

AUDIT AND RISK COMMITTEE REPORT
The Audit and Risk Committee of the Company’s
Board of Directors is composed of five Directors, each
of whom, the Board has determined, is independent
as defined by the NYSE listing standards and SEC
rules and is financially literate. The Board of Directors
has also determined that three members of the Audit
and Risk Committee (Douglas W. Johnson, W. Paul
Bowers, and Joseph L. Moskowitz) qualify as audit
committee financial experts as defined by the SEC
rules. The Audit and Risk Committee operates under
a written charter adopted by the Board of Directors.
The charter, which is annually reviewed and complies
with all current regulatory requirements, can be
viewed on the Company’s website,
www.aflac.com, by
clicking on “Investors,” then “Corporate Governance,”
then
“Audit
and
Risk
Committee”
(or
http://investors.aflac.com/corporate-governance/audit-committee.aspx
).
In 2015, the Audit and Risk Committee met 13 times.
During these meetings the Audit and Risk Committee
reviewed and discussed with management, KPMG
(the Company’s independent registered public
accounting firm), the internal auditors, the chief risk
officer, the general counsel and others a variety of
topics, including, but not limited to the Company’s
earnings releases and SEC filings related to quarterly
and annual financial statements, statutory insurance
financial statement filings and the Company’s system
of internal control over financial reporting. The Audit
and Risk Committee has discussed with, and received
regular status reports from, the Company's Director of
internal audit and KPMG on the overall scope and
plans for their audits of the Company. The Audit and
Risk Committee met with the internal auditors and
KPMG, with and without management present, to
discuss the results of their examinations, their
evaluations of the Company’s internal controls, and
the overall quality of the Company’s financial
reporting.
The Audit and Risk Committee has monitored the
Company’s compliance with Section 404 of the
Sarbanes-Oxley Act of 2002 regarding the reporting
related to internal control over financial reporting. The
monitoring process has included regular reports and
representations by financial management of the
Company, the internal auditors, and by KPMG. The
Audit and Risk Committee has also reviewed the
certifications of Company executive officers contained
in the Annual report on Form 10-K for the year ended
December 31, 2015 filed with the SEC, as well as
reports issued by KPMG, included in the Company’s
Annual report on Form 10-K related to its audit of (i)
the consolidated financial statements and (ii) the
effectiveness of internal control over financial
reporting.
The Audit and Risk Committee is responsible for the
appointment, compensation, retention and oversight
of the Company’s independent registered public
accounting firm. In accordance with SEC rules and
KPMG’s policies, audit partners are subject to rotation
requirements to limit the number of consecutive years
an individual partner may provide service to the
Company. For the lead audit partner the maximum
number of consecutive years of service in that
capacity is five years. The process for selection of the
lead audit partner for the Company pursuant to this
rotation policy involves a meeting between the Chair
of the Audit and Risk Committee and the candidate,
as well as discussions with the full Audit and Risk
Committee and with management. The Audit and
Risk Committee evaluates the performance of KPMG,
including the senior members of the audit
engagement team, each year and determines whether
to reengage them or consider other audit firms. In
doing so, the Audit and Risk Committee considers the
quality and efficiency of the services provided, their
global capabilities, particularly in the U.S. and Japan,
their technical expertise, their tenure as the
Company’s independent registered public accounting
firm (KPMG has served in this capacity since 1973),
and their knowledge of the Company’s operations and
industry. Based on this review and discussions with
members of senior management, the Audit and Risk
Committee concluded that it was in the best interest of
the Company and the shareholders to recommend
KPMG for approval and therefore the Audit and Risk
Committee recommended to the Board of Directors
that KMPG serve as the Company’s independent
registered public accounting firm during 2015.
Although the Audit and Risk Committee has the sole
authority to appoint the independent auditors, the
Audit and Risk Committee will continue its long-
standing practice of recommending that the Board ask
the shareholders, at the Annual Meeting, to ratify the
appointment of the independent registered public
accounting
firm
(see
RATIFICATION
OF
APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM (Proposal 3) on the
following page).
The Audit and Risk Committee also discussed with
KPMG those matters required to be discussed by the
auditors with the Audit and Risk Committee under the
rules adopted by the Public Company Accounting
Oversight Board, (the PCAOB). The Audit
and Risk
Committee received the written disclosures and the
letter from KPMG required by applicable requirements
of the PCAOB regarding the independent auditors’
communications with the Audit and Risk Committee
concerning independence and has discussed with
KPMG their independence. The Audit and Risk
Committee considered with KPMG whether the
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