SUPERVISION Individual companies in the AEGON Group are each subject to solvency supervision in their respective home countries. Based on European Commission legislation (Directive 98/79/EC) adopted in 1998, the supervisory authorities in the Netherlands (Pensioen- en Verzekeringskamer, or PVK) are, as lead supervisors, also required to carry out ‘supplementary supervision’. The supplementary supervision of insurance companies in an insurance group enables the lead supervisors to make a detailed assessment of the financial position of the insurance companies that are part of that group. The Directive requires the PVK to take into account the relevant financial affiliations between the insurance companies and other entities in the group. In this respect, AEGON is required to submit reports to the PVK twice a year setting out all the significant transactions and positions between the insurance and non-insurance companies in the AEGON Group. Both the insurance and banking companies in the AEGON Group are also required to maintain a minimum solvency margin based on local requirements. The required solvency margin is the sum of the margins of each of AEGON’s insurance and banking subsidiaries, based on the requirements of European directives. Available liability capital includes shareholders’ equity, capital securities and subordinated loans. United GENERAL ACCOUNT United States Canada Netherlands Kingdom Hungary Spain  Taiwan Traditional life Fixed annuities GICs and funding agreements* ACCOUNT OF POLICYHOLDERS Life for account of policyholders Variable annuities Fee business Banking Accident and health insurance General insurance EARNINGS CONTRIBUTION  2003 2002 2001 GENERAL ACCOUNT Traditional life 1,218 1,457 1,557 Fixed annuities 334 174 358 GICs and funding agreements 213 272 215 1,765 1,903 2,130 ACCOUNT OF POLICYHOLDERS Life for account of policyholders 378 371 632 Variable annuities 63 –462 120 Fee business 6 2 94 447 –89 846 OTHER ACTIVITIES Accident and health insurance 283 278 209 General insurance 61 62 67 Banking 20 8 45 Book profit Mexico – – 343 364 348 664 TOTAL INCOME BEFORE TAX 2,576 2,162 3,640 *Also distributed internationally from the United States AEGON GROUP ANNUAL REPORT 2003 46 $^{1}$Income before tax in this section refers to income before tax excluding interest charges and other and the income of Transamerica Finance Corporation. PRODUCT LINE OVERVIEW 1