Company: AEGOF
Filing Date: 2025-05-16
Form Type: 6-K
Source: 0001193125-25-121236
Chunk: 59

Company: AEGON LTD.
Filing Date: 2025-05-16
Form: 6-K
Chunk 59
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ency regulation to ensure an appropriate treatment of insurance products that include long-term guarantees. The MA can only be applied for separate portfolios of matched assets and liabilities and is designed to reflect the fact that for these portfolios there is no exposure to credit spread fluctuations that are not related to increased probability of default. The MA is applied by Aegon UK for separate portfolios of matched assets and liabilities that are covering annuity business. The calculation methodology which was adopted to implement the MA was approved by local regulators. The VA is the other long-term guarantee measures in the Solvency regulation to ensure an appropriate treatment of insurance products that include long-term guarantees. It aims at stabilizing the Solvency balance sheet during short periods of high market volatility by adding an extra spread component to the discount rate used for the calculation of technical provisions. The VA is applied by Aegon Spain for all types of their business while Aegon UK applies the VA to all traditional and unitized with-profits business. The RM is included in the technical provisions to allow for the uncertainty around the best estimate non-economicassumptions. SCR for non-hedgeablerisks (like underwriting and operational risks) form the basis of the calculation of the RM. The RM calculation is based on a cost-of-capitalmethod applied to a projection of SCRs based on a 99.5% confidence level and aggregation is performed by applying diversification benefits factors to each risk type that is applicable to the Solvency Partial Internal Capital Model (Aegon UK) or Standard Formula (EU legal entities). Diversification is only applied within the legal entities. The RM is calculated using Solvency II regulation for the EU legal entities and Solvency UK regulation for the UK legal entities. Ongoing validation and review processes are in place to ensure that models being used remain appropriate and can be relied upon, including model validations, process reviews carried out by the Internal Audit Function and review of results performed by external auditors. Assumptions - Best estimate non-economic(for EU and UK (re)insurance legal entities) Best estimate non-economicassumptions are used by the EU and UK (re)insurance legal entities for the Solvency reporting framework (for the valuation of the BEL), as well as the EU-IFRSreporting framework. Non-economicassumptions are proposed by the first line Chief Actuary and reviewed by the second line risk function. They are approved by the local board or local management team. This governance also requires the independent opinion and recommendation of the Actuar