e10vq

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q


(Mark One)
þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2010
OR
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		FOR THE TRANSITION PERIOD FROM TO

Commission file number: 33-03094

MetLife Insurance Company of Connecticut

(Exact name of registrant as specified in its charter)


Connecticut		06-0566090
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1300 Hall Boulevard, Bloomfield, Connecticut		06002
(Address of principal executive offices)		(Zip Code)

(860) 656-3000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer o		Accelerated filer o
Non-accelerated filer þ (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

At May 12, 2010, 34,595,317 shares of the registrant’s common stock, $2.50 par value per share, were outstanding, of which 30,000,000 shares were owned directly by MetLife, Inc. and the remaining 4,595,317 shares were owned by MetLife Investors Group, Inc., a wholly-owned subsidiary of MetLife, Inc.

REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and (b) of Form 10-Q and is, therefore, filing this Form 10-Q with the reduced disclosure format.

As used in this Form 10-Q, “MICC,” the “Company,” “we,” “our” and “us” refer to MetLife Insurance Company of Connecticut, a Connecticut corporation incorporated in 1863, and its subsidiaries, including MetLife Investors USA Insurance Company (“MLI-USA”). MetLife Insurance Company of Connecticut is a wholly-owned subsidiary of MetLife, Inc. (“MetLife”).

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, including the Management’s Discussion and Analysis of Financial Condition and Results of Operations, may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Any or all forward-looking statements may turn out to be wrong. They can be affected by inaccurate assumptions or by known or unknown risks and uncertainties. Many such factors will be important in determining MICC’s actual future results. These statements are based on current expectations and the current economic environment. They involve a number of risks and uncertainties that are difficult to predict. These statements are not guarantees of future performance. Actual results could differ materially from those expressed or implied in the forward-looking statements. Risks, uncertainties, and other factors that might cause such differences include the risks, uncertainties and other factors identified in MetLife Insurance Company of Connecticut’s filings with the U.S. Securities and Exchange Commission (the “SEC”). These factors include: (i) difficult and adverse conditions in the global and domestic capital and credit markets; (ii) continued volatility and further deterioration of the capital and credit markets, which may affect the Company’s ability to seek financing or access MetLife’s credit facilities; (iii) uncertainty about the effectiveness of the U.S. government’s plan to stabilize the financial system by injecting capital into financial institutions, purchasing large amounts of illiquid, mortgage-backed and other securities from financial institutions, or otherwise; (iv) exposure to financial and capital market risk; (v) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect the Company’s ability to raise capital, generate fee income and market-related revenue and finance statutory reserve requirements and may require the Company to pledge collateral or make payments related to declines in value of specified assets; (vi) potential liquidity and other risks resulting from MICC’s participation in a securities lending program and other transactions; (vii) investment losses and defaults, and changes to investment valuations; (viii) impairments of goodwill and realized losses or market value impairments to illiquid assets; (ix) defaults on the Company’s mortgage loans; (x) the impairment of other financial institutions; (xi) MICC’s ability to identify any future acquisitions and consummate such acquisitions and to successfully integrate acquired businesses with minimal disruption; (xii) economic, political, currency and other risks relating to the Company’s international operations; (xiii) downgrades in MetLife Insurance Company of Connecticut’s and its affiliates’ claims paying ability, financial strength or credit ratings; (xiv) ineffectiveness of risk management policies and procedures, including with respect to guaranteed benefits (which may be affected by fair value adjustments arising from changes in the Company’s own credit spread) on certain of the Company’s variable annuity products; (xv) availability and effectiveness of reinsurance or indemnification arrangements; (xvi) discrepancies between actual claims experience and assumptions used in setting prices for the Company’s products and establishing the liabilities for the Company’s obligations for future policy benefits and claims; (xvii) catastrophe losses; (xviii) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors and for personnel; (xix) unanticipated changes in industry trends; (xx) changes in accounting standards, practices and/or policies; (xxi) changes in assumptions related to deferred policy acquisition costs (“DAC”), value of business acquired (“VOBA”) or goodwill; (xxii) adverse results or other consequences from litigation, arbitration or regulatory investigations; (xxiii) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (xxiv) regulatory, legislative or tax changes that may affect the cost of, or demand for, the Company’s

products or services; (xxv) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes; (xxvi) the effectiveness of the Company’s programs and practices in avoiding giving its associates incentives to take excessive risks; and (xxvii) other risks and uncertainties described from time to time in MetLife Insurance Company of Connecticut’s filings with the SEC.

MetLife Insurance Company of Connecticut does not undertake any obligation to publicly correct or update any forward-looking statement if MetLife Insurance Company of Connecticut later becomes aware that such statement is not likely to be achieved. Please consult any further disclosures MetLife Insurance Company of Connecticut makes on related subjects in reports to the SEC.

Note Regarding Reliance on Statements in Our Contracts

In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife Insurance Company of Connecticut, its subsidiaries or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:


	•	should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;

	•	have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;

	•	may apply standards of materiality in a way that is different from what may be viewed as material to investors; and

	•	were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments.

Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time. Additional information about MetLife Insurance Company of Connecticut and its subsidiaries may be found elsewhere in this Quarterly Report on Form 10-Q and MetLife Insurance Company of Connecticut’s other public filings, which are available without charge through the SEC website at www.sec.gov.

Part I — Financial Information


Item 1.	*Financial Statements*

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Balance Sheets
March 31, 2010 (Unaudited) and December 31, 2009

(In millions, except share and per share data)


	March 31, 2010			December 31, 2009

Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $43,573 and $42,435, respectively)	$	43,125		$	41,275
Equity securities available-for-sale, at estimated fair value (cost: $508 and $494, respectively)		499			459
Trading securities, at estimated fair value (cost: $1,101 and $868, respectively)		1,143			938
Mortgage loans (net of valuation allowances of $85 and $77, respectively; includes $7,065 and $0, respectively, relating to variable interest entities)		11,894			4,748
Policy loans		1,191			1,189
Real estate and real estate joint ventures		438			445
Other limited partnership interests		1,304			1,236
Short-term investments		1,473			1,775
Other invested assets		1,394			1,498

Total investments		62,461			53,563
Cash and cash equivalents		1,935			2,574
Accrued investment income (includes $33 million and $0, respectively, relating to variable interest entities)		554			516
Premiums, reinsurance and other receivables		13,341			13,444
Deferred policy acquisition costs and value of business acquired		5,286			5,244
Deferred income tax assets		992			1,147
Goodwill		953			953
Other assets		808			799
Separate account assets		52,614			49,449

Total assets	$	138,944		$	127,689

Liabilities and Stockholders’ Equity
Liabilities
Future policy benefits	$	22,042		$	21,621
Policyholder account balances		37,140			37,442
Other policyholder funds		2,372			2,297
Payables for collateral under securities loaned and other transactions		7,273			7,169
Long-term debt (includes $7,019 and $0, respectively, relating to variable interest entities)		7,969			950
Current income tax payable		38			23
Other liabilities (includes $31 million and $0, respectively, relating to variable interest entities)		2,539			2,177
Separate account liabilities		52,614			49,449

Total liabilities		131,987			121,128

Contingencies, Commitments and Guarantees (Note 5)
Stockholders’ Equity
Common stock, par value $2.50 per share; 40,000,000 shares authorized; 34,595,317 shares issued and outstanding at March 31, 2010 and December 31, 2009		86			86
Additional paid-in capital		6,719			6,719
Retained earnings		539			541
Accumulated other comprehensive loss		(387	)		(785	)

Total stockholders’ equity		6,957			6,561

Total liabilities and stockholders’ equity	$	138,944		$	127,689

See accompanying notes to the interim condensed consolidated financial statements.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2010 and 2009 (Unaudited)

(In millions)


	Three Months
	Ended
	March 31,
	2010			2009

Revenues
Premiums	$	455		$	184
Universal life and investment-type product policy fees		369			284
Net investment income		790			440
Other revenues		110			69
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities		(34	)		(121	)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive loss		16			—
Other net investment gains (losses), net		(253	)		(479	)

Total net investment gains (losses)		(271	)		(600	)

Total revenues		1,453			377

Expenses
Policyholder benefits and claims		694			427
Interest credited to policyholder account balances		316			300
Other expenses		419			258

Total expenses		1,429			985

Income (loss) before provision for income tax		24			(608	)
Provision for income tax expense (benefit)		(8	)		(226	)

Net income (loss)	$	32		$	(382	)

See accompanying notes to the interim condensed consolidated financial statements.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Stockholders’ Equity
For the Three Months Ended March 31, 2010 (Unaudited)

(In millions)


								Accumulated Other Comprehensive Loss
								Net						Foreign
			Additional					Unrealized			Other-Than-			Currency
	Common		Paid-in		Retained			Investment			Temporary			Translation			Total
	Stock		Capital		Earnings			Gains (Losses)			Impairments			Adjustments			Equity

Balance at December 31, 2009	$	86	$	6,719	$	541		$	(593	)	$	(83	)	$	(109	)	$	6,561
Cumulative effect of change in accounting principle, net of income tax (Note 1)		—		—		(34	)		23			11			—			—

Balance at January 1, 2010		86		6,719		507			(570	)		(72	)		(109	)		6,561
Comprehensive income (loss):
Net income						32												32
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax									4									4
Unrealized investment gains (losses), net of related offsets and income tax									369			(2	)					367
Foreign currency translation adjustments, net of income tax															(7	)		(7	)

Other comprehensive income																		364

Comprehensive income																		396

Balance at March 31, 2010	$	86	$	6,719	$	539		$	(197	)	$	(74	)	$	(116	)	$	6,957

See accompanying notes to the interim condensed consolidated financial statements.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Stockholders’ Equity
For the Three Months Ended March 31, 2009 (Unaudited) — (Continued)

(In millions)


								Accumulated Other
								Comprehensive Loss
								Net			Foreign
			Additional					Unrealized			Currency
	Common		Paid-in		Retained			Investment			Translation			Total
	Stock		Capital		Earnings			Gains (Losses)			Adjustments			Equity

Balance at December 31, 2008	$	86	$	6,719	$	965		$	(2,682	)	$	(154	)	$	4,934
Comprehensive income (loss):
Net loss						(382	)								(382	)
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax									(2	)					(2	)
Unrealized investment gains (losses), net of related offsets and income tax									(313	)					(313	)
Foreign currency translation adjustments, net of income tax												(5	)		(5	)

Other comprehensive loss															(320	)

Comprehensive loss															(702	)

Balance at March 31, 2009	$	86	$	6,719	$	583		$	(2,997	)	$	(159	)	$	4,232

See accompanying notes to the interim condensed consolidated financial statements.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Interim Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2010 and 2009 (Unaudited)

(In millions)


	Three Months
	Ended
	March 31,
	2010			2009

Net cash provided by (used in) operating activities	$	484		$	(1,159	)

Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		3,329			4,042
Equity securities		8			12
Mortgage loans		205			108
Real estate and real estate joint ventures		6			2
Other limited partnership interests		3			68
Purchases of:
Fixed maturity securities		(4,454	)		(4,724	)
Equity securities		(23	)		(22	)
Mortgage loans		(113	)		(53	)
Real estate and real estate joint ventures		(41	)		(11	)
Other limited partnership interests		(47	)		(36	)
Cash received in connection with freestanding derivatives		23			165
Cash paid in connection with freestanding derivatives		(52	)		(134	)
Net change in policy loans		(2	)		5
Net change in short-term investments		303			328
Net change in other invested assets		(19	)		207
Other, net		1			—

Net cash used in investing activities		(873	)		(43	)

Cash flows from financing activities
Policyholder account balances:
Deposits		5,517			5,575
Withdrawals		(5,655	)		(5,173	)
Net change in payables for collateral under securities loaned and other transactions		104			(1,152	)
Long-term debt repaid		(185	)		—
Financing element on certain derivative instruments		(11	)		(9	)

Net cash used in financing activities		(230	)		(759	)

Effect of change in foreign currency exchange rates on cash balances		(20	)		(1	)

Change in cash and cash equivalents		(639	)		(1,962	)
Cash and cash equivalents, beginning of period		2,574			5,656

Cash and cash equivalents, end of period	$	1,935		$	3,694

Supplemental disclosures of cash flow information:
Net cash paid during the period for:
Interest	$	113		$	1

Income tax	$	22		$	1

See accompanying notes to the interim condensed consolidated financial statements.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited)


1.	Business, Basis of Presentation, and Summary of Significant Accounting Policies

Business

“MICC” or the “Company” refers to MetLife Insurance Company of Connecticut, a Connecticut corporation incorporated in 1863, and its subsidiaries, including MetLife Investors USA Insurance Company (“MLI-USA”). MetLife Insurance Company of Connecticut is a subsidiary of MetLife, Inc. (“MetLife”). The Company offers individual annuities, individual life insurance, and institutional protection and asset accumulation products.

Basis of Presentation

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the interim condensed consolidated financial statements.

In applying the Company’s accounting policies, management makes subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s businesses and operations. Actual results could differ from these estimates.

The accompanying interim condensed consolidated financial statements include the accounts of MetLife Insurance Company of Connecticut and its subsidiaries, as well as partnerships and joint ventures in which the Company has control and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. See “— Adoption of New Accounting Pronouncements.” Intercompany accounts and transactions have been eliminated.

The Company uses the equity method of accounting for investments in equity securities in which it has a significant influence or more than a 20% interest and for real estate joint ventures and other limited partnership interests in which it has more than a minor equity interest or more than a minor influence over the joint venture’s or partnership’s operations, but does not have a controlling interest and is not the primary beneficiary. The Company uses the cost method of accounting for investments in real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the joint venture’s or the partnership’s operations.

Certain amounts in the prior year periods’ interim condensed consolidated financial statements have been reclassified to conform with the 2010 presentation. Such reclassifications include $165 million and ($134) million reclassified from net change in other invested assets to cash received in connection with freestanding derivatives and cash paid in connection with freestanding derivatives, respectively, within cash flows from investing activities in the consolidated statements of cash flows for the three months ended March 31, 2009.

Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity.

The accompanying interim condensed consolidated financial statements reflect all adjustments (including normal recurring adjustments) necessary to present fairly the consolidated financial position of the Company at March 31, 2010, its consolidated results of operations for the three months ended March 31, 2010 and 2009, its consolidated cash flows for the three months ended March 31, 2010 and 2009, and its consolidated statements of stockholders’ equity for the three months ended March 31, 2010 and 2009, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2009 consolidated balance sheet data was derived from audited consolidated financial statements included in MetLife Insurance Company of Connecticut’s Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), which includes all disclosures required by

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2009 Annual Report.

Adoption of New Accounting Pronouncements

Financial Instruments

Effective January 1, 2010, the Company adopted new guidance related to financial instrument transfers and consolidation of VIEs. The financial instrument transfer guidance eliminates the concept of a qualified special purpose entity (“QSPE”), eliminates the guaranteed mortgage securitization exception, changes the criteria for achieving sale accounting when transferring a financial asset and changes the initial recognition of retained beneficial interests. The new consolidation guidance changes the definition of the primary beneficiary as well as the method of determining whether an entity is a primary beneficiary of a VIE from a quantitative model to a qualitative model. Under the new qualitative model, the entity that has both the ability to direct the most significant activities of the VIE and the obligation to absorb losses or receive benefits that could be significant to the VIE is considered to be the primary beneficiary of the VIE. The guidance also changes when reassessment is needed and requires enhanced disclosures, including the effects of a company’s involvement with VIEs on its financial statements.

As a result of the adoption of this guidance, the Company consolidated certain former QSPEs that were previously accounted for as fixed maturity commercial mortgage-backed securities. The Company also elected the fair value option for all of the consolidated assets and liabilities of these entities. Upon consolidation, the Company recorded $6,769 million of commercial mortgage loans and $6,717 million of long-term debt based on estimated fair values at January 1, 2010 and de-recognized $52 million in fixed maturity securities. The consolidation also resulted in a decrease in retained earnings of $34 million, net of income tax, and an increase in accumulated other comprehensive income of $34 million, net of income tax, as of January 1, 2010. For the three months ended March 31, 2010, the Company recorded $105 million of net investment income on the consolidated assets, $103 million of interest expense in other expenses on the related long-term debt and $4 million in net investment losses to remeasure the assets and liabilities at their estimated fair values as of March 31, 2010.

Also effective January 1, 2010, the Company adopted new guidance that indefinitely defers the above changes relating the Company’s interests in entities that have all the attributes of an investment company or for which it is industry practice to apply measurement principles for financial reporting that are consistent with those applied by an investment company. As a result of the deferral, the above guidance did not apply to certain real estate joint ventures and other limited partnership interests held by the Company.

Fair Value

Effective January 1, 2010, the Company adopted new guidance that requires new disclosures about significant transfers in and/or out of Levels 1 and 2 of the fair value hierarchy and activity in Level 3 (Accounting Standards Update (“ASU”) 2010-06, Fair Value Measurements and Disclosures (Topic 820): Improving Disclosures about Fair Value Measurements). In addition, this guidance provides clarification of existing disclosure requirements about level of disaggregation and inputs and valuation techniques. The adoption of this guidance did not have an impact on the Company’s consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In April 2010, the Financial Accounting Standards Board issued new guidance regarding accounting for investment funds determined to be VIEs (ASU 2010-15, How Investments Held through Separate Accounts Affect an Insurer’s Consolidation Analysis of Those Investments). Under this guidance, an insurance entity would not be required to consolidate a voting-interest investment fund when it holds the majority of the voting interests of the fund through its separate accounts. In addition, an insurance entity would not consider the interests held through

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

separate accounts for the benefit of policyholders in the insurer’s evaluation of its economics in a VIE, unless the separate account contract holder is a related party. The guidance is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2010. The Company does not expect the adoption of this new guidance to have a material impact on its consolidated financial statements.


2.	Investments

Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized gain and loss, estimated fair value of the Company’s fixed maturity and equity securities and the percentage that each sector represents by the respective total holdings for the periods shown. The unrealized loss amounts presented below include the noncredit loss component of other-than-temporary impairment (“OTTI”) loss:


	March 31, 2010
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gain		Loss		Loss		Value		Total
	(In millions)

Fixed Maturity Securities:
U.S. corporate securities	$	15,357	$	525	$	469	$	—	$	15,413		35.8	%
Foreign corporate securities		7,559		352		182		1		7,728		17.9
U.S. Treasury and agency securities		7,680		31		276		—		7,435		17.2
Residential mortgage-backed securities (“RMBS”)		5,907		168		325		92		5,658		13.1
Commercial mortgage-backed securities (“CMBS”)		2,755		84		102		1		2,736		6.3
Asset-backed securities (“ABS”)		2,241		43		149		17		2,118		4.9
State and political subdivision securities		1,371		18		106		—		1,283		3.0
Foreign government securities		703		57		6		—		754		1.8

Total fixed maturity securities (1), (2)	$	43,573	$	1,278	$	1,615	$	111	$	43,125		100.0	%

Equity Securities:
Non-redeemable preferred stock (1)	$	345	$	15	$	50	$	—	$	310		62.1	%
Common stock		163		26		—		—		189		37.9

Total equity securities (3)	$	508	$	41	$	50	$	—	$	499		100.0	%

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gain		Loss		Loss		Value		Total
	(In millions)

Fixed Maturity Securities:
U.S. corporate securities	$	15,598	$	441	$	639	$	2	$	15,398		37.3	%
Foreign corporate securities		7,292		307		255		6		7,338		17.8
U.S. Treasury and agency securities		6,503		35		281		—		6,257		15.2
RMBS		6,183		153		402		82		5,852		14.2
CMBS		2,808		43		216		18		2,617		6.3
ABS		2,152		33		163		33		1,989		4.8
State and political subdivision securities		1,291		12		124		—		1,179		2.8
Foreign government securities		608		46		9		—		645		1.6

Total fixed maturity securities (1), (2)	$	42,435	$	1,070	$	2,089	$	141	$	41,275		100.0	%

Equity Securities:
Non-redeemable preferred stock (1)	$	351	$	10	$	55	$	—	$	306		66.7	%
Common stock		143		11		1		—		153		33.3

Total equity securities (3)	$	494	$	21	$	56	$	—	$	459		100.0	%


(1)		Upon acquisition, the Company classifies perpetual securities that have attributes of both debt and equity as fixed maturity securities if the security has an interest rate step-up feature which, when combined with other qualitative factors, indicates that the security has more debt-like characteristics. The Company classifies perpetual securities with an interest rate step-up feature which, when combined with other qualitative factors, indicates that the security has more equity-like characteristics, as equity securities within non-redeemable preferred stock. Many of such securities have been issued by non-U.S. financial institutions that are accorded Tier 1 and Upper Tier 2 capital treatment by their respective regulatory bodies and are commonly referred to as “perpetual hybrid securities.” The following table presents the perpetual hybrid securities held by the Company at:

Classification

March 31, 2010

December 31, 2009

Estimated

Fair

Consolidated Balance Sheets

Sector Table

Primary Issuers

Value

(In millions)

Equity securities

Non-redeemable preferred stock

Non-U.S. financial institutions

267

237

Equity securities

Non-redeemable preferred stock

U.S. financial institutions

Fixed maturity securities

Foreign corporate securities

Non-U.S. financial institutions

602

580

Fixed maturity securities

U.S. corporate securities

U.S. financial institutions


(2)		Redeemable preferred stock with stated maturity dates are included in the U.S. corporate securities sector within fixed maturity securities. These securities, commonly referred to as “capital securities”, are primarily issued by U.S. financial institutions and have cumulative interest deferral features. The Company held $542 million and $513 million at estimated fair value of such securities at March 31, 2010 and December 31, 2009, respectively.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(3)		Equity securities primarily consist of investments in common and preferred stocks, including certain perpetual hybrid securities and mutual fund interests. Privately-held equity securities were $84 million and $82 million at estimated fair value at March 31, 2010 and December 31, 2009, respectively.

