the beneficial owner, directly or indirectly, of securities of the Controlling Company representing 30% or more of the combined voting power of the Controlling Company’s then outstanding securities; provided, for purposes of this subsection (i), securities acquired directly from the Controlling Company or its Affiliates will not be taken into account as securities beneficially owned by such Person;

(ii) During any period of 2 consecutive years, individuals who at the beginning of such period constitute the Board and any new director (other than a director designated by a Person who has entered into an agreement with the Controlling Company to effect a transaction described in subsection (i), (iii) or (iv) hereof) whose election by the Board or nomination for election by the Controlling Company’s shareholders was approved by a vote of at least 2/3 of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority thereof;

(iii) The shareholders of the Controlling Company approve a merger or consolidation of the Controlling Company with any other corporation, other than (A) a merger or consolidation which would result in the voting securities of the Controlling Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Controlling Company, at least 75% of the combined voting power of the voting securities of the Controlling Company or such surviving entity outstanding immediately after such merger or consolidation; or (B) a merger or consolidation effected to implement a recapitalization of the Controlling Company (or similar transaction) in which no Person acquires more than 50% of the combined voting power of the Controlling Company’s then outstanding securities; or

(iv) The shareholders of the Controlling Company approve a plan of complete liquidation of the Controlling Company or an agreement for the sale or disposition by the Controlling Company of all or substantially all of the Controlling Company’s assets.

As used herein, the term “Person” will have the meaning given in Section 3(a)(9) of the Securities Exchange Act of 1934, as modified and used in Sections 13(d) and 14(d) thereof; provided, a Person will not include (A) the Controlling Company or any of its subsidiaries; (B) a trustee or other fiduciary holding securities under an employee benefit plan of the Controlling Company or any of its subsidiaries; (C) an underwriter temporarily holding securities pursuant to an offering of such securities; or (D) a corporation owned, directly or indirectly, by the shareholders of the Controlling Company in substantially the same proportions as their ownership of stock of the Controlling Company.

(b) Payment Definition Under Code Section 409A. For purposes of a Participant’s Post-409A Account, “Change in Control” means any of the events specified in (i), (ii), (iii) or (iv) below, subject to the rules described in subsection (v) below:

(i) Any one person, or more than one person acting as a group (as described below), acquires ownership of stock of the Controlling Company that, together with stock held by such person or group constitutes more than 50 percent of the total fair market value or total voting power of the stock of the Controlling Company. However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Controlling Company, the acquisition of additional stock by the same person or persons

is not considered to cause a Change in Control. An increase in the percentage of stock owned by any one person, or persons acting as a group, as a result of a transaction in which the Controlling Company acquires its stock in exchange for property will be treated as an acquisition of stock for purposes of this subsection. This subsection applies only when there is a transfer of stock of the Controlling Company (or issuance of stock of the Controlling Company) and stock in the Controlling Company remains outstanding after the transaction.

(ii) Any one person, or more than one person acting as a group, acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of the Controlling Company possessing 30 percent or more of the total voting power of the stock of the Controlling Company. However, if any one person, or more than one person acting as a group, is considered to own more than 50 percent of the total fair market value or total voting power of the stock of the Controlling Company, the acquisition of additional stock by the same person or persons is not considered to cause a Change in Control.

(iii) A majority of members of the Controlling Company’s board of directors is replaced during any 12-month period by directors whose appointment or election is not endorsed by a majority of the members of the Controlling Company’s board of directors before the date of the appointment or election.

(iv) Any one person, or more than one person acting as a group acquires (or has acquired during the 12-month period ending on the date of the most recent acquisition by such person or persons) assets from the Controlling Company that have a total gross fair market value equal to or more than 40 percent of the total gross fair market value of all of the assets of the Controlling Company immediately before such acquisition or acquisitions. For this purpose, gross fair market value means the value of the assets of the Controlling Company, or the value of the assets being disposed of, determined without regard to any liabilities associated with such assets.

(A) There is no Change in Control under this subsection (iv) when there is a transfer to an entity that is controlled by the shareholders of the Controlling Company immediately after the transfer, as provided in this subsection. A transfer of assets by the Controlling Company is not treated as a change in the ownership of such assets if the assets are transferred to:

(1) A shareholder of the Controlling Company (immediately before the asset transfer) in exchange for or with respect to its stock;

(2) An entity, 50 percent or more of the total value or voting power of which is owned, directly or indirectly, by the Controlling Company;

(3) A person, or more than one person acting as a group, that owns, directly or indirectly, 50 percent or more of the total

value or voting power of all the outstanding stock of the Controlling Company; or

(4) An entity, at least 50 percent of the total value or voting power of which is owned, directly or indirectly, by a person described in subsection (3) above.

(B) For purposes of this subsection (iv) and except as otherwise provided in Treasury Regulations, a person’s status is determined immediately after the transfer of the assets. For example, a transfer to a company in which the Controlling Company has no ownership interest before the transaction, but that is a majority-owned subsidiary of the Controlling Company after the transaction, is not treated as a Change in Control.

(v) Additional Rules.

(A) Persons Acting as a Group. Persons will not be considered to be acting as a group solely because they purchase assets of the same corporation at the same time with respect to subsection (iv), or solely because they purchase or own stock of the same corporation at the same time with respect to subsections (i), (ii) and (iii). However, persons will be considered to be acting as a group if they are owners of a corporation that enters into a merger, consolidation, purchase or acquisition of assets (with respect to subsection (iv)) or stock (with respect to subsections (i), (ii) and (iii)), or similar business transaction with the Controlling Company. If a person, including an entity shareholder, owns stock in both corporations that enter into a merger, consolidation, purchase or acquisition of assets (with respect to subsection (iv)) or stock (with respect to subsections (i), (ii) and (iii)), or similar transaction, such shareholder is considered to be acting as a group with other shareholders in a corporation only to the extent of the ownership in that corporation before the transaction giving rise to the change and not with respect to the ownership interest in the other corporation.

(B) Attribution of Stock Ownership. For purposes of this section, Code Section 318(a) applies to determine stock ownership. Stock underlying a vested option is considered owned by the individual who holds the vested option (and the stock underlying an unvested option is not considered owned by the individual who holds the unvested option). For purposes of the preceding sentence, however, if a vested option is exercisable for stock that is not substantially vested (as defined by Treasury Regulations Section 1.83-3(b) and (j)), the stock underlying the option is not treated as owned by the individual who holds the option.

(C) Acquisition of Additional Control. If any one person, or more than one person acting as a group, is considered to effectively control the Controlling Company (as determined under subsections (ii) and (iii)), the acquisition of additional control of the Controlling Company by the same person or persons is not considered to cause a Change in Control under subsections (i), (ii) or (iii).

1.15 Code means the Internal Revenue Code of 1986, as amended, and any succeeding federal tax provisions.

1.16 Company Stock means the $.10 par value common stock of the Controlling Company.

1.17 Company Stock Fund means an Investment Fund, the rate of return of which will be determined as if the amounts deemed invested therein have been invested in shares of Company Stock. The aggregate of all Company Stock Units under the Plan will constitute the Company Stock Fund.

1.18 Company Stock Unit means an accounting entry that is equal in value at any time to the current fair market value of one share of Company Stock, and that represents an unsecured obligation to pay that amount to a Participant in accordance with the terms of the Plan. A Company Stock Unit will not carry any voting, dividend or other similar rights and will not constitute an option or any other right to acquire any equity securities of the Controlling Company.

1.19 Compensation Committee means the Compensation Committee of the Board.

1.20 Controlling Company means Aflac Incorporated, a Georgia corporation with its principal place of business in Columbus, Georgia.

1.21 Deferral Contributions means, for each Plan Year, a Participant’s Base Salary Contributions and Annual Bonus Contributions deferred under the Plan pursuant to Section 3.2.

1.22 Director means an individual employed by a Participating Company who is classified by the Participating Company as, and has the job title of, Director, but who does not have the job title of Market Director, Co-Market Director or Assistant Market Director.

1.23 Disability or Disabled means that a Participant has been determined to be disabled under the group long-term disability plan maintained by the Affiliates in which the Participant participates.

1.24 Discretionary Contributions means the amount (if any) credited to a Participant’s Account pursuant to Section 3.4.

1.25 Effective Date means September 1, 2015, the date that this amendment and restatement of the Plan will be effective. The Plan was initially effective on January 1, 1999.

1.26 Eligible Employee means, for a Plan Year, an individual who is a U.S.-based employee of a Participating Company and who is either an officer (other than an Assistant Vice President) or a Director of such Participating Company (other than a Market Director, Co-Market Director or Assistant Market Director of such Participating Company). The Compensation Committee, from time to time and in its sole discretion, may designate such other individuals, on an individual basis or as part of a specified group, as eligible to participate in the Plan. To be an “Eligible Employee”, such an employee must be a member of a select group of key management or highly compensated employees of the Affiliates.

1.27 ERISA means the Employee Retirement Income Security Act of 1974, as amended.

1.28 Executive Employer Contribution means the amount (if any) credited to an Executive Participant’s Account pursuant to Section 3.5.

1.29 FICA Tax means the Federal Insurance Contributions Act tax imposed under Code Sections 3101, 3121(a) and 3121(v)(2).

1.30 Financial Hardship means a severe financial hardship to the Participant resulting from a sudden and unexpected illness or accident of the Participant or of the Participant’s dependent [as defined in Code Section 152(a)] or, with respect to distributions upon Financial Hardship from a Participant’s Post-409A Account, the Participant’s Beneficiary, loss of the Participant’s property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. Financial Hardship will be determined by the Administrative Committee on the basis of the facts of each case, including information supplied by the Participant in accordance with uniform guidelines prescribed from time to time by the Administrative Committee; provided, the Participant will be deemed not to have a Financial Hardship to the extent that such hardship is or may be relieved:

(a) Through reimbursement or compensation by insurance or otherwise;

(b) By liquidation of the Participant’s assets, to the extent the liquidation of assets would not itself cause severe financial hardship; or

Examples of what are not considered Financial Hardships include the need to send a Participant’s child to college or the desire to purchase a home.

1.31 Investment Election means an election, made in such form as the Administrative Committee may direct, pursuant to which a Participant may elect the Investment Funds in which the amounts credited to his Account will be deemed to be invested.

1.32 Investment Funds means the investment funds selected from time to time by the Retirement Plans Investment Committee for purposes of determining the rate of return on amounts deemed invested pursuant to the terms of the Plan.

1.33 Key Employee means a Participant who is a “specified employee” as defined in Code Section 409A as of: (i) for a Participant who Separates from Service on or after the first day of a calendar year and before the first day of the fourth month of such calendar year, the December 31 of the second calendar year preceding the calendar year in which such Participant Separates from Service; or (ii) for any other Participant, the preceding December 31. For purposes of identifying Key Employees, the Participant’s compensation means all of the items listed in Treasury Regulations Section 1.415(c)-2(b), and excluding all of the items listed in Treasury Regulations Section 1.415(c)-2(c).

1.34 Matching Contributions means the amount (if any) credited to a Participant’s Account pursuant to Section 3.3.

1.35 Participant means any person who has been admitted to, and has not been removed from, participation in the Plan pursuant to the provisions of Article II.

1.36 Participating Company means, as of the Effective Date, each of (i) the Controlling Company, and (ii) each of its Affiliates that are designated by the Controlling Company on Exhibit A hereto as Participating Companies herein. In addition, any other Affiliate in the future may adopt the Plan with the consent of the Compensation Committee, and such Affiliate’s name will be added to Exhibit A without the necessity of amending the Plan.

1.37 Payment Date means the date on which all or a portion of the Participant’s benefit is scheduled to be paid (in the case of a lump-sum payment) or commenced (in the case of installment payments) pursuant to the terms of the Plan.

1.38 Plan means the Aflac Incorporated Executive Deferred Compensation Plan, as contained herein and all amendments hereto. For tax purposes and purposes of Title I of ERISA, the Plan is intended to be an unfunded, nonqualified deferred compensation plan covering certain designated employees who are within a select group of key management or highly compensated employees.

1.39 Plan Year means the 12-consecutive-month period ending on December 31 of each year.

1.40 Post 409A Account means the portion of a Participant’s Account that is not the Participant’s Pre-409A Account.

1.41 Pre-409A Account means the portion of a Participant’s Account attributable to the balance of the Participant’s Account that was earned and vested as of December 31, 2004.

1.42 Retirement Plans Investment Committee means the committee that will make and effect investment decisions, as provided in Article IX. To the extent that a Retirement Plans Investment Committee is not appointed, any other person or committee appointed by the Compensation Committee may act in lieu thereof.

1.43 Salary Deferral Election means a written, electronic or other form of election permitted by the Administrative Committee, pursuant to which a Participant may elect to defer under the Plan a portion of his Base Salary.

1.44 Separate from Service or Separation from Service means that a Participant separates from service with the Participating Company that is his employer and its Affiliates, as defined in Code Section 409A and guidance issued thereunder. Generally, a Participant Separates from Service if the Participant dies, retires or otherwise has a termination of employment with all Affiliates, determined in accordance with the following:

(a) Leaves of Absence. The employment relationship is treated as continuing intact while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed 6 months, or, if longer, so long as the Participant retains a right to reemployment with an Affiliate under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only while there is a reasonable expectation that the Participant will return to perform services for an Affiliate. If the period of leave exceeds 6 months and the Participant does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such 6-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 6 months, where such impairment causes the Participant to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a 29-month period of absence will be substituted for such 6-month period.

(b) Status Change. Generally, if a Participant performs services both as an employee and an independent contractor, such Participant must Separate from Service both as an employee, and as an independent contractor pursuant to standards set forth in Treasury Regulations, to be treated as having a Separation from Service. However, if a Participant provides services to Affiliates as an employee and as a member of the Board of Directors, the services provided as a director are not taken into account in determining whether the Participant has a Separation from Service as an employee for purposes of this Plan.

(c) Termination of Employment. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the Affiliates and the Participant reasonably anticipate that (i) no further services will be performed after a certain date, or (ii) the level of bona fide services the Participant will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to less than 50 percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding 36-month period (or the full period of services to all Affiliates if the Participant has been providing services to all Affiliates less than 36 months). Facts and circumstances to be considered in making this determination include, but

are not limited to, whether the Participant continues to be treated as an employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly situated service providers have been treated consistently, and whether the Participant is permitted, and realistically available, to perform services for other service recipients in the same line of business. For periods during which a Participant is on a paid bona fide leave of absence and has not otherwise terminated employment as described in subsection (a) above, for purposes of this subsection the Participant is treated as providing bona fide services at a level equal to the level of services that the Participant would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which a Participant is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this subsection (including for purposes of determining the applicable 36-month (or shorter) period).

1.45 Surviving Spouse means, with respect to a Participant, the person who is treated as married to such Participant under the laws of any U.S. or foreign jurisdiction that has the legal authority to sanction marriages. The determination of a Participant’s Surviving Spouse will be made as of the date of such Participant’s death.

1.46 Trust or Trust Agreement means the separate agreement or agreements between the Controlling Company and the Trustee governing the Trust Fund, and all amendments thereto.

1.47 Trust Fund means the total amount of cash and other property held by the Trustee (or any nominee thereof) at any time under the Trust Agreement.

1.48 Trustee means the party or parties so designated from time to time pursuant to the terms of the Trust Agreement.

1.49 Valuation Date means each Business Day; provided, the value of an Account on a day other than a Valuation Date will be the value determined as of the immediately preceding Valuation Date.

1.50 Years of Employment means the calendar years in which the Participant is employed by the Affiliates for the entire calendar year. If a Participant terminates employment with the Affiliates and is later rehired, previous Years of Employment will only be taken into account to the extent determined by the Compensation Committee. The Compensation Committee may grant a Participant additional Years of Employment in its discretion at any time.

1.51 Years of Participation means the calendar years in which the Participant is participating in the Executive Employer Contributions portion of the Plan for the entire calendar year. If a Participant terminates employment with the Affiliates and is later rehired, previous Years of Participation will only be taken into account to the extent determined by the Compensation Committee. The Compensation Committee may grant a Participant additional Years of Participation at its discretion at any time.

ARTICLE II

ELIGIBILITY AND PARTICIPATION

2.1 Eligibility for Deferral Contributions.

(a) Annual Participation. Each individual who is an Eligible Employee as of the first day of a Plan Year will be eligible to participate in the Plan with respect to Deferral Contributions for the entire Plan Year.

(b) Interim Plan Year Participation. Each individual who becomes an Eligible Employee during a Plan Year will be eligible to participate in the Plan with respect to Deferral Contributions for a portion of such Plan Year. Such individual’s participation will become effective as of the first day of the calendar month coinciding with or next following the date he becomes an Eligible Employee.

2.2 Procedure for Admission. The Administrative Committee may require a Participant to complete such forms and provide such data as the Administrative Committee determines in its sole discretion. Such forms and data may include, without limitation, a Salary Deferral Election, an Annual Bonus Election, the Eligible Employee’s acceptance of the terms and conditions of the Plan, and the designation of a Beneficiary to receive any death benefits payable hereunder.

2.3 Eligibility for Discretionary Contributions.

The Compensation Committee, the Chief Executive Officer of the Controlling Company or his duly authorized designee, or the Senior Human Resources Officer of the Controlling Company may select at any time or times any employee of the Affiliates who is a member of a select group of key management or highly compensated employees of the Affiliates for participation in the Plan with respect to Discretionary Contributions.

2.4 Eligibility for Executive Employer Contributions.

The Compensation Committee may select at any time any Eligible Employee for participation in the Plan with respect to Executive Employer Contributions.

2.5 Cessation of Eligibility.

The Administrative Committee may remove a Participant from active participation in the Plan with respect to Deferral Contributions if he ceases to satisfy the criteria which qualified him as an Eligible Employee, in which case his Deferral Contributions under the Plan will not apply to compensation earned in any Plan Year after the Plan Year in which he ceases to satisfy the criteria which qualified him as an Eligible Employee. A Participant’s active participation in the Plan with respect to Executive Employer Contributions will end upon the earliest of: (i) the date of his Separation from Service; (ii) the date he incurs a reduction or elimination of officer status; or (iii) the date the Compensation Committee removes such Eligible Employee from active participation in the Plan with respect to Executive Employer

Contributions, which the Compensation Committee may do at any time. Even if his active participation in the Plan ends, a current or former Eligible Employee will remain an inactive Participant in the Plan until the earlier of (i) the date the full amount of his vested Account (if any) is distributed from the Plan, or (ii) the date he again becomes an Eligible Employee and recommences active participation in the Plan. During the period of time that a current or former Eligible Employee is an inactive Participant in the Plan, his Account will continue to be credited with earnings as provided for in Section 3.6.

ARTICLE III

PARTICIPANTS' ACCOUNTS; DEFERRALS AND CREDITING

3.1 Participants’ Accounts.

(a) Establishment of Accounts. The Administrative Committee will establish and maintain an Account on behalf of each Participant. Each Account will be credited with (i) Deferral Contributions (separated as necessary or helpful into Base Salary Contributions and Annual Bonus Contributions), (ii) Matching Contributions, (iii) Discretionary Contributions, (iv) Executive Employer Contributions, and (v) earnings attributable to such Account, and will be debited by the amount of all distributions. Each Account will be subdivided into a Pre-409A Account and a Post-409A Account, which will be separately accounted for under the Plan. Each Account of a Participant will be maintained until the value thereof has been distributed to or on behalf of such Participant or his Beneficiary.

(b) Nature of Contributions and Accounts. The amounts credited to a Participant’s Account will be represented solely by bookkeeping entries. Except as provided in Article VIII, no monies or other assets will actually be set aside for such Participant, and all payments to a Participant under the Plan will be made from the general assets of the Participating Companies.

(c) Several Liabilities. Each Participating Company will be severally (and not jointly) liable for the payment of benefits under the Plan in an amount equal to the total of (i) all undistributed Deferral Contributions, (ii) all undistributed Matching Contributions, (iii) all undistributed Discretionary Contributions, (iv) all undistributed Executive Employer Contributions, and (v) all investment earnings attributable to the amounts described in clauses (i)-(iv) hereof. The Administrative Committee will allocate the total liability to pay benefits under the Plan among the Participating Companies, and the Administrative Committee’s determination will be final and binding.

(d) General Creditors. Any assets which may be acquired by a Participating Company in anticipation of its obligations under the Plan will be part of the general assets of such Participating Company. A Participating Company’s obligation to pay benefits under the Plan constitutes a mere promise of such Participating Company to pay such benefits, and a Participant or Beneficiary will be and remain no more than an unsecured, general creditor of such Participating Company.

3.2 Deferral Contributions.

Subject to the suspension period provided in Section 6.4(b), each Eligible Employee who is eligible to participate in the Plan for all or any portion of a Plan Year may elect to have Deferral Contributions made on his behalf for such Plan Year by completing and delivering to the Administrative Committee (or its designee) a Salary Deferral Election and/or an Annual Bonus Election, setting forth the terms of his election(s). Subject to the terms and conditions set forth below, a Salary Deferral Election may provide for the reduction of an Eligible Employee’s Base Salary earned during the Plan Year for which the Salary Deferral

Election is in effect, and an Annual Bonus Election will provide for the reduction of an Eligible Employee’s Annual Bonus earned during the Plan Year for which the Annual Bonus Election is in effect. The following terms will apply to such elections:

(a) Effective Date.

(i) General Deadline. A Participant’s Salary Deferral Election and Annual Bonus Election for the compensation earned during a Plan Year must be made before the first day of such Plan Year, except as provided in subsection (ii) below.

(ii) Special Rule for New Participants.

(A) Salary Deferrals. If a Participant initially becomes an Eligible Employee (determined in accordance with Code Section 409A) and does not make an initial Salary Deferral Election within the time period set forth in subsection (i) above, such Participant may make a prospective Salary Deferral Election (but not an Annual Bonus Election) either before or within 30 days after the date on which his participation becomes effective. Such election will apply to the Participant’s Base Salary for services performed after the Salary Deferral Election is made, starting with the second payroll period that begins after the 30-day period commencing on the date on which the Participant’s participation becomes effective.

(B) Newly Eligible. If a former Eligible Employee again becomes an Eligible Employee under the Plan within 24 months after he ceased to be eligible under the Plan, such individual will not be treated as newly eligible under the Plan upon return to eligible status for purposes of this subsection (ii). If a former participant in the Aflac Incorporated Market Director Deferred Compensation Plan (the “MDDCP”) becomes an Eligible Employee under the Plan within 24 months after he ceased to be eligible under the MDDCP, such individual will not be treated as newly eligible under the Plan upon so becoming an Eligible Employee, for purposes of this subsection (ii).

(b) Term and Irrevocability of Election. An Eligible Employee may change his Salary Deferral Election and/or Annual Bonus Election for the Plan Year any time prior to the deadlines specified in subsections (a)(i) or (a)(ii) above (as applicable to the Participant), only to the extent (if any) permitted by, and subject to any restrictions or procedures determined by, the Administrative Committee. Upon the latest of the deadlines specified in (a)(i) or (a)(ii) above that applies to a Participant, such Participant’s Salary Deferral Election and/or Annual Bonus Election, or failure to elect, will become irrevocable for the Plan Year except as provided under this subsection (b). Each Participant’s Salary Deferral Election and Annual Bonus Election will remain in effect only for the Plan Year for which it is made. A Participant’s Salary Deferral Election and Annual Bonus Election will be cancelled on the date the Participant receives a hardship distribution under an Affiliate’s tax-qualified retirement plan, but only to the extent that plan provides that a hardship distribution will be deemed necessary to satisfy an immediate and heavy financial need if the employee is prohibited from making elective contributions and employee contributions to all plans maintained by his employer for a period

following the hardship distribution. A Participant’s Salary Deferral Election and Annual Bonus Election will also be cancelled on the date the Participant Separates from Service. A Participant’s Salary Deferral Election and Annual Bonus Election may be cancelled in the discretion of the Administrative Committee as permitted under Code Section 409A (for example, on the date the Participant receives an unforeseeable emergency distribution pursuant to Code Section 409A, or hardship distribution under Treasury Regulations Section 1.401(k)-1(d)(3), under any plan maintained by the Affiliates). If a Participant is transferred from the employment of one participating company to the employment of another participating company, his Salary Deferral Election and Annual Bonus Election with the first participating company will remain in effect and will apply to his compensation from the second participating company until terminated in accordance with this subsection.

(i) Salary Deferrals. A Participant may elect to defer his Base Salary payable in each regular paycheck up to a maximum of 75% (or such other maximum percentage and/or amount, if any, established by the Administrative Committee from Plan Year to Plan Year). Notwithstanding the foregoing, a Participant’s deferral for a paycheck will not exceed the amount of his Base Salary payable in such paycheck equal to the amount remaining after required withholdings under Federal Insurance Contributions Act.

(ii) Bonus Deferrals. The Participant may elect to defer his Annual Bonus up to 100% (or such other maximum percentage and/or amount, if any, established by the Administrative Committee from Plan Year to Plan Year). Any election will be applied to the Participant’s gross Annual Bonus without reduction for any FICA Tax applicable to the Annual Bonus, but the deferral amount will be deducted after any FICA Tax applicable to the Annual Bonus and other tax withholding related to the amount of such FICA Taxes as permitted under Code Section 409A, and the deferral amount will not exceed the amount of the Annual Bonus after reduction for FICA Taxes and such related tax withholding.

(d) Crediting of Deferral Contributions. For each Plan Year that a Participant has a Salary Deferral Election or Annual Bonus Election in effect, the Administrative Committee will credit the amount of such Participant’s Deferral Contributions to his Account on, or as soon as practicable after, the Valuation Date on which such amount would have been paid to him but for his Salary Deferral Election or Annual Bonus Election.

3.3 Matching Contributions.

If and to the extent the Chief Executive Officer of the Controlling Company, his duly authorized designee, the Senior Human Resources Officer of the Controlling Company, or the Compensation Committee determines that the Controlling Company will make Matching Contributions for some or all Participants, then as of the end of each payroll period (or such other date or time as the Administrative Committee, in its sole discretion, determines from time-to-time), the Administrative Committee will credit to each Participant’s Account for such period a Matching Contribution equal to the amount of the Matching Contribution so determined.

3.4 Discretionary Contributions.

The amount of a Discretionary Contribution (if any) will be determined by the Chief Executive Officer of the Controlling Company or his duly authorized designee, the Senior Human Resources Officer of the Controlling Company, or the Compensation Committee, in his or its sole discretion. The Administrative Committee will credit any such Discretionary Contribution to the Account of a Participant as of any Valuation Date.

3.5 Executive Employer Contributions.

With respect to an Eligible Employee who has been selected for active participation in the Plan with respect to Executive Employer Contributions, the amount of such Participant’s Executive Employer Contribution (if any) will be determined by the Compensation Committee in its sole discretion from time to time. The Executive Employer Contribution for a Participant for a particular Plan Year will generally be equal to a percentage of the Participant’s Annual Compensation earned during the Plan Year. For a Participant to receive an Executive Employer Contribution for a Plan Year, he must either (i) have been employed on the last day of that Plan Year; or (ii) have terminated employment during the Plan Year due to (A) his death, (B) his Disability, or (C) his retirement after having attained (1) 15 Years of Employment, or (2) age 65. The Administrative Committee will credit any such Executive Employer Contribution to the Participant’s Account in the Plan Year following the Plan Year for which it is made as of the later of (i) the Valuation Date determined by the Compensation Committee, or (ii) the date the Recordkeeper credits such contribution to the Participant’s account.

3.6 Debiting of Distributions.

As of each Valuation Date, the Administrative Committee will debit each Participant’s Account for any amount distributed from such Account since the immediately preceding Valuation Date.

3.7 Crediting of Earnings.

As of each Valuation Date, the Administrative Committee will credit to each Participant’s Account the amount of earnings and/or losses applicable thereto for the period since the immediately preceding Valuation Date. Such crediting of earnings and/or losses will be effected as of each Valuation Date, as follows:

(a) General Rule.

