Minimum reserves required by an insurance company. An insurer’s required minimum margin of solvency must not fall below the MGF. MGF for general business is €2 million (or €3 million for motor, aviation, general liability, credit and suretyship). This is reduced by 25 per cent for mutual associations. The MGF for life insurance undertakings is €3 million but is reduced by 25 per cent for mutual associations. The new levels of MGF under Directive 2002/12/EC do not apply to mutuals with less than €5 million of annual contribution income. The FSA calls for a short-term plan if the MGF rule (rule 2.9) is breached. The new MGF levels are index linked in line with inflation. See MARGIN OF SOLVENCY.