138 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS OF AEGON N.V.  NOTE 4 The ‘Hybrid’ category is comprised of capital securities issued  by financial services entities which typically have an original  maturity of more than 30 years and may be perpetual.  In addition, Hybrids have other features that may not be  consistent across issues such as a cumulative or non- cumulative coupon, capital replacement and an alternative  payment mechanism, and could also be subordinate to the  traditional Trust Preferred in the Group’s capital structure.  Capital securities categorized as ‘Tier 1’ are issued by non-US  banks and are perpetual with a non-cumulative deferrable  coupon. Capital securities categorized as ‘Upper Tier 2’ are  also issued by non-US banks but these positions are generally  perpetual where the deferrable coupon is cumulative.  The follow table highlights AEGON’s credit risk to capital  securities within the banking sector: The unrealized losses in the brokerage, insurance and other  finance sub-sector primarily reflect general spread widening  on financial services companies (due to broad housing,  mortgage market, equity market and economic issues plus  increased liquidity and capital markets concerns).  About EUR 1.4 billion of the bonds in AEGON USA’s portfolio are  insured by monoline insurers (2009: EUR 1.7 billion), of which  The rating that is provided by the rating agencies on these  guaranteed bonds is the higher of the guarantor’s rating or  the rating of the underlying bond itself.  Of the EUR 1,382 million (2009: EUR 1,661 million) indirect  exposure on the monoline insurers, 35% relates to MBIA,  24% to AMBAC, 10% to FGIC and 15% to FSA (2009: 35%  related to MBIA, 29% to AMBAC, 9% to FGIC and 14% to FSA).  Of the remaining 16% (2009: 13%), no individual monoline  insurer represents more than 10% of the total wrapped  portfolio.  The following table breaks down bonds in AEGON USA’s portfolio  that are insured by monoline insurers. The disclosure by rating  follows a hierarchy of S&P, Moody’s, Fitch, internal and NAIC. EUR 427 million of bonds (2009: EUR 381 million) in the  EUR 1.3 billion subprime portfolio (2009: EUR 1.2 billion).  Expected claims against the monolines amount to EUR 122  million (2009: EUR 160 million), although an insolvency by one  of the monolines could create significant market price volatility  for the affected holdings. Financial Other Monoline exposure  2010 2009 Bonds insured by monoline insurers Cost price Fair value Cost price Fair value AAA 116 114 439 343 AA 354 301 51 45 <AA 912 741 1,171 829 AT DECEMBER 31 1,382 1,156 1,661 1,217 Americas The  Netherlands  United  Kingdom  New  Markets  Total  cost price  Total  fair value Hybrid 183 – 38 1 222 196 Trust Preferred 566 – 50 – 616 495 Tier 1 480 195 490 48 1,213 1,038 Upper Tier 2 673 63 136 7 879 718 AT DECEMBER 31, 2010 1,902 258 714 56 2,930 2,447 Hybrid 228 – 31 1 260 205 Trust Preferred 575 – 41 – 616 462 Tier 1 729 255 600 90 1,674 1,328 Upper Tier 2 667 67 248 7 989 759 AT DECEMBER 31, 2009 2,199 322 920 98 3,539 2,754