Today, the German Insurance Association (GDV) circulated a German Federal Ministry of Finance communication clarifying the tax treatment of certain own fund instruments under the Solvency II regime for the insurance industry (so-called “Restricted Tier 1 Instruments”). On the basis of this communication, German insurers will now be able to make use of Restricted Tier 1 Instruments to meet their own funds requirements under the Solvency II regime. In particular, the clarification enables German insurers to issue Restricted Tier 1 instruments in order to increase tier 1 own funds, or to replace grandfathered tier 1 instruments issued under Solvency I. Proceeds from Restricted Tier 1 instruments could also be used for other purposes including, but not limited to a replacement of tier 2 instruments or of senior bonds. Allianz has not yet made a decision regarding the issuance of Restricted Tier 1 instruments or on the use of proceeds of a potential issuance of such instruments. In particular, no decision has been made with respect to a potential call of any of its subordinated bonds, including existing grandfathered tier 1 instruments. Redemptions of grandfathered tier 1 instruments and tier 2 instruments are subject to regulatory approval. However, Allianz will evaluate the Ministry of Finance communication and its options resulting therefrom.