Business overview  Results of operations – Americas 38 in terms of its risk-based capital. The adjusted capital levels  of the Aegon USA insurance companies currently exceed all of  the regulatory action levels as defined by the Model Act. Any  modification of these adjusted capital levels by the regulators or  rating agency capital models may impact Aegon USA. Previously,  states adopted conservative reserving requirements for term and  universal life products. These continue to cause capital strain  for the life insurance industry and, in volatile market conditions,  funding for these reserves is challenging. The NAIC amended its Model Holding Company Act and  Regulation to enhance disclosure to regulators about risk  exposure to insurers from within their holding company system,  for adoption by jurisdictions from 2012. Existing insurance  holding company statutes and the regulations of each insurer’s  domiciliary state in the United States already impose various  limitations on investments in affiliates, and require prior approval  of the payment of dividends above certain threshold levels by  the licensed insurer to Aegon or its affiliates. In response to  international developments, the NAIC also passed a new Own  Risk and Solvency Protection Model Act and Guidance Manual,  to come into effect in 2015. The NAIC passed a revised Model  Standard Valuation Law (SVL) and Valuation Manual, which  together established Principles-Based Reserving (PBR) in 2012.  Seven states, none in Aegon USA’s domestic jurisdictions, passed  the SVL in 2013. As adoption by a super-majority of states is  required for PBR to be effective in any state, the effective date  of PBR is expected to be 2016 or later. The NAIC will continue  to consider changes to corporate governance and insurers’  use of captives through 2014. The impact of changes to the  use of captives on the company cannot be predicted at this  time. Proposals have included abolishing the use of captives or  significantly restricting their use. Although historically the federal government of the United  States has not regulated the insurance business, many federal  laws impact the insurance business in a variety of ways.  US federal and state privacy laws and regulations impose  restrictions on financial institutions’ use and disclosure, as well  as the security of customer information, including obligations  in the event of data security breaches. Congress is considering  proposals intended to assist in combating cyberthreats.  Proposals designed to assist the federal government in  combating cyberthreats could impose additional obligations on  companies to provide information relative to the effort. At this  time, it is uncertain what impact, if any, these proposals may  have on insurers.  In addition to the US Congress, non-traditional insurance  regulators are increasingly involved in insurance matters  traditionally reserved for State regulation; for example, the  Federal Reserve Board, the Federal Insurance Office (FIO), the  Securities & Exchange Commission and others have recently  considered the regulation of captive reinsurance transactions. The Dodd-Frank Act also established the Consumer Financial  Protection Bureau, which has the authority to regulate the  marketing practices of credit insurance and other financial  products sold through banks. The Federal Reserve Board has also  established certain disclosures relating to credit insurance sold in  connection with a bank loan. Federal laws and the rules of the Federal Trade Commission  (FTC) and the Federal Communications Commission (FCC)  prohibit telephone solicitations to customers who have placed  their telephone numbers on the National Do Not Call Registry.  Additionally, proposals to place restrictions on direct mail are  considered from time to time by the US Congress and states.  The Dodd-Frank Act has entrusted to the Board of Governors of  the Federal Reserve Board (the “Federal Reserve”) a significant  regulatory role with respect to life insurers which are either  designated as systemically significant or have a bank within  the group. Finally, the International Association of Insurance  Supervisors (IAIS), which includes the Federal Reserve, FIO and  representatives of state regulators, is developing international  capital and supervisory standards for internationally active life  insurance groups, such as Aegon. It is still to be determined  the extent to which these developments or the activities of the  FIO and the Federal Reserve will impact Aegon USA and the  regulation of insurance in the United States, or life insurers in  the United States or internationally.  The Dodd-Frank Wall Street Reform and Consumer Protection  Act (Dodd-Frank Act), enacted in 2010, established the Federal  Insurance Office. While the FIO has no direct regulatory authority  over US insurers, it does have certain authority to represent the  US government in establishing international regulatory standards  for insurers, and to represent the US insurance industry in  international matters. The FIO is also authorized to monitor all  aspects of the insurance industry, including identifying issues  or gaps in the regulation of insurers that could contribute to  a systemic crisis in the insurance industry of the US financial  system. On December 12, 2013, the FIO submitted to Congress  and released to the public a report on how to modernize and  improve the system of insurance regulation in the United States.  The report details strengths and weaknesses of the current US  insurance regulatory system and outlines near-term reforms  for states to undertake regarding capital adequacy, safety  and soundness, reform of insurer resolution practices, and  marketplace regulation. The report also outlines areas for federal  involvement in insurance regulation, including pursuing national  uniform treatment for reinsurers, adopting national standards for  agent licensing and other provisions of The National Association  of Registered Agents and Brokers Reform Act of 2013, and  studying the use of personal information for insurance pricing  and coverage purposes. The FIO is expected to continue to  monitor state insurance activities, coordinate policy, and engage  in other actions as necessary to pursue the recommendations  made in its report. .  Annual Report 2013