10-Q

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 JUNE 30, 2011
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 þ     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 August 12, 2011, 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.

Table of Contents

	Page
Part I — Financial Information
Item 1. Financial Statements (at June 30, 2011 (Unaudited) and December 31, 2010 and for the Three Months and Six Months Ended June 30, 2011 and 2010 (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		97
Item 4. Controls and Procedures		103
Part II — Other Information		104
Item 1. Legal Proceedings		104
Item 1A. Risk Factors		104
Item 6. Exhibits		112
Signatures		113
Exhibit Index		E-1
EX-31.1
EX-31.2
EX-32.1
EX-32.2
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

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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 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.

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 the actual future results of MetLife Insurance Company of Connecticut and its subsidiaries. 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: (1) difficult conditions in the global capital markets; (2) the delay by Congress in raising the statutory debt limit of the U.S., as well as rating agency downgrades of U.S. Treasury securities; (3) increased volatility and disruption of the capital and credit markets, which may affect our ability to seek financing or access our credit facilities; (4) uncertainty about the effectiveness of the U.S. government’s programs to stabilize the financial system, the imposition of fees relating thereto, or the promulgation of additional regulations; (5) impact of comprehensive financial services regulation reform on us; (6) exposure to financial and capital market risk; (7) changes in general economic conditions, including the performance of financial markets and interest rates, which may affect our ability to raise capital, generate fee income and market-related revenue and finance statutory reserve requirements and may require us to pledge collateral or make payments related to declines in value of specified assets; (8) potential liquidity and other risks resulting from our participation in a securities lending program and other transactions; (9) investment losses and defaults, and changes to investment valuations; (10) impairments of goodwill and realized losses or market value impairments to illiquid assets; (11) defaults on our mortgage loans; (12) the impairment of other financial institutions that could adversely affect our investments or business; (13) our ability to address unforeseen liabilities, asset impairments, loss of key contractual relationships, or rating actions arising from acquisitions or dispositions and to successfully integrate and manage the growth of acquired businesses with minimal disruption; (14) economic, political, currency and other risks relating to our international operations, including with respect to fluctuations of exchange rates; (15) downgrades in our claims paying ability, financial strength or credit ratings; (16) ineffectiveness of risk management policies and procedures; (17) availability and effectiveness of reinsurance or indemnification arrangements, as well as default or failure of counterparties to perform; (18) discrepancies between actual claims experience and assumptions used in setting prices for our products and establishing the liabilities for our obligations for future policy benefits and claims; (19) catastrophe losses; (20) heightened competition, including with respect to pricing, entry of new competitors, consolidation of distributors, the development of new products by new and existing competitors, distribution of amounts available under U.S. government programs, and for personnel; (21) unanticipated changes in industry trends; (22) changes in accounting standards, practices and/or policies; (23) changes in assumptions related to deferred policy acquisition costs, deferred sales inducements, value of business acquired or goodwill; (24) exposure to losses related to variable annuity guarantee benefits, including from significant and sustained downturns or extreme

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volatility in equity markets, reduced interest rates, unanticipated policyholder behavior, mortality or longevity, and the adjustment for nonperformance risk; (25) adverse results or other consequences from litigation, arbitration or regulatory investigations; (26) inability to protect our intellectual property rights or claims of infringement of the intellectual property rights of others; (27) discrepancies between actual experience and assumptions used in establishing liabilities related to other contingencies or obligations; (28) regulatory, legislative or tax changes that may affect the cost of, or demand for, our products or services, impair the ability of MetLife and its affiliates to attract and retain talented and experienced management and other employees, or increase the cost or administrative burdens of providing benefits to the employees who conduct our business; (29) the effects of business disruption or economic contraction due to terrorism, other hostilities, or natural catastrophes, including any related impact on our disaster recovery systems and management continuity planning which could impair our ability to conduct business effectively; (30) the effectiveness of our programs and practices in avoiding giving our associates incentives to take excessive risks; and (31) other risks and uncertainties described from time to time in MetLife Insurance Company of Connecticut’s filings with the SEC.

We do not undertake any obligation to publicly correct or update any forward-looking statement if we later become 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.

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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
June 30, 2011 (Unaudited) and December 31, 2010

(In millions, except share and per share data)

	June 30, 2011		December 31, 2010
Assets
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $45,548 and $44,132, respectively)	$	46,837	$	44,924
Equity securities available-for-sale, at estimated fair value (cost: $293 and $427, respectively)		308		405
Other securities, at estimated fair value		3,089		2,247
Mortgage loans (net of valuation allowances of $70 and $87, respectively; includes $6,697 and $6,840, respectively, at estimated fair value, relating to variable interest entities)		12,645		12,730
Policy loans		1,190		1,190
Real estate and real estate joint ventures		519		501
Other limited partnership interests		1,610		1,538
Short-term investments, principally at estimated fair value		2,203		1,235
Other invested assets, principally at estimated fair value		1,673		1,716
Total investments		70,074		66,486
Cash and cash equivalents, principally at estimated fair value		1,220		1,928
Accrued investment income (includes $32 and $31, respectively, relating to variable interest entities)		534		559
Premiums, reinsurance and other receivables		17,006		17,008
Deferred policy acquisition costs and value of business acquired		5,264		5,099
Current income tax recoverable		113		38
Deferred income tax assets		—		356
Goodwill		953		953
Other assets		851		839
Separate account assets		69,467		61,619
Total assets	$	165,482	$	154,885
Liabilities and Stockholders’ Equity
Liabilities
Future policy benefits	$	24,056	$	23,198
Policyholder account balances		40,659		39,291
Other policy-related balances		2,753		2,652
Payables for collateral under securities loaned and other transactions		8,201		8,103
Long-term debt (includes $6,617 and $6,773, respectively, at estimated fair value, relating to variable interest entities)		7,410		7,568
Deferred income tax liability		10		—
Other liabilities (includes $31 and $31, respectively, relating to variable interest entities)		4,357		4,503
Separate account liabilities		69,467		61,619
Total liabilities		156,913		146,934
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 June 30, 2011 and December 31, 2010		86		86
Additional paid-in capital		6,667		6,719
Retained earnings		1,310		934
Accumulated other comprehensive income (loss)		506		212
Total stockholders’ equity		8,569		7,951
Total liabilities and stockholders’ equity	$	165,482	$	154,885

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Operations
For the Three Months and Six Months Ended June 30, 2011 and 2010 (Unaudited)

(In millions)

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2011			2010			2011			2010
Revenues
Premiums	$	641		$	256		$	777		$	711
Universal life and investment-type product policy fees		493			407			948			776
Net investment income		796			725			1,584			1,515
Other revenues		131			103			261			213
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities		(21	)		(19	)		(30	)		(53	)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)		6			7			4			23
Other net investment gains (losses)		(12	)		62			(15	)		117
Total net investment gains (losses)		(27	)		50			(41	)		87
Net derivative gains (losses)		133			563			(23	)		255
Total revenues		2,167			2,104			3,506			3,557
Expenses
Policyholder benefits and claims		818			504			1,145			1,198
Interest credited to policyholder account balances		304			257			591			573
Other expenses		729			839			1,233			1,258
Total expenses		1,851			1,600			2,969			3,029
Income (loss) before provision for income tax		316			504			537			528
Provision for income tax expense (benefit)		100			162			161			154
Net income	$	216		$	342		$	376		$	374

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Stockholders’ Equity
For the Six Months Ended June 30, 2011 (Unaudited)

(In millions)

								Accumulated Other
								Comprehensive Income (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, 2010	$	86	$	6,719		$	934	$	388	$	(51	)	$	(125	)	$	7,951
Return of capital (Note 6)				(52	)												(52	)
Comprehensive income (loss):
Net income							376										376
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax									6								6
Unrealized investment gains (losses), net of related offsets and income tax									275		(7	)					268
Foreign currency translation adjustments, net of income tax														20			20
Other comprehensive income (loss)																	294
Comprehensive income (loss)																	670
Balance at June 30, 2011	$	86	$	6,667		$	1,310	$	669	$	(58	)	$	(105	)	$	8,569

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Stockholders’ Equity
For the Six Months Ended June 30, 2010 (Unaudited) — (Continued)

(In millions)

								Accumulated Other
								Comprehensive Income (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		—		—		(34	)		23			11			—			—
Balance at January 1, 2010		86		6,719		507			(570	)		(72	)		(109	)		6,561
Comprehensive income (loss):
Net income						374												374
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax									16									16
Unrealized investment gains (losses), net of related offsets and income tax									1,041			9						1,050
Foreign currency translation adjustments, net of income tax															(52	)		(52	)
Other comprehensive income (loss)																		1,014
Comprehensive income (loss)																		1,388
Balance at June 30, 2010	$	86	$	6,719	$	881		$	487		$	(63	)	$	(161	)	$	7,949

See accompanying notes to the interim condensed consolidated financial statements.

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

Interim Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2011 and 2010 (Unaudited)

(In millions)

	Six Months
	Ended
	June 30,
	2011			2010
Net cash provided by operating activities	$	406		$	519
Cash flows from investing activities
Sales, maturities and repayments of:
Fixed maturity securities		8,910			8,500
Equity securities		131			109
Mortgage loans		517			437
Real estate and real estate joint ventures		6			9
Other limited partnership interests		171			56
Purchases of:
Fixed maturity securities		(10,303	)		(9,145	)
Equity securities		(6	)		(46	)
Mortgage loans		(387	)		(395	)
Real estate and real estate joint ventures		(48	)		(57	)
Other limited partnership interests		(176	)		(163	)
Cash received in connection with freestanding derivatives		286			48
Cash paid in connection with freestanding derivatives		(250	)		(108	)
Net change in policy loans		—			(1	)
Net change in short-term investments		(972	)		(202	)
Net change in other invested assets		(253	)		(39	)
Other, net		1			—
Net cash used in investing activities		(2,373	)		(997	)
Cash flows from financing activities
Policyholder account balances:
Deposits		10,207			12,565
Withdrawals		(8,858	)		(12,604	)
Net change in payables for collateral under securities loaned and other transactions		98			491
Long-term debt repaid		(170	)		(311	)
Financing element on certain derivative instruments		(23	)		(15	)
Net cash provided by financing activities		1,254			126
Effect of change in foreign currency exchange rates on cash and cash equivalents balances		5			(24	)
Change in cash and cash equivalents		(708	)		(376	)
Cash and cash equivalents, beginning of period		1,928			2,574
Cash and cash equivalents, end of period	$	1,220		$	2,198
Supplemental disclosures of cash flow information:
Net cash paid during the period for:
Interest	$	221		$	245
Income tax	$	20		$	42

See accompanying notes to the interim condensed consolidated financial statements.

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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. 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 2011 presentation. Such reclassifications include:

•  Reclassification from other net investment gains (losses) of $563 million and $255 million to net derivative gains (losses) in the interim condensed consolidated statements of operations for the three months and six months ended June 30, 2010, respectively;

•  Reclassifications related to operating revenues and expenses that affected results of operations on a segment and consolidated basis. See Note 8.

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 June 30, 2011, its consolidated results of operations for the three months and six months ended June 30, 2011 and 2010, its consolidated statements of stockholders’ equity for the six months ended June 30, 2011 and 2010, and its consolidated statements of cash flows for the six months ended June 30, 2011 and 2010, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2010 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, 2010 (the “2010 Annual Report”),

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

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

filed with the U.S. Securities and Exchange Commission, which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2010 Annual Report.

Adoption of New Accounting Pronouncements

Effective January 1, 2011, the Company adopted new guidance that addresses when a business combination should be assumed to have occurred for the purpose of providing pro forma disclosure. Under the new guidance, if an entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. The guidance also expands the supplemental pro forma disclosures to include additional narratives. The adoption did not have an impact on the Company’s consolidated financial statements.

Effective January 1, 2011, the Company adopted new guidance regarding goodwill impairment testing. This guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity would be required to perform Step 2 of the test if qualitative factors indicate that it is more likely than not that goodwill impairment exists. The adoption did not have an impact on the Company’s consolidated financial statements.

Effective January 1, 2011, the Company adopted new guidance regarding accounting for investment funds determined to be VIEs. 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 separate accounts for the benefit of policyholders in the insurer’s evaluation of its economics in a VIE, unless the separate account contractholder is a related party. The adoption did not have a material impact on the Company’s consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance regarding comprehensive income (Accounting Standards Update (“ASU”) 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income), effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The guidance should be applied retrospectively and early adoption is permitted. The new guidance provides companies with the option to present the total of comprehensive income, components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The objective of the standard is to increase the prominence of items reported in other comprehensive income and to facilitate convergence of GAAP and International Financial Reporting Standards (“IFRS”). The standard eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders’ equity. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In May 2011, the FASB issued new guidance regarding fair value measurement (ASU 2011- 04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs), effective for the first interim or annual period beginning after December 15, 2011. The guidance should be applied prospectively. The amendments in this ASU are intended to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRS. Some of the amendments clarify the FASB’s intent on the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

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

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

In April 2011, the FASB issued new guidance regarding effective control in repurchase agreements (ASU 2011-03, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements), effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The amendments in this ASU remove from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In April 2011, the FASB issued new guidance regarding accounting for troubled debt restructuring (ASU 2011-02, Receivables (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring), effective for the first interim or annual period beginning on or after June 15, 2011 and which should be applied retrospectively to the beginning of the annual period of adoption. This guidance clarifies whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for the purpose of determining when a restructuring constitutes a troubled debt restructuring. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.

In October 2010, the FASB issued new guidance regarding accounting for deferred acquisition costs (ASU 2010-26, Financial Services— Insurance (Topic 944): Accounting for Costs Associated with Acquiring or Renewing Insurance Contracts) effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The guidance should be applied prospectively upon adoption. Retrospective application to all prior periods presented upon the date of adoption also is permitted, but not required. This guidance clarifies the costs that should be deferred by insurance entities when issuing and renewing insurance contracts. The guidance also specifies that only costs related directly to successful acquisition of new or renewal contracts can be capitalized. All other acquisition-related costs should be expensed as incurred. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

12

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

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

2.   Investments

Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized gains and losses, 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”) losses:

	June 30, 2011
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gains		Losses		Losses		Value		Total
	(In millions)
Fixed Maturity Securities:
U.S. corporate securities	$	15,125	$	916	$	220	$	—	$	15,821		33.8	%
Foreign corporate securities		8,409		561		70		—		8,900		19.0
U.S. Treasury and agency securities		8,615		131		135		—		8,611		18.4
Residential mortgage-backed securities (“RMBS”)		6,563		234		139		86		6,572		14.0
Commercial mortgage-backed securities (“CMBS”)		2,068		115		17		—		2,166		4.6
Asset-backed securities (“ABS”)		1,937		43		72		11		1,897		4.0
State and political subdivision securities		1,903		63		108		—		1,858		4.0
Foreign government securities		928		89		5		—		1,012		2.2
Total fixed maturity securities (1), (2)	$	45,548	$	2,152	$	766	$	97	$	46,837		100.0	%
Equity Securities:
Non-redeemable preferred stock (1)	$	166	$	11	$	16	$	—	$	161		52.3	%
Common stock		127		21		1		—		147		47.7
Total equity securities	$	293	$	32	$	17	$	—	$	308		100.0	%

13

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

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

	December 31, 2010
	Cost or		Gross Unrealized						Estimated
	Amortized				Temporary		OTTI		Fair		% of
	Cost		Gains		Losses		Losses		Value		Total
	(In millions)
Fixed Maturity Securities:
U.S. corporate securities	$	14,860	$	816	$	302	$	—	$	15,374		34.2	%
Foreign corporate securities		8,095		502		127		—		8,470		18.8
U.S. Treasury and agency securities		7,665		143		132		—		7,676		17.1
RMBS		6,803		203		218		79		6,709		14.9
CMBS		2,203		113		39		—		2,277		5.1
ABS		1,927		44		95		7		1,869		4.2
State and political subdivision securities		1,755		22		131		—		1,646		3.7
Foreign government securities		824		81		2		—		903		2.0
Total fixed maturity securities (1), (2)	$	44,132	$	1,924	$	1,046	$	86	$	44,924		100.0	%
Equity Securities:
Non-redeemable preferred stock (1)	$	306	$	9	$	47	$	—	$	268		66.2	%
Common stock		121		17		1		—		137		33.8
Total equity securities	$	427	$	26	$	48	$	—	$	405		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; while those with more equity-like characteristics are classified 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:

			June 30, 2011		December 31, 2010
			Estimated		Estimated
Classification			Fair		Fair
Consolidated Balance Sheets	Sector Table	Primary Issuers	Value		Value
			(In millions)
Fixed maturity securities	Foreign corporate securities	Non-U.S. financial institutions	$	217	$	450
Fixed maturity securities	U.S. corporate securities	U.S. financial institutions	$	10	$	10
Equity securities	Non-redeemable preferred stock	Non-U.S. financial institutions	$	112	$	202
Equity securities	Non-redeemable preferred stock	U.S. financial institutions	$	32	$	35

(2) The Company’s holdings in redeemable preferred stock with stated maturity dates, commonly referred to as “capital securities,” were primarily issued by U.S. financial institutions and have cumulative interest deferral features. The Company held $510 million and $645 million at estimated fair value of such securities at June 30, 2011 and December 31, 2010, respectively, which are included in the U.S. and foreign corporate securities sectors within fixed maturity securities.

The below investment grade and non-income producing amounts presented below are based on rating agency designations and equivalent designations of the National Association of Insurance Commissioners (“NAIC”), with

14

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

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

the exception of certain structured securities described below held by MetLife Insurance Company of Connecticut and its domestic insurance subsidiary. Non-agency RMBS, CMBS and ABS held by MetLife Insurance Company of Connecticut and its domestic insurance subsidiary, are presented based on final ratings from the revised NAIC rating methodologies for structured securities (which may not correspond to rating agency designations). All NAIC designation (e.g., NAIC 1 – 6) amounts and percentages presented herein are based on the revised NAIC methodologies. All rating agency designation (e.g., Aaa/AAA) amounts and percentages presented herein are based on rating agency designations without adjustment for the revised NAIC methodologies described above. Rating agency designations are based on availability of applicable ratings from rating agencies on the NAIC acceptable rating organization list, including Moody’s Investors Service (“Moody’s”), Standard & Poor’s Ratings Services (“S&P”) and Fitch Ratings (“Fitch”).

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

	June 30, 2011			December 31, 2010
	(In millions)
Below investment grade or non-rated fixed maturity securities:
Estimated fair value	$	4,072		$	4,027
Net unrealized gains (losses)	$	(57	)	$	(125	)
Non-income producing fixed maturity securities:
Estimated fair value	$	5		$	36
Net unrealized gains (losses)	$	(1	)	$	2

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 the government securities summarized in the table below.

Concentrations of Credit Risk (Government and Agency Securities).  The following section contains a summary of the concentrations of credit risk related to government and agency fixed maturity and fixed-income securities holdings which were greater than 10% of the Company’s equity at:

	June 30, 2011		December 31, 2010
	Carrying Value (1)
	(In millions)
U.S. Treasury and agency fixed maturity securities	$	8,611	$	7,676
U.S. Treasury and agency fixed-income securities included in:
Short-term investments	$	1,841	$	935
Cash equivalents	$	494	$	1,287

(1) Represents estimated fair value for fixed maturity securities; amortized cost, which approximates estimated fair value or estimated fair value, if available, for short-term investments; and amortized cost, which approximates estimated fair value, for cash equivalents.

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

15

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

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

portfolio does not have an exposure to any single issuer in excess of 1% of total investments. The tables below present information for U.S. and foreign corporate securities at:

	June 30, 2011					December 31, 2010
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
Corporate fixed maturity securities — by sector:
Foreign corporate fixed maturity securities (1)	$	8,900		36.0	%	$	8,470		35.5	%
U.S. corporate fixed maturity securities — by industry:
Consumer		3,988		16.1			3,893		16.3
Industrial		3,497		14.1			3,282		13.7
Utility		3,372		13.6			3,379		14.2
Finance		2,592		10.5			2,569		10.8
Communications		1,544		6.3			1,444		6.1
Other		828		3.4			807		3.4
Total	$	24,721		100.0	%	$	23,844		100.0	%

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

	June 30, 2011					December 31, 2010
	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	$	250		0.4	%	$	252		0.4	%
Holdings in ten issuers with the largest exposures	$	1,671		2.4	%	$	1,683		2.5	%

Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS.  The table below presents information on the Company’s RMBS holdings at:

	June 30, 2011					December 31, 2010
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
By security type:
Collateralized mortgage obligations	$	3,401		51.7	%	$	3,243		48.3	%
Pass-through securities		3,171		48.3			3,466		51.7
Total RMBS	$	6,572		100.0	%	$	6,709		100.0	%
By risk profile:
Agency	$	4,762		72.5	%	$	5,080		75.7	%
Prime		1,071		16.3			1,023		15.3
Alternative residential mortgage loans		739		11.2			606		9.0
Total RMBS	$	6,572		100.0	%	$	6,709		100.0	%
Rated Aaa/AAA	$	4,906		74.7	%	$	5,254		78.3	%
Rated NAIC 1	$	5,337		81.2	%	$	5,618		83.7	%

16

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

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

See Note 2 “— Investments — Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS” of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the security types and risk profile.

The following tables present information on the Company’s investment in alternative residential mortgage loans (“Alt-A”) RMBS at:

	June 30, 2011						December 31, 2010
	Estimated						Estimated
	Fair			% of			Fair			% of
	Value			Total			Value			Total
	(In millions)
Vintage Year:
2005 & Prior	$	361			48.8	%	$	311			51.3	%
2006		188			25.5			88			14.6
2007		190			25.7			207			34.1
2008 to 2011		—			—			—			—
Total	$	739			100.0	%	$	606			100.0	%
	June 30, 2011						December 31, 2010
				% of						% of
	Amount			Total			Amount			Total
	(In millions)
Net unrealized gains (losses)	$	(129	)				$	(141	)
Rated Aa/AA or better					0.5	%					1.5	%
Rated NAIC 1					17.4	%					14.9	%
Distribution of holdings — at estimated fair value — by collateral type:
Fixed rate mortgage loans collateral					97.2	%					96.1	%
Hybrid adjustable rate mortgage loans collateral					2.8						3.9
Total Alt-A RMBS					100.0	%					100.0	%

17

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) — CMBS.  The following tables present information about CMBS held by the Company at:

	June 30, 2011					December 31, 2010
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
Vintage Year:
2003 & Prior	$	728		33.6	%	$	947		41.6	%
2004		455		21.0			442		19.4
2005		430		19.9			431		18.9
2006		455		21.0			442		19.4
2007		16		0.7			15		0.7
2008 to 2011		82		3.8			—		—
Total	$	2,166		100.0	%	$	2,277		100.0	%
	June 30, 2011					December 31, 2010
			% of					% of
	Amount		Total			Amount		Total
	(In millions)
Net unrealized gains (losses)	$	98				$	74
Rated Aaa/AAA				89	%				88	%
Rated NAIC 1				95	%				95	%

The tables above reflect rating agency designations assigned by nationally recognized rating agencies including Moody’s, S&P, Fitch and Realpoint, LLC.

Concentrations of Credit Risk (Fixed Maturity Securities) — ABS.  The Company’s ABS are diversified both by collateral type and by issuer. The following table presents information about ABS held by the Company at:

	June 30, 2011					December 31, 2010
	Estimated					Estimated
	Fair		% of			Fair		% of
	Value		Total			Value		Total
	(In millions)
By collateral type:
Credit card loans	$	565		29.8	%	$	753		40.3	%
Collateralized debt obligations		364		19.2			254		13.5
RMBS backed by sub-prime mortgage loans		231		12.2			247		13.2
Student loans		210		11.0			174		9.3
Utility loans		155		8.2			157		8.4
Automobile loans		145		7.6			98		5.3
Other loans		227		12.0			186		10.0
Total	$	1,897		100.0	%	$	1,869		100.0	%
Rated Aaa/AAA	$	1,083		57.1	%	$	1,251		66.9	%
Rated NAIC 1	$	1,722		90.8	%	$	1,699		90.9	%

18

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 (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 or 1% of total investments at June 30, 2011 and December 31, 2010.

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

	June 30, 2011				December 31, 2010
			Estimated				Estimated
	Amortized		Fair		Amortized		Fair
	Cost		Value		Cost		Value
	(In millions)
Due in one year or less	$	1,816	$	1,833	$	1,874	$	1,889
Due after one year through five years		11,265		11,742		9,340		9,672
Due after five years through ten years		7,595		8,173		7,829		8,333
Due after ten years		14,304		14,454		14,156		14,175
Subtotal		34,980		36,202		33,199		34,069
RMBS, CMBS and ABS		10,568		10,635		10,933		10,855
Total fixed maturity securities	$	45,548	$	46,837	$	44,132	$	44,924

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.

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 2010 Annual Report, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings, including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired.

19

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 income (loss), were as follows:

	June 30, 2011			December 31, 2010
	(In millions)
Fixed maturity securities	$	1,381		$	878
Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss)		(97	)		(86	)
Total fixed maturity securities		1,284			792
Equity securities		18			(21	)
Derivatives		(99	)		(109	)
Short-term investments		(2	)		(2	)
Other		(4	)		(3	)
Subtotal		1,197			657
Amounts allocated from:
Insurance liability loss recognition		(65	)		(33	)
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		6			5
DAC and VOBA		(213	)		(126	)
Subtotal		(272	)		(154	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		33			30
Deferred income tax benefit (expense)		(347	)		(196	)
Net unrealized investment gains (losses)	$	611		$	337

The changes in fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss), were as follows:

	June 30, 2011			December 31, 2010
	(In millions)
Balance, beginning of period	$	(86	)	$	(141	)
Noncredit OTTI losses recognized (1)		(4	)		(53	)
Transferred to retained earnings (2)		—			16
Securities sold with previous noncredit OTTI loss		18			28
Subsequent changes in estimated fair value		(25	)		64
Balance, end of period	$	(97	)	$	(86	)

(1)	Noncredit OTTI losses recognized, net of deferred policy acquisition costs (“DAC”), were ($4) million and ($44) million for the periods ended June 30, 2011 and December 31, 2010, respectively.
(2)	Amounts transferred to retained earnings were in connection with the adoption of guidance related to the consolidation of VIEs as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report.

20

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

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

The changes in net unrealized investment gains (losses) were as follows:

	Six Months
	Ended
	June 30, 2011
	(In millions)
Balance, beginning of period	$	337
Fixed maturity securities on which noncredit OTTI losses have been recognized		(11	)
Unrealized investment gains (losses) during the period		551
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		(32	)
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		1
DAC and VOBA		(87	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		3
Deferred income tax benefit (expense)		(151	)
Balance, end of period	$	611
Change in net unrealized investment gains (losses)	$	274

21

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 Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale by Sector

The following tables present the estimated fair value and gross unrealized losses 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 income (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.

	June 30, 2011
					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		Losses		Value		Losses		Value		Losses
	(In millions, except number of securities)
Fixed Maturity Securities:
U.S. corporate securities	$	1,850	$	40	$	1,320	$	180	$	3,170	$	220
Foreign corporate securities		1,143		24		274		46		1,417		70
U.S. Treasury and agency securities		2,396		115		84		20		2,480		135
RMBS		1,888		41		1,066		184		2,954		225
CMBS		140		1		116		16		256		17
ABS		325		4		531		79		856		83
State and political subdivision securities		324		16		371		92		695		108
Foreign government securities		198		5		3		—		201		5
Total fixed maturity securities	$	8,264	$	246	$	3,765	$	617	$	12,029	$	863
Equity Securities:
Non-redeemable preferred stock	$	20	$	3	$	68	$	13	$	88	$	16
Common stock		9		1		—		—		9		1
Total equity securities	$	29	$	4	$	68	$	13	$	97	$	17
Total number of securities in an unrealized loss position		818				441

22

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

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

	December 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		Losses		Value		Losses		Value		Losses
	(In millions, except number of securities)
Fixed Maturity Securities:
U.S. corporate securities	$	1,956	$	56	$	1,800	$	246	$	3,756	$	302
Foreign corporate securities		727		24		816		103		1,543		127
U.S. Treasury and agency securities		2,857		113		85		19		2,942		132
RMBS		2,228		59		1,368		238		3,596		297
CMBS		68		1		237		38		305		39
ABS		245		5		590		97		835		102
State and political subdivision securities		716		36		352		95		1,068		131
Foreign government securities		49		1		9		1		58		2
Total fixed maturity securities	$	8,846	$	295	$	5,257	$	837	$	14,103	$	1,132
Equity Securities:
Non-redeemable preferred stock	$	26	$	5	$	187	$	42	$	213	$	47
Common stock		9		1		—		—		9		1
Total equity securities	$	35	$	6	$	187	$	42	$	222	$	48
Total number of securities in an unrealized loss position		759				637

23

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 Losses and OTTI Losses for Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized losses, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss), gross unrealized losses 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:

	June 30, 2011
	Cost or Amortized Cost				Gross Unrealized Losses						Number of 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	$	4,795	$	368	$	70		$	83			492		32
Six months or greater but less than nine months		3,333		203		143			51			180		16
Nine months or greater but less than twelve months		369		15		29			5			146		4
Twelve months or greater		3,295		514		305			177			340		48
Total	$	11,792	$	1,100	$	547		$	316
Percentage of amortized cost						5	%		29	%
Equity Securities:
Less than six months	$	9	$	2	$	—		$	1			3		4
Six months or greater but less than nine months		23		—		3			—			6		1
Nine months or greater but less than twelve months		—		—		—			—			—		2
Twelve months or greater		62		18		7			6			8		2
Total	$	94	$	20	$	10		$	7
Percentage of cost						11	%		35	%

24

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

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

	December 31, 2010
	Cost or Amortized Cost				Gross Unrealized Losses						Number of 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	$	8,882	$	439	$	268		$	109			686		43
Six months or greater but less than nine months		152		40		6			13			30		10
Nine months or greater but less than twelve months		48		25		2			11			11		3
Twelve months or greater		4,768		881		450			273			475		101
Total	$	13,850	$	1,385	$	726		$	406
Percentage of amortized cost						5	%		29	%
Equity Securities:
Less than six months	$	31	$	30	$	4		$	7			8		12
Six months or greater but less than nine months		—		3		—			1			—		1
Nine months or greater but less than twelve months		5		7		—			2			1		1
Twelve months or greater		150		44		18			16			12		5
Total	$	186	$	84	$	22		$	26
Percentage of cost						12	%		31	%

Equity securities with gross unrealized losses of 20% or more for twelve months or greater decreased from $16 million at December 31, 2010 to $6 million at June 30, 2011. As shown in the section “— Evaluating Temporarily Impaired Available-for-Sale Securities” below, all of the equity securities with gross unrealized losses of 20% or more for twelve months or greater at June 30, 2011 were financial services industry investment grade non-redeemable preferred stock, of which 33% were rated A or better.

25

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 Losses and OTTI Losses 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 losses on fixed maturity securities recognized in accumulated other comprehensive income (loss) were $880 million and $1.2 billion at June 30, 2011 and December 31, 2010, respectively. The concentration, calculated as a percentage of gross unrealized losses (including OTTI losses) by sector and industry was as follows at:

	June 30, 2011			December 31, 2010
Sector:
RMBS		26	%		25	%
U.S. corporate securities		25			26
U.S. Treasury and agency securities		15			11
State and political subdivision securities		12			11
ABS		9			9
Foreign corporate securities		8			11
CMBS		2			3
Other		3			4
Total		100	%		100	%
Industry:
Mortgage-backed		28	%		28	%
U.S. Treasury and agency securities		15			11
Finance		12			19
State and political subdivision securities		12			11
Asset-backed		9			9
Consumer		6			5
Utility		3			3
Communications		2			2
Transportation		2			1
Industrial		1			1
Other		10			10
Total		100	%		100	%

Evaluating Temporarily Impaired Available-for-Sale Securities

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

	June 30, 2011						December 31, 2010
	Fixed Maturity			Equity			Fixed Maturity			Equity
	Securities			Securities			Securities			Securities
	(In millions, except number of securities)
Number of securities		17			—			15			—
Total gross unrealized losses	$	249		$	—		$	210		$	—
Percentage of total gross unrealized losses		29	%		—	%		19	%		—	%

26

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 gross unrealized losses greater than $10 million, increased $39 million during the six months ended June 30, 2011. The increase in gross unrealized losses for the six months ended June 30, 2011 was primarily attributable to an increase in 30-year interest rates on our longer-term U.S. Treasury securities. 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 are 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 are 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 gross unrealized losses of 20% or more at June 30, 2011:

			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					% A
	Unrealized		Unrealized		Equity			Unrealized		Non-Redeemable			Unrealized		% of All			Rated or
	Losses		Losses		Securities			Losses		Preferred Stock			Losses		Industries			Better
	(In millions)
Less than six months	$	1	$	—		—	%	$	—		—	%	$	—		—	%		—	%
Six months or greater but less than twelve months		—		—		—	%		—		—	%		—		—	%		—	%
Twelve months or greater		6		6		100	%		6		100	%		6		100	%		33	%
All equity securities with gross unrealized losses of 20% or more	$	7	$	6		86	%	$	6		100	%	$	6		100	%		33	%

In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those in the financial services industry. 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 had been 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 OTTIs will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, changes in collateral

27

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

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

valuation, changes in interest rates and changes in credit spreads. If economic fundamentals and any of the above factors deteriorate, additional OTTIs may be incurred in upcoming quarters.

