Risk and capital management  Capital and liquidity management 90 liquid assets in reserve to fund at least 1.5 years of holding  company operating and funding expenses without having to rely  on the receipt of funds from its subsidiaries and without the  need to access capital and money markets. At Aegon N.V., liquidity is sourced from internal dividends  from operating companies and by accessing capital and money  markets. The main sources and uses of liquidity at Aegon N.V. are  dividends from subsidiaries and to shareholders, movements in  debt, net expenses (including interest), funding operations, and  the balance of acquisitions and divestitures.  Insurance laws and regulations in local regulatory jurisdictions  often contain minimum regulatory capital requirements, e.g.  100% of the Authorized Control Level (“ACL”) for US insurance  entities, 100% Solvency I required capital for Dutch insurance  companies and 100% Solvency I Pillar 1 capital for insurance  companies in the United Kingdom. The ability of our insurance subsidiaries to transfer funds to  the holding company is constrained by the need for these  subsidiaries to remain adequately capitalized to the levels set  by local insurance regulations and as administered by local  insurance regulatory authorities. The minimum regulatory capital requirements for our main  subsidiaries and the actual capitalization levels as per  December 31, 2013, are included in the following table: In order to ensure the holding company’s ability to fulfil its cash  obligations, it is Aegon’s policy that the holding company holds  1  Capitalization for the United States represents the internally defined combined risk-based capital ("RBC") ratio of Aegon's life insurance subsidiaries in the United States. The combined RBC ratio unilizes the NAIC RBC ratio excluding affiliated notes and taking into account excess or deficient amounts related to  offshore life affiliates. 2  Excluding the banking activities. 3  Including the With Profits fund at unaudited 30 June 2013 values. At December 31, 2013, Aegon N.V. held a balance of  EUR 2.2 billion in excess capital at group level, compared  with EUR 2.0 billion at the end of 2012. Local insurance regulators generally use their discretionary  authority and judgment to restrict and/or prohibit the transfer  of funds to the holding company to capital levels well above  the minimum capital requirements contained in the applicable  insurance regulations. The discretionary nature of the regulatory  assessment of capital adequacy creates a natural ambiguity  around the exact level of capital that is required by local  regulatory authorities. Precise capitalization levels effectively  required by local insurance regulators are often not known  in advance, in part because the views and risk tolerances  of certain regulators for certain asset classes continue to  develop over time, in line with the development and evolution  of local, regional and global regulatory capital frameworks. In  practice and for transfer of funds purposes, Aegon manages  the capitalization of its subsidiaries in excess of the minimum  regulatory capital requirements contained in the applicable  regulations, as shown in the table above. Aegon’s liquidity is invested in highly liquid assets, in accordance  with the company’s internal risk management policies. Aegon  believes its working capital, backed by its external funding  programs and facilities, is ample for the company’s present  requirements. Aegon aims to pay out a sustainable dividend, which may  increase based on Aegon’s performance, to allow equity investors  to share in Aegon’s performance. After investments have been  made in new business to generate organic growth, capital  generated by Aegon’s operating subsidiaries is available for  distribution to the holding company, while maintaining a capital  and liquidity position in the operating subsidiaries in line with  Aegon’s capital management and liquidity risk policies.  The capitalization level and shareholders’ equity of the  subsidiaries can be impacted by various factors (e.g. general  economic conditions, capital markets risks, underwriting  risk factors, changes in government regulations, legal and  arbitrational proceedings). To mitigate the impact of such factors  on the ability of subsidiaries to transfer funds, the subsidiaries  hold additional capital in excess of the levels required by local  insurance regulations. Aegon uses cash flows from its operating subsidiaries to pay  holding expenses, including funding costs. The remaining  cash flow is available to execute Aegon’s strategy and to fund  dividends on its shares. When determining whether to declare  or propose a dividend, Aegon’s Executive Board balances  Annual Report 2013 External dividends Aegon’s liquidity position Capital requirements Legal/regulatory minimum  capital requirement Actual capitalization Excess over legal/  regulatory minimum United States 1) 100% Authorized Control Level  (NAIC RBC ACL) ~880% of combined ACL ~EUR 5.1 bln The Netherlands 2) 100% Solvency I ~240% Solvency I ~EUR 2.3 bln United Kingdom 3 ) 100% Solvency I (Pillar 1) ~150% Solvency I (Pillar 1) ~EUR 0.7 bln