All below investment grade, non-income producing and National Association of Insurance Commissioners (“NAIC”) amounts and percentages presented herein, are based on rating agency designations and equivalent ratings of the NAIC, with the exception of non-agency RMBS held by the Company’s domestic insurance subsidiary. Non-agency RMBS, including RMBS backed by sub-prime mortgage loans reported within ABS, held by the Company’s domestic insurance subsidiary are presented based on final ratings from the revised NAIC rating methodology (i.e. NAIC 1 – 6) which became effective December 31, 2009 (which may not correspond to rating agency designations). All rating agency (i.e. Aaa/AAA) amounts or percentages presented herein are without adjustment for the revised NAIC methodology which became effective December 31, 2009.

The following table presents selected information about certain fixed maturity securities held by the Company at:


	March 31, 2010			December 31, 2009
	(In millions)

Below investment grade or non-rated fixed maturity securities:
Estimated fair value	$	3,807		$	3,866
Net unrealized loss	$	323		$	467
Non-income producing fixed maturity securities:
Estimated fair value	$	37		$	67
Net unrealized gain (loss)	$	(2	)	$	2
Fixed maturity securities credit enhanced by financial guarantor insurers — by sector — at estimated fair value:
State and political subdivision securities	$	509		$	493
U.S. corporate securities		472			458
ABS		101			107
RMBS		9			7
CMBS		3			3

Total fixed maturity securities credit enhanced by financial guarantor insurers	$	1,094		$	1,068

Ratings of the financial guarantor insurers providing the credit enhancement:
Portion rated Aa/AA		26	%		25	%

Portion rated Baa/BBB		39	%		39	%

Concentrations of Credit Risk (Fixed Maturity Securities) — Summary. The following section contains a summary of the concentrations of credit risk related to fixed maturity securities holdings.

The Company was not exposed to any concentrations of credit risk of any single issuer greater than 10% of the Company’s stockholders’ equity, other than securities of the U.S. government and certain U.S. government agencies. The Company’s holdings in U.S. Treasury and agency fixed maturity securities at estimated fair value were $7.4 billion and $6.3 billion at March 31, 2010 and December 31, 2009, respectively.

Concentrations of Credit Risk (Fixed Maturity Securities) — U.S. and Foreign Corporate Securities. The Company maintains a diversified portfolio of corporate fixed maturity securities across industries and issuers. This portfolio does not have exposure to any single issuer in excess of 1% of total investments. The tables below present

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

the major industry types that comprise the corporate fixed maturity securities holdings, the largest exposure to a single issuer and the combined holdings in the ten issuers to which it had the largest exposure at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)

Corporate fixed maturity securities — by industry type:
Foreign (1)	$	7,728		33.4	%	$	7,338		32.3	%
Consumer		3,632		15.7			3,507		15.4
Utility		3,390		14.7			3,328		14.6
Industrial		3,128		13.5			3,047		13.4
Finance		2,929		12.7			3,145		13.8
Communications		1,606		6.9			1,669		7.4
Other		728		3.1			702		3.1

Total	$	23,141		100.0	%	$	22,736		100.0	%


(1)		Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity security investments.


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of Total			Fair		% of Total
	Value		Investments			Value		Investments
			(In millions)

Concentrations within corporate fixed maturity securities:
Largest exposure to a single issuer	$	196		0.3	%	$	204		0.4	%
Holdings in ten issuers with the largest exposures	$	1,602		2.6	%	$	1,695		3.2	%

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS. The table below presents the Company’s RMBS holdings and portion rated Aaa/AAA and portion rated NAIC 1 at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)

By security type:
Collateralized mortgage obligations	$	3,552		62.8	%	$	3,646		62.3	%
Pass-through securities		2,106		37.2			2,206		37.7

Total RMBS	$	5,658		100.0	%	$	5,852		100.0	%

By risk profile:
Agency	$	3,941		69.7	%	$	4,095		70.0	%
Prime		1,106		19.5			1,118		19.1
Alternative residential mortgage loans		611		10.8			639		10.9

Total RMBS	$	5,658		100.0	%	$	5,852		100.0	%

Portion rated Aaa/AAA	$	4,665		82.4	%	$	4,347		74.3	%

Portion rated NAIC 1	$	4,681		82.7	%	$	4,835		82.6	%

Collateralized mortgage obligations are a type of mortgage-backed security structured by dividing the cash flows of mortgages into separate pools or tranches of risk that create multiple classes of bonds with varying maturities and priority of payments. Pass-through mortgage-backed securities are a type of asset-backed security that is secured by a mortgage or collection of mortgages. The monthly mortgage payments from homeowners pass from the originating bank through an intermediary, such as a government agency or investment bank, which collects the payments, and for a fee, remits or passes these payments through to the holders of the pass-through securities.

Prime residential mortgage lending includes the origination of residential mortgage loans to the most creditworthy borrowers with high quality credit profiles. Alternative residential mortgage loans (“Alt-A”) are a classification of mortgage loans where the risk profile of the borrower falls between prime and sub-prime. Sub-prime mortgage lending is the origination of residential mortgage loans to borrowers with weak credit profiles.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following tables present the Company’s investment in Alt-A RMBS by vintage year (vintage year refers to the year of origination and not to the year of purchase) and certain other selected data:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)

Vintage Year:
2004 & Prior	$	15		2.4	%	$	15		2.3	%
2005		312		51.1			336		52.6
2006		78		12.8			83		13.0
2007		206		33.7			205		32.1
2008		—		—			—		—
2009		—		—			—		—
2010		—		—			—		—

Total	$	611		100.0	%	$	639		100.0	%



	March 31, 2010					December 31, 2009
			% of					% of
	Amount		Total			Amount		Total
	(In millions)

Net unrealized loss	$	213				$	235
Rated Aa/AA or better				17.2	%				2.3	%
Rated NAIC 1				17.2	%				16.6	%
By collateral type:
Fixed rate mortgage loans collateral				95.7	%				95.6	%
Hybrid adjustable rate mortgage loans collateral				4.3					4.4

Total Alt-A RMBS				100.0	%				100.0	%

Concentrations of Credit Risk (Fixed Maturity Securities) — CMBS. The Company’s holdings in CMBS were $2.7 billion and $2.6 billion at estimated fair value at March 31, 2010 and December 31, 2009, respectively. The Company had no exposure to CMBS index securities at both March 31, 2010 and December 31, 2009. The Company held commercial real estate collateralized debt obligations securities of $73 million and $70 million at estimated fair value at March 31, 2010 and December 31, 2009, respectively.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following tables present the Company’s holdings of CMBS by rating agency designation and by vintage year at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)

Vintage Year:
2003 & Prior	$	1,285		47.0	%	$	1,202		45.9	%
2004		510		18.6			512		19.6
2005		481		17.6			472		18.0
2006		434		15.9			407		15.6
2007		26		0.9			24		0.9
2008		—		—			—		—
2009		—		—			—		—
2010		—		—			—		—

Total	$	2,736		100.0	%	$	2,617		100.0	%



	March 31, 2010					December 31, 2009
			% of					% of
	Amount		Total			Amount		Total
	(In millions)

Net unrealized loss	$	19				$	191
Rated Aaa/AAA				92	%				83	%

Concentrations of Credit Risk (Fixed Maturity Securities) — ABS. The Company’s holdings in ABS were $2.1 billion and $2.0 billion at estimated fair value at March 31, 2010 and December 31, 2009, respectively. The Company’s ABS are diversified both by collateral type and by issuer.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the collateral type and certain other information about ABS held by the Company at:


	March 31, 2010					December 31, 2009
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
			(In millions)

By collateral type:
Credit card loans	$	977		46.1	%	$	920		46.3	%
RMBS backed by sub-prime mortgage loans		241		11.4			247		12.4
Student loans		213		10.1			158		7.9
Automobile loans		177		8.3			205		10.3
Other loans		510		24.1			459		23.1

Total	$	2,118		100.0	%	$	1,989		100.0	%

Portion rated Aaa/AAA	$	1,621		76.5	%	$	1,292		65.0	%

Portion rated NAIC 1	$	1,929		91.1	%	$	1,767		88.8	%

RMBS backed by sub-prime mortgage loans — portion credit enhanced by financial guarantor insurers				20.8	%				20.6	%
Of the 20.8% and 20.6% credit enhanced, the financial guarantor insurers were rated as follows:
By financial guarantor insurers rated Aa/AA				0.9	%				0.7	%
By financial guarantor insurers rated A				0.2	%				0.2	%

Concentrations of Credit Risk (Equity Securities). The Company was not exposed to any concentrations of credit risk in its equity securities holdings of any single issuer greater than 10% of the Company’s stockholders’ equity at March 31, 2010 and December 31, 2009.

Maturities of Fixed Maturity Securities. The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date (excluding scheduled sinking funds), are as follows:


	March 31, 2010				December 31, 2009
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
			(In millions)

Due in one year or less	$	1,345	$	1,362	$	1,023	$	1,029
Due after one year through five years		9,324		9,544		9,048		9,202
Due after five years through ten years		8,172		8,421		7,882		7,980
Due after ten years		13,829		13,286		13,339		12,606

Subtotal		32,670		32,613		31,292		30,817
RMBS, CMBS and ABS		10,903		10,512		11,143		10,458

Total fixed maturity securities	$	43,573	$	43,125	$	42,435	$	41,275

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been included in the above table in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately in the table, as they are not due at a single maturity.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired. As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, effective April 1, 2009, the Company adopted new OTTI guidance that amends the methodology for determining for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how the amount of the OTTI loss that is charged to earnings is determined. There was no change in the OTTI methodology for equity securities.

With respect to fixed maturity securities, the Company considers, among other impairment criteria, whether it has the intent to sell a particular impaired fixed maturity security. The Company’s intent to sell a particular impaired fixed maturity security considers broad portfolio management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current conditions or the Company’s need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been made on an impaired security, the security will be deemed other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. In certain circumstances, the Company may determine that it does not intend to sell a particular security but that it is more likely than not that it will be required to sell that security before recovery of the decline in estimated fair value below amortized cost. In such instances, the fixed maturity security will be deemed other-than-temporarily impaired in the period during which it was determined more likely than not that the security will be required to be sold and an OTTI loss will be recorded in earnings. If the Company does not have the intent to sell (i.e., has not made the decision to sell) and it does not believe that it is more likely than not that it will be required to sell the security before recovery of its amortized cost, an impairment assessment is made, as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report. Prior to April 1, 2009, the Company’s assessment of OTTI for fixed maturity securities was performed in the same manner as described below for equity securities.

With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its value to an amount equal to or greater than cost. Decisions to sell equity securities are based on current conditions in relation to the same broad portfolio management considerations in a manner consistent with that described above for fixed maturity securities.

With respect to perpetual hybrid securities, some of which are classified as fixed maturity securities and some of which are classified as equity securities, within non-redeemable preferred stock, the Company considers in its OTTI analysis whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. The Company also considers whether any perpetual hybrid securities with an unrealized loss, regardless of credit rating, have deferred any dividend payments.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in accumulated other comprehensive loss, are as follows at:


	March 31, 2010			December 31, 2009
	(In millions)

Fixed maturity securities that were temporarily impaired	$	(337	)	$	(1,019	)
Fixed maturity securities with noncredit OTTI losses in other comprehensive loss		(111	)		(141	)

Total fixed maturity securities		(448	)		(1,160	)

Equity securities		(9	)		(35	)
Derivatives		1			(4	)
Short-term investments		(9	)		(10	)
Other		(6	)		(3	)

Subtotal		(471	)		(1,212	)

Amounts allocated from:
DAC and VOBA related to noncredit OTTI losses recognized in other comprehensive loss		(3	)		12
DAC and VOBA		48			151

Subtotal		45			163
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in other comprehensive loss		40			46
Deferred income tax benefit (expense)		115			327

Net unrealized investment gains (losses)	$	(271	)	$	(676	)

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive loss, as presented above, of $111 million at March 31, 2010, includes $141 million recognized prior to January 1, 2010, $16 million ($1 million, net of DAC) of noncredit losses recognized in the three months ended March 31, 2010, $16 million transferred to retained earnings in connection with the adoption of new guidance related to the consolidation of VIEs (see Note 1), and $30 million of subsequent increases in estimated fair value during the three months ended March 31, 2010 on such securities for which a noncredit loss was previously recognized in accumulated other comprehensive loss.

Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive loss, as presented above, of $141 million at December 31, 2009, includes $36 million related to the transition adjustment recorded in 2009 upon the adoption of new guidance on the recognition and presentation of OTTI, $165 million ($148 million, net of DAC) of noncredit losses recognized in the year ended December 31, 2009 (as more fully described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report) and $60 million of subsequent increases in estimated fair value during the year ended December 31, 2009 on such securities for which a noncredit loss was previously recognized in accumulated other comprehensive loss.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Continuous Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale by Sector

The following tables present the estimated fair value and gross unrealized loss of the Company’s fixed maturity and equity securities in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position. The unrealized loss amounts presented below include the noncredit component of OTTI loss. Fixed maturity securities on which a noncredit OTTI loss has been recognized in accumulated other comprehensive loss are categorized by length of time as being “less than 12 months” or “equal to or greater than 12 months” in a continuous unrealized loss position based on the point in time that the estimated fair value initially declined to below the amortized cost basis and not the period of time since the unrealized loss was deemed a noncredit OTTI loss.


	March 31, 2010
					Equal to or Greater
	Less than 12 Months				than 12 Months				Total
	Estimated		Gross		Estimated		Gross		Estimated		Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(In millions, except number of securities)

Fixed Maturity Securities:
U.S. corporate securities	$	1,651	$	49	$	3,774	$	420	$	5,425	$	469
Foreign corporate securities		779		22		1,162		161		1,941		183
U.S. Treasury and agency securities		3,999		199		512		77		4,511		276
RMBS		437		13		1,770		404		2,207		417
CMBS		92		2		486		101		578		103
ABS		220		8		720		158		940		166
State and political subdivision securities		343		11		448		95		791		106
Foreign government securities		142		4		16		2		158		6

Total fixed maturity securities	$	7,663	$	308	$	8,888	$	1,418	$	16,551	$	1,726

Equity Securities:
Non-redeemable preferred stock	$	25	$	2	$	220	$	48	$	245	$	50
Common stock		12		—		1		—		13		—

Total equity securities	$	37	$	2	$	221	$	48	$	258	$	50

Total number of securities in an unrealized loss position		644				1,007

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
					Equal to or Greater
	Less than 12 Months				than 12 Months				Total
	Estimated		Gross		Estimated		Gross		Estimated		Gross
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Loss		Value		Loss		Value		Loss
	(In millions, except number of securities)

Fixed Maturity Securities:
U.S. corporate securities	$	2,164	$	87	$	4,314	$	554	$	6,478	$	641
Foreign corporate securities		759		27		1,488		234		2,247		261
U.S. Treasury and agency securities		5,265		271		26		10		5,291		281
RMBS		703		12		1,910		472		2,613		484
CMBS		334		3		1,054		231		1,388		234
ABS		125		11		821		185		946		196
State and political subdivision securities		413		16		433		108		846		124
Foreign government securities		132		4		25		5		157		9

Total fixed maturity securities	$	9,895	$	431	$	10,071	$	1,799	$	19,966	$	2,230

Equity Securities:
Non-redeemable preferred stock	$	21	$	9	$	198	$	46	$	219	$	55
Common stock		3		1		3		—		6		1

Total equity securities	$	24	$	10	$	201	$	46	$	225	$	56

Total number of securities in an unrealized loss position		708				1,236

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Aging of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized loss, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive loss, gross unrealized loss as a percentage of cost or amortized cost and number of securities for fixed maturity and equity securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more at:


	March 31, 2010
	Cost or				Gross						Number of
	Amortized Cost				Unrealized Loss						Securities
	Less than		20% or		Less than			20% or			Less than		20% or
	20%		more		20%			more			20%		more
	(In millions, except number of securities)

Fixed Maturity Securities:
Less than six months	$	6,835	$	629	$	165		$	164			575		56
Six months or greater but less than nine months		36		60		1			18			10		7
Nine months or greater but less than twelve months		1,011		57		109			18			30		11
Twelve months or greater		7,797		1,852		687			564			744		187

Total	$	15,679	$	2,598	$	962		$	764

Percentage of amortized cost						6	%		29	%

Equity Securities:
Less than six months	$	40	$	25	$	2		$	6			13		3
Six months or greater but less than nine months		—		—		—			—			—		—
Nine months or greater but less than twelve months		—		—		—			—			—		—
Twelve months or greater		153		90		16			26			18		8

Total	$	193	$	115	$	18		$	32

Percentage of cost						9	%		28	%

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
	Cost or				Gross						Number of
	Amortized Cost				Unrealized Loss						Securities
	Less than		20% or		Less than			20% or			Less than		20% or
	20%		more		20%			more			20%		more
	(In millions, except number of securities)

Fixed Maturity Securities:
Less than six months	$	8,310	$	790	$	173		$	199			609		74
Six months or greater but less than nine months		1,084		132		114			37			33		24
Nine months or greater but less than twelve months		694		362		74			102			30		29
Twelve months or greater		8,478		2,346		737			794			867		260

Total	$	18,566	$	3,630	$	1,098		$	1,132

Percentage of amortized cost						6	%		31	%

Equity Securities:
Less than six months	$	3	$	9	$	—		$	3			7		3
Six months or greater but less than nine months		—		—		—			—			—		—
Nine months or greater but less than twelve months		10		20		1			8			2		3
Twelve months or greater		161		78		21			23			17		6

Total	$	174	$	107	$	22		$	34

Percentage of cost						13	%		32	%

Equity securities with a gross unrealized loss of 20% or more for twelve months or greater increased from $23 million at December 31, 2009 to $26 million at March 31, 2010. As shown in the section “Evaluating Temporarily Impaired Available-for-Sale Securities” below, the $26 million of equity securities with a gross unrealized loss of 20% or more for twelve months or greater at March 31, 2010 were investment grade non-redeemable preferred stock, all of which were financial services industry investment grade non-redeemable preferred stock, of which 86% were rated A or better.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Concentration of Gross Unrealized Loss and OTTI Loss for Fixed Maturity and Equity Securities Available-for-Sale

The Company’s gross unrealized losses related to its fixed maturity and equity securities, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive loss of $1.8 billion and $2.3 billion at March 31, 2010 and December 31, 2009, respectively, were concentrated, calculated as a percentage of gross unrealized loss and OTTI loss, by sector and industry as follows:


	March 31, 2010			December 31, 2009

Sector:
U.S. corporate securities		26	%		28	%
RMBS		23			21
U.S. Treasury and agency securities		16			12
Foreign corporate securities		10			11
ABS		9			9
CMBS		6			10
State and political subdivision securities		6			5
Other		4			4

Total		100	%		100	%

Industry:
Mortgage-backed		29	%		31	%
Finance		20			22
U.S. Treasury and agency securities		16			12
Asset-backed		9			9
State and political subdivision securities		6			5
Consumer		5			6
Utility		4			4
Communications		3			3
Industrial		1			2
Other		7			6

Total		100	%		100	%

Evaluating Temporarily Impaired Available-for-Sale Securities

The following table presents the Company’s fixed maturity and equity securities, each with a gross unrealized loss of greater than $10 million, the number of securities, total gross unrealized loss and percentage of total gross unrealized loss at:


	March 31, 2010						December 31, 2009
	Fixed Maturity			Equity			Fixed Maturity			Equity
	Securities			Securities			Securities			Securities
	(In millions, except number of securities)

Number of securities		23			—			33			—
Total gross unrealized loss	$	379		$	—		$	510		$	—
Percentage of total gross unrealized loss		22	%		—	%		23	%		—	%

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Fixed maturity and equity securities, each with a gross unrealized loss greater than $10 million, decreased $131 million during the three months ended March 31, 2010. The cause of the decline in, or improvement in, gross unrealized losses for the three months ended March 31, 2010 was primarily attributable to improving market conditions, including narrowing of credit spreads reflecting an improvement in liquidity. These securities were included in the Company’s OTTI review process. Based upon the Company’s current evaluation of these securities and other available-for-sale securities in an unrealized loss position in accordance with its impairment policy and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company has concluded that these securities are not other-than-temporarily impaired.

In the Company’s impairment review process, the duration and severity of an unrealized loss position for equity securities is given greater weight and consideration than for fixed maturity securities. An extended and severe unrealized loss position on a fixed maturity security may not have any impact on the ability of the issuer to service all scheduled interest and principal payments and the

Company’s evaluation of recoverability of all contractual cash flows or the ability to recover an amount at least equal to its amortized cost based on the present value of the expected future cash flows to be collected. In contrast, for an equity security, greater weight and consideration is given by the Company to a decline in market value and the likelihood such market value decline will recover.

The following table presents certain information about the Company’s equity securities available-for-sale with a gross unrealized loss of 20% or more at March 31, 2010:


			Non-Redeemable Preferred Stock
			All Types of
	All Equity		Non-Redeemable					Investment Grade
	Securities		Preferred Stock					All Industries					Financial Services Industry
	Gross		Gross		% of All			Gross		% of All			Gross
	Unrealized		Unrealized		Equity			Unrealized		Non-Redeemable			Unrealized		% of All			% A Rated
	Loss		Loss		Securities			Loss		Preferred Stock			Loss		Industries			or Better
								(In millions)

Less than six months	$	6	$	6		100	%	$	2		33	%	$	2		100	%		100	%
Six months or greater but less than twelve months		—		—		—	%		—		—	%		—		—	%		—	%
Twelve months or greater		26		26		100	%		26		100	%		26		100	%		86	%

All equity securities with a gross unrealized loss of 20% or more	$	32	$	32		100	%	$	28		88	%	$	28		100	%		87	%

In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those of financial services companies. The Company considered several factors including whether there has been any deterioration in credit of the issuer and the likelihood of recovery in value of non-redeemable preferred stock with a severe or an extended unrealized loss. The Company also considered whether any issuers of non-redeemable preferred stock with an unrealized loss held by the Company, regardless of credit rating, have deferred any dividend payments. No such dividend payments were deferred.