Net Investment Gains (Losses)

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

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In millions)
Total gains (losses) on fixed maturity securities:
Total OTTI losses recognized	$	(21	)	$	(19	)	$	(30	)	$	(53	)
Less: Noncredit portion of OTTI losses transferred to and recognized in other comprehensive income (loss)		6			7			4			23
Net OTTI losses on fixed maturity securities recognized in earnings		(15	)		(12	)		(26	)		(30	)
Fixed maturity securities — net gains (losses) on sales and disposals		2			58			(18	)		62
Total gains (losses) on fixed maturity securities		(13	)		46			(44	)		32
Other net investment gains (losses):
Equity securities		(24	)		20			(23	)		19
Mortgage loans		14			(7	)		18			(15	)
Real estate and real estate joint ventures		—			(3	)		—			(19	)
Other limited partnership interests		(4	)		(8	)		(2	)		(10	)
Other investment portfolio gains (losses)		(1	)		(4	)		(5	)		7
Subtotal — investment portfolio gains (losses)		(28	)		44			(56	)		14
Fair value option (“FVO”) consolidated securitization entities — changes in estimated fair value:
Commercial mortgage loans		7			172			25			653
Long-term debt — related to commercial mortgage loans		(5	)		(162	)		(11	)		(647	)
Other gains (losses)		(1	)		(4	)		1			67
Subtotal FVO consolidated securitization entities and other gains (losses)		1			6			15			73
Total net investment gains (losses)	$	(27	)	$	50		$	(41	)	$	87

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

See “— Related Party Investment Transactions” for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($2) million and ($3) million for the three months and six months ended June 30, 2011, respectively, and ($4) million and $76 million for the three months and six months ended June 30, 2010, respectively.

28

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) were as shown below. Investment gains and losses on sales of securities are determined on a specific identification basis.

	Three Months Ended June 30,
	2011			2010			2011			2010		2011			2010
	Fixed Maturity Securities						Equity Securities					Total
	(In millions)
Proceeds	$	2,529		$	3,076		$	128		$	74	$	2,657		$	3,150
Gross investment gains	$	33		$	87		$	2		$	20	$	35		$	107
Gross investment losses		(31	)		(29	)		(20	)		—		(51	)		(29	)
Total OTTI losses recognized in earnings:
Credit-related		(6	)		(12	)		—			—		(6	)		(12	)
Other (1)		(9	)		—			(6	)		—		(15	)		—
Total OTTI losses recognized in earnings		(15	)		(12	)		(6	)		—		(21	)		(12	)
Net investment gains (losses)	$	(13	)	$	46		$	(24	)	$	20	$	(37	)	$	66

	Six Months Ended June 30,
	2011			2010			2011			2010			2011			2010
	Fixed Maturity Securities						Equity Securities						Total
	(In millions)
Proceeds	$	5,042		$	5,264		$	144		$	79		$	5,186		$	5,343
Gross investment gains	$	51		$	131		$	5		$	20		$	56		$	151
Gross investment losses		(69	)		(69	)		(22	)		(1	)		(91	)		(70	)
Total OTTI losses recognized in earnings:
Credit-related		(17	)		(29	)		—			—			(17	)		(29	)
Other (1)		(9	)		(1	)		(6	)		—			(15	)		(1	)
Total OTTI losses recognized in earnings		(26	)		(30	)		(6	)		—			(32	)		(30	)
Net investment gains (losses)	$	(44	)	$	32		$	(23	)	$	19		$	(67	)	$	51

(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.

29

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

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

Fixed maturity security OTTI losses recognized in earnings related to the following sectors and industries within the U.S. and foreign corporate securities sector:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Sector:
U.S. and foreign corporate securities — by industry:
Finance	$	9	$	1	$	9	$	2
Communications		—		—		4		3
Consumer		—		—		—		9
Utility		—		2		—		2
Total U.S. and foreign corporate securities		9		3		13		16
ABS		3		—		5		—
RMBS		3		3		5		7
CMBS		—		6		3		7
Total	$	15	$	12	$	26	$	30

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

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Sector:
Non-redeemable preferred stock	$	6	$	—	$	6	$	—
Total	$	6	$	—	$	6	$	—
Industry:
Financial services industry — perpetual hybrid securities	$	6	$	—	$	6	$	—
Total	$	6	$	—	$	6	$	—

30

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

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

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 Income (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 for which a portion of the OTTI loss was recognized in other comprehensive income (loss):

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In millions)
Balance, beginning of period	$	43		$	80		$	63		$	213
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		4			1			4			3
Additional impairments — credit loss OTTI recognized on securities previously impaired		1			4			4			6
Reductions:
Due to sales (maturities, pay downs or prepayments) during the period of securities previously credit loss OTTI impaired		(2	)		(16	)		(4	)		(52	)
Due to securities de-recognized in connection with the adoption of new guidance related to the consolidation of VIEs		—			—			—			(100	)
Due to securities impaired to net present value of expected future cash flows		—			—			(20	)		—
Due to increases in cash flows — accretion of previous credit loss OTTI		—			(1	)		(1	)		(2	)
Balance, end of period	$	46		$	68		$	46		$	68

31

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 were as follows:

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2011		2010			2011			2010
	(In millions)
Investment income:
Fixed maturity securities	$	538	$	525		$	1,073		$	1,054
Equity securities		5		7			7			9
Other securities — FVO general account securities (1)		1		—			1			—
Mortgage loans		87		72			171			140
Policy loans		15		17			31			33
Real estate and real estate joint ventures		10		1			2			(25	)
Other limited partnership interests		40		34			120			102
Cash, cash equivalents and short-term investments		1		1			3			3
International joint ventures		2		(1	)		1			(2	)
Other		3		9			5			11
Subtotal		702		665			1,414			1,325
Less: Investment expenses		27		23			51			46
Subtotal, net		675		642			1,363			1,279
Other securities — FVO contractholder-directed unit-linked investments (1)		25		(22	)		30			26
FVO consolidated securitization entities — Commercial mortgage loans		96		105			191			210
Subtotal		121		83			221			236
Net investment income	$	796	$	725		$	1,584		$	1,515
(1) Changes in estimated fair value subsequent to purchase included in net investment income were:
Other securities — FVO general account securities	$	1	$	—		$	1		$	—
Other securities — FVO contractholder-directed unit-linked	$	18	$	(38	)	$	(7	)	$	3

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

Affiliated investment expenses, included in the table above, were $18 million and $33 million for the three months and six months ended June 30, 2011, respectively, and $14 million and $27 million for the three months and six months ended June 30, 2010, respectively. See “— Related Party Investment Transactions” for discussion of affiliated net investment income included in the table above.

Securities Lending

The Company participates in a securities lending program 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. The Company generally obtains collateral, generally cash, in an amount equal to 102% of the estimated fair value of the securities loaned, which is obtained at the inception of a loan and maintained at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be sold or

32

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

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

repledged by the transferee. The Company is liable to return to its counterparties the cash collateral under its control. These transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received.

Elements of the securities lending program are presented below at:

	June 30, 2011		December 31, 2010
	(In millions)
Securities on loan:
Amortized cost	$	6,992	$	6,992
Estimated fair value	$	7,047	$	7,054
Aging of cash collateral liability:
Open (1)	$	845	$	1,292
Less than thirty days		4,479		3,297
Thirty days or greater but less than sixty days		1,039		1,221
Sixty days or greater but less than ninety days		513		326
Ninety days or greater		340		1,002
Total cash collateral liability	$	7,216	$	7,138
Security collateral on deposit from counterparties	$	9	$	—
Reinvestment portfolio — estimated fair value	$	7,097	$	6,916

(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 June 30, 2011 was $825 million, of which $743 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 U.S. Treasury securities on loan were primarily holdings of on-the-run U.S. Treasury securities, the most liquid U.S. Treasury securities available. If these high quality securities that are on loan are put back to the Company, the proceeds from immediately selling these securities can be used to satisfy the related cash requirements. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including RMBS, U.S. Treasury and agency securities, U.S. corporate securities and ABS). If the on loan securities or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities are put back to the Company.

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.

33

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

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

Invested Assets on Deposit and Pledged as Collateral

Invested assets on deposit and pledged as collateral are presented below at estimated fair value for cash and cash equivalents and fixed maturity securities and at carrying value for mortgage loans.

	June 30, 2011		December 31, 2010
	(In millions)
Invested assets on deposit:
Regulatory agencies	$	55	$	55
Invested assets pledged as collateral:
Funding agreements — Federal Home Loan Bank of Boston		534		211
Funding agreements — Federal Agricultural Mortgage Corporation		231		231
Derivative transactions		82		83
Total invested assets on deposit and pledged as collateral	$	902	$	580

See Note 2 “— Investments — Invested Assets on Deposit and Pledged as Collateral” of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the types of invested assets on deposit and pledged as collateral and selected other information about the related program or counterparty.

See also “— Securities Lending” for the amount of the Company’s cash received from and due back to counterparties pursuant to the Company’s securities lending program. See “— Variable Interest Entities” for assets of certain CSEs that can only be used to settle liabilities of such entities.

Other Securities

The table below presents certain information about the Company’s securities for which the FVO has been elected:

	June 30, 2011		December 31, 2010
	(In millions)
FVO general account securities	$	48	$	7
FVO contractholder-directed unit-linked investments		3,041		2,240
Total other securities — at estimated fair value	$	3,089	$	2,247

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for discussion of FVO contractholder-directed unit-linked investments. See “— Net Investment Income” for the net investment income recognized on other securities and the related changes in estimated fair value subsequent to purchase included in net investment income.

34

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

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

Mortgage Loans

Mortgage loans are summarized as follows at:

	June 30, 2011						December 31, 2010
	Carrying			% of			Carrying			% of
	Value			Total			Value			Total
	(In millions)
Mortgage loans:
Commercial	$	4,675			37.0	%	$	4,635			36.4	%
Agricultural		1,343			10.6			1,342			10.6
Subtotal		6,018			47.6	%		5,977			47.0	%
Valuation allowances		(70	)		(0.6	)		(87	)		(0.7	)
Subtotal mortgage loans, net		5,948			47.0	%		5,890			46.3	%
Commercial mortgage loans held by consolidated securitization entities — FVO		6,697			53.0			6,840			53.7
Total mortgage loans, net	$	12,645			100.0	%	$	12,730			100.0	%

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

See Note 2 of the Notes to the Consolidated Financial Statements in the 2010 Annual Report for discussion of affiliated mortgage loans included in the table above. The carrying values of such loans were $198 million and $199 million at June 30, 2011 and December 31, 2010, respectively.

Concentration of Credit Risk.  The Company diversifies its mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration. The Company’s commercial and agricultural mortgage loans are collateralized by properties primarily located in the United States (“U.S.”). The carrying values of the Company’s commercial and agricultural mortgage loans located in California, New York and Illinois were 26%, 16% and 6%, respectively, of total mortgage loans (excluding commercial mortgage loans held by CSEs) at June 30, 2011. Additionally, the Company manages risk when originating commercial and agricultural mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate.

35

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 recorded investment in mortgage loans, by portfolio segment, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, at:

	Commercial		Agricultural		Total
	(In millions)
June 30, 2011:
Mortgage loans:
Evaluated individually for credit losses	$	23	$	—	$	23
Evaluated collectively for credit losses		4,652		1,343		5,995
Total mortgage loans		4,675		1,343		6,018
Valuation allowances:
Specific credit losses		15		—		15
Non-specifically identified credit losses		51		4		55
Total valuation allowances		66		4		70
Mortgage loans, net of valuation allowance	$	4,609	$	1,339	$	5,948
December 31, 2010:
Mortgage loans:
Evaluated individually for credit losses	$	23	$	—	$	23
Evaluated collectively for credit losses		4,612		1,342		5,954
Total mortgage loans		4,635		1,342		5,977
Valuation allowances:
Specific credit losses		23		—		23
Non-specifically identified credit losses		61		3		64
Total valuation allowances		84		3		87
Mortgage loans, net of valuation allowance	$	4,551	$	1,339	$	5,890

36

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 changes in the valuation allowance, by portfolio segment:

	Mortgage Loan Valuation Allowances
	Commercial			Agricultural		Total
	(In millions)
For the Three Months Ended June 30, 2011:
Balance, beginning of period	$	80		$	4	$	84
Provision (release)		(14	)		—		(14	)
Charge-offs, net of recoveries		—			—		—
Balance, end of period	$	66		$	4	$	70
For the Three Months Ended June 30, 2010:
Balance, beginning of period	$	82		$	3	$	85
Provision (release)		8			—		8
Charge-offs, net of recoveries		—			—		—
Balance, end of period	$	90		$	3	$	93
For the Six Months Ended June 30, 2011:
Balance, beginning of period	$	84		$	3	$	87
Provision (release)		(18	)		1		(17	)
Charge-offs, net of recoveries		—			—		—
Balance, end of period	$	66		$	4	$	70
For the Six Months Ended June 30, 2010:
Balance, beginning of period	$	74		$	3	$	77
Provision (release)		16			—		16
Charge-offs, net of recoveries		—			—		—
Balance, end of period	$	90		$	3	$	93

37

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

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

Commercial Mortgage Loans — by Credit Quality Indicators with Estimated Fair Value.  Presented below for the commercial mortgage loans is the recorded investment, prior to valuation allowances, by the indicated loan-to-value ratio categories and debt service coverage ratio categories and estimated fair value of such mortgage loans by the indicated loan-to-value ratio categories at:

	Commercial
	Recorded Investment
	Debt Service Coverage Ratios											Estimated
	> 1.20x		1.00x - 1.20x		< 1.00x		Total		% of Total			Fair Value		% of Total
	(In millions)											(In millions)
June 30, 2011:
Loan-to-value ratios:
Less than 65%	$	2,417	$	35	$	148	$	2,600		55.6	%	$	2,771		57.6	%
65% to 75%		680		43		137		860		18.4			900		18.8
76% to 80%		315		—		—		315		6.7			314		6.5
Greater than 80%		672		113		115		900		19.3			824		17.1
Total	$	4,084	$	191	$	400	$	4,675		100.0	%	$	4,809		100.0	%
December 31, 2010:
Loan-to-value ratios:
Less than 65%	$	2,051	$	11	$	34	$	2,096		45.2	%	$	2,196		47.1	%
65% to 75%		824		99		148		1,071		23.1			1,099		23.6
76% to 80%		301		29		7		337		7.3			347		7.4
Greater than 80%		828		163		140		1,131		24.4			1,018		21.9
Total	$	4,004	$	302	$	329	$	4,635		100.0	%	$	4,660		100.0	%

Agricultural Mortgage Loans — by Credit Quality Indicator.  The recorded investment in agricultural mortgage loans, prior to valuation allowances, by credit quality indicator, is as shown below. The estimated fair value of agricultural mortgage loans was $1.4 billion at both June 30, 2011 and December 31, 2010.

	Agricultural
	June 30, 2011					December 31, 2010
	Recorded Investment		% of Total			Recorded Investment		% of Total
	(In millions)					(In millions)
Loan-to-value ratios:
Less than 65%	$	1,284		95.6	%	$	1,289		96.0	%
65% to 75%		59		4.4			53		4.0
Total	$	1,343		100.0	%	$	1,342		100.0	%

38

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

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

Past Due and Interest Accrual Status of Mortgage Loans.  The Company has a high quality, well performing, mortgage loan portfolio with approximately 99% of all mortgage loans classified as performing at both June 30, 2011 and December 31, 2010. The Company defines delinquent mortgage loans consistent with industry practice, when interest and principal payments are past due as follows: commercial mortgage loans — 60 days or more past due; and agricultural mortgage loans — 90 days or more past due. The recorded investment in mortgage loans, prior to valuation allowances, past due according to these aging categories, greater than 90 days past due and still accruing interest and in nonaccrual status, by portfolio segment, were as follows at:

					Greater than 90 Days Past Due
	Past Due				Still Accruing Interest				Nonaccrual Status
	June 30, 2011		December 31, 2010		June 30, 2011		December 31, 2010		June 30, 2011		December 31, 2010
	(In millions)
Commercial	$	—	$	—	$	—	$	—	$	—	$	1
Agricultural		7		7		1		—		6		6
Total	$	7	$	7	$	1	$	—	$	6	$	7

Impaired Mortgage Loans.  The unpaid principal balance, recorded investment, valuation allowances and carrying value, net of valuation allowances, for impaired mortgage loans, by portfolio segment, were as follows at:

	Impaired Mortgage Loans
									Loans without
	Loans with a Valuation Allowance								a Valuation Allowance				All Impaired Loans
	Unpaid								Unpaid				Unpaid
	Principal		Recorded		Valuation		Carrying		Principal		Recorded		Principal		Carrying
	Balance		Investment		Allowances		Value		Balance		Investment		Balance		Value
	(In millions)
June 30, 2011:
Commercial	$	23	$	23	$	15	$	8	$	—	$	—	$	23	$	8
Agricultural		—		—		—		—		7		7		7		7
Total	$	23	$	23	$	15	$	8	$	7	$	7	$	30	$	15
December 31, 2010:
Commercial	$	23	$	23	$	23	$	—	$	—	$	—	$	23	$	—
Agricultural		—		—		—		—		7		7		7		7
Total	$	23	$	23	$	23	$	—	$	7	$	7	$	30	$	7

Unpaid principal balance is generally prior to any charge-off.

39

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

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

The average investment in impaired mortgage loans, and the related interest income, by portfolio segment, was:

	Impaired Mortgage Loans
	Average Investment		Interest Income Recognized
			Cash Basis		Accrual Basis
	(In millions)
For the Three Months Ended June 30, 2011:
Commercial	$	23	$	—	$	—
Agricultural		7		—		—
Total	$	30	$	—	$	—
For the Three Months Ended June 30, 2010:
Commercial	$	54	$	2	$	—
Agricultural		15		—		—
Total	$	69	$	2	$	—
For the Six Months Ended June 30, 2011:
Commercial	$	23	$	1	$	—
Agricultural		7		—		—
Total	$	30	$	1	$	—
For the Six Months Ended June 30, 2010:
Commercial	$	44	$	2	$	—
Agricultural		14		—		—
Total	$	58	$	2	$	—

Cash Equivalents

Cash equivalents, which include investments with an original or remaining maturity of three months or less, at the time of purchase, were $1.1 billion and $1.8 billion at June 30, 2011 and December 31, 2010, respectively.

Purchased Credit Impaired Investments

Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI.

40

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

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

The table below presents the purchased credit impaired fixed maturity securities held at:

	June 30, 2011		December 31, 2010
	(In millions)
Outstanding principal and interest balance (1)	$	429	$	20
Carrying value (2)	$	333	$	19

(1)	Represents the contractually required payments which is the sum of contractual principal, whether or not currently due, and accrued interest.
(2)	Estimated fair value plus accrued interest.

The following table presents information about purchased credit impaired fixed maturity securities acquired during the periods, as of their respective acquisition dates:

	Six Months
	Ended
	June 30,
	2011		2010
	(In millions)
Contractually required payments (including interest)	$	672	$	—
Cash flows expected to be collected (1)	$	621	$	—
Fair value of investments acquired	$	325	$	—

(1) Represents undiscounted principal and interest cash flow expectations at the date of acquisition.

The following table presents activity for the accretable yield on purchased credit impaired fixed maturity securities for:

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2011			2010		2011			2010
	(In millions)
Accretable yield, beginning of period	$	30		$	—	$	5		$	—
Investments purchased		273			—		296			—
Accretion recognized in net investment income		(3	)		—		(3	)		—
Disposals		—			—		—			—
Reclassification (to) from nonaccretable difference		6			—		8			—
Accretable yield, end of period	$	306		$	—	$	306		$	—

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, 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 at June 30, 2011 and December 31, 2010. Creditors or beneficial interest holders of

41

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

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

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.

	June 30, 2011		December 31, 2010
	(In millions)
Consolidated securitization entities: (1)
Assets:
Mortgage loans held-for-investment (commercial mortgage loans)	$	6,697	$	6,840
Accrued investment income		32		31
Total assets	$	6,729	$	6,871
Liabilities:
Long-term debt	$	6,617	$	6,773
Other liabilities		31		31
Total liabilities	$	6,648	$	6,804

(1) The Company consolidated former qualified special purpose entities (“QSPEs”) that are structured as CMBS. The assets of these entities can only be used to settle their respective 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 was limited to that of its remaining investment in the former QSPEs of $76 million and $64 million at estimated fair value at June 30, 2011 and December 31, 2010, respectively. 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 $94 million and $187 million for the three months and six months ended June 30, 2011, respectively, and $101 million and $204 million for the three months and six months ended June 30, 2010, respectively.

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:

	June 30, 2011				December 31, 2010
			Maximum				Maximum
	Carrying		Exposure		Carrying		Exposure
	Amount		to Loss (1)		Amount		to Loss (1)
			(In millions)
Fixed maturity securities available-for-sale:
RMBS (2)	$	6,572	$	6,572	$	6,709	$	6,709
CMBS (2)		2,166		2,166		2,277		2,277
ABS (2)		1,897		1,897		1,869		1,869
U.S. corporate securities		379		379		336		336
Foreign corporate securities		333		333		348		348
Other limited partnership interests		1,208		1,909		1,192		1,992
Real estate joint ventures		26		30		10		35
Total	$	12,581	$	13,286	$	12,741	$	13,566

(1) The maximum exposure to loss relating to the fixed maturity securities is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to the other limited partnership

42

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

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

	interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments of the Company. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.
(2)	For these variable 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 six months ended June 30, 2011.

Related Party Investment Transactions

At June 30, 2011 and December 31, 2010, the Company held $83 million and $63 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 for the three months and six months ended June 30, 2011, and for the three months and six months ended June 30, 2010.

In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. There were no invested assets transferred from affiliates, inclusive of amounts related to reinsurance agreements, for the three months and six months ended June 30, 2011 and 2010. Invested assets transferred to affiliates, inclusive of amounts related to reinsurance agreements, were as follows:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Estimated fair value of assets transferred to affiliates	$	—	$	445	$	—	$	445
Amortized cost of assets transferred to affiliates	$	—	$	406	$	—	$	406
Net investment gains (losses) recognized on transfers	$	—	$	39	$	—	$	39

3.   Derivative Financial Instruments

Accounting for Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage various 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 OTC 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.

43

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

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

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 derivative gains (losses) except for those (i) in policyholder benefits and claims for economic hedges of variable annuity guarantees included in future policy benefits; and (ii) in net investment income for economic hedges of equity method investments in joint ventures. 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.

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 being hedged, are reported within net derivative 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 derivative 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 derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value

44

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

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

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 derivative 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 derivative 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 derivative 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 derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire 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) or net investment income. 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) or net investment income if that contract contains an embedded derivative that requires bifurcation.

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

45

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

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

Primary Risks Managed by 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 gross notional amount, estimated fair value and primary underlying risk exposure of the Company’s derivative financial instruments, excluding embedded derivatives, held at:

		June 30, 2011						December 31, 2010
				Estimated Fair						Estimated Fair
Primary Underlying		Notional		Value (1)				Notional		Value (1)
Risk Exposure	Instrument Type	Amount		Assets		Liabilities		Amount		Assets		Liabilities
		(In millions)
Interest rate	Interest rate swaps	$	10,912	$	686	$	244	$	9,102	$	658	$	252
	Interest rate floors		7,986		139		73		7,986		127		62
	Interest rate caps		7,658		33		—		7,158		29		1
	Interest rate futures		2,135		5		5		1,966		5		7
	Interest rate forwards		695		—		67		695		—		71
Foreign currency	Foreign currency swaps		2,019		384		92		2,561		585		68
	Foreign currency forwards		189		1		4		151		4		1
Credit	Credit default swaps		1,833		16		16		1,324		15		22
Equity market	Equity futures		249		1		2		93		—		—
	Equity options		1,778		228		—		733		77		—
	Variance swaps		1,807		15		13		1,081		20		8
	Total rate of return swaps		150		—		—		—		—		—
	Total	$	37,411	$	1,508	$	516	$	32,850	$	1,520	$	492

(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.

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.

46

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

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

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 writes covered call options on its portfolio of U.S. Treasuries as an income generation strategy. In a covered call transaction, the Company receives a premium at the inception of the contract in exchange for giving the derivative counterparty the right to purchase the referenced security from the Company at a predetermined price. The call option is “covered” because the Company owns the referenced security over the term of the option. Covered call options are included in interest rate options. The Company utilizes covered call options 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 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.

47

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

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

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.

Total rate of return swaps (“TRRs”) are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the London Inter-Bank Offer Rate (“LIBOR”), calculated by reference to an agreed notional principal amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. These transactions are entered into pursuant to master agreements that provide for a single net payment to

48

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

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

be made by the counterparty at each due date. The Company uses TRRs to hedge its equity market guarantees in certain of its insurance products. TRRs can be used as hedges or to synthetically create investments. The Company utilizes TRRs in non-qualifying hedging relationships.

Hedging

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

	June 30, 2011						December 31, 2010
	Notional		Estimated Fair Value				Notional		Estimated Fair Value
Derivatives Designated as Hedging Instruments	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)
Fair value hedges:
Foreign currency swaps	$	598	$	272	$	16	$	787	$	334	$	18
Interest rate swaps		330		11		16		193		11		15
Subtotal		928		283		32		980		345		33
Cash flow hedges:
Foreign currency swaps		441		17		16		295		15		11
Interest rate swaps		415		—		26		575		1		45
Interest rate forwards		695		—		67		695		—		71
Subtotal		1,551		17		109		1,565		16		127
Total qualifying hedges	$	2,479	$	300	$	141	$	2,545	$	361	$	160

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

	June 30, 2011						December 31, 2010
Derivatives Not Designated or Not	Notional		Estimated Fair Value				Notional		Estimated Fair Value
Qualifying as Hedging Instruments	Amount		Assets		Liabilities		Amount		Assets		Liabilities
	(In millions)
Interest rate swaps	$	10,167	$	675	$	202	$	8,334	$	646	$	192
Interest rate floors		7,986		139		73		7,986		127		62
Interest rate caps		7,658		33		—		7,158		29		1
Interest rate futures		2,135		5		5		1,966		5		7
Foreign currency swaps		980		95		60		1,479		236		39
Foreign currency forwards		189		1		4		151		4		1
Credit default swaps		1,833		16		16		1,324		15		22
Equity futures		249		1		2		93		—		—
Equity options		1,778		228		—		733		77		—
Variance swaps		1,807		15		13		1,081		20		8
Total rate of return swaps		150		—		—		—		—		—
Total non-designated or non-qualifying derivatives	$	34,932	$	1,208	$	375	$	30,305	$	1,159	$	332

49

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

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

Net Derivative Gains (Losses)

The components of net derivative gains (losses) were as follows:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011			2010
	(In millions)
Derivatives and hedging gains (losses) (1)	$	9	$	231	$	(94	)	$	134
Embedded derivatives		124		332		71			121
Total net derivative gains (losses)	$	133	$	563	$	(23	)	$	255

(1) Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedge relationships, which are not presented elsewhere in this note.

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

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2011		2010			2011		2010
	(In millions)
Qualifying hedges:
Net investment income	$	—	$	1		$	1	$	1
Interest credited to policyholder account balances		12		6			23		16
Non-qualifying hedges:
Net derivative gains (losses)		7		(1	)		17		(7	)
Total	$	19	$	6		$	41	$	10

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.

50

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

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

The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table represents the amount of such net derivative gains (losses):

		Net Derivative			Net Derivative			Ineffectiveness
		Gains (Losses)			Gains (Losses)			Recognized in
Derivatives in Fair Value	Hedged Items in Fair Value	Recognized			Recognized for			Net Derivative
Hedging Relationships	Hedging Relationships	for Derivatives			Hedged Items			Gains (Losses)
		(In millions)
For the Three Months Ended June 30, 2011:
Interest rate swaps:	Fixed maturity securities	$	(4	)	$	3		$	(1	)
	Policyholder account balances (1)		5			(5	)		—
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		14			(17	)		(3	)
Total		$	15		$	(19	)	$	(4	)
For the Three Months Ended June 30, 2010:
Interest rate swaps:	Fixed maturity securities	$	(1	)	$	1		$	—
	Policyholder account balances (1)		4			(1	)		3
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(65	)		55			(10	)
Total		$	(62	)	$	55		$	(7	)
For the Six Months Ended June 30, 2011:
Interest rate swaps:	Fixed maturity securities	$	(3	)	$	2		$	(1	)
	Policyholder account balances (1)		—			(1	)		(1	)
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		36			(43	)		(7	)
Total		$	33		$	(42	)	$	(9	)
For the Six Months Ended June 30, 2010:
Interest rate swaps:	Fixed maturity securities	$	(1	)	$	1		$	—
	Policyholder account balances (1)		5			(5	)		—
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(117	)		99			(18	)
Total		$	(113	)	$	95		$	(18	)

(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.

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; (iii) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments; and (iv) interest rate swaps to convert floating rate investments to fixed rate investments.

In certain instances, 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. The net amounts reclassified into net derivative gains (losses) for both the three months and six months ended June 30, 2011 related to such discontinued cash flow hedges were $1 million. For the three months and six months ended June 30,

51

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

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

2010, 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.

At both June 30, 2011 and December 31, 2010, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed six years.

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

	Three Months					Six Months
	Ended					Ended
	June 30,					June 30,
	2011			2010		2011			2010
	(In millions)
Accumulated other comprehensive income (loss), balance at beginning of period	$	(132	)	$	4	$	(109	)	$	(1	)
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges		35			17		14			20
Amounts reclassified to net derivative gains (losses)		(2	)		2		(4	)		4
Accumulated other comprehensive income (loss), balance at end of period	$	(99	)	$	23	$	(99	)	$	23

At June 30, 2011, ($2) million of deferred net gains (losses) on derivatives in accumulated other comprehensive income (loss) was expected to be reclassified to earnings within the next 12 months.

52

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 interim condensed consolidated statements of operations and the interim condensed consolidated statements of stockholders’ equity:

	Amount of Gains			Amount and Location
	(Losses) Deferred			of Gains (Losses)			Amount and Location
	in Accumulated Other			Reclassified from			of Gains (Losses)
Derivatives in Cash Flow	Comprehensive Income			Accumulated Other Comprehensive			Recognized in Income (loss)
Hedging Relationships	(Loss) on Derivatives			Income (Loss) into Income (Loss)			on Derivatives
							(Ineffective Portion and
							Amount Excluded from
	(Effective Portion)			(Effective Portion)			Ineffectiveness Testing)
				Net Derivative			Net Derivative
				Gains (Losses)			Gains (Losses)
	(In millions)
For the Three Months Ended June 30, 2011:
Interest rate swaps	$	15		$	1		$	—
Foreign currency swaps		—			—			—
Interest rate forwards		20			—			(8	)
Credit forwards		—			1			—
Total	$	35		$	2		$	(8	)
For the Three Months Ended June 30, 2010:
Interest rate swaps	$	1		$	—		$	—
Foreign currency swaps		10			(4	)		—
Interest rate forwards		—			2			—
Credit forwards		6			—			—
Total	$	17		$	(2	)	$	—
For the Six Months Ended June 30, 2011:
Interest rate swaps	$	4		$	1		$	—
Foreign currency swaps		(1	)		2			—
Interest rate forwards		11			—			(8	)
Credit forwards		—			1			—
Total	$	14		$	4		$	(8	)
For the Six Months Ended June 30, 2010:
Interest rate swaps	$	1		$	—		$	—
Foreign currency swaps		10			(6	)		—
Interest rate forwards		—			2			—
Credit forwards		9			—			—
Total	$	20		$	(4	)	$	—

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

53

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

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

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, TRRs 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; (x) covered call options for income generation; and (xi) equity options to economically hedge certain invested assets against adverse changes in equity indices.

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

	Net			Net			Policyholder
	Derivative			Investment			Benefits
	Gains (Losses)			Income (1)			and Claims (2)
	(In millions)
For the Three Months Ended June 30, 2011:
Interest rate swaps	$	28		$	—		$	—
Interest rate floors		18			—			—
Interest rate caps		(16	)		—			—
Interest rate futures		(11	)		—			—
Equity futures		4			—			(1	)
Foreign currency swaps		(1	)		—			—
Foreign currency forwards		(5	)		—			—
Equity options		1			(1	)		—
Variance swaps		(4	)		—			—
Credit default swaps		2			—			—
Total	$	16		$	(1	)	$	(1	)
For the Three Months Ended June 30, 2010:
Interest rate swaps	$	45		$	—		$	—
Interest rate floors		54			—			—
Interest rate caps		(6	)		—			—
Interest rate futures		(23	)		—			—
Equity futures		4			—			—
Foreign currency swaps		(13	)		—			—
Foreign currency forwards		9			—			—
Equity options		66			5			—
Interest rate options		(3	)		—			—
Variance swaps		38			—			—
Credit default swaps		1			—			—
Total	$	172		$	5		$	—

54

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

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

	Net			Net			Policyholder
	Derivative			Investment			Benefits
	Gains (Losses)			Income (1)			and Claims (2)
	(In millions)
For the Six Months Ended June 30, 2011:
Interest rate swaps	$	4		$	—		$	—
Interest rate floors		1			—			—
Interest rate caps		(17	)		—			—
Interest rate futures		(12	)		—			—
Equity futures		4			—			(1	)
Foreign currency swaps		2			—			—
Foreign currency forwards		(16	)		—			—
Equity options		(21	)		(2	)		—
Variance swaps		(10	)		—			—
Credit default swaps		2			—			—
Total	$	(63	)	$	(2	)	$	(1	)
For the Six Months Ended June 30, 2010:
Interest rate swaps	$	63		$	—		$	—
Interest rate floors		47			—			—
Interest rate caps		(14	)		—			—
Interest rate futures		(28	)		—			—
Equity futures		(1	)		—			—
Foreign currency swaps		(57	)		—			—
Foreign currency forwards		13			—			—
Equity options		43			4			—
Interest rate options		(3	)		—			—
Variance swaps		28			—			—
Credit default swaps		1			—			—
Total	$	92		$	4		$	—

(1)	Changes in estimated fair value related to economic hedges of equity method investments in joint ventures.
(2)	Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.

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 $1,469 million and $912 million at June 30, 2011 and December 31, 2010, 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 June 30, 2011 and December 31, 2010, the Company would have received $14 million and $13 million, respectively, to terminate all of these contracts.