(i) Rate of Return. The Administrative Committee will first determine a rate of return for the period since the immediately preceding Valuation Date for each of the Investment Funds;

(ii) Amount Invested. The Administrative Committee next will determine the amount of (i) each Participant’s Account that was deemed invested in each Investment Fund as of the immediately preceding Valuation Date; minus (ii) the amount of any distributions debited from the amount determined in clause (i) since the immediately preceding Valuation Date; and

(iii) Determination of Amount. The Administrative Committee will then apply the rate of return for each Investment Fund for such Valuation Date (as determined in subsection (a) hereof) to the amount of the Participant’s Account deemed invested in such Investment Fund for such Valuation Date (as determined in subsection (b) hereof), and the total amount of earnings and/or losses resulting therefrom will be credited to such Participant’s Account as of the applicable Valuation Date.

(b) Cash Dividends. For Company Stock Units that have been credited to a Participant’s Account on or before a record date for Company Stock cash dividends and that remain credited to his Account through the corresponding dividend payment date, the Administrative Committee will credit to such Participant’s Account (in the subaccount where the related Company Stock Units are held) a dollar amount equal to the amount of cash dividends that would have been paid on his Company Stock Units if each Company Stock Unit constituted one share of Company Stock. Such dollar amount then will be deemed invested as directed by the Investment Committee.

(c) Adjustments for Stock Dividends and Splits. In the event of any subdivision or combination of the outstanding shares of Company Stock, by reclassification, stock split, reverse stock split or otherwise, or in the event of the payment of a stock dividend on Company Stock, or in the event of any other increase or decrease in the number of outstanding shares of Company Stock, other than the issuance of shares for value received by the Controlling Company or the redemption of shares for value, the number of Company Stock Units credited to a Participant’s Account will be adjusted upward or downward, as the case may be, to reflect the subdivision or combination of the outstanding shares. The amount of increase or decrease in the number of Company Stock Units in such event will be equal to the adjustment that would have been made if each Company Stock Unit credited to a Participant’s Account immediately prior to the event constituted one share of Company Stock.

3.8 Value of Account.

(a) General Rule. The value of a Participant’s Account as of any date will be equal to the aggregate value of all contributions and all investment earnings deemed credited to his Account as of such date, determined in accordance with this Article III.

(b) Value of Company Stock.

(i) New York Stock Exchange. For all purposes under the Plan for which the value of Company Stock must be determined as of any particular date as of which Company Stock is trading on the New York Stock Exchange, the fair market value per share of Company Stock on such date will be the closing price of Company Stock on the New York Stock Exchange on such date. If, for any reason, the fair market value per share of Company Stock cannot be ascertained or is unavailable for a particular date, the fair market value of Company Stock on such date will be determined as of the nearest preceding date on which the fair market value can be ascertained pursuant to the terms hereof.

(ii) Other Exchange. For all purposes under the Plan for which the value of Company Stock must be determined as of any particular date on which Company Stock is not trading on the New York Stock Exchange but on which Company Stock is trading on another national securities exchange in the United States, the fair market value per share of Company Stock will be the closing price of the Company Stock on such national securities exchange on such date. If Company Stock is trading on such other national securities exchange in the United States on such date but no sales of shares of Company Stock occurred thereon, the fair market value per share of Company Stock will be the closing price of the Company Stock on the nearest preceding date. If on any particular date a public market will exist for Company Stock but Company Stock is not trading on a national securities exchange in the United States, then, if Company Stock is listed on the National Market List by the National Association of Securities Dealers, Inc. (the “NASD”), the fair market value per share of Company Stock will be the last sale price for such shares reflected on said market list for such date, and if Company Stock is not listed on the National Market List of the NASD, then the fair market value per share of Company Stock will be the mean between the bid and asked quotations in the over-the-counter market for such shares on such date. If there is no bid and asked quotation for Company Stock on such date, the fair market value per share of Company Stock will be the mean between the bid and asked quotations in the over-the-counter market for such shares on the nearest preceding date. If the fair market value per share of Company Stock cannot otherwise be determined under this Section as of a particular date, such value will be determined by the Administrative Committee, in its sole discretion, based on all relevant available facts.

3.9 Vesting.

(a) General. A Participant will at all times be fully vested in his Deferral Contributions and his Matching Contributions to the extent such Matching Contributions were made with respect to deferrals of Base Salary and/or Annual Bonuses considered earned before January 1, 2015, and the earnings credited to his Account with respect to such Deferral and Matching Contributions. Except as otherwise provided by the Chief Executive Officer of the Controlling Company, his designee, the Senior Human Resources Officer of the Controlling Company, or the Compensation Committee before or at the time such contributions are made, a Participant will at all times be fully vested in his Discretionary Contributions and other Matching Contributions, and the earnings thereon.

(b) Executive Employer Contributions.

(i) Vesting Date. Subject to subsection (ii) below, the portion of a Participant’s Account that is attributable to Executive Employer Contributions will be 100% vested on the earliest of: (A) December 31 of the Plan Year in which the Participant completes 15 Years of Employment or 5 Years of Participation, whichever occurs later; (B) the date a Change in Control occurs with respect to the Controlling Company while the Participant is employed by the Affiliates; (C) the date the Participant attains age 65 while employed by the Affiliates; (D) the date of the Participant’s death while employed by the Affiliates; or (E) the date the Participant’s Disability occurs while

employed by the Affiliates; provided, the Compensation Committee may determine a different vesting schedule and/or criteria for any Participant.

(ii) Forfeiture. If a Participant terminates employment with the Affiliates before becoming vested as provided in subsection (i), the portion of such Participant’s Account that is attributable to Executive Employer Contributions will be immediately forfeited. In addition, notwithstanding the provisions of subsection (i), whether or not the Participant’s Executive Employer Contributions are 100% vested, any remaining balance in a Participant’s Executive Employer Contributions subaccount will be immediately forfeited upon:

(A) Termination due to Cause of (1) the Participant’s active participation in the Executive Employer Contribution portion of the Plan, or (2) his employment with the Affiliates; or

(B) The Participant’s violation of the noncompetition and confidentiality restrictions in subsection (iii) below.

(iii) Noncompetition and Confidentiality.

(A) Noncompetition. Any amounts otherwise payable to a Participant under the Plan attributable to Executive Employer Contributions will be immediately forfeited if the Compensation Committee determines that the Participant, without the prior consent of the Board, the Compensation Committee or the Controlling Company’s Chief Executive Officer, directly or indirectly has rendered advisory or any other services to, or has become employed by, or participated or engaged in any business competitive with, any of the business activities of the Controlling Company or any Affiliate in any states, the District of Columbia, any territories, or any foreign countries, in which the Controlling Company or any of its Affiliates do business. For purposes of this Section, “participated or engaged in” means that the Participant has acted as an agent, consultant, representative, officer, director, member, independent contractor or employee; or as an owner, partner, limited partner, joint venturer, creditor or shareholder (except as a shareholder holding no more than a 1% interest in a publicly traded entity). As a condition to receiving benefits attributable to Executive Employer Contributions, the Compensation Committee or the Controlling Company’s Chief Executive Officer, in its or his sole discretion and at any time, may require any Participant to enter into a noncompete and/or nonsolicitation agreement with such terms and provisions as the Compensation Committee, or the Controlling Company’s Chief Executive Officer, may dictate; and if the Participant does not execute such agreement in a sufficiently timely manner to permit a payment attributable to Executive Employer Contributions to be made hereunder on the applicable Payment Date, such payment will be forfeited.

(B) Confidentiality. Any amounts otherwise payable to a Participant under the Plan attributable to Executive Employer Contributions will

be immediately forfeited if the Compensation Committee or the Controlling Company’s Chief Executive Officer determines that the Participant, at any time during or following the Participant’s employment with the Affiliates, has disclosed any Confidential Information to any other person or entity (except employees of the Affiliates) without the prior written consent of the Board, the Compensation Committee, or the Controlling Company’s Chief Executive Officer. For this purpose, “Confidential Information” means (i) all information of or about the Affiliates that would be considered a trade secret under Georgia law; namely, that information which (A) derives economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, other persons who can obtain economic value from its disclosure or use, and (B) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy (this may include, but will not be limited to, technical or nontechnical data, a formula, pattern, compilation, program, device, method, technique, drawing or process, financial data or plans, product plans, or a list of actual or potential customers or suppliers); and (ii) any other information that is material to the Affiliates and not generally available to the public, including, without limitation, information concerning the Affiliates’ methods and plans of operation, production processes, marketing and sales strategies, research and development, know-how, computer programming, style and design technology and plans, non-published product specifications, patent applications, product and raw material costs, pricing strategies, business plans, financial data, personnel records, suppliers and customers (whether or not such information constitutes a trade secret).

(c) Change in Control. If a Change in Control occurs with respect to the Controlling Company, Participants will be or become immediately 100% vested in the Matching Contributions and Discretionary Contributions that are not otherwise vested as of the date of such Change in Control. Matching Contributions and Discretionary Contributions that the Chief Executive Officer of the Controlling Company, his designee, the Senior Human Resources Officer of the Controlling Company, or the Compensation Committee determines are not immediately vested and that are credited to Participants’ Account after the date of a Change in Control will continue to vest in accordance with the applicable vesting schedules as applied to such Matching and Discretionary before the Change in Control.

(d) Other Vesting Schedules. In addition to the vesting dates provided in subsections (a) and (c), a Participant’s Matching Contributions and/or Discretionary Contributions, and the earnings credited with respect thereto, will vest at the time or times provided in any employment agreement, offer letter or other valid written agreement between the Participant and the Affiliates.

3.10 Notice to Participants of Account Balances.

At least once for each Plan Year, the Administrative Committee will cause a written statement of a Participant’s Account balance to be distributed to the Participant.

3.11 Good Faith Valuation Binding.

In determining the value of the Accounts, the Administrative Committee will exercise its best judgment, and all such determinations of value (in the absence of bad faith) will be binding upon all Participants and their Beneficiaries.

3.12 Errors and Omissions in Accounts.

If an error or omission is discovered in the Account of a Participant, the Administrative Committee, in its sole discretion, will cause appropriate, equitable adjustments to be made as soon as administratively practicable following the discovery of such error or omission.

ARTICLE IV

INVESTMENT FUNDS

4.1 Selection by Retirement Plans Investment Committee.

From time to time, the Retirement Plans Investment Committee will select two or more Investment Funds for purposes of determining the rate of return on amounts deemed invested in accordance with the terms of the Plan. The Retirement Plans Investment Committee may change, add or remove Investment Funds on a prospective basis at any time(s) and in any manner it deems appropriate.

4.2 Participant Direction of Deemed Investments.

Each Participant generally may direct the manner in which his Account will be deemed invested in and among the Investment Funds; provided, any amounts credited to the Company Stock Fund will at all times remain credited to such fund until the date such amount is distributed to the Participant or his Beneficiary. Any Participant investment directions permitted hereunder will be made in accordance with the following terms:

(a) Nature of Participant Direction. The selection of Investment Funds by a Participant will be for the sole purpose of determining the rate of return to be credited to his Account, and will not be treated or interpreted in any manner whatsoever as a requirement or direction to actually invest assets in any Investment Fund or any other investment media. The Plan, as an unfunded, nonqualified deferred compensation plan, at no time will have any actual investment of assets relative to the benefits or Accounts hereunder.

(b) Investment of Contributions. Each Participant may make an Investment Election prescribing the percentage of the future contributions that will be deemed invested in each Investment Fund. An initial Investment Election of a Participant will be made as of the date the Participant commences participation in the Plan and will apply to all contributions credited to such Participant’s Account after such date. Such Participant may make subsequent Investment Elections as of any Business Day, and each such election will apply to all such specified contributions credited to such Participant’s Account after the Administrative Committee (or its designee) has a reasonable opportunity to process such election pursuant to such procedures as the Administrative Committee may determine from time-to-time. Any Investment Election made pursuant to this subsection with respect to future contributions will remain effective until changed by the Participant.

(c) Investment of Existing Account Balances. Each Participant may make an Investment Election prescribing the percentage of his existing Account balance that will be deemed invested in each Investment Fund. Such Participant may make such Investment Elections as of any Business Day, and each such election will be effective after the Administrative Committee (or its designee) has a reasonable opportunity to process such election. Each such election will remain in effect until changed by such Participant.

(d) Administrative Committee Discretion. The Administrative Committee will have complete discretion to adopt and revise procedures to be followed in making such Investment Elections. Such procedures may include, but are not limited to, the process of making elections, the permitted frequency of making elections, the incremental size of elections, the deadline for making elections and the effective date of such elections. Any procedures adopted by the Administrative Committee that are inconsistent with the deadlines or procedures specified in this Section will supersede such provisions of this Section without the necessity of a Plan amendment.

ARTICLE V

PAYMENT OF POST-409A ACCOUNT BALANCES

5.1 Amount of Benefit Payments for Post-409A Account.

Payment of a benefit amount from a Participant’s Post-409A Account as of any Payment Date hereunder will be calculated by determining the vested amount credited to the Participant’s Post-409A Account that is payable on such Payment Date, determined as of the Valuation Date on which the distribution is processed. For purposes of this subsection, the “Valuation Date on which such distribution is processed” refers to the Valuation Date established for such purpose by administrative practice, even if actual payment is made or commenced at a later date due to delays in valuation, administration or any other procedure.

5.2 Timing and Form of Distribution of Post-409A Account.

(a) Timing of Distributions.

(i) Default Timing of Distribution. Except as provided in Sections 5.3, 5.4, 5.5 and 5.6, and subsections (a)(ii), (a)(iii) and (c) hereof, the Payment Date for a Participant’s Post-409A Account will be: (i) within 90 days after the date the Participant Separates from Service, in the case of a Participant who is not a Key Employee on the date he Separates from Service; or (ii) 6 months after the date the Participant Separates from Service, in the case of a Participant who is a Key Employee on the date he Separates from Service.

(ii) Payment Date Election. A Participant may elect, at the time he makes a Salary Deferral Election or Annual Bonus Election, to have the Payment Date for the portion of his Post-409A Account balance attributable to such election (including any vested Matching Contributions related to Deferral Contributions made pursuant to such Salary Deferral Election or Annual Bonus Election, respectively) be a specified date that is after the one-year period following the end of the Plan Year to which the election applies. Notwithstanding the foregoing election timing requirements, if the Participant elected a Payment Date before January 1, 2009, such Payment Date election will apply. A Participant may elect a different Payment Date with respect to his Salary Deferral Election and with respect to his Annual Bonus Election for each Plan Year.

(iii) Matching Contributions Made after Separation. Notwithstanding subsections (i) and (ii), the Payment Date with respect to Matching Contributions, which are credited to the Participant’s Account after the last day of the Plan Year in which the Participant Separates from Service or dies, will be the later of (A) the date determined under subsections (i) and (ii) or Section 5.4 (as applicable), or (B) a date within the calendar year following the calendar year in which the Participant incurs a Separation from Service or dies, respectively; provided, it generally is anticipated that such Payment Date will occur, within 60 days following the date such Matching Contributions are credited to the Participant’s Account.

(b) Form of Distribution for Post-409A Account Balances.

(i) Single-Sum Payment. Except as provided in Section 5.5 and 5.6 and subsections (b)(ii) and (c) hereof, the portion of a Participant’s Post-409A Account payable on a given Payment Date will be distributed in the form of a single lump-sum payment.

(ii) Annual Installments.

(A) Election of Annual Installments. A Participant may elect, at the time he makes a Salary Deferral Election or Annual Bonus Election, to receive the benefit attributable to such election (including any vested Matching Contributions related to Deferral Contributions made pursuant to the Salary Deferral Election or Annual Bonus Election) in the form of annual installments. A Participant may elect a different form of payment with respect to his Salary Deferral Election and with respect to his Annual Bonus Election for each Plan Year. Notwithstanding the foregoing election timing requirements, if the Participant elected a form of payment before January 1, 2009, such election will apply.

(B) Installment Periods. The installment payments will be made in substantially equal annual installments over a period of not less than 2 years and not more than 10 years (adjusted for earnings between payments in the manner described in Section 3.7), beginning on the applicable Payment Date. The number of annual installment payments elected by the Participant will be specified at the time the Participant makes the deferral election in which the installment payments are elected.

(i) Availability of Election. A Participant may make one or more elections to (i) delay the payment (or commencement) of the portion of his Post-409A Account attributable to a selected Plan Year’s Salary Deferral Election or Annual Bonus Election, and/or (ii) change the form of payment to: (A) have the portion of his Post-409A Account attributable to such election paid in the form of annual installment payments as described above, (B) change the number of installment payments elected, or (C) change installments to a lump sum. Any election under this subsection will specify the number of installment payments elected, if any.

(ii) Delay in Payment Date. In the event of an election under subsection (i), the Payment Date for the portion of the Participant’s Post-409A Account attributable to such election will be delayed to 5 years after the date of payment that applied prior to the election, or such later date as may be elected by the Participant under subsection (i).

(iii) Restrictions. Any election under this subsection (c) will not take effect until 12 months after the date on which the election is made, and, if made within 12 months before the payment was scheduled to begin or be made under the previous payment terms, will not be effective. In the case of an amount payable on a specified

date selected under Section 5.2(a)(ii) or subsection (c)(i), an election under this subsection (c) will be made at least 1 year before such specified date.

(d) Medium of Payment. All distributions will be made in the form of cash, except for amounts deemed invested in the Company Stock Fund, which will be distributed in whole shares of Company Stock with fractional shares paid in cash.

(e) Order of Distribution. If any portion of a Participant’s Post-409A Account is deemed invested in the Company Stock Fund, any partial distributions from such Participant’s Post-409A Account will be made first from such amounts. After all amounts deemed invested in the Company Stock Fund have been distributed, any remaining amounts will be distributed in cash.

(f) Cash-out.

(i) Employee Deferral Cashout. Except as provided in subsection (v) below, if at any time a Participant’s Post-409A Account balance attributable to the aggregate of his Deferral Contributions does not exceed the applicable dollar amount under Code Section 402(g)(1)(B), the Administrative Committee may elect, in its sole discretion, to pay the Participant’s entire Post-409A Account balance attributable to Deferral Contributions in an immediate single-sum payment. For purposes of determining the amount of Deferral Contributions in a Participant’s Post-409A Account in order to apply this provision, any deferrals of compensation that the Participant has elected under this or any other nonqualified deferred compensation plan maintained by an Affiliate that is an “account balance plan” subject to Code Section 409A will be considered as part of the Participant’s Post-409A Account balance attributable to Deferral Contributions hereunder.

(ii) Cashout of Employer Contributions. Except as provided in subsection (v) below, if at any time a Participant’s Post-409A Account balance, other than amounts attributable to Deferral Contributions, does not exceed the applicable dollar amount under Code Section 402(g)(1)(B), the Administrative Committee may elect, in its sole discretion, to pay such portion of the Participant’s Post-409A Account balance in an immediate single-sum payment. For purposes of determining the amount of a Participant’s Post-409A Account other than Deferral Contributions in order to apply this provision, any deferrals of compensation other than Participant elective deferrals under this or any other nonqualified deferred compensation plan maintained by an Affiliate that is an “account balance plan” subject to Code Section 409A will be considered as part of the Participant’s Post-409A Account balance other than amounts attributable to Deferral Contributions hereunder.

(iii) Documentation of Determination. Any exercise of the Administrative Committee’s discretion pursuant to subsections (i) and (ii) will be evidenced in writing no later than the date of the distribution.

(iv) Mandatory Cash-Out. Notwithstanding anything in this section 5.2 or a Participant’s election to the contrary, subject to subsection (v) below, if a

Participant’s total vested Post-409A Account balance is less than $25,000 on the date of the Participant’s Separation from Service, such Participant’s Post-409A Account will be distributed in a single lump-sum payment within 90 days after the date of the Participant’s Separation from Service.

(v) Six Month Delay for Key Employees. Notwithstanding the foregoing, to the extent provided by Code Section 409A, with respect to a Participant who is a Key Employee on the date he Separates from Service, no payment under this subsection (f) made on account of such Participant’s Separation from Service will be made within 6 months after the date the Participant Separates from Service.

5.3 Change in Control.

If a Participant who is employed by the Affiliates Separates from Service during the 1-year period immediately following a Change in Control, such Participant’s Post-409A Account will be paid in a single lump sum, and the Payment Date for such Participant’s Post-409A Benefit will be (i) the date the Participant Separates from Service, in the case of a Participant who is not a Key Employee on the date he Separates from Service; or (ii) 6 months after the date the Participant Separates from Service, in the case of a Participant who is a Key Employee on the date he Separates from Service.

5.4 Death Benefits.

If a Participant dies before full payment of his Post-409A Account is made, his Beneficiary or Beneficiaries will be entitled to receive a distribution of the entire vested amount credited to such Participant’s Post-409A Account. The Post-409A Account will be distributed to such Beneficiary or Beneficiaries in the form of a single-sum payment, and the Payment Date will be the 60th day after the date of the Participant’s death.

5.5 Distribution of Post-409A Account Discretionary Contributions.

(a) Determination by Grantor. Subject to Sections 5.2(f), 5.3 and 5.4, distribution of any Discretionary Contributions from a Participant’s Post-409A Account will be made in the form and at the time specified by the Chief Executive Officer of the Controlling Company (to the extent duly authorized) or his duly authorized designee, the Senior Human Resources Officer of the Controlling Company, or the Compensation Committee, as applicable, when such Discretionary Contribution is declared.

(b) Participant Election in Absence of Designation by Grantor. If the Chief Executive Officer of the Controlling Company (to the extent duly authorized) or his duly authorized designee, the Senior Human Resources Officer of the Controlling Company, or the Compensation Committee, as applicable, does not designate a time and form of payment for Discretionary Contributions as provided in subsection (a), then such Discretionary Contribution will be distributed at the same time and in the same form of payment applicable to such Participant’s Salary Deferral Election, if any (including any modifications thereafter made in accordance with the provisions of this Article), applicable to the Plan Year in which the Discretionary Contribution is made, but only if either (i) such Salary Deferral Election was made before the first day of the first Plan Year in which services to which the Discretionary

Contribution are attributable are performed, or (ii) such Salary Deferral Election was made pursuant to Section 3.2(a)(ii) and was made before the first day on which services to which the Discretionary Contribution are attributable are performed.

(c) Default Payment. If no payment elections apply under subsections (a) and (b) for a particular Discretionary Contribution, such Discretionary Contributions will be distributed in the form provided in Section 5.2(b)(i), and the Payment Date for such Discretionary Contributions will be determined under Section 5.2(a)(i), subject to Sections 5.2(f), 5.3 and 5.4.

5.6 Distribution of Executive Employer Contributions.

(a) Generally. Except as provided in Sections 5.2(f), 5.3 and 5.4, the Payment Date for the portion of a Participant’s Account that is attributable to Executive Employer Contributions will be the date that is 6 months after the date of the Participant’s Separation from Service. Except as provided in subsection (b) below, such benefit will be paid in a single lump sum in cash.

(b) Installment Election. Subject to Sections 5.2(f), 5.3 and 5.4, a Participant may elect, in accordance with procedures established by the Administrative Committee in its sole discretion, with respect to a given Plan Year, to receive payment of the portion of his Account attributable to Executive Employer Contributions related to services performed during such Plan Year in the form of substantially equal annual installments over a period of not less than 2 years and not more than 20 years (adjusted for earnings between payments in the manner described in Section 3.7), beginning on the applicable Payment Date. Such election must be made before the beginning of the Plan Year to which it relates. A Participant may make a separate election as to form of payment for each Plan Year for which he receives Executive Employer Contributions.

(c) Change in Form of Payments. A Participant may make a one-time election to change a form of payment otherwise applicable under subsections (a) and (b) to any other form permitted under this Section, only if such election is made at least 12 months before the Payment Date described in subsection (a) hereof; provided, to the extent any such change in payment form is effective, the Payment Date for the applicable benefit will be delayed 5 years; and provided further, no such election will be effective if any portion of the payment(s) would thereby be delayed beyond 20 years from the 6-month anniversary of the Participant’s Separation from Service.

(d) Other Distribution Rules. If a Participant’s last Executive Employer Contribution is to be credited to his Account after his Separation from Service or death, the Payment Date for such amount will be the later of (i) the date determined in subsection (a) or (c) hereof or Section 5.4 (as applicable), or (ii) the calendar year following the calendar year in which the Participant incurs a Separation from Service or dies, respectively; provided, it generally is anticipated that such Payment Date will occur both within such calendar year and within 60 days after such Executed Employer Contribution is credited to the Participant’s Account. Sections 5.2(d) and (f) and Sections 5.3 and 5.4 will apply to the distribution of a Participant’s Executive Employer Contributions.

5.7 Hardship Withdrawals.

Upon receipt of an application for an in-service hardship distribution and the Administrative Committee’s decision, made in its sole discretion, that a Participant has suffered a Financial Hardship, the Administrative Committee will cause the applicable Participating Company to pay an in-service distribution to such Participant from the Participant’s vested Post-409A Account, excluding any portion of such Account that is attributable to Executive Employer Contributions. Such distribution will be paid in a lump sum payment within 90 days after the date that the Administrative Committee makes its determination that the Participant has suffered a Financial Hardship (assuming that the Financial Hardship exists on that date), which must be prior to the Participant’s Separation from Service. The amount of such lump sum payment will be limited to the amount of such Participant’s vested Post-409A Account reasonably necessary to meet the Participant’s requirements resulting from the Financial Hardship. Determinations of amounts reasonably necessary to satisfy the emergency need will take into account any additional compensation that is available under the Plan due to cancellation of a deferral election upon a payment due to a Financial Hardship. However, the determination of amounts reasonably necessary to satisfy the emergency need will not take into account any additional compensation that due to the Financial Hardship is available under the Plan or another nonqualified deferred compensation plan but has not actually been paid. If payment is made hereunder upon a Financial Hardship, it will be so designated at the time of payment. The amount of such distribution will reduce the Participant’s Post-409A Account balance as provided in Section 3.5.

5.8 Taxes.

(a) Amounts Payable Whether or Not Account is in Pay Status. If the whole or any part of any Participant’s or Beneficiary’s Post-409A Account hereunder will become subject to FICA Tax or any state, local or foreign tax obligations, which a Participating Company will be required to pay or withhold prior to the time the Participant’s Post-409A Account becomes payable hereunder, the Participating Company will have the full power and authority to withhold and pay such tax and related taxes as permitted under Code Section 409A.

(b) Amounts Payable Only if Account is in Pay Status. If the whole or any part of any Participant’s or Beneficiary’s Post-409A Account hereunder is subject to any taxes which a Participating Company will be required to pay or withhold at the time the Post-409A Account becomes payable hereunder, the Participating Company will have the full power and authority to withhold and pay such tax out of any monies or other property that the Participating Company holds for the account of the Participant or Beneficiary, excluding, except as provided in this Section, any portion of the Participant’s Post-409A Account that is not then payable.

5.9 Offset of Post-409A Account by Amounts Owed to the Affiliates.

Notwithstanding anything in the Plan to the contrary, the Administrative Committee may, in its sole discretion, offset any benefit payment or payments of a Participant’s or Beneficiary’s Post-409A Account under the Plan by any amount owed by such Participant or Beneficiary (whether or not such obligation is related to the Plan) to the Affiliates. Notwithstanding the foregoing, no such offset will apply before the Post-409A Account is otherwise payable under the Plan, unless the following requirements are satisfied: (i) the debt

owed to the Affiliates was incurred in the ordinary course of the relationship between the Participant and the Affiliates, (ii) the entire amount of offset under this sentence and any similar provision in the Aflac Incorporated Market Director Deferred Compensation Plan in a single taxable year does not exceed $5,000, and (iii) the offset occurs at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant or Beneficiary.

5.10 No Acceleration of Post-409A Account Payments.

Except as otherwise provided in this Section, no payment scheduled to be made under this Article V may be accelerated. Notwithstanding the foregoing, the Administrative Committee, in its sole discretion, may accelerate any payment scheduled to be made under this Article V in accordance with Code Section 409A (for example, upon certain terminations of the Plan, limited cashouts or to avoid certain conflicts of interest); provided, a Participant may not elect whether his scheduled payment will be accelerated pursuant to this sentence.

