323 Aegon may be required to increase its statutory reserves and/or hold higher amounts of statutory capital for some of its  products, which will decrease Aegon’s returns on these products unless Aegon increases its prices. The European Commission´s Solvency II directive, effective date pending, is expected to impose, among other things, substantially  greater quantitative and qualitative capital requirements on some of Aegon’s businesses and at Group level, as well as supervisory and  disclosure requirements, and may impact the structure, business strategies, and profitability of Aegon’s insurance subsidiaries and of  the Group. Some of Aegon’s competitors who are headquartered outside the European Economic Area may not be subject to Solvency II  requirements and may thereby be better able to compete against Aegon, particularly in Aegon’s businesses in the United States and  Asia. The National Association of Insurance Commissioners´ (NAIC) Model Regulation entitled ‘Valuation of Life Insurance Policies,’  commonly known as Regulation XXX, requires insurers in the United States to establish additional statutory reserves for term life  insurance policies with long-term premium guarantees. In addition, Actuarial Guideline 38, The Application of the Valuation of Life  Insurance Policies Regulation, commonly known as Regulation AXXX, or AG38, requires insurers to establish additional statutory  reserves for certain universal life insurance policies with secondary guarantees. Virtually all of Aegon’s newly issued term and universal  life insurance products in the United States are now affected by Regulations XXX and AXXX, respectively.  In response to the NAIC regulations, Aegon has implemented reinsurance and capital management actions to mitigate their impact.  However, for a variety of reasons, Aegon may not be able to implement actions to mitigate the impact of Regulation XXX and AXXX on  future sales of term or universal life insurance products, potentially resulting in an adverse impact on these products and Aegon’s  market position in the life insurance market. In addition, the NAIC is reviewing internal captive reinsurance, the vehicle used in many  capital management actions.  For some of Aegon’s products, market performance impacts the level of statutory reserves and statutory capital Aegon is required to  hold, which may have an adverse effect on returns on capital associated with these products. Capacity for reserve funding available in  the marketplace is currently limited as a result of market conditions generally. Aegon’s ability to efficiently manage capital and  economic reserve levels may be impacted, thereby affecting profitability and return on capital. Aegon may not be able to comply fully with, or obtain appropriate exemptions from, the wide variety of laws and regulations applicable  to insurance companies and insurance holding companies. Failure to comply with or to obtain appropriate exemptions under any  applicable laws may result in restrictions on Aegon’s ability to do business in one or more of the jurisdictions in which Aegon operates  and may result in fines and other sanctions, which may have a materially adverse effect on Aegon’s businesses, financial position or  results of operations. There may be heightened oversight of insurers by regulatory authorities in the jurisdictions in which Aegon’s subsidiaries are domiciled  and operate. Aegon cannot predict specific proposals that might be adopted, or what impact, if any, such proposals or, if enacted, such  laws, may have on its businesses, results of operations, or financial condition. The European Union is adopting Solvency II as discussed  above, the NAIC or state regulators may adopt revisions to applicable risk based capital formulas, local regulators in other jurisdictions  in which Aegon’s subsidiaries operate may increase their capital requirements, or rating agencies may incorporate higher capital  thresholds into their quantitative analyses, thus requiring additional capital for Aegon’s insurance subsidiaries. Since 2012, further to a decision by the European Court of Justice, our European units may no longer use gender-related factors to  determine premiums and benefits under insurance policies.. We have not observed any negative financial or business impact through  2013 but there remains a risk of future adverse impact. Aegon utilizes affiliated captives to manage risks related to universal life with secondary guarantees and level term life insurance  policies. Through these structures, Aegon finances certain regulatory required reserves at a lower cost. To the extent that state  insurance departments restrict Aegon's use of captives and regulatory reserve requirements remain unchanged this could increase its  cost, limit its ability to write these products in the future or lead to increased prices to consumers on those products. The NAIC  continues to consider changes to corporate governance and insurers' use of captives. Due to the uncertainty of the proposals it is not  possible to provide an estimate of the effects at this time.