With respect to common stock holdings, the Company considered the duration and severity of the unrealized losses for securities in an unrealized loss position of 20% or more; and the duration of unrealized losses for securities in an unrealized loss position of less than 20% in an extended unrealized loss position (i.e., 12 months or greater).

Future other-than-temporary impairments will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

credit rating, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals and any of the above factors deteriorate, additional other-than-temporary impairments may be incurred in upcoming quarters.

Net Investment Gains (Losses)

As described more fully in Note 1 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report, effective April 1, 2009, the Company adopted new guidance on the recognition and presentation of OTTI that amends the methodology to determine for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how OTTI losses that are charged to earnings are measured. There was no change in the methodology for identification and measurement of OTTI losses charged to earnings for impaired equity securities.

The components of net investment gains (losses) are as follows:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Total losses on fixed maturity securities:
Total OTTI losses recognized	$	(34	)	$	(121	)
Less: Noncredit portion of OTTI losses transferred to and recognized in other comprehensive loss		16			—

Net OTTI losses on fixed maturity securities recognized in earnings		(18	)		(121	)
Fixed maturity securities — net gains (losses) on sales and disposals		4			(40	)

Total losses on fixed maturity securities		(14	)		(161	)

Other net investment gains (losses):
Equity securities		(1	)		(58	)
Mortgage loans		(8	)		(14	)
Commercial mortgage loans held by consolidated securitization entities — fair value option		481			—
Real estate and real estate joint ventures		(16	)		(11	)
Other limited partnership interests		(2	)		(50	)
Freestanding derivatives		(97	)		(178	)
Embedded derivatives		(211	)		(184	)
Long-term debt of consolidated securitization entities — related to mortgage loans — fair value option		(485	)		—
Other		82			56

Total net investment gains (losses)	$	(271	)	$	(600	)

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

See Note 8 for discussion of affiliated net investment gains (losses) included in embedded derivatives in the table above.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) are as shown below. Investment gains and losses on sales of securities are determined on a specific identification basis.


	Fixed Maturity Securities						Equity Securities						Total
	Three Months Ended March 31,
	2010			2009			2010			2009			2010			2009
	(In millions)

Proceeds	$	2,188		$	3,258		$	5		$	8		$	2,193		$	3,266

Gross investment gains	$	44		$	47		$	—		$	1		$	44		$	48

Gross investment losses		(40	)		(87	)		(1	)		(1	)		(41	)		(88	)

Total OTTI losses recognized in earnings:
Credit-related		(17	)		(117	)		—			—			(17	)		(117	)
Other (1)		(1	)		(4	)		—			(58	)		(1	)		(62	)

Total OTTI losses recognized in earnings		(18	)		(121	)		—			(58	)		(18	)		(179	)

Net investment gains (losses)	$	(14	)	$	(161	)	$	(1	)	$	(58	)	$	(15	)	$	(219	)


(1)		Other OTTI losses recognized in earnings include impairments on equity securities, impairments on perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and fixed maturity securities where there is an intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value.

Fixed maturity security OTTI losses recognized in earnings relate to the following sectors and industries:


	Three Months
	Ended
	March 31,
	2010		2009
	(In millions)

Sector:
U.S. and foreign corporate securities — by industry:
Consumer	$	9	$	14
Communications		3		40
Finance		1		20
Industrial		—		18
Utility		—		4

Total U.S. and foreign corporate securities		13		96
RMBS		4		—
CMBS		1		2
ABS		—		23

Total	$	18	$	121

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Equity security OTTI losses recognized in earnings relate to the following sectors and industries:


	Three Months
	Ended
	March 31,
	2010		2009
	(In millions)

Sector:
Non-redeemable preferred stock	$	—	$	55
Common stock		—		3

Total	$	—	$	58

Industry:
Financial services industry:
Perpetual hybrid securities	$	—	$	36
Common and remaining non-redeemable preferred stock		—		3

Total financial services industry		—		39
Other		—		19

Total	$	—	$	58

Credit Loss Rollforward — Rollforward of the Cumulative Credit Loss Component of OTTI Loss Recognized in Earnings on Fixed Maturity Securities Still Held for Which a Portion of the OTTI Loss was Recognized in Other Comprehensive Loss

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held by the Company at March 31, 2010 for which a portion of the OTTI loss was recognized in other comprehensive loss:


	Three Months
	Ended
	March 31, 2010
	(In millions)

Balance, beginning of period	$	213
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		2
Additional impairments — credit loss OTTI recognized on securities previously impaired		2
Reductions:
Due to sales (maturities, pay downs or prepayments) during the period of securities previously credit loss OTTI impaired		(36	)
Due to securities de-recognized in connection with the adoption of new guidance related to the consolidation of VIEs		(100	)
Due to increases in cash flows — accretion of previous credit loss OTTI		(1	)

Balance, end of period	$	80

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net Investment Income

The components of net investment income are as follows:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Fixed maturity securities	$	529		$	511
Equity securities		2			7
Trading securities		48			(9	)
Mortgage loans		68			59
Commercial mortgage loans held by consolidated securitization entities		105			—
Policy loans		16			21
Real estate and real estate joint ventures		(26	)		(46	)
Other limited partnership interests		68			(81	)
Cash, cash equivalents and short-term investments		2			7
International joint ventures		(1	)		(1	)
Other		2			(1	)

Total investment income		813			467
Less: Investment expenses		23			27

Net investment income	$	790		$	440

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Affiliated investment expenses, included in the table above, were $13 million and $11 million for the three months ended March 31, 2010 and 2009, respectively. See “— Related Party Investment Transactions” for discussion of affiliated net investment income related to short-term investments included in the table above.

Securities Lending

The Company participates in securities lending programs whereby blocks of securities, which are included in fixed maturity securities and short-term investments, are loaned to third parties, primarily brokerage firms and commercial banks. These transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received. The Company generally obtains collateral in an amount equal to 102% of the estimated fair value of the securities loaned. Securities loaned under such transactions may be sold or repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control, the amounts of which by aging category are presented below.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Elements of the securities lending programs are presented below at:


	March 31, 2010		December 31, 2009
	(In millions)

Securities on loan:
Cost or amortized cost	$	6,386	$	6,173
Estimated fair value	$	6,266	$	6,051
Aging of cash collateral liability:
Open (1)	$	1,407	$	1,325
Less than thirty days		3,497		3,342
Thirty days or greater but less than sixty days		417		1,323
Sixty days or greater but less than ninety days		64		—
Ninety days or greater		975		234

Total cash collateral liability	$	6,360	$	6,224

Reinvestment portfolio — estimated fair value	$	5,953	$	5,686


(1)		Open — meaning that the related loaned security could be returned to the Company on the next business day requiring the Company to immediately return the cash collateral.

The estimated fair value of the securities on loan related to the cash collateral on open at March 31, 2010 was $1,377 million, of which $1,334 million were U.S. Treasury and agency securities which, if put to the Company, can be immediately sold to satisfy the cash requirements. The remainder of the securities on loan was primarily U.S. Treasury and agency securities, and very liquid RMBS. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including RMBS, ABS, U.S. corporate and foreign corporate securities).

There was no security collateral on deposit from counterparties in connection with the securities lending transactions at both March 31, 2010 and December 31, 2009.

Invested Assets on Deposit and Pledged as Collateral

The invested assets on deposit and invested assets pledged as collateral are presented in the table below. The amounts presented in the table below are at estimated fair value for cash and cash equivalents and fixed maturity securities.


	March 31, 2010		December 31, 2009
	(In millions)

Invested assets on deposit:
Regulatory agencies (1)	$	21	$	21
Invested assets pledged as collateral:
Debt and funding agreements — FHLB of Boston (2)		405		419
Derivative transactions (3)		17		18

Total invested assets on deposit and pledged as collateral	$	443	$	458


(1)		The Company had investment assets on deposit with regulatory agencies consisting primarily of fixed maturity securities.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(2)		The Company has pledged fixed maturity securities in support of its debt and funding agreements with the Federal Home Loan Bank of Boston (“FHLB of Boston”). The nature of these Federal Home Loan Bank arrangements is described in Note 7 of the Notes to the Consolidated Financial Statements included in the 2009 Annual Report.

(3)		Certain of the Company’s invested assets are pledged as collateral for various derivative transactions as described in Note 3.

See also the immediately preceding section “Securities Lending” for the amount of the Company’s cash and invested assets received from and due back to counterparties pursuant to the securities lending program.

Trading Securities

The Company has trading securities portfolios to support investment strategies that involve the active and frequent purchase and sale of securities and asset and liability matching strategies for certain insurance products.

At March 31, 2010 and December 31, 2009, trading securities at estimated fair value were $1,143 million and $938 million, respectively.

Interest and dividends earned on trading securities, in addition to the net realized gains (losses) and changes in estimated fair value subsequent to purchase, recognized on the trading securities included within net investment income (loss) totaled $48 million and ($9) million for the three months ended March 31, 2010 and 2009, respectively. Changes in estimated fair value subsequent to purchase of the trading securities included within net investment income (loss) were $41 million and ($11) million for the three months ended March 31, 2010 and 2009, respectively.

Mortgage Loans

Mortgage loans, net of valuation allowances, are categorized as follows:


	March 31, 2010					December 31, 2009
	Carrying		% of			Carrying		% of
	Value		Total			Value		Total
	(In millions)

Mortgage loans held-for-investment, net:
Commercial mortgage loans	$	3,639		30.6	%	$	3,546		74.7	%
Agricultural mortgage loans		1,190		10.0			1,201		25.3
Consumer loans		—		—			1		—

Subtotal mortgage loans held-for-investment, net		4,829		40.6	%		4,748		100.0	%
Commercial mortgage loans held by consolidated securitization entities — fair value option		7,065		59.4			—		—

Total mortgage loans held-for-investment, net	$	11,894		100.0	%	$	4,748		100.0	%

See “— Variable Interest Entities” for discussion of consolidated securitization entities included in the table above.

Additions to the mortgage valuation allowance were $9 million and $13 million for the three months ended March 31, 2010 and 2009, respectively.

See Note 2 of the Notes to the Consolidated Financial Statements in the 2009 Annual Report for discussion of affiliated mortgage loans included in the table above. Such loans were $200 million at both March 31, 2010 and December 31, 2009.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Short-term Investments

The carrying value of short-term investments, which include investments with remaining maturities of one year or less, but greater than three months, at the time of acquisition was $1.5 billion and $1.8 billion at March 31, 2010 and December 31, 2009, respectively. The Company is exposed to concentrations of credit risk related to securities of the U.S. government and certain U.S. government agencies included within short-term investments, which were $1.1 billion and $1.5 billion at March 31, 2010 and December 31, 2009, respectively.

Cash Equivalents

The carrying value of cash equivalents, which include investments with an original or remaining maturity of three months or less, at the time of acquisition was $1.8 billion and $2.4 billion at March 31, 2010 and December 31, 2009, respectively. The Company is exposed to concentrations of credit risk related to securities of the U.S. government and certain U.S. government agencies included within cash equivalents, which were $1.2 billion and $1.5 billion at March 31, 2010 and December 31, 2009, respectively.

Variable Interest Entities

The Company holds investments in certain entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, consistent with the new guidance described in Note 1, is deemed to be the primary beneficiary or consolidator of the entity. The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated in the Company’s financial statements at March 31, 2010 and December 31, 2009. Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.


	March 31, 2010				December 31, 2009
	Total		Total		Total		Total
	Assets		Liabilities		Assets		Liabilities
	(In millions)

Consolidated securitization entities (1)	$	7,098	$	7,050	$	—	$	—


(1)		As discussed in Note 1, upon the adoption of new guidance effective January 1, 2010, the Company consolidated former QSPEs that are structured as CMBS. At March 31, 2010, these entities held total assets of $7,098 million consisting of $7,065 million of commercial mortgage loans and $33 million of accrued investment income. These entities had total liabilities of $7,050 million, consisting of $7,019 million of debt and $31 million of other liabilities. The assets of these entities can only be used to settle its liabilities, and under no circumstances is the Company or any of its subsidiaries or affiliates liable for any principal or interest shortfalls, should any arise. The Company’s exposure is limited to that of its remaining investment in the former QSPEs of $48 million at estimated fair value at March 31, 2010. The long-term debt referred to above bears interest at primarily fixed rates ranging from 2.25% to 5.57%, payable primarily on a monthly basis and is expected to be repaid over the next 7 years. Interest expense related to these obligations, included in other expenses, was $103 million for the three months ended March 31, 2010.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the carrying amount and maximum exposure to loss relating to VIEs for which the Company holds significant variable interests but is not the primary beneficiary and which have not been consolidated at:


	March 31, 2010				December 31, 2009
			Maximum				Maximum
	Carrying		Exposure		Carrying		Exposure
	Amount		to Loss (1)		Amount		to Loss (1)
			(In millions)

Fixed maturity securities available-for-sale:
RMBS (2)	$	5,658	$	5,658	$	—	$	—
CMBS (2)		2,736		2,736		—		—
ABS (2)		2,118		2,118		—		—
Other limited partnership interests		963		1,871		838		1,273
U.S. corporate securities		364		364		247		247
Foreign corporate securities		325		325		304		304
Real estate joint ventures		9		38		32		39

Total	$	12,173	$	13,110	$	1,421	$	1,863


(1)		The maximum exposure to loss relating to the fixed maturity securities available-for-sale is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to the real estate joint ventures and other limited partnership interests is equal to the carrying amounts plus any unfunded commitments. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2)		As discussed in Note 1, the Company adopted new guidance effective January 1, 2010 which eliminated the concept of a QSPE. As a result, the Company concluded it held variable interests in RMBS, CMBS and ABS. For these interests, the Company’s involvement is limited to that of a passive investor.

As described in Note 5, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the three months ended March 31, 2010.

Related Party Investment Transactions

At March 31, 2010 and December 31, 2009, the Company held $346 million and $285 million, respectively, in the Metropolitan Money Market Pool and the MetLife Intermediate Income Pool, which are affiliated partnerships. These amounts are included in short-term investments. Net investment income from these investments was less than $1 million and $1 million for the three months ended March 31, 2010 and 2009, respectively.

In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Transfers of invested assets are done at estimated fair value with net investment gains (losses) recognized by the affiliate initiating the transfer. There were no transfers of invested assets to or from affiliates for the three months ended March 31, 2010. The estimated fair value of invested assets transferred to and from affiliates, inclusive of amounts related to reinsurance agreements, were $0 million and $143, respectively, for the three months ended March 31, 2009.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


3.	Derivative Financial Instruments

Accounting for Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage risks relating to its ongoing business. To a lesser extent, the Company uses credit derivatives, such as credit default swaps, to synthetically replicate investment risks and returns which are not readily available in the cash market. The Company also purchases certain securities, issues certain insurance policies and investment contracts and engages in certain reinsurance contracts that have embedded derivatives.

Freestanding derivatives are carried on the Company’s consolidated balance sheets either as assets within other invested assets or as liabilities within other liabilities at estimated fair value as determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The Company does not offset the fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement.

If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are generally reported in net investment gains (losses). The fluctuations in estimated fair value of derivatives which have not been designated for hedge accounting can result in significant volatility in net income.

To qualify for hedge accounting, at the inception of the hedging relationship, the Company formally documents its risk management objective and strategy for undertaking the hedging transaction, as well as its designation of the hedge as either (i) a hedge of the estimated fair value of a recognized asset or liability (“fair value hedge”); or (ii) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow hedge”). In this documentation, the Company sets forth how the hedging instrument is expected to hedge the designated risks related to the hedged item and sets forth the method that will be used to retrospectively and prospectively assess the hedging instrument’s effectiveness and the method which will be used to measure ineffectiveness. A derivative designated as a hedging instrument must be assessed as being highly effective in offsetting the designated risk of the hedged item. Hedge effectiveness is formally assessed at inception and periodically throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income.

The accounting for derivatives is complex and interpretations of the primary accounting guidance continue to evolve in practice. Judgment is applied in determining the availability and application of hedge accounting designations and the appropriate accounting treatment under such accounting guidance. If it was determined that hedge accounting designations were not appropriately applied, reported net income could be materially affected. Differences in judgment as to the availability and application of hedge accounting designations and the appropriate accounting treatment may result in a differing impact in the consolidated financial statements of the Company from that previously reported.

Under a fair value hedge, changes in the estimated fair value of the hedging derivative, including amounts measured as ineffectiveness, and changes in the estimated fair value of the hedged item related to the designated risk

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

being hedged, are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of operations within interest income or interest expense to match the location of the hedged item. However, accruals that are not scheduled to settle until maturity are included in the estimated fair value of derivatives in the consolidated balance sheets.

Under a cash flow hedge, changes in the estimated fair value of the hedging derivative measured as effective are reported within other comprehensive income (loss), a separate component of stockholders’ equity and the deferred gains or losses on the derivative are reclassified into the consolidated statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item. Changes in the estimated fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of operations within interest income or interest expense to match the location of the hedged item. However, accruals that are not scheduled to settle until maturity are included in the estimated fair value of derivatives in the consolidated balance sheets.

The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument.

When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in other comprehensive income (loss) related to discontinued cash flow hedges are released into the consolidated statement of operations when the Company’s earnings are affected by the variability in cash flows of the hedged item.

When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried in the consolidated balance sheets at its estimated fair value, with changes in estimated fair value recognized currently in net investment gains (losses). Deferred gains and losses of a derivative recorded in other comprehensive income (loss) pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net investment gains (losses).

In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value in the consolidated balance sheets, with changes in its estimated fair value recognized in the current period as net investment gains (losses).

The Company is also a party to financial instruments that contain terms which are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. If the instrument would not be accounted for in its entirety at estimated fair value and it is determined that the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract, and that a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative. Such embedded derivatives are carried in the consolidated balance sheets at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net investment gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses). Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) if that contract contains an embedded derivative that requires bifurcation. There is a risk that embedded derivatives requiring bifurcation may not be identified and reported at estimated fair value in the consolidated financial statements and that their related changes in estimated fair value could materially affect reported net income.

See Note 4 for information about the fair value hierarchy for derivatives.

Primary Risks Managed by Derivative Financial Instruments and Non-Derivative Financial Instruments

The Company is exposed to various risks relating to its ongoing business operations, including interest rate risk, foreign currency risk, credit risk and equity market risk. The Company uses a variety of strategies to manage these risks, including the use of derivative instruments. The following table presents the notional amount, estimated fair value and primary underlying risk exposure of the Company’s derivative financial instruments, excluding embedded derivatives, held at:


		March 31, 2010						December 31, 2009
				Estimated						Estimated
Primary Underlying		Notional		Fair Value (1)				Notional		Fair Value (1)
Risk Exposure	Instrument Type	Amount		Assets		Liabilities		Amount		Assets		Liabilities
		(In millions)

Interest rate	Interest rate swaps	$	6,236	$	566	$	178	$	5,261	$	534	$	179
	Interest rate floors		7,986		69		30		7,986		78		34
	Interest rate caps		4,000		7		—		4,003		15		—
	Interest rate futures		944		2		2		835		2		1
Foreign currency	Foreign currency swaps		2,732		583		72		2,678		689		93
	Foreign currency forwards		74		2		—		79		3		—
Credit	Credit default swaps		1,372		18		27		966		12		31
	Credit forwards		109		1		1		90		—		3
Equity market	Equity futures		71		—		—		81		1		—
	Equity options		753		83		—		775		112		—
	Variance swaps		1,081		17		10		1,081		24		6

	Total	$	25,358	$	1,348	$	320	$	23,835	$	1,470	$	347


(1)		The estimated fair value of all derivatives in an asset position is reported within other invested assets in the consolidated balance sheets and the estimated fair value of all derivatives in a liability position is reported within other liabilities in the consolidated balance sheets.

Interest rate swaps are used by the Company primarily to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). In an interest rate swap, the Company agrees with another party to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts as calculated by reference to an agreed notional principal amount. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by the counterparty at each due date. The Company utilizes interest rate swaps in fair value, cash flow and non-qualifying hedging relationships.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The Company also enters into basis swaps to better match the cash flows from assets and related liabilities. In a basis swap, both legs of the swap are floating with each based on a different index. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. A single net payment is usually made by one counterparty at each due date. Basis swaps are included in interest rate swaps in the preceding table. The Company utilizes basis swaps in non-qualifying hedging relationships.

Inflation swaps are used as an economic hedge to reduce inflation risk generated from inflation-indexed liabilities. Inflation swaps are included in interest rate swaps in the preceding table. The Company utilizes inflation swaps in non-qualifying hedging relationships.

Implied volatility swaps are used by the Company primarily as economic hedges of interest rate risk associated with the Company’s investments in mortgage-backed securities. In an implied volatility swap, the Company exchanges fixed payments for floating payments that are linked to certain market volatility measures. If implied volatility rises, the floating payments that the Company receives will increase, and if implied volatility falls, the floating payments that the Company receives will decrease. Implied volatility swaps are included in interest rate swaps in the preceding table. The Company utilizes implied volatility swaps in non-qualifying hedging relationships.

The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities (duration mismatches), as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in non-qualifying hedging relationships.