55

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:

	June 30, 2011						December 31, 2010
			Maximum						Maximum
	Estimated		Amount				Estimated		Amount
	Fair Value		of Future		Weighted		Fair Value		of Future		Weighted
Rating Agency Designation of	of Credit		Payments under		Average		of Credit		Payments under		Average
Referenced	Default		Credit Default		Years to		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	$	130		4.3	$	1	$	45		3.6
Credit default swaps referencing indices		10		661		3.6		11		679		3.7
Subtotal		11		791		3.7		12		724		3.7
Baa
Single name credit default swaps (corporate)		1		255		4.9		—		5		3.0
Credit default swaps referencing indices		2		423		5.0		1		183		5.0
Subtotal		3		678		5.0		1		188		5.0
Total	$	14	$	1,469		4.3	$	13	$	912		4.0

(1)	The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody’s, S&P and Fitch. 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 OTC 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 June 30, 2011 and December 31, 2010, the Company was obligated to return cash collateral under its control of $985 million and $965 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 June 30, 2011 and December 31, 2010, the Company had also accepted collateral consisting of various securities with a fair market value of $33 million and $3 million, respectively, which were held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but at June 30, 2011, none of the collateral had been sold or repledged.

56

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 OTC 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 OTC 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.

			Estimated
			Fair Value of
			Collateral		Fair Value of Incremental
			Provided:		Collateral Provided Upon:
							Downgrade in the
					One Notch		Company’s Credit Rating
					Downgrade		to a Level that Triggers
	Estimated				in the		Full Overnight
	Fair Value (1) of				Company’s		Collateralization or
	Derivatives in Net		Fixed Maturity		Credit		Termination of
	Liability Position		Securities (2)		Rating		the Derivative Position
	(In millions)
June 30, 2011	$	134	$	48	$	15	$	71
December 31, 2010	$	96	$	58	$	11	$	62

(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 June 30, 2011 and December 31, 2010, the Company did not provide any cash collateral.

Without considering the effect of netting agreements, the estimated fair value of the Company’s OTC derivatives with credit-contingent provisions that were in a gross liability position at June 30, 2011 was $220 million. At June 30, 2011, the Company provided securities collateral of $48 million in connection with these derivatives. In the unlikely event that both: (i) the Company’s credit rating was downgraded to a level that triggers full overnight collateralization or termination of all derivative positions; and (ii) the Company’s netting agreements were 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 June 30, 2011 would be $172 million. This amount does not consider gross derivative assets of $86 million for which the Company has the contractual right of offset.

The Company also has exchange-traded futures, which may require the pledging of collateral. At both June 30, 2011 and December 31, 2010, the Company did not pledge any securities collateral for exchange-traded futures. At June 30, 2011 and December 31, 2010, the Company provided cash collateral for exchange-traded futures of $34 million and $25 million, respectively, which is included in premiums, reinsurance and other receivables.

57

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 ceded reinsurance contracts of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; affiliated assumed reinsurance contracts of guaranteed minimum benefits related to GMWBs and certain GMIBs; ceded reinsurance written on a funds withheld basis; and options embedded in debt or equity securities.

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

	June 30, 2011			December 31, 2010
	(In millions)
Net embedded derivatives within asset host contracts:
Ceded guaranteed minimum benefits	$	824		$	936
Options embedded in debt or equity securities		—			(2	)
Net embedded derivatives within asset host contracts	$	824		$	934
Net embedded derivatives within liability host contracts:
Direct guaranteed minimum benefits	$	17		$	254
Assumed guaranteed minimum benefits		(5	)		—
Funds withheld on ceded reinsurance		30			5
Net embedded derivatives within liability host contracts	$	42		$	259

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

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Net derivative gains (losses) (1), (2)	$	124	$	332	$	71	$	121

(1)

The valuation of direct and assumed guaranteed minimum benefits includes an adjustment for nonperformance risk. The amounts included in net derivative gains (losses), in connection with this adjustment, were $1 million and ($28) million for the three months and six months ended June 30, 2011, respectively, and $125 million and $54 million for the three months and six months ended June 30, 2010, respectively. In addition, the valuation of ceded guaranteed minimum benefits includes an adjustment for nonperformance risk. The amounts included in net derivative gains (losses), in connection with this adjustment, were ($18) million and $23 million for the three months and six months ended June 30, 2011, respectively, and ($65) million and ($21) million for the three months and six months ended June 30, 2010, respectively. The net derivative gains (losses) for the three months and six months ended June 30, 2010 included $191 million relating to a refinement for estimating nonperformance risk in fair value measurements implemented at June 30, 2010. See Note 4.

(2)

See Note 9 for discussion of affiliated net derivative 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.

58

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 FVO, were determined as described below. These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as follows:

	June 30, 2011
	Fair Value Measurements at Reporting Date Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant		Total
	Identical Assets		Observable		Unobservable		Estimated
	and Liabilities		Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
			(In millions)
Assets:
Fixed maturity securities:
U.S. corporate securities	$	—	$	14,376	$	1,445	$	15,821
Foreign corporate securities		—		8,144		756		8,900
U.S. Treasury and agency securities		6,010		2,601		—		8,611
RMBS		—		6,553		19		6,572
CMBS		—		2,011		155		2,166
ABS		—		1,589		308		1,897
State and political subdivision securities		—		1,833		25		1,858
Foreign government securities		—		1,010		2		1,012
Total fixed maturity securities		6,010		38,117		2,710		46,837
Equity securities:
Non-redeemable preferred stock		—		40		121		161
Common stock		38		77		32		147
Total equity securities		38		117		153		308
Other securities:
FVO general account securities		—		48		—		48
FVO contractholder-directed unit-linked investments		3,041		—		—		3,041
Total other securities		3,041		48		—		3,089
Short-term investments (1)		765		1,264		92		2,121
Mortgage loans held by consolidated securitization entities		—		6,697		—		6,697
Derivative assets: (2)
Interest rate contracts		5		853		5		863
Foreign currency contracts		—		385		—		385
Credit contracts		—		5		11		16
Equity market contracts		1		228		15		244
Total derivative assets		6		1,471		31		1,508
Net embedded derivatives within asset host contracts (3)		—		—		824		824
Separate account assets (4)		199		69,138		130		69,467
Total assets	$	10,059	$	116,852	$	3,940	$	130,851
Liabilities:
Derivative liabilities: (2)
Interest rate contracts	$	5	$	317	$	67	$	389
Foreign currency contracts		—		96		—		96
Credit contracts		—		15		1		16
Equity market contracts		2		—		13		15
Total derivative liabilities		7		428		81		516
Net embedded derivatives within liability host contracts (3)		—		—		42		42
Long-term debt of consolidated securitization entities		—		6,617		—		6,617
Total liabilities	$	7	$	7,045	$	123	$	7,175

59

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

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

	December 31, 2010
	Fair Value Measurements at Reporting Date Using
	Quoted Prices in
	Active Markets for		Significant Other		Significant		Total
	Identical Assets		Observable		Unobservable		Estimated
	and Liabilities		Inputs		Inputs		Fair
	(Level 1)		(Level 2)		(Level 3)		Value
			(In millions)
Assets:
Fixed maturity securities:
U.S. corporate securities	$	—	$	13,864	$	1,510	$	15,374
Foreign corporate securities		—		7,590		880		8,470
U.S. Treasury and agency securities		4,616		3,026		34		7,676
RMBS		—		6,674		35		6,709
CMBS		—		2,147		130		2,277
ABS		—		1,301		568		1,869
State and political subdivision securities		—		1,614		32		1,646
Foreign government securities		—		889		14		903
Total fixed maturity securities		4,616		37,105		3,203		44,924
Equity securities:
Non-redeemable preferred stock		—		54		214		268
Common stock		43		72		22		137
Total equity securities		43		126		236		405
Other securities:
FVO general account securities		—		7		—		7
FVO contractholder-directed unit-linked investments		2,240		—		—		2,240
Total other securities		2,240		7		—		2,247
Short-term investments (1)		390		584		173		1,147
Mortgage loans held by consolidated securitization entities		—		6,840		—		6,840
Derivative assets: (2)
Interest rate contracts		5		804		10		819
Foreign currency contracts		—		589		—		589
Credit contracts		—		3		12		15
Equity market contracts		—		77		20		97
Total derivative assets		5		1,473		42		1,520
Net embedded derivatives within asset host contracts (3)		—		—		936		936
Separate account assets (4)		76		61,410		133		61,619
Total assets	$	7,370	$	107,545	$	4,723	$	119,638
Liabilities:
Derivative liabilities: (2)
Interest rate contracts	$	7	$	315	$	71	$	393
Foreign currency contracts		—		69		—		69
Credit contracts		—		21		1		22
Equity market contracts		—		—		8		8
Total derivative liabilities		7		405		80		492
Net embedded derivatives within liability host contracts (3)		—		—		259		259
Long-term debt of consolidated securitization entities		—		6,773		—		6,773
Total liabilities	$	7	$	7,178	$	339	$	7,524

60

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

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

(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.), and therefore are excluded from the tables presented above.
(2)	Derivative assets are presented within other invested assets in the consolidated balance sheets and derivative liabilities are presented within other liabilities in the consolidated balance sheets. 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 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables which follow.
(3)	Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables in the consolidated balance sheets. Net embedded derivatives within liability host contracts are presented in the consolidated balance sheets within policyholder account balances and other liabilities. At June 30, 2011, fixed maturity securities and equity securities also included embedded derivatives of $5 million and ($5) million, respectively. At December 31, 2010, fixed maturity securities and equity securities included embedded derivatives of $3 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.

See “— Variable Interest Entities” in Note 2 for discussion of CSEs included in the tables above.

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

Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments

When available, the estimated fair value of the Company’s fixed maturity securities, equity securities, other securities and short-term investments 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’s 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’s judgment or estimation and cannot be supported by reference to market

61

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

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

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 Held by CSEs

The Company consolidates certain securitization entities that hold commercial mortgage loans. These commercial mortgage loans held by CSEs, for which the Company has elected the FVO, are presented within mortgage loans in the consolidated balance sheets. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

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 OTC 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 OTC 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 OTC 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 OTC 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 to 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 OTC 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.

62

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

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

Net 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 at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefits. 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 derivative gains (losses). These embedded derivatives are classified within policyholder account balances in the consolidated balance sheets.

The fair value of these guarantees is 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 guarantee liabilities includes adjustments for nonperformance risk and for a risk margin related to non-capital market inputs. Both of these adjustments are captured as components of the spread which, when combined with the risk free rate, is used to discount the cash flows of the liability for purposes of determining its fair value.

The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife’s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife.

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 nonperformance risk; 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 assumed, from an affiliated insurance company, the risk associated with certain GMIBs and GMWBs. These embedded derivatives are included in other policy-related balances in the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on these assumed risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company.

The Company ceded, to an affiliated reinsurance company, the risk associated with certain of the GMIBs, GMABs and GMWBs described above that are also accounted for as embedded derivatives. 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 GMIBs 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 within premiums, reinsurance and other receivables in the consolidated balance sheets with changes in estimated fair value reported in net derivative 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

63

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

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

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.

As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk (commonly referred to as “own credit”) in fair value measurements. During the second quarter of 2010, the Company completed a study that aggregated and evaluated data, including historical recovery rates of insurance companies, as well as policyholder behavior observed over the prior two years as the recent financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the way in which it incorporates expected recovery rates into the nonperformance risk adjustment for purposes of estimating the fair value of investment-type contracts and embedded derivatives within insurance contracts. For the three months ended June 30, 2010, the Company recognized income of $19 million, net of DAC and income tax, relating to the change in fair value associated with nonperformance risk for embedded derivatives within the above mentioned guaranteed minimum benefit guarantees and associated reinsurance. The Company recognized a gain of $60 million, net of DAC and income tax, relating to implementing the refinement at June 30, 2010.

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 previously described in “— Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities in the consolidated balance sheets with changes in estimated fair value recorded in net derivative 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.

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 is 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, derivatives, other limited partnership interests, short-term investments and cash and cash equivalents. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

Long-term Debt of CSEs

The Company has elected the FVO for the long-term debt of CSEs, which are carried at estimated fair value. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

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.

64

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

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

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, Equity Securities, Other Securities and Short-term Investments

These securities are comprised of U.S. Treasury securities, exchange traded common stock, exchange traded registered mutual fund interests included in other securities and short-term money market securities, including U.S. Treasury bills. Valuation of these securities is based on unadjusted quoted prices in active markets that are readily and regularly available. Contractholder-directed unit-linked investments reported within other securities include certain registered mutual fund interests priced using daily net asset value (“NAV”) provided by the fund managers.

Derivative Assets and Derivative Liabilities

These assets and liabilities are comprised of exchange-traded derivatives. Valuation of these assets and liabilities is based on unadjusted quoted prices in active markets that are readily and regularly available.

Separate Account Assets

These assets are comprised of (i) securities that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above; and (ii) certain exchange-traded derivatives, including financial futures. Valuation of these assets is based on unadjusted quoted prices in active markets that are readily and regularly available.

Level 2 Measurements:

Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments

This level includes fixed maturity securities and equity securities priced principally by independent pricing services using observable inputs. Other securities and short-term investments within this level are of a similar nature and class to the Level 2 securities described below.

U.S. corporate and foreign corporate securities.  These securities are principally valued using the market and income approaches. Valuation is 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 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 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. This level also includes certain below investment grade privately placed fixed maturity securities priced by independent pricing services that use observable inputs.

Structured securities comprised of RMBS, CMBS and ABS.  These securities are principally valued using the market approach. Valuation is based primarily on matrix pricing or other similar techniques using standard

65

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

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

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, but not limited to: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans.

U.S. Treasury and agency securities.  These securities are principally valued using the market approach. Valuation is 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 securities.  These securities are principally valued using the market approach. Valuation is 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.

Common and non-redeemable preferred stock.  These securities are principally valued using the market approach where market quotes are available but are not considered actively traded. Valuation is based principally on observable inputs including quoted prices in markets that are not considered active.

Mortgage Loans Held by CSEs

These commercial mortgage 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 CSEs to determine the estimated fair value of these commercial loan portfolios. These market prices are determined principally by independent pricing services using observable inputs.

Derivative Assets and Derivative Liabilities

This level includes all types of derivative instruments utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivative instruments with unobservable inputs as described in Level 3. These derivatives are principally valued using an income approach.

Interest rate contracts.

Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves and repurchase rates.

Option-based — Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves and interest rate volatility.

Foreign currency contracts.

Non-option-based — 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.

Credit contracts.

Non-option-based — Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, credit curves and recovery rates.

66

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

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

Equity market contracts.

Non-option-based — 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 — 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 investments that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above. Also included are certain mutual funds without readily determinable fair values given prices are not published publicly. Valuation of the mutual funds is based upon quoted prices or reported NAV provided by the fund managers.

Long-term Debt of CSEs

The estimated fair value of the long-term debt of the Company’s CSEs is based on 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.

Level 3 Measurements:

In general, investments classified within Level 3 use many of the same valuation techniques and inputs as described in Level 2 Measurements. 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 a lack of transparency in the process to develop the valuation estimates generally causing these investments to be classified in Level 3.

Fixed Maturity Securities, Equity Securities and Short-term Investments

This level includes fixed maturity securities and equity securities priced principally by 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. Short-term investments within this level are of a similar nature and class to the Level 3 securities described below; accordingly, the valuation techniques and significant market standard observable inputs used in their valuation are also similar to those described below.

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.

Structured securities comprised of RMBS, CMBS and ABS.  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

67

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

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

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 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.

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.

Derivative Assets and Derivative Liabilities

These derivatives are principally valued using an income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. These valuation methodologies generally use the same inputs as described in the corresponding sections above for Level 2 measurements of 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.

Interest rate contracts.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves.

Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves and interest rate volatility.

Foreign currency contracts.

Non-option-based — 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.

Credit contracts.

Non-option-based — 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.

Equity market contracts.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves.

Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves and equity volatility.

68

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

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

Direct and Assumed Guaranteed Minimum Benefits

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, nonperformance risk and cost of capital for purposes of calculating the risk margin.

Reinsurance Ceded on Certain Guaranteed Minimum Benefits

These embedded derivatives are principally valued using an income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those previously described for Direct and Assumed Guaranteed Minimum Benefits and also include counterparty credit spreads.

Embedded Derivatives Within Funds Withheld Related to Certain Ceded Reinsurance

These embedded 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 assets are comprised of investments that are similar in nature to the fixed maturity securities and equity securities referred to above. Separate account assets within this level also include other limited partnership interests. 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.

Transfers between Levels 1 and 2:

During the three months and six months ended June 30, 2011 and 2010, transfers between Levels 1 and 2 were not significant.

Transfers into or out of Level 3:

Overall, transfers into 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 underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input 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 into and/or out of any level are assumed to

69

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

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

occur at the beginning of the period. Significant transfers into and/or out of Level 3 assets and liabilities for the three months and six months ended June 30, 2011 and 2010 are summarized below.

Transfers into Level 3 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) which have resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated fair value.

During both the three months and six months ended June 30, 2011, transfers into Level 3 for fixed maturity securities of $14 million were principally comprised of certain foreign corporate securities. During the three months and six months ended June 30, 2010, transfers into Level 3 for fixed maturity securities of $224 million and $256 million, respectively, were principally comprised of certain CMBS and U.S. and foreign corporate securities.

Transfers out of Level 3 resulted primarily from increased transparency of both new issuances that subsequent to issuance and establishment of trading activity, became priced by independent pricing services and existing issuances that, over time, the Company was able to obtain pricing from, or corroborate pricing received from, independent pricing services with observable inputs or increases in market activity and upgraded credit ratings. With respect to derivatives, transfers out of Level 3 resulted primarily from increased transparency related to the observable portion of the swap yield curve or the observable portion of the equity volatility surface.

During the three months and six months ended June 30, 2011, transfers out of Level 3 for fixed maturity securities of $344 million and $425 million, respectively, were principally comprised of certain ABS, U.S. and foreign corporate securities. During the three months and six months ended June 30, 2010, transfers out of Level 3 for fixed maturity securities of $99 million and $239 million, respectively, and transfers out of Level 3 for separate account assets of less than $1 million and $4 million, respectively, were principally comprised of certain U.S. and foreign corporate securities, ABS and CMBS.

70

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 summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3), including realized and unrealized gains (losses) of all assets and (liabilities) and realized and unrealized gains (losses) of all assets and (liabilities) still held at the end of the respective time periods:

	Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
	Fixed Maturity Securities:
							U.S.											State and
	U.S.			Foreign			Treasury											Political			Foreign
	Corporate			Corporate			and Agency											Subdivision			Government
	Securities			Securities			Securities			RMBS		CMBS			ABS			Securities			Securities
	(In millions)
Three Months Ended June 30, 2011:
Balance, beginning of period	$	1,428		$	782		$	32		$	18	$	152		$	561		$	32		$	2
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		—			1			—			—		—			—			—			—
Net investment gains (losses)		4			(19	)		—			—		2			(2	)		—			—
Net derivative gains (losses)		—			—			—			—		—			—			—			—
Other comprehensive income (loss)		12			18			—			—		—			(3	)		(7	)		—
Purchases (3)		64			293			—			1		18			8			—			—
Sales (3)		(42	)		(286	)		—			—		(9	)		(20	)		—			—
Issuances (3)		—			—			—			—		—			—			—			—
Settlements (3)		—			—			—			—		—			—			—			—
Transfers into Level 3 (4)		3			11			—			—		—			—			—			—
Transfers out of Level 3 (4)		(24	)		(44	)		(32	)		—		(8	)		(236	)		—			—
Balance, end of period	$	1,445		$	756		$	—		$	19	$	155		$	308		$	25		$	2
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2011 included in earnings:
Net investment income	$	—		$	1		$	—		$	—	$	—		$	—		$	—		$	—
Net investment gains (losses)	$	—		$	(6	)	$	—		$	—	$	—		$	(3	)	$	—		$	—
Net derivative gains (losses)	$	—		$	—		$	—		$	—	$	—		$	—		$	—		$	—

71

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)
	Equity Securities:								Net Derivatives: (5)
	Non-
	redeemable								Interest			Foreign					Equity			Net		Separate
	Preferred			Common		Short-term			Rate			Currency		Credit			Market			Embedded		Account
	Stock			Stock		Investments			Contracts			Contracts		Contracts			Contracts			Derivatives (6)		Assets (7)
	(In millions)
Three Months Ended June 30, 2011:
Balance, beginning of period	$	219		$	31	$	82		$	(75	)	$	—	$	11		$	6		$	647	$	130
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		—			—		—			—			—		—			—			—		—
Net investment gains (losses)		(24	)		—		—			—			—		—			—			—		(1	)
Net derivative gains (losses)		—			—		—			1			—		—			(4	)		126		—
Other comprehensive income (loss)		24			1		—			12			—		—			—			—		—
Purchases (3)		—			—		58			—			—		—			—			—		2
Sales (3)		(98	)		—		(48	)		—			—		—			—			—		—
Issuances (3)		—			—		—			—			—		—			—			—		—
Settlements (3)		—			—		—			—			—		(1	)		—			9		—
Transfers into Level 3 (4)		—			—		—			—			—		—			—			—		—
Transfers out of Level 3 (4)		—			—		—			—			—		—			—			—		(1	)
Balance, end of period	$	121		$	32	$	92		$	(62	)	$	—	$	10		$	2		$	782	$	130
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2011 included in earnings:
Net investment income	$	—		$	—	$	—		$	—		$	—	$	—		$	—		$	—	$	—
Net investment gains (losses)	$	(5	)	$	—	$	—		$	—		$	—	$	—		$	—		$	—	$	—
Net derivative gains (losses)	$	—		$	—	$	—		$	1		$	—	$	—		$	(4	)	$	126	$	—

72

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)
	Fixed Maturity Securities:
							U.S.										State and
	U.S.			Foreign			Treasury										Political			Foreign
	Corporate			Corporate			and Agency										Subdivision			Government
	Securities			Securities			Securities		RMBS		CMBS			ABS			Securities			Securities
	(In millions)
Three Months Ended June 30, 2010:
Balance, beginning of period	$	1,510		$	953		$	32	$	28	$	48		$	521		$	48		$	7
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		2			(1	)		—		—		—			—			—			—
Net investment gains (losses)		—			5			—		—		1			(1	)		—			—
Net derivative gains (losses)		—			—			—		—		—			—			—			—
Other comprehensive income (loss)		28			(29	)		2		1		7			14			1			—
Purchases, sales, issuances and settlements (3)		38			(100	)		—		17		(5	)		27			(2	)		—
Transfers into Level 3 (4)		54			66			—		21		73			10			—			—
Transfers out of Level 3 (4)		(23	)		(38	)		—		—		(24	)		(6	)		(8	)		—
Balance, end of period	$	1,609		$	856		$	34	$	67	$	100		$	565		$	39		$	7
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2010 included in earnings:
Net investment income	$	2		$	—		$	—	$	—	$	—		$	—		$	—		$	—
Net investment gains (losses)	$	(1	)	$	—		$	—	$	—	$	1		$	(1	)	$	—		$	—
Net derivative gains (losses)	$	—		$	—		$	—	$	—	$	—		$	—		$	—		$	—

73

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)
	Equity Securities:								Net Derivatives: (5)
	Non-
	redeemable								Interest			Foreign						Equity		Net		Separate
	Preferred			Common			Short-term		Rate			Currency			Credit			Market		Embedded		Account
	Stock			Stock			Investments		Contracts			Contracts			Contracts			Contracts		Derivatives (6)		Assets (7)
	(In millions)
Three Months Ended June 30, 2010:
Balance, beginning of period	$	242		$	34		$	1	$	6		$	18		$	7		$	7	$	258	$	146
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		—			—			—		—			—			—			—		—		—
Net investment gains (losses)		14			4			—		—			—			—			—		—		(3	)
Net derivative gains (losses)		—			—			—		5			(10	)		(4	)		39		333		—
Other comprehensive income (loss)		(12	)		(6	)		—		—			—			7			—		—		—
Purchases, sales, issuances and settlements (3)		(55	)		12			12		(2	)		—			—			—		21		(3	)
Transfers into Level 3 (4)		—			—			—		—			—			—			—		—		—
Transfers out of Level 3 (4)		—			—			—		—			—			—			—		—		—
Balance, end of period	$	189		$	44		$	13	$	9		$	8		$	10		$	46	$	612	$	140
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2010 included in earnings:
Net investment income	$	—		$	—		$	—	$	—		$	—		$	—		$	—	$	—	$	—
Net investment gains (losses)	$	—		$	—		$	—	$	—		$	—		$	—		$	—	$	—	$	—
Net derivative gains (losses)	$	—		$	—		$	—	$	6		$	(10	)	$	(5	)	$	38	$	332	$	—

74

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)
	Fixed Maturity Securities:
							U.S.												State and
	U.S.			Foreign			Treasury												Political			Foreign
	Corporate			Corporate			and Agency												Subdivision			Government
	Securities			Securities			Securities			RMBS			CMBS			ABS			Securities			Securities
	(In millions)
Six Months Ended June 30, 2011:
Balance, beginning of period	$	1,510		$	880		$	34		$	35		$	130		$	568		$	32		$	14
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		2			1			—			—			—			—			—			—
Net investment gains (losses)		3			(17	)		—			—			—			(8	)		—			—
Net derivative gains (losses)		—			—			—			—			—			—			—			—
Other comprehensive income (loss)		21			35			—			—			17			8			(7	)		—
Purchases (3)		88			296			—			—			18			16			—			—
Sales (3)		(91	)		(392	)		(1	)		—			(10	)		(49	)		—			(12	)
Issuances (3)		—			—			—			—			—			—			—			—
Settlements (3)		—			—			—			—			—			—			—			—
Transfers into Level 3 (4)		3			11			—			—			—			—			—			—
Transfers out of Level 3 (4)		(91	)		(58	)		(33	)		(16	)		—			(227	)		—			—
Balance, end of period	$	1,445		$	756		$	—		$	19		$	155		$	308		$	25		$	2
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2011 included in earnings:
Net investment income	$	2		$	1		$	—		$	—		$	—		$	—		$	—		$	—
Net investment gains (losses)	$	—		$	(6	)	$	—		$	—		$	—		$	(5	)	$	—		$	—
Net derivative gains (losses)	$	—		$	—		$	—		$	—		$	—		$	—		$	—		$	—

75

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)
	Equity Securities:									Net Derivatives: (5)
	Non-
	redeemable									Interest			Foreign					Equity			Net		Separate
	Preferred			Common			Short-term			Rate			Currency		Credit			Market			Embedded		Account
	Stock			Stock			Investments			Contracts			Contracts		Contracts			Contracts			Derivatives (6)		Assets (7)
	(In millions)
Six Months Ended June 30, 2011:
Balance, beginning of period	$	214		$	22		$	173		$	(61	)	$	—	$	11		$	12		$	677	$	133
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		—			—			—			—			—		—			—			—		—
Net investment gains (losses)		(24	)		1			(1	)		—			—		—			—			—		(5	)
Net derivative gains (losses)		—			—			—			2			—		1			(10	)		73		—
Other comprehensive income (loss)		28			5			—			4			—		—			—			—		—
Purchases (3)		—			9			92			—			—		—			—			—		3
Sales (3)		(97	)		(5	)		(172	)		—			—		—			—			—		(1	)
Issuances (3)		—			—			—			—			—		(1	)		—			—		—
Settlements (3)		—			—			—			—			—		(1	)		—			32		—
Transfers into Level 3 (4)		—			—			—			—			—		—			—			—		—
Transfers out of Level 3 (4)		—			—			—			(7	)		—		—			—			—		—
Balance, end of period	$	121		$	32		$	92		$	(62	)	$	—	$	10		$	2		$	782	$	130
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2011 included in earnings:
Net investment income	$	—		$	—		$	—		$	—		$	—	$	—		$	—		$	—	$	—
Net investment gains (losses)	$	(5	)	$	—		$	—		$	—		$	—	$	—		$	—		$	—	$	—
Net derivative gains (losses)	$	—		$	—		$	—		$	2		$	—	$	1		$	(10	)	$	75	$	—

76

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)
	Fixed Maturity Securities:
							U.S.											State and
	U.S.			Foreign			Treasury											Political		Foreign
	Corporate			Corporate			and Agency											Subdivision		Government
	Securities			Securities			Securities			RMBS		CMBS			ABS			Securities		Securities
	(In millions)
Six Months Ended June 30, 2010:
Balance, beginning of period	$	1,605		$	994		$	33		$	25	$	45		$	537		$	32	$	16
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		4			(1	)		—			—		—			—			—		—
Net investment gains (losses)		1			(1	)		—			—		—			—			—		—
Net derivative gains (losses)		—			—			—			—		—			—			—		—
Other comprehensive income (loss)		67			15			3			3		10			25			7		—
Purchases, sales, issuances and settlements (3)		(62	)		(158	)		(2	)		17		—			45			—		—
Transfers into Level 3 (4)		76			77			—			22		72			9			—		—
Transfers out of Level 3 (4)		(82	)		(70	)		—			—		(27	)		(51	)		—		(9	)
Balance, end of period	$	1,609		$	856		$	34		$	67	$	100		$	565		$	39	$	7
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2010 included in earnings:
Net investment income	$	3		$	(1	)	$	—		$	—	$	—		$	—		$	—	$	—
Net investment gains (losses)	$	(4	)	$	—		$	—		$	—	$	—		$	(1	)	$	—	$	—
Net derivative gains (losses)	$	—		$	—		$	—		$	—	$	—		$	—		$	—	$	—

77

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)
	Equity Securities:								Net Derivatives: (5)
	Non-
	redeemable								Interest			Foreign						Equity		Net		Separate
	Preferred			Common			Short-term		Rate			Currency			Credit			Market		Embedded		Account
	Stock			Stock			Investments		Contracts			Contracts			Contracts			Contracts		Derivatives (6)		Assets (7)
	(In millions)
Six Months Ended June 30, 2010:
Balance, beginning of period	$	258		$	11		$	8	$	2		$	23		$	4		$	18	$	445	$	153
Total realized/unrealized gains (losses) included in:
Earnings: (1), (2)
Net investment income		—			—			—		—			—			—			—		—		—
Net investment gains (losses)		14			4			—		—			—			—			—		—		(3	)
Net derivative gains (losses)		—			—			—		9			(15	)		(4	)		28		123		—
Other comprehensive income (loss)		(6	)		1			—		—			—			9			—		—		—
Purchases, sales, issuances and settlements (3)		(77	)		30			5		(2	)		—			1			—		44		(6	)
Transfers into Level 3 (4)		—			—			—		—			—			—			—		—		—
Transfers out of Level 3 (4)		—			(2	)		—		—			—			—			—		—		(4	)
Balance, end of period	$	189		$	44		$	13	$	9		$	8		$	10		$	46	$	612	$	140
Changes in unrealized gains (losses) relating to assets and liabilities still held at June 30, 2010 included in earnings:
Net investment income	$	—		$	—		$	—	$	—		$	—		$	—		$	—	$	—	$	—
Net investment gains (losses)	$	—		$	—		$	—	$	—		$	—		$	—		$	—	$	—	$	—
Net derivative gains (losses)	$	—		$	—		$	—	$	9		$	(15	)	$	(4	)	$	28	$	123	$	—

(1)	Amortization of premium/discount is included within net investment income. Impairments charged to earnings on securities are included within net investment gains (losses). Lapses associated with embedded derivatives are included within net derivative 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 or issuance price and the sales or settlement proceeds based upon the actual date purchased or issued and sold or settled, respectively. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. For the three months and six months ended June 30, 2011, fees attributed to net embedded derivatives are included within settlements. For the three months and six months ended June 30, 2010, fees attributed to net embedded derivatives are included within purchases, sales, issuances and settlements.
(4)	Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded from the rollforward.
(5)	Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
(6)	Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
(7)	Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income. For the purpose of this disclosure, these changes are presented within net investment gains (losses).

78

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

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

FVO — Consolidated Securitization Entities

The Company has elected the FVO for the following assets and liabilities held by CSEs: commercial mortgage loans and long-term debt. The following table presents these commercial mortgage loans carried under the FVO at:

	June 30, 2011		December 31, 2010
	(In millions)
Unpaid principal balance	$	6,468	$	6,636
Excess of estimated fair value over unpaid principal balance		229		204
Carrying value at estimated fair value	$	6,697	$	6,840

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

	June 30, 2011		December 31, 2010
	(In millions)
Contractual principal balance	$	6,373	$	6,541
Excess of estimated fair value over contractual principal balance		244		232
Carrying value at estimated fair value	$	6,617	$	6,773

Interest income on commercial mortgage loans held by CSEs is recorded in net investment income. Interest expense on long-term debt of CSEs 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.

Non-Recurring Fair Value Measurements

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

	Three Months Ended June 30,
	2011							2010
			Estimated		Net					Estimated		Net
	Carrying		Fair		Investment			Carrying		Fair		Investment
	Value Prior to		Value After		Gains			Value Prior to		Value After		Gains
	Measurement		Measurement		(Losses)			Measurement		Measurement		(Losses)
	(In millions)
Mortgage loans, net (1)	$	—	$	8	$	8		$	23	$	23	$	—
Other limited partnership interests (2)	$	3	$	2	$	(1	)	$	24	$	17	$	(7	)
Real estate joint ventures (3)	$	—	$	—	$	—		$	7	$	3	$	(4	)

	Six Months Ended June 30,
	2011							2010
			Estimated		Net					Estimated		Net
	Carrying		Fair		Investment			Carrying		Fair		Investment
	Value Prior to		Value After		Gains			Value Prior to		Value After		Gains
	Measurement		Measurement		(Losses)			Measurement		Measurement		(Losses)
	(In millions)
Mortgage loans, net (1)	$	—	$	8	$	8		$	31	$	23	$	(8	)
Other limited partnership interests (2)	$	3	$	2	$	(1	)	$	24	$	17	$	(7	)
Real estate joint ventures (3)	$	—	$	—	$	—		$	25	$	5	$	(20	)

79

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

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

(1)	Mortgage loans — The impaired mortgage loans presented above were written down to their estimated fair values at the date the impairments were recognized and are reported as losses above. Subsequent improvements in estimated fair value on previously impaired loans recorded through a reduction in the previously established valuation allowance are reported as gains above. 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 and decreases in previous impairments from subsequent improvements in 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 method. Impairments on these cost method 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 using certain investment strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and 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 and $19 million at June 30, 2011 and 2010, respectively.
(3)	Real estate joint ventures — The impaired investments presented above were accounted for using the cost method. Impairments on these cost method 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. There were no unfunded commitments for these investments at June 30, 2011. Unfunded commitments for these investments were $8 million at June 30, 2010.

