37 agreement, Aegon divested its global life reinsurance activities  with the exception of select blocks of business. The retained  businesses comprise mainly variable annuity guarantee business. Competitors of Aegon Americas’ companies include other large  and highly-rated insurance carriers, as well as certain banks,  securities brokerage firms, investment advisors, and other  financial intermediaries marketing insurance products, annuities  and mutual funds. Aegon USA leverages long-term relationships  with many institutions to offer them product lines such as  variable annuities, life insurance, mutual funds, and 401(k)  products. In the United States, the Life & Protection division faces  competition from a variety of carriers. Leading competitors  include AIG, Genworth, John Hancock, Lincoln National, MetLife,  and USAA. In Canada, the primary competitors are Industrial- Alliance, Manulife Financial, Power Corporation (comprising  Canada Life, Great West Life, London Life,), and Sun Life  Financial. The result is a highly competitive marketplace and  increasing commoditization in many product categories. Aegon USA markets variable universal life, mutual funds,  and variable annuities to middle-income clients with equity  investment objectives. Variable annuity sales are often driven  by the competitiveness of the living benefits offered by  competitors, with most product development focusing on  guaranteed lifetime withdrawal benefits, which guarantee  lifetime withdrawals of a certain amount under certain  conditions. There is continued interest, and strong competition  among providers, in guaranteed lifetime withdrawal products.  Aegon USA competes in the variable annuity marketplace.  It maintains an effective wholesaling force, and focuses on  strategic business relationships and products with competitive  features, benefits and pricing. Aegon USA’s primary competitors  in the variable annuity market are Jackson National, Lincoln  National, MetLife, Nationwide, and Prudential. The top five competitors in the mutual fund market are American  Funds, Fidelity, Franklin Templeton, PIMCO, and T. Rowe Price. The retirement plan market continues to evolve rapidly and is  facing growing regulatory compliance pressures, continuing  demand for technological innovation, pricing pressures, and  provider consolidation. Aegon USA’s ability to achieve greater  economies of scale in operations will be assisted by continued  growth in key market segments, technology improvements, and  process management efficiency. State insurance regulators have risk-based capital (RBC)  standards for life insurance companies, established by the  National Association of Insurance Commissioners (NAIC). The  RBC Model Act (Model Act) provides for various actions should  an insurer’s adjusted capital, based on statutory accounting  principles, fall below certain prescribed levels, which are defined  1 Source: Reports from LIMRA International and the Stable Value Investment Association’s Stable Value and Funding Agreement Products as of the first three  quarters of 2013. Insurance companies are subject to a mandatory audit  every three to five years by their domestic state insurance  departments, and every year by their independent auditors.  In addition, examinations by non-domestic state insurance  departments are conducted, on a targeted, random or cyclical  basis. Some state Attorneys General have also commenced  investigations into certain insurers’ business practices. Within  the insurance industry, substantial liability has been incurred by  insurance companies based on their past sales, marketing and  operational practices. Aegon USA continues to focus on these  compliance issues, and costs may increase as a result of these  regulatory activities. The Aegon USA insurance companies are subject to regulation  and supervision in the states and jurisdictions in which they  transact business, maintain offices or otherwise have a business  presence. Regulators in each of those states and jurisdictions  have broad powers to grant or revoke licenses to transact  business, regulate trade and marketing practices, license agents,  approve policy forms and certain premium rates, set reserve  and capital requirements, determine the form and content of  required financial reports, examine the insurance companies,  prescribe the type and amount of investments permitted, levy  fines and seek restitution, fines, sanctions or other monetary  penalties for failure to comply with applicable regulations. The  international businesses of Aegon USA are governed by the laws  and regulations of the countries in which they transact business,  maintain offices or otherwise have a business presence. Aegon USA has been a leading issuer of synthetic GICs 1 .  In the defined contribution market, Aegon USA’s main  competitors are Fidelity, Mass Mutual, New York Life, Principal  Financial, Schwab, T. Rowe Price, and Vanguard. Aegon USA’s  main competitors in the defined benefit segment are Mass  Mutual, New York Life, Principal Financial, and Prudential. In  the emerging market segment and the multiple employer plan  segment, Aegon USA’s main competitors are American Funds,  Fidelity, ING, John Hancock, and Principal Financial. In the single  premium group annuity market, Aegon USA’s main competitors  are John Hancock, Mass Mutual, MetLife, Mutual of Omaha, and  Prudential. Regulation and supervision Aegon USA Competition