In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring and to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance. The Company utilizes exchange-traded interest rate futures in non-qualifying hedging relationships.

The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow and non-qualifying hedging relationships.

Foreign currency derivatives, including foreign currency swaps and foreign currency forwards, are used by the Company to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies.

In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon principal amount. The principal amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow, and non-qualifying hedging relationships.

In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

for such a contract is made in a different currency at the specified future date. The Company utilizes foreign currency forwards in non-qualifying hedging relationships.

Swap spreadlocks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads. Swap spreadlocks are forward transactions between two parties whose underlying reference index is a forward starting interest rate swap where the Company agrees to pay a coupon based on a predetermined reference swap spread in exchange for receiving a coupon based on a floating rate. The Company has the option to cash settle with the counterparty in lieu of maintaining the swap after the effective date. The Company utilizes swap spreadlocks in non-qualifying hedging relationships.

Certain credit default swaps are used by the Company to hedge against credit-related changes in the value of its investments and to diversify its credit risk exposure in certain portfolios. In a credit default swap transaction, the Company agrees with another party, at specified intervals, to pay a premium to hedge credit risk. If a credit event, as defined by the contract, occurs, generally the contract will require the swap to be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. The Company utilizes credit default swaps in non-qualifying hedging relationships.

Credit default swaps are also used to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. Treasury or agency security. These credit default swaps are not designated as hedging instruments.

The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these as credit forwards. The Company utilizes credit forwards in cash flow hedging relationships.

In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge liabilities embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in non-qualifying hedging relationships.

Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. Equity index options are included in equity options in the preceding table. The Company utilizes equity index options in non-qualifying hedging relationships.

Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. Equity variance swaps are included in variance swaps in the preceding table. The Company utilizes equity variance swaps in non-qualifying hedging relationships.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Hedging

The following table presents the notional amount and estimated fair value of derivatives designated as hedging instruments by type of hedge designation at:


	March 31, 2010						December 31, 2009
			Estimated						Estimated
			Fair						Fair
	Notional		Value				Notional		Value
Derivatives Designated as Hedging Instruments	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)

Fair Value Hedges:
Foreign currency swaps	$	850	$	324	$	22	$	850	$	370	$	15
Interest rate swaps		130		10		2		220		11		2

Subtotal		980		334		24		1,070		381		17

Cash Flow Hedges:
Foreign currency swaps		252		14		5		166		15		7
Interest rate swaps		10		—		—		—		—		—
Credit forwards		109		1		1		90		—		3

Subtotal		371		15		6		256		15		10

Total Qualifying Hedges	$	1,351	$	349	$	30	$	1,326	$	396	$	27

The following table presents the notional amount and estimated fair value of derivatives that are not designated or do not qualify as hedging instruments by derivative type at:


	March 31, 2010						December 31, 2009
			Estimated						Estimated
			Fair						Fair
Derivatives Not Designated or	Notional		Value				Notional		Value
Not Qualifying as Hedging Instruments	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)

Interest rate swaps	$	6,096	$	556	$	176	$	5,041	$	523	$	177
Interest rate floors		7,986		69		30		7,986		78		34
Interest rate caps		4,000		7		—		4,003		15		—
Interest rate futures		944		2		2		835		2		1
Foreign currency swaps		1,630		245		45		1,662		304		71
Foreign currency forwards		74		2		—		79		3		—
Credit default swaps		1,372		18		27		966		12		31
Equity futures		71		—		—		81		1		—
Equity options		753		83		—		775		112		—
Variance swaps		1,081		17		10		1,081		24		6

Total non-designated or non-qualifying derivatives	$	24,007	$	999	$	290	$	22,509	$	1,074	$	320

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the settlement payments recorded in income for the:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Qualifying hedges:
Net investment income	$	—		$	(1	)
Interest credited to policyholder account balances		10			8
Non-qualifying hedges:
Net investment gains (losses)		(6	)		2

Total	$	4		$	9

Fair Value Hedges

The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate investments to floating rate investments; (ii) interest rate swaps to convert fixed rate liabilities to floating rate liabilities; and (iii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated liabilities.

The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net investment gains (losses). The following table represents the amount of such net investment gains (losses) recognized for the three months ended March 31, 2010 and 2009:


								Ineffectiveness
		Net Investment Gains			Net Investment Gains			Recognized in Net
Derivatives in Fair Value	Hedged Items in Fair Value	(Losses) Recognized			(Losses) Recognized			Investment Gains
Hedging Relationships	Hedging Relationships	for Derivatives			for Hedged Items			(Losses)
		(In millions)

For the Three Months Ended March 31, 2010:
Interest rate swaps:	Fixed maturity securities	$	—		$	—		$	—
	Policyholder account balances (1)		1			(4	)		(3	)
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(52	)		44			(8	)

Total		$	(51	)	$	40		$	(11	)

For the Three Months Ended March 31, 2009:
Interest rate swaps:	Fixed maturity securities	$	5		$	(5	)	$	—
	Policyholder account balances (1)		(3	)		2			(1	)
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		—			1			1

Total		$	2		$	(2	)	$	—


(1)		Fixed rate liabilities

(2)		Fixed rate or floating rate liabilities

All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Cash Flow Hedges

The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments and liabilities; (ii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; and (iii) interest rate swaps to convert floating rate investments to fixed rate investments.

For the three months ended March 31, 2010, the Company recognized insignificant net investment losses which represented the ineffective portion of all cash flow hedges. For the three months ended March 31, 2009, the Company did not recognize any net investment gains (losses) which represented the ineffective portion of all cash flow hedges. All components of each derivative’s gain or loss were included in the assessment of hedge effectiveness. For the three months ended March 31, 2010 and 2009, there were no instances in which the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or within two months of that date. As of March 31, 2010, the maximum length of time over which the Company is hedging its exposure to variability in future cash flows for forecasted transactions does not exceed one year. There were no hedged forecasted transactions, other than the receipt or payment of variable interest payments, at March 31, 2009.

The following table presents the components of other comprehensive income (loss), before income tax, related to cash flow hedges:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Other comprehensive income (loss), balance at beginning of period	$	(1	)	$	20
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges		3			(43	)
Amounts reclassified to net investment gains (losses)		2			40

Other comprehensive income (loss), balance at end of period	$	4		$	17

At March 31, 2010, $1 million of deferred net losses on derivatives accumulated in other comprehensive income (loss) is expected to be reclassified to earnings within the next 12 months.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of stockholders’ equity for the three months ended March 31, 2010 and 2009:


				Amount and Location of
				Gains (Losses)
	Amount of Gains			Reclassified from
	(Losses) Deferred			Accumulated Other
	in Accumulated			Comprehensive Income
	Other Comprehensive			(Loss) into Income (Loss)
	Income (Loss) on			Net Investment
Derivatives in Cash Flow Hedging Relationships	Derivatives			Gains (Losses)
	(In millions)

For the Three Months Ended March 31, 2010:
Foreign currency swaps	$	—		$	(2	)
Credit forwards		3			—

Total	$	3		$	(2	)

For the Three Months Ended March 31, 2009:
Foreign currency swaps	$	(43	)	$	(40	)

Non-Qualifying Derivatives and Derivatives for Purposes Other Than Hedging

The Company enters into the following derivatives that do not qualify for hedge accounting or for purposes other than hedging: (i) interest rate swaps, implied volatility swaps, caps and floors and interest rate futures to economically hedge its exposure to interest rates; (ii) foreign currency forwards and swaps to economically hedge its exposure to adverse movements in exchange rates; (iii) credit default swaps to economically hedge exposure to adverse movements in credit; (iv) equity futures, equity index options, interest rate futures and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; (v) swap spreadlocks to economically hedge invested assets against the risk of changes in credit spreads; (vi) credit default swaps to synthetically create investments; (vii) interest rate forwards to buy and sell securities to economically hedge its exposure to interest rates; (viii) basis swaps to better match the cash flows of assets and related liabilities; (ix) inflation swaps to reduce risk generated from inflation-indexed liabilities; and (x) equity options to economically hedge certain invested assets against adverse changes in equity indices.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the amount and location of gains (losses) recognized in income for derivatives that are not designated or qualifying as hedging instruments:


	Net Investment			Net Investment
	Gains (Losses)			Income (1)
	(In millions)

For the Three Months Ended March 31, 2010:
Interest rate swaps	$	18		$	—
Interest rate floors		(7	)		—
Interest rate caps		(8	)		—
Interest rate futures		(5	)		—
Equity futures		(5	)		—
Foreign currency swaps		(44	)		—
Foreign currency forwards		4			—
Equity options		(23	)		(1	)
Variance swaps		(10	)		—

Total	$	(80	)	$	(1	)

For the Three Months Ended March 31, 2009:
Interest rate swaps	$	(39	)	$	—
Interest rate floors		(184	)		—
Interest rate caps		(3	)		—
Interest rate futures		1			—
Equity futures		25			—
Foreign currency swaps		(51	)		—
Foreign currency forwards		4			—
Equity options		32			—
Variance swaps		(6	)		—
Swap spreadlocks		(4	)		—
Credit default swaps		20			—

Total	$	(205	)	$	—


(1)		Changes in estimated fair value related to economic hedges of equity method investments in joint ventures.

Credit Derivatives

In connection with synthetically created investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the non-qualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, generally the contract will require the Company to pay the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company’s maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $890 million and $477 million at March 31, 2010 and December 31, 2009, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current fair value of the credit default swaps. At March 31, 2010 and December 31, 2009, the Company would have received $12 million and $8 million, respectively, to terminate all of these contracts.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at March 31, 2010 and December 31, 2009:


	March 31, 2010						December 31, 2009
			Maximum						Maximum
	Estimated		Amount of				Estimated		Amount of
	Fair		Future		Weighted		Fair		Future		Weighted
	Value of		Payments under		Average		Value of		Payments under		Average
Rating Agency Designation of Referenced	Credit Default		Credit Default		Years to		Credit Default		Credit Default		Years to
Credit Obligations (1)	Swaps		Swaps (2)		Maturity (3)		Swaps		Swaps (2)		Maturity (3)
	(In millions)

Aaa/Aa/A
Single name credit default swaps (corporate)	$	1	$	45		4.3	$	1	$	25		4.0
Credit default swaps referencing indices		10		690		4.3		7		437		3.5

Subtotal		11		735		4.3		8		462		3.5

Baa
Single name credit default swaps (corporate)		—		5		3.8		—		5		4.0
Credit default swaps referencing indices		1		150		4.9		—		10		5.0

Subtotal		1		155		4.8		—		15		4.7

Total	$	12	$	890		4.4	$	8	$	477		3.5


(1)		The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s Investors Service, Standard & Poor’s Ratings Service and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used.

(2)		Assumes the value of the referenced credit obligations is zero.

(3)		The weighted average years to maturity of the credit default swaps is calculated based on weighted average notional amounts.

Credit Risk on Freestanding Derivatives

The Company may be exposed to credit-related losses in the event of nonperformance by counterparties to derivative financial instruments. Generally, the current credit exposure of the Company’s derivative contracts is limited to the net positive estimated fair value of derivative contracts at the reporting date after taking into consideration the existence of netting agreements and any collateral received pursuant to credit support annexes.

The Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange-traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivative instruments. See Note 4 for a description of the impact of credit risk on the valuation of derivative instruments.

The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. At March 31, 2010 and December 31, 2009, the Company was obligated to return cash collateral under its control of $913 million and $945 million, respectively. This unrestricted cash collateral is included in cash and cash equivalents or in short-term investments and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. At March 31, 2010 and December 31, 2009, the Company had also accepted collateral consisting of various securities with a fair market value of $1 million and $88 million, respectively, which are held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but at March 31, 2010, none of the collateral had been sold or repledged.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The Company’s collateral arrangements for its over-the-counter derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the fair value of that counterparty’s derivatives reaches a pre-determined threshold. Certain of these arrangements also include credit-contingent provisions that provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in the credit ratings of the Company and/or the counterparty. In addition, certain of the Company’s netting agreements for derivative instruments contain provisions that require the Company to maintain a specific investment grade credit rating from at least one of the major credit rating agencies. If the Company’s credit ratings were to fall below that specific investment grade credit rating, it would be in violation of these provisions, and the counterparties to the derivative instruments could request immediate payment or demand immediate and ongoing full overnight collateralization on derivative instruments that are in a net liability position after considering the effect of netting agreements.

The following table presents the estimated fair value of the Company’s over-the-counter derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The table also presents the incremental collateral that the Company would be required to provide if there was a one notch downgrade in the Company’s credit rating at the reporting date or if the Company’s credit rating sustained a downgrade to a level that triggered full overnight collateralization or termination of the derivative position at the reporting date. Derivatives that are not subject to collateral agreements are not included in the scope of this table.

Fair Value of Incremental Collateral

Provided Upon:

Downgrade in the

Estimated

One Notch

Company’s Credit Rating

Fair Value of

Downgrade

to a Level that Triggers

Estimated

Collateral

in the

Full Overnight

Fair Value (1) of

Provided

Company’s

Collateralization or

Derivatives in Net

Fixed Maturity

Credit

Termination

Liability Position

Securities (2)

Rating

of the Derivative Position

(In millions)

At March 31, 2010

At December 31, 2009

—


(1)		After taking into consideration the existence of netting agreements.

(2)		Included in fixed maturity securities in the consolidated balance sheets. The counterparties are permitted by contract to sell or repledge this collateral. At both March 31, 2010 and December 31, 2009, the Company did not provide any cash collateral.

Without considering the effect of netting agreements, the estimated fair value of the Company’s over-the-counter derivatives with credit-contingent provisions that were in a gross liability position at March 31, 2010 was $100 million. At March 31, 2010, the Company provided securities collateral of $3 million in connection with these derivatives. In the unlikely event that both: (i) the Company’s credit rating is downgraded to a level that triggers full overnight collateralization or termination of all derivative positions; and (ii) the Company’s netting agreements are deemed to be legally unenforceable, then the additional collateral that the Company would be required to provide to its counterparties in connection with its derivatives in a gross liability position at March 31, 2010 would be $97 million. This amount does not consider gross derivative assets of $54 million for which the Company has the contractual right of offset.

The Company also has exchange-traded futures, which require the pledging of collateral. At both March 31, 2010 and December 31, 2009, the Company did not pledge any securities collateral for exchange-traded futures. At March 31, 2010 and December 31, 2009, the Company provided cash collateral for exchange-traded futures of $14 million and $18 million, respectively, which is included in premiums, reinsurance and other receivables.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Embedded Derivatives

The Company has certain embedded derivatives that are required to be separated from their host contracts and accounted for as derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including guaranteed minimum withdrawal benefits (“GMWBs”), guaranteed minimum accumulation benefits (“GMABs”) and certain guaranteed minimum income benefits (“GMIBs”); affiliated reinsurance contracts of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; and ceded reinsurance written on a funds withheld basis.

The following table presents the estimated fair value of the Company’s embedded derivatives at:


	March 31, 2010			December 31, 2009
	(In millions)

Net embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefits	$	405		$	724
Call options in equity securities		(6	)		(5	)

Net embedded derivatives within asset host contracts	$	399		$	719

Net embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits	$	150		$	290
Other		(3	)		(11	)

Net embedded derivatives within liability host contracts	$	147		$	279

The following table presents changes in estimated fair value related to embedded derivatives:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Net investment gains (losses) (1), (2)	$	(211	)	$	(184	)


(1)		Effective January 1, 2008, the valuation of the Company’s guaranteed minimum benefits includes an adjustment for the Company’s own credit. Included in net investment gains (losses) for the three months ended March 31, 2010 and 2009 were gains (losses) of ($71) million and $229 million, respectively, in connection with this adjustment.

(2)		See Note 8 for discussion of affiliated net investment gains (losses) included in the table above.


4.	Fair Value

Considerable judgment is often required in interpreting market data to develop estimates of fair value and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Fair Value of Financial Instruments

Amounts related to the Company’s financial instruments are as follows:


					Estimated
	Notional		Carrying		Fair
March 31, 2010	Amount		Value		Value
	(In millions)

Assets
Fixed maturity securities			$	43,125	$	43,125
Equity securities			$	499	$	499
Trading securities			$	1,143	$	1,143
Mortgage loans:
Mortgage loans			$	4,829	$	4,537
Mortgage loans held by consolidated securitization entities				7,065		7,065

Mortgage loans, net			$	11,894	$	11,602

Policy loans			$	1,191	$	1,245
Real estate joint ventures (1)			$	51	$	55
Other limited partnership interests (1)			$	122	$	146
Short-term investments			$	1,473	$	1,473
Other invested assets: (1)
Derivative assets: (2)
Interest rate contracts	$	12,660	$	644	$	644
Foreign currency contracts		2,230		585		585
Credit contracts		918		19		19
Equity market contracts		1,506		100		100

Total derivative assets	$	17,314	$	1,348	$	1,348

Cash and cash equivalents			$	1,935	$	1,935
Accrued investment income			$	554	$	554
Premiums, reinsurance and other receivables (1)			$	4,643	$	3,983
Separate account assets			$	52,614	$	52,614
Net embedded derivatives within asset host contracts (3)			$	405	$	405
Liabilities
Policyholder account balances (1)			$	24,087	$	23,439
Payables for collateral under securities loaned and other transactions			$	7,273	$	7,273
Long-term debt: (1)
Company-issued long-term debt — affiliated			$	950	$	1,046
Long-term debt of consolidated securitization entities				7,019		7,019

Total long-term debt			$	7,969	$	8,065

Other liabilities: (1)
Derivative liabilities: (2)
Interest rate contracts	$	6,506	$	210	$	210
Foreign currency contracts		576		72		72
Credit contracts		563		28		28
Equity market contracts		399		10		10

Total derivative liabilities	$	8,044	$	320	$	320

Other			$	510	$	510
Separate account liabilities (1)			$	1,412	$	1,412
Net embedded derivatives within liability host contracts (3)			$	147	$	147
Commitments (4)
Mortgage loan commitments	$	264	$	—	$	(3	)
Commitments to fund bank credit facilities and private corporate bond investments	$	420	$	—	$	(27	)

See Note 2 for discussion of consolidated securitization entities included in the table above.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


					Estimated
	Notional		Carrying		Fair
December 31, 2009	Amount		Value		Value
	(In millions)

Assets
Fixed maturity securities			$	41,275	$	41,275
Equity securities			$	459	$	459
Trading securities			$	938	$	938
Mortgage loans			$	4,748	$	4,345
Policy loans			$	1,189	$	1,243
Real estate joint ventures (1)			$	64	$	62
Other limited partnership interests (1)			$	128	$	151
Short-term investments			$	1,775	$	1,775
Other invested assets: (1)
Derivative assets (2)	$	16,580	$	1,470	$	1,470
Cash and cash equivalents			$	2,574	$	2,574
Accrued investment income			$	516	$	516
Premiums, reinsurance and other receivables (1)			$	4,582	$	4,032
Separate account assets			$	49,449	$	49,449
Net embedded derivatives within asset host contracts (3)			$	724	$	724
Liabilities
Policyholder account balances (1)			$	24,591	$	24,233
Payables for collateral under securities loaned and other transactions			$	7,169	$	7,169
Long-term debt			$	950	$	1,003
Other liabilities: (1)
Derivative liabilities (2)	$	7,255	$	347	$	347
Other			$	188	$	188
Separate account liabilities (1)			$	1,367	$	1,367
Net embedded derivatives within liability host contracts (3)			$	279	$	279
Commitments (4)
Mortgage loan commitments	$	131	$	—	$	(5	)
Commitments to fund bank credit facilities and private corporate bond investments	$	445	$	—	$	(29	)


(1)		Carrying values presented herein differ from those presented in the consolidated balance sheets because certain items within the respective financial statement caption are not considered financial instruments. Financial statement captions excluded from the table above are not considered financial instruments.

(2)		Derivative assets are presented within other invested assets and derivative liabilities are presented within other liabilities.

(3)		Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. At March 31, 2010 and December 31, 2009, equity securities also included embedded derivatives of ($6) million and ($5) million, respectively.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(4)		Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities.

The methods and assumptions used to estimate the fair value of financial instruments are summarized as follows:

Fixed Maturity Securities, Equity Securities and Trading Securities — When available, the estimated fair value of the Company’s fixed maturity, equity and trading securities are based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company’s securities holdings and valuation of these securities does not involve management judgment.

When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies. The market standard valuation methodologies utilized include: discounted cash flow methodologies, matrix pricing or other similar techniques. The inputs in applying these market standard valuation methodologies include, but are not limited to: interest rates, credit standing of the issuer or counterparty, industry sector of the issuer, coupon rate, call provisions, sinking fund requirements, maturity and management’s assumptions regarding estimated duration, liquidity and estimated future cash flows. Accordingly, the estimated fair values are based on available market information and management’s judgments about financial instruments.

The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Such observable inputs include benchmarking prices for similar assets in active markets, quoted prices in markets that are not active and observable yields and spreads in the market.

When observable inputs are not available, the market standard valuation methodologies for determining the estimated fair value of certain types of securities that trade infrequently, and therefore have little or no price transparency, rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. These unobservable inputs can be based in large part on management judgment or estimation and cannot be supported by reference to market activity. Even though unobservable, these inputs are assumed to be consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances.

The use of different methodologies, assumptions and inputs may have a material effect on the estimated fair values of the Company’s securities holdings.

Mortgage Loans — The Company originates mortgage loans principally for investment purposes. These loans are primarily carried at amortized cost. In addition, as discussed in Note 1, the Company adopted new guidance effective January 1, 2010 and consolidated certain securitization entities that hold commercial mortgage loans. The estimated fair values of these mortgage loans are determined as follows:

Mortgage Loans. For mortgage loans carried at amortized cost, estimated fair value was primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk.

