Aegon's group supervision to transfer from Dutch Central Bank to Bermuda Monetary Authority
- Aegon’s legal domicile to be transferred to Bermuda. Consequently, group supervision to move from the Dutch Central Bank (DNB) to the Bermuda Monetary Authority (BMA)
- Aegon will maintain its headquarters in the Netherlands and will remain a Dutch tax resident
- The change in group supervision will have no material impact on Aegon’s capital management approach
- Aegon to propose changes to its governance including the implementation of a one-tier board
Aegon today announces that it intends to move its legal seat to Bermuda. Subsequently, Aegon’s group supervision will transfer from the DNB to the BMA. Aegon will maintain its headquarters in the Netherlands, will remain a Dutch tax resident and will continue to be listed on Euronext Amsterdam and on the New York Stock Exchange (NYSE).
Change in group supervision
Following the closing of the transaction with a.s.r., Aegon will no longer have a regulated insurance business in the Netherlands. Under Solvency II rules, Aegon’s current supervisor, the DNB, can therefore no longer remain Aegon’s group supervisor. After consulting the members of the college of supervisors, the BMA has informed Aegon that the BMA would become its group supervisor if Aegon were to transfer its legal seat to Bermuda.
Bermuda hosts many respected international insurance companies, including four of Aegon's subsidiaries. Bermuda’s regulatory regime is well recognized, having been granted equivalent status by the EU under the Solvency II regime, and by the UK under its own Solvency UK regime. It has also been designated as a qualified jurisdiction and reciprocal jurisdiction by the US National Association of Insurance Commissioners (NAIC). This enables insurance companies that are regulated by the BMA to easily conduct cross-border business.
“I welcome the transfer of group supervision from the DNB to the BMA,” said Lard Friese, Aegon’s CEO. “Bermuda has an established, well regarded regulatory regime that will facilitate the implementation of our strategy to build leaders in investment, protection and retirement solutions, as outlined at our recent Capital Markets Day.”
The change of Aegon’s legal domicile to Bermuda will allow Aegon to maintain its headquarters in the Netherlands, remain a Dutch tax resident, and maintain its listings on Euronext Amsterdam and the NYSE.
Continuity in supervision of local entities and accounting
Aegon’s regulated insurance entities in the US, UK, Spain, Portugal and in other jurisdictions will continue to be supervised by their current local regulators. In addition, Aegon’s asset management activities in the Netherlands will continue to be supervised by the Authority Financial Markets and the DNB.
Aegon will continue to report under IFRS accounting standards. Aegon is exploring the implementation of US GAAP in the medium term, in addition to IFRS, so as to allow for better comparison against US peers, and provide long-term strategic flexibility for the Group.
No material impact on Aegon’s capital management framework
The change in group supervision will not have a material impact on Aegon’s capital management approach, which will continue to focus on the capitalization of its operating units, Cash Capital at the Holding and gross financial leverage. Consequently, the financial targets for 2025 that Aegon provided at its recent Capital Markets Day are unchanged. Furthermore, Aegon also reconfirms its intention to initiate a EUR 1.5 billion share buyback program shortly after the closing of the transaction with a.s.r.
Aegon expects its group solvency ratio and surplus under the Bermuda solvency framework to be broadly in line with that under the Solvency II framework during a transition period until the end of 2027. The method to translate Transamerica’s capital position into the group solvency position will also be similar to the current methodology. After the transition period, Aegon will fully adopt the Bermudian solvency framework.
Aegon anticipates that its debt instruments that are currently grandfathered under the Solvency II regime will remain so until the end of 2025. In addition, Aegon’s debt instruments will continue to be subject to existing triggers for mandatory deferral or cancellation of interest payments or conversion into equity, based on the group solvency ratio.
Aegon’s future debt structure and refinancing decisions will remain primarily driven by economic considerations, taking into account investor expectations, market circumstances, regulatory requirements, and rating agency considerations. As previously announced, Aegon intends to reduce its gross financial leverage by up to EUR 700 million following the closing of the transaction with a.s.r.
Change in governance
Upon the change of the legal domicile becoming effective, Aegon N.V. will be converted into Aegon Ltd., a Bermuda entity, and all existing assets and liabilities, rights, obligations and other legal relationships of Aegon N.V. will remain with Aegon Ltd. Aegon will adjust its governance to reflect the change in legal domicile. It will preserve Aegon’s current governance principles to the extent possible and practical in view of the redomiciliation, and where appropriate in the context of Aegon's international footprint. This includes Aegon’s commitment to take into account the long-term interests of the company and all its stakeholders. It will apply well-recognized international governance standards to reflect the international footprint of Aegon following closing of the transaction with a.s.r. The new governance includes the implementation of a one-tier board structure, comprised of both executive and non-executive directors. The governance position of, and arrangements with, Vereniging Aegon will remain materially unchanged. The proposed Aegon Ltd. governance is explained in a draft Shareholder Circular that can be found on Aegon’s website.
Following the closing of the transaction with a.s.r., the change in legal domicile is subject to shareholder approval at an Extraordinary General Meeting of Shareholders (EGM). The Board of Vereniging Aegon has been informed of the intended change in legal domicile. The Board of Vereniging Aegon is supportive and will seek the approval from its members for their support.
Aegon today has also published a draft Shareholder Circular and a conversion proposal. In addition, Aegon will today publicly file with the US Securities and Exchange Commission (SEC) a draft registration statement on Form F-4, that is substantially similar to the draft Shareholder Circular, save for certain additions required pursuant to US law, and which is to be declared effective by the SEC prior to the shareholder vote.
The BMA will assume the role of group supervisor following the transfer of Aegon’s legal domicile. In the envisaged interim period between the closing of the transaction with a.s.r. and the completion of the transfer of Aegon’s legal domicile, the role of group supervisor is expected to be allocated to the Dirección General de Seguros y Fondos de Pensiones (DGSFP), in accordance with Solvency II regulations. The DGSFP, in cooperation with the DNB, and after informing the European Insurance and Occupational Pensions Authority (EIOPA), is expected to delegate its tasks and responsibilities related to its role as group supervisor to the DNB for a period which is expected to cover the duration of this interim period.