ARTICLE VI

PAYMENT OF PRE-409A ACCOUNT BALANCES

6.1 Benefit Payments of Pre-409A Accounts Upon Termination of Service for Reasons Other Than Death.

(a) General Rule Concerning Benefit Payments. In accordance with the terms of subsection (b) hereof, if a Participant terminates his employment with the Controlling Company and all of its Affiliates for any reason other than death, he (or his Beneficiary, if he dies after such termination of employment but before distribution of his Account) will be entitled to receive or begin receiving a distribution of the entire vested amount credited to his Pre-409A Account, determined as of the Valuation Date on which such distribution is processed. For purposes of this subsection, the “Valuation Date on which such distribution is processed” refers to the Valuation Date established for such purpose by administrative practice, even if actual payment is made or commenced at a later date due to delays in valuation, administration or any other procedure.

(b) Timing of Distribution.

(i) Except as provided in subsection (b)(ii) hereof, the Pre-409A Account payable to a Participant under this Section will be distributed as soon as administratively feasible after the date the Participant terminates his employment with the Controlling Company and all of its Affiliates for any reason other than death.

(ii) A Participant was permitted to elect, at the time he made his initial Salary Deferral or Annual Bonus Election or other deferral election under the Plan, to have his Pre-409A Account payable under this Section paid (or commenced) on any date (whether before or after the date his employment terminates, but not earlier than 1 year after the end of the Plan Year for which such election applies) specified in such election. A Participant was permitted to elect a different benefit commencement date with respect to his Salary Deferral and Annual Bonus Elections; provided, unless determined otherwise by the Administrative Committee, a Participant may elect no more than 2 different benefit commencement dates with respect to his Salary Deferral and Annual Bonus Elections. The Administrative Committee will pay (or commence the payment of) the Participant’s Pre-409A Account as soon as administratively feasible after the time specified in such election; provided, with respect to each initial scheduled benefit commencement date, (as determined in accordance with the preceding sentence or subsection (b)(i) hereof), the Participant may make a one-time election in writing, at least 1 year before such initial scheduled benefit commencement date, to delay the payment (or commencement) of his total benefit payable on such date to a later date, and such total benefit will be paid (or commenced) as soon as administratively feasible after such delayed date.

6.2 Form of Distribution for Pre-409A Account.

(a) Single-Sum Payment. Except as provided in subsection (b) hereof, the Pre-409A Account payable to a Participant under Section 6.1 will be distributed in the form of a single-sum payment.

(b) Annual Installments. A Participant was permitted to elect, at the time he made his initial Salary Deferral or Annual Bonus Election or other deferral election under the Plan, to have his Pre-409A Account payable under Section 6.1 paid in the form of annual installment payments. If a Participant did not initially elect the installment form of distribution for any portion of his benefit, that portion of his benefit will be paid in the form of a lump sum payment unless, at least 1 year before his initial scheduled benefit commencement date (as determined in accordance with Section 6.1), the Participant makes a one-time election in writing to receive such benefit in the form of installment payments (in accordance with the terms of this subsection). The following terms and conditions will apply to installment payments made with respect to a Participant’s Pre-409A Account under the Plan:

(i) The installment payments will be made in substantially equal annual installments (adjusted for investment income between payments in the manner described in Section 3.6); provided, in no event will such payments be made over a period in excess of 10 years. The initial value of the obligation for the installment payments will be equal to the amount of the Participant’s Pre-409A Account balance calculated in accordance with the terms of Section 6.1(a).

(ii) If a Participant dies after payment of his benefit from the Plan has begun, but before his entire benefit has been distributed, the remaining amount of his Pre-409A Account balance will be distributed to the Participant’s designated Beneficiary in the form of a single-sum payment.

(iii) Notwithstanding any election under this Section 6.2(b) to the contrary, with respect to any Participant whose Pre-409A Account distribution as of the date it is scheduled to commence in accordance with Section 6.1(b) is less than $10,000 per year, or such other minimum amount as may be determined by the Administrative Committee in its sole discretion, such benefit will be paid in a lump sum payment.

(c) Multiple Forms of Distribution. To the extent a Participant elects multiple benefit commencement dates in accordance with Section 6.1(b)(ii), such Participant may elect, with respect to the total benefit corresponding to each benefit commencement date, to receive such total benefit in the form of either a single-sum payment or annual installments as set forth above.

(d) Change in Control. Notwithstanding anything in Section 6.1 or this Section 6.2 or any election made by the Participant to the contrary, any Participant (i) who terminates employment with all Affiliates for a reason other than his death within the 12 month period beginning on the date a Change in Control occurs, or (ii) whose installment payments as elected under Section 6.2(b) have commenced or are scheduled to commence as of the date of the Change in Control, will receive a full distribution of the Pre-409A Account payable under

Section 6.1(a) in the form of a lump sum payment. Such payment will be made as soon as administratively feasible after the date the Participant terminates employment with all Affiliates for any reason other than death or the date of the Change in Control, as applicable.

(e) Form of Assets. All distributions will be made in the form of cash, except for amounts deemed invested in the Company Stock Fund (which will be distributed in whole shares of Company Stock with fractional shares paid in cash).

(f) Order of Distribution. If any portion of a Participant’s Pre-409A Account is deemed invested in the Company Stock Fund, any partial distributions from such Participant’s Pre-409A Account will be made first from such amounts. After all amounts deemed invested in the Company Stock Fund have been distributed, any remaining amounts will be distributed in cash, as provided for in subsection (e) hereof.

6.3 Death Benefits.

If a Participant dies before payment of his Pre-409A Account from the Plan is made or commenced, the Beneficiary or Beneficiaries designated by such Participant in his latest beneficiary designation form filed with the Administrative Committee will be entitled to receive a distribution of the total of the entire vested amount credited to such Participant’s Pre-409A Account, determined as of the Valuation Date on which such distribution is processed. For purposes of this Section, the “Valuation Date on which such distribution is processed” refers to the Valuation Date established for such purpose by administrative practice, even if actual payment is made or commenced at a later date due to delays in valuation, administration or any other procedure. The Pre-409A Account will be distributed to such Beneficiary or Beneficiaries, as soon as administratively feasible after the date of the Participant’s death, in the form of a single-sum payment in cash or Company Stock as prescribed in Section 6.2(e).

6.4 In-Service Distributions.

(a) Hardship Distributions. Upon receipt of an application for an in-service hardship distribution and the Administrative Committee’s decision, made in its sole discretion, that a Participant has suffered a Financial Hardship, the Administrative Committee will cause the Controlling Company to pay an in service distribution to such Participant from such Participant’s Pre-409A Account. Such distribution will be paid in a lump sum payment, in cash or Company Stock as prescribed in Section 6.2(e), as soon as administratively feasible after the Administrative Committee determines that the Participant has incurred a Financial Hardship. The amount of such lump sum payment will be limited to the amount reasonably necessary to meet the Participant’s requirements resulting from the Financial Hardship. The amount of such distribution will reduce the Participant’s Pre-409A Account balance as provided in Section 3.5.

(b) Distributions with Forfeiture. Notwithstanding any other provision of this Article VI to the contrary, a Participant may elect, at any time prior to termination of his employment with the Controlling Company and all of its Affiliates, to receive a distribution of a portion of the total of the entire vested amount credited to his Pre-409A Account, determined as of the Valuation Date on which such distribution is processed. Such distribution will be made in the form of a single-sum payment, in cash or Company Stock as prescribed in Section 6.2(e), as

soon as administratively feasible after the date of the Participant’s election under this subsection (b). At the time such distribution is made, an amount equal to 10% of the amount distributed will be permanently and irrevocably forfeited (and, if the distribution request is for 90% or more of such Participant’s Pre-409A Account, the forfeiture amount will be deducted from his distribution amount to the extent there otherwise will be an insufficient remaining Pre-409A Account balance from which to deduct this forfeiture). In addition, the Participant receiving such distribution will not be eligible to actively participate in the Plan during the Plan Year next following the Plan Year in which the distribution is made.

6.5 Taxes.

If the whole or any part of any Participant’s or Beneficiary’s Pre-409A Account hereunder will become subject to any estate, inheritance, income or other tax which the Participating Company will be required to pay or withhold, the Participating Company will have the full power and authority to withhold and pay such tax out of any monies or other property in its hand for the account of the Participant or Beneficiary whose interests hereunder are so affected, except any portion of the Post-409A Account that is not then payable. Prior to making any payment, the Participating Company may require such releases or other documents from any lawful taxing authority as it will deem necessary.

ARTICLE VII

CLAIMS

7.1 Rights.

If a Participant or Beneficiary has any grievance, complaint or claim concerning any aspect of the operation or administration of the Plan, including but not limited to claims for benefits (collectively referred to herein as “claim” or “claims”), such claimant will submit the claim in accordance with the procedures set forth in this Article. All such claims must be submitted within the “applicable limitations period.” The “applicable limitations period” will be 2 years, beginning on (i) in the case of any lump-sum payment, the date on which the payment was made, (ii) in the case of a periodic payment, the date of the first in the series of payments, or (iii) for all other claims, the date on which the action complained of occurred. Additionally, upon denial of an appeal pursuant to Section 7.2(b), a Participant or Beneficiary will have 90 days within which to bring suit for any claim related to such denied appeal; any such suit initiated after such 90-day period will be precluded.

7.2 Claim Procedure.

(a) Initial Claim. Claims for benefits under the Plan may be filed in writing with the Administrative Committee on forms or in such other written documents (if any) as the Administrative Committee may prescribe. The Administrative Committee will furnish to the claimant written notice of the disposition of a claim within 90 days after the application therefor is filed; provided, if special circumstances require an extension, the Administrative Committee may extend such 90-day period by up to an additional 90 days, by providing a notice of such extension to the claimant before the end of the initial 90-day period. In the event the claim is denied, the notice of the disposition of the claim will provide the specific reasons for the denial, citations of the pertinent provisions of the Plan, and, where appropriate, an explanation as to how the claimant can perfect the claim and/or submit the claim for review (where appropriate), and a statement of the claimant’s right to bring a civil action under ERISA Section 502(a) following an adverse determination on review.

(b) Appeal. Any Participant or Beneficiary who has been denied a benefit, or his duly authorized representative, will be entitled, upon request to the Administrative Committee, to appeal the denial of his claim. The claimant (or his duly authorized representative) may review pertinent documents related to the Plan and in the Administrative Committee’s possession in order to prepare the appeal. The request for review, together with a written statement of the claimant’s position, must be filed with the Administrative Committee no later than 60 days after receipt of the written notification of denial of a claim provided for in subsection (a). The Administrative Committee’s decision will be made within 60 days following the filing of the request for review; provided, if special circumstances require an extension, the Administrative Committee may extend such 60-day period by up to an additional 60 days, by providing a notice of such extension to the claimant before the end of the initial 60-day period. If unfavorable, the notice of decision will explain the reasons for denial, indicate the provisions

of the Plan or other documents used to arrive at the decision, and state the claimant’s right to bring a civil action under ERISA Section 502(a).

7.3 Satisfaction of Claims.

Any payment to a Participant or Beneficiary will to the extent thereof be in full satisfaction of all claims hereunder against the Administrative Committee and the Participating Companies, any of whom may require such Participant or Beneficiary, as a condition to such payment, to execute a receipt and release therefor in such form as will be determined by the Administrative Committee or the Participating Companies. If receipt and release is required but the Participant or Beneficiary (as applicable) does not provide such receipt and release in a timely enough manner to permit a timely distribution in accordance with the general timing of distribution provisions in the Plan, such payment will be forfeited.

ARTICLE VIII

SOURCE OF FUNDS; TRUST

8.1 Source of Funds.

Except as provided in this Section and Section 8.2 (relating to the Trust), each Participating Company will provide the benefits described in the Plan from its general assets. However, to the extent that funds in such Trust allocable to the benefits payable under the Plan are sufficient, the Trust assets may be used to pay benefits under the Plan. If such Trust assets are not sufficient to pay all benefits due under the Plan, then the appropriate Participating Company will have the obligation, and the Participant or Beneficiary who is due such benefits will look to such Participating Company to provide such benefits.

8.2 Trust.

(a) Establishment. To the extent determined by the Controlling Company, the Participating Companies will transfer the funds necessary to fund benefits accrued hereunder to the Trustee to be held and administered by the Trustee pursuant to the terms of the Trust Agreement. Except as otherwise provided in the Trust Agreement, each transfer into the Trust Fund will be irrevocable as long as a Participating Company has any liability or obligations under the Plan to pay benefits, such that the Trust property is in no way subject to use by the Participating Company; provided, it is the intent of the Controlling Company that the assets held by the Trust are and will remain at all times subject to the claims of the general creditors of the Participating Companies.

(b) Distributions. Pursuant to the Trust Agreement, the Trustee will make payments to Plan Participants and Beneficiaries in accordance with a payment schedule provided by the Participating Company. The Participating Company will make provisions for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and will pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Participating Company.

(c) Status of the Trust. No Participant or Beneficiary will have any interest in the assets held by the Trust or in the general assets of the Participating Companies other than as a general, unsecured creditor. Accordingly, a Participating Company will not grant a security interest in the assets held by the Trust in favor of the Participants, Beneficiaries or any creditor.

(d) Change in Control. Notwithstanding anything in this Article to the contrary, in the event of a Change in Control, each of the Participating Companies will immediately transfer to the Trustee an amount equal to the aggregate of all benefit amounts (determined as of the Valuation Date as of which the Change in Control occurs) of all Participants for which such Participating Company is liable for payment in accordance with the terms of Section 3.1(c). The funds so transferred will be held and administered by the Trustee pursuant to the terms of the Trust Agreement and the foregoing provisions of this Section.

8.3 Funding Prohibition under Certain Circumstances.

Notwithstanding anything in this Article to the contrary, no assets will be set aside to fund benefits under the Plan if such setting aside would be treated as a transfer of property under Code Section 83 pursuant to Code Section 409A(b).

ARTICLE IX

ADMINISTRATIVE AND RETIREMENT PLANS INVESTMENT COMMITTEES

9.1 Action of Administrative Committee.

Action of the Administrative Committee may be taken with or without a meeting of committee members; provided, action will be taken only upon the vote or other affirmative expression of a majority of the committee members qualified to vote with respect to such action. If a member of the committee is a Participant or Beneficiary, he will not participate in any decision which solely affects his own benefit under the Plan. For purposes of administering the Plan, the Administrative Committee will choose a secretary who will keep minutes of the committee’s proceedings and all records and documents pertaining to the administration of the Plan. The secretary may execute any certificate or any other written direction on behalf of the Administrative Committee.

9.2 Rights and Duties of Administrative Committee.

The Administrative Committee will administer the Plan and will have all the powers necessary to accomplish that purpose, including (but not limited to) the following:

(a) To construe, interpret and administer the Plan;

(b) To make determinations required by the Plan, and to maintain records regarding Participants’ and Beneficiaries’ benefits hereunder;

(c) To compute and certify to the Participating Company the amount and kinds of benefits payable to Participants and Beneficiaries, and to determine the time and manner in which such benefits are to be paid;

(d) To authorize all disbursements by the Participating Company pursuant to the Plan;

(e) To maintain all the necessary records of the administration of the Plan;

(f) To make and publish such rules for the regulation of the Plan as are not inconsistent with the terms hereof;

(g) To delegate to other individuals or entities from time to time the performance of any of its duties or responsibilities hereunder;

(h) To have all powers elsewhere conferred upon it; and

(i) To hire agents, accountants, actuaries, consultants and legal counsel to assist in operating and administering the Plan.

The Administrative Committee will have the exclusive right in its discretion to construe and interpret the Plan, to decide all questions of eligibility for benefits and to determine the amount of such benefits, and its decisions on such matters will be final and conclusive on all parties.

9.3 Compensation, Indemnity and Liability.

The Administrative Committee and the Retirement Plans Investment Committee and their members will serve as such without bond and without compensation for services hereunder. All expenses of the Administrative Committee and Retirement Plans Investment Committee will be paid by the Participating Companies. No member of the committees will be liable for any act or omission of any other member of the committees, nor for any act or omission on his own part, except with regard to his own willful misconduct. The Participating Companies will indemnify and hold harmless the Administrative Committee and the Retirement Plans Investment Committee, and each member thereof, against any and all expenses and liabilities, including reasonable legal fees and expenses, arising out of his membership on the Administrative Committee and/or Retirement Plans Investment Committee, excepting only expenses and liabilities arising out of his own willful misconduct.

9.4 Retirement Plans Investment Committee.

(a) Appointment. The Retirement Plans Investment Committee will initially consist of those individuals who have been so appointed by the Board or one of its Committees. A member may resign at any time by written resignation to the remaining members of the Retirement Plans Investment Committee. Members of the Retirement Plans Investment Committee may be added, removed and/or replaced pursuant to the membership procedures that are established for the Retirement Plans Investment Committee from time to time.

(b) Duties. The Retirement Plans Investment Committee will have the following responsibility and authority:

(i) To appoint one or more persons to serve as investment manager with respect to all or part of the Trust, if any; and

(ii) To provide the Trustee with general investment policy guidelines and directions to assist the Trustee respecting investments made pursuant to the terms of the Plan.

9.5 Delegation and Discretion.

(a) Delegation. The Board, the Compensation Committee, the Controlling Company’s Chief Executive Officer, the Controlling Company’s Senior Human Resources Officer, the Administrative Committee, and Retirement Plans Investment Committee may delegate any authority or responsibilities they may have under the Plan to any other person.

(b) Discretion. The Board, the Compensation Committee, the Controlling Company’s Chief Executive Officer, the Controlling Company’s Senior Human Resources Officer, the Administrative Committee, and Retirement Plans Investment Committee (and their designees) shall have full and complete discretion to exercise all authority and carry out all

responsibilities given to them under the Plan, and their decisions and actions shall be binding on all Participants, Beneficiaries and other persons.

ARTICLE X

AMENDMENT AND TERMINATION

10.1 Amendments.

The Administrative Committee will have the right, in its sole discretion, to amend the Plan in whole or in part at any time and from time to time; provided, any amendment that may result in significantly increased expenses under the Plan must be approved by the Compensation Committee. Any amendment will be in writing and executed by a duly authorized officer of the Controlling Company. An amendment to the Plan may modify its terms in any respect whatsoever; provided, no such action may reduce the amount already credited to a Participant’s Account without the affected Participant’s written consent. All Participants and Beneficiaries will be bound by such amendment.

10.2 Termination of Plan.

(a) Freezing. The Controlling Company, through action of the Board or the Compensation Committee, reserves the right to discontinue and freeze the Plan at any time, for any reason. Any action to freeze the Plan will be taken by the Board in the form of a written Plan amendment executed by a duly authorized officer of the Controlling Company. Upon the freezing of the Plan, Salary Deferral Elections and Annual Bonus Elections will not apply to Base Salary or Annual Bonuses earned after the Plan Year in which the Plan is frozen.

(b) Termination. The Controlling Company expects to continue the Plan but reserves the right to terminate the Plan and fully distribute all Accounts under the Plan at any time, for any reason; provided, the distribution of Post-409A Accounts will be subject to the restrictions provided under Code Section 409A (including, to the extent required by Code Section 409A, the 6-month delay that applies to distributions to Key Employees following Separation from Service). Any action to terminate the Plan will be taken by the Board or the Compensation Committee in the form of a written Plan amendment executed by a duly authorized officer of the Controlling Company. If the Plan is terminated, each Participant will become 100 percent vested in his Account. Such termination will be binding on all Participants and Beneficiaries.

ARTICLE XI

MISCELLANEOUS

11.1 Beneficiary Designation.

(a) General. Participants will designate and from time to time may redesignate their Beneficiaries in such form and manner as the Administrative Committee may determine.

(b) No Designation or Designee Dead or Missing. In the event that:

(i) a Participant dies without designating a Beneficiary;

(ii) the Beneficiary designated by a Participant is not surviving when a payment is to be made to such person under the Plan, and no contingent Beneficiary has been designated; or

(iii) the Beneficiary designated by a Participant cannot be located by the Administrative Committee within the maximum time limit for payment of benefits to such person (or within 1 year from the date benefits are to be paid to such person in the case of the Participant’s Pre-409A Account);

then, in any of such events, the Beneficiary of such Participant with respect to any benefits that remain payable under the Plan will be the Participant’s Surviving Spouse, if any, and if not, the estate of the Participant.

11.2 Distribution Pursuant to Domestic Relations Order.

Upon receipt of a valid domestic relations order (determined in accordance with the rules applicable to a tax-qualified retirement plan under Code Section 401(a)) requiring the distribution of all or a portion of a Participant’s vested Account to an alternate payee, the Administrative Committee will cause the Controlling Company to pay a distribution to such alternate payee.

11.3 Taxation.

It is the intention of the Controlling Company that the benefits payable hereunder will not be deductible by the Participating Companies nor taxable for federal income tax purposes to Participants or Beneficiaries until such benefits are paid by the Participating Company, or the Trust, as the case may be, to such Participants or Beneficiaries. When such benefits are so paid, it is the intention of the Controlling Company that they will be deductible by the Participating Companies under Code Section 162. The Plan is intended to satisfy the requirements of Code Section 409A with respect to Post-409A Accounts, the Plan will be interpreted in all ways consistent with such intention, and the Administrative Committee will use its reasonable best efforts to interpret and administer the Plan in accordance with such requirements.

11.4 Elections Prior to 2009.

To the extent not consistent with the terms of this Plan, Salary Deferral Election forms and Annual Bonus Election forms submitted under the Plan prior to the Effective Date for Plan Years beginning after December 31, 2004, will be deemed modified to conform to the provisions of this document. Without limiting the generality of the foregoing, (i) any reference to payment as soon as administratively feasible following separation from service will be deemed to mean within 90 days following separation from service; (ii) any statement that the election will remain in effect for all future years until changed will be deemed modified to conform to subsection 3.2(b); (iii) any statement that if payments are less than $10,000 annually they will be paid in a single lump sum will be modified to provide for the cash-out distributions described in subsection 5.2(f) instead; and (iv) any statement that benefits will be paid beginning on the first day of the calendar quarter following Separation from Service will be deemed to provide for payment within 90 days after Separation from Service instead.

11.5 No Employment Contract.

Nothing herein contained is intended to be nor will be construed as constituting a contract or other arrangement between a Participating Company and any Participant to the effect that the Participant will be employed by the Participating Company for any specific period of time.

11.6 Headings.

The headings of the various articles and sections in the Plan are solely for convenience and will not be relied upon in construing any provisions hereof. Any reference to a section will refer to a section of the Plan unless specified otherwise.

11.7 Gender and Number.

Use of any gender in the Plan will be deemed to include all genders when appropriate, and use of the singular number will be deemed to include the plural when appropriate, and vice versa in each instance.

11.8 Assignment of Benefits.

The right of a Participant or his Beneficiary to receive payments under the Plan may not be anticipated, alienated, sold, transferred, pledged, encumbered, attached or garnished by creditors of such Participant or Beneficiary, except: (i) by will or by the laws of descent and distribution and then only to the extent permitted under the terms of the Plan; or (ii) pursuant to a valid domestic relations order, in accordance with Section 11.2.

11.9 Legally Incompetent.

The Administrative Committee, in its sole discretion, may direct that payment be made to an incompetent or disabled person, whether because of minority or mental or physical disability, to the guardian of such person or to the person having custody of such person, without

further liability on the part of the Participating Company for the amount of such payment to the person on whose account such payment is made.

11.10 Governing Law.

The Plan will be construed, administered and governed in all respects in accordance with applicable federal law (including ERISA) and, to the extent not preempted by federal law, in accordance with the laws of the State of Georgia. If any provisions of this instrument are held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions hereof will continue to be fully effective.

IN WITNESS WHEREOF, the Controlling Company has caused the Plan to be executed by its duly authorized officer on the 20th day of August, 2015.



AFLAC INCORPORATED

By:	/s/ Daniel P. Amos

Title:	Chairman and CEO

EXHIBIT A

Participating Companies

(See §1.36)



Company Names			Effective Date

Communicorp, Inc.			Original Effective Date of the Plan

American Family Life Assurance			Original Effective Date of the Plan
Company of New York

American Family Life Assurance			Original Effective Date of the Plan
Company of Columbus

AFLAC International, Inc.			Original Effective Date of the Plan

Continental American Insurance			August 1, 2010
Company

Aflac Benefit Advisors, Inc.			February 2, 2012
(formerly Aflac Benefit Solutions, Inc.)

A-1

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 10.29

STATE OF GEORGIA

COUNTY OF MUSCOGEE

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made and entered into as of the 20^thday of August, 2015, by and between AFLAC INCORPORATED, a Georgia corporation, hereinafter referred to as “Corporation,” and DANIEL P. AMOS, a resident of said State and county, hereinafter referred to as “Employee”;

W I T N E S S E T H T H A T:

WHEREAS, Employee and Corporation previously entered into an employment agreement dated August 1, 1993, as subsequently amended (the “Original Agreement”), and Employee is currently employed by Corporation as its Chief Executive Officer; and

WHEREAS, Corporation and Employee desire to amend and restate the Original Agreement and to set forth the existing and continuing terms and conditions of Employee’s employment by Corporation as its Chief Executive Officer;

NOW, THEREFORE, the parties, for and in consideration of the mutual covenants and agreements hereinafter contained, do contract and agree as follows, to-wit:

1.Purpose and employment. The purpose of this Agreement is to define the relationship between Corporation as an employer and Employee as an employee and Chief Executive Officer of Corporation.

2.Duties. Employee agrees to continue to provide executive management services as Chief Executive Officer of Corporation to Corporation and its subsidiaries and affiliates on a full-time and exclusive basis; provided, however, nothing shall preclude Employee from serving on boards of directors of other corporations; engaging in charitable and community affairs or managing his own or his family’s personal investments.

3.Performance. Employee agrees to devote all necessary time and his best efforts in the performance of his duties as Chief Executive Officer of Corporation on behalf of Corporation and its subsidiaries and affiliates.

4.Term. The term of employment under the Original Agreement began on August 1, 1993, for a period of three (3) years until July 31, 1996. Under the Original Agreement, effective each August 1, beginning effective August 1, 1994, the scheduled term of the Original Agreement was automatically extended for successive one (1)-year periods. Most recently, the term was automatically extended on August 1, 2015, such that the current term is through July 31, 2018. Under this Agreement, the term shall continue to be extended for one (1)-year periods as of each August 1, beginning August 1, 2016, unless written notice of termination is given prior to such annual date by one party to the other party that the Agreement will not be extended by its terms.

5.Base Salary. For all the services rendered by Employee, Corporation shall continue to pay Employee a base salary of one million four hundred forty one thousand one hundred dollars ($1,441,100.00) per year commencing January 1, 2015. The Compensation Committee of the Board may determine to defer and contribute to the Aflac, Inc. Executive Deferred Compensation Plan any portion of said base salary, and the amount of said salary that is not so deferred will be payable to Employee in accordance with Corporation’s normal payroll procedures. Employee’s base salary may be changed annually during the term of this Agreement and any extensions hereof as determined by the Compensation Committee of the Board of Directors (the “Compensation Committee of the Board”).

6.Documentation of increase in base salary. Any increase in base salary determined by the Compensation Committee of the Board under Paragraph 5 shall be documented in Corporation’s records and communicated to the Employee, as the Compensation Committee of the Board may determine.

7.Management Incentive Plan. In addition to the base salary paid to Employee in accordance with Paragraph 5, Corporation shall for each calendar year of Employee’s employment by Corporation, beginning (for purposes of this Agreement) with the calendar year 2015, continue to pay Employee, as performance bonus compensation, an amount determined each year under Corporation’s current Management Incentive Plan (i.e., short-term incentive program) with a target level based on at least two hundred and twenty percent (220%) of base salary. Nothing in this Paragraph shall preclude Employee from receiving additional discretionary bonuses approved by the Compensation Committee of the Board. Amounts payable to Employee under the Management Incentive Plan (or any successor or other executive bonus program) shall be payable in such manner, at such times and in such forms, as prescribed by the terms of the Management Incentive Plan (or successor or other program).