80

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 that were not measured at fair value on a recurring basis were as follows:

	June 30, 2011							December 31, 2010
					Estimated							Estimated
	Notional		Carrying		Fair			Notional		Carrying		Fair
	Amount		Value		Value			Amount		Value		Value
	(In millions)
Assets:
Mortgage loans, net (1)			$	5,948	$	6,188				$	5,890	$	6,022
Policy loans			$	1,190	$	1,260				$	1,190	$	1,260
Real estate joint ventures (2)			$	87	$	120				$	79	$	102
Other limited partnership interests (2)			$	103	$	129				$	104	$	116
Short-term investments (3)			$	82	$	82				$	88	$	88
Cash and cash equivalents			$	1,220	$	1,220				$	1,928	$	1,928
Accrued investment income			$	534	$	534				$	559	$	559
Premiums, reinsurance and other receivables (2)			$	5,997	$	6,332				$	5,959	$	6,164
Liabilities:
Policyholder account balances (2)			$	24,273	$	25,952				$	24,622	$	26,061
Payables for collateral under securities loaned and other transactions			$	8,201	$	8,201				$	8,103	$	8,103
Long-term debt (4)			$	793	$	965				$	795	$	930
Other liabilities (2)			$	336	$	336				$	294	$	294
Separate account liabilities (2)			$	1,407	$	1,407				$	1,407	$	1,407
Commitments: (5)
Mortgage loan commitments	$	255	$	—	$	(2	)	$	270	$	—	$	(2	)
Commitments to fund bank credit facilities and private corporate bond investments	$	234	$	—	$	(10	)	$	315	$	—	$	(12	)

(1)	Mortgage loans as presented in the table above differs from the amounts presented in the consolidated balance sheets because this table does not include commercial mortgage loans held by CSEs, which are accounted for under the FVO.
(2)	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.
(3)	Short-term investments as presented in the table above differ from the amounts presented in the consolidated balance sheets because this table does not include short-term investments that meet the definition of a security, which are measured at estimated fair value on a recurring basis.
(4)	Long-term debt as presented in the table above differs from the amounts presented in the consolidated balance sheets because this table does not include long-term debt of CSEs, which are accounted for under the FVO.
(5)	Commitments are off-balance sheet obligations. Negative estimated fair values represent off-balance sheet liabilities.

81

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

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

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

The assets and liabilities measured at estimated fair value on a recurring basis include: fixed maturity securities, equity securities, other securities, certain short-term investments, mortgage loans held by CSEs, derivative assets and liabilities, net embedded derivatives within asset and liability host contracts, separate account assets and long-term debt of CSEs. These assets and liabilities are described in the section “— Recurring Fair Value Measurements” and, therefore, are excluded from the table above. The estimated fair value for these financial instruments approximates carrying value.

Mortgage Loans

The Company originates mortgage loans principally for investment purposes. These loans are principally carried at amortized cost. The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk.

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 table 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 carried at cost less accumulated depreciation, 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 real estate joint ventures and other limited partnership interests accounted for under the cost method are generally based on the Company’s share of the 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.

82

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

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

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.

Premiums, Reinsurance and Other Receivables

Premiums, reinsurance and other receivables in the preceding table are principally comprised of certain amounts recoverable under reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions and amounts receivable for securities sold but not yet settled.

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. The estimated fair value is determined as the present value of expected future cash flows under the related contracts, which were 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.

Policyholder Account Balances

Policyholder account balances in the table 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 table above as they are separately presented in “— Recurring Fair Value Measurements.” 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 to reflect the nonperformance risk in the liability.

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

83

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

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

cross-collateralized by the borrowed securities, the Company believes no additional consideration for changes in nonperformance risk are necessary.

Long-term Debt

The estimated fair value of long-term debt is generally determined by discounting expected future cash flows using market rates currently available for debt with similar 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. Risk-adjusted discount rates applied to the expected future cash flows can vary significantly based upon the specific terms of each individual arrangement, including, but not limited to: contractual interest rates in relation to current market rates; the structuring of the arrangement; and the nature and observability of the applicable valuation inputs. Use of different risk-adjusted discount rates could result in different estimated fair values.

Other Liabilities

Other liabilities 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 treaties accounted for as deposit type treaties. 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 carrying values.

Separate Account Liabilities

Separate account liabilities included in the preceding table represents those balances due to policyholders under contracts that are classified as investment contracts. The remaining amounts presented in the consolidated balance sheets represent those contracts classified as insurance contracts, which do not satisfy the definition of financial instruments.

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 are recognized in the consolidated balance sheets at an equivalent value of the related separate account assets. Separate account assets, which equal net deposits, net investment income and realized and unrealized investment 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 in the section “— Recurring Fair Value Measurements,” the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities.

Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilities and Private Corporate Bond Investments

The estimated fair values for mortgage loan commitments that will be held for investment and commitments to fund bank credit facilities and private corporate bonds that will be held for investment reflected in the above table represents 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 commitments.

84

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 U.S. 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, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

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 difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness 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.

The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for some of the matters below. 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 June 30, 2011.

Matters as to Which an Estimate Can Be Made

For some of the matters discussed below, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of June 30, 2011, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters is not material for the Company.

Matters as to Which an Estimate Cannot Be Made

For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Sales Practices Claims

Over the past several years, the Company has faced claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys’ fees. The Company

85

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

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

continues to vigorously defend against the claims in all pending matters. The Company believes adequate provision has been made in its financial statements for all probable and reasonably estimable losses for sales practices matters.

Connecticut General Life Insurance Company and MetLife Insurance Company of Connecticut are engaged in an arbitration proceeding to determine whether MetLife Insurance Company of Connecticut is owed money from Connecticut General Life Insurance Company or is required to refund several million dollars it collected and/or should stop submitting certain claims under reinsurance contracts in which Connecticut General Life Insurance Company reinsured death benefits payable under certain MetLife Insurance Company of Connecticut annuities.

A former Tower Square 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 have conducted inquiries. Tower Square has made remediation to all the affected customers. The Illinois Securities Division has issued a Statement of Violations to Tower Square, and Tower Square is conducting discussions with the Illinois Securities Division.

Unclaimed Property Inquiries

More than 30 U.S. jurisdictions are auditing MetLife Insurance Company of Connecticut and certain of its affiliates for compliance with unclaimed property laws. Additionally, MetLife Insurance Company of Connecticut and certain of its affiliates have received subpoenas and other regulatory inquiries from certain regulators and other officials relating to claims-payment practices and compliance with unclaimed property laws. On July 5, 2011, the New York Insurance Department issued a letter requiring life insurers doing business in New York to use data available on the U.S. Social Security Administration’s Death Master File or a similar database to identify instances where death benefits under life insurance policies, annuities, and retained asset accounts are payable, to locate and pay beneficiaries under such contracts, and to report the results of the use of the data. It is possible that other jurisdictions may pursue similar investigations or inquiries, or issue directives similar to the New York Insurance Department’s letter. It is possible that the audits and related activity may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, and changes to the Company’s procedures for the identification and escheatment of abandoned property. The Company is not currently able to estimate the reasonably possible amount of any such additional payments or the reasonably possible cost of any such changes in procedures, but it is possible that such costs may be substantial.

Summary

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. 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.

86

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

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

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 $1.2 billion at both June 30, 2011 and December 31, 2010. 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 $255 million and $270 million at June 30, 2011 and December 31, 2010, 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 $234 million and $315 million at June 30, 2011 and December 31, 2010, respectively.

Other Commitments

The Company has entered into collateral arrangements with affiliates, which require the transfer of collateral in connection with secured demand notes. At June 30, 2011 and December 31, 2010, the Company had agreed to fund up to $90 million and $114 million, respectively, of cash upon the request by these affiliates and had transferred collateral consisting of various securities with a fair market value of $105 million and $144 million, respectively, to custody accounts to secure the notes. Each of these affiliates is permitted by contract to sell or repledge this collateral.

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 $297 million at both June 30, 2011 and December 31, 2010. The Company does not hold any collateral related to this guarantee, but has a recorded liability of $1 million that was based on the total account value of the guaranteed policies plus the amounts retained per policy at both June 30, 2011 and December 31, 2010. The remainder of the risk was ceded to external reinsurers.

6.   Equity

During the six months ended June 30, 2011, Sino-US MetLife Insurance Company Limited (“Sino”), an insurance underwriting joint venture of the Company accounted for under the equity method, merged with United MetLife Insurance Company Limited (“United”), another insurance underwriting joint venture of an affiliate of the Company. The Company’s ownership interest in the merged entity, Sino-US United MetLife Insurance Company Limited (“Sino-United”) was determined based on its contributed capital and share of undistributed earnings of Sino compared to the contributed capital and undistributed earnings of all other investees of Sino and United. Since both the joint ventures were under common ownership both prior to and subsequent to the merger, the Company’s investment in Sino-United is based on the carrying value of its investment in Sino. Pursuant to the merger, the Company entered into an agreement to pay the affiliate an amount based on the relative fair value of their respective investment in Sino-United. Accordingly, $52 million was recorded as a liability representing a return of capital at June 30, 2011. Such amount, subject to completion of the estimation of fair value, is expected to be paid in the third quarter of 2011. The Company’s investment in Sino-United is accounted for under equity method and is included in other invested assets.

87

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

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

7.   Other Expenses

Information on other expenses was as follows:

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In millions)
Compensation	$	76		$	47		$	151		$	91
Commissions		368			243			674			463
Volume-related costs		44			73			82			133
Affiliated interest costs on ceded reinsurance		51			47			105			80
Capitalization of DAC		(384	)		(268	)		(694	)		(498	)
Amortization of DAC and VOBA		327			460			444			524
Interest expense on debt and debt issue costs		110			119			220			239
Premium taxes, licenses & fees		13			12			28			22
Professional services		20			6			29			10
Rent		8			—			15			1
Other		96			100			179			193
Total other expenses	$	729		$	839		$	1,233		$	1,258

Affiliated Expenses

See Note 9 for a discussion of affiliated expenses included in the table above.

8.   Business Segment Information

The Company’s business is currently divided into three segments: Retirement Products, Corporate Benefit Funding and Insurance Products. 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 and corporations, as well as other institutions and their respective employees, and is organized into two distinct businesses: Individual Life and Non-Medical Health. Individual Life insurance products and services include variable life, universal life, term life and whole life products. Non-Medical Health includes individual disability insurance products.

Corporate & Other contains the excess capital not allocated to the 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 and, consistent with GAAP accounting guidance for segment reporting, it is the Company’s measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for GAAP net income (loss). The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results from operations and the underlying profitability drivers of the business.

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

88

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

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

Operating revenues exclude net investment gains (losses) and net derivative gains (losses). The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues:

•  Universal life and investment-type product policy fees exclude the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (“GMIB Fees”); and

•  Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) excludes certain amounts related to contractholder-directed unit-linked investments and (iii) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP.

The following adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses:

•  Policyholder benefits and claims exclude: (i) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (ii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iii) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);

•  Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and amounts related to net investment income earned on contractholder-directed unit-linked investments;

•  Amortization of DAC and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;

•  Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

•  Other expenses exclude costs related to business combinations.

In the first quarter of 2011, management modified its definition of operating earnings to exclude impacts related to certain variable annuity guarantees and Market Value Adjustments to better conform to the way it manages and assesses its business. Accordingly, such results are no longer reported in operating earnings. Consequently, prior period results for Retirement Products and total consolidated operating earnings have been increased by $3 million, net of $1 million of income tax and reduced by $3 million, net of $2 million of income tax, for the three months and six months ended June 30, 2010, respectively.

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 and six months ended June 30, 2011 and 2010. 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 business.

Effective January 1, 2011, MetLife updated its economic capital model to align segment allocated equity with emerging standards and consistent risk principles. Such changes to MetLife’s economic capital model are applied prospectively. Segment net investment income is also credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, operating earnings or net income.

89

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 June 30, 2011	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	99		$	475		$	67		$	—		$	641		$	—		$	641
Universal life and investment-type product policy fees		290			6			163			13			472			21			493
Net investment income		208			299			149			44			700			96			796
Other revenues		87			2			42			—			131			—			131
Net investment gains (losses)		—			—			—			—			—			(27	)		(27	)
Net derivative gains (losses)		—			—			—			—			—			133			133
Total revenues		684			782			421			57			1,944			223			2,167
Expenses
Policyholder benefits and claims		133			595			67			—			795			23			818
Interest credited to policyholder account balances		181			45			63			—			289			15			304
Capitalization of DAC		(258	)		(1	)		(108	)		(17	)		(384	)		—			(384	)
Amortization of DAC and VOBA		134			1			69			1			205			122			327
Interest expense on debt		—			—			—			16			16			94			110
Other expenses		388			7			234			36			665			11			676
Total expenses		578			647			325			36			1,586			265			1,851
Provision for income tax expense (benefit)		37			47			33			(5	)		112			(12	)		100
Operating earnings	$	69		$	88		$	63		$	26			246
Adjustments to:
Total revenues														223
Total expenses														(265	)
Provision for income tax (expense) benefit														12
Net income													$	216					$	216

90

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 June 30, 2010	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	90		$	126		$	38		$	2		$	256		$	—		$	256
Universal life and investment-type product policy fees		236			7			136			2			381			26			407
Net investment income		237			279			118			—			634			91			725
Other revenues		79			1			23			—			103			—			103
Net investment gains (losses)		—			—			—			—			—			50			50
Net derivative gains (losses)		—			—			—			—			—			563			563
Total revenues		642			413			315			4			1,374			730			2,104
Expenses
Policyholder benefits and claims		123			256			89			(1	)		467			37			504
Interest credited to policyholder account balances		182			48			59			(21	)		268			(11	)		257
Capitalization of DAC		(146	)		(1	)		(107	)		(14	)		(268	)		—			(268	)
Amortization of DAC and VOBA		157			1			68			1			227			233			460
Interest expense on debt		—			—			—			18			18			101			119
Other expenses		260			8			226			34			528			—			528
Total expenses		576			312			335			17			1,240			360			1,600
Provision for income tax expense (benefit)		23			34			(6	)		(20	)		31			131			162
Operating earnings	$	43		$	67		$	(14	)	$	7			103
Adjustments to:
Total revenues														730
Total expenses														(360	)
Provision for income tax (expense) benefit														(131	)
Net income													$	342					$	342

91

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
Six Months Ended June 30, 2011	Products			Funding			Products			& Other			Total			Adjustments			Consolidated
	(In millions)
Revenues
Premiums	$	129		$	537		$	111		$	—		$	777		$	—		$	777
Universal life and investment-type product policy fees		563			17			307			20			907			41			948
Net investment income		414			597			305			92			1,408			176			1,584
Other revenues		184			3			74			—			261			—			261
Net investment gains (losses)		—			—			—			—			—			(41	)		(41	)
Net derivative gains (losses)		—			—			—			—			—			(23	)		(23	)
Total revenues		1,290			1,154			797			112			3,353			153			3,506
Expenses
Policyholder benefits and claims		196			783			136			—			1,115			30			1,145
Interest credited to policyholder account balances		361			95			123			—			579			12			591
Capitalization of DAC		(449	)		(6	)		(209	)		(30	)		(694	)		—			(694	)
Amortization of DAC and VOBA		244			2			140			3			389			55			444
Interest expense on debt		—			—			—			33			33			187			220
Other expenses		696			23			467			66			1,252			11			1,263
Total expenses		1,048			897			657			72			2,674			295			2,969
Provision for income tax expense (benefit)		84			90			49			(16	)		207			(46	)		161
Operating earnings	$	158		$	167		$	91		$	56			472
Adjustments to:
Total revenues														153
Total expenses														(295	)
Provision for income tax (expense) benefit														46
Net income													$	376					$	376

92

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
Six Months Ended June 30, 2010	Products		Funding		Products		& Other		Total		Adjustments		Consolidated
	(In millions)
Revenues
Premiums	$	148	$	497	$	66	$	—	$	711	$	—	$	711
Universal life and investment-type product policy fees		444		15		266		7		732		44		776
Net investment income		466		548		232		83		1,329		186		1,515
Other revenues		155		2		56		—		213		—		213
Net investment gains (losses)		—		—		—		—		—		87		87
Net derivative gains (losses)		—		—		—		—		—		255		255
Total revenues		1,213		1,062		620		90		2,985		572		3,557
Expenses
Policyholder benefits and claims		209		755		173		—		1,137		61		1,198
Interest credited to policyholder account balances		364		93		117		24		598		(25)		573
Capitalization of DAC		(266)		(2)		(205)		(25)		(498)		—		(498)
Amortization of DAC and VOBA		249		1		139		2		391		133		524
Interest expense on debt		—		—		—		35		35		204		239
Other expenses		479		17		434		63		993		—		993
Total expenses		1,035		864		658		99		2,656		373		3,029
Provision for income tax expense (benefit)		62		68		(13)		(34)		83		71		154
Operating earnings	$	116	$	130	$	(25)	$	25		246
Adjustments to:
Total revenues										572
Total expenses										(373)
Provision for income tax (expense) benefit										(71)
Net income									$	374			$	374

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

	June 30, 2011		December 31, 2010
	(In millions)
Retirement Products	$	94,498	$	87,461
Corporate Benefit Funding		30,966		30,491
Insurance Products		18,605		16,296
Corporate & Other		21,413		20,637
Total	$	165,482	$	154,885

93

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.

9.   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. For certain agreements, charges are based on various performance measures or activity-based costing. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the Company and/or affiliate. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $457 million and $834 million for the three months and six months ended June 30, 2011, respectively, and $340 million and $638 million for the three months and six months ended June 30, 2010, respectively. The aforementioned expenses and fees incurred with affiliates were comprised of the following:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Compensation	$	64	$	38	$	127	$	74
Commissions		241		134		426		257
Volume-related costs		61		88		109		155
Professional services		5		—		9		—
Rent		6		—		12		—
Other		80		80		151		152
Total other expenses	$	457	$	340	$	834	$	638

Revenues received from affiliates related to these agreements were recorded as follows:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Universal life and investment-type product policy fees	$	36	$	28	$	69	$	54
Other revenues	$	34	$	24	$	65	$	47

94

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

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

The Company had net receivables from affiliates of $40 million and $60 million at June 30, 2011 and December 31, 2010, respectively, related to the items discussed above. These amounts exclude affiliated reinsurance balances discussed below. See Note 2 for expenses related to investment advice under these agreements, recorded in net investment income.

Reinsurance Transactions

The Company has reinsurance agreements with certain MetLife subsidiaries, including Metropolitan Life Insurance Company, MetLife Reinsurance Company of South Carolina, Exeter Reassurance Company, Ltd., General American Life Insurance Company, MetLife Investors Insurance Company and MetLife Reinsurance Company of Vermont, all of which are related parties.

Information regarding the effect of affiliated reinsurance included in the interim condensed consolidated statements of operations was as follows:

	Three Months						Six Months
	Ended						Ended
	June 30,						June 30,
	2011			2010			2011			2010
	(In millions)
Premiums:
Reinsurance assumed	$	6		$	3		$	4		$	7
Reinsurance ceded		(55	)		(52	)		(109	)		(111	)
Net premiums	$	(49	)	$	(49	)	$	(105	)	$	(104	)
Universal life and investment-type product policy fees:
Reinsurance assumed	$	23		$	19		$	43		$	30
Reinsurance ceded		(97	)		(72	)		(188	)		(133	)
Net universal life and investment-type product policy fees	$	(74	)	$	(53	)	$	(145	)	$	(103	)
Other revenues:
Reinsurance assumed	$	—		$	—		$	—		$	—
Reinsurance ceded		78			65			158			139
Net other revenues	$	78		$	65		$	158		$	139
Policyholder benefits and claims:
Reinsurance assumed	$	9		$	5		$	12		$	6
Reinsurance ceded		(113	)		(89	)		(228	)		(173	)
Net policyholder benefits and claims	$	(104	)	$	(84	)	$	(216	)	$	(167	)
Interest credited to policyholder account balances:
Reinsurance assumed	$	17		$	16		$	33		$	31
Reinsurance ceded		(19	)		(12	)		(37	)		(24	)
Net interest credited to policyholder account balances	$	(2	)	$	4		$	(4	)	$	7
Other expenses:
Reinsurance assumed	$	13		$	13		$	28		$	25
Reinsurance ceded		37			36			82			60
Net other expenses	$	50		$	49		$	110		$	85

95

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 interim condensed consolidated balance sheets was as follows at:

	June 30, 2011					December 31, 2010
	Assumed		Ceded			Assumed		Ceded
	(In millions)
Assets:
Premiums, reinsurance and other receivables	$	72	$	9,610		$	40	$	9,826
Deferred policy acquisition costs and value of business acquired		150		(492	)		164		(484	)
Total assets	$	222	$	9,118		$	204	$	9,342
Liabilities:
Future policy benefits	$	44	$	—		$	41	$	—
Other policy-related balances		1,470		570			1,435		508
Other liabilities		29		3,007			12		3,200
Total liabilities	$	1,543	$	3,577		$	1,488	$	3,708

The Company ceded risks to affiliates related to guaranteed minimum benefit guarantees written directly by the Company through December 31, 2010. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value are also included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were assets of $824 million and $936 million at June 30, 2011 and December 31, 2010, respectively. Net derivative gains (losses) associated with the embedded derivatives were $195 million and ($248) million for the three months and six months ended June 30, 2011, respectively, and $1,413 million and $1,047 million for the three months and six months ended June 30, 2010, respectively.

MLI-USA cedes two blocks of business to an affiliate 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 increased the funds withheld balance by $30 million and $5 million at June 30, 2011 and December 31, 2010, respectively. Net derivative gains (losses) associated with the embedded derivatives were ($50) million and ($25) million for the three months and six months ended June 30, 2011, respectively, and ($81) million and ($90) million for the three months and six months ended June 30, 2010, 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 the affiliated reinsurer during the first several years of the reinsurance agreement. The experience refund reduced the funds withheld by MLI-USA from the affiliated reinsurer by $49 million and $98 million for the three months and six months ended June 30, 2011, respectively, and $64 million and $117 million for the three months and six months ended June 30, 2010, respectively, and are considered unearned revenue, amortized over the life of the contract using the same assumptions as used for the DAC associated with the underlying policies. Amortization and interest of the unearned revenue associated with the experience refund was $21 million and $37 million for the three months and six months ended June 30, 2011, respectively, and $22 million and $45 million for the three months and six months ended June 30, 2010, respectively, and is included in premiums and universal life and investment-type product policy fees in the consolidated statements of operations. At June 30, 2011 and December 31, 2010, unearned revenue related to the experience refund was $621 million and $560 million, respectively, and is included in other policy-related balances in the interim condensed consolidated balance sheets.

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

For purposes of this discussion, “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. 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 MetLife Insurance Company of Connecticut’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “2010 Annual Report”), filed with the U.S. Securities and Exchange Commission, 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 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. 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 accounting principles generally accepted 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, it is our measure of segment performance.

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

Operating revenues exclude net investment gains (losses) and net derivative gains (losses). The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues:

•  Universal life and investment-type product policy fees exclude the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity guaranteed minimum income benefits (“GMIB”) fees (“GMIB Fees”); and

•  Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) excludes certain amounts related to contractholder-directed unit-linked investments, and (iii) excludes certain amounts related to securitization entities that are variable interest entities (“VIEs”) consolidated under GAAP.

The following adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses:

•  Policyholder benefits and claims exclude: (i) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (ii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iii) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);

•  Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and amounts related to net investment income earned on contractholder-directed unit-linked investments;

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•  Amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments;

•  Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

•  Other expenses exclude costs related to business combinations.

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 business. Operating revenues, operating expenses and operating earnings should not be viewed as a substitute for GAAP revenues, GAAP expenses and GAAP net income, respectively. Reconciliations of these measures to the most directly comparable GAAP measures, are included in “— Results of Operations.”

In the first quarter of 2011, management modified its definition of operating earnings to exclude impacts related to certain variable annuity guarantees and Market Value Adjustments to better conform to the way it manages and assesses its business. Accordingly, such results are no longer reported in operating earnings. Consequently, prior period results for Retirement Products and total consolidated operating earnings have been increased by $3 million, net of $1 million of income tax, and reduced by $3 million, net of $2 million of income tax, for the three months and six months ended June 30, 2010, respectively.

In this discussion, we sometimes refer to sales activity for various products. These sales statistics do not correspond to revenues under GAAP, but are used as relevant measures of business activity.

Business

The Company’s business is currently divided into three segments: Retirement Products, Corporate Benefit Funding and Insurance Products. 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 and corporations, as well as other institutions and their respective employees, and is organized into two distinct businesses: Individual Life and Non-Medical Health. Individual Life insurance products and services include variable life, universal life, term life and whole life products. Non-Medical Health includes individual disability insurance products.

Corporate & Other contains the excess capital not allocated to the 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.

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;

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(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; and
(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 business 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” in the 2010 Annual Report and Note 1 of the Notes to the Consolidated Financial Statements in the 2010 Annual Report.

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 business.

Effective January 1, 2011, MetLife updated its economic capital model to align segment allocated equity with emerging standards and consistent risk principles. Such changes to MetLife’s economic capital model are applied prospectively. Segment net investment income is also credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company’s consolidated net investment income, operating earnings or net income.

Results of Operations

Six Months Ended June 30, 2011 Compared with the Six Months Ended June 30, 2010

We have experienced growth and an increase in market share in several of our businesses, which, together with improved overall market conditions compared to conditions in the prior period, positively impacted our results, most significantly through higher policy fee income and higher net investment income in certain of our businesses. Sales of our domestic annuity products were up 59%, driven by an increase in variable annuity sales compared with the prior period. We also benefited in the current quarter from increased issuances of funding agreements and increased sales of $348 million, before income tax, in our pension closeout business in the United Kingdom due to a

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significant sale in the current quarter. Premiums associated with the closeout business can vary significantly from period to period. We also continue to experience growth in our variable and universal life businesses.

	Six Months
	Ended
	June 30,
	2011			2010			Change			% Change
	(In millions)
Revenues
Premiums	$	777		$	711		$	66			9.3	%
Universal life and investment-type product policy fees		948			776			172			22.2	%
Net investment income		1,584			1,515			69			4.6	%
Other revenues		261			213			48			22.5	%
Net investment gains (losses)		(41	)		87			(128	)		(147.1	)%
Net derivative gains (losses)		(23	)		255			(278	)		(109.0	)%
Total revenues		3,506			3,557			(51	)		(1.4	)%
Expenses
Policyholder benefits and claims		1,145			1,198			(53	)		(4.4	)%
Interest credited to policyholder account balances		591			573			18			3.1	%
Capitalization of DAC		(694	)		(498	)		(196	)		(39.4	)%
Amortization of DAC and VOBA		444			524			(80	)		(15.3	)%
Interest expense on debt		220			239			(19	)		(7.9	)%
Other expenses		1,263			993			270			27.2	%
Total expenses		2,969			3,029			(60	)		(2.0	)%
Income (loss) before provision for income tax		537			528			9			1.7	%
Provision for income tax expense (benefit)		161			154			7			4.5	%
Net income	$	376		$	374		$	2			0.5	%

Unless otherwise stated, all amounts discussed below are net of income tax.

During the six months ended June 30, 2011, net income remained essentially flat predominantly due to a $226 million increase in operating earnings substantially offset by decreases in net derivative and investment gains (losses), net of related adjustments, principally associated with DAC and VOBA amortization.

We manage our investment portfolio using disciplined Asset/Liability Management 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, net of income tax, 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 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 specific mix of products and business segments. In addition, the general account investment portfolio includes, within other securities, contractholder-directed investments supporting unit-linked variable annuity type liabilities, which do not qualify as separate account assets. The returns on these contractholder-directed investments, which can vary significantly period to period, include changes in estimated fair value

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subsequent to purchase, inure to contractholders and are offset in earnings by a corresponding change in policyholder account balances through interest credited to policyholder account balances.

The composition of the investment portfolio of each business segment is tailored to the specific characteristics of its insurance liabilities, causing certain portfolios to be shorter in duration and others to be longer in duration. Accordingly, certain portfolios are more heavily weighted in longer duration, higher yielding fixed maturity securities, or certain sub-sectors of fixed maturity securities, than other portfolios.

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 changes in market factors such as interest rates, foreign currencies, credit spreads and equity markets, counterparty specific factors such as financial performance, credit rating and collateral valuation, and internal factors such as portfolio rebalancing. Changes in these factors from period to period can significantly impact the levels of both impairments and realized gains and losses on investments sold.

We use freestanding equity, interest rate, currency and credit derivatives to provide economic hedges of certain invested assets and insurance liabilities, including embedded derivatives, within certain of our variable annuity minimum benefit guarantees. For those hedges not designated as accounting hedges, changes in market factors can lead to the recognition of fair value changes in net derivative gains (losses) without an offsetting gain or loss recognized in earnings for the item being hedged even though these are effective economic hedges. Additionally, we issue liabilities and purchase assets that contain embedded derivatives whose changes in estimated fair value are sensitive to changes in market factors and are also recognized in net derivative gains (losses).

The unfavorable variance in net derivative gains (losses) of $181 million was driven by an unfavorable change in freestanding derivatives of $149 million and an unfavorable change in embedded derivatives of $32 million primarily associated with variable annuity minimum benefit guarantees.

The $149 million unfavorable variance in freestanding derivatives was primarily attributable to the impact of equity market movements, a decrease in equity volatility, falling long-term and mid-term interest rates, and a weakening United States (“U.S.”) dollar. The impact of equity market movements and decreased equity volatility in the current period compared to the prior period had a negative impact of $67 million on our equity derivatives, all of which was attributable to hedges of variable annuity minimum benefit guarantee liabilities that are accounted for as embedded derivatives. A smaller decrease in long-term and mid-term interest rates in the current period than in the prior period had a negative impact of $47 million on our interest rate derivatives, $3 million of which was attributable to hedges of variable annuity minimum benefit guarantee liabilities that are accounted for as embedded derivatives. Foreign currency derivatives had a negative impact of $39 million related to hedges of foreign-currency exposures.

Certain variable annuity products with minimum benefit guarantees contain embedded derivatives that are measured at estimated fair value separately from the host variable annuity contract with changes in estimated fair value reported in net derivative gains (losses). The fair value of these embedded derivatives also includes an adjustment for nonperformance risk, which is unhedged. The $32 million unfavorable change in embedded derivatives was primarily attributable to an unfavorable change in ceded affiliated reinsurance assets of $806 million and an unfavorable change in the adjustment for nonperformance risk of $67 million on direct liabilities, partially offset by a favorable change in market factors on direct liabilities of $652 million, a favorable change in other unhedged non-market risks of $142 million and a favorable change in the adjustment for the reinsurer’s nonperformance risk of $39 million. The foregoing $67 million unfavorable change in the adjustment for nonperformance risk was net of a prior period $256 million loss relating to a refinement in estimating the spreads used in the adjustment for nonperformance risk. The aforementioned favorable change in the adjustment for the reinsurer’s nonperformance risk of $39 million was net of a prior period $380 million gain relating to a refinement in estimating the spreads used in the adjustment for nonperformance risk.

The unfavorable variance in net investment gains (losses) of $83 million was primarily due to increased realized losses on sales of fixed maturity securities and non-redeemable preferred securities and increased impairments on equity securities. An increase in other-than-temporary impairment losses on equity securities in the financial sector industry primarily reflects impairments on securities the Company intends to sell driven by

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the repositioning of the portfolio to diversify and extend duration, which were partially offset by decreased impairments on structured securities reflecting improved economic fundamentals.

Income tax expense for the six months ended June 30, 2011 was $161 million, or 30% of income before provision for income tax, compared with $154 million, or 29% of income before provision for income tax, for the comparable 2010 period. The Company’s 2011 and 2010 effective tax rates differ from the U.S. statutory rate of 35% primarily due to the impact of certain permanent tax differences, including non-taxable investment income and tax credits for investments in low income housing, in relation to income before income tax, as well as certain foreign permanent tax differences.

As more fully described in the discussion of performance measures above, we use operating earnings, which does not equate to net income as determined in accordance with GAAP, to analyze our performance, evaluate segment performance, and allocate resources. 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 net income. Operating earnings increased by $226 million to $472 million in the first six months of 2011 from $246 million in the comparable 2010 period.

Reconciliation of net income to operating earnings

	Six Months
	Ended
	June 30,
	2011			2010
	(In millions)
Net income	$	376		$	374
Less: Net investment gains (losses)		(41	)		87
Less: Net derivative gains (losses)		(23	)		255
Less: Other adjustments to net income (1)		(78	)		(143	)
Less: Provision for income tax (expense) benefit		46			(71	)
Operating earnings	$	472		$	246

(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

	Six Months
	Ended
	June 30,
	2011			2010
	(In millions)
Total revenues	$	3,506		$	3,557
Less: Net investment gains (losses)		(41	)		87
Less: Net derivative gains (losses)		(23	)		255
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)		(2	)		3
Less: Other adjustments to revenues (1)		219			227
Total operating revenues	$	3,353		$	2,985
Total expenses	$	2,969		$	3,029
Less: Adjustments related to net investment gains (losses) and net derivative gains (losses)		53			129
Less: Other adjustments to expenses (1)		242			244
Total operating expenses	$	2,674		$	2,656

(1) See definitions of operating revenues and operating expenses for the components of such adjustments.

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Unless otherwise stated, all amounts discussed below are net of income tax.

The $226 million increase in operating earnings was primarily driven by the improvement in the financial markets, the impact of positive net cash flows, and net favorable claims and mortality experience.

The improvement in the financial markets, specifically the favorable equity market performance, contributed to an increase in our average separate account balances, upon which certain policy related fees are calculated. This, coupled with positive net cash flows from our annuity business, resulted in higher policy fees and other revenues of $133 million.

Positive net cash flows generated from the majority of our businesses was also the primary driver of the $51 million increase in net investment income, with $33 million of the increase being generated from growth in average invested assets and $18 million from higher yields. Growth in the investment portfolio was primarily invested in mortgage loans, fixed maturity securities and other limited partnership interests. Yields were positively impacted by increased real estate joint venture yields as a result of the positive effects of stabilizing real estate markets period over period. This was partially offset by lower fixed maturity securities yields due to new investment and reinvestment during this lower interest rate environment and higher other limited partnership interests yields in the prior period from a stronger recovery in the private equity markets in the prior period compared to the current period. Beginning in the fourth quarter of 2010, investment earnings and interest credited related to contractholder-directed unit-linked investments are excluded from operating revenues and operating expenses, as the contractholder, and not the Company, directs the investment of the funds. This change in presentation had no impact on operating earnings; however, it unfavorably impacted the change in net investment income in the current period.

