Most likely the code is a P0410 which is the seconday air system as you describe. This is caused by the air pump system failing. This is a VERY common failure in 850's. It's an emission related item that is poorly designed and Volvo fails to live up to their obligation to recall the cars and provide a fix. The air pump hose fills with condensation from the exhaust and it runs down into the pump (under the battery). The pump eventually fails due to rusting out of the motor. Could also be the relay near the radiator causing the exhaust valve (near the firewall on the engine) to stick open. It won't cause any problems with the engine but over time it will cause your O2 sensor to prematurely fail. I have had this problem with mine and I just keep resetting the CE light. It takes about a month for the failure to be detected in my car. I plugged the hose to the pump so as not to allow air to be injected into the manifold and ruin the O2 sensor.
Great design huh?