8.Employee Benefits. Employee shall be eligible to participate with other employees of Corporation in all fringe benefit programs applicable to similarly-situated employees generally which may be authorized and adopted from time to time by the Board, including without limitation: a qualified pension plan, a qualified 401(k) and profit sharing plan, a disability income or sick pay plan, an accident and health plan (including medical reimbursement and hospitalization and major medical benefits), and a group life insurance plan. In addition, Corporation shall furnish to Employee such other “fringe” or employee benefits as are provided to similarly-situated key executive employees of Corporation and such additional employee benefits which the Compensation Committee of the Board shall determine to be appropriate to Employee’s duties and responsibilities as Chief Executive Officer of Corporation, including, without limitation, reimbursement of legal and accounting expenses incurred by Employee in connection with the preparation of his employment or other agreements with Corporation and any expenses for legal, accounting or financial services incurred by Employee in connection with his employment. Any reimbursements made pursuant to the preceding sentence shall be paid as soon as practicable but no later than ninety (90) days after Employee submits evidence of such expenses to Corporation (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any such benefits shall not be subject to liquidation or exchange for another benefit.

9.Retirement plan for senior officers. Employee shall continue to participate in Corporation’s Retirement Plan for Senior Officers which provides retirement, medical, and other benefits to certain senior officers of Corporation, upon all of the terms and conditions of the Plan, said Plan being entitled “Retirement Plan for Senior Officers (as amended and restated January 1, 2009).”

10.Equity award plans. Employee shall be eligible to be awarded stock options, restricted stock awards, and other equity awards (collectively, “Equity Awards”) to purchase Corporation’s common stock under Corporation’s Long-Term Incentive Plans for selected key employees and directors during the term of this Agreement.

11.Working Facilities and Expenses. Employee shall continue to be provided with an office, books, periodicals, stenographic and technical help, ground and air transportation, and such other facilities, equipment, supplies and services suitable to his position and adequate for the performance of his duties. Corporation shall continue to pay Employee’s dues in such social and country clubs, civic clubs and business societies and associations as shall be appropriate in facilitating Employee’s job performance and in the best interest of Corporation. Corporation shall also continue to pay all appropriate business liability insurance and any business licenses and fees pertaining to the services rendered by Employee hereunder. Employee is encouraged and is expected, from time to time to incur reasonable expenses for promoting the business of Corporation, including expenses for social and civic club memberships and participation, entertainment, travel and other activities associated with Employee’s duties. The cost of all such activities shall be the expense of Corporation unless the Compensation Committee of the Board shall determine in advance that any such expense of Employee should be paid by Employee.

Any expense reimbursements made to satisfy the terms of this Paragraph 11 shall be paid as soon as practicable but no later than ninety (90) days after Employee submits evidence of such expenses to Corporation (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any benefits under this Paragraph shall not be subject to liquidation or exchange for another benefit.

12.Vacation. Employee shall continue to be entitled to his vacation time with pay during each calendar year in accordance with Corporation’s vacation policy for senior executive employees. In addition, Employee shall be entitled to such holidays as Corporation shall recognize for its employees generally.

13.Sickness and total disability. Employee’s absence from work because of sickness or accident (not resulting in Employee becoming “totally disabled,” as that term is hereinafter defined) shall not result in any adjustment in Employee’s compensation or other benefits under this Agreement.

benefit programs and retirement plans shall continue without reduction except as hereinafter provided, during the continuance of such disability for a period not exceeding the earlier of (1) the end of the term of this Agreement or any extension hereof or (2) a period of five hundred and forty-seven (547) calendar days for each continuous disability. Payments pursuant to this Paragraph 13 shall be reduced by any amounts paid to Employee during any such period of disability from time to time under any disability programs, plans or policies maintained by Corporation, its subsidiaries or affiliates.

Should Employee’s total disability continue for a period beyond the end of the term of this Agreement or in excess of five hundred and forty-seven (547) calendar days, this Agreement shall, at the end of such period which first occurs, be automatically terminated. If, however, prior to such time, Employee’s total disability shall have ceased and he shall have resumed the adequate performance of his duties hereunder, this Agreement shall continue in full force and effect and Employee shall be entitled to continue his employment hereunder and to receive his full compensation and other benefits as though he had not been disabled; provided, however, unless Employee shall adequately perform his duties hereunder for a continuous period of at least sixty (60) calendar days following a period of total disability before Employee again becomes totally disabled, he shall not be entitled to start a new five hundred and forty-seven (547)-day period under this Paragraph, but instead may only continue under the remaining portion of the original five hundred and forty-seven (547)-day period of total disability. In the event Employee shall not adequately perform his duties hereunder for a continuous period of at least sixty (60) calendar days following a period of total disability, the running of the original five hundred and forty-seven (547)-day period shall cease during the time of Employee’s adequate performance of his duties hereunder before Employee again becomes totally disabled.

It is understood that for purposes of this Paragraph 13, Employee shall, upon his becoming totally disabled, be given such additional “credited service” if necessary to fully qualify Employee under Corporation’s Retirement Plan for Senior Officers and to provide a survivor annuity to Employee’s spouse under the Plan; provided, these provisions shall not affect the timing or form of his distributions under said plan, which shall be determined solely under the terms of said plan.

For the purpose of this Agreement, the term “totally disabled” or “total disability” shall mean Employee’s inability to adequately perform his executive and management duties hereunder on account of accident or illness. It is understood that Employee’s occasional sickness or other incapacity of short duration may not result in his being or becoming “totally disabled;” however, such illness or incapacity could constitute Employee’s being or becoming “totally disabled” if such illness or incapacity is prolonged or recurring.


14.	Termination of employment.

A. Termination by Corporation. Corporation may, when acting in accordance with resolutions adopted by a two-third’s (2/3) majority vote of its entire Board acting at a meeting called for the purpose of considering Employee’s termination, terminate this Agreement and Employee’s employment (the date thereof being referred to as his “Actual Termination Date”), at any time, with or without “good cause” (“good cause” being hereinafter defined), by giving at least thirty (30) days’ written notice to Employee of its intention to terminate Employee’s

employment without “good cause” or immediately upon giving written notice to Employee of its intention to terminate Employee’s employment for “good cause”; provided, however, with respect to termination without “good cause,” Corporation may, at its election, terminate Employee’s actual employment (so that Employee no longer renders services on behalf of Corporation) at any time during said thirty (30)-day period.

B. Termination by employee. Employee may terminate this Agreement, at any time either for good reason (being hereinafter defined) or without good reason, by giving at least sixty (60) days’ written notice to Corporation of his intention to terminate his employment.

C. Pay and benefits. In the event of any termination of Employee’s employment hereunder, Corporation shall be obligated to:

(1) Pay Employee his base salary (as provided for in Paragraph 5 of this Agreement) earned through his Actual Termination Date;

(2) Unless Employee’s employment has been terminated by Corporation for good cause, pay Employee his performance bonus compensation (as provided for in Paragraph 7 of this Agreement) that has accrued and vested but not been paid as of his Actual Termination Date;

(3) Unless Employee’s employment has been terminated by Corporation for good cause, continue to honor all Equity Awards, subject to the terms thereof, granted to Employee prior to the termination date stated in said written notice; provided, in the event Employee’s termination is (i) by Corporation without good cause (and not by Corporation for good cause), or (ii) by Employee for good reason (but not by Employee without good reason) and not by Employee with the intention to enter a business competitive with that of Corporation, and if Employee timely signs and does not revoke a release as provided in subparagraph H of this Paragraph 14, all of said Equity Awards not already vested shall become fully vested as of the last day of his employment; provided, any Equity Awards that vest based on performance will remain subject to the applicable performance criteria, and Employee’s performance will be deemed to be at target while actual vesting based on performance of Corporation will be applied in the manner and at the time provided in the agreements for such Equity Awards;

(4) Continue to pay or provide to Employee all of the retirement, health, life and disability benefits, as are provided for in this Agreement or under any programs, plans or policies covering Employee at the time of any notice of termination, through his Actual Termination Date; and

(5) Pay Employee and/or his wife such benefits as provided for in the Retirement Plan for Senior Officers (see Paragraph 9 above), in a manner and in such forms and at such times, as provided under the terms of said plan.

D. Good cause. For purposes of this Agreement, “good cause” shall mean: that, in the sole discretion of the Board, any of the following have occurred or exist: (i) the willful and deliberate failure of Employee to substantially perform his executive and management duties

hereunder for reasons other than Employee’s sickness, injury or disability; (ii) the willful and deliberate conduct by Employee which results in substantial injury or damage to Corporation; or (iii) the conviction or plea of guilty by Employee of a felony crime. A termination of Employee for “good cause” based on clause (i) or (ii) of the preceding sentence will take effect immediately, unless the Board, in its sole discretion, allows Employee a right to cure, in which case such termination for “good cause” will take effect thirty (30) days (or such shorter period as determined by the Board) after Employee receives from Corporation written notice of its intent to terminate Employee’s employment and Corporation’s description of the alleged cause, unless Employee, in the opinion of the Board, during such permitted cure period, makes significant progress toward remedying (and as soon as practicable thereafter, substantially completes the remedy of) the events or circumstances constituting “good cause;” a termination of Employee for “good cause” based on clause (iii) of the preceding sentence will take effect immediately.

E. Good reason. For purposes of this Paragraph 14, “good reason” shall mean the termination of employment by Employee upon the occurrence of any one or more of the following events:

(1) Any breach by Corporation of the terms and conditions of this Agreement affecting Employee’s salary and bonus compensation, any employee benefit, Equity Awards or the loss of any of Employee’s titles or positions with Corporation;

(2) A significant diminution of Employee’s duties and responsibilities;

(3) The assignment to Employee of any duties inconsistent with or significantly different from his duties and responsibilities existing at the time of such assignment;

(4) A purported termination of Employee’s employment by Corporation other than as permitted by this Agreement;

(5) The relocation of Corporation’s principal office or of Employee’s own office to any place beyond twenty-five (25) miles from the current principal office of Corporation in Columbus, Georgia; or

(6) The failure of any successor to Corporation to expressly assume and agree to discharge Corporation’s obligations to Employee under this Agreement, in form and substance satisfactory to Employee.

F. Termination while disabled. If Employee is totally disabled at the time any such notice of termination is given, then, notwithstanding the provisions of this Paragraph 14, Corporation shall nevertheless continue to pay Employee, as his sole compensation hereunder, the compensation and other benefits for the remaining period of Employee’s total disability as provided for in Paragraph 13 hereinabove. It is understood that in no event shall such disabled Employee be entitled to compensation under this Paragraph 14 in addition to the continuation of his compensation under Paragraph 13.

G. Separate Payments. Each payment made to Employee pursuant to this Paragraph 14 shall be treated as a separate payment for purposes of Code Section 409A.

H. Release Requirement. As a condition to Employee receiving any benefits under subparagraph C(3) of this Paragraph 14, Employee must sign (and not revoke) a written release agreement (“Release”) containing any terms specified by Corporation for (i) Employee’s release of Corporation and its affiliates from all claims arising from Employee’s employment or termination, (ii) Employee’s non-revocation of that release during the seven (7)-day period applicable to age-based claims, and (iii) Employee’s promise to comply with specified confidentiality, noncompetition and/or nonsolicitation provisions. Corporation will terminate Employee’s eligibility for severance pay and benefits if he fails to sign, if he revokes, or if he fails to follow the terms of this Release and if it is not signed and returned to Corporation within the earlier of (i) the deadline specified by Corporation, or (ii) sixty (60) days after Employee’s Actual Termination Date. Employee must sign the Release after his Actual Termination Date. In the event that any payment under subparagraph C(3) of this Paragraph 14 is not exempt from Code Section 409A, the payment timing is based on the signing of this Release, and the period in which Employee could timely sign and return the release spans two (2) calendar years, such payment shall in all events be made in the second such calendar year. Notwithstanding the foregoing, if the payment timing of any portion of payments or benefits, which rely solely on the short-term deferral rule to be exempt from Code Section 409A, would be delayed beyond the short-term deferral rule period due to Employee’s late signing of the Release, such portion shall be forfeited.

15.Cooperation after notice of termination. Following any such notice of termination, Employee shall fully cooperate with Corporation in all matters relating to the winding up of his pending work on behalf of Corporation and the orderly transfer of any such pending work to other employees of Corporation as may be designated by the Board; and to that end, Corporation shall be entitled to full-time services of Employee through his actual termination date and such full-time or part-time services of Employee as Corporation may reasonably require during all or any part of the sixty (60)-day period that both follows any such notice of termination and his actual termination date; provided, the parties acknowledge that, depending on the level of services so required, the provision of such services may delay the timing of Employee’s separation from service.

16.Death of employee. In the event of Employee’s death during the term of this Agreement or any extension hereof, this Agreement shall terminate immediately, and Employee’s estate shall be entitled to receive terminal pay in an amount equal to the amount of Employee’s base salary and any performance bonus compensation actually paid by Corporation to Employee during the last thirty-six (36) months of his life, said terminal pay to be paid in thirty-six (36) equal monthly installments beginning on the first day of the month next following the month during which Employee’s death occurs. Terminal pay as herein provided for in this Paragraph shall be in addition to amounts otherwise receivable by Employee or his estate under this or any other agreements with Corporation or under any employee benefit or retirement plans established by Corporation and in which Employee is participating at the time of his death. In addition, Corporation shall honor all Equity Awards, subject to the terms thereof, granted to Employee prior to his death and Employee or his estate shall, if not otherwise vested, become fully vested in said options as of the date of Employee’s death. For purposes of this Paragraph, Employee shall, upon his death, be given such additional “credited service” as necessary to fully qualify Employee under Corporation’s Retirement Plan for Senior Officers and to provide a survivor annuity to Employee’s spouse under the Plan; provided, these provisions shall not affect the

timing or form of his distributions from such Plan, which shall be determined solely under the terms of such Plan.

17.Covenants not to compete and not to disclose confidential information and trade secrets

A. Covenant against competition. During employment and for a twenty-four (24)-month period after Employee’s Actual Termination Date resulting from (i) Employee’s voluntary termination without “good reason” (as defined in Paragraph 14), or (ii) Corporation’s termination of Employee for “good cause” (as defined in Paragraph 14), Employee will not, on his own behalf, or on behalf of any other person or entity, compete with Aflac and its affiliated companies (the “Aflac Companies”) by providing in the Restricted Territory (as defined in subparagraph A(3) of this Paragraph 17) to any Competing Business (as defined in subparagraph A(2) of this Paragraph 17), services similar to those Employee provided to the Aflac Companies with respect to the Aflac Business (as defined in subparagraph A(1) of this Paragraph 17), in circumstances in which Employee’s responsibilities and duties are substantially similar to those performed by him during the 24-month period ending on his Actual Termination Date.

(1) “Aflac Business” means the Aflac Companies’ insurance company business, which the Aflac Companies operate throughout the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and throughout Japan, and which includes but is not limited to (i) the development, underwriting marketing, distribution and sale of individual and group voluntary insurance products, including accident, cancer and other specified diseases, dental, hospital confinement indemnity, hospital confinement sickness indemnity, hospital intensive care, life, annuities, lump sum cancer, lump sum cancer critical illness, specified health event, short term disability and vision; (ii) the offering of un-reimbursed medical, dependent care, and transportation flexible spending accounts; and (iii) operating a private medical and insurance product exchange and similar enrollment services. “Aflac Business” will also include any additional insurance and reimbursement account products and services, which become part of the business conducted by the Aflac Companies, whether through acquisition and/or development, and in which or to which Employee has had direct exposure in his position with the Aflac Companies. Similarly, “Aflac Business” will not include any business operation, which formerly was part of the business conducted by the Aflac Companies and which ceased being a part thereof due to divestiture or discontinuation of that part of the business.

(2) “Competing Business” means any person, concern or entity, which is engaged in, or conducts a business substantially the same as, the Aflac Business or any part thereof.

(3) “Restricted Territory” means the area within the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and Japan.

Corporation that may not constitute trade secrets as so defined. With respect to such Trade Secrets and other confidential and proprietary information, Employee covenants and agrees, as follows:

(1) Employee agrees to not disclose to any third party, without the prior written consent of the Board or unless necessary to perform his duties and responsibilities hereunder, the processes, machines, technical documentation, computer programs, customer lists, identity of customers, business plans, marketing plans and techniques, pricing data, financial data, marketing programs, customer files, financial institution files, technical expertise and know how, and other confidential and proprietary information and trade secrets, whether as defined in the Trade Secret Act or which may lie beyond it (collectively, the “Property”), which have been or will be provided to Employee by any of the Aflac Companies and are confidential and proprietary property of any of the Aflac Companies. Employee further agrees not to use any Property to his personal benefit or the benefit of any third party. Employee also agrees to return to Corporation all such Property which is tangible upon or before his Actual Termination Date. Notwithstanding the foregoing, the Property protected hereunder will not include any data or information that has been disclosed to the public (except where such public disclosure has been made by Employee without authorization), that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means. The restrictions in this Paragraph are in addition to, and not in lieu of, any rights or remedies Corporation may have available pursuant to the laws of the State of Georgia to prevent the disclosure of trade secrets and proprietary information, with such laws including but not limited to the Trade Secrets Act.

(2) Employee’s obligations under the nondisclosure provisions in this Paragraph 17.B (i) will apply to Property that does not constitute trade secrets during the term of Employee’s employment hereunder and for as long as the Property remains confidential, and (ii) will apply to Property that constitutes trade secrets until such Property no longer constitutes trade secrets and is no longer confidential.

18.Enforcement of restrictive covenants.

A. Blue Penciling. The parties agree that if any court finds that any provision in Paragraph 17 or this Paragraph 18 is overly broad such that it is unenforceable under applicable state law, the court may reform that provision to narrow its scope to the extent necessary to render it enforceable.

B. Severability. Employee acknowledges and agrees that the covenant against competition and the covenant against disclosure contained in Paragraphs 17.A and 17.B, respectively, are reasonable and valid and do not impose limitations greater than those that are necessary to protect the business interests and confidential information of the Aflac Companies. The parties agree that the invalidity or unenforceability of any one or more of such covenants, other provisions, or parts thereof (collectively the “Covenants”) will not affect the validity or enforceability of the other Covenants, all of which are inserted conditionally on their being valid in law. In the event one or more Covenants contained herein are ruled invalid (after application of subparagraph A of this Paragraph), this Agreement will be construed as if such invalid Covenant had not been inserted. The parties hereto agree that the Covenants contained in this Agreement are severable and divisible; that none of such Covenants depends on any other

Covenant for its enforceability; that such Covenants constitute enforceable obligations between the parties; that each such Covenant will be construed as an agreement independent of any other Covenant of this Agreement; and that the existence of any claim or cause of action by one party to this Agreement against the other party to this Agreement, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by any party to this Agreement of any such Covenant.

C. Injunctive Relief. Employee hereby agrees that any remedy at law for any breach of the Covenants will be inadequate and that any of the Aflac Companies will be entitled to apply for injunctive relief in addition to any other remedy the Aflac Companies might have under this Agreement.

D. Claim for Damages. Employee acknowledges that, in addition to seeking injunctive relief, any of the Aflac Companies may bring a cause of action against him for any and all losses, liabilities, damages, deficiencies, costs (including, without limitation, court costs), and expenses (including, without limitation, reasonable attorneys’ fees), incurred by the Aflac Companies and arising out of or due to his breach of any Covenant or agreement contained in Paragraph 17. Notwithstanding anything herein to the contrary, the breach of the nondisclosure Covenant set forth in Paragraph 17.B will cause Employee to forfeit any rights to the vesting of Equity Awards under subparagraph (C)(3) of Paragraph 14; and Employee agrees to repay to the Aflac Companies any amount already paid under such subparagraph.

E. Survival. Paragraph 17 and this Paragraph 18, to the extent applicable, will survive the termination of this Agreement and Employee’s employment. In addition, neither the termination of this Agreement nor Employee’s employment will terminate any other obligations or rights that, by the specific terms of this Agreement, extend beyond such termination.

19.Right to acquire insurance. If Employee shall terminate his employment hereunder for any reason other than death, he may, at his election, acquire any insurance policies upon his life owned by Corporation by giving written notice of his election to Corporation within ninety (90) days after his termination of employment. Such policies shall be transferred to the employee upon his payment to Corporation of the then interpolated terminal reserve value of said insurance. In the event any policies transferred to Employee as herein provided shall not have an interpolated terminal reserve value, then the amount to be paid by Employee shall be its then fair market value.

20.No requirement to seek employment and no offset. Corporation agrees that, if Employee’s employment is terminated by Corporation during the term of this Agreement, Employee is not required to seek other employment or attempt in any way to reduce the amounts payable to Employee by Corporation pursuant to the applicable terms of this Agreement; it being understood and agreed that the amount of any payment or benefit to Employee provided for hereunder shall not be reduced by any compensation or other benefits earned by Employee as a result of his employment by another employer or by Corporation’s attempt to offset any amount claimed to be owed by Employee to Corporation or otherwise.

21.Waiver of breach or violation not deemed continuing. The waiver by either party of a breach or violation of any provisions of this Agreement shall not operate as or be construed to be a waiver of any subsequent breach hereof.

22.Notices. Any and all notices required or permitted to be given under this Agreement will be sufficient if furnished in writing, sent by registered or certified mail to his last known residence in the case of Employee or to its principal office in Columbus, Georgia, in the case of Corporation.

23.Authority. The provisions of this Agreement required to be approved by the Board of Directors of Corporation or the appropriate committee thereof have been so approved and authorized.

24.Arbitration. From time-to-time, Employee agrees to sign and become a party to any arbitration agreement with such terms as Corporation may provide, and the terms of such arbitration agreement shall be incorporated herein by this reference and shall apply to all claims under this Agreement; provided, notwithstanding the foregoing, any claims or actions, whether for damages, injunctive relief or other relief, for any violation or breach of the Covenants set forth in Paragraphs 17 and 18, including but not limited to the actions described in subparagraphs C and D of Paragraph 18, (i) shall be excluded from the arbitration agreement and its applicability, and (ii) shall be subject to the jurisdiction of the applicable court as set forth in Paragraph 25.

/s/ KC /s/ DPA

Initials for Corporation Initials of Employee

25.Governing Law. This Agreement shall be interpreted, construed and governed according to the laws of the State of Georgia. Any legal action brought in regard to this Agreement, which is not subject to arbitration as provided in Paragraph 23 or is brought to enforce the finding of the arbitrator, shall be brought in the Superior Court of Muscogee County, Georgia, or the United States District Court of the Southern District of Georgia, whichever applies, and the parties waive jurisdiction and venue in any other court.

26.Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and shall in no manner be construed as part of this Agreement.

27.Two originals. This Agreement is executed in two (2) originals, each of which shall be deemed an original and together shall constitute one and the same Agreement, with one original being delivered to each party hereto.

28.Code Section 409A. This Agreement is intended to comply with the requirements of Code Section 409A and shall be construed accordingly. Any payments or distributions to be made to Employee under this Agreement upon a “separation from service” (as defined above) of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A, payable due to a separation from service and not exempt from Section 409A, shall in no event be made or commence until six (6) months after such separation from service. Each payment of

nonqualified deferred compensation under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. Notwithstanding the foregoing, Corporation shall not be liable to Employee or any other person if the Internal Revenue Service or any court determines for any reason that any payments under this Agreement are subject to taxes or penalties under Section 409A.

29.Tax Withholding. Corporation shall withhold all applicable taxes from any amounts payable under this Agreement, including, but not limited to, any federal, foreign, state and local taxes; and all such amounts described in this Agreement shall be paid net of such taxes.

30.Amendments and Waivers. Except as otherwise specified herein, this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Corporation and Employee.

IN WITNESS WHEREOF, Corporation has hereunto caused its name to be signed and its seal to be affixed by its duly authorized officers, and Employee has hereunto set his hand and seal, all being done in duplication original with one original being delivered to each party as of the 20^th day of August, 2015.



Daniel P. Amos

/s/ Daniel P. Amos
Employee

AFLAC INCORPORATED

/s/ Kriss Cloninger, III
By:	Kriss Cloninger, III
	President and Treasurer

Attest: J. Matthew Loudermilk

/s/ J. Matthew Loudermilk
Vice President, Corporate Secretary

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 10.30

STATE OF GEORGIA,

COUNTY OF MUSCOGEE:

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made and entered into as of the 20^th day of August, 2015, by and between AFLAC INCORPORATED, a Georgia corporation, hereinafter referred to as “Corporation,” and KRISS CLONINGER, III, a resident of said State and County, hereinafter referred to as “Employee;”

W I T N E S S E T H T H A T:

WHEREAS, the Employee and the Corporation, previously entered into an employment agreement dated February 14, 1992, as subsequently amended (the “Original Agreement”);

WHEREAS, the Employee is currently employed by the Corporation as its President and Treasurer;

WHEREAS, Corporation and Employee desire to amend and restate the Original Agreement and to set forth the terms and conditions of Employee’s employment by Corporation as its President and Treasurer;

NOW, THEREFORE, the parties, for and in consideration of the mutual covenants and agreements hereinafter contained, do contract and agree as follows, to-wit:

1. Purpose and employment. The purpose of this Agreement is to define the relationship between Corporation as an employer and Employee as an employee and President and Treasurer of the Corporation.

2. Duties. Employee agrees to provide executive management services as President and Treasurer of Corporation to Corporation and its subsidiaries and affiliates on a full-time and exclusive basis; provided, however, nothing shall preclude Employee from engaging in charitable and community affairs or managing his own or his family’s personal investments.

3. Performance. Employee agrees to devote all necessary time and his best efforts in the performance of his duties as President and Treasurer of Corporation on behalf of Corporation and its subsidiaries and affiliates.

4. Term. The term of employment under the Original Agreement began on March 16, 1992, for a period of three (3) years until March 15, 1995. Under the Original Agreement, on an annual basis beginning effective March 16, 1993, the scheduled term of the Original Agreement was automatically extended for successive one (1)-year periods. Most recently, the term was automatically extended on March 16, 2015, such that the current term is through March 15, 2018. Under this Agreement, the term shall continue to be extended for one (1)-year periods as of each

March 16, beginning March 16, 2016, unless written notice of termination is given prior to such annual date by one party to the other party that the Agreement will not be extended by its terms.

5. Base salary. For all the services rendered by Employee, Corporation shall continue to pay Employee a base salary of nine hundred seventy-five thousand dollars ($975,000.00) per year commencing January 1, 2015, said salary to be payable in accordance with Corporation’s normal payroll procedures. Employee’s base salary may be increased annually during the term of this Agreement and any extensions hereof as determined by the Compensation Committee of the Board of Directors of Aflac Incorporated (the “Compensation Committee of the Board”).

6. Documentation of increase in base salary. Any increase in base salary determined by the Compensation Committee of the Board under Paragraph 5 shall be documented in the Corporation’s records and communicated to the Employee, as the Compensation Committee of the Board may determine.

7. Management Incentive Plan. In addition to the base salary paid to Employee in accordance with Paragraph 5, Corporation shall for each calendar year of Employee’s employment by Corporation, beginning (for purposes of this Agreement) with the calendar year 2015, continue to pay Employee, as performance bonus compensation, an amount determined each year under the Corporation’s Management Incentive Plan (i.e., short-term incentive program) with a target level based on at least one-hundred fifty percent (150%) of base salary. However, Employee’s bonus shall not exceed three hundred percent (300%) of base salary. Nothing in this Paragraph shall preclude Employee from receiving additional discretionary bonuses approved by the Chief Executive Officer or the Compensation Committee of the Board. Amounts payable to Employee under the Management Incentive Plan (or any successor or other executive bonus program) shall be payable in such manner, at such times and in such forms, as prescribed by the terms of the Management Incentive Plan (or successor or other program).

