15 STRATEGY  OUR STRATEGY  ANNUAL REPORT 2010  Core capital securities  Many of these measures had been decided by AEGON  before the European Commission ruling as part of  broader measures to improve AEGON’s risk-return  profile and operational efficiency and to lower costs.  AEGON does not expect these measures to affect the  company’s ability to grow its core business profitably.  In August 2010, the European Commission approved  the support of EUR 3 billion of core capital obtained  from the Dutch State through Vereniging AEGON  at the height of the global financial crisis. The  Commission gave its approval, on condition that the  company adopted a limited number of behavioral  constraints.  To secure the European Commission’s approval,  AEGON will$^{ 1}$: In addition, AEGON is also subject to a number of  other temporary behavioral constraints, which will  remain in force until the convertible core capital  securities are fully repurchased: ■ Continue to run off its institutional spread-based  business in the United States and lower production  of fixed annuities. These measures will result in a  reduction of USD 25 billion in AEGON’s US general  account by the end of 2012.  ■ Increase the equity hedge on the company’s  variable annuity in-force book in the United States  and commit to continue pricing new variable  annuity products on a market consistent basis  worldwide and in line with AEGON’s pricing policy.  ■ Implement measures to further improve the quality  of the company’s capital base, primarily by  increasing the core capital to at least 75% of total  capital by the end of 2012.  ■ AEGON will request Standard & Poor’s to no longer  publish a financial strength rating for the  company’s Dutch life insurance unit$^{ 2}$.  ■ In the Netherlands, AEGON will not pursue a top- three price leadership position in either the  residential mortgage or internet savings market.  ■ AEGON will make no further dividend payments to  common shareholders until all core capital  securities issued to the Dutch State are fully  repurchased.  ■ AEGON will not pursue acquisitions, though  investment in the company’s partnerships in Spain  is permitted, providing AEGON’s overall share of  the Spanish market does not increase.  1 For full details, please refer to the decision of the European Commission of August 17, 2010, published in the Official Journal of  the European Union (C/290/2010 - http://ec.europe.eu). 2 Standard & Poor’s has subsequently complied with this request.  Date Repayment Terms and conditions December 2009 EUR 1 billion AEGON repaid one third of the convertible core capital, taking advantage  of a lower premium for repayment. Including this premium and interest, the  repayment amounted to EUR 1.15 billion. August 2010 EUR 500 million Following the European Commission’s approval, a further EUR 500 million was  repaid. Accrued interest and premium payments on this repayment amounted  to an additional EUR 63 million.  March 2011 EUR 750 million EUR 750 million was repaid in March 2011. There was a 50% premium and no  coupon. In total an amount of EUR 1.25 billion was paid by AEGON. June 2011 (expected) EUR 750 million Market conditions permitting, AEGON has agreed to accelerate repayment of  the remaining EUR 750 million. AEGON will repay this amount at a premium  of 50%, but without any accrued interest. Repayments must be approved by  the Dutch Central Bank. Timetable for repayment SHARPENING OUR FOCUS