Mortgage Loans Held by Consolidated Securitization Entities. For commercial mortgage loans held by the Company’s consolidated securitization entities, the Company has determined that the principal market for these commercial loan portfolios is the securitization market. The Company uses the securitization market price of the obligations of the consolidated securitization entities to determine the estimated fair value of these commercial loan portfolios, which is provided primarily by independent pricing services using observable inputs.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Policy Loans — For policy loans with fixed interest rates, estimated fair values are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. The estimated fair value for policy loans with variable interest rates approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates.

Real Estate Joint Ventures and Other Limited Partnership Interests — Real estate joint ventures and other limited partnership interests included in the preceding tables consist of those investments accounted for using the cost method. The remaining carrying value recognized in the consolidated balance sheets represents investments in real estate or real estate joint ventures and other limited partnership interests accounted for using the equity method, which do not meet the definition of financial instruments for which fair value is required to be disclosed.

The estimated fair values for other limited partnership interests and real estate joint ventures accounted for under the cost method are generally based on the Company’s share of the net asset value (“NAV”) as provided in the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments.

Short-term Investments — Certain short-term investments do not qualify as securities and are recognized at amortized cost in the consolidated balance sheets. For these instruments, the Company believes that there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, short-term investments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality and the Company has determined additional adjustment is not required. Short-term investments that meet the definition of a security are recognized at estimated fair value in the consolidated balance sheets in the same manner described above for similar instruments that are classified within captions of other major investment classes.

Other Invested Assets — Other invested assets in the consolidated balance sheets are principally comprised of freestanding derivatives with positive estimated fair values, investments in tax credit partnerships and joint venture investments. Investments in tax credit partnerships and joint venture investments, which are accounted for under the equity method or under the effective yield method, are not financial instruments subject to fair value disclosure. Accordingly, they have been excluded from the preceding table.

The estimated fair value of derivatives — with positive and negative estimated fair values — is described in the section labeled “Derivatives” which follows.

Cash and Cash Equivalents — Due to the short-term maturities of cash and cash equivalents, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value generally approximates carrying value. In light of recent market conditions, cash and cash equivalent instruments have been monitored to ensure there is sufficient demand and maintenance of issuer credit quality, or sufficient solvency in the case of depository institutions, and the Company has determined additional adjustment is not required.

Accrued Investment Income — Due to the short term until settlement of accrued investment income, the Company believes there is minimal risk of material changes in interest rates or credit of the issuer such that estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the credit quality of the issuers and has determined additional adjustment is not required.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Premiums, Reinsurance and Other Receivables — Premiums, reinsurance and other receivables in the consolidated balance sheets are principally comprised of premiums due and unpaid for insurance contracts, amounts recoverable under reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions, amounts receivable for securities sold but not yet settled, fees and general operating receivables and embedded derivatives related to the ceded reinsurance of certain variable annuity guarantees.

Premiums receivable and those amounts recoverable under reinsurance treaties determined to transfer sufficient risk are not financial instruments subject to disclosure and thus have been excluded from the amounts presented in the preceding table. Amounts recoverable under ceded reinsurance contracts, which the Company has determined do not transfer sufficient risk such that they are accounted for using the deposit method of accounting, have been included in the preceding table with the estimated fair value determined as the present value of expected future cash flows under the related contracts discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty.

The amounts on deposit for derivative settlements essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. In light of recent market conditions, the Company has monitored the solvency position of the financial institutions and has determined additional adjustments are not required.

Embedded derivatives recognized in connection with ceded reinsurance of certain variable annuity guarantees are included in this caption in the consolidated financial statements but excluded from this caption in the preceding table as they are separately presented. The estimated fair value of these embedded derivatives is described in the section labeled “Embedded Derivatives within Asset and Liability Host Contracts” which follows.

Separate Account Assets — Separate account assets are carried at estimated fair value and reported as a summarized total on the consolidated balance sheets. The estimated fair value of separate account assets are based on the estimated fair value of the underlying assets owned by the separate account. Assets within the Company’s separate accounts include: mutual funds, fixed maturity securities, equity securities, other limited partnership interests, short-term investments and cash and cash equivalents. The estimated fair value of mutual funds is based on NAVs provided by the fund manager. The estimated fair values of fixed maturity securities, equity securities, short-term investments and cash and cash equivalents held by separate accounts are determined on a basis consistent with the methodologies described herein for similar financial instruments held within the general account. Other limited partnership interests are valued giving consideration to the value of the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest.

Policyholder Account Balances — Policyholder account balances in the tables above include investment contracts. Embedded derivatives on investment contracts and certain variable annuity guarantees accounted for as embedded derivatives are included in this caption in the consolidated financial statements but excluded from this caption in the tables above as they are separately presented therein. The remaining difference between the amounts reflected as policyholder account balances in the preceding table and those recognized in the consolidated balance sheets represents those amounts due under contracts that satisfy the definition of insurance contracts and are not considered financial instruments.

The investment contracts primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts. The fair values for these investment contracts are estimated by discounting best estimate future cash flows using current market risk-free interest rates and adding a spread for the Company’s own credit which is determined using publicly available information relating to the Company’s debt, as well as its claims paying ability.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Payables for Collateral Under Securities Loaned and Other Transactions — The estimated fair value for payables for collateral under securities loaned and other transactions approximates carrying value. The related agreements to loan securities are short-term in nature such that the Company believes there is limited risk of a material change in market interest rates. Additionally, because borrowers are cross-collateralized by the borrowed securities, the Company believes no additional consideration for changes in its own credit are necessary.

Affiliated Long-term Debt — The estimated fair value of affiliated long-term debt is generally determined by discounting expected future cash flows using market rates currently available for debt with similar terms, remaining maturities and reflecting the credit risk of the Company including inputs, when available, from actively traded debt of other companies with similar types of borrowing arrangements.

Long-term Debt Obligations of Consolidated Securitization Entities — The estimated fair value of the long-term debt obligations of the Company’s consolidated securitization entities are based on their quoted prices when traded as assets in active markets, or if not available, based on market standard valuation methodologies, consistent with the Company’s methods and assumptions used to estimate the fair value of comparable fixed maturity securities.

Other Liabilities — Other liabilities in the consolidated balance sheets are principally comprised of freestanding derivatives with negative estimated fair values; taxes payable; obligations for employee-related benefits; interest due on the Company’s debt obligations; amounts due for securities purchased but not yet settled; funds withheld under ceded reinsurance contracts and, when applicable, their associated embedded derivatives; and general operating accruals and payables.

The estimated fair value of derivatives — with positive and negative estimated fair values — and embedded derivatives within asset and liability host contracts are described in the sections labeled “Derivatives” and “Embedded Derivatives within Asset and Liability Host Contracts” which follow.

The remaining other amounts included in the table above reflect those other liabilities that satisfy the definition of financial instruments subject to disclosure. These items consist primarily of interest payable; amounts due for securities purchased but not yet settled; and funds withheld under reinsurance contracts recognized using the deposit method of accounting. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which were not materially different from the recognized carrying values.

Separate Account Liabilities — Separate account liabilities included in the table above represent those balances due to policyholders under contracts that are classified as investment contracts. The difference between the separate account liabilities reflected above and the amounts presented in the consolidated balance sheets represents those contracts classified as insurance contracts which do not satisfy the criteria of financial instruments for which estimated fair value is to be disclosed.

Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance and certain contracts that provide for benefit funding.

Separate account liabilities, whether related to investment or insurance contracts, are recognized in the consolidated balance sheets at an equivalent summary total of the separate account assets. Separate account assets, which equal net deposits, net investment income and realized and unrealized capital gains and losses, are fully offset by corresponding amounts credited to the contractholders’ liability which is reflected in separate account liabilities. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described above, the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Derivatives — The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives or through the use of pricing models for over-the-counter derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that are assumed to be consistent with what other market participants would use when pricing the instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk (including the counterparties to the contract), volatility, liquidity and changes in estimates and assumptions used in the pricing models.

The significant inputs to the pricing models for most over-the-counter derivatives are inputs that are observable in the market or can be derived principally from or corroborated by observable market data. Significant inputs that are observable generally include: interest rates, foreign currency exchange rates, interest rate curves, credit curves and volatility. However, certain over-the-counter derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from or corroborated by observable market data. Significant inputs that are unobservable generally include: independent broker quotes, credit correlation assumptions, references to emerging market currencies and inputs that are outside the observable portion of the interest rate curve, credit curve, volatility or other relevant market measure. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and are assumed to be consistent with what other market participants would use when pricing such instruments.

The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all over-the-counter derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its derivative positions using the standard swap curve which includes a spread over the risk free rate. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with the standard swap curve. As the Company and its significant derivative counterparties consistently execute trades at such pricing levels, additional credit risk adjustments are not currently required in the valuation process. The Company’s ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. The evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period.

Most inputs for over-the-counter derivatives are mid market inputs but, in certain cases, bid level inputs are used when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company’s derivatives and could materially affect net income.

Embedded Derivatives within Asset and Liability Host Contracts — Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, and embedded derivatives related to funds withheld on ceded reinsurance. Embedded derivatives are recorded in the financial statements at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefit guarantees. GMWBs, GMABs and certain GMIBs are embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net investment gains (losses). These embedded derivatives are classified within policyholder account balances. The fair value for these guarantees are estimated using the present value of future benefits minus the present value of future fees using actuarial and capital market assumptions related to the projected cash flows over the expected lives of the contracts. A risk neutral valuation methodology is used under which the cash flows from the guarantees are projected under multiple capital market scenarios using observable risk free rates, currency exchange rates and observable and estimated implied volatilities. The valuation of these guarantees includes an adjustment for the Company’s own

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

credit and risk margins for non-capital market inputs. The Company’s own credit adjustment is determined taking into consideration publicly available information relating to the Company’s debt, as well as its claims paying ability. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in the Company’s own credit standing; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income.

The Company ceded the risk associated with certain of the GMIB, GMAB and GMWB guarantees described in the preceding paragraph to an affiliated reinsurance company. These reinsurance contracts contain embedded derivatives which are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees directly written by the Company.

In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also cedes, to the same affiliated reinsurance company, certain directly written GMIB guarantees that are accounted for as insurance (i.e. not as embedded derivatives) but where the reinsurance contract contains an embedded derivative. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net investment gains (losses). The value of the embedded derivatives on these ceded risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company. Because the direct guarantee is not accounted for at fair value, significant fluctuations in net income may occur as the change in fair value of the embedded derivative on the ceded risk is being recorded in net income without a corresponding and offsetting change in fair value of the direct guarantee.

The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described above in “Fixed Maturity Securities, Equity Securities and Trading Securities” and “Short-term Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities with changes in estimated fair value recorded in net investment gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income.

Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities and Private Corporate Bond Investments — The estimated fair values for mortgage loan commitments and commitments to fund bank credit facilities and private corporate bond investments reflected in the above tables represent the difference between the discounted expected future cash flows using interest rates that incorporate current credit risk for similar instruments on the reporting date and the principal amounts of the original commitments.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Assets and Liabilities Measured at Fair Value

Recurring Fair Value Measurements

The assets and liabilities measured at estimated fair value on a recurring basis, including those items for which the Company has elected the fair value option, are determined as described in the preceding section. These estimated fair values and their corresponding fair value hierarchy are summarized as follows:


	March 31, 2010
	Fair Value Measurements at Reporting Date Using
	Quoted Prices in
	Active Markets for				Significant		Total
	Identical Assets		Significant Other		Unobservable		Estimated
	and Liabilities		Observable Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
	(In millions)

Assets
Fixed maturity securities:
U.S. corporate securities	$	—	$	13,903	$	1,510	$	15,413
Foreign corporate securities		—		6,775		953		7,728
U.S. Treasury and agency securities		4,668		2,735		32		7,435
RMBS		—		5,630		28		5,658
CMBS		—		2,688		48		2,736
ABS		—		1,597		521		2,118
State and political subdivision securities		—		1,235		48		1,283
Foreign government securities		—		747		7		754

Total fixed maturity securities		4,668		35,310		3,147		43,125

Equity securities:
Non-redeemable preferred stock		—		68		242		310
Common stock		85		70		34		189

Total equity securities		85		138		276		499

Trading securities		1,136		7		—		1,143
Short-term investments (1)		467		999		1		1,467
Mortgage loans held by consolidated securitization entities		—		7,065		—		7,065
Derivative assets: (2)
Interest rate contracts		2		636		6		644
Foreign currency contracts		—		567		18		585
Credit contracts		—		10		9		19
Equity market contracts		—		83		17		100

Total derivative assets		2		1,296		50		1,348

Net embedded derivatives within asset host contracts (3)		—		—		405		405
Separate account assets (4)		74		52,394		146		52,614

Total assets	$	6,432	$	97,209	$	4,025	$	107,666

Liabilities
Derivative liabilities: (2)
Interest rate contracts	$	2	$	208	$	—	$	210
Foreign currency contracts		—		72		—		72
Credit contracts		—		26		2		28
Equity market contracts		—		—		10		10

Total derivative liabilities		2		306		12		320

Net embedded derivatives within liability host contracts (3)		—		—		147		147
Long-term debt of consolidated securitization entities		—		7,019		—		7,019

Total liabilities	$	2	$	7,325	$	159	$	7,486

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	December 31, 2009
	Fair Value Measurements at Reporting Date Using
	Quoted Prices in
	Active Markets for				Significant		Total
	Identical Assets		Significant Other		Unobservable		Estimated
	and Liabilities		Observable Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
	(In millions)

Assets
Fixed maturity securities:
U.S. corporate securities	$	—	$	13,793	$	1,605	$	15,398
Foreign corporate securities		—		6,344		994		7,338
U.S. Treasury and agency securities		3,972		2,252		33		6,257
RMBS		—		5,827		25		5,852
CMBS		—		2,572		45		2,617
ABS		—		1,452		537		1,989
State and political subdivision securities		—		1,147		32		1,179
Foreign government securities		—		629		16		645

Total fixed maturity securities		3,972		34,016		3,287		41,275

Equity securities:
Non-redeemable preferred stock		—		48		258		306
Common stock		72		70		11		153

Total equity securities		72		118		269		459

Trading securities		931		7		—		938
Short-term investments (1)		1,057		703		8		1,768
Derivative assets (2)		3		1,410		57		1,470
Net embedded derivatives within asset host contracts (3)		—		—		724		724
Separate account assets (4)		69		49,227		153		49,449

Total assets	$	6,104	$	85,481	$	4,498	$	96,083

Liabilities
Derivative liabilities (2)	$	1	$	336	$	10	$	347
Net embedded derivatives within liability host contracts (3)		—		—		279		279

Total liabilities	$	1	$	336	$	289	$	626


(1)		Short-term investments as presented in the tables above differ from the amounts presented in the consolidated balance sheets because certain short-term investments are not measured at estimated fair value (e.g. time deposits, etc.).

(2)		Derivative assets are presented within other invested assets and derivative liabilities are presented within other liabilities. The amounts are presented gross in the tables above to reflect the presentation in the consolidated balance sheets, but are presented net for purposes of the rollforward in the following tables.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(3)		Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables. Net embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities. At March 31, 2010 and December 31, 2009, equity securities also included embedded derivatives of ($6) million and ($5) million, respectively.

(4)		Separate account assets are measured at estimated fair value. Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets.

The Company has categorized its assets and liabilities into the three-level fair value hierarchy based upon the priority of the inputs to the respective valuation technique. The following summarizes the types of assets and liabilities included within the three-level fair value hierarchy presented in the preceding table.


	Level 1	This category includes most U.S. Treasury and agency fixed maturity securities; exchange-traded common stock; trading securities and certain short-term money market securities. As it relates to derivatives, this level includes exchange-traded equity and interest rate futures. Separate account assets classified within this level are similar in nature to those classified in this level for the general account.

	Level 2	This category includes fixed maturity and equity securities priced principally by independent pricing services using observable inputs. Fixed maturity securities classified as Level 2 include certain U.S. Treasury and agency securities, as well as the majority of U.S. and foreign corporate securities, RMBS, CMBS, state and political subdivision securities, foreign government securities, and ABS. Equity securities classified as Level 2 securities consist principally of common stock and non-redeemable preferred stock where market quotes are available but are not considered actively traded. Short-term investments and trading securities included within Level 2 are of a similar nature to these fixed maturity and equity securities. Mortgage loans included in Level 2 include mortgage loans held by consolidated securitization entities. Mortgage loans held by consolidated securitization entities are priced using the securitization market price of the obligations of the consolidated securitization entities, which are priced principally by independent pricing services using observable inputs. As it relates to derivatives, this level includes all types of derivative instruments utilized by the Company with the exception of exchange-traded futures included within Level 1 and those derivative instruments with unobservable inputs as described in Level 3. Separate account assets classified within this level are generally similar to those classified within this level for the general account, with the exception of certain mutual funds without readily determinable fair values given prices are not published publicly. Long-term debt of consolidated securitization entities included in this level includes obligations priced principally by independent pricing services using observable inputs.

	Level 3	This category includes fixed maturity securities priced principally through independent broker quotations or market standard valuation methodologies using inputs that are not market observable or cannot be derived principally from or corroborated by observable market data. This level primarily consists of less liquid fixed maturity securities with very limited trading activity or where less price transparency exists around the inputs to the valuation methodologies including: U.S. and foreign corporate securities — including below investment grade private placements; CMBS; and ABS — including all of those supported by sub-prime mortgage loans. Equity securities classified as Level 3 securities consist principally of non-redeemable preferred stock and common stock of companies that are privately held or of companies for which there has been very limited trading activity or where less price transparency exists around the inputs to the valuation. Short-term investments included within Level 3 are of a similar nature to these fixed maturity securities. As it relates to derivatives this category includes: swap spreadlocks with maturities which extend beyond

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


		observable periods; equity variance swaps with unobservable volatility inputs or that are priced via independent broker quotations; foreign currency swaps priced through independent broker quotations; interest rate swaps with maturities which extend beyond the observable portion of the yield curve; credit default swaps based upon baskets of credits having unobservable credit correlations; equity options with unobservable volatility inputs; implied volatility swaps with unobservable volatility inputs; credit forwards having unobservable repurchase rates and interest rate caps referencing unobservable yield curves and/or which include liquidity and volatility adjustments. Separate account assets classified within this level are generally similar to those classified within this level for the general account; however, they also include other limited partnership interests. Embedded derivatives classified within this level include embedded derivatives associated with certain variable annuity guarantees, as well as those on the cession of risks associated with those guarantees to affiliates and embedded derivatives related to funds withheld on ceded reinsurance.

Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities. A description of the significant valuation techniques and inputs to the determination of estimated fair value for the more significant asset and liability classes measured at fair value on a recurring basis is as follows:

The Company determines the estimated fair value of its investments using primarily the market approach and the income approach. The use of quoted prices for identical assets and matrix pricing or other similar techniques are examples of market approaches, while the use of discounted cash flow methodologies is an example of the income approach. The Company attempts to maximize the use of observable inputs and minimize the use of unobservable inputs in selecting whether the market or income approach is used.

While certain investments have been classified as Level 1 from the use of unadjusted quoted prices for identical investments supported by high volumes of trading activity and narrow bid/ask spreads, most investments have been classified as Level 2 because the significant inputs used to measure the fair value on a recurring basis of the same or similar investment are market observable or can be corroborated using market observable information for the full term of the investment. Level 3 investments include those where estimated fair values are based on significant unobservable inputs that are supported by little or no market activity and may reflect our own assumptions about what factors market participants would use in pricing these investments.

Level 1 Measurements:

Fixed maturity securities — Comprised of U.S. Treasury securities. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Equity securities — common stock — Comprised of exchange-traded U.S. and international common stock. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Trading securities — Comprised of securities that are similar in nature to the fixed maturity and equity securities referred to above. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Short-term investments — Comprised of short-term money market securities, including U.S. Treasury bills. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Derivative assets and derivative liabilities — Comprised of exchange-traded equity and interest rate futures. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Separate account assets — Comprised of securities that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above; and certain exchange-traded derivatives, including

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

financial futures and owned options. Valuation based on unadjusted quoted prices in active markets that are readily and regularly available.

Level 2 Measurements:

U.S. corporate and foreign corporate fixed maturity securities — These securities are principally valued using the market and income approaches. Valuation based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques that use standard market observable inputs such as a benchmark yields, spreads off benchmark yields, new issuances, issuer rating, duration, and trades of identical or comparable securities. Investment grade privately placed securities are valued using a discounted cash flow methodologies using standard market observable inputs, and inputs derived from, or corroborated by, market observable data including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues that incorporate the credit quality and industry sector of the issuer.

Structured securities comprised of RMBS, CMBS and ABS fixed maturity securities — These securities are principally valued using the market approach. Valuation based primarily on matrix pricing or other similar techniques using standard market inputs including spreads for actively traded securities, spreads off benchmark yields, expected prepayment speeds and volumes, current and forecasted loss severity, rating, weighted average coupon, weighted average maturity, average delinquency rates, geographic region, debt-service coverage ratios and issuance-specific information including: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans, etc.

U.S. Treasury and agency fixed maturity securities — These securities are principally valued using the market approach. Valuation based primarily on quoted prices in markets that are not active, or using matrix pricing or other similar techniques using standard market observable inputs such as benchmark U.S. Treasury yield curve, the spread off the U.S. Treasury curve for the identical security and comparable securities that are actively traded.

Foreign government and state and political subdivision fixed maturity securities — These securities are principally valued using the market approach. Valuation based primarily on matrix pricing or other similar techniques using standard market observable inputs including benchmark U.S. Treasury or other yields, issuer ratings, broker-dealer quotes, issuer spreads and reported trades of similar securities, including those within the same sub-sector or with a similar maturity or credit rating.