8. Employee benefits. Employee shall be eligible to participate with other employees of Corporation in all fringe benefit programs applicable to similarly-situated employees generally which may be authorized and adopted from time to time by the Board of Directors of Aflac Incorporated (the “Board”), including without limitation: a qualified pension plan, a qualified 401(k) and profit sharing plan, a disability income or sick pay plan, an accident and health plan (including medical reimbursement and hospitalization and major medical benefits), and a group life insurance plan. In addition, Corporation shall furnish to Employee such other “fringe” or employee benefits as are provided to similarly-situated key executive employees of Corporation and such additional employee benefits which the Compensation Committee of the Board or the Chief Executive Officer shall determine to be appropriate to Employee’s duties and responsibilities as President and Treasurer of the Corporation, including, without limitation, reimbursement of legal and accounting expenses incurred by Employee in connection with the preparation of his employment or other agreements with Corporation and any expenses for legal, accounting or financial services incurred by Employee in connection with his employment. Any reimbursements made pursuant to the preceding sentence shall be paid as soon as practicable but no later than ninety (90) days after Employee submits evidence of such expenses to Corporation (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during

any calendar year shall not affect the benefits provided in any other calendar year, and the right to any such benefits shall not be subject to liquidation or exchange for another benefit. Employee’s spouse and dependent children who are covered participants in Corporation’s group health plan will be permitted to continue their health insurance coverage through Corporation until their eligibility would have expired had Employee remained active with Corporation; provided, however, that Employee’s spouse’s benefits shall expire in the event of said spouse’s remarriage. This coverage will be provided on the same basis as if the participants had continued to be members of that plan.

9. Equity award plans. Employee shall be eligible to be awarded stock options, restricted stock awards, and other equity awards (collectively, “Equity Awards”) to purchase Corporation’s common stock under the Aflac Incorporated Long-Term Incentive Plans for selected key employees and directors during the term of this Agreement.

10. Working facilities and expenses. Employee shall be provided with an office, books, periodicals, stenographic and technical help, ground and air transportation, and such other facilities, equipment, supplies and services suitable to his position and adequate for the performance of his duties. Corporation shall pay Employee’s fees and dues in such social and country clubs, civic clubs and business societies and associations as shall be appropriate in facilitating Employee’s job performance and in the best interest of Corporation. Corporation shall also pay all appropriate business liability insurance and any business licenses and fees pertaining to the services rendered by Employee hereunder.

Employee is encouraged and is expected, from time to time to incur reasonable expenses for promoting the business of Corporation, including expenses for social and civic club memberships and participation, entertainment, travel and other activities associated with Employee’s duties. The cost of all such activities shall be the expenses of Corporation unless the Compensation Committee of the Board shall determine in advance that any such expense of Employee should be paid by Employee.

Any expense reimbursements made to satisfy the terms of this Paragraph 10 shall be paid as soon as practicable but no later than ninety (90) days after Employee submits evidence of such expenses to Corporation (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any benefits under this Paragraph shall not be subject to liquidation or exchange for another benefit.

11. Vacation. Employee shall continue to be entitled to his vacation time with pay during each calendar year in accordance with Corporation’s vacation policy for senior executive employees. In addition, Employee shall be entitled to such holidays as Corporation shall recognize for its employees generally.

12. Sickness and total disability. Employee’s absence from work because of sickness or accident (not resulting in Employee becoming “totally disabled,” as that term is hereinafter defined)

shall not result in any adjustment in Employee’s compensation or other benefits under this Agreement.

Should Employee become totally disabled as a result of sickness or accident and unable to adequately perform his regular duties prescribed under this Agreement, his base salary (which shall continue to be adjusted as provided for in Paragraph 5), together with incentive bonuses under the Corporation’s Management Incentive Plan and his participation in Corporation’s employee benefit programs and retirement plan shall continue without reduction except as hereinafter provided, during the continuance of such disability for a period not exceeding the earlier of (1) the end of the term of this Agreement or any extension hereof, or (2) a period of one and one-half (1-1/2) years (547 calendar days) for each continuous disability. Payments pursuant to this Paragraph 12 shall be reduced by any amounts paid to Employee during any such period of disability from time to time under any disability programs, plans or policies maintained by Corporation, its subsidiaries or affiliates. In addition, if during, or on the first day of, the period Employee is receiving such disability pay and benefits, (i) Employee reaches or has reached the date upon which he satisfies the criteria to receive the maximum percentage of retirement benefits available under the Aflac Incorporated Supplemental Executive Retirement Plan (the “Maximum Retirement Benefit Date”); and (ii) upon or after the Maximum Retirement Benefit Date, there ceases to be a reasonable expectation that he will return to perform services for Corporation, such that Employee has a separation from service (as defined below) and his Benefit Commencement Date under the Aflac Incorporated Supplemental Executive Retirement Plan (the “SERP”) has occurred (whether or not the SERP benefit payments are to actually commence on his Benefit Commencement Date or are to be delayed by six (6) months as may be required under the SERP to satisfy the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)); the amount of disability pay consisting of base salary and cash incentive bonuses being paid or payable under this Paragraph 12 shall be reduced effective as of the date of such separation from service to an amount that is forty percent (40%) of the amount being paid or payable immediately before such date.

If, following Employee’s becoming totally disabled, this Agreement shall be terminated (as provided in the preceding paragraph) and Employee’s employment with Corporation terminated, Employee shall be one hundred percent (100%) vested in, and entitled to, benefits under the SERP determined as if Employee’s “Years of Participation” and “Years of Employment” (as such terms (or similar terms) are defined in the SERP) include the period of time before such termination date during which Employee was totally disabled. Furthermore, if on such termination date Employee is not yet eligible for an early retirement benefit under the SERP, Employee will be entitled to benefits under the SERP the amount of which shall be determined as if his termination date was Employee’s Early Retirement Date (as such term is defined in the SERP); provided, these provisions shall not affect the timing or form of his SERP distributions, which shall be determined solely under the terms of the SERP.

For the purpose of this Agreement, the term “totally disabled” or “total disability” shall mean Employee’s inability to adequately perform his executive and management duties hereunder on account of accident or illness. It is understood that Employee’s occasional sickness or other incapacity of short duration may not result in him being or becoming “totally disabled;” however, such illness or incapacity could constitute Employee’s being or becoming “totally disabled” if such illness or incapacity is prolonged or recurring.

13. Termination of employment.

A. Termination by Corporation. The Corporation’s Chief Executive Officer may terminate this Agreement and Employee’s employment (the date thereof being referred to as his “Actual Termination Date”), at any time, with or without “good cause” (“good cause” being hereinafter defined), (i) immediately upon giving written notice to Employee of his termination for “good cause,” and (ii) by giving at least thirty (30) days’ written notice to Employee of its intention to terminate Employee’s employment without “good cause;” provided, however, with respect to termination without “good cause,” Corporation may, at its selection, terminate Employee’s actual employment (so that Employee no longer renders services on behalf of Corporation) at any time during said thirty (30)-day period; and,

(1) In the event such termination is for “good cause,” Corporation shall be obligated only to pay Employee his base salary earned under Paragraph 5 through his Actual Termination Date.

For purposes of this Agreement (including Paragraph 18 hereof), “good cause” shall mean: that, in the sole discretion of the Corporation’s Chief Executive Officer, any of the following have occurred or exist: (i) the willful and deliberate failure of Employee to substantially perform his executive and management duties hereunder for reasons other than Employee’s sickness, injury or disability; (ii) the willful and deliberate conduct by Employee which results in substantial injury or damage to Corporation; or (iii) the conviction or plea of guilty by Employee of a felony crime. A termination of Employee for “good cause” based on clause (i) or (ii) of the preceding sentence will take effect immediately, unless Corporation’s Chief Executive Officer, in his sole discretion, allows Employee a right to cure, in which case such termination for “good cause” will take effect thirty (30) days (or such shorter period as determined by the Corporation’s Chief Executive Officer) after Employee receives from Corporation written notice of its intent to terminate Employee’s employment and

Corporation’s description of the alleged cause, unless Employee, in the opinion of the Corporation’s Chief Executive Officer, during such permitted cure period, makes significant progress toward remedying (and as soon as practicable thereafter, substantially completes the remedy of) the events or circumstances constituting “good cause;” a termination of Employee for “good cause” based on clause (iii) of the preceding sentence will take effect immediately.

(2) In the event such termination is without “good cause,” as defined in subparagraph (1) of this Paragraph and, if applicable, subject to the terms of Paragraph 18, and if Employee timely signs and does not revoke a release as provided in subparagraph G of Paragraph 13, Corporation shall be obligated to:

(a) upon Employee’s separation from service, pay Employee his base salary as provided for in Paragraph 5 of this Agreement up to the end of the scheduled term of this Agreement; provided, if at the time Employee has a separation from service (such that his Benefit Commencement Date under the SERP has occurred) Employee has attained his Maximum Retirement Benefit Date, all payments being paid or payable under this subparagraph (a) shall cease or not commence, as applicable. Such amount, if any, payable under this subparagraph (a) for the period after his Actual Termination Date will be paid in accordance with the regular payroll schedule applicable to all other similarly-situated active executive employees of Corporation commencing with the next regularly scheduled payday, with any portion of such amount that is not exempt from Section 409A and that is otherwise payable within the six (6)-month period beginning on the date of his separation from service being paid in a lump sum upon the day after the six (6)-month anniversary of his separation from service;

(b) pay Employee an amount equal to a portion of his performance bonus compensation as provided for in Paragraph 7 of this Agreement prorated based on the number of days through the end of the scheduled term of this Agreement; provided, if at the time Employee has a separation from service (such that his Benefit Commencement Date under the SERP has occurred) Employee has attained his Maximum Retirement Benefit Date, all payments being paid or payable under this subparagraph (b) shall cease or not commence, as applicable. The amount of such bonus payable under this subparagraph (b), if any, will be paid to Employee pursuant to the terms and customary operations of the Management Incentive Program (or other applicable bonus program) except that Employee’s performance will be deemed to be at target while actual performance of Corporation will be applied; provided, if the scheduled term of this Agreement ends after the calendar year in which the notice of termination is given, (i) the bonus payment for the calendar year in which such notice is given (and any other full calendar year that ends before the scheduled term of this Agreement ends) will be paid without any proration; and (ii) the amount of the bonus payment for the calendar year in which the scheduled term of this Agreement ends will be calculated on a pro rata basis, using the number of days elapsed during such calendar year through the end of the scheduled term of this Agreement, and will be paid upon Employee’s separation from service in a lump

sum between January 1 and March 15, inclusive, of the calendar year following the calendar year in which the scheduled term of this Agreement ends or, if later and the payment is not exempt from Section 409A, upon the day after the six (6)-month anniversary of his separation from service;

(c) continue to honor all Equity Awards, subject to the terms thereof, granted to Employee prior to the termination date stated in said written notice, all of said options to be or become fully vested as of the termination date stated in said written notice; provided, any Equity Awards that vest based on performance will remain subject to the applicable performance criteria, and Employee’s performance will be deemed to be at target while actual vesting based on performance of Corporation will be applied in the manner and at the time provided in the agreements for such Equity Awards;

(d) upon Employee’s separation from service, continue to pay or provide to Employee all of the retirement, health, life and disability benefits, as are provided for in this Agreement or under any programs, plans or policies covering Employee at the time of any such notice of termination, up to the end of the scheduled term of this Agreement.

Notwithstanding the foregoing, after Employee’s Actual Termination Date, Employee shall not actively participate in any retirement plan qualified under Code Section 401(a), any employee stock purchase plan under Code Section 423, any fully insured benefit for which the insurer does not allow post-employment participation, or any other plan or benefit (other than Corporation’s self-insured group health plan) that Corporation or the third-party insurer of such benefit reasonably determines is not suitable or available for post-employment participation. In such event, Employee shall be entitled to the benefits described in the next succeeding paragraph, to the extent applicable, up to the end of the scheduled term of this Agreement.

(i) After Employee’s Actual Termination Date, Employee shall no longer actively participate in the Aflac Incorporated 401(k) Savings and Profit Sharing Plan (the “401(k) Plan”). Corporation shall pay to Employee an amount equal to the dollar amount of matching contributions, if any, that would have been made to Employee’s account(s) under the 401(k) Plan if Employee had continued to actively participate in such plan for the period from Employee’s Actual Termination Date through the end of the scheduled term of this Agreement, and had made Employee deferrals at the deferral rate necessary to receive the maximum matching contribution (if any) available to him under the terms of the 401(k) Plan with such amount being calculated as if Employee’s compensation and the limits applicable under the 401(k) plan all remained at the levels in effect as of the date the notice of termination is given. This payment shall be made to Employee in a lump sum upon the day of his separation from service or, to the extent such amount is not exempt from

Section 409A, upon the day after the six (6)-month anniversary of his separation from service.

(ii) If, following Employee’s separation from service, Employee does not qualify for retiree health benefits (if any) under Corporation’s group health plan, then upon Employee’s separation from service, Corporation shall allow Employee to continue to participate in Corporation’s group health plan for the remainder of the stated term of this Agreement as if he remained an active employee; provided, Employee pays the full premium cost for such coverage; and provided further, Corporation shall reimburse Employee for the employer portion of the cost of such coverage (such that Employee shall pay in net terms only the active employee cost of such coverage) within sixty 60 days after the end of each calendar month in which Employee maintains such coverage, except that such reimbursement for any continuing coverage for his spouse and eligible dependents for the period before the six (6)-month anniversary of his separation from service shall be paid to him in a single lump sum upon such six (6)-month anniversary.

B. Termination by Employee. Employee may terminate this Agreement, at any time by giving at least sixty (60) days’ written notice to Corporation of his intention to terminate his employment;

(1) in the event such termination by Employee shall be without “good reason” (as defined in Paragraph 18 hereof) and with a bona fide intent either (i) to retire or (ii) not to work in, or engage in a business or activity that would be in a Competing Business (as defined in Paragraph 15) that would violate the covenant against competition as set forth in Paragraph 15, Corporation shall be obligated to:

(a) pay Employee his base salary due him under Paragraph 5 of this Agreement up to his Actual Termination Date;

(b) pay Employee an amount equal to any performance bonus compensation due him under Paragraph 7 of this Agreement for the period ending on the earlier of (i) the termination date stated in such written notice, or (ii) the last day of the calendar year in which written notice of termination is provided. The amount of said bonus, if any, will be paid to Employee pursuant to the terms and customary operations of the Aflac Incorporated Management Incentive Program (or other applicable bonus program) except that Employee’s performance will be deemed at target while actual performance of Corporation will be applied, and will be calculated on a pro rata basis, using the number of days Employee was actually employed by Corporation during the calendar year in which Employee provides such written notice of termination;

(c) continue to honor all Equity Awards, subject to the terms thereof, which have been granted to Employee and are fully vested prior to the termination date stated in said written notice;

(d) pay Employee, and if elected by Employee, his spouse such retirement benefits as are provided for in the Supplemental Executive Retirement Plan (the “SERP”) under Paragraph 9 thereof. For purposes of this subparagraph, Employee shall continue to accrue “credited service” as an employee under the SERP up through his Actual Termination Date; provided, these provisions shall not affect the timing or form of his SERP distributions, which shall be determined solely under the terms of the SERP.

(2) In the event such termination by Employee shall be for “good reason” (as defined in Paragraph 18 hereof), and if Employee timely signs and does not revoke a release as provided in subparagraph G of Paragraph 13, Corporation shall be obligated to provide Employee with the payments, benefits and rights in a manner, at such times and in such forms as specified in subparagraphs A.(2)(a)-(d) of this Paragraph 13.

(3) In the event (i) such termination by Employee shall be without “good reason” (as defined in Paragraph 18 hereof) and (ii) Corporation determines that Employee’s post-employment activities violate, or will be in violation of, the Covenants of Paragraphs 15 and/or 16, then Corporation shall not be obligated to make or provide any further payments or benefits to Employee under this Agreement except as herein provided in this subparagraph.

(a) Subject to Corporation’s rights under Paragraphs 15 and 16, Corporation shall pay Employee his base salary due him under Paragraph 5 of this Agreement up to his Actual Termination Date;

(b) Subject to Corporation’s rights under Paragraphs 15 and 16 hereof, Corporation shall continue to honor all Equity Awards, subject to the terms thereof, which have been granted to Employee and are fully vested prior to the termination date stated in said written notice.

C. Termination while disabled. If Employee is totally disabled at the time any such notice of termination is given, then notwithstanding the provisions of this Paragraph 13, Corporation shall nevertheless continue to pay Employee, as his sole compensation hereunder, the compensation and other benefits for the remaining period of Employee’s total disability as provided for in Paragraph 12 hereinabove. It is understood that in no event shall such disabled Employee be entitled to compensation under this Paragraph 13 in addition to the continuation of his compensation under Paragraph 12.

his Actual Termination Date and such full-time or part-time services of Employee as Corporation may reasonably require during all or any part of the sixty (60)-day period that follows his Actual Termination Date; provided, the parties acknowledge that, depending on the level of services so required, the provision of such services may delay the timing of Employee’s separation from service.

E. Separation from Service. The term “separation from service” when used in this Agreement shall mean that Employee separates from service with Corporation and all affiliates, as defined in Code Section 409A and guidance issued thereunder (“Section 409A”). As a general overview of Section 409A’s definition of “separation from service”, an employee separates from service if the employee dies, retires, or otherwise has a termination of employment with all affiliates, determined in accordance with the following:

(1) Leaves of Absence. The employment relationship is treated as continuing intact while the employee is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six (6) months, or, if longer, so long as the employee retains a right to reemployment with an affiliate under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only while there is a reasonable expectation that the employee will return to perform services for an affiliate. If the period of leave exceeds six (6) months and the employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6)-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a twenty-nine (29)-month period of absence shall be substituted for such six (6)-month period.

(2) Status Change. Generally, if an employee performs services both as an employee and an independent contractor, the employee must separate from service both as an employee and as an independent contractor pursuant to standards set forth in Treasury Regulations to be treated as having a separation from service. However, if an employee provides services to affiliates as an employee and as a member of the Board of Directors, the services provided as a director are not taken into account in determining whether the employee has a separation from service as an employee for purposes of this Agreement.

employee is permitted, and realistically available, to perform services for other service recipients in the same line of business. For periods during which an employee is on a paid bona fide leave of absence and has not otherwise terminated employment as described in subparagraph (1) above, for purposes of this subparagraph, the employee is treated as providing bona fide services at a level equal to the level of services that the employee would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which an employee is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this subsection (including for purposes of determining the applicable thirty-six (36)-month period).

F. Separate Payments. Each payment made to Employee pursuant to this Paragraph 13 or Paragraph 18 shall be treated as a separate payment for purposes of Code Section 409A.

G. Release Requirement. As a condition to Employee receiving any pay or benefits under subparagraph A(2) or B(2) of this Paragraph 13 or under Paragraph 18 (as applicable), Employee must sign (and not revoke) a written release agreement (“Release”) containing any terms specified by Corporation for (i) Employee’s release of Corporation and its affiliates from all claims arising from Employee’s employment or termination, (ii) Employee’s non-revocation of that release during the seven (7)-day period applicable to age-based claims, and (iii) Employee’s promise to comply with specified confidentiality, noncompetition and/or nonsolicitation provisions. Corporation will terminate Employee’s eligibility for severance pay and benefits if she fails to sign, if she revokes, or if she fails to follow the terms of this Release and if it is not signed and returned to Corporation within the earlier of (i) the deadline specified by Corporation, or (ii) sixty (60) days after Employee’s Actual Termination Date (or Termination Date for purposes of Paragraph 18). Employee must sign the Release after his Actual Termination Date (or Termination Date for purposes of Paragraph 18). In the event that any payment under subparagraph A(2) or B(2) of this Paragraph 13 or under Paragraph 18 (as applicable) is not exempt from Code Section 409A, the payment timing is based on the signing of this Release, and the period in which Employee could timely sign and return the release spans two (2) calendar years, such payment shall in all events be made in the second such calendar year. Notwithstanding the foregoing, if the payment timing of any portion of payments or benefits, which rely solely on the short-term deferral rule to be exempt from Code Section 409A, would be delayed beyond the short-term deferral rule period due to Employee’s late signing of the Release, such portion shall be forfeited.

been paid had he survived for the full initial thirty-six (36)-month period. Terminal pay as herein provided for in this Paragraph shall be in addition to amounts otherwise receivable by Employee or his estate under this or any other agreements with Corporation or under any employee benefits or retirement plans established by Corporation and in which Employee is participating at the time of his death. In addition, Corporation shall honor all Equity Awards, subject to the terms thereof, granted to Employee prior to his death and Employee or his estate shall, if not otherwise vested, become fully vested in said options as of the date of Employee’s death. If upon Employee’s death Employee was not eligible for (at least) an early retirement benefit under SERP, benefits will be payable under the SERP the amount of which shall be determined as if Employee’s date of death was his Early Retirement Date (as such term is defined in SERP); provided, these provisions shall not affect the timing or form of his SERP distributions, which shall be determined solely under the terms of the SERP.

15. Covenants not to compete and not to disclose confidential information and trade secrets.

A. Covenant against competition. During employment and for a twenty-four (24)-month period after Employee’s Actual Termination Date (or Termination Date for purposes of Paragraph 18) resulting from (i) Employee’s voluntary termination without “good reason” (as defined in Paragraph 18), or (ii) Corporation’s termination of Employee for “good cause” (as defined in Paragraph 13), Employee will not, on his own behalf, or on behalf of any other person or entity, compete with Aflac and its affiliated companies (the “Aflac Companies”) by providing in the Restricted Territory (as defined in subparagraph A(3) of this Paragraph 15) to any Competing Business (as defined in subparagraph A(2) of this Paragraph 15), services similar to those Employee provided to the Aflac Companies with respect to the Aflac Business (as defined in subparagraph A(1) of this Paragraph 15), in circumstances in which Employee’s responsibilities and duties are substantially similar to those performed by him during the twenty-four (24)-month period ending on his Actual Termination Date.

(1)“Aflac Business” means the Aflac Companies’ insurance company business, which the Aflac Companies operate throughout the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and throughout Japan, and which includes but is not limited to (i) the development, underwriting marketing, distribution and sale of individual and group voluntary insurance products, including accident, cancer and other specified diseases, dental, hospital confinement indemnity, hospital confinement sickness indemnity, hospital intensive care, life, annuities, lump sum cancer, lump sum cancer critical illness, specified health event, short term disability and vision; (ii) the offering of un-reimbursed medical, dependent care, and transportation flexible spending accounts; and (iii) operating a private medical and insurance product exchange and similar enrollment services. “Aflac Business” will also include any additional insurance and reimbursement account products and services, which become part of the business conducted by the Aflac Companies, whether through acquisition and/or development, and in which or to which Employee has had direct exposure in his position with the Aflac Companies. Similarly, “Aflac Business” will not include any business operation, which formerly was part of the business conducted by the Aflac Companies and which ceased being a part thereof due to divestiture or discontinuation of that part of the business.

(2)“Competing Business” means any person, concern or entity, which is engaged in, or conducts a business substantially the same as, the Aflac Business or any part thereof.

(3)“Restricted Territory” means the area within the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and Japan.

B. Covenant against disclosure of confidential information and trade secrets. Employee acknowledges that, during the term of his employment under this Agreement, Employee will be privy to (i) certain confidential and proprietary information of Aflac Companies, which constitutes trade secrets as defined in the Georgia Trade Secret Act of 1990 (the “Trade Secret Act”), and (ii) certain other confidential and proprietary information of Corporation that may not constitute trade secrets as so defined. With respect to such Trade Secrets and other confidential and proprietary information, Employee covenants and agrees, as follows:

(1) Employee agrees to not disclose to any third party, without the prior written consent of the Chief Executive Officer or unless necessary to perform his duties and responsibilities hereunder, the processes, machines, technical documentation, computer programs, customer lists, identity of customers, business plans, marketing plans and techniques, pricing data, financial data, marketing programs, customer files, financial institution files, technical expertise and know how, and other confidential and proprietary information and trade secrets, whether as defined in the Trade Secret Act or which may lie beyond it (collectively, the “Property”), which have been or will be provided to Employee by any of the Aflac Companies and are confidential and proprietary property of any of the Aflac Companies. Employee further agrees not to use any Property to his personal benefit or the benefit of any third party. Employee also agrees to return to Corporation all such Property which is tangible upon or before his Actual Termination Date. Notwithstanding the foregoing, the Property protected hereunder will not include any data or information that has been disclosed to the public (except where such public disclosure has been made by Employee without authorization), that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means. The restrictions in this Paragraph are in addition to, and not in lieu of, any rights or remedies Corporation may have available pursuant to the laws of the State of Georgia to prevent the disclosure of trade secrets and proprietary information, with such laws including but not limited to the Trade Secrets Act.

(2) Employee’s obligations under the nondisclosure provisions in this Paragraph 15.B (i) will apply to Property that does not constitute trade secrets during the term of Employee’s employment hereunder and for as long as the Property remains confidential, and (ii) will apply to Property that constitutes trade secrets until such Property no longer constitutes trade secrets and is no longer confidential.

16. Enforcement of restrictive covenants.

A.Blue Penciling. The parties agree that if any court finds that any provision in Paragraph 15 or this Paragraph 16 is overly broad such that it is unenforceable under

applicable state law, the court may reform that provision to narrow its scope to the extent necessary to render it enforceable.

B.Severability. Employee acknowledges and agrees that the covenant against competition and the covenant against disclosure contained in Paragraphs 15.A and 15.B, respectively, are reasonable and valid and do not impose limitations greater than those that are necessary to protect the business interests and confidential information of the Aflac Companies. The parties agree that the invalidity or unenforceability of any one or more of such covenants, other provisions, or parts thereof (collectively the “Covenants”) will not affect the validity or enforceability of the other Covenants, all of which are inserted conditionally on their being valid in law. In the event one or more Covenants contained herein are ruled invalid (after application of subparagraph A of this Paragraph), this Agreement will be construed as if such invalid Covenant had not been inserted. The parties hereto agree that the Covenants contained in this Agreement are severable and divisible; that none of such Covenants depends on any other Covenant for its enforceability; that such Covenants constitute enforceable obligations between the parties; that each such Covenant will be construed as an agreement independent of any other Covenant of this Agreement; and that the existence of any claim or cause of action by one party to this Agreement against the other party to this Agreement, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by any party to this Agreement of any such Covenant.

C.Injunctive Relief. Employee hereby agrees that any remedy at law for any breach of the Covenants will be inadequate and that any of the Aflac Companies will be entitled to apply for injunctive relief in addition to any other remedy the Aflac Companies might have under this Agreement.

D.Claim for Damages. Employee acknowledges that, in addition to seeking injunctive relief, any of the Aflac Companies may bring a cause of action against him for any and all losses, liabilities, damages, deficiencies, costs (including, without limitation, court costs), and expenses (including, without limitation, reasonable attorneys’ fees), incurred by the Aflac Companies and arising out of or due to his breach of any Covenant or agreement contained in Paragraph 15. Notwithstanding anything herein to the contrary, the breach of any Covenant will cause Employee to forfeit any and all payments otherwise due under subparagraphs A(1), B(1) and B(3) (as applicable) of Paragraph 13, and the breach of the nondisclosure Covenant set forth in Paragraph 15.B will cause Employee to forfeit any and all payments otherwise due under subparagraphs A(2) and B(2) (as applicable) of Paragraph 13; and Employee agrees to repay to the Aflac Companies any amount already paid under such applicable subparagraph.

E.Survival. Paragraph 15 and this Paragraph 16, to the extent applicable, will survive the termination of this Agreement and Employee’s employment. In addition, neither the termination of this Agreement nor Employee’s employment will terminate any other obligations or rights that, by the specific terms of this Agreement, extend beyond such termination.

17. Right to acquire insurance. If Employee shall terminate his employment hereunder for any reason other than death, he may, at his election, acquire any insurance policies upon his life

owned by the Corporation by giving written notice of his election to Corporation within ninety (90) days after his termination of employment. Such policies shall be transferred to the Employee upon his payment to Corporation of the then interpolated terminal reserve value of said insurance. In the event any policies transferred to Employee as herein provided shall not have an interpolated terminal reserve value, then the amount to be paid by Employee shall be its then fair market value.