Claims experience varied amongst our businesses with a net favorable impact of $51 million to operating earnings. We experienced favorable mortality in our traditional life and structured settlement business. This was partially offset by less favorable mortality in our variable and universal life businesses.

Business growth, specifically in our annuity business, was the primary driver of the increase in variable expenses, such as commissions, which accounted for $137 million of the total $168 million increase in our operating expenses. The majority of the increase in variable expenses was offset by DAC capitalization. Additionally, higher market driven expenses of $16 million, such as letter of credit fees, contributed to the increase in operating expenses.

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.   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 three months ended June 30, 2011 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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Part II — Other Information

Item 1.   Legal Proceedings

The following should be read in conjunction with (i) Part I, Item 3, of MetLife Insurance Company of Connecticut’s Annual Report on Form 10-K for the year ended December 31, 2010 (the “2010 Annual Report”), filed with the U.S. Securities and Exchange Commission (“SEC”); (ii) Part II, Item 1, of MetLife Insurance Company of Connecticut’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2011 (the “First Quarter 2011 10-Q”); and (iii) Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements in Part I of this report.

Unclaimed Property Inquiries

More than 30 U.S. jurisdictions are auditing MetLife Insurance Company of Connecticut and certain of its affiliates for compliance with unclaimed property laws. Additionally, MetLife Insurance Company of Connecticut and certain of its affiliates have received subpoenas and other regulatory inquiries from certain regulators and other officials relating to claims-payment practices and compliance with unclaimed property laws. On July 5, 2011, the New York Insurance Department issued a letter requiring life insurers doing business in New York to use data available on the U.S. Social Security Administration’s Death Master File or a similar database to identify instances where death benefits under life insurance policies, annuities, and retained asset accounts are payable, to locate and pay beneficiaries under such contracts, and to report the results of the use of the data. It is possible that other jurisdictions may pursue similar investigations or inquiries, or issue directives similar to the New York Insurance Department’s letter. It is possible that the audits and related activity may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, and changes to the Company’s procedures for the identification and escheatment of abandoned property. The Company is not currently able to estimate the reasonably possible amount of any such additional payments or the reasonably possible cost of any such changes in procedures, but it is possible that such costs may be substantial.

Summary

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. 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.

Item 1A.   Risk Factors

The following, together with the information under “Risk Factors” in Part II, Item 1A, of the First Quarter 2011 10-Q, which is incorporated herein by reference, 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 2010 Annual Report.

Difficult Conditions in the Global Capital Markets and the Economy Generally May Materially Adversely Affect Our Business and Results of Operations and These Conditions May Not Improve in the Near Future

Our business and results of operations are materially affected by conditions in the global capital markets and the economy, generally, both in the U.S. and elsewhere around the world. Stressed conditions, volatility and

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disruptions in global capital markets, particular markets, or financial asset classes can have an adverse effect on us, in part because we have a large investment portfolio and our insurance liabilities are sensitive to changing market factors. Disruptions in one market or asset class can also spread to other markets or asset classes. Upheavals in the financial markets can also affect our business through their effects on general levels of economic activity, employment and customer behavior. Although the disruption in the global financial markets has moderated, not all global financial markets are functioning normally, and recovery from the U.S. recession has been below historic averages. Global inflation had fallen over the last several years, but is now rising, and a number of central banks around the world have begun tightening monetary conditions. The global recession and disruption of the financial markets has led to concerns over capital markets access and the solvency of certain European Union member states, including Portugal, Ireland, Italy, Greece and Spain, and of financial institutions that have significant direct or indirect exposure to debt issued by these countries. Certain of the major rating agencies have downgraded the sovereign debt of Greece, Portugal and Ireland. These ratings downgrades and implementation of European Union and private sector support programs have increased concerns that other European Union member states could experience similar financial troubles. The Japanese economy, to which MetLife, Inc. faces substantial exposure given its operations there, has been significantly negatively impacted by the March 2011 earthquake and tsunami. Disruptions to the Japanese economy are having, and will continue to have, negative impacts on the overall global economy, not all of which can be foreseen. Furthermore, the recent downgrade by Standard & Poor’s Ratings Services (“S&P”) of U.S. Treasury securities and the delay by Congress in raising the statutory national debt limit could have severe repercussions to the U.S. and global credit and financial markets, further exacerbate concerns over sovereign debt of other countries and could disrupt economic activity in the U.S. and elsewhere. See “— The Delay by Congress in Raising the Statutory Debt Limit of the U.S., as well as Rating Agency Downgrades of U.S. Treasury Securities, Could Have an Adverse Effect on Our Business, Financial Condition and Results of Operations.”

Our revenues and net investment income are likely to remain under pressure in such circumstances and our profit margins could erode. Also, in the event of extreme prolonged market events, such as the recent global credit crisis, we could incur significant capital and/or operating losses. Even in the absence of a market downturn, we are exposed to substantial risk of loss due to market volatility.

We are a significant writer of variable annuity products. The account values of these products decrease as a result of downturns in capital markets. Decreases in account values reduce the fees generated by our variable annuity products, cause the amortization of deferred policy acquisition costs to accelerate and could increase the level of insurance liabilities we must carry to support those variable annuities issued with any associated guarantees.

Factors such as consumer spending, business investment, government spending, the volatility and strength of the capital markets, and inflation all affect the business and economic environment and, ultimately, the amount and profitability of our business. In an economic downturn characterized by higher unemployment, lower family income, lower corporate earnings, lower business investment and lower consumer spending, the demand for our financial and insurance products could be adversely affected. Group insurance, in particular, is affected by the higher unemployment rate. In addition, we may experience an elevated incidence of claims and lapses or surrenders of policies. Our policyholders may choose to defer paying insurance premiums or stop paying insurance premiums altogether. Adverse changes in the economy could affect earnings negatively and could have a material adverse effect on our business, results of operations and financial condition. The recent market turmoil has precipitated, and may continue to raise the possibility of, legislative, regulatory and governmental actions. We cannot predict whether or when such actions may occur, or what impact, if any, such actions could have on our business, results of operations and financial condition. See “Risk Factors — 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 U.S.,” “Risk Factors — Our Insurance and Brokerage Businesses Are Heavily Regulated, and Changes in Regulation May Reduce Our Profitability and Limit Our Growth,” “Risk Factors — Various Aspects of Dodd-Frank Could Impact Our Business Operations, Capital Requirements and Profitability and Limit Our Growth,” and “Risk Factors — Competitive Factors May Adversely Affect Our Market Share and Profitability” in the 2010 Annual Report.

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The Delay by Congress in Raising the Statutory Debt Limit of the U.S., as well as Rating Agency Downgrades of U.S. Treasury Securities, Could Have an Adverse Effect on Our Business, Financial Condition and Results of Operations

The delay by Congress in raising the statutory national debt limit could have severe repercussions to the U.S. and global credit and financial markets, further exacerbate concerns over sovereign debt of other countries and could disrupt economic activity in the U.S. and elsewhere. As a result, our access to, or cost of, liquidity may deteriorate.

On August 5, 2011, S&P downgraded the AAA rating of U.S. Treasury securities to AA+ with a negative outlook. On August 2, 2011, Moody’s Investors Service (“Moody’s”) affirmed the Aaa rating of U.S. Treasury securities, but imposed a negative outlook as well. As a result of such rating actions, the market value of some of our investments is likely to decrease, and our capital adequacy could be adversely affected, which could require us to raise additional capital during a period of distress in financial markets, potentially at a higher cost. In the event of further downgrades, the risks we face and any resulting adverse effects on our business, financial condition and results of operations would be significantly exacerbated, including those described under “— Difficult Conditions in the Global Capital Markets and the Economy Generally May Materially Adversely Affect Our Business and Results of Operations and These Conditions May Not Improve in the Near Future” and “Risk Factors — Adverse Capital and Credit Market Conditions May Significantly Affect Our Ability to Meet Liquidity Needs, Access to Capital and Cost of Capital,” “Risk Factors — Our Participation in a Securities Lending Program Subjects Us to Potential Liquidity and Other Risks” and “Risk Factors — The Determination of the Amount of Allowances and Impairments Taken on Our Investments is Highly Subjective and Could Materially Impact Our Results of Operations or Financial Position” in the 2010 Annual Report. We cannot predict whether or when these adverse consequences may occur, what other unforeseen consequences may result, or the extent, severity and duration of the impact of such consequences on our business, results of operations and financial condition.

The Resolution of Several Issues Affecting the Financial Services Industry Could Have a Negative Impact on Our Reported Results or on Our Relations with Current and Potential Customers

We will continue to be subject to legal and regulatory actions in the ordinary course of our business, both in the U.S. and internationally. This could result in a challenge of business sold in the past under previously acceptable market practices at the time. Regulators are increasingly interested in the approach that product providers use to select third-party distributors and to monitor the appropriateness of sales made by them. In some cases, product providers can be held responsible for the deficiencies of third-party distributors. In addition, regulators are auditing compliance by life insurers with state unclaimed property laws. See “— Litigation and Regulatory Investigations Are Increasingly Common in Our Businesses and May Result in Significant Financial Losses and/or Harm to Our Reputation.”

As a result of publicity relating to widespread perceptions of industry abuses, there have been numerous regulatory inquiries and proposals for legislative and regulatory reforms.

We Are Exposed to Significant Financial and Capital Markets Risk Which May Adversely Affect Our Results of Operations, Financial Condition and Liquidity, and May Cause Our Net Investment Income to Vary from Period to Period

We are exposed to significant financial and capital markets risk, including changes in interest rates, credit spreads, equity prices, real estate markets, foreign currency exchange rates, market volatility, the performance of the global economy in general, the performance of the specific obligors, including governments, included in our portfolio and other factors outside our control.

Our exposure to interest rate risk relates primarily to the market price and cash flow variability associated with changes in interest rates. Changes in interest rates will impact the net unrealized gain or loss position of our fixed income investment portfolio. If long-term interest rates rise dramatically within a six to twelve month time period, certain of our life insurance businesses and fixed annuity business may be exposed to disintermediation risk. Disintermediation risk refers to the risk that our policyholders may surrender their contracts in a rising interest rate environment, requiring us to liquidate fixed income investments in an unrealized loss position. Due to the long-term nature of the liabilities associated with certain of our life insurance businesses, guaranteed benefits on variable annuities, and structured settlements, sustained declines in long-term interest rates may subject us to reinvestment

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risks and increased hedging costs. In other situations, declines in interest rates may result in increasing the duration of certain life insurance liabilities, creating asset-liability duration mismatches.

Our investment portfolio also contains interest rate sensitive instruments, such as fixed income securities, which may be adversely affected by changes in interest rates from governmental monetary policies, domestic and international economic and political conditions and other factors beyond our control. Changes in interest rates will impact both the net unrealized gain or loss position of our fixed income portfolio and the rates of return we receive on funds invested. Our mitigation efforts with respect to interest rate risk are primarily focused towards maintaining an investment portfolio with diversified maturities that has a weighted average duration that is approximately equal to the duration of our estimated liability cash flow profile. However, our estimate of the liability cash flow profile may be inaccurate and we may be forced to liquidate fixed income investments prior to maturity at a loss in order to cover the cash flow profile of the liability. Although we take measures to manage the economic risks of investing in a changing interest rate environment, we may not be able to mitigate the interest rate risk of our fixed income investments relative to our liabilities. See also “ — Changes in Market Interest Rates May Significantly Affect Our Profitability.”

Our exposure to credit spreads primarily relates to market price volatility and cash flow variability associated with changes in credit spreads. A widening of credit spreads will adversely impact both the net unrealized gain or loss position of the fixed-income investment portfolio, will increase losses associated with credit-based non qualifying derivatives where we assume credit exposure, and, if issuer credit spreads increase significantly or for an extended period of time, will likely result in higher other-than-temporary impairments. Credit spread tightening will reduce net investment income associated with new purchases of fixed maturity securities. In addition, market volatility can make it difficult to value certain of our securities if trading becomes less frequent. As such, valuations may include assumptions or estimates that may have significant period to period changes which could have a material adverse effect on our results of operations or financial condition. Credit spreads on both corporate and structured securities widened significantly during 2008, resulting in continuing depressed pricing. As a result of improved conditions, credit spreads narrowed in 2009 and changed to a lesser extent in 2010. If there is a resumption of significant volatility in the markets, it could cause changes in credit spreads and defaults and a lack of pricing transparency which, individually or in tandem, could have a material adverse effect on our results of operations, financial condition, liquidity or cash flows through realized investment losses, impairments, and changes in unrealized loss positions.

Our primary exposure to equity risk relates to the potential for lower earnings associated with certain of our insurance businesses where fee income is earned based upon the estimated fair value of the assets under management. Downturns and volatility in equity markets can have a material adverse effect on the revenues and investment returns from our savings and investment products and services. Because these products and services generate fees related primarily to the value of assets under management, a decline in the equity markets could reduce our revenues from the reduction in the value of the investments we manage. The retail variable annuity business in particular is highly sensitive to equity markets, and a sustained weakness in the equity markets could decrease revenues and earnings in variable annuity products. Furthermore, certain of our variable annuity products offer guaranteed benefits which increase our potential benefit exposure should equity markets decline. We use derivatives and reinsurance to mitigate the impact of such increased potential benefit exposures. We are also exposed to interest rate and equity risk based upon the discount rate and expected long-term rate of return assumptions associated with our pension and other postretirement benefit obligations. Sustained declines in long term interest rates or equity returns likely would have a negative effect on the funded status of these plans. Lastly, we invest a portion of our investments in public and private equity securities, leveraged buy-out funds, hedge funds and other private equity funds and the estimated fair value of such investments may be impacted by downturns or volatility in equity markets.

Our primary exposure to real estate risk relates to commercial and agricultural real estate. Our exposure to commercial and agricultural real estate risk stems from various factors. These factors include, but are not limited to, market conditions including the demand and supply of leasable commercial space, creditworthiness of tenants and partners, capital markets volatility and the inherent interest rate movement. In addition, our real estate joint venture development program is subject to risks, including, but not limited to, reduced property sales and decreased availability of financing which could adversely impact the joint venture developments and/or operations. The state

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of the economy and speed of recovery in fundamental and capital market conditions in the commercial and agricultural real estate sectors will continue to influence the performance of our investments in these sectors. These factors and others beyond our control could have a material adverse effect on our results of operations, financial condition, liquidity or cash flows through net investment income, realized investment losses and levels of valuation allowances.

Our investment portfolio contains investments in government bonds issued by European nations, commonly referred to as “Europe’s perimeter region” and in financial institutions that have significant direct or indirect exposure to debt issued by those nations. Recently, the European Union member states have experienced above average public debt, inflation and unemployment as the global economic downturn has developed. A number of member states are significantly impacted by the economies of their more influential neighbors, such as Germany. In addition, financial troubles of one nation can lead to troubles in others. In particular, a number of large European banks hold significant amounts of sovereign and/or financial institution debt of other European nations and could experience difficulties as a result of defaults or declines in the value of such debt. These difficulties or concern that they may occur could disrupt the functioning of the financial markets. Our investment portfolio also contains investments in revenue bonds issued under the auspices of U.S. states and municipalities and a limited amount of general obligation bonds of U.S. states and municipalities (collectively, “Municipal Bonds”). Recently, certain U.S. states and municipalities have faced budget deficits and financial difficulties. There can be no assurance that the financial difficulties of such U.S. states and municipalities would not have an adverse impact on our Municipal Bond portfolio.

Our primary foreign currency exchange risks are described under “Risk Factors — Fluctuations in Foreign Currency Exchange Rates Could Negatively Affect Our Profitability” in the 2010 Annual Report. Changes in these factors, which are significant risks to us, can affect our net investment income in any period, and such changes can be substantial.

A portion of our investments are made in leveraged buy-out funds, hedge funds and other private equity funds, many of which make private equity investments. The amount and timing of net investment income from such investment funds tends to be uneven as a result of the performance of the underlying investments, including private equity investments. The timing of distributions from the funds, which depends on particular events relating to the underlying investments, as well as the funds’ schedules for making distributions and their needs for cash, can be difficult to predict. As a result, the amount of net investment income that we record from these investments can vary substantially from quarter to quarter. Recovering private equity markets and stabilizing credit and real estate markets during 2010 had a positive impact on returns and net investment income on private equity funds, hedge funds and real estate joint ventures, which are included within other limited partnership interests and real estate and real estate joint venture portfolios. Although volatility in most global financial markets has moderated, if there is a resumption of significant volatility, it could adversely impact returns and net investment income on these alternative investment classes.

Continuing challenges include continued weakness in the U.S. real estate market, investor anxiety over the U.S. and European economies, defaults or declines in the value of sovereign or financial institution debt, rating agency downgrades of various structured products and financial issuers, unresolved issues with structured investment vehicles and monoline financial guarantee insurers, deleveraging of financial institutions and hedge funds, sustained high levels of unemployment and the continuing recovery in the inter-bank market. If there is a resumption of significant volatility in the markets, it could cause changes in interest rates, declines in equity prices, and the strengthening or weakening of foreign currencies against the U.S. dollar which, individually or in tandem, could have a material adverse effect on our results of operations, financial condition, liquidity or cash flows through realized investment losses, impairments, increased valuation allowances and changes in unrealized gain or loss positions.

Changes in Market Interest Rates May Significantly Affect Our Profitability

Some of our products, principally traditional whole life insurance, fixed annuities and guaranteed interest contracts, expose us to the risk that changes in interest rates will reduce our investment margin or “spread,” or the difference between the amounts that we are required to pay under the contracts in our general account and the rate of

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return we are able to earn on general account investments intended to support obligations under the contracts. Our spread is a key component of our net income.

As interest rates decrease or remain at low levels, we may be forced to reinvest proceeds from investments that have matured or have been prepaid or sold at lower yields, reducing our investment margin. Moreover, borrowers may prepay or redeem the fixed income securities, commercial or agricultural mortgage loans and mortgage backed securities in our investment portfolio with greater frequency in order to borrow at lower market rates, which exacerbates this risk. Lowering interest crediting rates can help offset decreases in investment margins on some products. However, our ability to lower these rates could be limited by competition or contractually guaranteed minimum rates and may not match the timing or magnitude of changes in asset yields. As a result, our spread could decrease or potentially become negative. Our expectation for future spreads is an important component in the amortization of deferred policy acquisition costs (“DAC”) and value of business acquired (“VOBA”), and significantly lower spreads may cause us to accelerate amortization, thereby reducing net income in the affected reporting period. In addition, during periods of declining interest rates, life insurance and annuity products may be relatively more attractive investments to consumers, resulting in increased premium payments on products with flexible premium features, repayment of policy loans and increased persistency, or a higher percentage of insurance policies remaining in force from year to year, during a period when our new investments carry lower returns. A decline in market interest rates could also reduce our return on investments that do not support particular policy obligations. During periods of sustained lower interest rates, policy liabilities may not be sufficient to meet future policy obligations and may need to be strengthened. Accordingly, declining interest rates may materially affect our results of operations, financial position and cash flows and significantly reduce our profitability. We recognize that a low interest rate environment will adversely affect our earnings, but we do not believe any such impact will be material in 2011.

Increases in market interest rates could also negatively affect our profitability. In periods of rapidly increasing interest rates, we may not be able to replace, in a timely manner, the investments in our general account with higher yielding investments needed to fund the higher crediting rates necessary to keep interest sensitive products competitive. We, therefore, may have to accept a lower spread and, thus, lower profitability or face a decline in sales and greater loss of existing contracts and related assets. In addition, policy loans, surrenders and withdrawals may tend to increase as policyholders seek investments with higher perceived returns as interest rates rise. This process may result in cash outflows requiring that we sell investments at a time when the prices of those investments are adversely affected by the increase in market interest rates, which may result in realized investment losses. Unanticipated withdrawals and terminations may cause us to accelerate the amortization of DAC and VOBA, which reduces net income. An increase in market interest rates could also have a material adverse effect on the value of our investment portfolio, for example, by decreasing the estimated fair values of the fixed income securities that comprise a substantial portion of our investment portfolio. Lastly, an increase in interest rates could result in decreased fee income associated with a decline in the value of variable annuity account balances invested in fixed income funds.

Gross Unrealized Losses on Fixed Maturity and Equity Securities May Be Realized or Result in Future Impairments, Resulting in a Reduction in Our Net Income

Fixed maturity and equity securities classified as available-for-sale are reported at their estimated fair value. Unrealized gains or losses on available-for-sale securities are recognized as a component of other comprehensive income (loss) and are, therefore, excluded from net income. Our gross unrealized gains and gross unrealized losses on fixed maturity and equity securities available for sale at June 30, 2011 were $2,184 million and $880 million, respectively. The portion of the $880 million of gross unrealized losses for fixed maturity and equity securities where the estimated fair value has declined and remained below amortized cost or cost by 20% or more for six months or greater was $239 million at June 30, 2011. The accumulated change in estimated fair value of these available-for-sale securities is recognized in net income when the gain or loss is realized upon the sale of the security or in the event that the decline in estimated fair value is determined to be other-than-temporary and an impairment charge to earnings is taken. Realized losses or impairments may have a material adverse effect on our net income in a particular quarterly or annual period.

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The Impairment of Other Financial Institutions Could Adversely Affect Us

We have exposure to many different industries and counterparties, and routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, hedge funds and other investment funds and other institutions. Many of these transactions expose us to credit risk in the event of default of our counterparty. In addition, with respect to secured transactions, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the loan or derivative exposure due to us. We also have exposure to these financial institutions in the form of unsecured debt instruments, non-redeemable and redeemable preferred securities, derivative transactions, joint venture, hedge fund and equity investments. Further, potential action by governments and regulatory bodies in response to the financial crisis affecting the global banking system and financial markets, such as investment, nationalization, conservatorship, receivership and other intervention, whether under existing legal authority or any new authority that may be created, or lack of action by European Union member governments and central banks, could negatively impact these instruments, securities, transactions and investments. There can be no assurance that any such losses or impairments to the carrying value of these investments would not materially and adversely affect our business and results of operations.

Litigation and Regulatory Investigations Are Increasingly Common in Our Businesses and May Result in Significant Financial Losses and/or Harm to Our Reputation

We face a significant risk of litigation and regulatory investigations and actions in the ordinary course of operating our businesses, including the risk of class action lawsuits. Our pending legal and regulatory actions include proceedings specific to us and others generally applicable to business practices in the industries in which we operate. In connection with our insurance operations, plaintiffs’ lawyers may bring or are bringing class actions and individual suits alleging, among other things, issues relating to sales or underwriting practices, claims payments and procedures, product design, disclosure, administration, denial or delay of benefits and breaches of fiduciary or other duties to customers. Plaintiffs in class action and other lawsuits against us may seek very large or indeterminate amounts, including punitive and treble damages. Modern pleading practice in the U.S. permits considerable variation in the assertion of money damages or other relief. 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, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. See Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements.

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 difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness 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.

The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of matters noted in Note 5 of the Notes to the Interim Condensed Consolidated Financial Statements. It is possible that some of the matters could require us to pay damages or make other expenditures or establish accruals in amounts that could not be estimated at June 30, 2011.

We are also subject to various regulatory inquiries, such as information requests, subpoenas and books and record examinations, from state and federal regulators and other authorities. A substantial legal liability or a significant regulatory action against us could have a material adverse effect on our business, financial condition and results of operations. Moreover, even if we ultimately prevail in the litigation, regulatory action or investigation, we could suffer significant reputational harm, which could have a material adverse effect on our business, financial condition and results of operations, including our ability to attract new customers and retain our current customers.

More than 30 U.S. jurisdictions are auditing MetLife Insurance Company of Connecticut and certain of its affiliates for compliance with unclaimed property laws. Additionally, MetLife Insurance Company of Connecticut

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and certain of its affiliates have received subpoenas and other regulatory inquiries from certain regulators and other officials relating to claims-payment practices and compliance with unclaimed property laws. On July 5, 2011, the New York Insurance Department issued a letter requiring life insurers doing business in New York to use data available on the U.S. Social Security Administration’s Death Master File or a similar database to identify instances where death benefits under life insurance policies, annuities, and retained asset accounts are payable, to locate and pay beneficiaries under such contracts, and to report the results of the use of the data. It is possible that other jurisdictions may pursue similar investigations or inquiries, or issue directives similar to the New York Insurance Department’s letter. It is possible that the audits and related activity may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, and changes to the Company’s procedures for the identification and escheatment of abandoned property. The Company is not currently able to estimate the reasonably possible amount of any such additional payments or the reasonably possible cost of any such changes in procedures, but it is possible that such costs may be substantial.

We cannot give assurance that current claims, litigation, unasserted claims probable of assertion, investigations and other proceedings against us will not have a material adverse effect on our business, financial condition or results of operations. It is also possible that related or unrelated claims, litigation, unasserted claims probable of assertion, investigations and proceedings may be commenced in the future, and we could become subject to further investigations and have lawsuits filed or enforcement actions initiated against us. In addition, increased regulatory scrutiny and any resulting investigations or proceedings could result in new legal actions and precedents and industry-wide regulations that could adversely affect our business, financial condition and results of operations.

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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 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’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.
	101	.INS	XBRL Instance Document.
	101	.SCH	XBRL Taxonomy Extension Schema Document.
	101	.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
	101	.LAB	XBRL Taxonomy Extension Label Linkbase Document.
	101	.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
	101	.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

METLIFE INSURANCE COMPANY OF CONNECTICUT

By:  /s/  Peter M. Carlson

Name:     Peter M. Carlson

Title:  Executive Vice President, Finance Operations and
Chief Accounting Officer

(Authorized Signatory and Principal Accounting Officer)

Date: August 12, 2011

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Exhibit Index

(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 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’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.
	101	.INS	XBRL Instance Document.
	101	.SCH	XBRL Taxonomy Extension Schema Document.
	101	.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
	101	.LAB	XBRL Taxonomy Extension Label Linkbase Document.
	101	.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
	101	.DEF	XBRL Taxonomy Extension Definition Linkbase Document.

E-1

EX-31.1

Exhibit 31.1

CERTIFICATIONS

     I, Michael K. Farrell, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of MetLife Insurance Company of Connecticut;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2011

/s/ Michael K. Farrell

Michael K. Farrell 

Chairman, President and Chief Executive Officer 

EX-31.2

Exhibit 31.2

CERTIFICATIONS

     I, Stanley J. Talbi, certify that:

     1. I have reviewed this quarterly report on Form 10-Q of MetLife Insurance Company of Connecticut;

     2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

     3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

     4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

     5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 12, 2011

/s/ Stanley J. Talbi

Stanley J. Talbi 

Executive Vice President and Chief Financial Officer 

EX-32.1

Exhibit 32.1

SECTION 906 CERTIFICATION

     CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

     I, Michael K. Farrell, certify that (i) MetLife Insurance Company of Connecticut’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of MetLife Insurance Company of Connecticut.

Date: August 12, 2011

/s/ Michael K. Farrell

Michael K. Farrell 

Chairman, President and Chief Executive Officer 

     A signed original of this written statement required by Section 906 has been provided to MetLife Insurance Company of Connecticut and will be retained by MetLife Insurance Company of Connecticut and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

SECTION 906 CERTIFICATION

     CERTIFICATION PURSUANT TO SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE UNITED STATES CODE

     I, Stanley J. Talbi, certify that (i) MetLife Insurance Company of Connecticut’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2011 (the “Form 10-Q”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of MetLife Insurance Company of Connecticut.

Date: August 12, 2011

/s/ Stanley J. Talbi

Stanley J. Talbi 

Executive Vice President and Chief Financial Officer 

     A signed original of this written statement required by Section 906 has been provided to MetLife Insurance Company of Connecticut and will be retained by MetLife Insurance Company of Connecticut and furnished to the Securities and Exchange Commission or its staff upon request.

XML



Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $) In Millions, except Share data	Jun. 30, 2011	Dec. 31, 2010
Stockholders' Equity
Common stock, par value	$ 2.50	$ 2.50
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	34,595,317	34,595,317
Common stock, shares outstanding	34,595,317	34,595,317
Investments:
Amortized cost of fixed maturity securities available-for-sale	$ 45,548	$ 44,132
Cost of equity securities available-for-sale	293	427
Mortgage loans:
Valuation allowances for held-for-investment	70	87
Mortgage loans, at estimated fair value, relating to variable interest entities	12,645	12,730
Accrued investment income relating to variable interest entities	534	559
Liabilities
Long-term debt, at estimated fair value, relating to variable interest entities	7,410	7,568
Other liabilities relating to variable interest entities	4,357	4,503
Variable Interest, Held by Entity [Member]
Mortgage loans:
Mortgage loans, at estimated fair value, relating to variable interest entities	6,697	6,840
Accrued investment income relating to variable interest entities	32	31
Liabilities
Long-term debt, at estimated fair value, relating to variable interest entities	6,617	6,773
Other liabilities relating to variable interest entities	$ 31	$ 31

XML



Consolidated Statements of Operations (Unaudited) (USD $) In Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010	Jun. 30, 2011	Jun. 30, 2010
Revenues
Premiums	$ 641	$ 256	$ 777	$ 711
Universal life and investment-type product policy fees	493	407	948	776
Net investment income	796	725	1,584	1,515
Other revenues	131	103	261	213
Net investment gains (losses):
Other-than-temporary impairments on fixed maturity securities	(21)	(19)	(30)	(53)
Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)	6	7	4	23
Other net investment gains (losses)	(12)	62	(15)	117
Total net investment gains (losses)	(27)	50	(41)	87
Net derivative gains (losses)	133	563	(23)	255
Total revenues	2,167	2,104	3,506	3,557
Expenses
Policyholder benefits and claims	818	504	1,145	1,198
Interest credited to policyholder account balances	304	257	591	573
Other expenses	729	839	1,233	1,258
Total expenses	1,851	1,600	2,969	3,029
Income (loss) before provision for income tax	316	504	537	528
Provision for income tax expense (benefit)	100	162	161	154
Net income	$ 216	$ 342	$ 376	$ 374

XML



Document and Entity Information	6 Months Ended
	Jun. 30, 2011	Aug. 12, 2011
Document and Entity Information [Abstract]
Entity Registrant Name	MetLife Insurance CO of Connecticut
Entity Central Index Key	0000733076
Document Type	10-Q
Document Period End Date	Jun. 30, 2011
Amendment Flag	false
Document Fiscal Year Focus	2011
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		34,595,317

XML



Equity

6 Months Ended

Jun. 30, 2011

Equity Abstract

Equity

6.Equity

Duringthe six months ended June 30, 2011, Sino-US MetLife Insurance Company Limited ("Sino"), an insurance underwriting joint venture of the Company accounted for under the equity method, merged with United MetLife Insurance Company Limited ("United"), another insurance underwriting joint venture of an affiliate of the Company. The Company's ownership interest in the merged entity, Sino-US United MetLife Insurance Company Limited ("Sino-United") was determined based on its contributed capital and share of undistributed earnings of Sino compared to the contributed capital and undistributed earnings of all other investees of Sino and United. Since both the joint ventures were under common ownership both prior to and subsequent to the merger, the Company's investment in Sino-United is based on the carrying value of its investment in Sino. Pursuant to the merger, the Company entered into an agreement to pay the affiliate an amount based on the relative fair value of their respective investment in Sino-United. Accordingly, $52 million was recorded as a liability representing a return of capital at June 30, 2011. Such amount, subject to completion of the estimation of fair value, is expected to be paid in the third quarter of 2011. The Company's investment in Sino-United is accounted for under equity method and is included in other invested assets.

XML



Investments

6 Months Ended

Jun. 30, 2011

Investments [Abstract]

Investments

2.  Investments

Fixed Maturity and Equity Securities Available-for-Sale

The following tables present the cost or amortized cost, gross unrealized gains and losses, 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”) losses:

		June 30, 2011
		Cost or			Gross Unrealized					Estimated
		Amortized				Temporary		OTTI		Fair		% of
		Cost			Gains	Losses		Losses		Value		Total
			(In millions)
Fixed Maturity Securities:
U.S. corporate securities		$	15,125	$	916	$	220	$	0	$	15,821		33.8	%
Foreign corporate securities			8,409		561		70		0		8,900		19.0
U.S. Treasury and agency securities			8,615		131		135		0		8,611		18.4
Residential mortgage-backed securities (“RMBS”)			6,563		234		139		86		6,572		14.0
Commercial mortgage-backed securities (“CMBS”)			2,068		115		17		0		2,166		4.6
Asset-backed securities (“ABS”)			1,937		43		72		11		1,897		4.0
State and political subdivision securities			1,903		63		108		0		1,858		4.0
Foreign government securities			928		89		5		0		1,012		2.2
	Total fixed maturity securities (1), (2)	$	45,548	$	2,152	$	766	$	97	$	46,837		100.0	%
Equity Securities:
Non-redeemable preferred stock (1)		$	166	$	11	$	16	$	0	$	161		52.3	%
Common stock			127		21		1		0		147		47.7
	Total equity securities	$	293	$	32	$	17	$	0	$	308		100.0	%

		December 31, 2010
		Cost or			Gross Unrealized					Estimated
		Amortized				Temporary		OTTI		Fair		% of
		Cost			Gains	Losses		Losses		Value		Total
			(In millions)
Fixed Maturity Securities:
U.S. corporate securities		$	14,860	$	816	$	302	$	0	$	15,374		34.2	%
Foreign corporate securities			8,095		502		127		0		8,470		18.8
U.S. Treasury and agency securities			7,665		143		132		0		7,676		17.1
RMBS			6,803		203		218		79		6,709		14.9
CMBS			2,203		113		39		0		2,277		5.1
ABS			1,927		44		95		7		1,869		4.2
State and political subdivision securities			1,755		22		131		0		1,646		3.7
Foreign government securities			824		81		2		0		903		2.0
	Total fixed maturity securities (1), (2)	$	44,132	$	1,924	$	1,046	$	86	$	44,924		100.0	%
Equity Securities:
Non-redeemable preferred stock (1)		$	306	$	9	$	47	$	0	$	268		66.2	%
Common stock			121		17		1		0		137		33.8
	Total equity securities	$	427	$	26	$	48	$	0	$	405		100.0	%

____________

• Uponacquisition,theCompanyclassifiesperpetualsecuritiesthathaveattributesofbothdebtandequityasfixedmaturitysecuritiesifthesecurityhasaninterestratestep-upfeaturewhich,whencombinedwithotherqualitativefactors,indicatesthatthesecurityhasmoredebt-likecharacteristics; while those withmoreequity-likecharacteristicsare classified asequitysecuritieswithinnon-redeemablepreferredstock.Manyofsuchsecuritieshavebeenissuedbynon-U.S.financialinstitutionsthatareaccordedTier1andUpperTier2capitaltreatmentbytheirrespectiveregulatorybodiesandarecommonlyreferredtoas“perpetualhybridsecurities.”Thefollowingtablepresentstheperpetualhybridsecuritiesheld by the Company at:

			June 30, 2011		December 31, 2010
			Estimated		Estimated
Classification			Fair		Fair
Consolidated Balance Sheets	Sector Table	Primary Issuers	Value		Value
			(In millions)
Fixed maturity securities	Foreign corporate securities	Non-U.S. financial institutions	$	217	$	450
Fixed maturity securities	U.S. corporate securities	U.S. financial institutions	$	10	$	10
Equity securities	Non-redeemable preferred stock	Non-U.S. financial institutions	$	112	$	202
Equity securities	Non-redeemable preferred stock	U.S. financial institutions	$	32	$	35

____________

• The Company's holdings in redeemablepreferredstockwithstatedmaturitydates,commonlyreferredtoas“capitalsecurities,”wereprimarilyissuedbyU.S.financialinstitutionsandhavecumulativeinterestdeferralfeatures.TheCompanyheld$510millionand$645millionatestimatedfairvalueofsuchsecuritiesatJune 30,2011andDecember 31,2010,respectively, which are included in the U.S. and foreign corporate securities sectors within fixed maturity securities.