Equity securities — common and non-redeemable preferred stock — These securities are principally valued using the market approach. Valuation is based principally on observable inputs including quoted prices in markets that are not considered active.

Trading securities and short-term investments — Trading securities and short-term investments are of a similar nature to Level 2 fixed maturity and equity securities; accordingly the valuation techniques and significant market standard observable inputs used in their valuation are similar to those described above for fixed maturity and equity securities.

Mortgage loans of consolidated securitization entities — These loans are principally valued using the market approach. The principal market for these commercial loan portfolios is the securitization market. The Company uses the quoted securitization market price of the obligations of the consolidated securitization entities to determine the estimated fair value of these commercial loan portfolios.

Non-option based interest rate derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, London Inter-Bank Offer Rate (“LIBOR”) basis curves, and repurchase rates.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Non-option based foreign currency derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves, currency spot rates, and cross currency basis curves.

Non-option based equity market derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, spot equity index levels, and dividend yield curves.

Option based equity market derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, spot equity index levels, dividend yield curves, and equity volatility.

Separate account assets — These assets are comprised of securities that are similar in nature to the fixed maturity securities, equity securities, short-term investments and derivatives referred to above. Also included are certain mutual funds and hedge funds with non-readily determinable fair values given prices are not published publicly. Valuation of the mutual funds and hedge funds is based upon quoted prices or reported NAVs provided by the fund managers.

Level 3 Measurements:

In general, investments classified within Level 3 use many of the same valuation techniques and inputs as described above. However, if key inputs are unobservable, or if the investments are less liquid and there is very limited trading activity, the investments are generally classified as Level 3. The use of independent non-binding broker quotations to value investments generally indicates there is a lack of liquidity or the general lack of transparency in the process to develop the valuation estimates generally causing these investments to be classified in Level 3.

U.S. corporate and foreign corporate securities — These securities, including financial services industry hybrid securities classified within fixed maturity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing or other similar techniques that utilize unobservable inputs or cannot be derived principally from, or corroborated by, observable market data, including illiquidity premiums and spread adjustments to reflect industry trends or specific credit-related issues. Valuations may be based on independent non-binding broker quotations. Generally, below investment grade privately placed or distressed securities included in this level are valued using discounted cash flow methodologies which rely upon significant, unobservable inputs and inputs that cannot be derived principally from, or corroborated by, observable market data.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Structured securities comprised of RMBS, CMBS and ABS fixed maturity securities — These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques that utilize inputs that are unobservable or cannot be derived principally from, or corroborated by, observable market data, or are based on independent non-binding broker quotations. Below investment grade securities and ABS supported by sub-prime mortgage loans included in this level are valued based on inputs including quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, and certain of these securities are valued based on independent non-binding broker quotations.

Foreign government and state and political subdivision fixed maturity securities — These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques, however these securities are less liquid and certain of the inputs are based on very limited trading activity.

Equity securities — common and non-redeemable preferred stock — These securities, including privately held securities and financial services industry hybrid securities classified within equity securities, are principally valued using the market and income approaches. Valuations are based primarily on matrix pricing or other similar techniques using inputs such as comparable credit rating and issuance structure. Equity securities valuations determined with discounted cash flow methodologies use inputs such as earnings multiples based on comparable public companies, and industry-specific non-earnings based multiples. Certain of these securities are valued based on independent non-binding broker quotations.

Non-option based interest rate derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based interest rate derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves.

Option based interest rate derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which generally utilize the same inputs as described in the section above for Level 2 measurements of option based interest rate derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves, and interest rate volatility.

Non-option based foreign currency derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based foreign currency derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves and cross currency basis curves. Certain of these derivatives are valued based on independent non-binding broker quotations.

Non-option based credit derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based credit derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include credit correlation, repurchase rates and the extrapolation beyond observable limits of the swap yield curve and credit curves. Certain of these derivatives are valued based on independent non-binding broker quotations.

Non-option based equity market derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which generally utilize the same inputs as described in the section above for Level 2 measurements of non-option based equity market derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves.

Option based equity market derivative assets and derivative liabilities — These derivatives are principally valued using an income approach. Valuations are based on option pricing models, which generally utilize the same inputs as described in the section above for Level 2 measurements of option based equity market derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves and equity volatility.

Guaranteed minimum benefit guarantees — These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, own credit spreads and cost of capital for purposes of calculating the risk margin.

Reinsurance ceded on certain guarantees minimum benefit guarantees — These embedded derivatives are principally valued using an income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curve, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curve and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, counterparty credit spreads and cost of capital for purposes of calculating the risk margin.

Embedded derivatives within funds withheld at interest related to certain ceded reinsurance — These derivatives are principally valued using an income approach. Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data.

Separate account assets — These securities consist of fixed maturity securities, equity securities and derivatives referred to above. Separate account assets within this Level also include other limited partnership interests. The estimated fair value other limited partnership interests are valued giving consideration to the value of

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

the underlying holdings of the partnerships and by applying a premium or discount, if appropriate, for factors such as liquidity, bid/ask spreads, the performance record of the fund manager or other relevant variables which may impact the exit value of the particular partnership interest.

A rollforward of all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs for the three months ended March 31, 2010 and 2009 is as follows:


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Total Realized/Unrealized
			Gains (Losses) included in:					Purchases,
	Balance,					Other		Sales,
	Beginning of					Comprehensive		Issuances and			Transfer Into		Transfer Out			Balance,
	Period		Earnings (1), (2)			Income (Loss)		Settlements (3)			Level 3 (4)		of Level 3 (4)			End of Period
	(In millions)

For the Three Months Ended March 31, 2010:
Fixed maturity securities:
U.S. corporate securities	$	1,605	$	4		$	39	$	(95	)	$	20	$	(63	)	$	1,510
Foreign corporate securities		994		(7	)		46		(33	)		10		(57	)		953
U.S. Treasury and agency securities		33		—			—		(1	)		—		—			32
RMBS		25		—			1		8			2		(8	)		28
CMBS		45		(1	)		5		—			26		(27	)		48
ABS		537		—			17		14			5		(52	)		521
State and political subdivision securities		32		—			7		9			—		—			48
Foreign government securities		16		—			—		—			—		(9	)		7

Total fixed maturity securities	$	3,287	$	(4	)	$	115	$	(98	)	$	63	$	(216	)	$	3,147

Equity securities:
Non-redeemable preferred stock	$	258	$	—		$	6	$	(22	)	$	—	$	—		$	242
Common stock		11		—			8		17			—		(2	)		34

Total equity securities	$	269	$	—		$	14	$	(5	)	$	—	$	(2	)	$	276

Short-term investments	$	8	$	—		$	—	$	(7	)	$	—	$	—		$	1
Net derivatives: (5)
Interest rate contracts	$	2	$	4		$	—	$	—		$	—	$	—		$	6
Foreign currency contracts		23		(5	)		—		—			—		—			18
Credit contracts		4		—			2		1			—		—			7
Equity market contracts		18		(11	)		—		—			—		—			7

Total net derivatives	$	47	$	(12	)	$	2	$	1		$	—	$	—		$	38

Separate account assets (6)	$	153	$	(1	)	$	—	$	(1	)	$	—	$	(5	)	$	146
Net embedded derivatives (7)	$	445	$	(210	)	$	—	$	23		$	—	$	—		$	258

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Total Realized/Unrealized
			Gains (Losses) included in:						Purchases,
	Balance,					Other			Sales,			Transfer In			Balance,
	Beginning					Comprehensive			Issuances and			and/or Out			End
	of Period		Earnings (1), (2)			Income (Loss)			Settlements (3)			of Level 3 (4)			of Period
						(In millions)

For the Three Months Ended March 31, 2009:
Fixed maturity securities:
U.S. corporate securities	$	1,401	$	(6	)	$	(155	)	$	(21	)	$	318		$	1,537
Foreign corporate securities		926		(30	)		(28	)		(37	)		(72	)		759
U.S. Treasury and agency securities		36		—			(1	)		(2	)		—			33
RMBS		62		(3	)		7			(18	)		—			48
CMBS		116		—			(11	)		(6	)		—			99
ABS		558		(22	)		(36	)		(46	)		19			473
State and political subdivision securities		24		—			—			3			—			27
Foreign government securities		10		—			(1	)		—			6			15

Total fixed maturity securities	$	3,133	$	(61	)	$	(225	)	$	(127	)	$	271		$	2,991

Equity securities:
Non-redeemable preferred stock	$	318	$	(51	)	$	(50	)	$	(1	)	$	—		$	216
Common stock		8		—			—			—			—			8

Total equity securities	$	326	$	(51	)	$	(50	)	$	(1	)	$	—		$	224

Trading securities	$	50	$	—		$	—		$	(50	)	$	—		$	—
Short-term investments	$	—	$	—		$	—		$	1		$	—		$	1
Net derivatives (5)	$	309	$	17		$	—		$	2		$	—		$	328
Separate account assets (6)	$	159	$	(15	)	$	—		$	(3	)	$	1		$	142
Net embedded derivatives (7)	$	657	$	(217	)	$	—		$	44		$	—		$	484


(1)		Amortization of premium/discount is included within net investment income which is reported within the earnings caption of total gains (losses). Impairments charged to earnings are included within net investment gains (losses) which are reported within the earnings caption of total gains (losses). Lapses associated with embedded derivatives are included with the earnings caption of total gains (losses).

(2)		Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.

(3)		The amount reported within purchases, sales, issuances and settlements is the purchase/issuance price (for purchases and issuances) and the sales/settlement proceeds (for sales and settlements) based upon the actual date purchased/issued or sold/settled. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. For embedded derivatives, attributed fees are included within this caption along with settlements, if any.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


(4)		Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers in and/or out of Level 3 occurred at the beginning of the period. Items transferred in and out in the same period are excluded from the rollforward.

(5)		Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.

(6)		Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities.

(7)		Embedded derivative assets and liabilities are presented net for purposes of the rollforward.

Transfers between Levels 1 and 2 — During the three months ended March 31, 2010, transfers between Levels 1 and 2 were not significant.

Transfers in or out of Level 3 — Overall, transfers in and/or out of Level 3 are attributable to a change in the observability of inputs. Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and transparency to underlying inputs cannot be observed, current prices are not available, and when there are significant variances in quoted prices. Assets and liabilities are transferred out of Level 3 when circumstances change such that significant inputs can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Transfers in and/or out of any level are assumed to occur at the beginning of the period. Significant transfers in and/or out of Level 3 assets and liabilities for the three months ended March 31, 2010 are summarized as described below.

During the three months ended March 31, 2010, fixed maturity securities transfers into Level 3 of $63 million resulted primarily from current market conditions characterized by a lack of trading activity, decreased liquidity and credit ratings downgrades (e.g., from investment grade to below investment grade). These current market conditions have resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated fair value principally for certain CMBS and U.S. and foreign corporate securities.

During the three months ended March 31, 2010, fixed maturity securities transfers out of Level 3 of $216 million and separate account assets transfers out of Level 3 of $5 million resulted primarily from increased transparency of both new issuances that subsequent to issuance and establishment of trading activity, became priced by pricing services and existing issuances that, over time, the Company was able to corroborate pricing received from independent pricing services with observable inputs, primarily for certain U.S. and foreign corporate securities, ABS and CMBS.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The tables below summarize both realized and unrealized gains and losses for the three months ended March 31, 2010 and 2009 due to changes in estimated fair value recorded in earnings for Level 3 assets and liabilities:


	Total Gains and Losses
	Classification of Realized/Unrealized
	Gains (Losses) included in Earnings
	Net		Net
	Investment		Investment
	Income		Gains (Losses)			Total
			(In millions)

For the Three Months Ended March 31, 2010:
Fixed maturity securities:
U.S. corporate securities	$	2	$	2		$	4
Foreign corporate securities		—		(7	)		(7	)
RMBS		—		—			—
CMBS		—		(1	)		(1	)
ABS		—		—			—

Total fixed maturity securities	$	2	$	(6	)	$	(4	)

Equity securities:
Non-redeemable preferred stock	$	—	$	—		$	—

Total equity securities	$	—	$	—		$	—

Net derivatives:
Interest rate contracts	$	—	$	4		$	4
Foreign currency contracts		—		(5	)		(5	)
Credit contracts		—		—			—
Equity market contracts		—		(11	)		(11	)

Total net derivatives	$	—	$	(12	)	$	(12	)

Net embedded derivatives	$	—	$	(210	)	$	(210	)

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

The tables below summarize the portion of unrealized gains and losses recorded in earnings for the three months ended March 31, 2010 and 2009 for Level 3 assets and liabilities that were still held at March 31, 2010 and 2009, respectively.


	Changes in Unrealized Gains (Losses)
	Relating to Assets and Liabilities Held at
	March 31, 2010
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
				(In millions)

For the Three Months Ended March 31, 2010:
Fixed maturity securities:
U.S. corporate securities	$	2		$	(4	)	$	(2	)
Foreign corporate securities		(1	)		(4	)		(5	)
CMBS		—			(1	)		(1	)
ABS		—			—			—

Total fixed maturity securities	$	1		$	(9	)	$	(8	)

Equity securities:
Non-redeemable preferred stock	$	—		$	—		$	—

Total equity securities	$	—		$	—		$	—

Net derivatives:
Interest rate contracts	$	—		$	4		$	4
Foreign currency contracts		—			(5	)		(5	)
Credit contracts		—			—			—
Equity market contracts		—			(11	)		(11	)

Total net derivatives	$	—		$	(12	)	$	(12	)

Net embedded derivatives	$	—		$	(209	)	$	(209	)

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Changes in Unrealized Gains (Losses)
	Relating to Assets and Liabilities Held at
	March 31, 2009
	Net			Net
	Investment			Investment
	Income			Gains (Losses)			Total
				(In millions)

For the Three Months Ended March 31, 2009:
Fixed maturity securities:
U.S. corporate securities	$	1		$	(6	)	$	(5	)
Foreign corporate securities		(1	)		(30	)		(31	)
CMBS		1			(1	)		—
ABS		—			(22	)		(22	)

Total fixed maturity securities	$	1		$	(59	)	$	(58	)

Equity securities:
Non-redeemable preferred stock	$	—		$	(31	)	$	(31	)

Total equity securities	$	—		$	(31	)	$	(31	)

Net derivatives	$	—		$	17		$	17
Net embedded derivatives	$	—		$	(220	)	$	(220	)

Fair Value Option — Consolidated Securitization Entities

As discussed in Note 1, upon the adoption of new guidance effective January 1, 2010, the Company has elected fair value accounting for commercial mortgage loans held by and the related long-term debt of the consolidated securitization entities. The following table presents these commercial mortgage loans carried under the fair value option at:


	March 31, 2010
	(In millions)

Unpaid principal balance	$	7,138
Excess of unpaid principal balance over estimated fair value		(73	)

Carrying value at estimated fair value	$	7,065

The following table presents the long-term debt carried under the fair value option related to the commercial mortgage loans at:


	March 31, 2010
	(In millions)

Contractual principal balance	$	7,036
Excess of contractual principal balance over estimated fair value		(17	)

Carrying value at estimated fair value	$	7,019

Interest income on commercial mortgage loans held by consolidated securitization entities is recorded in net investment income. Interest expense on long-term debt of consolidated securitization entities is recorded in other expenses. Gains and losses from initial measurement, subsequent changes in estimated fair value and gains or losses on sales of both the commercial mortgage loans and long-term debt are recognized in net investment gains (losses), which is summarized in Note 2 — “Investments — Net Investment Gains (Losses).”

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Non-Recurring Fair Value Measurements

Certain assets are measured at estimated fair value on a non-recurring basis and are not included in the tables above. The amounts below relate to certain investments measured at estimated fair value during the period and still held as of the reporting dates.


	For the Three Months Ended March 31,
	2010							2009
			Estimated							Estimated
	Carrying		Fair					Carrying		Fair
	Value Prior to		Value After					Value Prior to		Value After
	Impairment		Impairment		Gains (Losses)			Impairment		Impairment		Gains (Losses)
					(In millions)

Mortgage loans (1)	$	31	$	23	$	(8	)	$	—	$	—	$	—
Other limited partnership interests (2)	$	—	$	—	$	—		$	69	$	21	$	(48	)
Real estate joint ventures (3)	$	18	$	2	$	(16	)	$	—	$	—	$	—


(1)		Mortgage Loans — The impaired mortgage loans presented above were written down to their estimated fair values at the date the impairments were recognized. Estimated fair values for impaired mortgage loans are based on observable market prices or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, on the estimated fair value of the underlying collateral, or the present value of the expected future cash flows. Impairments to estimated fair value represent non-recurring fair value measurements that have been categorized as Level 3 due to the lack of price transparency inherent in the limited markets for such mortgage loans.

(2)		Other Limited Partnership Interests — The impaired investments presented above were accounted for using the cost basis. Impairments on these cost basis investments were recognized at estimated fair value determined from information provided in the financial statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for such investments. This category includes several private equity and debt funds that typically invest primarily in a diversified pool of investments across certain investment strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; below investment grade debt and mezzanine debt funds. The estimated fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’ capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of the funds, and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were less than $1 million at March 31, 2010.

(3)		Real Estate Joint Ventures — The impaired investments presented above were accounted for using the cost basis. Impairments on these cost basis investments were recognized at estimated fair value determined from information provided in the financial statements of the underlying entities in the period in which the impairment was incurred. These impairments to estimated fair value represent non-recurring fair value measurements that have been classified as Level 3 due to the limited activity and price transparency inherent in the market for such investments. This category includes several real estate funds that typically invest primarily in commercial real estate. The estimated fair values of these investments have been determined using the NAV of the Company’s ownership interest in the partners’ capital. Distributions from these investments will be generated from investment gains, from operating income from the underlying investments of the funds, and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next 2 to 10 years. Unfunded commitments for these investments were $10 million as of March 31, 2010.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


5.	Contingencies, Commitments and Guarantees

Contingencies

Litigation

The Company is a defendant in a number of litigation matters. In some of the matters, large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrate to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Thus, unless stated below, the specific monetary relief sought is not noted.

Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be inherently impossible to ascertain with any degree of certainty. Inherent uncertainties can include how fact finders will view individually and in their totality documentary evidence, the credibility and effectiveness of witnesses’ testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law.

On a quarterly and annual basis, the Company reviews relevant information with respect to litigation and contingencies to be reflected in the Company’s consolidated financial statements. The review includes senior legal and financial personnel. Estimates of possible losses or ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. It is possible that some of the matters could require the Company to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at March 31, 2010.

The Company has faced numerous claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. The Company continues to vigorously defend against the claims in all pending matters. Some sales practices claims have been resolved through settlement. Other sales practices claims have been won by dispositive motions or have gone to trial. Most of the current cases seek substantial damages, including in some cases punitive and treble damages and attorneys’ fees. Additional litigation relating to the Company’s marketing and sales of individual life insurance, annuities, mutual funds or other products may be commenced in the future.

Travelers Ins. Co., et al. v. Banc of America Securities LLC (S.D.N.Y., filed December 13, 2001). On January 6, 2009, after a jury trial, the district court entered a judgment in favor of The Travelers Insurance Company, now known as MetLife Insurance Company of Connecticut, in the amount of approximately $42 million in connection with securities and common law claims against the defendant. On May 14, 2009, the district court issued an opinion and order denying the defendant’s post judgment motion seeking a judgment in its favor or, in the alternative, a new trial. On June 3, 2009, the defendant filed a notice of appeal from the January 6, 2009 judgment and the May 14, 2009 opinion and order. As it is possible that the judgment could be affected during appellate practice, and the Company has not collected any portion of the judgment, the Company has not recognized any award amount in its consolidated financial statements.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

A former Tower Square Securities financial services representative is alleged to have misappropriated funds from customers. The Illinois Securities Division, the U.S. Postal Inspector, the Internal Revenue Service, FINRA and the U.S. Attorney’s Office are conducting inquiries.

Various litigation, claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company’s consolidated financial statements, have arisen in the course of the Company’s business, including, but not limited to, in connection with its activities as an insurer, employer, investor, investment advisor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.

It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses. In some of the matters referred to previously, large and/or indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an adverse outcome in certain cases could have a material adverse effect upon the Company’s financial position, based on information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material adverse effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.

Commitments

Commitments to Fund Partnership Investments

The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded commitments were $1.4 billion and $1.5 billion at March 31, 2010 and December 31, 2009, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years.

Mortgage Loan Commitments

The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $264 million and $131 million at March 31, 2010 and December 31, 2009, respectively.

Commitments to Fund Bank Credit Facilities and Private Corporate Bond Investments

The Company commits to lend funds under bank credit facilities and private corporate bond investments. The amounts of these unfunded commitments were $420 million and $445 million at March 31, 2010 and December 31, 2009, respectively.

Other Commitments

The Company has entered into collateral arrangements with affiliates, which require the transfer of collateral in connection with secured demand notes. The Company had agreed to fund up to $126 million of cash upon the request by these affiliates and had transferred collateral consisting of various securities with a fair market value of $158 million to custody accounts to secure the notes at both March 31, 2010 and December 31, 2009. Each of these affiliates is permitted by contract to sell or repledge this collateral.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Guarantees

The Company has provided a guarantee on behalf of MetLife International Insurance Company, Ltd. (“MLII”), a former affiliate, that is triggered if MLII cannot pay claims because of insolvency, liquidation or rehabilitation. Life insurance coverage in-force, representing the maximum potential obligation under this guarantee, was $322 million at both March 31, 2010 and December 31, 2009. The Company does not hold any collateral related to this guarantee, but has recorded a liability of $1 million that was based on the total account value of the guaranteed policies plus the amounts retained per policy at both March 31, 2010 and December 31, 2009. The remainder of the risk was ceded to external reinsurers.