18. Change in control.

A. In general. In the event there is a Change in Control (as defined in this Paragraph) of Corporation, this Agreement shall, in order to help eliminate the uncertainties and concerns which may arise at such time, be automatically extended upon all of the same terms and provisions contained herein, for an additional period of three (3) years, beginning on the first day of the month during which such Change in Control shall occur.

B. Notwithstanding the term of subparagraph A(2) and (B)(2) of Paragraph 13, and in lieu of the obligations of the Corporation under such paragraph, if, after a Change in Control Employee’s employment is terminated by Corporation without “good cause” (as defined in Paragraph 13), or is terminated by Employee for “good reason” (as defined in Paragraph 18), any such termination by Corporation to be made only in accordance with the requirements specified by Paragraph 13.A, Employee shall be entitled to the following if Employee timely signs and does not revoke a release as provided in subparagraph G of Paragraph 13:

(1) In a manner, at such times and in such forms as provided in Paragraph 13.A(1), Corporation shall pay Employee’s full base salary to Employee through the date of termination stated in Corporation’s written notice required pursuant to Paragraph 13.A hereof (hereinafter in this Paragraph the “Termination Date”) at the rate in effect on the date such notice is given and, additionally, shall pay Employee all compensation and benefits payable to Employee under the terms of any compensation or benefit plan, program or arrangement maintained by Corporation during such period through the Termination Date.

(2) The Corporation shall pay Employee all compensation and benefits due Employee under Corporation’s retirement, insurance and other compensation or benefit plans, programs of arrangements as such payments become due. The amount of such compensation and benefits shall be determined under, and paid in accordance with, Corporation’s retirement, insurance and other compensation or benefit plans, programs and arrangements.

pursuant to the terms hereinabove, and the remainder shall be paid pursuant to the terms of Paragraphs 13.A(2)(a) and (b) as if no Change in Control had occurred; and, provided further, to the extent any amount of such lump-sum amount payable after the Termination Date is not exempt from Section 409A, such amount will be paid upon the day after the six (6)-month anniversary of Employee’s separation from service; provided further, if upon his Termination Date Employee has attained his Maximum Retirement Benefit Date, no amount shall be payable under this subparagraph 3.

(4) The Corporation shall pay to Employee, immediately after the Termination Date, a lump sum amount, in cash, equal to a pro rata portion (based on the number of days Employee is an employee during the year in which the Termination Date occurs) of the aggregate value of the maximum annual amount of all contingent incentive compensation awards to Employee for all uncompleted periods under the Corporation’s Management Incentive Plan (or successor plan thereto); provided, to the extent any amount of such lump sum payable after the Termination Date is not exempt from Section 409A, such amount will be paid upon the day after the six (6)-month anniversary of Employee’s separation from service.

(5) For a thirty-six (36)-month period after Employee’s separation from service, Corporation shall provide Employee with life, disability, accident and, to the extent, following Employee’s separation from service, Employee does not qualify for retiree health benefits (if any) under Corporation’s group health plan, health insurance benefits, substantially similar to and equal or greater in economic value than such benefits which Employee is receiving immediately prior to the Termination Date (without giving effect to any reduction in such benefits subsequent to a Change in Control which reduction in benefits would constitute “good reason” as defined in this Paragraph); provided, Employee must pay the full premium cost for such group health insurance coverage; and provided further, Corporation shall reimburse Employee for the employer portion of the cost of such coverage (such that Employee shall pay in net terms only the active employee cost of such coverage) within sixty (60) days after the end of each calendar month in which Employee maintains such coverage, except that such reimbursement for any continuing coverage for his spouse and eligible dependents for the period before the six (6)-month anniversary of his separation from service shall be paid to him in a single lump sum upon such six (6)-month anniversary. Benefits required to be provided to Employee pursuant to this subparagraph B(5) shall be reduced to the extent comparable benefits are actually received by or made available to Employee without cost during such thirty-six (36)-month period and any such benefit actually received by Employee shall be reported to Corporation by Employee.

Notwithstanding the foregoing, with respect to any of such life and/or disability benefits that are fully insured, in lieu of providing such benefits for such period, Corporation shall pay Employee a lump-sum amount equal to the cost of such benefits on a post-employment basis for such thirty-six (36)-month period; provided, any such cash payment shall be made as soon as practicable after Employee’s separation from service, with any amount that is not exempt from Section 409A and that is otherwise payable within the six (6)-month period beginning on the date of his separation from service being paid upon the day after the six (6)-month anniversary of his separation from service.

C. In addition to the payments provided for in subparagraph B of this Paragraph 18, in the event that after a Change in Control Employee’s employment by the Corporation is terminated by the Corporation without “good cause” or by Employee for “good reason,” the Corporation shall continue to honor all Equity Awards granted to Employee (subject to the terms of such awards) prior to the Termination Date, and all Equity Awards granted to Employee prior to his Actual Termination Date shall become fully vested and exercisable (and to the extent applicable, e.g., with respect to any restricted stock units or similar awards) payable, as of the Termination Date; provided, any Equity Awards that vest based on performance will vest as if the maximum performance under the performance criteria had been satisfied.

D. Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by Employee in connection with a Change in Control or the termination of Employee’s employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Corporation, any person whose actions result in a Change in Control or any person affiliated with the Corporation or such person) (all such payments and benefits being hereinafter called “Total Payments”) would not be deductible (in whole or in part) by the Corporation, an affiliate or person making such payment or providing such benefit as a result of Section 280G of the Internal Revenue Code of 1986 (the “Code”) then, to the extent necessary to make such portion of the Total Payments deductible (and after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, arrangement or agreement), adjustments in such payments shall be made as follows: (i) the cash payments provided pursuant to subparagraph B.(3) and B.(4) of this Paragraph 18 that are exempt from Section 409A shall first be reduced (if necessary, to zero); (ii) then, if further reductions are necessary, benefits provided under subparagraph B.(5) of this Paragraph 18 that are exempt from Section 409A shall be reduced (if necessary, to zero); (iii) then, if still further reductions are necessary, the cash payments provided pursuant to subparagraph B.(3) and B.(4) of this Paragraph 18 that are not exempt from Section 409A shall be reduced (if necessary, to zero); and (iv) finally, if still further reductions are necessary, all of the benefits provided under subparagraph B.(5) of this Paragraph 18 that are not exempt from Section 409A shall be forfeited. For purposes of this limitation (i) no portion of the Total Payments, the receipt or enjoyment of which Employee shall have effectively waived in writing prior to the date of termination of employment shall be taken into account (provided that, in no event will any such waiver impermissibly affect any portion of the Total Payments that is subject to Section 409A), (ii) no portion of the Total Payments shall be taken into account which in the opinion of the tax counsel selected by the Corporation’s independent auditors and reasonably acceptable to Employee does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, including by reason of Section 280G(b)(4)(A) of the Code, (iii) except as provided in clause (iv) above, the payments and benefits be reduced only to the extent necessary so that the Total Payments (other than those referred to in clauses (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the tax counsel referred to in clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Corporation’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. In no event shall the Corporation’s obligation to continue to honor all Equity

Awards granted to Employee prior to the Termination Date nor the vesting of Equity Awards in accordance with Paragraph 18.C hereof be affected by this Paragraph 18.D.

E. Definitions.

(1) “Change in Control” means a change in ownership or effective control of the Corporation, or a change in the ownership of a substantial portion of the assets of a Relevant Corporation, all within the meaning of Section 409A. As a general overview, Section 409A’s definition of these terms, and the dates as of which they occur, are as follows:

(a) The date any one person, or more than one person acting as a group, acquires ownership of stock of Corporation that, together with stock held by such person or group constitutes more than fifty percent (50%) of the total voting power of the stock of Corporation. However, if any one person, or more than one person acting as a group, is considered to own more than fifty percent (50%) of the total fair market value or total voting power of the stock of Corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of Corporation or to cause a change in the effective control of Corporation.

(b) The date any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of Corporation possessing thirty percent (30%) or more of the total voting power of the stock of Corporation.

(c) The date that any one person, or more than one person acting as a group acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets from Corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of Corporation immediately before such acquisition or acquisitions.

(d) The date a majority of the Corporation’s board of directors is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of the members of such Relevant Corporation’s board of directors before the date of the appointment or election.

(2) “Good reason” shall mean the termination of employment by Employee upon the occurrence of any one or more of the following events to the extent that there is, or would be if not corrected, a material negative change in Employee’s employment relationship with Corporation:

(a) A material breach by Corporation of the terms and conditions of this Agreement affecting Employee’s salary and bonus compensation, any employee benefit, Equity Awards or the loss of any of

Employee’s titles or positions with Corporation;

(b) A significant diminution of Employee’s duties and responsibilities;

(c) The assignment to Employee of duties significantly inconsistent with or different from his duties and responsibilities existing at the time of a Change in Control;

(d) A purported termination of Employee’s employment by Corporation other than as permitted by this Agreement;

(e) The relocation of Corporation’s principal office or of Employee’s own office to any place beyond twenty-five (25) miles from the current principal office of Corporation in Columbus, Georgia; and

(f) The failure of any successor to Corporation to expressly assume and agree to discharge Corporation’s obligations to Employee under this Agreement as extended under this Paragraph, in form and substance satisfactory to Employee.

Notwithstanding the foregoing, Employee shall have good reason under this Agreement only if (i) Employee provides Corporation, within ninety (90) days of the occurrence of the event giving rise to the notice, a written notice indicating the specific good reason provision(s) in this Agreement relied upon, setting forth in reasonable detail the facts and circumstances claimed to provide a basis for good reason, and indicating a date of termination of employment (not less than thirty (30) nor more than sixty (60) days after the date such notice is given); and (ii) such facts and circumstances are not substantially corrected by Corporation prior to the date of termination specified by Employee in such notice. Any failure by Employee to set forth in a notice of good reason any facts or circumstances which contribute to the showing of good reason shall not waive any right of Employee hereunder or preclude Employee from asserting such fact or circumstances in enforcing his rights hereunder.

19. No requirement to seek employment and no offset. Corporation agrees that, if Employee’s employment is terminated by Corporation during the term of this Agreement or by Employee for “good reason” during the term of this Agreement, Employee is not required to seek other employment or attempt in any way to reduce the amounts payable to Employee by Corporation pursuant to the applicable terms of this Agreement; it being understood and agreed that the amount of any payment or benefit to Employee provided for hereunder shall not be reduced by any compensation or other benefits earned by Employee as a result of his employment by another employer or, after a Change in Control, by Corporation’s attempt to offset any amount claimed to be owed by Employee to Corporation or otherwise.

20. Waiver of breach or violation not deemed continuing. The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as or be construed to be a waiver of any subsequent breach hereof.

21. Notices. Any and all notices required or permitted to be given under this Agreement will be sufficient if furnished in writing, sent by registered or certified mail to his last known residence in the case of Employee or to its principal office in Columbus, Georgia, in the case of the Corporation.

22. Authority. The provisions of this Agreement required to be approved by the Board of Directors of Corporation or the Compensation Committee of the Board have been so approved and authorized.

23. Arbitration. From time-to-time, Employee agrees to sign and become a party to any arbitration agreement with such terms as Corporation may provide, and the terms of such arbitration agreement shall be incorporated herein by this reference and shall apply to all claims under this Agreement; provided, notwithstanding the foregoing, any claims or actions, whether for damages, injunctive relief or other relief, for any violation or breach of the Covenants set forth in Paragraphs 15 and 16, including but not limited to the actions described in subparagraphs C and D of Paragraph 16, (i) shall be excluded from the arbitration agreement and its applicability, and (ii) shall be subject to the jurisdiction of the applicable court as set forth in Paragraph 24.

/s/ DPA /s/ KC

Initials for Corporation Initials of Employee

24. Governing Law. This Agreement shall be interpreted, construed and governed according to the laws of the State of Georgia. Any legal action brought in regard to this Agreement, which is not subject to arbitration as provided in Paragraph 23 or is brought to enforce the finding of the arbitrator, shall be brought in the Superior Court of Muscogee County, Georgia, or the United States District Court of the Southern District of Georgia, whichever applies, and the parties waive jurisdiction and venue in any other court.

25. Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and shall in no manner be construed as part of this Agreement.

26. Two originals. This Agreement is executed in two (2) originals, each of which shall be deemed an original and together shall constitute one and the same Agreement, with one original being delivered to each party hereto.

27. Code Section 409A. This Agreement is intended to comply with the requirements of Code Section 409A and shall be construed accordingly. Any payments or distributions to be made to Employee under this Agreement upon a “separation from service” (as defined above) of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A, payable due to a separation from service and not exempt from Section 409A, shall in no event be made or commence until six (6) months after such separation from service. Each payment of nonqualified deferred compensation under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. Notwithstanding the foregoing, Corporation shall not be liable to Employee or any other person if the Internal Revenue Service or any court determines

for any reason that any payments under this Agreement are subject to taxes or penalties under Section 409A.

28. Tax Withholding. Corporation shall withhold all applicable taxes from any amounts payable under this Agreement, including, but not limited to, any federal, foreign, state and local taxes; and all such amounts described in this Agreement shall be paid net of such taxes.

29. Amendments and Waivers. Except as otherwise specified herein, this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Corporation and Employee.

IN WITNESS WHEREOF, Corporation has hereunto caused its name to be signed and its seal to be affixed by its duly authorized officers, and Employee has hereunto set his hand and seal, all being done in duplicate originals, with one original being delivered to each party as of the 20^th day of August, 2015.



	AFLAC INCORPORATED

/s/ Kriss Cloninger, III	BY:	/s/ Daniel P. Amos
KRISS CLONINGER, III		DANIEL P. AMOS
Employee		Chairman and Chief Executive Officer

/s/ Robin L. Blackmon	ATTEST:	/s/ J. Matthew Loudermilk
Witness		J. MATTHEW LOUDERMILK
		Vice President, Corporate Secretary

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 10.31

STATE OF GEORGIA,

COUNTY OF MUSCOGEE:

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT, made and entered into as of the 19^th day of August, 2015, by and between AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS (Aflac), a Nebraska corporation, hereinafter referred to as “Corporation,” and PAUL S. AMOS, II, a resident of said State and County, hereinafter referred to as “Employee;”

W I T N E S S E T H T H A T:

WHEREAS, the Employee and Aflac Incorporated, the parent company of the Corporation, previously entered into an employment agreement dated January 1, 2005, as subsequently amended (the “Original Agreement”);

WHEREAS, the Employee is currently employed by the Corporation as its President;

WHEREAS, Corporation and Employee desire to amend and restate the Original Agreement and to set forth the terms and conditions of Employee’s employment by Corporation as its President;

NOW, THEREFORE, the parties, for and in consideration of the mutual covenants and agreements hereinafter contained, do contract and agree as follows, to-wit:

1. Purpose and employment. The purpose of this Agreement is to define the relationship between Corporation as an employer and Employee as an employee and President of the Corporation.

2. Duties. Employee agrees to provide executive management services as President of Corporation to Corporation and its subsidiaries and affiliates on a full-time and exclusive basis; provided, however, nothing shall preclude Employee from engaging in charitable and community affairs or managing his own or his family’s personal investments.

3. Performance. Employee agrees to devote all necessary time and his best efforts in the performance of his duties as President of Corporation on behalf of Corporation and its subsidiaries and affiliates.

4. Term. The term of employment under the Original Agreement began on January 1, 2005, for a period of three (3) years until December 31, 2007. Under the Original Agreement, effective each January 1, beginning effective January 1, 2006, the scheduled term of the Original Agreement was automatically extended for successive one (1)-year periods. Most recently, the term was automatically extended on January 1, 2015, such that the current term is through December 31, 2017. Under this Agreement, the term shall continue to be extended for one (1)-year periods as of

each January 1, beginning January 1, 2016, unless written notice of termination is given prior to such annual date by one party to the other party that the Agreement will not be extended by its terms.

5. Base salary. For all the services rendered by Employee, Corporation shall continue to pay Employee a base salary of six hundred seventy-seven thousand nine hundred dollars ($677,900.00) per year commencing January 1, 2015, said salary to be payable in accordance with Corporation’s normal payroll procedures. Employee’s base salary may be increased annually during the term of this Agreement and any extensions hereof as determined by the Compensation Committee of the Board of Directors of Aflac Incorporated (the “Compensation Committee of the Board”).

7. Management Incentive Plan. In addition to the base salary paid to Employee in accordance with Paragraph 5, Corporation shall for each calendar year of Employee’s employment by Corporation, beginning (for purposes of this Agreement) with the calendar year 2015, continue to pay Employee, as performance bonus compensation, an amount determined each year under the current Aflac Incorporated Management Incentive Plan (i.e., short-term incentive program) with a target level based on at least one hundred and twenty-five percent (125%) of base salary. Nothing in this Paragraph shall preclude Employee from receiving additional discretionary bonuses approved by the Chief Executive Officer or the Compensation Committee of the Board. Amounts payable to Employee under the Aflac Incorporated Management Incentive Plan (or any successor or other executive bonus program) shall be payable in such manner, at such times and in such forms, as prescribed by the terms of the Aflac Incorporated Management Incentive Plan (or successor or other program).

8. Employee benefits. Employee shall be eligible to participate with other employees of Corporation in all fringe benefit programs applicable to similarly-situated employees generally which may be authorized and adopted from time to time by the Board of Directors of Aflac Incorporated (the “Board”), including without limitation: a qualified pension plan, a qualified 401(k) and profit sharing plan, a disability income or sick pay plan, an accident and health plan (including medical reimbursement and hospitalization and major medical benefits), and a group life insurance plan. In addition, Corporation shall furnish to Employee such other “fringe” or employee benefits as are provided to similarly-situated key executive employees of Corporation and such additional employee benefits which the Compensation Committee of the Board or the Chief Executive Officer shall determine to be appropriate to Employee’s duties and responsibilities as President of the Corporation, including, without limitation, reimbursement of legal and accounting expenses incurred by Employee in connection with the preparation of his employment or other agreements with Corporation and any expenses for legal, accounting or financial services incurred by Employee in connection with his employment. Any reimbursements made pursuant to the preceding sentence shall be paid as soon as practicable but no later than ninety (90) days after Employee submits evidence of such expenses to Corporation (which payment date shall in no

event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any such benefits shall not be subject to liquidation or exchange for another benefit.

12. Sickness and total disability. Employee’s absence from work because of sickness or accident (not resulting in Employee becoming “totally disabled,” as that term is hereinafter defined) shall not result in any adjustment in Employee’s compensation or other benefits under this Agreement.

Should Employee become totally disabled as a result of sickness or accident and unable to adequately perform his regular duties prescribed under this Agreement, his base salary (which shall

continue to be adjusted as provided for in Paragraph 5), together with incentive bonuses under the Aflac Incorporated Management Incentive Plan and his participation in Corporation’s employee benefit programs and retirement plan shall continue without reduction except as hereinafter provided, during the continuance of such disability for a period not exceeding the earlier of (1) the end of the term of this Agreement or any extension hereof, or (2) a period of one and one-half (1-1/2) years (547 calendar days) for each continuous disability. Payments pursuant to this Paragraph 12 shall be reduced by any amounts paid to Employee during any such period of disability from time to time under any disability programs, plans or policies maintained by Corporation, its subsidiaries or affiliates. In addition, if during, or on the first day of, the period Employee is receiving such disability pay and benefits, (i) Employee reaches or has reached the date upon which he satisfies the criteria to receive the maximum percentage of retirement benefits available under the Aflac Incorporated Supplemental Executive Retirement Plan (the “Maximum Retirement Benefit Date”); and (ii) upon or after the Maximum Retirement Benefit Date, there ceases to be a reasonable expectation that he will return to perform services for Corporation, such that Employee has a separation from service (as defined below) and his Benefit Commencement Date under the Aflac Incorporated Supplemental Executive Retirement Plan (the “SERP”) has occurred (whether or not the SERP benefit payments are to actually commence on his Benefit Commencement Date or are to be delayed by six (6) months as may be required under the SERP to satisfy the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”)); the amount of disability pay consisting of base salary and cash incentive bonuses being paid or payable under this Paragraph 12 shall be reduced effective as of the date of such separation from service to an amount that is forty percent (40%) of the amount being paid or payable immediately before such date.

time before such termination date during which Employee was totally disabled. Furthermore, if on such termination date Employee is not yet eligible for an early retirement benefit under the SERP, Employee will be entitled to benefits under the SERP the amount of which shall be determined as if his termination date was Employee’s Early Retirement Date (as such term is defined in the SERP); provided, these provisions shall not affect the timing or form of his SERP distributions, which shall be determined solely under the terms of the SERP.

For the purpose of this Agreement, the term “totally disabled” or “total disability” shall mean Employee’s inability to adequately perform his executive and management duties hereunder on account of accident or illness. It is understood that Employee’s occasional sickness or other incapacity of short duration may not result in him being or becoming “totally disabled;” however, such illness or incapacity could constitute Employee’s being or becoming “totally disabled” if such illness or incapacity is prolonged or recurring.

13. Termination of employment.

A. Termination by Corporation. The Chief Executive Officer may terminate this Agreement and Employee’s employment (the date thereof being referred to as his “Actual Termination Date”), at any time, with or without “good cause” (“good cause” being hereinafter defined), (i) immediately upon giving written notice to Employee of his termination for “good cause,” and (ii) by giving at least thirty (30) days’ written notice to Employee of its intention to terminate Employee’s employment without “good cause;” provided, however, with respect to termination without “good cause,” Corporation may, at its election, terminate Employee’s actual employment (so that Employee no longer renders services on behalf of Corporation) at any time during said thirty (30) day period; and,

(1) In the event such termination is for “good cause,” Corporation shall be obligated only to pay Employee his base salary earned under Paragraph 5 through his Actual Termination Date.

For purposes of this Agreement (including Paragraph 18 hereof), “good cause” shall mean: that, in the sole discretion of the Chief Executive Officer, any of the following have occurred or exist: (i) the willful and deliberate failure of Employee to substantially perform his executive and management duties hereunder for reasons other than Employee’s sickness, injury or disability; (ii) the willful and deliberate conduct by Employee which results in substantial injury or damage to Corporation; or (iii) the conviction or plea of guilty by Employee of a felony crime. A termination of Employee for “good cause” based on clause (i) or (ii) of the preceding sentence will take effect immediately, unless Chief Executive Officer, in his sole discretion, allows Employee a right to cure, in which case such termination for “good cause” will take effect thirty (30) days (or such shorter period as determined by the Chief Executive Officer) after Employee receives from Corporation written notice of its intent to terminate Employee’s employment and Corporation’s description of the alleged cause, unless Employee, in the opinion of the Chief Executive Officer, during such permitted cure period, makes significant progress toward remedying (and as soon as practicable thereafter, substantially completes the remedy of) the events or circumstances constituting “good cause;” a termination of Employee for “good cause” based on clause (iii) of the preceding sentence will take effect immediately.

(a) upon Employee’s separation from service, pay Employee his base salary as provided for in Paragraph 5 of this Agreement up to the end of the scheduled term of this Agreement; provided, if at the time Employee has a separation from service (such that his Benefit Commencement Date under the SERP has occurred) Employee has attained his Maximum Retirement Benefit Date, all payments being paid or payable under this subparagraph (a) shall cease or not commence, as applicable. Such amount, if any, payable under this subparagraph (a) for the period after his Actual Termination Date will be paid in accordance with the regular payroll schedule applicable to all other similarly-situated active executive employees of Corporation commencing with the next regularly scheduled payday, with any portion of such amount that is payable within the six (6)-month period beginning on the date of his separation from service being paid in a lump sum upon the day after the six (6)-month anniversary of his separation from service;

(b) pay Employee an amount equal to a portion of his performance bonus compensation as provided for in Paragraph 7 of this Agreement prorated based on the number of days through the end of the scheduled term of this Agreement; provided, if at the time Employee has a separation from service (such that his Benefit Commencement Date under the SERP has occurred) Employee has attained his Maximum Retirement Benefit Date, all payments being paid or payable under this subparagraph (b) shall cease or not commence, as applicable. The amount of such bonus payable under this subparagraph (b), if any, will be paid to Employee pursuant to the terms and customary operations of the Aflac Incorporated Management Incentive Program (or other applicable bonus program) except that Employee’s performance will be deemed to be at target while actual performance of Corporation will be applied; provided, if the scheduled term of this Agreement ends after the calendar year in which the notice of termination is given, (i) the bonus payment for the calendar year in which such notice is given (and any other full calendar year that ends before the scheduled term of this Agreement ends) will be paid without any proration; and (ii) the amount of the bonus payment for the calendar year in which the scheduled term of this Agreement ends will be calculated on a pro rata basis, using the number of days elapsed during such calendar year through the end of the scheduled term of this Agreement, and will be paid upon Employee’s separation from service in a lump sum between January 1 and March 15, inclusive, of the calendar year following the calendar year in which the scheduled term of this Agreement ends or, if later, upon the day after the six (6)-month anniversary of his separation from service;

(i) After Employee’s Actual Termination Date, Employee shall no longer actively participate in the Aflac Incorporated 401(k) Savings and Profit Sharing Plan (the “401(k) Plan”). Corporation shall pay to Employee an amount equal to the dollar amount of matching contributions, if any, that would have been made to Employee’s account(s) under the 401(k) Plan if Employee had continued to actively participate in such plan for the period from Employee’s Actual Termination Date through the end of the scheduled term of this Agreement, and had made Employee deferrals at the deferral rate necessary to receive the maximum matching contribution (if any) available to him under the terms of the 401(k) Plan with such amount being calculated as if Employee’s compensation and the limits applicable under the 401(k) plan all remained at the levels in effect as of the date the notice of termination is given. This payment shall be made to Employee in a lump sum upon the day after the six (6)-month anniversary of his separation from service.

(ii) If, following Employee’s separation from service, Employee does not qualify for retiree health benefits (if

any) under Corporation’s group health plan, then upon Employee’s separation from service, Corporation shall allow Employee to continue to participate in Corporation’s group health plan for the remainder of the stated term of this Agreement as if he remained an active employee; provided, Employee pays the full premium cost for such coverage; and provided further, Corporation shall reimburse Employee for the employer portion of the cost of such coverage (such that Employee shall pay in net terms only the active employee cost of such coverage) within sixty (60) days after the end of each calendar month in which Employee maintains such coverage.

B. Termination by Employee. Employee may terminate this Agreement, at any time by giving at least sixty (60) days’ written notice to Corporation of his intention to terminate his employment;

(a) pay Employee his base salary due him under Paragraph 5 of this Agreement up to his Actual Termination Date;

(c) continue to honor all Equity Awards, subject to the terms thereof, which have been granted to Employee and are fully vested prior to the termination date stated in said written notice;

(d) pay Employee, and if elected by Employee, his spouse such retirement benefits as are provided for in the Aflac Incorporated Supplemental Executive Retirement Plan (the “SERP”) under Paragraph 9 thereof. For purposes of this subparagraph, Employee shall continue to accrue “credited service” as an employee under the SERP up through his Actual Termination Date; provided,

these provisions shall not affect the timing or form of his SERP distributions, which shall be determined solely under the terms of the SERP.

(a) Subject to Corporation’s rights under Paragraphs 15 and 16, Corporation shall pay Employee his base salary due him under Paragraph 5 of this Agreement up to his Actual Termination Date;

D. Cooperation After Notice of Termination. Following any such notice of termination, Employee shall fully cooperate with Corporation in all matters relating to the winding up of his pending work on behalf of Corporation and the orderly transfer of any such pending work to other employees of Corporation as may be designated by the Chief Executive Officer; and to that end, Corporation shall be entitled to full-time services of Employee through his Actual Termination Date and such full-time or part-time services of Employee as Corporation may reasonably require during all or any part of the sixty (60)-day period that follows his Actual Termination Date; provided, the parties acknowledge that, depending on the level of services so required, the provision of such services may delay the timing of Employee’s separation from service.

a general overview of Section 409A’s definition of “separation from service”, an employee separates from service if the employee dies, retires, or otherwise has a termination of employment with all affiliates, determined in accordance with the following:

(3) Termination of Employment. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the employer and the employee reasonably anticipate that (A) no further services will be performed after a certain date, or (B) the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to less than fifty percent (50%) of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36)-month period. Facts and circumstances to be considered in making this determination include, but are not limited to, whether the employee continues to be treated as an employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly-situated service providers have been treated consistently, and whether the employee is permitted, and realistically available, to perform services for other service recipients in the same line of business. For periods during which an employee is on a paid bona fide leave of absence and has not otherwise terminated employment as described in subparagraph (1) above, for purposes of this subparagraph, the employee is treated as providing bona fide services at a level equal to the level of services that the employee would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which an employee is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this subsection (including for purposes of

determining the applicable thirty-six (36)-month period).

