The Commission has confirmed its approval of the €3bn that the Netherlands made available to the insurance company AEGON in 2008. Rescue aid was approved on the condition that within six months a plan showing how the financial institution would secure long term viability, ensure sufficient burden-sharing between AEGON and the State and offset the market-distorting effects of the measures would be submitted. The Commission has now approved the plan, under which AEGON will rebalance its business model by closing the institutional spread-based business, limiting exposure to equity risk from variable annuities and reducing the USA general account by €19bn. The plan also provides for a repayment schedule for the remaining state held capital, which, until repaid, subjects AEGON to a series of conditions to prevent market distortion. These include a ban on price leadership in specific segments of the Dutch market, a rating withdrawal of its main life subsidiary and a ban on acquisitions.
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Commission approves Dutch recapitalisation of AEGON
- Nabarro LLP
- Cyrus Mehta, Brian Sher and Rachel Bickler
- European Union, Netherlands
- September 23 2010
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