6.	Other Expenses

Information on other expenses is as follows:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Compensation	$	44		$	31
Commissions		219			200
Interest and debt issue costs		125			20
Affiliated interest costs on ceded reinsurance		33			9
Capitalization of DAC		(230	)		(227	)
Amortization of DAC and VOBA		64			76
Rent		1			1
Insurance tax		10			10
Other		153			138

Total other expenses	$	419		$	258

Interest and Debt Issue Costs

Includes interest expense related to consolidated securitization entities of $103 million and $0, for the three months ended March 31, 2010 and 2009, respectively (see Note 2), and interest expense on tax audits of $5 million and $0, for the three months ended March 31, 2010 and 2009, respectively.

Affiliated Expenses

See Note 8 for discussion of affiliated expenses included in the table above.


7.	Business Segment Information

The Company’s business is currently divided into three operating segments. The Company’s U.S. Business operations consists of the Retirement Products, Corporate Benefit Funding and Insurance Products segments. In addition, the Company reports certain of its results of operations in Corporate & Other.

Retirement Products offers asset accumulation and income products, including a wide variety of annuities. Corporate Benefit Funding offers pension risk solutions, structured settlements, stable value and investment products and other benefit funding products. Insurance Products offers a broad range of protection products and services to individuals, corporations and other institutions, and is organized into two distinct businesses: Individual

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Life and Non-Medical Health. Individual Life includes variable life, universal life, term life and whole life insurance products. Non-Medical Health includes individual disability insurance products.

Corporate & Other contains the excess capital not allocated to the business segments, various domestic and international start-up entities and run-off business, the Company’s ancillary international operations, interest expense related to the majority of the Company’s outstanding debt and expenses associated with certain legal proceedings and income tax audit issues. Corporate & Other also includes the elimination of intersegment amounts.

Operating earnings is the measure of segment profit or loss the Company uses to evaluate segment performance and allocate resources. Consistent with GAAP accounting guidance for segment reporting, it is the Company’s measure of segment performance reported below. Operating earnings does not equate to income (loss) from continuing operations, net of income tax, or net income (loss) as determined in accordance with GAAP and should not be viewed as a substitute for those GAAP measures. The Company believes the presentation of operating earnings herein as we measure it for management purposes enhances the understanding of its performance by highlighting the results from operations and the underlying profitability drivers of the businesses.

Operating earnings is defined as operating revenues less operating expenses, net of income tax.

Operating revenues is defined as GAAP revenues (i) less net investment gains (losses), (ii) less amortization of unearned revenue related to net investment gains (losses), (iii) plus scheduled periodic settlement payments on derivative instruments that are hedges of investments but do not qualify for hedge accounting treatment, (iv) plus income from discontinued real estate operations, if applicable, and (v) plus, for operating joint ventures reported under the equity method of accounting, the aforementioned adjustments and those identified in the definition of operating expenses, net of income tax, if applicable to these joint ventures.

Operating expenses is defined as GAAP expenses (i) less changes in policyholder benefits associated with asset value fluctuations related to experience-rated contractholder liabilities, (ii) less costs related to business combinations (since January 1, 2009), (iii) less amortization of DAC and VOBA related to net investment gains (losses), and (iv) plus scheduled periodic settlement payments on derivative instruments that are hedges of policyholder account balances but do not qualify for hedge accounting treatment.

In addition, operating revenues and operating expenses do not reflect the consolidation of certain securitization vehicles that are VIEs as required under GAAP.

Set forth in the tables below is certain financial information with respect to the Company’s segments, as well as Corporate & Other for the three months ended March 31, 2010 and 2009. The accounting policies of the segments are the same as those of the Company, except for the method of capital allocation and the accounting for gains (losses) from intercompany sales, which are eliminated in consolidation. Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife’s businesses. As a part of the economic capital process, a portion of net investment income is credited to the segments based on the level of allocated equity.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Operating Earnings
				Corporate
	Retirement			Benefit			Insurance			Corporate									Total
Three Months Ended March 31, 2010	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)

Revenues
Premiums	$	58		$	371		$	28		$	(2	)	$	455		$	—		$	455
Universal life and investment-type product policy fees		227			8			130			5			370			(1	)		369
Net investment income		229			269			114			83			695			95			790
Other revenues		76			1			33			—			110			—			110
Net investment gains (losses)		—			—			—			—			—			(271	)		(271	)

Total revenues		590			649			305			86			1,630			(177	)		1,453

Expenses
Policyholder benefits and claims		95			499			84			1			679			15			694
Interest credited to policyholder account balances		182			45			58			45			330			(14	)		316
Capitalization of DAC		(120	)		(1	)		(98	)		(11	)		(230	)		—			(230	)
Amortization of DAC and VOBA		93			—			71			1			165			(101	)		64
Interest expense		—			—			—			17			17			103			120
Other expenses		219			9			208			29			465			—			465

Total expenses		469			552			323			82			1,426			3			1,429

Provision for income tax expense (benefit)		42			34			(7	)		(14	)		55			(63	)		(8	)

Operating earnings	$	79		$	63		$	(11	)	$	18			149

Adjustments to:
Total revenues														(177	)
Total benefits and expenses														(3	)
Provision for income tax (expense) benefit														63

Net income													$	32					$	32

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)


	Operating Earnings
				Corporate
	Retirement			Benefit		Insurance			Corporate									Total
Three Months Ended March 31, 2009	Products			Funding		Products			& Other			Total			Adjustments			Consolidated
	(In millions)

Revenues
Premiums	$	76		$	83	$	25		$	—		$	184		$	—		$	184
Universal life and investment-type product policy fees		150			5		132			1			288			(4	)		284
Net investment income		192			242		58			(40	)		452			(12	)		440
Other revenues		56			2		11			—			69			—			69
Net investment gains (losses)		—			—		—			—			—			(600	)		(600	)

Total revenues		474			332		226			(39	)		993			(616	)		377

Expenses
Policyholder benefits and claims		147			207		69			—			423			4			427
Interest credited to policyholder account balances		183			76		57			(7	)		309			(9	)		300
Capitalization of DAC		(144	)		—		(78	)		(5	)		(227	)		—			(227	)
Amortization of DAC and VOBA		157			1		61			1			220			(144	)		76
Interest expense		—			2		—			18			20			—			20
Other expenses		224			8		144			15			391			(2	)		389

Total expenses		567			294		253			22			1,136			(151	)		985

Provision for income tax expense (benefit)		(33	)		12		(10	)		(33	)		(64	)		(162	)		(226	)

Operating earnings	$	(60	)	$	26	$	(17	)	$	(28	)		(79	)

Adjustments to:
Total revenues													(616	)
Total benefits and expenses													151
Provision for income tax (expense) benefit													162

Net loss												$	(382	)				$	(382	)

The following table presents total assets with respect to the Company’s segments, as well as Corporate & Other, at:


	March 31, 2010		December 31, 2009
	(In millions)

Retirement Products	$	77,074	$	73,840
Corporate Benefit Funding		28,185		28,046
Insurance Products		14,151		13,647
Corporate & Other		19,534		12,156

Total	$	138,944	$	127,689

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Net investment income is based upon the actual results of each segment’s specifically identifiable asset portfolio adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company’s product pricing.

Revenues derived from any customer did not exceed 10% of consolidated revenues for the three months ended March 31, 2010 and 2009. Revenues from U.S. operations were $1,035 million and $330 million for the three months ended March 31, 2010 and 2009, respectively, which represented 71% and 88%, respectively, of consolidated revenues.


8.	Related Party Transactions

Service Agreements

The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include management, policy administrative functions, personnel, investment advice and distribution services. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $298 million and $274 million for the three months ended March 31, 2010 and 2009, respectively. For the three months ended March 31, 2010, the aforementioned expenses and fees incurred with affiliates were comprised of $36 million recorded in compensation, $123 million recorded in commissions and $139 million recorded in other expenses. For the three months ended March 31, 2009, the aforementioned expenses and fees incurred with affiliates were comprised of $30 million recorded in compensation, $135 million recorded in commissions and $109 million recorded in other expenses. Revenue received from affiliates related to these agreements and recorded in other revenues was $23 million and $13 million for the three months ended March 31, 2010 and 2009, respectively. Revenue received from affiliates related to these agreements and recorded in universal life and investment-type product policy fees was $26 million and $16 million for the three months ended March 31, 2010 and 2009, respectively. See Note 2 for expenses related to investment advice under these agreements, recorded in net investment income.

The Company had net payables to affiliates of $14 million at March 31, 2010 and net receivables from affiliates of $46 million at December 31, 2009, related to the items discussed above. These amounts exclude affiliated reinsurance balances discussed below.

Reinsurance Transactions

The Company has reinsurance agreements with certain MetLife subsidiaries, including MLIC, MetLife Reinsurance Company of South Carolina (“MRSC”), Exeter Reassurance Company, Ltd., General American Life Insurance Company and MetLife Reinsurance Company of Vermont (“MRV”), all of which are related parties.

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Information regarding the effect of affiliated reinsurance included in the consolidated statements of operations is as follows:


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Premiums:
Reinsurance assumed	$	4		$	5
Reinsurance ceded		(59	)		(39	)

Net premiums	$	(55	)	$	(34	)

Universal life and investment-type product policy fees:
Reinsurance assumed	$	11		$	22
Reinsurance ceded		(61	)		(33	)

Net universal life and investment-type product policy fees	$	(50	)	$	(11	)

Other revenues:
Reinsurance assumed	$	—		$	—
Reinsurance ceded		74			44

Net other revenues	$	74		$	44

Policyholder benefits and claims:
Reinsurance assumed	$	1		$	13
Reinsurance ceded		(84	)		(115	)

Net policyholder benefits and claims	$	(83	)	$	(102	)

Interest credited to policyholder account balances:
Reinsurance assumed	$	15		$	15
Reinsurance ceded		(12	)		(8	)

Net interest credited to policyholder account balances	$	3		$	7

Other expenses:
Reinsurance assumed	$	12		$	11
Reinsurance ceded		24			3

Net other expenses	$	36		$	14

MetLife Insurance Company of Connecticut
(A Wholly-Owned Subsidiary of MetLife, Inc.)

Notes to the Interim Condensed Consolidated Financial Statements (Unaudited) — (Continued)

Information regarding the effect of affiliated reinsurance included in the consolidated balance sheets is as follows:


	March 31, 2010					December 31, 2009
	Assumed		Ceded			Assumed		Ceded
			(In millions)

Assets:
Premiums, reinsurance and other receivables	$	34	$	6,970		$	30	$	7,157
Deferred policy acquisition costs and value of business acquired		225		(397	)		230		(399	)

Total assets	$	259	$	6,573		$	260	$	6,758

Liabilities:
Future policy benefits	$	27	$	—		$	27	$	—
Other policyholder funds		1,420		329			1,393		284
Other liabilities		11		1,184			9		1,150

Total liabilities	$	1,458	$	1,513		$	1,429	$	1,434

The Company has ceded risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value are also included within net investment gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were assets of $405 million and $724 million at March 31, 2010 and December 31, 2009, respectively. For the three months ended March 31, 2010 and 2009, net investment gains (losses) included ($366) million, and ($493) million, respectively, in changes in fair value of such embedded derivatives.

MLI-USA cedes two blocks of business to MRV, on a 90% coinsurance with funds withheld basis. Certain contractual features of this agreement qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company’s consolidated balance sheet. The embedded derivative related to the funds withheld associated with this reinsurance agreement is included within other liabilities and reduced the funds withheld balance by $3 million and $11 million at March 31, 2010 and December 31, 2009, respectively. The changes in fair value of the embedded derivatives, included in net investment gains (losses), were ($9) million and $18 million for the three months ended March 31, 2010 and 2009, respectively. The reinsurance agreement also includes an experience refund provision, whereby some or all of the profits on the underlying reinsurance agreement are returned to MLI-USA from MRV during the first several years of the reinsurance agreement. The experience refund reduced the funds withheld by MLI-USA from MRV by $53 million and $38 million for the three months ended March 31, 2010 and 2009, respectively, and are considered unearned revenue and amortized over the life of the contract using the same assumption basis as the deferred acquisition cost in the underlying policies. The amortization of the unearned revenue associated with the experience refund was $23 million and $15 million for the three months ended March 31, 2010 and 2009, respectively, and is included in universal life and investment-type product policy fees in the consolidated statements of operations. At March 31, 2010 and December 31, 2009, the unearned revenue related to the experience refund was $377 million and $337 million, respectively, and is included in other policyholder funds in the consolidated balance sheet.

The Company cedes its universal life secondary guarantee (“ULSG”) risk to MRSC under certain reinsurance treaties. These treaties do not expose the Company to a reasonable possibility of a significant loss from insurance risk and are recorded using the deposit method of accounting. In the second quarter of 2009, the Company completed a review of various ULSG assumptions and projections including its regular annual third party assessment of these treaties and related assumptions. As a result of projected lower lapse rates and lower interest rates, the Company refined its effective yield methodology to include these updated assumptions and


Item 2.	*Management’s Discussion and Analysis of Financial Condition and Results of Operations*

For purposes of this discussion, “MICC” or the “Company” refers to MetLife Insurance Company of Connecticut, a Connecticut corporation incorporated in 1863, and its subsidiaries, including MetLife Investors USA Insurance Company (“MLI-USA”). MetLife Insurance Company of Connecticut is a subsidiary of MetLife, Inc. (“MetLife”). Management’s narrative analysis of the results of operations is presented pursuant to General Instruction H(2)(a) of Form 10-Q. This narrative analysis should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended December 31, 2009 (“2009 Annual Report”) filed with the U.S. Securities and Exchange Commission (“SEC”), the forward-looking statement information included below, the “Risk Factors” set forth in Part II, Item 1A, and the additional risk factors referred to therein, and the Company’s interim condensed consolidated financial statements included elsewhere herein.

This narrative analysis may contain or incorporate by reference information that includes or is based upon forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements give expectations or forecasts of future events. These statements can be identified by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe” and other words and terms of similar meaning in connection with a discussion of future operating or financial performance. In particular, these include statements relating to future actions, prospective services or products, future performance or results of current and anticipated services or products, sales efforts, expenses, the outcome of contingencies such as legal proceedings, trends in operations and financial results. Any or all forward-looking statements may turn out to be wrong. Actual results could differ materially from those expressed or implied in the forward-looking statements. See “Note Regarding Forward-Looking Statements.”

The following discussion includes references to our performance measure, operating earnings, that is not based on generally accepted accounting principles in the United States of America (“GAAP”). Operating earnings is the measure of segment profit or loss we use to evaluate segment performance and allocate resources and, consistent with GAAP accounting guidance for segment reporting, is our measure of segment performance. Operating earnings is defined as operating revenues less operating expenses, net of income tax.

Operating revenues is defined as GAAP revenues: (i) less net investment gains (losses), (ii) less amortization of unearned revenue related to net investment gains (losses), (iii) plus scheduled periodic settlement payments on derivative instruments that are hedges of investments but do not qualify for hedge accounting treatment, (iv) plus income from discontinued real estate operations, if applicable, and (v) plus, for operating joint ventures reported under the equity method of accounting, the aforementioned adjustments and those identified in the definition of operating expenses, net of income tax, if applicable to these joint ventures.

Operating expenses is defined as GAAP expenses: (i) less changes in policyholder benefits associated with asset value fluctuations related to experience-rated contractholder liabilities, (ii) less costs related to business combinations (since January 1, 2009), (iii) less amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) related to net investment gains (losses), and (iv) plus scheduled periodic settlement payments on derivative instruments that are hedges of policyholder account balances but do not qualify for hedge accounting treatment.

In addition, operating revenues and operating expenses do not reflect the consolidation of certain securitization vehicles that are variable interest entities (“VIEs”) as required under GAAP.

We believe the presentation of operating earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of our businesses. Operating earnings should not be viewed as a substitute for GAAP net income (loss). Reconciliations of operating earnings to GAAP net income (loss), the most directly comparable GAAP measure, is included in “— Consolidated Results of Operations.”

Business

The Company offers individual annuities, individual life insurance, and institutional protection and asset accumulation products. The Company’s Retirement Products offers asset accumulation and income products, including a wide variety of annuities. Corporate Benefit Funding offers pension risk solutions, structured

settlements, stable value and investment products and other benefit funding products. Insurance Products offers a broad range of protection products and services to individuals, corporations and other institutions, and is organized into two businesses: Individual Life and Non-Medical Health. Individual Life includes variable life, universal life, term life and whole life insurance products. Non-Medical Health includes individual disability insurance products.

We market our products and services through various distribution groups. Our life insurance and retirement products targeted to individuals are sold via sales forces, comprised of MetLife employees, in addition to third-party organizations. Our corporate benefit funding and non-medical health insurance products are sold via sales forces primarily comprised of MetLife employees. Our sales employees work with all distribution groups to better reach and service customers, brokers, consultants and other intermediaries.

Summary of Critical Accounting Estimates

The preparation of financial statements in conformity with GAAP requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the interim condensed consolidated financial statements. The most critical estimates include those used in determining:


	(i)	the estimated fair value of investments in the absence of quoted market values;

	(ii)	investment impairments;

	(iii)	the recognition of income on certain investment entities and the application of the consolidation rules to certain investments;

	(iv)	the estimated fair value of and accounting for freestanding derivatives and the existence and estimated fair value of embedded derivatives requiring bifurcation;

	(v)	the capitalization and amortization of DAC and the establishment and amortization of VOBA;

	(vi)	the measurement of goodwill and related impairment, if any;

	(vii)	the liability for future policyholder benefits and the accounting for reinsurance contracts;

	(viii)	accounting for income taxes and the valuation of deferred tax assets;

	(ix)	the liability for litigation and regulatory matters.

In applying the Company’s accounting policies, we make subjective and complex judgments that frequently require estimates about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company’s businesses and operations. Actual results could differ from these estimates.

The above critical accounting estimates are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Summary of Critical Accounting Estimates” and Note 1 of the Notes to the Consolidated Financial Statements of our 2009 Annual Report. In addition, effective January 1, 2010 the Company adopted new accounting guidance relating to the consolidation of VIEs. See Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Economic Capital

Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife’s businesses. As a part of the economic capital process, a portion of net investment income is credited to the segments based on the level of allocated equity. This is in contrast to the standardized regulatory risk-based capital formula, which is not as refined in its risk calculations with respect to the nuances of the Company’s businesses.

Consolidated Results of Operations

Three Months Ended March 31, 2010 compared with the Three Months Ended March 31, 2009

As the U.S. and global financial markets continue to recover, we have experienced a significant improvement in net investment income and policy fees, as well as a favorable change in net investment gains (losses). We have also continued to experience an increase in market share and sales in some of our businesses, most notably in our pension closeout business in the United Kingdom where sales have increased $291 million, or 471%, before income tax. These positive factors were somewhat tempered by the negative impact of the general economic conditions, including high levels of unemployment, on the demand and sales of certain of our products. Our funding agreement products, primarily the London Inter-Bank Offer Rate (“LIBOR”)-based contracts, were the most significantly affected by the general economic conditions. As a result of companies seeking greater liquidity, investment managers are refraining from repurchasing the contracts when they mature and are opting for more liquid investments. The decrease in sales of these investment-type products is not necessarily evident in our results of operations as the transactions related to these products are recorded through the balance sheet. In addition, sales of our annuity products were down 37%, driven by a decline in fixed annuity sales as compared to the prior period. The unusually high level of fixed annuity sales experienced in the first quarter of 2009 was in response to the market disruption and dislocation at that time and, as expected, was not sustained in the current period reflecting the stabilization of the financial markets. Higher levels of unemployment continued to impact certain group businesses as a decrease in covered payrolls dampened growth, and general economic conditions negatively impacted revenues, particularly in our non-medical health and individual life businesses.


	Three Months
	Ended
	March 31,
	2010			2009			Change			% Change
	(In millions)

Revenues
Premiums	$	455		$	184		$	271			147.3	%
Universal life and investment-type product policy fees		369			284			85			29.9	%
Net investment income		790			440			350			79.5	%
Other revenues		110			69			41			59.4	%
Net investment gains (losses)		(271	)		(600	)		329			54.8	%

Total revenues		1,453			377			1,076			285.4	%

Expenses
Policyholder benefits and claims		694			427			267			62.5	%
Interest credited to policyholder account balances		316			300			16			5.3	%
Capitalization of DAC		(230	)		(227	)		(3	)		(1.3	)%
Amortization of DAC and VOBA		64			76			(12	)		(15.8	)%
Interest expense		120			20			100			500.0	%
Other expenses		465			389			76			19.5	%

Total expenses		1,429			985			444			45.1	%

Income (loss) before provision for income tax		24			(608	)		632			103.9	%
Provision for income tax expense (benefit)		(8	)		(226	)		218			96.5	%

Net income (loss)	$	32		$	(382	)	$	414			108.4	%

Unless otherwise stated, all amounts are net of income tax.

During the three months ended March 31, 2010, MICC’s net income (loss) increased $414 million to income of $32 million from a loss of $382 million in the comparable 2009 period. The period over period change is due to a $228 million increase in operating earnings and a $188 million favorable variance in net investment gains (losses), net of related adjustments.