F. Separate Payments. Each payment made to Employee pursuant to this Paragraph 13 or Paragraph 18 shall be treated as a separate payment for purposes of Code Section 409A.

14. Death of Employee. In the event of Employee’s death during the term of this agreement or any extension hereof, this Agreement shall terminate immediately, and Employee’s estate shall be entitled to receive terminal pay in an amount equal to the amount of Employee’s base salary and any performance bonus compensation actually paid by Corporation to Employee during the last thirty-six (36) months of his life, said terminal pay to be paid in thirty-six (36) equal monthly installments beginning on the first day of the month next following the month during which Employee’s death occurs. If the Employee’s death occurs before he has been employed for thirty-six (36) months, the terminal pay shall be based on an amount equal to the Employee’s base salary and any performance bonus actually paid by Corporation to Employee during the period of his employment plus the amount of base salary and performance bonus the Employee would have been paid had he survived for the full initial thirty-six (36)-month period. Terminal pay as herein provided for in this Paragraph shall be in addition to amounts otherwise receivable by Employee or his estate under this or any other agreements with Corporation or under any employee benefits or retirement plans established by Corporation and in which Employee is participating at the time of his death. In addition, Corporation shall honor all Equity Awards, subject to the terms thereof, granted to Employee prior to his death and Employee or his estate shall, if not otherwise vested, become fully vested in said options as of the date of Employee’s death. For purposes of this Paragraph, Employee shall, upon his death, be given such additional “credited service” as necessary

to fully qualify Employee under Aflac Incorporated Supplemental Executive Retirement Plan (“SERP”) and to provide a survivor annuity to Employee’s spouse under the Plan. If upon Employee’s death Employee was not eligible for (at least) an early retirement benefit under the SERP, benefits will be payable under the SERP the amount of which shall be determined as if Employee’s date of death was his Early Retirement Date (as such term is defined in the SERP); provided, these provisions shall not affect the timing or form of his SERP distributions, which shall be determined solely under the terms of the SERP.

15. Covenants not to compete and not to disclose confidential information and trade secrets.

A. Covenant against competition. During employment and for a twenty-four (24)-month period after Employee’s Actual Termination Date (or Termination Date for purposes of Paragraph 18) resulting from (i) Employee’s voluntary termination without “good reason” (as defined in Paragraph 18), or (ii) Corporation’s termination of Employee for “good cause” (as defined in Paragraph13), Employee will not, on his own behalf, or on behalf of any other person or entity, compete with Aflac Incorporated and its affiliated companies (the “Aflac Companies”) by providing in the Restricted Territory (as defined in subparagraph A(3) of this Paragraph 15) to any Competing Business (as defined in subparagraph A(2) of this Paragraph 15), services similar to those Employee provided to the Aflac Companies with respect to the Aflac Business (as defined in subparagraph A(1) of this Paragraph 15), in circumstances in which Employee’s responsibilities and duties are substantially similar to those performed by him during the 24-month period ending on his Actual Termination Date.

(2) “Competing Business” means any person, concern or entity, which is engaged in, or conducts a business substantially the same as, the Aflac Business or any part thereof.

(3) “Restricted Territory” means the area within the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and Japan.

16. Enforcement of restrictive covenants.

A.Blue Penciling. The parties agree that if any court finds that any provision in Paragraph 15 or this Paragraph 16 is overly broad such that it is unenforceable under applicable state law, the court may reform that provision to narrow its scope to the extent necessary to render it enforceable.

B.Severability. Employee acknowledges and agrees that the covenant against competition and the covenant against disclosure contained in Paragraphs 15.A and 15.B,

respectively, are reasonable and valid and do not impose limitations greater than those that are necessary to protect the business interests and confidential information of the Aflac Companies. The parties agree that the invalidity or unenforceability of any one or more of such covenants, other provisions, or parts thereof (collectively the “Covenants”) will not affect the validity or enforceability of the other Covenants, all of which are inserted conditionally on their being valid in law. In the event one or more Covenants contained herein are ruled invalid (after application of subparagraph A of this Paragraph), this Agreement will be construed as if such invalid Covenant had not been inserted. The parties hereto agree that the Covenants contained in this Agreement are severable and divisible; that none of such Covenants depends on any other Covenant for its enforceability; that such Covenants constitute enforceable obligations between the parties; that each such Covenant will be construed as an agreement independent of any other Covenant of this Agreement; and that the existence of any claim or cause of action by one party to this Agreement against the other party to this Agreement, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by any party to this Agreement of any such Covenant.

C.Injunctive Relief. Employee hereby agrees that any remedy at law for any breach of the Covenants will be inadequate and that any of the Aflac Companies will be entitled to apply for injunctive relief in addition to any other remedy the Aflac Companies might have under this Agreement.

D.Claim for Damages. Employee acknowledges that, in addition to seeking injunctive relief, any of the Aflac Companies may bring a cause of action against him for any and all losses, liabilities, damages, deficiencies, costs (including, without limitation, court costs), and expenses (including, without limitation, reasonable attorneys’ fees), incurred by the Aflac Companies and arising out of or due to his breach of any Covenant or agreement contained in Paragraph 15. Notwithstanding anything herein to the contrary, the breach of any Covenant will cause Employee to forfeit any and all payments otherwise due under subparagraphs A(1), B(1) and B(3) (as applicable) of Paragraph 13, and the breach of the nondisclosure Covenant set forth in Paragraph 15.B will cause Employee to forfeit any and all payments otherwise due under subparagraphs A(2) and B(2) (as applicable) of Paragraph 13; and Employee agrees to repay to the Aflac Companies any amount already paid under such applicable subparagraph.

17. Right to acquire insurance. If Employee shall terminate his employment hereunder for any reason other than death, he may, at his election, acquire any insurance policies upon his life owned by the Corporation by giving written notice of his election to Corporation within ninety (90) days after his termination of employment. Such policies shall be transferred to the Employee upon his payment to Corporation of the then interpolated terminal reserve value of said insurance. In the event any policies transferred to Employee as herein provided shall not have an interpolated terminal reserve value, then the amount to be paid by Employee shall be its then fair market value.

18. Change in control.

(3) In lieu of any further salary payments to Employee for periods subsequent to the Termination Date, the Corporation shall pay to Employee, immediately after the Termination Date, a lump sum payment, in cash, equal to three (3) times the sum of (i) Employee’s annual base salary in effect immediately prior to the Change in Control and (ii) the higher of the amount paid to Employee pursuant to the Aflac Incorporated Management Incentive Plan (or any successor plan thereto) for the year preceding the year in which the Termination Date occurs or paid in the year preceding the year in which the Change in Control occurs; provided, if Employee’s separation from service occurs more than twenty-four (24) months after the Change in Control, only the portion of such lump-sum severance payment in excess of the total amount that would have been payable under Paragraphs 13.A(2)(a) and (b) shall be paid pursuant to the terms hereinabove, and the remainder shall be paid pursuant to the terms of Paragraphs 13.A(2)(a) and (b) as if no Change in Control had occurred; and, provided further, such amount will be paid upon the day after the six (6)-month anniversary of Employee’s separation from service; provided further, if upon his Termination Date Employee has attained his Maximum Retirement Benefit Date, no amount shall be payable under this subparagraph 3.

(4) The Corporation shall pay to Employee, immediately after the Termination Date, a lump sum amount, in cash, equal to a pro rata portion (based on the number of days Employee is an employee during the year in which the Termination Date occurs) of the aggregate value of the maximum annual amount of all contingent incentive compensation awards to Employee for all uncompleted periods under the Aflac Incorporated Management Incentive Plan (or successor plan thereto); provided, to the extent any amount of such lump sum payable after the Termination Date is not exempt from Section 409A, such amount will be paid upon the day after the six (6)-month anniversary of Employee’s separation from service.

(5) For a thirty-six (36)-month period after Employee’s separation from service, Corporation shall provide Employee with life, disability, accident and health insurance benefits substantially similar to and equal or greater in economic value than such benefits which Employee is receiving immediately prior to the Termination Date (without giving effect to any reduction in such benefits subsequent to a Change in Control which reduction in benefits would constitute “good reason” as defined in this Paragraph). Benefits required to be provided to Employee pursuant to this subparagraph B(5) shall be reduced to the extent comparable benefits are actually received by or made available to Employee without cost during such thirty-six (36)-month period and any such benefit actually received by Employee shall be reported to Corporation by Employee.

deductible (in whole or in part) by the Corporation, an affiliate or person making such payment or providing such benefit as a result of Section 280G of the Internal Revenue Code of 1986 (the “Code”) then, to the extent necessary to make such portion of the Total Payments deductible (and after taking into account any reduction in the Total Payments provided by reason of Section 280G of the Code in such other plan, arrangement or agreement), adjustments in such payments shall be made as follows: (i) the cash payments provided pursuant to subparagraph B.(3) and B.(4) of this Paragraph 18 that are exempt from Section 409A shall first be reduced (if necessary, to zero); (ii) then, if further reductions are necessary, benefits provided under subparagraph B.(5) of this Paragraph 18 that are exempt from Section 409A shall be reduced (if necessary, to zero); (iii) then, if still further reductions are necessary, the cash payments provided pursuant to subparagraph B.(3) and B.(4) of this Paragraph 18 that are not exempt from Section 409A shall be reduced (if necessary, to zero); and (iv) finally, if still further reductions are necessary, all of the benefits provided under subparagraph B.(5) of this Paragraph 18 that are not exempt from Section 409A shall be forfeited. For purposes of this limitation (i) no portion of the Total Payments, the receipt or enjoyment of which Employee shall have effectively waived in writing prior to the date of termination of employment shall be taken into account (provided that, in no event will any such waiver impermissibly affect any portion of the Total Payments that is subject to Section 409A), (ii) no portion of the Total Payments shall be taken into account which in the opinion of the tax counsel selected by the Corporation’s independent auditors and reasonably acceptable to Employee does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code, including by reason of Section 280G(b)(4)(A) of the Code, (iii) except as provided in clause (iv) above, the payments and benefits be reduced only to the extent necessary so that the Total Payments (other than those referred to in clauses (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions, in the opinion of the tax counsel referred to in clause (ii); and (iv) the value of any non-cash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Corporation’s independent auditors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. In no event shall the Corporation’s obligation to continue to honor all Equity Awards granted to Employee prior to the Termination Date nor the vesting of Equity Awards in accordance with Paragraph 18.C hereof be affected by this Paragraph 18.D.

E. Definitions.

(1) “Change in Control” means a change in ownership or effective control of the Corporation, Aflac Incorporated or any other “relevant corporation” within the meaning of Treas. Reg. §1.409A-3(i)(5)(ii) (each a “Relevant Corporation”) or a change in the ownership of a substantial portion of the assets of a Relevant Corporation, all within the meaning of Section 409A. As a general overview, Section 409A’s definition of these terms, and the dates as of which they occur, are as follows:

(a) The date any one person, or more than one person acting as a group, acquires ownership of stock of a Relevant Corporation that, together with stock held by such person or group constitutes more than fifty percent (50%) of the total voting power of the stock of a Relevant Corporation. However, if any one person, or more than one person acting as a group, is considered to own more

than fifty percent (50%) of the total fair market value or total voting power of the stock of a Relevant Corporation, the acquisition of additional stock by the same person or persons is not considered to cause a change in the ownership of a Relevant Corporation or to cause a change in the effective control of a Relevant Corporation.

(b) The date any one person, or more than one person acting as a group, acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) ownership of stock of a Relevant Corporation possessing thirty percent (30%) or more of the total voting power of the stock of a Relevant Corporation.

(c) The date that any one person, or more than one person acting as a group acquires (or has acquired during the twelve (12)-month period ending on the date of the most recent acquisition by such person or persons) assets from a Relevant Corporation that have a total gross fair market value equal to or more than forty percent (40%) of the total gross fair market value of all of the assets of a Relevant Corporation immediately before such acquisition or acquisitions.

(d) The date a majority of the board of directors of a Relevant Corporation for which no other corporation is a majority shareholder is replaced during any twelve (12)-month period by directors whose appointment or election is not endorsed by a majority of the members of such Relevant Corporation’s board of directors before the date of the appointment or election.

(a) A material breach by Corporation of the terms and conditions of this Agreement affecting Employee’s salary and bonus compensation, any employee benefit, Equity Awards or the loss of any of Employee’s titles or positions with Corporation;

(b) A significant diminution of Employee’s duties and responsibilities;

(c) The assignment to Employee of duties significantly inconsistent with or different from his duties and responsibilities existing at the time of a Change in Control;

(d) A purported termination of Employee’s employment by Corporation other than as permitted by this Agreement;

22. Authority. The provisions of this Agreement required to be approved by the Board of Directors of Corporation or the Compensation Committee of the Board have been so approved and authorized.

23. Arbitration. From time-to-time, Employee agrees to sign and become a party to any arbitration agreement with such terms as Corporation may provide, and the terms of such arbitration

agreement shall be incorporated herein by this reference and shall apply to all claims under this Agreement; provided, notwithstanding the foregoing, any claims or actions, whether for damages, injunctive relief or other relief, for any violation or breach of the Covenants set forth in Paragraphs 15 and 16, including but not limited to the actions described in subparagraphs C and D of Paragraph 16, (i) shall be excluded from the arbitration agreement and its applicability, and (ii) shall be subject to the jurisdiction of the applicable court as set forth in Paragraph 24.

/s/ KC /s/ PSA

Initials for Corporation Initials of Employee

25. Paragraph Headings. The paragraph headings contained in this Agreement are for convenience only and shall in no manner be construed as part of this Agreement.

IN WITNESS WHEREOF, Corporation has hereunto caused its name to be signed and its seal to be affixed by its duly authorized officers, and Employee has hereunto set his hand and seal, all being done in duplicate originals, with one original being delivered to each party as of the 19^th day of August, 2015.



	AMERICAN FAMILY LIFE ASSURANCE
	COMPANY OF COLUMBUS (Aflac)

/s/ Paul S. Amos, II	BY:	/s/ Kriss Cloninger, III
PAUL S. AMOS, II		KRISS CLONINGER, III
Employee		Executive Vice President

/s/ Robin L. Blackmon	ATTEST:	/s/ J. Matthew Loudermilk
Witness		J. MATTHEW LOUDERMILK
		Vice President, Corporate Secretary

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 10.32

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

THIS AGREEMENT, is made and entered into as of August 21, 2015, by and between AMERICAN FAMILY LIFE ASSURANCE COMPANY OF COLUMBUS (Aflac), a Nebraska corporation, (hereinafter referred to as “Corporation”) and ERIC KIRSCH (hereinafter referred to as “Employee”);

WITNESSETH THAT

WHEREAS, Corporation and Employee previously entered into an employment agreement dated November 1, 2011, as subsequently amended (the “Original Agreement”), pursuant to which Employee is employed by Corporation as its Executive Vice President, Global Chief Investment Officer; and

WHEREAS, Corporation and Employee desire to amend and restate the Original Agreement and to set forth the terms and conditions of Employee's continued employment by Corporation as its Executive Vice President, Global Chief Investment Officer;

NOW, THEREFORE, the parties, for and in consideration of the mutual covenants and agreements hereinafter contained, do contract and agree as follows, to-wit:

1. Purpose and employment. The purpose of this Agreement is to define the relationship between Corporation as an employer and Employee as an employee and Executive Vice President, Global Chief Investment Officer.

2. Duties. Employee agrees to provide, as a member of the executive management team, management services as Executive Vice President, Global Chief Investment Officer to Corporation and its subsidiaries and affiliates on a full-time and exclusive basis; provided, however, nothing shall preclude Employee from engaging in charitable and community affairs or managing his own or his family’s personal investments.

3. Performance. Employee agrees to devote all necessary time and his best efforts in the performance of his duties as Executive Vice President, Global Chief Investment Officer on behalf of Corporation and its subsidiaries and affiliates.

4. Term. The term of employment under the Original Agreement began on November 1, 2011 and continued through December 31, 2012. Under the Original Agreement, effective each January 1, beginning effective January 1, 2013, the scheduled term of the Original Agreement was automatically extended for one (1)-year periods. Most recently, the term was automatically extended on January 1, 2015, such that the current term is through December 31, 2015. Under this Agreement, the term shall continue to be extended for one (1)-year periods effective each January 1, beginning January 1, 2016, unless written notice of termination is given prior to such annual date by one party to the other party that this Agreement will not be extended by its terms. It is further understood and agreed that the covenants set forth in Paragraph 14 shall survive the term of this Agreement.

5. Base salary. For all the services rendered by Employee, Corporation shall continue to pay Employee a base salary of five hundred ninety-three thousand eight hundred dollars ($593,800.00) per year commencing January 1, 2015, said salary to be payable in accordance with Corporation's normal payroll procedures. Employee's base salary may be increased annually during the term of this Agreement and any extensions hereof as determined by the Compensation Committee of the Board of Directors of Aflac Incorporated (the “Compensation Committee of the Board”).

6. Documentation of increase in base salary. Any increase in Employee’s base salary determined by the Compensation Committee of the Board under Paragraph 5 shall be documented in the Corporation’s records and communicated to Employee, as the Compensation Committee of the Board may determine.

7. Management Incentive Plan. In addition to the base salary paid to Employee in accordance with Paragraph 5, Corporation shall for each calendar year of Employee's employment by Corporation, beginning (for purposes of this Agreement) with the calendar year 2015, continue to pay Employee, as performance bonus compensation, an amount determined each year under the current Aflac Incorporated Management Incentive Plan (i.e., short-term incentive program) with a target level based on at least two-hundred percent (200%) of Employee’s base salary. Nothing in this paragraph shall preclude Employee from receiving additional discretionary bonuses approved by the Chief Executive Officer or the Compensation Committee of the Board. Amounts payable to Employee under the Management Incentive Plan (or any successor or other executive bonus program) shall be payable in such manner, at such times and in such forms, as prescribed by the terms of the Management Incentive Plan (or successor or other program).

8. Equity award plans. Employee shall be eligible to be awarded stock options, restricted stock awards, and other equity awards (collectively, “Equity Awards”) to purchase Corporation's common stock under the Aflac Incorporated Long-Term Incentive Plans for selected key employees and directors during the term of this Agreement.

9. Employee benefits. Employee shall be eligible to participate with other employees of Corporation in all fringe benefit programs applicable to similarly-situated employees generally which may be authorized and adopted from time to time by the Board of Directors of Aflac Incorporated (the “Board”), including without limitation: a qualified pension plan, a qualified 401(k) and profit sharing plan, a disability income or sick pay plan, an accident and health plan (including medical reimbursement and hospitalization and major medical benefits), and a group life insurance plan. In addition, Corporation shall furnish to Employee such other “fringe” or employee benefits as are provided to key executive employees of Corporation and such additional employee benefits which the Compensation Committee of the Board shall determine to be appropriate to Employee’s duties and responsibilities as Executive Vice President, Global Chief Investment Officer.

10. Working facilities and expenses. Employee shall be provided with an office, books, periodicals, stenographic and technical help, and such other facilities, equipment, supplies and services suitable to his position and adequate for the performance of his duties. Employee shall initially be based in New York, New York and shall travel for Corporation’s business on an as needed basis.

Any expense reimbursements made to satisfy the terms of this Paragraph 10 shall be timely submitted by Employee, in accordance with Corporation’s policies and paid as soon as practicable but no later than ninety (90) days after Employee submits evidence of such expenses to Corporation (which payment date shall in no event be later than the last day of the calendar year following the calendar year in which the expense was incurred). The amount of such reimbursements during any calendar year shall not affect the benefits provided in any other calendar year, and the right to any benefits under this paragraph shall not be subject to liquidation or exchange for another benefit.

11. Vacation. Employee shall be entitled to his vacation time with pay during each calendar year in accordance with Corporation’s vacation policy for senior executive employees. In addition, Employee shall be entitled to such holidays as Corporation shall recognize for its employees generally.

12. Sickness and total disability. Employee’s absence from work because of illness or injury (not resulting in Employee becoming Totally Disabled, as defined below) shall not result in any adjustment in Employee’s base salary or other benefits under this Agreement. For purposes of this Agreement, the term “Totally Disabled” or “Total Disability” shall mean Employee’s inability to adequately perform his executive and management duties with or without a reasonable accommodation on account of illness or injury for more than twelve (12) consecutive weeks. It is understood that Employee’s occasional sickness or other incapacity of short duration may not result in him being or becoming Totally Disabled. However, such illness or incapacity could constitute Employee’s being or becoming Totally Disabled if such illness or incapacity is prolonged or recurring. Upon becoming Totally Disabled, Employee’s employment and this Agreement may be terminated pursuant to the terms of Paragraph 13.A(1).

13. Termination of employment. Notwithstanding any other provision in this Agreement, this Agreement may be terminated at any time by either party in accordance with the following terms:

A. Termination by Corporation. The Chief Executive Officer may terminate this Agreement and Employee’s employment (the date thereof being referred to as his “Actual Termination Date”), at any time, with or without “Cause” (“Cause” being hereinafter defined), (i) immediately upon giving written notice to Employee of his termination for “Cause,” and (ii) by giving at least thirty (30) days’ written notice to Employee of its intention to terminate Employee’s employment without “Cause”; provided, however, with respect to termination without “Cause,” Corporation may, at its selection, terminate Employee’s actual employment (so that Employee no longer renders services on behalf of Corporation) at any time during said thirty (30)-day period; and

(1) In the event such termination is for “Cause,” Corporation shall be obligated only to pay Employee his base salary earned under Paragraph 5 through his Actual Termination Date.

(2) For purposes of this Agreement, “Cause” shall mean that, in the sole discretion of the Chief Executive Officer, any of the following have occurred or exist:

(a) the failure of Employee to substantially perform his executive and management duties (for reasons other than sickness or injury, which do not rise to the level of Total Disability);

(b) any conduct by Employee involving moral turpitude;

(c) any conduct by Employee that causes material injury or damage to the goodwill, reputation or business of Corporation or any of its subsidiaries or affiliates;

(d) Employee’s commission or conviction of, or pleading guilty or nolo contendere (or any similar plea or admission) to a felony or to a criminal act involving dishonesty or other moral turpitude;

(e) any material breach of Corporation’s policies and practices, which are known or reasonably should have been known by Employee, or a violation of laws applicable to him in his capacity as an employee or executive of Corporation or applicable to Corporation or any of its subsidiaries or affiliates;

(f) Employee’s Total Disability as defined in Paragraph 12;

(g) any use of illegal drugs, abuse of other controlled substances or working under the influence of alcohol or other controlled substances; or

(h) any breach by Employee of any obligation under this Agreement.

(3) Notwithstanding the foregoing, a termination of Employee for “cause” based on clause (a), (c) or (h) of Paragraph 13.A(2) will take effect immediately, unless the Chief Executive Officer, in his sole discretion, allows Employee a right to cure, in which case such termination for “cause” will take effect ten (10) days (or such shorter period as determined by the Chief Executive Officer) after Employee receives from Corporation written notice of its intent to terminate Employee’s employment and Corporation’s description of the alleged cause, unless Employee, in the opinion of the Chief Executive Officer, during such permitted cure period, makes significant progress toward remedying (and as soon as practicable thereafter, substantially completes the remedy of) the events or circumstances constituting “cause.” If Corporation’s Cause to terminate Employee’s employment under this Agreement is for a reason stated in items (b), (d), (e), (f), and (g) above, Corporation shall have no obligation to provide Employee with an opportunity to cure or correct the events which gave rise to Corporation’s claim of Cause.

(4) Termination by Corporation without Cause.

(a) Corporation may terminate Employee’s employment at any time during the term of this Agreement without Cause by providing Employee with at least thirty (30) days’ written notice. At its sole discretion,

however, Corporation may direct Employee to cease rendering services to Corporation prior to the expiration of the thirty (30)-day notice period.

(b) If Corporation terminates Employee’s employment during the term of the Agreement without “Cause,” as defined in subparagraph (2) of this Paragraph 13 and if Employee timely signs and does not revoke a release as provided in subparagraph (E) of this Paragraph 13, Corporation shall be obligated to:

i. pay Employee’s base salary as set forth in Paragraph 5 of this Agreement from the Actual Termination Date through the remainder of the term of this Agreement. The payment of such base salary shall be in accordance with the regular payroll schedule applicable to all other similarly-situated active executive employees of Corporation commencing with the next regularly scheduled payday after the Actual Termination Date; provided, any portion of such amount that is payable within the six (6)-month period beginning on the date of his separation from service (as defined in subparagraph C of this Paragraph 13) and that is not exempt from Section 409A of the Internal Revenue Code of 1986 (the “Code”) shall be paid in a lump sum upon the day after the six (6)-month anniversary of his separation from service;

ii. pay Employee a portion of his performance bonus compensation to which he is entitled under Paragraph 7 of this Agreement determined on a pro-rated basis. Such pro-rated bonus shall be calculated based upon the number of calendar days in the calendar year up to Employee’s Actual Termination Date, divided by the total number of calendar days in the calendar year. Such bonus shall be paid to Employee in accordance with the terms of the Management Incentive Plan or other bonus plan, except that Employee’s performance shall be considered to be “on target” at the time of his Actual Termination Date. If the Actual Termination Date occurs after the end of the calendar year in which the notice of termination is given, (a) the bonus payment for the calendar year in which such notice is given will be paid without any pro-ration, and (b) the pro-ration described herein will apply to the next calendar year (i.e., the calendar year in which the Actual Termination Date occurs); and the bonus for such next calendar year shall be paid upon Employee’s separation from service in a lump sum between January 1 and March 15, inclusive, of the calendar year following the calendar year in which the Actual Termination Date occurs or, if later, on the date after the six (6)-month anniversary of Employee’s separation from service;

iii. continue to honor all fully vested equity awards, subject to the terms and conditions of the applicable equity award or agreement, which were granted to Employee prior to the Actual Termination Date; and

iv. continue to pay or provide to Employee all of the retirement, health, life and disability benefits, as are provided for in this Agreement or under any programs, plans or policies, covering Employee at the time of the Actual Termination Date, from the Actual Termination Date through the remainder of the term of this Agreement. Notwithstanding the foregoing, after Employee’s Actual Termination Date, Employee shall not actively participate in any retirement plan qualified under Code Section 401(a), any employee stock purchase plan under Code Section 423, any fully insured benefit for which the insurer does not allow post-employment participation, or any other plan or benefit (other than Corporation’s self-insured group health plan) that Corporation or the third-party insurer of such benefit reasonably determines is not suitable or available for post-employment participation. Furthermore, to the extent that Employee is paid or provided with any benefits under this provision after the Actual Termination Date, Employee understands and agrees that his entitlement to such benefits or the level of such benefits is subject to change or termination in the event that the applicable benefit is modified, amended or eliminated by Corporation or the Board.

B. Termination by Employee.

(1) Resignation by Employee with “Good Reason”.

(a) Subject to the terms of this subparagraph 13.B(1), Employee may resign his employment during the term of this Agreement for “Good Reason.”

(b) For purposes of this Agreement, “Good Reason” shall mean:

i. Corporation’s material breach of any material provision of this Agreement;

ii. Corporation’s material diminution of Employee’s title as Executive Vice President, Global Chief Investment Officer and/or Employee’s working facilities pursuant to Paragraph 10, without consent of Employee;

iii. Corporation’s assignment to Employee, without consent of Employee, of duties that are materially different from the duties described in Paragraph 2 of this Agreement; or

iv. Corporation’s material reduction of Employee’s base salary as set forth in Paragraph 5.