Thebelowinvestmentgradeandnon-incomeproducingamountspresentedbelowarebasedonratingagencydesignationsandequivalentdesignationsoftheNationalAssociationofInsuranceCommissioners(“NAIC”),withtheexceptionof certain structured securities described belowheldbyMetLife Insurance Company of Connecticut and itsdomesticinsurancesubsidiary.Non-agencyRMBS,CMBS and ABS heldbyMetLife InsuranceCompany of Connecticut and itsdomesticinsurancesubsidiary,arepresentedbasedonfinalratingsfromtherevisedNAICratingmethodologiesfor structured securities(whichmaynotcorrespondtoratingagencydesignations).AllNAICdesignation(e.g., NAIC 1 — 6) amountsandpercentagespresentedhereinarebasedontherevisedNAICmethodologies.Allratingagencydesignation(e.g.,Aaa/AAA)amountsandpercentagespresentedhereinarebasedonratingagencydesignationswithoutadjustmentfortherevisedNAICmethodologiesdescribedabove.RatingagencydesignationsarebasedonavailabilityofapplicableratingsfromratingagenciesontheNAICacceptableratingorganizationlist,includingMoody'sInvestorsService(“Moody's”),Standard&Poor'sRatingsServices(“S&P”)andFitchRatings(“Fitch”).

Thefollowingtablepresentsselectedinformationaboutcertainfixedmaturitysecuritiesheldby the Company at:

		June 30, 2011		December 31, 2010
		(In millions)
Below investment grade or non-rated fixed maturity securities:
	Estimated fair value	$	4,072	$	4,027
	Net unrealized gains (losses)	$	(57)	$	(125)
Non-income producing fixed maturity securities:
	Estimated fair value	$	5	$	36
	Net unrealized gains (losses)	$	(1)	$	2

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 the government securities summarized in the table below.

Concentrations of Credit Risk (Government and Agency Securities).  The following section contains a summary of the concentrations of credit risk related to government and agency fixed maturity and fixed-income securities holdings which were greater than 10% of the Company's equity at:

		June 30, 2011		December 31, 2010
		Carrying Value (1)
		(In millions)
U.S. Treasury and agency fixed maturity securities		$	8,611	$	7,676
U.S. Treasury and agency fixed-income securities included in:
	Short-term investments	$	1,841	$	935
	Cash equivalents	$	494	$	1,287

____________

• Represents estimated fair value for fixed maturity securities; amortized cost, which approximates estimated fair value or estimated fair value, if available, for short-term investments; and amortized cost, which approximates estimated fair value, for cash equivalents.

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

			June 30, 2011				December 31, 2010
			Estimated				Estimated
			Fair		% of		Fair		% of
			Value		Total		Value		Total
			(In millions)
Corporate fixed maturity securities — by sector:
	Foreign corporate fixed maturity securities (1)		$	8,900	36.0	%	$	8,470	35.5	%
U.S. corporate fixed maturity securities — by industry:
	Consumer			3,988	16.1			3,893	16.3
	Industrial			3,497	14.1			3,282	13.7
	Utility			3,372	13.6			3,379	14.2
	Finance			2,592	10.5			2,569	10.8
	Communications			1,544	6.3			1,444	6.1
	Other			828	3.4			807	3.4
		Total	$	24,721	100.0	%	$	23,844	100.0	%

____________

• Includes U.S. dollar-denominated debt obligations of foreign obligors and other foreign fixed maturity securities.

		June 30, 2011				December 31, 2010
		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	$	250	0.4	%	$	252	0.4	%
	Holdings in ten issuers with the largest exposures	$	1,671	2.4	%	$	1,683	2.5	%

Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS.  The table below presents information on the Company's RMBS holdings at:

			June 30, 2011				December 31, 2010
			Estimated				Estimated
			Fair		% of		Fair		% of
			Value		Total		Value		Total
			(In millions)
By security type:
	Collateralized mortgage obligations		$	3,401	51.7	%	$	3,243	48.3	%
	Pass-through securities			3,171	48.3			3,466	51.7
		Total RMBS	$	6,572	100.0	%	$	6,709	100.0	%
By risk profile:
	Agency		$	4,762	72.5	%	$	5,080	75.7	%
	Prime			1,071	16.3			1,023	15.3
	Alternative residential mortgage loans			739	11.2			606	9.0
		Total RMBS	$	6,572	100.0	%	$	6,709	100.0	%
Rated Aaa/AAA			$	4,906	74.7	%	$	5,254	78.3	%
Rated NAIC 1			$	5,337	81.2	%	$	5,618	83.7	%

See Note 2 “— Investments — Concentrations of Credit Risk (Fixed Maturity Securities) — RMBS” of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the security types and risk profile.

The following tables present information on the Company's investment in alternative residential mortgage loans (“Alt-A”) RMBS at:

		June 30, 2011				December 31, 2010
		Estimated				Estimated
		Fair		% of		Fair		% of
		Value		Total		Value		Total
		(In millions)
Vintage Year:
2005 & Prior		$	361	48.8	%	$	311	51.3	%
2006			188	25.5			88	14.6
2007			190	25.7			207	34.1
2008 to 2011			0	0.0			0	0.0
	Total	$	739	100.0	%	$	606	100.0	%

			June 30, 2011				December 31, 2010
					% of				% of
			Amount		Total		Amount		Total
			(In millions)
Net unrealized gains (losses)			$	(129)			$	(141)
Rated Aa/AA or better					0.5	%			1.5	%
Rated NAIC 1					17.4	%			14.9	%
Distribution of holdings — at estimated fair value — by collateral type:
	Fixed rate mortgage loans collateral				97.2	%			96.1	%
	Hybrid adjustable rate mortgage loans collateral				2.8				3.9
		Total Alt-A RMBS			100.0	%			100.0	%

Concentrations of Credit Risk (Fixed Maturity Securities) — CMBS.  The following tables present information about CMBS held by the Company at:

		June 30, 2011				December 31, 2010
		Estimated				Estimated
		Fair		% of		Fair		% of
		Value		Total		Value		Total
		(In millions)
Vintage Year:
2003 & Prior		$	728	33.6	%	$	947	41.6	%
2004			455	21.0			442	19.4
2005			430	19.9			431	18.9
2006			455	21.0			442	19.4
2007			16	0.7			15	0.7
2008 to 2011			82	3.8			0	0.0
	Total	$	2,166	100.0	%	$	2,277	100.0	%
		June 30, 2011				December 31, 2010
				% of				% of
		Amount		Total		Amount		Total
		(In millions)
Net unrealized gains (losses)		$	98			$	74
Rated Aaa/AAA				89	%			88	%
Rated NAIC 1				95	%			95	%

The tables above reflect rating agency designations assigned by nationally recognized rating agencies including Moody's, S&P, Fitch and Realpoint, LLC.

Concentrations of Credit Risk (Fixed Maturity Securities) — ABS.The Company's ABSare diversified both by collateral type and by issuer.The following table presents information about ABS held by the Company at:

			June 30, 2011				December 31, 2010
			Estimated				Estimated
			Fair		% of		Fair		% of
			Value		Total		Value		Total
				(In millions)
By collateral type:
	Credit card loans		$	565	29.8	%	$	753	40.3	%
	Collateralized debt obligations			364	19.2			254	13.5
	RMBS backed by sub-prime mortgage loans			231	12.2			247	13.2
	Student loans			210	11.0			174	9.3
	Utility loans			155	8.2			157	8.4
	Automobile loans			145	7.6			98	5.3
	Other loans			227	12.0			186	10.0
		Total	$	1,897	100.0	%	$	1,869	100.0	%
Rated Aaa/AAA			$	1,083	57.1	%	$	1,251	66.9	%
Rated NAIC 1			$	1,722	90.8	%	$	1,699	90.9	%

Concentrations of Credit Risk (Equity Securities).  The Company was not exposed to any concentrationsof credit risk in its equity securities holdings of any single issuer greater than 10% of the Company's stockholders' equity or 1% of total investments at June 30, 2011 and December 31, 2010.

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

		June 30, 2011				December 31, 2010
				Estimated				Estimated
		Amortized		Fair		Amortized		Fair
		Cost		Value		Cost		Value
		(In millions)
Due in one year or less		$	1,816	$	1,833	$	1,874	$	1,889
Due after one year through five years			11,265		11,742		9,340		9,672
Due after five years through ten years			7,595		8,173		7,829		8,333
Due after ten years			14,304		14,454		14,156		14,175
	Subtotal		34,980		36,202		33,199		34,069
RMBS, CMBS and ABS			10,568		10,635		10,933		10,855
	Total fixed maturity securities	$	45,548	$	46,837	$	44,132	$	44,924

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.

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

As described more fully in Note1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale securities holdings,including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily impaired.

Net Unrealized Investment Gains (Losses)

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

			June 30, 2011		December 31, 2010
			(In millions)
Fixed maturity securities			$	1,381	$	878
Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive
	income (loss)			(97)		(86)
		Total fixed maturity securities		1,284		792
Equity securities				18		(21)
Derivatives				(99)		(109)
Short-term investments				(2)		(2)
Other				(4)		(3)
		Subtotal		1,197		657
Amounts allocated from:
	Insurance liability loss recognition			(65)		(33)
	DAC and VOBA related to noncredit OTTI losses recognized in accumulated other
		comprehensive income (loss)		6		5
	DAC and VOBA			(213)		(126)
		Subtotal		(272)		(154)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized
	in accumulated other comprehensive income (loss)			33		30
Deferred income tax benefit (expense)				(347)		(196)
Net unrealized investment gains (losses)			$	611	$	337

The changes in fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss), were as follows:

		June 30, 2011		December 31, 2010
		(In millions)
Balance, beginning of period		$	(86)	$	(141)
	Noncredit OTTI losses recognized (1)		(4)		(53)
	Transferred to retained earnings (2)		0		16
	Securities sold with previous noncredit OTTI loss		18		28
	Subsequent changes in estimated fair value		(25)		64
Balance, end of period		$	(97)	$	(86)

____________

• Noncredit OTTI losses recognized, net of deferred policy acquisition costs (“DAC”), were ($4) million and ($44) million for the periods ended June 30, 2011 and December 31, 2010, respectively.
• Amounts transferred to retained earnings were in connection with the adoption of guidance related to the consolidation of VIEs as described in Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report.

The changes in net unrealized investment gains (losses) were as follows:

			Six Months
			Ended
			June 30, 2011
			(In millions)
Balance, beginning of period			$	337
Fixed maturity securities on which noncredit OTTI losses have been recognized				(11)
Unrealized investment gains (losses) during the period				551
Unrealized investment gains (losses) relating to:
	Insurance liability gain (loss) recognition			(32)
	DAC and VOBA related to noncredit OTTI losses recognized in accumulated other
		comprehensive income (loss)		1
	DAC and VOBA			(87)
	Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other
		comprehensive income (loss)		3
	Deferred income tax benefit (expense)			(151)
Balance, end of period			$	611
Change in net unrealized investment gains (losses)			$	274

Continuous Gross Unrealized Losses and OTTI Losses for Fixed Maturity and EquitySecurities Available-for-Sale by Sector

The following tables present the estimated fair value and gross unrealized lossesof 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 income (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.

		June 30, 2011
						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		Losses		Value		Losses		Value		Losses
		(In millions, except number of securities)
Fixed Maturity Securities:
U.S. corporate securities		$	1,850	$	40	$	1,320	$	180	$	3,170	$	220
Foreign corporate securities			1,143		24		274		46		1,417		70
U.S. Treasury and agency securities			2,396		115		84		20		2,480		135
RMBS			1,888		41		1,066		184		2,954		225
CMBS			140		1		116		16		256		17
ABS			325		4		531		79		856		83
State and political subdivision securities			324		16		371		92		695		108
Foreign government securities			198		5		3		0		201		5
	Total fixed maturity securities	$	8,264	$	246	$	3,765	$	617	$	12,029	$	863
Equity Securities:
Non-redeemable preferred stock		$	20	$	3	$	68	$	13	$	88	$	16
Common stock			9		1		0		0		9		1
	Total equity securities	$	29	$	4	$	68	$	13	$	97	$	17
Total number of securities in an
	unrealized loss position		818				441

		December 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		Losses		Value		Losses		Value		Losses
		(In millions, except number of securities)
Fixed Maturity Securities:
U.S. corporate securities		$	1,956	$	56	$	1,800	$	246	$	3,756	$	302
Foreign corporate securities			727		24		816		103		1,543		127
U.S. Treasury and agency securities			2,857		113		85		19		2,942		132
RMBS			2,228		59		1,368		238		3,596		297
CMBS			68		1		237		38		305		39
ABS			245		5		590		97		835		102
State and political subdivision securities			716		36		352		95		1,068		131
Foreign government securities			49		1		9		1		58		2
	Total fixed maturity securities	$	8,846	$	295	$	5,257	$	837	$	14,103	$	1,132
Equity Securities:
Non-redeemable preferred stock		$	26	$	5	$	187	$	42	$	213	$	47
Common stock			9		1		0		0		9		1
	Total equity securities	$	35	$	6	$	187	$	42	$	222	$	48
Total number of securities in an
	unrealized loss position		759				637

Aging of Gross Unrealized Losses and OTTI Losses for Fixed Maturity and Equity SecuritiesAvailable-for-Sale

The following tables present the cost or amortized cost, gross unrealized losses, including the portion of OTTI loss on fixed maturity securities recognized in accumulated other comprehensive income (loss), gross unrealized losses 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:

		June 30, 2011
		Cost or Amortized Cost				Gross Unrealized Losses						Number of 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		$	4,795	$	368	$	70		$	83		492	32
Six months or greater but less than nine months			3,333		203		143			51		180	16
Nine months or greater but less than twelve months			369		15		29			5		146	4
Twelve months or greater			3,295		514		305			177		340	48
	Total	$	11,792	$	1,100	$	547		$	316
Percentage of amortized cost							5	%		29	%
Equity Securities:
Less than six months		$	9	$	2	$	0		$	1		3	4
Six months or greater but less than nine months			23		0		3			0		6	1
Nine months or greater but less than twelve months			0		0		0			0		0	2
Twelve months or greater			62		18		7			6		8	2
	Total	$	94	$	20	$	10		$	7
Percentage of cost							11	%		35	%

		December 31, 2010
		Cost or Amortized Cost				Gross Unrealized Losses						Number of 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		$	8,882	$	439	$	268		$	109		686	43
Six months or greater but less than nine months			152		40		6			13		30	10
Nine months or greater but less than twelve months			48		25		2			11		11	3
Twelve months or greater			4,768		881		450			273		475	101
	Total	$	13,850	$	1,385	$	726		$	406
Percentage of amortized cost							5	%		29	%
Equity Securities:
Less than six months		$	31	$	30	$	4		$	7		8	12
Six months or greater but less than nine months			0		3		0			1		0	1
Nine months or greater but less than twelve months			5		7		0			2		1	1
Twelve months or greater			150		44		18			16		12	5
	Total	$	186	$	84	$	22		$	26
Percentage of cost							12	%		31	%

Equity securities with gross unrealized losses of 20% or more for twelve months or greater decreased from $16 million at December 31, 2010to $6 million at June 30, 2011. As shown in the section “—Evaluating Temporarily Impaired Available-for-Sale Securities” below, all of the equity securities with gross unrealized losses of 20% or more for twelve months or greater at June 30, 2011 were financial services industry investment grade non-redeemable preferred stock, of which 33% were rated A or better.

Concentration of Gross Unrealized Losses and OTTI Losses 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 losses on fixed maturity securities recognized in accumulated other comprehensive income (loss) were$880million and $1.2 billion at June 30, 2011 and December 31, 2010, respectively. The concentration, calculated as a percentage of gross unrealized losses (including OTTI losses) by sector and industry was as follows at:

			June 30, 2011			December 31, 2010
Sector:
	RMBS			26	%		25	%
	U.S. corporate securities			25			26
	U.S. Treasury and agency securities			15			11
	State and political subdivision securities			12			11
	ABS			9			9
	Foreign corporate securities			8			11
	CMBS			2			3
	Other			3			4
		Total		100	%		100	%
Industry:
	Mortgage-backed			28	%		28	%
	U.S. Treasury and agency securities			15			11
	Finance			12			19
	State and political subdivision securities			12			11
	Asset-backed			9			9
	Consumer			6			5
	Utility			3			3
	Communications			2			2
	Transportation			2			1
	Industrial			1			1
	Other			10			10
		Total		100	%		100	%

Evaluating Temporarily Impaired Available-for-Sale Securities

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

	June 30, 2011						December 31, 2010
	Fixed Maturity			Equity			Fixed Maturity			Equity
	Securities			Securities			Securities			Securities
	(In millions, except number of securities)
Number of securities		17			0			15			0
Total gross unrealized losses	$	249		$	0		$	210		$	0
Percentage of total gross unrealized losses		29	%		0	%		19	%		0	%

Fixed maturity and equity securities, each with gross unrealized losses greater than $10 million, increased $39 million during the six months endedJune 30, 2011. The increase in gross unrealized losses for the six months ended June 30, 2011 was primarily attributable to anincrease in 30-year interest rates on our longer-term U.S. Treasury securities. 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 are 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 are 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 gross unrealized losses of 20% or more at June 30, 2011:

					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					% A
			Unrealized		Unrealized		Equity			Unrealized		Non-Redeemable			Unrealized		% of All			Rated or
			Losses		Losses		Securities			Losses		Preferred Stock			Losses		Industries			Better
		(In millions)
Less than six months			$	1	$	0		0	%	$	0		0	%	$	0		0	%		0	%
Six months or greater but less
	than twelve months			0		0		0	%		0		0	%		0		0	%		0	%
Twelve months or greater				6		6		100	%		6		100	%		6		100	%		33	%
All equity securities with
	gross unrealized losses of
	20% or more		$	7	$	6		86	%	$	6		100	%	$	6		100	%		33	%

In connection with the equity securities impairment review process, the Company evaluated its holdings in non-redeemable preferred stock, particularly those in the financial services industry. 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 had been 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 OTTIs will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals and any of the above factors deteriorate, additional OTTIs may be incurred in upcoming quarters.

Net Investment Gains (Losses)

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

				Three Months				Six Months
				Ended				Ended
				June 30,				June 30,
				2011		2010		2011		2010
				(In millions)
Total gains (losses) on fixed maturity securities:
Total OTTI losses recognized				$	(21)	$	(19)	$	(30)	$	(53)
Less: Noncredit portion of OTTI losses transferred to and recognized in other
	comprehensive income (loss)				6		7		4		23
	Net OTTI losses on fixed maturity securities recognized in earnings				(15)		(12)		(26)		(30)
	Fixed maturity securities — net gains (losses) on sales and disposals				2		58		(18)		62
		Total gains (losses) on fixed maturity securities			(13)		46		(44)		32
Other net investment gains (losses):
	Equity securities				(24)		20		(23)		19
	Mortgage loans				14		(7)		18		(15)
	Real estate and real estate joint ventures				0		(3)		0		(19)
	Other limited partnership interests				(4)		(8)		(2)		(10)
	Other investment portfolio gains (losses)				(1)		(4)		(5)		7
		Subtotal — investment portfolio gains (losses)			(28)		44		(56)		14
Fair value option ("FVO") consolidated securitization entities — changes in
	estimated fair value:
	Commercial mortgage loans				7		172		25		653
	Long-term debt — related to commercial mortgage loans				(5)		(162)		(11)		(647)
Other gains (losses)					(1)		(4)		1		67
		Subtotal FVO consolidated securitization entities and other gains (losses)			1		6		15		73
			Total net investment gains (losses)	$	(27)	$	50	$	(41)	$	87

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

See “— Related Party Investment Transactions” for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($2) million and ($3) million for the three months and six months ended June 30, 2011, respectively, and ($4) million and $76 million for the three months and six months ended June 30, 2010, respectively.

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

				Three Months Ended June 30,
				2011		2010		2011		2010		2011		2010
				Fixed Maturity Securities				Equity Securities				Total
				(In millions)
Proceeds				$	2,529	$	3,076	$	128	$	74	$	2,657	$	3,150
Gross investment gains				$	33	$	87	$	2	$	20	$	35	$	107
Gross investment losses					(31)		(29)		(20)		0		(51)		(29)
Total OTTI losses recognized in earnings:
	Credit-related				(6)		(12)		0		0		(6)		(12)
	Other (1)				(9)		0		(6)		0		(15)		0
		Total OTTI losses recognized in earnings			(15)		(12)		(6)		0		(21)		(12)
			Net investment gains (losses)	$	(13)	$	46	$	(24)	$	20	$	(37)	$	66

				Six Months Ended June 30,
				2011		2010		2011		2010		2011		2010
				Fixed Maturity Securities				Equity Securities				Total
				(In millions)
Proceeds				$	5,042	$	5,264	$	144	$	79	$	5,186	$	5,343
Gross investment gains				$	51	$	131	$	5	$	20	$	56	$	151
Gross investment losses					(69)		(69)		(22)		(1)		(91)		(70)
Total OTTI losses recognized in earnings:
	Credit-related				(17)		(29)		0		0		(17)		(29)
	Other (1)				(9)		(1)		(6)		0		(15)		(1)
		Total OTTI losses recognized in earnings			(26)		(30)		(6)		0		(32)		(30)
			Net investment gains (losses)	$	(44)	$	32	$	(23)	$	19	$	(67)	$	51

____________

• 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 related to the following sectors and industries within the U.S. and foreign corporate securities sector:

			Three Months				Six Months
			Ended				Ended
			June 30,				June 30,
			2011		2010		2011		2010
			(In millions)
Sector:
U.S. and foreign corporate securities — by industry:
	Finance		$	9	$	1	$	9	$	2
	Communications			0		0		4		3
	Consumer			0		0		0		9
	Utility			0		2		0		2
		Total U.S. and foreign corporate securities		9		3		13		16
ABS				3		0		5		0
RMBS				3		3		5		7
CMBS				0		6		3		7
		Total	$	15	$	12	$	26	$	30

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

		Three Months				Six Months
		Ended				Ended
		June 30,				June 30,
		2011		2010		2011		2010
		(In millions)
Sector:
Non-redeemable preferred stock		$	6	$	0	$	6	$	0
	Total	$	6	$	0	$	6	$	0
Industry:
Financial services industry — perpetual hybrid securities		$	6	$	0	$	6	$	0
	Total	$	6	$	0	$	6	$	0

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 Income (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 for which a portion of the OTTI loss was recognized in other comprehensive income (loss):

			Three Months				Six Months
			Ended				Ended
			June 30,				June 30,
			2011		2010		2011		2010
			(In millions)
Balance, beginning of period			$	43	$	80	$	63	$	213
Additions:
	Initial impairments — credit loss OTTI recognized on securities not
		previously impaired		4		1		4		3
	Additional impairments — credit loss OTTI recognized on securities
		previously impaired		1		4		4		6
Reductions:
	Due to sales (maturities, pay downs or prepayments) during the period of
		securities previously credit loss OTTI impaired		(2)		(16)		(4)		(52)
	Due to securities de-recognized in connection with the adoption of new
		guidance related to the consolidation of VIEs		0		0		0		(100)
	Due to securities impaired to net present value of expected future
		cash flows		0		0		(20)		0
	Due to increases in cash flows — accretion of previous credit loss OTTI			0		(1)		(1)		(2)
Balance, end of period			$	46	$	68	$	46	$	68

Net Investment Income

The components of net investment income were as follows:

					Three Months				Six Months
					Ended				Ended
					June 30,				June 30,
					2011		2010		2011		2010
					(In millions)
Investment income:
	Fixed maturity securities				$	538	$	525	$	1,073	$	1,054
	Equity securities					5		7		7		9
	Other securities - FVO general account securities (1)					1		0		1		0
	Mortgage loans					87		72		171		140
	Policy loans					15		17		31		33
	Real estate and real estate joint ventures					10		1		2		(25)
	Other limited partnership interests					40		34		120		102
	Cash, cash equivalents and short-term investments					1		1		3		3
	International joint ventures					2		(1)		1		(2)
	Other					3		9		5		11
			Subtotal			702		665		1,414		1,325
		Less: Investment expenses				27		23		51		46
			Subtotal, net			675		642		1,363		1,279
	Other securities – FVO contractholder-directed unit-linked investments (1)					25		(22)		30		26
	FVO consolidated securitization entities — Commercial mortgage loans					96		105		191		210
			Subtotal			121		83		221		236
				Net investment income	$	796	$	725	$	1,584	$	1,515

____________

• Changes in estimated fair value subsequent to purchase included in net investment income were:

Other securities - FVO general account securities	$	1	$	0	$	1	$	0
Other securities - FVO contractholder-directed unit-linked	$	18	$	(38)	$	(7)	$	3

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

Affiliated investment expenses, included in the table above, were $18 million and $33 million for the three months and six months ended June 30, 2011, respectively, and $14 million and $27 million for the three months and six months ended June 30, 2010, respectively. See “— Related Party Investment Transactions” for discussion of affiliated net investment income included in the table above.

Securities Lending

The Company participates in a securities lending program 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. The Company generally obtains collateral, generally cash, in an amount equal to 102% of the estimated fair value of the securities loaned, which is obtained at the inception of a loan and maintained at a level greater than or equal to 100% for the duration of the loan. 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. These transactions are treated as financing arrangements and the associated liability is recorded at the amount of the cash received.

Elements of the securities lending program are presented below at:

			June 30, 2011		December 31, 2010
				(In millions)
Securities on loan:
	Amortized cost		$	6,992	$	6,992
	Estimated fair value		$	7,047	$	7,054
Aging of cash collateral liability:
	Open (1)		$	845	$	1,292
	Less than thirty days			4,479		3,297
	Thirty days or greater but less than sixty days			1,039		1,221
	Sixty days or greater but less than ninety days			513		326
	Ninety days or greater			340		1,002
		Total cash collateral liability	$	7,216	$	7,138
Security collateral on deposit from counterparties			$	9	$	0
Reinvestment portfolio — estimated fair value			$	7,097	$	6,916

____________

• 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 openat June 30,2011 was $825 million, of which $743 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 U.S. Treasury securities on loan were primarily holdings of on-the-run U.S. Treasury securities, the most liquid U.S. Treasury securities available. If these high quality securities that are on loan are put back to the Company, the proceeds from immediately selling these securities can be used to satisfy the related cash requirements. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including RMBS, U.S. Treasury and agency securities, U.S. corporate securities and ABS). If the on loan securities or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities are put back to the Company.

Security collateral on deposit from counterparties in connection with the securities lending transactions may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.

Invested Assets on Deposit and Pledged as Collateral

Invested assets on deposit and pledged as collateral are presented below at estimated fair value for cash and cash equivalents and fixed maturity securities and at carrying value for mortgage loans.

			June 30, 2011		December 31, 2010
				(In millions)
Invested assets on deposit:
	Regulatory agencies		$	55	$	55
Invested assets pledged as collateral:
	Funding agreements — Federal Home Loan Bank of Boston			534		211
	Funding agreements — Federal Agricultural Mortgage Corporation			231		231
	Derivative transactions			82		83
		Total invested assets on deposit and pledged as collateral	$	902	$	580

See Note 2 “ — Investments — Invested Assets on Deposit and Pledged as Collateral” of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for a description of the types of invested assets on deposit and pledged as collateral and selected other information about the related program or counterparty.

See also “— Securities Lending” for the amount of the Company's cash received from and due back to counterparties pursuant to the Company's securities lending program. See “— Variable Interest Entities” for assets of certain CSEs that can only be used to settle liabilities of such entities.

Other Securities

The table below presents certain information about the Company's securities for which the FVO has been elected:

		June 30, 2011		December 31, 2010
			(In millions)
FVO general account securities		$	48	$	7
FVO contractholder-directed unit-linked investments			3,041		2,240
	Total other securities — at estimated fair value	$	3,089	$	2,247

See Note 1 of the Notes to the Consolidated Financial Statements included in the 2010 Annual Report for discussion of FVO contractholder-directed unit-linked investments. See “— Net Investment Income” for the net investment income recognized on other securities and the related changes in estimated fair value subsequent to purchase included in net investment income.

Mortgage Loans

Mortgage loans are summarized as follows at:

				June 30, 2011				December 31, 2010
				Carrying		% of		Carrying		% of
				Value		Total		Value		Total
					(In millions)
Mortgage loans:
	Commercial			$	4,675	37.0	%	$	4,635	36.4	%
	Agricultural				1,343	10.6			1,342	10.6
		Subtotal			6,018	47.6	%		5,977	47.0	%
	Valuation allowances				(70)	(0.6)			(87)	(0.7)
		Subtotal mortgage loans, net			5,948	47.0	%		5,890	46.3	%
	Commercial mortgage loans held by consolidated securitization
		entities — FVO			6,697	53.0			6,840	53.7
			Total mortgage loans, net	$	12,645	100.0	%	$	12,730	100.0	%

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

See Note 2 of the Notes to the Consolidated Financial Statements in the 2010 Annual Report for discussion of affiliated mortgage loans included in the table above. The carrying values of such loans were $198 million and $199 million at June 30, 2011 and December 31, 2010, respectively.

Concentration of Credit Risk. The Company diversifies its mortgage loan portfolio by both geographic region and property type to reduce the risk of concentration. The Company's commercial and agricultural mortgage loans are collateralized by properties primarily located in the United States (“U.S.”). The carrying values of the Company's commercial and agricultural mortgage loans located in California, New York and Illinois were 26%, 16% and 6%, respectively, of total mortgage loans (excluding commercial mortgage loans held by CSEs) at June 30, 2011. Additionally, the Company manages risk when originating commercial and agricultural mortgage loans by generally lending only up to 75% of the estimated fair value of the underlying real estate.

The following tables present the recorded investment in mortgage loans, by portfolio segment, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, at:

				Commercial		Agricultural		Total
				(In millions)
June 30, 2011:
Mortgage loans:
	Evaluated individually for credit losses			$	23	$	0	$	23
	Evaluated collectively for credit losses				4,652		1,343		5,995
		Total mortgage loans			4,675		1,343		6,018
Valuation allowances:
	Specific credit losses				15		0		15
	Non-specifically identified credit losses				51		4		55
		Total valuation allowances			66		4		70
			Mortgage loans, net of valuation allowance	$	4,609	$	1,339	$	5,948
December 31, 2010:
Mortgage loans:
	Evaluated individually for credit losses			$	23	$	0	$	23
	Evaluated collectively for credit losses				4,612		1,342		5,954
		Total mortgage loans			4,635		1,342		5,977
Valuation allowances:
	Specific credit losses				23		0		23
	Non-specifically identified credit losses				61		3		64
		Total valuation allowances			84		3		87
			Mortgage loans, net of valuation allowance	$	4,551	$	1,339	$	5,890

The following tables present the changes in the valuation allowance, by portfolio segment:

		Mortgage Loan Valuation Allowances
		Commercial		Agricultural		Total
		(In millions)
For the Three Months Ended June 30, 2011:
Balance, beginning of period		$	80	$	4	$	84
	Provision (release)		(14)		0		(14)
	Charge-offs, net of recoveries		0		0		0
Balance, end of period		$	66	$	4	$	70
For the Three Months Ended June 30, 2010:
Balance, beginning of period		$	82	$	3	$	85
	Provision (release)		8		0		8
	Charge-offs, net of recoveries		0		0		0
Balance, end of period		$	90	$	3	$	93
For the Six Months Ended June 30, 2011:
Balance, beginning of period		$	84	$	3	$	87
	Provision (release)		(18)		1		(17)
	Charge-offs, net of recoveries		0		0		0
Balance, end of period		$	66	$	4	$	70
For the Six Months Ended June 30, 2010:
Balance, beginning of period		$	74	$	3	$	77
	Provision (release)		16		0		16
	Charge-offs, net of recoveries		0		0		0
Balance, end of period		$	90	$	3	$	93

Commercial Mortgage Loans — by Credit Quality Indicators with Estimated FairValue.  Presented below for the commercial mortgage loans is the recorded investment, prior to valuation allowances, by the indicated loan-to-value ratio categories and debt service coverage ratio categories and estimated fair value of such mortgage loans by the indicated loan-to-value ratio categories at:

		Commercial
		Recorded Investment
		Debt Service Coverage Ratios											Estimated
		> 1.20x			1.00x - 1.20x	< 1.00x		Total		% of Total			Fair Value		% of Total
June 30, 2011:		(In millions)											(In millions)
Loan-to-value ratios:
Less than 65%		$	2,417	$	35	$	148	$	2,600		55.6	%	$	2,771		57.6	%
65% to 75%			680		43		137		860		18.4			900		18.8
76% to 80%			315		0		0		315		6.7			314		6.5
Greater than 80%			672		113		115		900		19.3			824		17.1
	Total	$	4,084	$	191	$	400	$	4,675		100.0	%	$	4,809		100.0	%

December 31, 2010:
Loan-to-value ratios:
Less than 65%		$	2,051	$	11	$	34	$	2,096	45.2	%	$	2,196	47.1	%
65% to 75%			824		99		148		1,071	23.1			1,099	23.6
76% to 80%			301		29		7		337	7.3			347	7.4
Greater than 80%			828		163		140		1,131	24.4			1,018	21.9
	Total	$	4,004	$	302	$	329	$	4,635	100.0	%	$	4,660	100.0	%

Agricultural Mortgage Loans — by Credit Quality Indicator.The recorded investment in agricultural mortgage loans, prior to valuation allowances, by credit quality indicator, is as shown below. The estimated fair value of agricultural mortgage loans was $1.4 billion at both June 30, 2011 and December 31, 2010.