We manage our investment portfolio using disciplined Asset/Liability Management (“ALM”) principles, focusing on cash flow and duration to support our current and future liabilities. Our intent is to match the timing and amount of liability cash outflows with invested assets that have cash inflows of comparable timing and amount, while optimizing risk-adjusted net investment income and risk-adjusted total return. Our investment portfolio is heavily weighted toward fixed income investments, with over 80% of our portfolio invested in fixed maturity securities and mortgage loans. These securities and loans have varying maturities and other characteristics which cause them to be generally well suited for matching the cash flow and duration of our insurance liabilities. Other invested asset classes including, but not limited to, equity securities, other limited partnership interests and real estate and real estate joint ventures provide additional diversification and opportunity for long-term yield enhancement in addition to supporting the cash flow and duration objectives of our investment portfolio. We also use derivatives as an integral part of our management of the investment portfolio to hedge certain risks, including changes in interest rates, foreign currencies, credit spreads and equity market levels. Additional considerations for our investment portfolio include current and expected market conditions and expectations for changes within our unique mix of products and business segments.

Investments are purchased to support our insurance liabilities and not to generate net investment gains and losses. However, net investment gains and losses are generated and can change significantly from period to period, due to changes in external influences, including movements in interest rates, equity markets, foreign currencies and credit spreads; counterparty specific factors, such as financial performance, credit rating and collateral valuation; and internal factors such as portfolio rebalancing. As an investor in the fixed income, equity security, mortgage loan and certain other invested asset classes, we are exposed to the above stated risks, which can lead to both impairments and credit-related losses.

The favorable variance in net investment gains (losses) of $188 million, net of related adjustments, was primarily driven by decreases in both impairments and losses on derivatives. Improving market conditions across several invested asset classes and sectors as compared to the prior period resulted in decreased impairments in fixed maturity securities, equity securities, and other limited partnerships. To a lesser extent, the strengthening of the U.S. dollar against several major foreign currencies drove decreased losses related to our funding agreements. Period over period, there was a favorable variance in freestanding derivatives, as net losses decreased, partially offset by an increase in embedded derivative losses. In the prior period, there was significant movement in interest rates, equity markets and credit spreads, driving larger losses on freestanding derivatives; however, in the current period, there was much less movement in these markets resulting in decreased losses on our derivatives programs.

We use freestanding interest rate, currency, credit and equity derivatives to provide economic hedges of certain invested assets and insurance liabilities, as well as to hedge certain of the risks inherent in our embedded derivatives associated with our variable annuity minimum benefit guarantees. Modest decreases in long-term interest rates in the current period compared to more significant increases in long-term interest rates in the prior period resulted in decreased losses on interest rate derivatives, which we use to hedge interest rate risk. This favorable variance was partially offset by the unfavorable variance, from gains in the prior year period, to losses in the current year period, that was driven by the impact of both improving equity markets and decreased volatility in the equity markets on our equity derivatives used to hedge variable annuity minimum benefit guarantees. To a much lesser degree, there was an unfavorable variance on certain foreign currency derivatives from the impact of U.S. dollar strengthening on certain foreign currency derivatives, which are used to hedge foreign-denominated asset and liability exposures.

We issue variable annuity products with minimum benefit guarantees. Certain of these products contain embedded derivatives that are measured at fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net investment gains (losses). The estimated fair value of these embedded derivatives also includes the impact of MICC’s own credit spread. Increased embedded derivative losses in the current period from a modest change in MICC’s own credit spread, as compared with a significant widening of MICC’s own credit spread in the prior period, were partially offset by a favorable change from improving equity markets. Losses on the freestanding derivatives that hedge these embedded derivative risks partially offset the change in liabilities attributable to market factors, excluding the adjustment for the change in MICC’s own credit spread, which is unhedged. The unfavorable change in embedded derivatives was also driven by losses on ceded reinsurance of variable annuity minimum benefit guarantees, net of a modest change in the reinsurer’s credit spread in the current period, compared to a significant widening in the prior period.

As more fully described in the discussion of performance measures above, we use operating earnings, which does not equate to net income (loss) as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. Operating earnings is also a measure by which senior management’s and many other employees’ performance is evaluated for the purposes of determining their compensation under applicable compensation plans. We believe that the presentation of operating earnings, as we measure it for management purposes, enhances the understanding of our performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating earnings should not be viewed as a substitute for GAAP income (loss), net of income tax. Operating earnings increased by $228 million to $149 million for the first quarter of 2010 from a loss of $79 million for the comparable 2009 period.

Reconciliation of net income (loss) to operating earnings (loss)


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Net income (loss)	$	32		$	(382	)
Less: Net investment gains (losses)		(271	)		(600	)
Less: Other adjustments (1)		91			135
Less: Provision for income tax (expense) benefit		63			162

Operating earnings	$	149		$	(79	)


(1)		See definitions of operating revenues and operating expenses for the components of such adjustments.

Reconciliation of GAAP revenues to operating revenues and GAAP expenses to operating expenses


	Three Months
	Ended
	March 31,
	2010			2009
	(In millions)

Total revenues	$	1,453		$	377
Less: Net investment gains (losses)		(271	)		(600	)
Less: Adjustments related to net investment gains (losses)		(1	)		(4	)
Less: Other adjustments to revenues (1)		95			(12	)

Total operating revenues	$	1,630		$	993

Total expenses	$	1,429		$	985
Less: Adjustments related to net investment gains (losses)		(101	)		(144	)
Less: Other adjustments to expenses (1)		104			(7	)

Total operating expenses	$	1,426		$	1,136


(1)		See definitions of operating revenues and operating expenses for the components of such adjustments.

The improvement in the financial markets which began in the latter part of 2009 and continued into 2010 was the primary driver of the increase in operating earnings. Such market improvement was most evident in higher net investment income and policy fees, as well as lower amortization of DAC and VOBA. Mortality and morbidity experience did not have a material impact on operating earnings.

A $158 million increase in net investment income was primarily the result of increasing yields. The improvement in yields increased net investment income by $142 million and growth in average invested assets contributed an additional $16 million. The increase in yields resulted from the effects of improving equity markets, which began in the latter part of 2009, and stabilizing real estate markets, which began in the first quarter of 2010. In light of these improving market conditions, we continued to reposition the accumulated liquidity in our portfolio to longer duration and higher yielding investments. The impact of the improvement in yields was concentrated in other limited partnership interests, real estate joint ventures and fixed maturity securities. As many of our products are interest-spread based, the increase in net investment income was partially offset by a $14 million increase in interest credited expense. Our Ireland unit-linked policyholder liabilities are tied directly to our trading portfolio and, as a result, Corporate & Other recognized an increase of $34 million in interest credited expense. In our Corporate Benefit Funding segment, interest credited expense related to the growth in UK closeouts increased slightly. However, this was more than offset by a $20 million decrease in interest credited expense driven by a $2.3 billion decline in our average policyholder account balances, primarily in funding agreements, coupled with a decrease in the interest crediting rates. The increase in interest credited expense attributed to growth in our Retirement Product segment’s fixed annuity policyholder account balances was entirely offset by declines due to lower crediting rates.

The improvement in the financial market conditions resulted in an increase in the market value of our separate account balances which generated higher policy fee income of $66 million and caused us to increase our expected future gross profits. The increase in expected future gross profits triggered a decrease of $36 million in DAC and VOBA amortization, most significantly in the Retirement Products segment. The improvement in the equity markets and higher interest rate environment also resulted in a $25 million decrease in net guaranteed annuity benefit costs in our Retirement Products segment.

The improvement in operating earnings includes an increase in other revenues related to certain affiliated reinsurance treaties. The most significant impact was in our Insurance Products segment, which benefited from the impact of a refinement in the assumptions and methodology used to value a deposit receivable from an affiliated reinsurance treaty of $14 million.

Business growth was the primary driver of our $48 million increase in other expenses. The positive impact of Operational Excellence, MetLife’s enterprise-wide cost reduction and revenue enhancement initiative, was more than offset by expense increases attributable to business growth. Such increases include higher variable costs, such as commissions, a portion of which is offset in DAC capitalization, as well as increased reinsurance costs.

Liquidity and Capital Resources

Beginning in September 2008, the global financial markets experienced unprecedented disruption, adversely affecting the business environment in general, as well as financial services companies in particular. Conditions in the financial markets have materially improved, but financial institutions may have to pay higher spreads over benchmark U.S. Treasury securities than before the market disruption began. There is still some uncertainty as to whether the stressed conditions that prevailed during the market disruption could recur, which could affect the Company’s ability to meet liquidity needs and obtain capital.

Liquidity Management. Based upon the strength of its franchise, diversification of its businesses and strong financial fundamentals, we continue to believe that the Company has ample liquidity to meet business requirements under current market conditions and unlikely but reasonably possible stress scenarios. The Company’s short-term liquidity position (cash, and cash equivalents and short-term investments, excluding cash collateral received under the Company’s securities lending program that has been reinvested in cash, cash equivalents, short-term investments and publicly-traded securities and cash collateral received from counterparties in connection with derivative instruments) was $1.4 billion and $1.8 billion at March 31, 2010 and December 31, 2009, respectively. We continuously monitor and adjust our liquidity and capital plans for the Company in light of changing needs and opportunities.

Insurance Liabilities. The Company’s principal cash outflows primarily relate to the liabilities associated with its various life insurance, annuity and group pension products, operating expenses and income tax, as well as principal and interest on its outstanding debt obligations. Liabilities arising from its insurance activities primarily

relate to benefit payments under the aforementioned products, as well as payments for policy surrenders, withdrawals and loans. For annuity or deposit type products, surrender or lapse product behavior differs somewhat by segment. In the Retirement Products segment, which includes individual annuities, lapses and surrenders tend to occur in the normal course of business. During the three months ended March 31, 2010 and 2009, general account surrenders and withdrawals from annuity products were $366 million and $446 million, respectively. In the Corporate Benefit Funding segment, which includes pension closeouts, bank owned life insurance, other fixed annuity contracts, as well as funding agreements and other capital market products, most of the business has fixed maturities or fairly predictable surrenders or withdrawals. Of the Corporate Benefit Funding liabilities, $460 million were subject to credit ratings downgrade triggers that permit early termination subject to a notice period of 90 days.

Securities Lending. Under the Company’s securities lending program, the Company was liable for cash collateral under its control of $6.4 billion and $6.2 billion at March 31, 2010 and December 31, 2009, respectively. For further detail on the securities lending program and the related liquidity needs, see Note 2 of the Notes to the Interim Condensed Consolidated Financial Statements.

Derivatives and Collateral. The Company pledges collateral to, and has collateral pledged to it by, counterparties under the Company’s current derivative transactions. With respect to derivative transactions with credit ratings downgrade triggers, a two-notch downgrade would have impacted the Company’s derivative collateral requirements by $15 million at March 31, 2010.

Short-term Funding Agreements. MetLife Short Term Funding LLC (“Short Term Funding”), is an issuer of commercial paper under a program supported by funding agreements issued by MetLife Insurance Company of Connecticut and Metropolitan Life Insurance Company, an affiliate. As a back-up source of funding, Short Term Funding was accepted in 2008 for the Federal Reserve’s Commercial Paper Funding Facility (“CPFF”), which was intended to improve liquidity in short-term funding markets by increasing the availability of term commercial paper funding to issuers and by providing greater assurance to both issuers and investors that firms will be able to rollover their maturing commercial paper. Short Term Funding did not draw funds under this program in 2009 or 2010. The CPFF program expired on February 1, 2010. The Company’s short-term liability under the funding agreement it issued to Short Term Funding was $2.9 billion at both March 31, 2010 and December 31, 2009, which is included in policyholder account balances.

Adoption of New Accounting Pronouncements

See “Adoption of New Accounting Pronouncements” in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.

Future Adoption of New Accounting Pronouncements

See “Future Adoption of New Accounting Pronouncements” in Note 1 of the Notes to the Interim Condensed Consolidated Financial Statements.


Item 4(T).	*Controls and Procedures*

Management, with the participation of the Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that these disclosure controls and procedures are effective.

There were no changes to the Company’s internal control over financial reporting as defined in Exchange Act Rule 15d-15(f) during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Part II — Other Information


Item 1.	*Legal Proceedings*

The following should be read in conjunction with (i) “Legal Proceedings” in Part I, Item 3, of the 2009 Annual Report; and (ii) Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements in Part I of this report.


Item 1A.	*Risk Factors*

The following should be read in conjunction with and supplements and amends the factors that may affect the Company’s business or operations described under “Risk Factors” in Part I, Item 1A, of the 2009 Annual Report.

Actions of the U.S. Government, Federal Reserve Bank of New York and Other Governmental and Regulatory Bodies for the Purpose of Stabilizing and Revitalizing the Financial Markets and Protecting Investors and Consumers May Not Achieve the Intended Effect or Could Adversely Affect the Competitive Position of MetLife, Inc. and its Subsidiaries, Including Us

In response to the financial crises affecting the banking system and financial markets and going concern threats to investment banks and other financial institutions, on October 3, 2008, President Bush signed the Emergency Economic Stabilization Act of 2008 (“EESA”) into law. Pursuant to EESA, the U.S. Treasury has the authority to, among other things, purchase up to $700 billion of mortgage-backed and other securities (including newly issued preferred shares and subordinated debt) from financial institutions for the purpose of stabilizing the financial markets. The U.S. federal government, the Federal Reserve Bank of New York, the Federal Deposit Insurance Corporation (“FDIC”) and other governmental and regulatory bodies have taken other actions to address the financial crisis. For example, the Federal Reserve Bank of New York made funds available to commercial and financial companies under a number of programs, including the Commercial Paper Funding Facility, which expired in early 2010. The U.S. Treasury has established programs based in part on EESA and in part on the separate authority of the Federal Reserve Board and the FDIC, to foster purchases from and by banks, insurance companies and other financial institutions of certain kinds of assets for which valuations have been low and markets weak. Some of the programs established by governmental and regulatory bodies have recently been discontinued or will be in the near term. The discontinuance of these programs may roughly coincide with a change in monetary policy by the Federal Reserve Board. We cannot predict what impact, if any, this could have on our business, results of operations and financial condition.

Although such actions appear to have provided some stability to the financial markets, our business, financial condition and results of operations could be materially and adversely affected to the extent that credit availability and prices for financial assets revert to their low levels of late 2008 and early 2009 or do not continue to improve. Furthermore, Congress has considered, and may consider in the future, legislative proposals that could impact the estimated fair value of mortgage loans, such as legislation that would permit bankruptcy courts to rewrite the terms

of a mortgage contract, including reducing the principal balance of mortgage loans owed by bankrupt borrowers, or legislation that requires loan modifications. If such legislation is enacted, it could cause loss of principal on certain of our non-agency prime residential mortgage-backed security (“RMBS”) holdings and could cause a ratings downgrade in such holdings which, in turn, would cause an increase in unrealized losses on such securities and increase the risk-based capital that we must hold to support such securities. See “Risk Factors — We Are Exposed to Significant Financial and Capital Markets Risk Which May Adversely Affect Our Results of Operations, Financial Condition and Liquidity, and Our Net Investment Income Can Vary from Period to Period” in the 2009 Annual Report. We cannot predict whether the funds made available by the U.S. federal government and its agencies will be enough to continue stabilizing or to further revive the financial markets or, if additional amounts are necessary, whether Congress will be willing to make the necessary appropriations, what the public’s sentiment would be towards any such appropriations, or what additional requirements or conditions might be imposed on the use of any such additional funds.

The Obama Administration has proposed, and Congress may consider, the imposition of a fee or fees on financial firms with more than $50 billion in consolidated assets, and on certain other financial firms of systemic significance, for the purpose of recovering the cost of the Troubled Asset Relief Program (“TARP”) established under EESA. Estimates of the cost have varied, but the Congressional Budget Office has estimated the cost at over $110 billion. As a bank holding company with more than $50 billion of consolidated assets, MetLife would be subject to any such fee. The Obama Administration, the House and the Senate have also made various proposals to create a fund to pay for the costs of winding up bank holding companies and certain other systemically important financial firms that may fail in the future. Any such fund would be funded through assessments on certain financial firms. Full details of the proposed fees and assessments, the companies that may be subject to them, and the exact manner in which they would be assessed are not yet available, so we cannot estimate their cumulative financial impact on us, if any. However, it is possible that the proposed fees and assessments could have a material adverse impact on our results of operations.

The choices made by the U.S. Treasury, the Federal Reserve Board and the FDIC in their distribution of amounts available under EESA and any future asset purchase programs, as well as any decisions made regarding the imposition of additional regulation on large financial institutions may have, over time, the effect of supporting some aspects of the financial services industry more than others. Some of our competitors have received, or may in the future receive, benefits under one or more of the federal government’s programs. This could adversely affect our competitive position. See “Risk Factors — Competitive Factors May Adversely Affect Our Market Share and Profitability” in the 2009 Annual Report. In addition, the adoption of proposals that would restrict investments in private equity funds, could affect MetLife’s ability to make investments that provide returns over the long periods of time that many of our products require. See also “Risk Factors — Proposals to Regulate Compensation, if Implemented, Could Hinder or Prevent Us From Attracting and Retaining Management and Other Employees with the Talent and Experience to Manage and Conduct Our Business Effectively” and “Risk Factors — Our Insurance Businesses Are Heavily Regulated, and Changes in Regulation May Reduce Our Profitability and Limit Our Growth” in the 2009 Annual Report.

Legislative and Regulatory Activity in Health Care and Other Employee Benefits Could Increase the Costs or Administrative Burdens of Providing Benefits to Employees Who Conduct Our Business or Hinder or Prevent MetLife and its Affiliates From Attracting and Retaining Employees, or Affect our Profitability As a Provider of Life Insurance, Annuities, and Non-Medical Health Insurance Benefit Products.

The Patient Protection and Affordable Care Act, signed into law on March 23, 2010, and The Health Care and Education Reconciliation Act of 2010, signed into law on March 30, 2010 (together, the “Health Care Act”), may lead to fundamental changes in the way that employers, including affiliates of MetLife, provide health care benefits, other benefits, and other forms of compensation to their employees. and former employees. Among other changes, and subject to various effective dates, the Health Care Act generally restricts certain limits on benefits, mandates coverage for certain kinds of care, extends the required coverage of dependent children through age 26, eliminates pre-existing condition exclusions or limitations, requires cost reporting and, in some cases, requires premium rebates to participants under certain circumstances, limits coverage waiting periods, establishes several penalties on employers who fail to offer sufficient coverage to their full-time employees, and requires employers under certain circumstances to provide employees with vouchers to purchase their own health care coverage. The Health Care Act

also provides for increased taxation of “high cost” coverage, restricts the tax deductibility of certain compensation paid by health care and some other insurers, reduces the tax deductibility of retiree health care costs to the extent of any retiree prescription drug benefit subsidy provided to the employer by the federal government, increases Medicare payroll taxes on certain high earners, and establishes health insurance “exchanges” for individual purchase of health insurance.

We depend on employees of MetLife affiliates to conduct our business. The impact of the Health Care Act on MetLife’s affiliates as employers and on the benefit plans they sponsor for their employees or retirees and their dependents, whether those benefits remain competitive or effective in meeting their business objectives, and our costs to provide such benefits and our tax liabilities in connection with benefits or compensation, cannot be predicted. Furthermore, we cannot predict the impact of choices that will be made by various regulators, including the United States Treasury and Internal Revenue Service, the United States Department of Health and Human Services, and state regulators, to promulgate regulations or guidance, or to make determinations under or related to the Health Care Act. Either the Health Care Act or any of these regulatory actions could adversely affect the ability of MetLife and its affiliates to attract, retain, and motivate talented associates. They could also result in increased or unpredictable costs to provide employee benefits, and could harm our competitive position if MetLife or its affiliates are subject to fees, penalties, tax provisions or other limitations in the Health Care Act and our competitors are not.

The Health Care Act also imposes requirements on us as a provider of certain products, subject to various effective dates. It also imposes requirements on the purchasers of certain of these products. We cannot predict the impact of the Act or of regulations, guidance or determinations made by various regulators, on the various products that we offer. Either the Health Care Act or any of these regulatory actions could adversely affect our ability to offer certain of these products in the same manner as we do today. They could also result in increased or unpredictable costs to provide certain products, and could harm our competitive position if the Health Care Act has a disparate impact on our products compared to products offered by our competitors.


Item 6.	*Exhibits*

(Note Regarding Reliance on Statements in Our Contracts: In reviewing the agreements included as exhibits to this Quarterly Report on Form 10-Q, please remember that they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about MetLife Insurance Company of Connecticut, its subsidiaries or the other parties to the agreements. The agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and (i) should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate; (ii) have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement; (iii) may apply standards of materiality in a way that is different from what may be viewed as material to investors; and (iv) were made only at the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs at the date they were made or at any other time. Additional information about MetLife Insurance Company of Connecticut and its subsidiaries may be found elsewhere in this Quarterly Report on Form 10-Q and MetLife Insurance Company of Connecticut’s other public filings, which are available without charge through the SEC’s website at www.sec.gov.)


Exhibit
No.			Description

	31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit Index


Exhibit
No.			Description

	31	.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	31	.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
	32	.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
	32	.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

E-1


	Page

Part I — Financial Information
Item 1. Financial Statements (at March 31, 2010 (Unaudited) and December 31, 2009 and for the Three Months Ended March 31, 2010 and 2009 (Unaudited))		5
Interim Condensed Consolidated Balance Sheets		5
Interim Condensed Consolidated Statements of Operations		6
Interim Condensed Consolidated Statements of Stockholders’ Equity		7
Interim Condensed Consolidated Statements of Cash Flows		9
Notes to the Interim Condensed Consolidated Financial Statements		10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		84
Item 4(T). Controls and Procedures		90
Part II — Other Information		91
Item 1. Legal Proceedings		91
Item 1A. Risk Factors		91
Item 6. Exhibits		94
Signatures		95
Exhibit Index		E-1
EX-31.1
EX-31.2
EX-32.1
EX-32.2