(c) Notwithstanding the foregoing, Employee shall have Good Reason under this Agreement only if (i) he first provides Corporation with a written statement of the grounds upon which his claim of Good Reason is based within ninety (90) days of the alleged events which he believes establishes Good Reason to resign his employment; and (ii) Corporation is given thirty (30) days to substantially cure or correct the events which gave rise to Employee’s claim that he has Good Reason to terminate this Agreement. In the event that Corporation is unable to substantially cure or correct the events which gave rise to Employee’s claim that he has Good Reason to terminate this Agreement, the Actual Termination Date shall be the earlier of (i) the date Corporation provides notice to Employee that it will not cure or correct the events which gave rise to Employee’s claim that he has Good Reason to terminate this Agreement, or (ii) the expiration of the thirty (30)-day cure or correction period.

(d) If Employee resigns his employment for Good Reason, and if Employee timely signs and does not revoke a release as provided in subparagraph E of Paragraph 13, Corporation shall be obligated to pay Employee according to the terms set forth in Paragraph 13.A(4)(b)(i)-(iv) of this Agreement.

(2) Resignation by Employee without Good Reason.

(a) Employee may resign his employment at any time during the term of the Agreement without Good Reason by providing Corporation with at least sixty (60) days’ written notice. At its sole discretion, however, Corporation may direct Employee to cease rendering services to Corporation prior to the expiration of the sixty (60)-day notice period.

(b) If Employee resigns his employment without Good Reason, Corporation shall be obligated to pay Employee according to the terms set forth in Paragraph 13.A(1).

C. Separation from Service. The term “separation from service” when used in this Agreement shall mean that Employee separates from service with Corporation and all affiliates, as defined in Code Section 409A and guidance issued thereunder. As a general overview of Code Section 409A’s definition of “separation from service,” an employee separates from service if the employee dies, retires, or otherwise has a termination of employment with all affiliates, determined in accordance with the following:

(1) Leaves of absence. The employment relationship is treated as continuing intact while the employee is on military leave, sick leave, or other bona fide

leave of absence if the period of such leave does not exceed six (6) months, or, if longer, so long as the employee retains a right to reemployment with an affiliate under an applicable statute or by contract. A leave of absence constitutes a bona fide leave of absence only while there is a reasonable expectation that the employee will return to perform services for an affiliate. If the period of leave exceeds six (6) months and the employee does not retain a right to reemployment under an applicable statute or by contract, the employment relationship is deemed to terminate on the first date immediately following such six (6)-month period. Notwithstanding the foregoing, where a leave of absence is due to any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, where such impairment causes the employee to be unable to perform the duties of his or her position of employment or any substantially similar position of employment, a twenty-nine (29)-month period of absence shall be substituted for such six (6)-month period.

(2) Status change. Generally, if an employee performs services both as an employee and an independent contractor, the employee must separate from service both as an employee and as an independent contractor pursuant to standards set forth in Treasury Regulations to be treated as having a separation from service. However, if an employee provides services to affiliates as an employee and as a member of the Board, the services provided as a director are not taken into account in determining whether the employee has a separation from service as an employee for purposes of this Agreement.

(3) Termination of employment. Whether a termination of employment has occurred is determined based on whether the facts and circumstances indicate that the employer and the employee reasonably anticipate that (A) no further services will be performed after a certain date, or (B) the level of bona fide services the employee will perform after such date (whether as an employee or as an independent contractor) will permanently decrease to less than fifty (50) percent of the average level of bona fide services performed (whether as an employee or an independent contractor) over the immediately preceding thirty-six (36)-month period. Facts and circumstances to be considered in making this determination include, but are not limited to, whether the employee continues to be treated as an employee for other purposes (such as continuation of salary and participation in employee benefit programs), whether similarly-situated service providers have been treated consistently, and whether the employee is permitted, and realistically available, to perform services for other service recipients in the same line of business. For periods during which an employee is on a paid bona fide leave of absence and has not otherwise terminated employment as described in subparagraph (1) above, for purposes of this subparagraph (3), the employee is treated as providing bona fide services at a level equal to the level of services that the employee would have been required to perform to receive the compensation paid with respect to such leave of absence. Periods during which an employee is on an unpaid bona fide leave of absence and has not otherwise terminated employment are disregarded for purposes of this subparagraph (3)

(including for purposes of determining the applicable thirty-six (36)-month period).

D. Death. In the event of Employee’s death, this Agreement shall terminate immediately, and Corporation shall only be obligated to pay Employee’s family or estate Employee’s pro-rated base salary earned through the date of Employee’s death.

E. Release requirement. As a condition to Employee receiving any pay or benefits under subparagraph A(4) or B(1) of this Paragraph 13, Employee must sign (and not revoke) a written release agreement (“Release”) containing any terms specified by Corporation for (i) Employee’s release of Corporation and its subsidiaries and affiliates from all claims arising from Employee’s employment or termination, (ii) Employee’s non-revocation of that release during the seven (7)-day period applicable to age-based claims, and (iii) Employee’s promise to comply with specified confidentiality, noncompetition and/or nonsolicitation provisions. Corporation will terminate Employee’s eligibility for severance pay and benefits if he fails to sign, if he revokes, or if he fails to follow the terms of this Release and if it is not signed and returned to Corporation within the earlier of (i) the deadline specified by Corporation, or (ii) sixty (60) days after Employee’s Actual Termination Date. Employee must sign the Release after his Actual Termination Date. In the event that any payment under subparagraph A(4) or B(1) of this Paragraph 13 is not exempt from Code Section 409A, the payment timing is based on the signing of this Release, and the period in which Employee could timely sign and return the release spans two (2) calendar years, such payment shall in all events be made in the second such calendar year. Notwithstanding the foregoing, if the payment timing of any portion of payments or benefits, which rely solely on the short-term deferral rule to be exempt from Code Section 409A, would be delayed beyond the short-term deferral rule period due to Employee’s late signing of the Release, such portion shall be forfeited.

F. Cooperation after notice of termination. Following any such notice of termination, Employee shall fully cooperate with Corporation in all matters relating to the winding up of his pending work on behalf of Corporation and the orderly transfer of any such pending work to other employees of Corporation as may be designated by the Chief Executive Officer; and to that end, Corporation shall be entitled to full-time services of Employee through his Actual Termination Date and such full-time or part-time services of Employee as Corporation may reasonably require during all or any part of the sixty (60)-day period that follows his Actual Termination Date; provided, the parties acknowledge that, depending on the level of services so required, the provision of such services may delay the timing of Employee’s separation from service.

G. Separate Payments. Each payment made to Employee pursuant to this Paragraph 13 shall be treated as a separate payment for purposes of Code Section 409A.

14. Covenants.

A. Covenant against competition. During employment and for a twenty-four (24)-month period after Employee’s Actual Termination Date resulting from (i) Employee’s

voluntary termination without “Good Reason,” or (ii) Corporation’s termination of Employee for “Cause” (as defined in Paragraph 13), Employee will not, on his own behalf, or on behalf of any other person or entity, compete with Aflac Incorporated and its affiliated companies (the “Aflac Companies”) by providing in the Restricted Territory (as defined in subparagraph A(3) of this Paragraph 14) to any Competing Business (as defined in subparagraph A(2) of this Paragraph 14), services similar to those Employee provided to the Aflac Companies with respect to the Aflac Business (as defined in subparagraph A(1) of this Paragraph 14), in circumstances in which Employee’s responsibilities and duties are substantially similar to those performed by him during the 24-month period ending on him Actual Termination Date.

(1) “Aflac Business” means the Aflac Companies’ insurance company business, which the Aflac Companies operate throughout the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and throughout Japan, and which includes, but is not limited to (i) the development, underwriting marketing, distribution and sale of individual and group voluntary insurance products, including accident, cancer and other specified diseases, dental, hospital confinement indemnity, hospital confinement sickness indemnity, hospital intensive care, life, annuities, lump sum cancer, lump sum cancer critical illness, specified health event, short term disability and vision; (ii) the offering of un-reimbursed medical, dependent care, and transportation flexible spending accounts; and (iii) operating a private medical and insurance product exchange and similar enrollment services. “Aflac Business” will also include any additional insurance and reimbursement account products and services, which become part of the business conducted by the Aflac Companies, whether through acquisition and/or development, and in which or to which Employee has had direct exposure in his position with the Aflac Companies. Similarly, “Aflac Business” will not include any business operation, which formerly was part of the business conducted by the Aflac Companies and which ceased being a part thereof due to divestiture or discontinuation of that part of the business.

(2) “Competing Business” means any person, concern or entity, which is engaged in, or conducts a business substantially the same as, the Aflac Business or any part thereof.

(3) “Restricted Territory” means the area within the United States (including the District of Columbia, Puerto Rico, the U.S. Virgin Islands and Guam) and Japan.

B. Covenant against disclosure of confidential information and trade secrets. Employee acknowledges that, during the term of his employment under this Agreement, Employee will be privy to (i) certain confidential and proprietary information of the Aflac Companies, which constitutes trade secrets as defined in the Georgia Trade Secret Act of 1990 (the “Trade Secret Act”), and (ii) certain other confidential and proprietary information of Corporation that may not constitute trade secrets as so defined. With

respect to such Trade Secrets and other confidential and proprietary information, Employee covenants and agrees, as follows:

(1) Employee agrees to not disclose to any third party, without the prior written consent of the Chief Executive Officer or unless necessary to perform his duties and responsibilities hereunder, the processes, machines, technical documentation, computer programs, customer lists, identity of customers, business plans, marketing plans and techniques, pricing data, financial data, marketing programs, customer files, financial institution files, technical expertise and know how, and other confidential and proprietary information and trade secrets, whether as defined in the Trade Secret Act or which may lie beyond it (collectively, the “Property”), which have been or will be provided to Employee by any of the Aflac Companies and are confidential and proprietary property of any of the Aflac Companies. Employee further agrees not to use any Property to his personal benefit or the benefit of any third party. Employee also agrees to return to Corporation all such Property which is tangible upon or before his Actual Termination Date. Notwithstanding the foregoing, the Property protected hereunder will not include any data or information that has been disclosed to the public (except where such public disclosure has been made by Employee without authorization), that has been independently developed and disclosed by others, or that otherwise enters the public domain through lawful means. The restrictions in this Paragraph 14 are in addition to, and not in lieu of, any rights or remedies Corporation may have available pursuant to the laws of the State of Georgia to prevent the disclosure of trade secrets and proprietary information, with such laws including but not limited to the Trade Secrets Act.

(2) Employee’s obligations under the nondisclosure provisions in this Paragraph 14.B, (i) will apply to the Property that does not constitute trade secrets during the term of Employee’s employment hereunder and for as long as the Property remains confidential, and (ii) will apply to the Property that constitutes trade secrets until such Property no longer constitutes trade secrets and is no longer confidential.

C. Non-Solicitation of employees and associates. Employee understands and agrees that the relationship between Corporation and its employees, agents, and independent contractors constitutes a valuable asset of Corporation and may not be converted to Employee’s own use. Employee likewise understands and agrees that the relationship between any of Corporation’s subsidiaries or affiliates and their employees, agents, and independent contractors constitutes a valuable asset of such subsidiary or affiliate and may not be converted to Employee’s own use. Employee agrees that during his employment with Corporation and for a twenty-four (24)-month period following the termination his employment for any reason, Employee shall not, directly or indirectly, solicit, recruit, hire or induce any employee, agent, or independent contractor of Corporation to terminate his or her engagement with Corporation or any of such subsidiary or affiliate so as to work for any other person or business; provided however, that the restrictions set forth in this subparagraph shall only apply to employees, agents, or independent contractors with whom Employee worked or

communicated during the twenty-four (24)-month period preceding the end of his employment with Corporation.

D. Non-Solicitation of customers and distributors. Employee understands and agrees that the relationship between Corporation and each of its accounts, policyholders, customers, prospects and distributors constitutes a valuable asset of Corporation and may not be converted to Employee’s own use. Employee likewise understands and agrees that the relationship between any of Corporation’s subsidiaries or affiliates and their policyholders, customers, prospects and distributors constitutes a valuable asset of such subsidiary or affiliate and may not be converted to Employee’s own use. Employee agrees that during his employment with Corporation and for a twenty-four (24)-month period following the termination of his employment for any reason, Employee shall not, directly or indirectly, on behalf of any person or business, solicit, contact, or call upon any account, policyholder, customer, customer prospect, or distributor of Corporation, or any representative of Corporation or any of its subsidiaries or affiliates, for the purpose of providing any service or product competitive with any service or product sold or provided by Corporation or any of its subsidiaries or affiliates during Employee’s employment with Corporation; provided, however, the restrictions set forth in this subparagraph D shall apply only to policyholders, customers, prospects, or distributors of Corporation or any of its subsidiaries or affiliates, or representatives of Corporation or any of its subsidiaries or affiliates, with which Employee had Material Contact on behalf of Corporation or any such subsidiary or affiliates during the twenty-four (24)-month period preceding the end of his employment with Corporation. “Material Contact” is contact between Employee and another person or entity with whom or which Employee dealt on behalf of Corporation or any subsidiary or affiliate, whose dealings with Corporation or any subsidiary or affiliate were coordinated or supervised by Employee, or about whom Employee obtained Confidential Information in the course of Employee’s employment for Corporation.

E. Assignment of inventions. If, at any time during the term of his employment, Employee (either alone or with others) makes, conceives, creates, develops, discovers, invents or reduces to practice any “Protected Work” that (i) is directly related to the business of Corporation or any of its subsidiaries or affiliates or any policyholder or customer thereof, or any of the products or services developed, manufactured or sold by Corporation or any of its subsidiaries or affiliates or that may be used in relation therewith; (ii) results from tasks assigned to Employee by the Board, the Chief Executive Officer, Corporation, and any of its subsidiaries or affiliates; or (iii) results directly from the use of premises or personal property (whether tangible or intangible) owned, leased or contracted for by Corporation or any of its subsidiaries or affiliates, then Employee agrees that the “Protected Work” and the benefits shall immediately become the sole and absolute property of Corporation and its subsidiaries or affiliates and their assigns, and Employee hereby assigns all rights he may have in such Protected Work, and all benefits and rights resulting therefrom, to Corporation and its subsidiaries or affiliates. The term “Protected Work” means any and all ideas, inventions, formulas, source codes, object codes, techniques, processes, concepts, systems, programs, software, software integration techniques, hardware systems, schematics, flow charts, computer data bases, data compiled for clients or others, client lists, trademarks, service

marks, brand names, trade names, compilations, documents, data, notes, designs, drawings, technical data and/or training materials, including improvements thereto or derivatives therefrom, whether or not patentable, or subject to copyright or trademark or trade secret protection.

15. Enforcement of restrictive covenants.

A. Blue penciling. The parties agree that if any court finds that any provision in Paragraph 14 or this Paragraph 15 is overly broad such that it is unenforceable under applicable state law, the court may reform that provision to narrow its scope to the extent necessary to render it enforceable.

B. Severability. Employee acknowledges and agrees that the covenant against competition, the covenant against disclosure, the covenant against solicitation of employees and associates, the covenant against solicitation of customers and distributors, and the assignment of inventions, contained in Paragraphs 14.A-E, respectively, are reasonable and valid and do not impose limitations greater than those that are necessary to protect the business interests and confidential information of the Aflac Companies. The parties agree that the invalidity or unenforceability of any one or more of such covenants, other provisions, or parts thereof (collectively the “Covenants”) will not affect the validity or enforceability of the other Covenants, all of which are inserted conditionally on their being valid in law. In the event one or more Covenants contained herein are ruled invalid (after application of subparagraph A of this Paragraph), this Agreement will be construed as if such invalid Covenant had not been inserted. The parties hereto agree that the Covenants contained in this Agreement are severable and divisible; that none of such Covenants depends on any other Covenant for its enforceability; that such Covenants constitute enforceable obligations between the parties; that each such Covenant will be construed as an agreement independent of any other Covenant of this Agreement; and that the existence of any claim or cause of action by one party to this Agreement against the other party to this Agreement, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by any party to this Agreement of any such Covenant.

C. Injunctive relief. Employee hereby agrees that any remedy at law for any breach of the Covenants will be inadequate and that any of the Aflac Companies will be entitled to apply for injunctive relief in addition to any other remedy the Aflac Companies might have under this Agreement.

D. Claim for damages. Employee acknowledges that, in addition to seeking injunctive relief, any of the Aflac Companies may bring a cause of action against him for any and all losses, liabilities, damages, deficiencies, costs (including, without limitation, court costs), and expenses (including, without limitation, reasonable attorneys’ fees), incurred by the Aflac Companies and arising out of or due to his breach of any Covenant or agreement contained in Paragraph 14. Notwithstanding anything herein to the contrary, the breach of any Covenant will cause Employee to forfeit any and all payments otherwise due under subparagraphs A(1) and B(2) (as applicable) of Paragraph 13, and the breach of the nondisclosure Covenant set forth in Paragraph 14.B

will cause Employee to forfeit any and all payments otherwise due under subparagraphs A(4) and B(1) (as applicable) of Paragraph 13; and Employee agrees to repay to the Aflac Companies any amount already paid under such applicable subparagraph.

E. Survival. Paragraph 14 and this Paragraph 15, to the extent applicable, will survive the termination of this Agreement and Employee’s employment. In addition, neither the termination of this Agreement nor Employee’s employment will terminate any other obligations or rights that, by the specific terms of this Agreement, extend beyond such termination.

16. No requirement to seek employment and no offset. Corporation agrees that, if Employee’s employment is terminated by Corporation without Cause during the term of this Agreement or by Employee for Good Reason during the term of this Agreement, Employee is not required to seek other employment or attempt in any way to reduce the amounts payable to Employee by Corporation pursuant to the applicable terms of this Agreement; it being understood and agreed that the amount of any payment or benefit to Employee provided for hereunder shall not be reduced by any compensation or other benefits earned by Employee as a result of his employment by another employer.

17. Waiver of breach or violation not deemed continuing. The waiver by either party of a breach or violation of any provision of this Agreement shall not operate as or be construed to be a waiver of any subsequent breach hereof.

18. Notices. All notices, requests, demands and other communications hereunder shall be given in writing and shall be: (A) personally delivered; (B) sent by telecopier, facsimile transmission or other electronic means of transmitting written documents; (C) sent to the parties at their respective addresses indicated herein by certified U.S. mail, return receipt requested and postage prepaid; or (D) sent to the parties at their respective addresses indicated herein by private overnight mail courier service, delivery fee prepaid. The respective addresses to be used for all such notices, demands or requests are as follows:

To Corporation: Aflac, Incorporated

Attention: General Counsel

1932 Wynnton Road

Columbus, GA 31999

Fax: 706-596-3577

To Employee: Eric Kirsch

If personally delivered, such communication shall be deemed delivered upon actual receipt. If electronically transmitted, such communication shall be deemed delivered the new business day after transmission (and sender shall bear the burden of proof of delivery). If sent by U.S. mail, such communication shall be deemed delivered as of the date of delivery indicated on the

receipt issued by the relevant postal service, or, if the addressee fails or refuses to accept delivery, as of the date of such failure or refusal. If sent by overnight courier, such communication shall be deemed delivered upon receipt. Any party may change his or its address for the purposes of this Agreement by giving notice thereof in accordance with this Paragraph 18.

19. Authority. The provisions of this Agreement required to be approved by the Board or the Compensation Committee of the Board have been so approved and authorized.

20. Arbitration. From time-to-time, Employee agrees to sign and become a party to any arbitration agreement with such terms as Corporation may provide, and the terms of such arbitration agreement shall be incorporated herein by this reference and shall apply to all claims under this Agreement; provided, notwithstanding the foregoing, any claims or actions, whether for damages, injunctive relief or other relief, for any violation or breach of the Covenants set forth in Paragraphs 14 and 15, including but not limited to the actions described in subparagraphs C and D of Paragraph 15, (i) shall be excluded from the arbitration agreement and its applicability, and (ii) shall be subject to the jurisdiction of the applicable court as set forth in Paragraph 24.

/s/ DPA /s/ EK

Initials for Corporation Initials of Employee

21. Compliance with policies and laws. Employee agrees to comply with any and all of Corporation’s policies, work rules and standards of conduct and pledges to observe order and discipline of work. Employee agrees to abide by the laws of the United States and all other applicable jurisdictions and to exercise good judgment in the best interest of Corporation and its subsidiaries and affiliates.

22. Rights to materials and return of materials. All records, files, software, software code, memoranda, reports, price lists, customer lists, drawings, plans, sketches, documents, technical information, information on the use, development and integration of software, and the like (together with all copies of such documents and things) relating to the business of Corporation, which Employee shall use or prepare or come in contact within the course of, or as a result of Employee’s employment or other engagement by Corporation or any of its subsidiaries or affiliates shall remain the sole property of Corporation or any such subsidiary or affiliates. Laptop computers, other computers, software and related data, information and things provided to Employee by Corporation or any of its subsidiaries or affiliates, or obtained by Employee, directly or indirectly, from Corporation or any of its subsidiaries or affiliates, also shall remain the sole property of Corporation or any such subsidiary or affiliate. Upon the termination of Employee’s employment with Corporation for any reason or upon the prior demand of Corporation or any of its subsidiaries or affiliates, Employee shall immediately return all such materials and things to Corporation or any such subsidiary or affiliate and shall not retain any copies or remove or participate in removing any such materials or things from the premises of Corporation or any such subsidiary or affiliate after termination or upon Corporation’s or any subsidiary’s or affiliate’s request for return.

23. Severability. The paragraphs and provisions set forth in this Agreement, including the covenants set forth in Paragraph 14, shall be considered and construed as separate and independent paragraphs, provisions and covenants. Should any part or provision of any such paragraph, provision or covenant be held invalid, void or unenforceable in any court of competent jurisdiction, such invalidity, voidness or unenforceability shall not render invalid, void or unenforceable any other paragraph, provision or covenants of this Agreement.

24. Governing law. This Agreement shall be interpreted, construed and governed according to the laws of the State of Georgia. Any legal action brought in regard to this Agreement, which is not subject to arbitration as provided in Paragraph 20 or is brought to enforce the finding of the arbitrator, shall be brought in the Superior Court of Muscogee County, Georgia, or the United States District Court of the Southern District of Georgia, whichever applies, and the parties waive jurisdiction and venue in any other court.

25. Paragraph headings. The headings of the paragraphs herein are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

27. Acknowledgements. Employee acknowledges and agrees that he has read and reviewed this Agreement in its entirety and that he has been given the opportunity to ask Corporation about this Agreement. Employee further acknowledges and agrees that he has been given an opportunity to consult with an attorney of his choice regarding this Agreement.

28. Integrated agreement. This Agreement is intended by the parties hereto to be the final expression of their agreement with respect to the subject matter hereof and this is the complete and exclusive statement of the terms of their agreement, notwithstanding any representations, statements or agreements to the contrary heretofore made.

29. Amendments and waivers. Except as otherwise specified herein, this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of Corporation and Employee.

30. Code Section 409A. This Agreement is intended to comply with the requirements of Code Section 409A and shall be construed accordingly. Any payments or distributions to be made to Employee under this Agreement upon a “separation from service” (as defined above) of amounts classified as “nonqualified deferred compensation” for purposes of Code Section 409A, payable due to a separation from service and not exempt from Code Section 409A, shall in no event be made or commence until six (6) months after such separation from service. Each payment of nonqualified deferred compensation under this Agreement shall be treated as a separate payment for purposes of Code Section 409A. Notwithstanding the foregoing, Corporation shall not be liable to Employee or any other person if the Internal Revenue Service

or any court determines for any reason that any payments under this Agreement are subject to taxes or penalties under Code Section 409A.

31. Tax withholding. Corporation shall withhold all applicable taxes from any amounts payable under this Agreement, including, but not limited to, any federal, foreign, state and local taxes; and all such amounts described in this Agreement shall be paid net of such taxes.

IN WITNESS WHEREOF, Corporation has hereunto caused its name to be signed and its seal to be affixed by its duly authorized officers, and Employee has hereunto set his hand and seal, all being done in duplicate originals, with one original being delivered to each party as of the 21^st day of August, 2015.



	AMERICAN FAMILY LIFE
	ASSURANCE COMPANY OF
	COLUMBUS (Aflac)

/s/ Eric Kirsch	BY:	/s/ Daniel P. Amos
ERIC KIRSCH		DANIEL P. AMOS
Employee		Chairman and Chief Executive Officer

/s/ John G. Shalhoub	ATTEST:	/s/ J. Matthew Loudermilk
Witness		J. MATTHEW LOUDERMILK
		Vice President, Corporate Secretary

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 11

Aflac Incorporated and Subsidiaries

Computation of Earnings Per Share



	Three Months Ended September 30,				Nine Months Ended September 30,
	2015		2014		2015		2014
Numerator (In millions):
Basic and diluted: net earnings applicable to common stock	$	567	$	706	$	1,803	$	2,248
Denominator (In thousands):
Weighted-average outstanding shares used in the computation of earnings per share - basic	428,735		451,246		432,540		452,833
Dilutive effect of share-based awards	2,367		2,735		2,524		2,841
Weighted-average outstanding shares used in the computation of earnings per share - diluted	431,102		453,981		435,064		455,674
Earnings per share:
Basic	$	1.32	$	1.56	$	4.17	$	4.96
Diluted	1.32		1.56		4.14		4.93

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 12

Aflac Incorporated and Subsidiaries

Ratio of Earnings to Fixed Charges



	Three Months Ended September 30,				Nine Months Ended September 30,
(In thousands)	2015		2014		2015		2014
Fixed charges:
Interest expense⁽¹⁾	$	66,864	$	77,807	$	224,170	$	237,911
Interest on investment-type contracts	14,290		14,457		41,849		43,526
Rental expense deemed interest	136		158		402		486
Total fixed charges	$	81,290	$	92,422	$	266,421	$	281,923
Earnings before income tax⁽¹⁾	$	865,122	$	1,074,582	$	2,752,322	$	3,416,691
Add back:
Total fixed charges	81,290		92,422		266,421		281,923
Total earnings before income tax and fixed charges	$	946,412	$	1,167,004	$	3,018,743	$	3,698,614
Ratio of earnings to fixed charges	11.6x		12.6x		11.3x		13.1x

⁽¹⁾Excludes interest expense on income tax liabilities

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 15

November 3, 2015

Aflac Incorporated

Columbus, Georgia

Re: Registration Statement No. 333-197984 and 333-203839 on Form S-3; 333-135327, 333-161269, 333-202781, 333-158969, 333-27883, 333-200570, and 333-115105 on Form S-8

With respect to the subject registration statements, we acknowledge our awareness of the use therein of our report dated November 3, 2015, related to our review of interim financial information.

Pursuant to Rule 436 under the Securities Act of 1933 (the Act), such report is not considered part of a registration statement prepared or certified by an independent registered public accounting firm, or a report prepared or certified by an independent registered public accounting firm within the meaning of Sections 7 and 11 of the Act.

/s/ KPMG LLP

Atlanta, Georgia

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 31.1

Certification of Chief Executive Officer

I, Daniel P. Amos, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Aflac Incorporated;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	November 3, 2015	/s/ Daniel P. Amos
		Daniel P. Amos
		Chairman and Chief Executive Officer

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 31.2

Certification of Chief Financial Officer

I, Frederick J. Crawford, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Aflac Incorporated;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;


4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:


a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and


5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):


a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and


b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	November 3, 2015	/s/ Frederick J. Crawford
		Frederick J. Crawford
		Executive Vice President, Chief Financial Officer

Exhibit

Aflac Incorporated 3rd Quarter 2015 10-Q

EXHIBIT 32

Certification of CEO and CFO Pursuant to

18 U.S.C. Section 1350,

as Adopted Pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of Aflac Incorporated (the “Company”) for the quarterly period ended September 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Daniel P. Amos, as Chief Executive Officer of the Company, and Frederick J. Crawford, as Chief Financial Officer of the Company, each hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:


(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



/s/ Daniel P. Amos
Name:		Daniel P. Amos
Title:		Chief Executive Officer
Date:		November 3, 2015



/s/ Frederick J. Crawford
Name:		Frederick J. Crawford
Title:		Chief Financial Officer
Date:		November 3, 2015

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