		Agricultural
		June 30, 2011				December 31, 2010
		Recorded Investment		% of Total		Recorded Investment		% of Total
		(In millions)				(In millions)
Loan-to-value ratios:
Less than 65%		$	1,284	95.6	%	$	1,289	96.0	%
65% to 75%			59	4.4			53	4.0
	Total	$	1,343	100.0	%	$	1,342	100.0	%

Past Due and Interest Accrual Status of Mortgage Loans.  The Company has a high quality, well performing, mortgage loan portfolio with approximately 99% of all mortgage loans classified as performing at both June 30, 2011 and December 31, 2010. The Company defines delinquent mortgage loans consistent with industry practice, when interest and principal payments are past due as follows: commercial mortgage loans — 60 days or more past due; and agricultural mortgage loans — 90 days or more past due. The recorded investment in mortgage loans, prior to valuation allowances, past due according to these aging categories, greater than 90 days past due and still accruing interest and in nonaccrual status, by portfolio segment, were as follows at:

						Greater than 90 Days Past Due
		Past Due				Still Accruing Interest				Nonaccrual Status
		June 30, 2011		December 31, 2010		June 30, 2011		December 31, 2010		June 30, 2011		December 31, 2010
		(In millions)
Commercial		$	0	$	0	$	0	$	0	$	0	$	1
Agricultural			7		7		1		0		6		6
	Total	$	7	$	7	$	1	$	0	$	6	$	7

Impaired Mortgage Loans.  The unpaid principal balance, recorded investment, valuation allowances and carrying value, net of valuation allowances, for impaired mortgage loans, by portfolio segment, were as follows at:

		Impaired Mortgage Loans
										Loans without
		Loans with a Valuation Allowance								a Valuation Allowance				All Impaired Loans
		Unpaid								Unpaid				Unpaid
		Principal		Recorded		Valuation		Carrying		Principal		Recorded		Principal		Carrying
		Balance		Investment		Allowances		Value		Balance		Investment		Balance		Value
		(In millions)
June 30, 2011:
Commercial		$	23	$	23	$	15	$	8	$	0	$	0	$	23	$	8
Agricultural			0		0		0		0		7		7		7		7
	Total	$	23	$	23	$	15	$	8	$	7	$	7	$	30	$	15
December 31, 2010:
Commercial		$	23	$	23	$	23	$	0	$	0	$	0	$	23	$	0
Agricultural			0		0		0		0		7		7		7		7
	Total	$	23	$	23	$	23	$	0	$	7	$	7	$	30	$	7

Unpaid principal balance is generally prior to any charge-off.

The average investment in impaired mortgage loans, and the related interest income, by portfolio segment, was:

			Impaired Mortgage Loans
			Average Investment		Interest Income Recognized
					Cash Basis		Accrual Basis
			(In millions)
For the Three Months Ended June 30, 2011:
	Commercial		$	23	$	0	$	0
	Agricultural			7		0		0
		Total	$	30	$	0	$	0
For the Three Months Ended June 30, 2010:
	Commercial		$	54	$	2	$	0
	Agricultural			15		0		0
		Total	$	69	$	2	$	0

For the Six Months Ended June 30, 2011:
	Commercial		$	23	$	1	$	0
	Agricultural			7		0		0
		Total	$	30	$	1	$	0
For the Six Months Ended June 30, 2010:
	Commercial		$	44	$	2	$	0
	Agricultural			14		0		0
		Total	$	58	$	2	$	0

Cash Equivalents

Cash equivalents, which include investments with an original or remaining maturity of three months or less, at the time of purchase, were $1.1 billion and $1.8 billion at June 30, 2011 and December 31, 2010, respectively.

Purchased Credit Impaired Investments

Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI.

The table below presents the purchased credit impaired fixed maturity securities held at:

	June 30, 2011		December 31, 2010
		(In millions)
Outstanding principal and interest balance (1)	$	429	$	20
Carrying value (2)	$	333	$	19

____________

• Represents the contractually required payments which is the sum of contractual principal, whether or not currently due, and accrued interest.

• Estimated fair value plus accrued interest.

The following table presents information about purchased credit impaired fixed maturity securities acquired during the periods, as of their respective acquisition dates:

		Six
		Months Ended
		June 30,
		2011		2010
		(In millions)
Contractually required payments (including
	interest)	$	672	$	0
Cash flows expected to be collected (1)		$	621	$	0
Fair value of investments acquired		$	325	$	0

____________

• Represents undiscounted principal and interest cash flow expectations at the date of acquisition.

The following table presents activity for the accretable yield on purchased credit impaired fixed maturity securities for:

		Three Months				Six Months
		Ended				Ended
		June 30,				June 30,
		2011		2010		2011		2010
			(In millions)
Accretable yield, beginning of period		$	30	$	0	$	5	$	0
	Investments purchased		273		0		296		0
	Accretion recognized in net investment income		(3)		0		(3)		0
	Disposals		0		0		0		0
	Reclassification (to) from nonaccretable difference		6		0		8		0
Accretable yield, end of period		$	306	$	0	$	306	$	0

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, 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 at June 30, 2011 and December 31, 2010. 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.

			June 30, 2011		December 31, 2010
			(In millions)
Consolidated securitization entities: (1)
Assets:
	Mortgage loans held-for-investment (commercial mortgage loans)		$	6,697	$	6,840
	Accrued investment income			32		31
		Total assets	$	6,729	$	6,871
Liabilities:
	Long-term debt		$	6,617	$	6,773
	Other liabilities			31		31
		Total liabilities	$	6,648	$	6,804

____________

• The Company consolidated former qualified special purpose entities (“QSPEs”) that are structured as CMBS. The assets of these entities can only be used to settle their respective 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 was limited to that of its remaining investment in the former QSPEs of $76 million and $64million at estimated fair value at June 30, 2011 and December 31, 2010, respectively. 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 $94 million and $187 million for the three months and six months ended June 30, 2011, respectively, and $101 millionand $204 million for the three months and six months ended June 30, 2010, respectively.

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:

			June 30, 2011				December 31, 2010
					Maximum				Maximum
			Carrying		Exposure		Carrying		Exposure
			Amount		to Loss (1)		Amount		to Loss (1)
			(In millions)
Fixed maturity securities available-for-sale:
	RMBS (2)		$	6,572	$	6,572	$	6,709	$	6,709
	CMBS (2)			2,166		2,166		2,277		2,277
	ABS (2)			1,897		1,897		1,869		1,869
	U.S. corporate securities			379		379		336		336
	Foreign corporate securities			333		333		348		348
Other limited partnership interests				1,208		1,909		1,192		1,992
Real estate joint ventures				26		30		10		35
		Total	$	12,581	$	13,286	$	12,741	$	13,566

____________

• The maximum exposure to loss relating to the fixed maturity securities is equal to the carrying amounts or carrying amounts of retained interests. The maximum exposure to loss relating to the other limited partnership interestsand real estate joint venturesis equal to the carrying amounts plus any unfunded commitments of the Company. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.
• For these variable 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 six months ended June 30, 2011.

Related Party Investment Transactions

At June 30, 2011 and December 31, 2010, the Company held $83million and $63 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 for the three months and six months ended June 30, 2011,and for the three months and six months ended June 30, 2010.

In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. There were no invested assets transferred from affiliates, inclusive of amounts related to reinsurance agreements, for the three months and six months ended June 30, 2011 and 2010. Invested assets transferred to affiliates, inclusive of amounts related to reinsurance agreements, were as follows:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Estimated fair value of assets transferred to affiliates	$	0	$	445	$	0	$	445
Amortized cost of assets transferred to affiliates	$	0	$	406	$	0	$	406
Net investment gains (losses) recognized on transfers	$	0	$	39	$	0	$	39

XML



Business Segment Information

6 Months Ended

Jun. 30, 2011

Business Segment Information [Abstract]

Business Segment Information

8.  Business Segment Information

The Company's business is currently divided into three segments: Retirement Products, Corporate Benefit Funding and Insurance Products. 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 and corporations, as well as other institutions and their respective employees, and is organized into two distinct businesses: Individual Life and Non-Medical Health. Individual Life insurance products and services include variable life, universal life, term life and whole life products. Non-Medical Health includes individual disability insurance products.

Corporate & Other contains the excess capital not allocated to the 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 and,consistent with GAAP accounting guidance for segment reporting, it is the Company's measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for GAAP net income (loss). The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results from operations and the underlying profitability drivers of the business.

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

Operating revenues exclude net investment gains (losses) and net derivative gains (losses). The following additional adjustments are made to GAAP revenues, in the line items indicated, in calculating operating revenues:

•       Universal life and investment-type product policy fees exclude the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees (“GMIB Fees”); and

•       Net investment income: (i) includes amounts for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of investments but do not qualify for hedge accounting treatment, (ii) excludes certain amounts related to contractholder-directed unit-linked investments and (iii) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP.

The following adjustments are made to GAAP expenses, in the line items indicated, in calculating operating expenses:

•       Policyholder benefits and claims exclude: (i) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (ii) benefits and hedging costs related to GMIBs (“GMIB Costs”), and (iii) market value adjustments associated with surrenders or terminations of contracts (“Market Value Adjustments”);

•       Interest credited to policyholder account balances includes adjustments for scheduled periodic settlement payments and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment and amounts related to net investment income earned on contractholder-directed unit-linked investments;

•       Amortization of DAC and value of business acquired (“VOBA”) excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs, and (iii) Market Value Adjustments; 

•       Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and

•       Other expenses exclude costs related to business combinations.

In the first quarter of 2011, management modified its definition of operating earnings to exclude impacts related to certain variable annuity guarantees and Market Value Adjustments to better conform to the way it manages and assesses its business. Accordingly, such results are no longer reported in operating earnings. Consequently, prior period results for Retirement Products and total consolidated operating earnings have been increased by $3 million, net of $1 million of income tax and reduced by $3 million, net of $2 million of income tax, for the three months and six months ended June 30, 2010, respectively.

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 and six months ended June 30, 2011 and 2010. 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 business.

Effective January 1, 2011, MetLife updated its economic capital model to align segment allocated equity with emerging standards and consistent risk principles. Such changes to MetLife's economic capital model are applied prospectively. Segment net investment income is also credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company's consolidated net investment income, operating earnings or net income.

		Operating Earnings
				Corporate
		Retirement		Benefit		Insurance		Corporate						Total
Three Months Ended June 30, 2011		Products		Funding		Products		& Other		Total		Adjustments		Consolidated
		(In millions)
Revenues
Premiums		$	99	$	475	$	67	$	0	$	641	$	0	$	641
Universal life and investment-type
	product policy fees		290		6		163		13		472		21		493
Net investment income			208		299		149		44		700		96		796
Other revenues			87		2		42		0		131		0		131
Net investment gains (losses)			0		0		0		0		0		(27)		(27)
Net derivative gains (losses)			0		0		0		0		0		133		133
	Total revenues		684		782		421		57		1,944		223		2,167
Expenses
Policyholder benefits and claims			133		595		67		0		795		23		818
Interest credited to policyholder account balances			181		45		63		0		289		15		304
Capitalization of DAC			(258)		(1)		(108)		(17)		(384)		0		(384)
Amortization of DAC and VOBA			134		1		69		1		205		122		327
Interest expense on debt			0		0		0		16		16		94		110
Other expenses			388		7		234		36		665		11		676
	Total expenses		578		647		325		36		1,586		265		1,851
Provision for income tax expense (benefit)			37		47		33		(5)		112		(12)		100
Operating earnings		$	69	$	88	$	63	$	26		246
Adjustments to:
	Total revenues										223
	Total expenses										(265)
	Provision for income tax (expense) benefit										12
Net income										$	216			$	216

		Operating Earnings
				Corporate
		Retirement		Benefit		Insurance		Corporate						Total
Three Months Ended June 30, 2010		Products		Funding		Products		& Other		Total		Adjustments		Consolidated
		(In millions)
Revenues
Premiums		$	90	$	126	$	38	$	2	$	256	$	0	$	256
Universal life and investment-type
	product policy fees		236		7		136		2		381		26		407
Net investment income			237		279		118		0		634		91		725
Other revenues			79		1		23		0		103		0		103
Net investment gains (losses)			0		0		0		0		0		50		50
Net derivative gains (losses)			0		0		0		0		0		563		563
	Total revenues		642		413		315		4		1,374		730		2,104
Expenses
Policyholder benefits and claims			123		256		89		(1)		467		37		504
Interest credited to policyholder account balances			182		48		59		(21)		268		(11)		257
Capitalization of DAC			(146)		(1)		(107)		(14)		(268)		0		(268)
Amortization of DAC and VOBA			157		1		68		1		227		233		460
Interest expense on debt			0		0		0		18		18		101		119
Other expenses			260		8		226		34		528		0		528
	Total expenses		576		312		335		17		1,240		360		1,600
Provision for income tax expense (benefit)			23		34		(6)		(20)		31		131		162
Operating earnings		$	43	$	67	$	(14)	$	7		103
Adjustments to:
	Total revenues										730
	Total expenses										(360)
	Provision for income tax (expense) benefit										(131)
Net income										$	342			$	342

		Operating Earnings
				Corporate
		Retirement		Benefit		Insurance		Corporate						Total
Six Months Ended June 30, 2011		Products		Funding		Products		& Other		Total		Adjustments		Consolidated
		(In millions)
Revenues
Premiums		$	129	$	537	$	111	$	0	$	777	$	0	$	777
Universal life and investment-type
	product policy fees		563		17		307		20		907		41		948
Net investment income			414		597		305		92		1,408		176		1,584
Other revenues			184		3		74		0		261		0		261
Net investment gains (losses)			0		0		0		0		0		(41)		(41)
Net derivative gains (losses)			0		0		0		0		0		(23)		(23)
	Total revenues		1,290		1,154		797		112		3,353		153		3,506
Expenses
Policyholder benefits and claims			196		783		136		0		1,115		30		1,145
Interest credited to policyholder account balances			361		95		123		0		579		12		591
Capitalization of DAC			(449)		(6)		(209)		(30)		(694)		0		(694)
Amortization of DAC and VOBA			244		2		140		3		389		55		444
Interest expense on debt			0		0		0		33		33		187		220
Other expenses			696		23		467		66		1,252		11		1,263
	Total expenses		1,048		897		657		72		2,674		295		2,969
Provision for income tax expense (benefit)			84		90		49		(16)		207		(46)		161
Operating earnings		$	158	$	167	$	91	$	56		472
Adjustments to:
	Total revenues										153
	Total expenses										(295)
	Provision for income tax (expense) benefit										46
Net income										$	376			$	376

		Operating Earnings
				Corporate
		Retirement		Benefit		Insurance		Corporate						Total
Six Months Ended June 30, 2010		Products		Funding		Products		& Other		Total		Adjustments		Consolidated
		(In millions)
Revenues
Premiums		$	148	$	497	$	66	$	0	$	711	$	0	$	711
Universal life and investment-type
	product policy fees		444		15		266		7		732		44		776
Net investment income			466		548		232		83		1,329		186		1,515
Other revenues			155		2		56		0		213		0		213
Net investment gains (losses)			0		0		0		0		0		87		87
Net derivative gains (losses)			0		0		0		0		0		255		255
	Total revenues		1,213		1,062		620		90		2,985		572		3,557
Expenses
Policyholder benefits and claims			209		755		173		0		1,137		61		1,198
Interest credited to policyholder account balances			364		93		117		24		598		(25)		573
Capitalization of DAC			(266)		(2)		(205)		(25)		(498)		0		(498)
Amortization of DAC and VOBA			249		1		139		2		391		133		524
Interest expense on debt			0		0		0		35		35		204		239
Other expenses			479		17		434		63		993		0		993
	Total expenses		1,035		864		658		99		2,656		373		3,029
Provision for income tax expense (benefit)			62		68		(13)		(34)		83		71		154
Operating earnings		$	116	$	130	$	(25)	$	25		246
Adjustments to:
	Total revenues										572
	Total expenses										(373)
	Provision for income tax (expense) benefit										(71)
Net income										$	374			$	374

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

		June 30, 2011		December 31, 2010
		(In millions)
Retirement Products		$	94,498	$	87,461
Corporate Benefit Funding			30,966		30,491
Insurance Products			18,605		16,296
Corporate & Other			21,413		20,637
	Total	$	165,482	$	154,885

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.

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Related Party Transactions

6 Months Ended

Jun. 30, 2011

Related Party Transactions [Abstract]

Related Party Transactions

9.  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. For certain agreements, charges are based on various performance measures or activity-based costing. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual incidence of cost incurred by the Company and/or affiliate. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $457million and $834million for the three months and six months ended June 30, 2011, respectively, and $340 million and $638 million for the three months and six months ended June 30, 2010, respectively. The aforementioned expenses and fees incurred with affiliates were comprised of the following:

		Three Months				Six Months
		Ended				Ended
		June 30,				June 30,
		2011		2010		2011		2010
		(In millions)
Compensation		$	64	$	38	$	127	$	74
Commissions			241		134		426		257
Volume-related costs			61		88		109		155
Professional services			5		0		9		0
Rent			6		0		12		0
Other			80		80		151		152
	Total other expenses	$	457	$	340	$	834	$	638

Revenues received from affiliates related to these agreements were recorded as follows:

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
	(In millions)
Universal life and investment-type product policy fees	$	36	$	28	$	69	$	54
Other revenues	$	34	$	24	$	65	$	47

The Company had net receivablesfromaffiliatesof $40million and $60 million at June 30, 2011 and December 31, 2010, respectively, related to the items discussed above. These amounts exclude affiliated reinsurance balances discussed below. See Note 2 for expenses related to investment advice under these agreements, recorded in net investment income.

Reinsurance Transactions

The Company has reinsurance agreements with certain MetLife subsidiaries, including Metropolitan Life Insurance Company, MetLife Reinsurance Company of South Carolina, Exeter Reassurance Company, Ltd., General American Life Insurance Company, MetLife Investors Insurance Company and MetLife Reinsurance Company of Vermont, all of which are related parties.

Information regarding the effect of affiliated reinsurance included in the interim condensed consolidated statements of operations was as follows:

		Three Months				Six Months
		Ended				Ended
		June 30,				June 30,
		2011		2010		2011		2010
		(In millions)
Premiums:
Reinsurance assumed		$	6	$	3	$	4	$	7
Reinsurance ceded			(55)		(52)		(109)		(111)
	Net premiums	$	(49)	$	(49)	$	(105)	$	(104)
Universal life and investment-type product policy fees:
Reinsurance assumed		$	23	$	19	$	43	$	30
Reinsurance ceded			(97)		(72)		(188)		(133)
	Net universal life and investment-type product policy fees	$	(74)	$	(53)	$	(145)	$	(103)
Other revenues:
Reinsurance assumed		$	0	$	0	$	0	$	0
Reinsurance ceded			78		65		158		139
	Net other revenues	$	78	$	65	$	158	$	139
Policyholder benefits and claims:
Reinsurance assumed		$	9	$	5	$	12	$	6
Reinsurance ceded			(113)		(89)		(228)		(173)
	Net policyholder benefits and claims	$	(104)	$	(84)	$	(216)	$	(167)
Interest credited to policyholder account balances:
Reinsurance assumed		$	17	$	16	$	33	$	31
Reinsurance ceded			(19)		(12)		(37)		(24)
	Net interest credited to policyholder account balances	$	(2)	$	4	$	(4)	$	7
Other expenses:
Reinsurance assumed		$	13	$	13	$	28	$	25
Reinsurance ceded			37		36		82		60
	Net other expenses	$	50	$	49	$	110	$	85

Information regarding the effect of affiliated reinsurance included in the interim condensed consolidated balance sheets was as follows at:

		June 30, 2011				December 31, 2010
		Assumed		Ceded		Assumed		Ceded
		(In millions)
Assets:
Premiums, reinsurance and other receivables		$	72	$	9,610	$	40	$	9,826
Deferred policy acquisition costs and value of business acquired			150		(492)		164		(484)
	Total assets	$	222	$	9,118	$	204	$	9,342
Liabilities:
Future policy benefits		$	44	$	0	$	41	$	0
Other policy-related balances			1,470		570		1,435		508
Other liabilities			29		3,007		12		3,200
	Total liabilities	$	1,543	$	3,577	$	1,488	$	3,708

The Company ceded risks to affiliates related to guaranteed minimum benefit guarantees written directly by the Company through December 31, 2010. These ceded reinsurance agreements contain embedded derivatives and changes in their fair value arealso included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were assets of $824 million and $936 million atJune 30, 2011and December 31, 2010, respectively. Net derivative gains (losses)associated with the embedded derivatives were $195 million and ($248) millionfor the three months and six months ended June 30,2011, respectively,and$1,413 millionand $1,047 millionfor the three months and six months ended June 30, 2010, respectively.

MLI-USA cedes two blocks of business to an affiliate 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 increasedthe funds withheld balance by $30 million and $5 million at June 30, 2011 and December 31, 2010, respectively.Net derivative gains (losses)associated with the embedded derivatives were ($50) million and ($25) million for the three months and six months ended June 30, 2011, respectively, and ($81) million and ($90) million for the three months and six months ended June 30, 2010, 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 the affiliated reinsurer during the first several years of the reinsurance agreement. The experience refund reduced the funds withheld by MLI-USA from the affiliated reinsurer by $49 million and $98 million for the three months and six months ended June 30, 2011, respectively, and $64 million and $117 million for the three months and six months ended June 30, 2010, respectively, and are considered unearned revenue, amortized over the life of the contract using the same assumptions as used for the DAC associated with the underlying policies. Amortization and interest of the unearned revenue associated with the experience refund was $21 million and $37 million for the three months and six months ended June 30, 2011, respectively, and $22 million and $45 million for the three months and six months ended June 30, 2010, respectively, and is includedin premiums and universal life and investment-type product policy fees in the consolidated statements of operations. At June 30, 2011 and December 31, 2010, unearned revenue related to the experience refund was $621 million and $560million, respectively, and is included in other policy-related balances in the interim condensed consolidated balance sheets.

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Other Expenses

6 Months Ended

Jun. 30, 2011

Other Expenses [Abstract]

Other Expenses

7. Other Expenses

Information on other expenses was as follows:

		Three Months				Six Months
		Ended				Ended
		June 30,				June 30,
		2011		2010		2011		2010
		(In millions)
Compensation		$	76	$	47	$	151	$	91
Commissions			368		243		674		463
Volume-related costs			44		73		82		133
Affiliated interest costs on ceded reinsurance			51		47		105		80
Capitalization of DAC			(384)		(268)		(694)		(498)
Amortization of DAC and VOBA			327		460		444		524
Interest expense on debt and debt issue costs			110		119		220		239
Premium taxes, licenses & fees			13		12		28		22
Professional services			20		6		29		10
Rent			8		0		15		1
Other			96		100		179		193
	Total other expenses	$	729	$	839	$	1,233	$	1,258

Affiliated Expenses

See Note 9 for a discussion of affiliated expenses included in the table above.

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Consolidated Statements of Cash Flows (Unaudited) (USD $) In Millions	6 Months Ended
	Jun. 30, 2011	Jun. 30, 2010
Consolidated Statement Of Cash Flows [Abstract]
Net cash provided by operating activities	$ 406	$ 519
Cash flows from investing activities
Sales, maturities and repayments of fixed maturity securities	8,910	8,500
Sales, maturities and repayments of equity securities	131	109
Sales, maturities and repayments of mortgage loans	517	437
Sales, maturities and repayments of real estate and real estate joint ventures	6	9
Sales, maturities and repayments of other limited partnership interests	171	56
Purchases of fixed maturity securities	(10,303)	(9,145)
Purchases of equity securities	(6)	(46)
Purchases of mortgage loans	(387)	(395)
Purchases of real estate and real estate joint ventures	(48)	(57)
Purchases of other limited partnership interests	(176)	(163)
Cash received in connection with freestanding derivatives	286	48
Cash paid in connection with freestanding derivatives	(250)	(108)
Net change in policy loans	0	(1)
Net change in short-term investments	(972)	(202)
Net change in other invested assets	(253)	(39)
Other, net	1	0
Net cash used in investing activities	(2,373)	(997)
Cash flows from financing activities
Policyholder account balances: Deposits	10,207	12,565
Policyholder account balances: Withdrawals	(8,858)	(12,604)
Net change in payables for collateral under securities loaned and other transactions	98	491
Long-term debt repaid	(170)	(311)
Financing element on certain derivative instruments	(23)	(15)
Net cash provided by financing activities	1,254	126
Effect of change in foreign currency exchange rates on cash and cash equivalents balances	5	(24)
Change in cash and cash equivalents	(708)	(376)
Cash and cash equivalents, beginning of period	1,928	2,574
Cash and cash equivalents, end of period	1,220	2,198
Supplemental disclosures of cash flow information:
Net cash paid during the period for interest	221	245
Net cash paid during the period for income tax	$ 20	$ 42

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2011

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Derivative Financial Instruments

3.  Derivative Financial Instruments

Accounting for Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter (“OTC”) market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage various 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 OTC 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 derivative gains (losses) except for those (i) in policyholder benefits and claims for economic hedges of variable annuity guarantees included in future policy benefits; and (ii) in net investment income for economic hedges of equity method investments in joint ventures. 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.

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 being hedged, are reported within net derivative 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 derivative 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 derivative 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 derivative 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 derivative 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 derivative 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 derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire 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) or net investment income. 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) or net investment income if that contract contains an embedded derivative that requires bifurcation.

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

Primary Risks Managed by 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 gross notional amount, estimated fair value and primary underlying risk exposure of the Company's derivative financial instruments, excluding embedded derivatives, held at:

				June 30, 2011						December 31, 2010
						Estimated Fair						Estimated Fair
Primary Underlying				Notional		Value (1)				Notional		Value (1)
Risk Exposure	Instrument Type			Amount		Assets		Liabilities		Amount		Assets		Liabilities
				(In millions)
Interest rate	Interest rate swaps		$	10,912	$	686	$	244	$	9,102	$	658	$	252
	Interest rate floors			7,986		139		73		7,986		127		62
	Interest rate caps			7,658		33		0		7,158		29		1
	Interest rate futures			2,135		5		5		1,966		5		7
	Interest rate forwards			695		0		67		695		0		71
Foreign currency	Foreign currency swaps			2,019		384		92		2,561		585		68
	Foreign currency forwards			189		1		4		151		4		1
Credit	Credit default swaps			1,833		16		16		1,324		15		22
Equity market	Equity futures			249		1		2		93		0		0
	Equity options			1,778		228		0		733		77		0
	Variance swaps			1,807		15		13		1,081		20		8
	Total rate of return swaps			150		0		0		0		0		0
		Total	$	37,411	$	1,508	$	516	$	32,850	$	1,520	$	492

____________

• 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.

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 writes covered call options on its portfolio of U.S. Treasuries as an income generation strategy. In a covered call transaction, the Company receives a premium at the inception of the contract in exchange for giving the derivative counterparty the right to purchase the referenced security from the Company at a predetermined price. The call option is “covered” because the Company owns the referenced security over the term of the option. Covered call options are included in interest rate options. The Company utilizes covered call options 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 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.

Total rate of return swaps (“TRRs”) are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the London Inter-Bank Offer Rate (“LIBOR”), calculated by reference to an agreed notional principal amount. No cash is exchanged at the outset of the contract. Cash is paid and received over the life of the contract based on the terms of the swap. 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 uses TRRs to hedge its equity market guarantees in certain of its insurance products. TRRs can be used as hedges or to synthetically create investments. The Company utilizes TRRs in non-qualifying hedging relationships.

Hedging

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

				June 30, 2011						December 31, 2010
				Notional		Estimated Fair Value				Notional		Estimated Fair Value
Derivatives Designated as Hedging Instruments				Amount		Assets		Liabilities		Amount		Assets		Liabilities
					(In millions)
Fair value hedges:
	Foreign currency swaps			$	598	$	272	$	16	$	787	$	334	$	18
	Interest rate swaps				330		11		16		193		11		15
		Subtotal			928		283		32		980		345		33
Cash flow hedges:
	Foreign currency swaps				441		17		16		295		15		11
	Interest rate swaps				415		0		26		575		1		45
	Interest rate forwards				695		0		67		695		0		71
		Subtotal			1,551		17		109		1,565		16		127
			Total qualifying hedges	$	2,479	$	300	$	141	$	2,545	$	361	$	160

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

			June 30, 2011						December 31, 2010
Derivatives Not Designated or Not		Notional		Estimated Fair Value				Notional		Estimated Fair Value
Qualifying as Hedging Instruments		Amount		Assets		Liabilities		Amount		Assets		Liabilities
			(In millions)
Interest rate swaps		$	10,167	$	675	$	202	$	8,334	$	646	$	192
Interest rate floors			7,986		139		73		7,986		127		62
Interest rate caps			7,658		33		0		7,158		29		1
Interest rate futures			2,135		5		5		1,966		5		7
Foreign currency swaps			980		95		60		1,479		236		39
Foreign currency forwards			189		1		4		151		4		1
Credit default swaps			1,833		16		16		1,324		15		22
Equity futures			249		1		2		93		0		0
Equity options			1,778		228		0		733		77		0
Variance swaps			1,807		15		13		1,081		20		8
Total rate of return swaps			150		0		0		0		0		0
	Total non-designated or non-qualifying derivatives	$	34,932	$	1,208	$	375	$	30,305	$	1,159	$	332

Net Derivative Gains (Losses)

The components of net derivative gains (losses) were as follows:

		Three Months				Six Months
		Ended				Ended
		June 30,				June 30,
		2011		2010		2011		2010
		(In millions)
Derivatives and hedging gains (losses) (1)		$	9	$	231	$	(94)	$	134
Embedded derivatives			124		332		71		121
	Total net derivative gains (losses)	$	133	$	563	$	(23)	$	255

____________

• Includes foreign currency transaction gains (losses) on hedged items in cash flow and non-qualifying hedge relationships, which are not presented elsewhere in this note.

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

			Three Months				Six Months
			Ended				Ended
			June 30,				June 30,
			2011		2010		2011		2010
				(In millions)
Qualifying hedges:
	Net investment income		$	0	$	1	$	1	$	1
	Interest credited to policyholder account balances			12		6		23		16
Non-qualifying hedges:
	Net derivative gains (losses)			7		(1)		17		(7)
		Total	$	19	$	6	$	41	$	10

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 derivative gains (losses). The following table represents the amount of such net derivative gains (losses):

		Net Derivative		Net Derivative		Ineffectiveness
		Gains (Losses)		Gains (Losses)		Recognized in
Derivatives in Fair Value	Hedged Items in Fair Value	Recognized		Recognized for		Net Derivative
Hedging Relationships	Hedging Relationships	for Derivatives		Hedged Items		Gains (Losses)
			(In millions)
For the Three Months Ended June 30, 2011:
Interest rate swaps:	Fixed maturity securities	$	(4)	$	3	$	(1)
	Policyholder account balances (1)		5		(5)		0
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		14		(17)		(3)
Total		$	15	$	(19)	$	(4)
For the Three Months Ended June 30, 2010:
Interest rate swaps:	Fixed maturity securities	$	(1)	$	1	$	0
	Policyholder account balances (1)		4		(1)		3
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(65)		55		(10)
Total		$	(62)	$	55	$	(7)
For the Six Months Ended June 30, 2011:
Interest rate swaps:	Fixed maturity securities	$	(3)	$	2	$	(1)
	Policyholder account balances (1)		0		(1)		(1)
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		36		(43)		(7)
Total		$	33	$	(42)	$	(9)
For the Six Months Ended June 30, 2010:
Interest rate swaps:	Fixed maturity securities	$	(1)	$	1	$	0
	Policyholder account balances (1)		5		(5)		0
Foreign currency swaps:	Foreign-denominated policyholder account balances (2)		(117)		99		(18)
Total		$	(113)	$	95	$	(18)

____________

• Fixed rate liabilities.
• Fixed rate or floating rate liabilities.

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

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; (iii) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments; and (iv) interest rate swaps to convert floating rate investments to fixed rate investments.

In certain instances, 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.The net amounts reclassified into net derivative gains (losses) forboth the three months and six months ended June 30, 2011 related to such discontinued cash flow hedges were $1 million. For the three months and six months ended June 30, 2010, 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.

At both June 30, 2011 and December 31, 2010, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed six years.

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

		Three Months					Six Months
		Ended					Ended
		June 30,				June 30,
		2011		2010		2011		2010
		(In millions)
Accumulated other comprehensive income (loss), balance at beginning of period		$	(132)	$	4	$	(109)	$	(1)
Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash
	flow hedges		35		17		14		20
Amounts reclassified to net derivative gains (losses)			(2)		2		(4)		4
Accumulated other comprehensive income (loss), balance at end of period		$	(99)	$	23	$	(99)	$	23

At June 30,2011, ($2) million of deferred net gains (losses) on derivatives in accumulated other comprehensive income (loss) was expected to be reclassified to earnings within the next 12 months.

