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Allianz Annual Report 2012

In addition to regulatory capital requirements, ­­­Allianz SE also uses an internal risk capital model to determine how much capital is required to absorb any unexpected volatil- ity in results of operations. Insurance subsidiaries of the ­­Allianz Group including ­AllianzSEprepareindividualfinancialstatementsbasedon local laws and regulations. These laws establish to some extent different restrictions on the minimum level of capi- tal and the amount of dividends that may be paid to share- holders. The minimum capital requirements are based on various criteria including, but not limited to, volume of premiums written or claims paid, amount of insurance re- serves, investment risks, mortality risks, credit risks, under- writing risks and off-balance sheet risks. As of 31 December 2012, the ­­Allianz Group’s insurance sub- sidiaries were in compliance with all applicable regulatory solvency and capital adequacy requirements. Some insurance subsidiaries are subjected to regulatory restrictions on the amount of dividends which can be re- mitted to ­­Allianz SE without prior approval by the appropri- ate regulatory body. Such restrictions provide that a com- pany may only pay dividends up to an amount in excess of certain regulatory capital levels or based on the levels of undistributed earned surplus or current year income or a percentage thereof. By way of example only, the operations of the ­­Allianz Group’s insurance subsidiaries located in the United States are subject to limitations on the payment of dividends to their parent company under applicable state insurance laws. Dividends paid in excess of these limita- tions generally require prior approval of the insurance commissioner of the state of domicile. The ­­Allianz Group believes that these restrictions will not affect the ability of ­­­Allianz SE to pay dividends to its shareholders in the future. Non-controlling interests non-controlling interests D 096 € mn as of 31 December 2012 2011 Unrealized gains and losses (net) 135 (13) Share of earnings 322 259 Other equity components 2,208 2,092 Total 2,665 2,338 Capital requirements The ­­Allianz Group’s capital requirements are primarily de- pendent on the growth and the type of business that it un- derwrites, as well as the industry and geographic locations in which it operates. In addition, the allocation of the ­­Allianz Group’s investments plays an important role. Dur- ing the ­­Allianz Group’s annual planning dialogues with its operating entities, capital requirements are determined through business plans regarding the levels and timing of capital expenditures and investments. Regulators impose minimum capital rules at the level of the ­­Allianz Group’s operating entities and the ­­Allianz Group as a whole. On 1 January 2005, the Financial Conglomerates Directive, a supplementary European Union (E.U.) directive, became effective in Germany. Under this directive, a financial con- glomerate is defined as any financial parent holding com- pany that, together with its subsidiaries, has significant cross-border and cross-sector activities. The ­­Allianz Group is a financial conglomerate within the scope of the direc- tive and the related German laws. The directive requires that the financial conglomerate calculates the capital needed to meet the respective solvency requirement on a consolidated basis. As of 31 December 2012, the ­­Allianz Group’s eligible capital for the solvency margin, required for the insurance seg- ments and the Asset Management and Banking business, was € 48.4 bn (2011: € 42.6 bn) including off-balance sheet reserves 1 of € 2.2 bn (2011: € 2.2 bn), surpassing the mini- mum legally stipulated level by € 23.8 bn (2011: € 18.8 bn). This margin resulted in a preliminary cover ratio of 197 % (2011: 179 %) as of 31 December 2012. The ratio decreased by approximately 17 %-points as of 1 January 2013 due to amendments to IAS 19. 1 Off-balance sheet reserves are accepted by the authorities as eligible capital only upon re- quest; ­­­Allianz SE has not submitted an application so far. The solvency ratio excluding off- balance sheet reserves would be 188 % (2011: 170 %). Annual Report 2012    Allianz Group310