The following table presents the effects of derivatives in cash flow hedging relationships on the interim condensed consolidated statements of operations and the interim condensed consolidated statements of stockholders' equity

		Amount of Gains		Amount and Location
		(Losses) Deferred		of Gains (Losses)		Amount and Location
		in Accumulated Other		Reclassified from		of Gains (Losses)
		Comprehensive Income		Accumulated Other Comprehensive		Recognized in Income (loss)
		(Loss) on Derivatives		Income (Loss) into Income (Loss)		on Derivatives
						(Ineffective Portion and
						Amount Excluded from
		(Effective Portion)		(Effective Portion)		Ineffectiveness Testing)
Derivatives in Cash Flow				Net Derivative		Net Derivative
Hedging Relationships				Gains (Losses)		Gains (Losses)
		(In millions)
For the Three Months Ended June 30, 2011:
Interest rate swaps		$	15	$	1	$	0
Foreign currency swaps			0		0		0
Interest rate forwards			20		0		(8)
Credit forwards			0		1		0
	Total	$	35	$	2	$	(8)
For the Three Months Ended June 30, 2010:
Interest rate swaps		$	1	$	0	$	0
Foreign currency swaps			10		(4)		0
Interest rate forwards			0		2		0
Credit forwards			6		0		0
	Total	$	17	$	(2)	$	0
For the Six Months Ended June 30, 2011:
Interest rate swaps		$	4	$	1	$	0
Foreign currency swaps			(1)		2		0
Interest rate forwards			11		0		(8)
Credit forwards			0		1		0
	Total	$	14	$	4	$	(8)
For the Six Months Ended June 30, 2010:
Interest rate swaps		$	1	$	0	$	0
Foreign currency swaps			10		(6)		0
Interest rate forwards			0		2		0
Credit forwards			9		0		0
	Total	$	20	$	(4)	$	0

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

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, TRRs 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 hedgeits 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; (x) covered call options for income generation; and (xi) equity options to economically hedge certain invested assets against adverse changes in equity indices.

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

			Net		Net		Policyholder
			Derivative		Investment		Benefits
			Gains (Losses)		Income (1)		and Claims (2)
			(In millions)
For the Three Months Ended June 30, 2011:
	Interest rate swaps		$	28	$	0	$	0
	Interest rate floors			18		0		0
	Interest rate caps			(16)		0		0
	Interest rate futures			(11)		0		0
	Equity futures			4		0		(1)
	Foreign currency swaps			(1)		0		0
	Foreign currency forwards			(5)		0		0
	Equity options			1		(1)		0
	Variance swaps			(4)		0		0
	Credit default swaps			2		0		0
		Total	$	16	$	(1)	$	(1)
For the Three Months Ended June 30, 2010:
	Interest rate swaps		$	45	$	0	$	0
	Interest rate floors			54		0		0
	Interest rate caps			(6)		0		0
	Interest rate futures			(23)		0		0
	Equity futures			4		0		0
	Foreign currency swaps			(13)		0		0
	Foreign currency forwards			9		0		0
	Equity options			66		5		0
	Interest rate options			(3)		0		0
	Variance swaps			38		0		0
	Credit default swaps			1		0		0
		Total	$	172	$	5	$	0

			Net		Net		Policyholder
			Derivative		Investment		Benefits
			Gains (Losses)		Income (1)		and Claims (2)
			(In millions)
For the Six Months Ended June 30, 2011:
	Interest rate swaps		$	4	$	0	$	0
	Interest rate floors			1		0		0
	Interest rate caps			(17)		0		0
	Interest rate futures			(12)		0		0
	Equity futures			4		0		(1)
	Foreign currency swaps			2		0		0
	Foreign currency forwards			(16)		0		0
	Equity options			(21)		(2)		0
	Variance swaps			(10)		0		0
	Credit default swaps			2		0		0
		Total	$	(63)	$	(2)	$	(1)
For the Six Months Ended June 30, 2010:
	Interest rate swaps		$	63	$	0	$	0
	Interest rate floors			47		0		0
	Interest rate caps			(14)		0		0
	Interest rate futures			(28)		0		0
	Equity futures			(1)		0		0
	Foreign currency swaps			(57)		0		0
	Foreign currency forwards			13		0		0
	Equity options			43		4		0
	Interest rate options			(3)		0		0
	Variance swaps			28		0		0
	Credit default swaps			1		0		0
		Total	$	92	$	4	$	0

____________

• Changes in estimated fair value related to economic hedges of equity method investments in joint ventures.
• Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits.

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 $1,469 million and $912 million at June 30, 2011 and December 31, 2010, 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 June 30, 2011 and December 31, 2010, the Company would have received $14 millionand $13 million, respectively, to terminate all of these contracts.

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:

			June 30, 2011					December 31, 2010
					Maximum					Maximum
			Estimated		Amount			Estimated		Amount
			Fair Value		of Future		Weighted	Fair Value		of Future		Weighted
Rating Agency Designation of			of Credit		Payments under		Average	of Credit		Payments under		Average
Referenced			Default		Credit Default		Years to	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	$	130	4.3	$	1	$	45	3.6
Credit default swaps referencing indices				10		661	3.6		11		679	3.7
	Subtotal			11		791	3.7		12		724	3.7
Baa
Single name credit default swaps (corporate)				1		255	4.9		0		5	3.0
Credit default swaps referencing indices				2		423	5.0		1		183	5.0
	Subtotal			3		678	5.0		1		188	5.0
		Total	$	14	$	1,469	4.3	$	13	$	912	4.0

____________

• The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's, S&P and Fitch. If no rating is available from a rating agency, then an internally developed rating is used.
• Assumes the value of the referenced credit obligations is zero.
• 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 OTC 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 futuresare 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 June 30, 2011 and December 31, 2010, the Company was obligated to return cash collateral under its control of $985 million and $965 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 June 30, 2011 and December 31, 2010, the Company had also accepted collateral consisting of various securities with a fair market value of $33million and $3 million, respectively, which were held in separate custodial accounts. The Company is permitted by contract to sell or repledge this collateral, but at June 30, 2011, none of the collateral had been sold or repledged.

The Company's collateral arrangements for its OTC 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 OTC 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.

			Estimated
			Fair Value of
			Collateral		Fair Value of Incremental
			Provided:		Collateral Provided Upon:
							Downgrade in the
					One Notch		Company’s Credit Rating
					Downgrade		to a Level that Triggers
	Estimated				in the		Full Overnight
	Fair Value (1) of				Company’s		Collateralization or
	Derivatives in Net		Fixed Maturity		Credit		Termination of
	Liability Position		Securities (2)		Rating		the Derivative Position
	(In millions)
June 30, 2011	$	134	$	48	$	15	$	71
December 31, 2010	$	96	$	58	$	11	$	62

____________

• After taking into consideration the existence of netting agreements.
• Included in fixed maturity securities in the consolidated balance sheets. The counterparties are permitted by contract to sell or repledge this collateral. At both June 30, 2011 and December 31, 2010, the Companydid not provide any cash collateral.

Without considering the effect of netting agreements, the estimated fair value of the Company's OTC derivatives with credit-contingent provisions that were in a gross liability position at June 30, 2011 was $220 million. At June 30, 2011, the Company provided securities collateral of $48 million in connection with these derivatives. In the unlikely event that both: (i) the Company's credit rating was downgraded to a level that triggers full overnight collateralization or termination of all derivative positions; and (ii) the Company's netting agreements were 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 June 30, 2011 would be $172 million. This amount does not consider gross derivative assets of $86 million for which the Company has the contractual right of offset.

The Company also has exchange-traded futures, which may require the pledging of collateral. At both June 30, 2011 and December 31, 2010, the Company did not pledge any securities collateral for exchange-traded futures. At June 30, 2011 and December 31, 2010, the Company provided cash collateral for exchange-traded futuresof $34 million and $25 million, respectively, which is included in premiums, reinsurance and other receivables.

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 cededreinsurance contracts of guaranteed minimum benefits related to GMWBs,GMABs and certain GMIBs;affiliated assumed reinsurance contracts of guaranteed minimum benefits related to GMWBs and certain GMIBs;ceded reinsurance written on a funds withheld basis; and options embedded in debt or equity securities.

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

			June 30, 2011		December 31, 2010
				(In millions)
Net embedded derivatives within asset host contracts:
	Ceded guaranteed minimum benefits		$	824	$	936
	Options embedded in debt or equity securities			0		(2)
		Net embedded derivatives within asset host contracts	$	824	$	934
Net embedded derivatives within liability host contracts:
	Direct guaranteed minimum benefits		$	17	$	254
	Assumed guaranteed minimum benefits			(5)		0
	Funds withheld on ceded reinsurance			30		5
		Net embedded derivatives within liability host contracts	$	42	$	259

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

	Three Months				Six Months
	Ended				Ended
	June 30,				June 30,
	2011		2010		2011		2010
		(In millions)
Net derivative gains (losses) (1), (2)	$	124	$	332	$	71	$	121

____________

• The valuation of direct and assumed guaranteed minimum benefits includes an adjustment for nonperformance risk. The amounts included in net derivative gains (losses), in connection with this adjustment, were$1 million and ($28) million for the three months and six months ended June 30, 2011, respectively, and$125million and $54 million for the three months and six months ended June 30, 2010, respectively. In addition, the valuation of ceded guaranteed minimum benefits includes an adjustment for nonperformance risk. The amounts included in net derivative gains (losses), in connection with this adjustment, were ($18) million and $23 million for the three months and six months ended June 30, 2011, respectively, and($65) million and ($21) million forthe three months and six months ended June 30, 2010, respectively. The netderivative gains (losses) for the three months and six months ended June 30, 2010 included$191 million relating to a refinement for estimating nonperformance risk in fair value measurements implemented at June 30, 2010. See Note 4.

• See Note 9 for discussion of affiliated net derivative gains (losses) included in the table above.

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Fair Value

6 Months Ended

Jun. 30, 2011

Fair Value [Abstract]

Fair Value

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.

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 FVO, were determined as described below. These estimated fair values and their corresponding placement in the fair value hierarchy are summarized as follows:

				June 30, 2011
			Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant		Total
			Identical Assets		Observable		Unobservable		Estimated
			and Liabilities		Inputs		Inputs		Fair
			(Level 1)		(Level 2)		(Level 3)		Value
			(In millions)
Assets:
Fixed maturity securities:
	U.S. corporate securities		$	0	$	14,376	$	1,445	$	15,821
	Foreign corporate securities			0		8,144		756		8,900
	U.S. Treasury and agency securities			6,010		2,601		0		8,611
	RMBS			0		6,553		19		6,572
	CMBS			0		2,011		155		2,166
	ABS			0		1,589		308		1,897
	State and political subdivision securities			0		1,833		25		1,858
	Foreign government securities			0		1,010		2		1,012
		Total fixed maturity securities		6,010		38,117		2,710		46,837
Equity securities:
	Non-redeemable preferred stock			0		40		121		161
	Common stock			38		77		32		147
		Total equity securities		38		117		153		308
Other securities:
	FVO general account securities			0		48		0		48
	FVO contractholder-directed unit-linked investments			3,041		0		0		3,041
		Total other securities		3,041		48		0		3,089
Short-term investments (1)				765		1,264		92		2,121
Mortgage loans held by consolidated securitization entities				0		6,697		0		6,697
Derivative assets: (2)
	Interest rate contracts			5		853		5		863
	Foreign currency contracts			0		385		0		385
	Credit contracts			0		5		11		16
	Equity market contracts			1		228		15		244
		Total derivative assets		6		1,471		31		1,508
Net embedded derivatives within asset host contracts (3)				0		0		824		824
Separate account assets (4)				199		69,138		130		69,467
		Total assets	$	10,059	$	116,852	$	3,940	$	130,851
Liabilities:
Derivative liabilities: (2)
	Interest rate contracts		$	5	$	317	$	67	$	389
	Foreign currency contracts			0		96		0		96
	Credit contracts			0		15		1		16
	Equity market contracts			2		0		13		15
		Total derivative liabilities		7		428		81		516
Net embedded derivatives within liability host contracts (3)				0		0		42		42
Long-term debt of consolidated securitization entities				0		6,617		0		6,617
		Total liabilities	$	7	$	7,045	$	123	$	7,175

			December 31, 2010
			Fair Value Measurements at Reporting Date Using
			Quoted Prices in
			Active Markets for		Significant Other		Significant		Total
			Identical Assets		Observable		Unobservable		Estimated
			and Liabilities		Inputs		Inputs		Fair
			(Level 1)		(Level 2)		(Level 3)		Value
			(In millions)
Assets:
Fixed maturity securities:
	U.S. corporate securities		$	0	$	13,864	$	1,510	$	15,374
	Foreign corporate securities			0		7,590		880		8,470
	U.S. Treasury and agency securities			4,616		3,026		34		7,676
	RMBS			0		6,674		35		6,709
	CMBS			0		2,147		130		2,277
	ABS			0		1,301		568		1,869
	State and political subdivision securities			0		1,614		32		1,646
	Foreign government securities			0		889		14		903
		Total fixed maturity securities		4,616		37,105		3,203		44,924
Equity securities:
	Non-redeemable preferred stock			0		54		214		268
	Common stock			43		72		22		137
		Total equity securities		43		126		236		405
Other securities:
	FVO general account securities			0		7		0		7
	FVO contractholder-directed unit-linked investments			2,240		0		0		2,240
		Total other securities		2,240		7		0		2,247
Short-term investments (1)				390		584		173		1,147
Mortgage loans held by consolidated securitization entities				0		6,840		0		6,840
Derivative assets: (2)
	Interest rate contracts			5		804		10		819
	Foreign currency contracts			0		589		0		589
	Credit contracts			0		3		12		15
	Equity market contracts			0		77		20		97
		Total derivative assets		5		1,473		42		1,520
Net embedded derivatives within asset host contracts (3)				0		0		936		936
Separate account assets (4)				76		61,410		133		61,619
		Total assets	$	7,370	$	107,545	$	4,723	$	119,638
Liabilities:
Derivative liabilities: (2)
	Interest rate contracts		$	7	$	315	$	71	$	393
	Foreign currency contracts			0		69		0		69
	Credit contracts			0		21		1		22
	Equity market contracts			0		0		8		8
		Total derivative liabilities		7		405		80		492
Net embedded derivatives within liability host contracts (3)				0		0		259		259
Long-term debt of consolidated securitization entities				0		6,773		0		6,773
		Total liabilities	$	7	$	7,178	$	339	$	7,524

____________

• 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.), and therefore are excluded from the tables presented above.
• Derivative assets are presented within other invested assets in the consolidated balance sheets and derivative liabilities are presented within other liabilities in the consolidated balance sheets. 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 Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables which follow.
• Net embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables in the consolidated balance sheets. Net embedded derivatives within liability host contracts are presented in the consolidated balance sheets within policyholder account balancesand other liabilities. At June 30, 2011, fixed maturity securities and equity securities also included embedded derivatives of $5million and ($5) million, respectively.AtDecember 31, 2010, fixed maturity securities and equity securities included embedded derivatives of $3million and($5) million, respectively.
• 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.

See “— Variable Interest Entities” in Note 2 for discussion of CSEs included in the tables above.

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

Fixed Maturity Securities, Equity Securities, OtherSecurities and Short-term Investments

When available, the estimated fair value of the Company's fixed maturity securities, equity securities, other securities and short-term investments 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's 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's 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 Held by CSEs

The Company consolidates certain securitization entities that hold commercial mortgage loans. These commercial mortgage loans held by CSEs, for which the Company has elected the FVO, are presented within mortgage loans in the consolidated balance sheets. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

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 OTC 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 OTC 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 OTC 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 OTC 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 to 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 OTC 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.

Net Embedded Derivatives Within Asset and Liability Host Contracts

Embedded derivatives principally include certain direct, assumedand ceded variable annuity guarantees and embedded derivatives related to funds withheld on ceded reinsurance. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income.

The Company issues certain variable annuity products with guaranteed minimum benefits. 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 derivative gains (losses). These embedded derivatives are classified within policyholder account balances in the consolidated balance sheets.

The fair value of these guarantees is 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 guarantee liabilities includes adjustments for nonperformance risk and for a risk margin related to non-capital market inputs. Both of these adjustments are captured as components of the spread which, when combined with the risk free rate, is used to discount the cash flows of the liability for purposes of determining its fair value.

The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife's debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries compared to MetLife.

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 nonperformance risk; 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 assumed, from an affiliated insurance company, the risk associated with certain GMIBs and GMWBs. These embedded derivatives are included in other policy-related balances in the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on these assumed risks is determined using a methodology consistent with that described previously for the guarantees directly written by the Company.

The Company ceded, to an affiliated reinsurance company, the risk associated with certain of the GMIBs, GMABs and GMWBs described above that are also accounted for as embedded derivatives. 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 GMIBs that are accounted for as insurance (i.e., not as embedded derivatives), but where the reinsurance contract contains an embedded derivative. These embedded derivativesare included within premiums, reinsurance and other receivables in the consolidated balance sheets with changes in estimated fair value reported in net derivative 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.

As part of its regular review of critical accounting estimates, the Company periodically assesses inputs for estimating nonperformance risk (commonly referred to as “own credit”) in fair value measurements. During the second quarter of 2010, the Company completed a study that aggregated and evaluated data, including historical recovery rates of insurance companies, as well as policyholder behavior observed over the prior two years as the recent financial crisis evolved. As a result, at the end of the second quarter of 2010, the Company refined the way in which it incorporates expected recovery rates into the nonperformance risk adjustment for purposes of estimating the fair value of investment-type contracts and embedded derivatives within insurance contracts.For the three months ended June 30, 2010, the Company recognized income of $19 million, net of DAC and income tax, relating to the change in fair value associated with nonperformance risk for embedded derivatives within the above mentioned guaranteed minimum benefit guarantees and associated reinsurance.The Company recognized a gain of $60 million, net of DAC and income tax, relating to implementing the refinement at June 30, 2010.

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 previously described in “— Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments.” The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities in the consolidated balance sheets with changes in estimated fair value recorded in net derivative 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.

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 is 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, derivatives, other limited partnership interests, short-term investments and cash and cash equivalents. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

Long-term Debt of CSEs

 The Company has elected the FVO for the long-term debt of CSEs, which are carried at estimated fair value. See “— Valuation Techniques and Inputs by Level Within the Three-Level Fair Value Hierarchy by Major Classes of Assets and Liabilities” below for a discussion of the methods and assumptions used to estimate the fair value of these financial instruments.

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,Equity Securities, Other Securities and Short-term Investments

These securities are comprised of U.S. Treasury securities,exchangetraded common stock, exchange traded registered mutual fund interests included in other securities and short-term money market securities, including U.S. Treasury bills. Valuation of these securities is based on unadjusted quoted prices in active markets that are readily and regularly available. Contractholder-directed unit-linked investments reported within other securities include certain registered mutual fund interests priced using daily net asset value (“NAV”) provided by the fund managers.

Derivative Assets and Derivative Liabilities

These assets and liabilities are comprised of exchange-traded derivatives. Valuation of these assets and liabilities is based on unadjusted quoted prices in active markets that are readily and regularly available.

Separate Account Assets

These assets are comprised of (i) securities that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above; and (ii) certain exchange-traded derivatives, including financial futures. Valuation of these assets is based on unadjusted quoted prices in active markets that are readily and regularly available.

Level 2 Measurements:

Fixed Maturity Securities, Equity Securities, Other Securities and Short-term Investments

 This level includes fixed maturity securities and equity securities priced principally by independent pricing services using observable inputs. Other securities and short-term investments within this level are of a similar nature and class to the Level 2 securities described below.

U.S. corporate and foreign corporate securities.These securities are principally valued using the market and income approaches. Valuation is 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 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 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. This level also includes certain below investment grade privately placed fixed maturity securities priced by independent pricing services that use observable inputs.

Structured securities comprised of RMBS, CMBS and ABS.These securities are principally valued using the market approach. Valuation is 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, but not limited to: collateral type, payment terms of the underlying assets, payment priority within the tranche, structure of the security, deal performance and vintage of loans.

U.S. Treasury and agency securities.These securities are principally valued using the market approach. Valuation is 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 subdivisionsecurities.These securities are principally valued using the market approach. Valuation is 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.

Common and non-redeemable preferred stock. These securities are principally valued using the market approach where market quotes are available but are not considered actively traded. Valuation is based principally on observable inputs including quoted prices in markets that are not considered active.

Mortgage Loans Held by CSEs

These commercial mortgage 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 CSEs to determine the estimated fair value of these commercial loan portfolios. These market prices are determined principally by independent pricing services using observable inputs.

Derivative Assets and Derivative Liabilities

This level includes all types of derivative instruments utilized by the Company with the exception of exchange-traded derivativesincluded within Level 1 and those derivative instruments with unobservable inputs as described in Level 3. These derivatives are principally valued using an income approach.

Interest rate contracts.

Non-option-based—Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve,LIBORbasis curves and repurchase rates.

Option-based— Valuations are based on option pricing models, which utilize significant inputs that may include the swap yield curve, LIBOR basis curves and interest rate volatility.

Foreign currency contracts.

Non-option-based —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.

Credit contracts.

Non-option-based —Valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curve, credit curves and recovery rates.

Equity market contracts.

Non-option-based — 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—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 investments that are similar in nature to the fixed maturity securities, equity securities and short-term investments referred to above. Also included are certain mutual funds without readily determinable fair values given prices are not published publicly. Valuation of the mutual funds is based upon quoted prices or reported NAV provided by the fund managers.

Long-term Debt of CSEs

The estimated fair value of the long-term debt of the Company's CSEs is based on 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.

Level 3 Measurements:

In general, investments classified within Level 3 use many of the same valuation techniques and inputs as described in Level 2 Measurements. 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 a lack of transparency in the process to develop the valuation estimates generally causing these investments to be classified in Level 3.

Fixed MaturitySecurities, Equity Securities and Short-term Investments

This level includes fixed maturity securities and equity securities priced principally by 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. Short-term investments within this level are of a similar nature and class to the Level 3 securities described below; accordingly, the valuation techniques and significant market standard observable inputs used in their valuation are also similar to those described below.

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.

Structured securities comprised of RMBS, CMBS and ABS.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 subdivisionsecurities.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.

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.

Derivative Assets and Derivative Liabilities

These derivatives are principally valued using an income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. These valuation methodologies generally use the same inputs as described in the corresponding sections above for Level 2 measurements of 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.

Interest rate contracts.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve and LIBOR basis curves.

Option-based—Significant unobservable inputs may include the extrapolation beyond observable limits of the swap yield curve, LIBOR basis curves and interest rate volatility.

Foreign currency contracts.

Non-option-based — 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.

Credit contracts.

Non-option-based — 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.

Equity market contracts.

Non-option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves.

Option-based — Significant unobservable inputs may include the extrapolation beyond observable limits of dividend yield curves and equity volatility.

Direct and Assumed Guaranteed Minimum Benefits

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, nonperformance risk and cost of capital for purposes of calculating the risk margin.

Reinsurance Ceded on Certain Guaranteed Minimum Benefits

These embedded derivatives are principally valued using an income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those previously described for Direct and Assumed Guaranteed Minimum Benefits and also include counterparty credit spreads.

Embedded Derivatives Within Funds Withheld Related to Certain Ceded Reinsurance

These embedded 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 assets are comprised of investments that are similar in nature to the fixed maturity securities and equity securities referred to above. Separate account assets within this level also include other limited partnership interests. Otherlimited 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.

Transfers between Levels 1 and 2:

During the three months and six months ended June 30, 2011 and 2010, transfers between Levels 1 and 2 were not significant.

Transfers into or out of Level 3:

Overall, transfers into 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 underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input 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 into and/or out of any level are assumed to occur at the beginning of the period. Significant transfers into and/or out of Level 3 assets and liabilities for the three months and six months ended June 30, 2011 and 2010 are summarized below.

Transfers into Level 3 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) which have resulted in decreased transparency of valuations and an increased use of broker quotations and unobservable inputs to determine estimated fair value.

During both the three months and six months ended June 30, 2011, transfers into Level 3 for fixed maturity securities of $14 million were principally comprised of certain foreign corporate securities.During the three months and six months ended June 30, 2010, transfers into Level 3 for fixed maturity securities of $224 million and $256 million, respectively, were principally comprised of certain CMBSand U.S. and foreign corporate securities.

Transfers out of Level 3 resulted primarily from increased transparency of both new issuances that subsequent to issuance and establishment of trading activity, became priced by independent pricing services and existing issuances that, over time, the Company was able to obtain pricing from, or corroborate pricing received from, independent pricing services with observable inputs or increases in market activity and upgraded credit ratings. With respect to derivatives, transfers out of Level 3 resulted primarily from increased transparency related to the observable portion of the swap yield curve or the observable portion of the equity volatility surface.

During the three months and six months ended June 30, 2011, transfers out of Level 3 for fixed maturity securities of $344 million and $425 million, respectively, were principally comprised of certain ABS, U.S. and foreign corporate securities.During the three months and six months ended June 30, 2010, transfers out of Level 3 for fixed maturity securities of $99 million and $239 million, respectively, and transfers out of Level 3 for separate account assets of less than $1 millionand $4 million, respectively, were principally comprised of certain U.S. and foreign corporate securities, ABS and CMBS.

The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3), including realized and unrealized gains (losses) of all assets and (liabilities) and realized and unrealized gains (losses) of all assets and (liabilities) still held at the end of the respective time periods:

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities
			(In millions)
Three Months Ended June 30, 2011:
Balance, beginning of period			$	1,428	$	782	$	32	$	18	$	152	$	561	$	32	$	2
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		1		0		0		0		0		0		0
		Net investment gains (losses)		4		(19)		0		0		2		(2)		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			12		18		0		0		0		(3)		(7)		0
Purchases (3)				64		293		0		1		18		8		0		0
Sales (3)				(42)		(286)		0		0		(9)		(20)		0		0
Issuances (3)				0		0		0		0		0		0		0		0
Settlements (3)				0		0		0		0		0		0		0		0
Transfers into Level 3 (4)				3		11		0		0		0		0		0		0
Transfers out of Level 3 (4)				(24)		(44)		(32)		0		(8)		(236)		0		0
Balance, end of period			$	1,445	$	756	$	0	$	19	$	155	$	308	$	25	$	2
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	0	$	1	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	(6)	$	0	$	0	$	0	$	(3)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)
			(In millions)
Three Months Ended June 30, 2011:
Balance, beginning of period			$	219	$	31	$	82	$	(75)	$	0	$	11	$	6	$	647	$	130
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		(24)		0		0		0		0		0		0		0		(1)
		Net derivative gains (losses)		0		0		0		1		0		0		(4)		126		0
	Other comprehensive income (loss)			24		1		0		12		0		0		0		0		0
Purchases (3)				0		0		58		0		0		0		0		0		2
Sales (3)				(98)		0		(48)		0		0		0		0		0		0
Issuances (3)				0		0		0		0		0		0		0		0		0
Settlements (3)				0		0		0		0		0		(1)		0		9		0
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		0		0		0		0		0		0		0		(1)
Balance, end of period			$	121	$	32	$	92	$	(62)	$	0	$	10	$	2	$	782	$	130
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(5)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	1	$	0	$	0	$	(4)	$	126	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities
			(In millions)
Three Months Ended June 30, 2010:
Balance, beginning of period			$	1,510	$	953	$	32	$	28	$	48	$	521	$	48	$	7
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		2		(1)		0		0		0		0		0		0
		Net investment gains (losses)		0		5		0		0		1		(1)		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			28		(29)		2		1		7		14		1		0
Purchases, sales, issuances and
	settlements (3)			38		(100)		0		17		(5)		27		(2)		0
Transfers into Level 3 (4)				54		66		0		21		73		10		0		0
Transfers out of Level 3 (4)				(23)		(38)		0		0		(24)		(6)		(8)		0
Balance, end of period			$	1,609	$	856	$	34	$	67	$	100	$	565	$	39	$	7
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	2	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(1)	$	0	$	0	$	0	$	1	$	(1)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)
			(In millions)
Three Months Ended June 30, 2010:
Balance, beginning of period			$	242	$	34	$	1	$	6	$	18	$	7	$	7	$	258	$	146
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		14		4		0		0		0		0		0		0		(3)
		Net derivative gains (losses)		0		0		0		5		(10)		(4)		39		333		0
	Other comprehensive income (loss)			(12)		(6)		0		0		0		7		0		0		0
Purchases, sales, issuances and
	settlements (3)			(55)		12		12		(2)		0		0		0		21		(3)
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		0		0		0		0		0		0		0		0
Balance, end of period			$	189	$	44	$	13	$	9	$	8	$	10	$	46	$	612	$	140
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	6	$	(10)	$	(5)	$	38	$	332	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities
			(In millions)
Six Months Ended June 30, 2011:
Balance, beginning of period			$	1,510	$	880	$	34	$	35	$	130	$	568	$	32	$	14
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		2		1		0		0		0		0		0		0
		Net investment gains (losses)		3		(17)		0		0		0		(8)		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			21		35		0		0		17		8		(7)		0
Purchases (3)				88		296		0		0		18		16		0		0
Sales (3)				(91)		(392)		(1)		0		(10)		(49)		0		(12)
Issuances (3)				0		0		0		0		0		0		0		0
Settlements (3)				0		0		0		0		0		0		0		0
Transfers into Level 3 (4)				3		11		0		0		0		0		0		0
Transfers out of Level 3 (4)				(91)		(58)		(33)		(16)		0		(227)		0		0
Balance, end of period			$	1,445	$	756	$	0	$	19	$	155	$	308	$	25	$	2
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	2	$	1	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	(6)	$	0	$	0	$	0	$	(5)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)
			(In millions)
Six Months Ended June 30, 2011:
Balance, beginning of period			$	214	$	22	$	173	$	(61)	$	0	$	11	$	12	$	677	$	133
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		(24)		1		(1)		0		0		0		0		0		(5)
		Net derivative gains (losses)		0		0		0		2		0		1		(10)		73		0
	Other comprehensive income (loss)			28		5		0		4		0		0		0		0		0
Purchases (3)				0		9		92		0		0		0		0		0		3
Sales (3)				(97)		(5)		(172)		0		0		0		0		0		(1)
Issuances (3)				0		0		0		0		0		(1)		0		0		0
Settlements (3)				0		0		0		0		0		(1)		0		32		0
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		0		0		(7)		0		0		0		0		0
Balance, end of period			$	121	$	32	$	92	$	(62)	$	0	$	10	$	2	$	782	$	130
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2011 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(5)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	2	$	0	$	1	$	(10)	$	75	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Fixed Maturity Securities:
							U.S.								State and
			U.S.		Foreign		Treasury								Political		Foreign
			Corporate		Corporate		and Agency								Subdivision		Government
			Securities		Securities		Securities		RMBS		CMBS		ABS		Securities		Securities
			(In millions)
Six Months Ended June 30, 2010:
Balance, beginning of period			$	1,605	$	994	$	33	$	25	$	45	$	537	$	32	$	16
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		4		(1)		0		0		0		0		0		0
		Net investment gains (losses)		1		(1)		0		0		0		0		0		0
		Net derivative gains (losses)		0		0		0		0		0		0		0		0
	Other comprehensive income (loss)			67		15		3		3		10		25		7		0
Purchases, sales, issuances and
	settlements (3)			(62)		(158)		(2)		17		0		45		0		0
Transfers into Level 3 (4)				76		77		0		22		72		9		0		0
Transfers out of Level 3 (4)				(82)		(70)		0		0		(27)		(51)		0		(9)
Balance, end of period			$	1,609	$	856	$	34	$	67	$	100	$	565	$	39	$	7
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	3	$	(1)	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	(4)	$	0	$	0	$	0	$	0	$	(1)	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0

			Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
			Equity Securities:						Net Derivatives: (5)
			Non-
			redeemable						Interest		Foreign				Equity		Net		Separate
			Preferred		Common		Short-term		Rate		Currency		Credit		Market		Embedded		Account
			Stock		Stock		Investments		Contracts		Contracts		Contracts		Contracts		Derivatives (6)		Assets (7)
			(In millions)
Six Months Ended June 30, 2010:
Balance, beginning of period			$	258	$	11	$	8	$	2	$	23	$	4	$	18	$	445	$	153
Total realized/unrealized gains
	(losses) included in:
	Earnings: (1), (2)
		Net investment income		0		0		0		0		0		0		0		0		0
		Net investment gains (losses)		14		4		0		0		0		0		0		0		(3)
		Net derivative gains (losses)		0		0		0		9		(15)		(4)		28		123		0
	Other comprehensive income (loss)			(6)		1		0		0		0		9		0		0		0
Purchases, sales, issuances and
	settlements (3)			(77)		30		5		(2)		0		1		0		44		(6)
Transfers into Level 3 (4)				0		0		0		0		0		0		0		0		0
Transfers out of Level 3 (4)				0		(2)		0		0		0		0		0		0		(4)
Balance, end of period			$	189	$	44	$	13	$	9	$	8	$	10	$	46	$	612	$	140
Changes in unrealized gains (losses)
	relating to assets and liabilities still held
	at June 30, 2010 included in earnings:
		Net investment income	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net investment gains (losses)	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
		Net derivative gains (losses)	$	0	$	0	$	0	$	9	$	(15)	$	(4)	$	28	$	123	$	0

___________

• Amortization of premium/discount is included within net investment income. Impairments charged to earnings on securities are included within net investment gains (losses). Lapses associated with embedded derivatives are included within net derivative gains (losses).
• Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward.
• The amount reported within purchases, sales, issuances and settlements is the purchase or issuance price and the sales or settlement proceeds based upon the actual date purchased or issued and sold or settled, respectively. Items purchased/issued and sold/settled in the same period are excluded from the rollforward. For the three months and six months ended June 30, 2011, fees attributed to net embedded derivatives are included within settlements. For the three months and six months ended June 30, 2010, fees attributed to net embedded derivatives are included within purchases, sales, issuances and settlements.
• Total gains and losses (in earnings and other comprehensive income (loss)) are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and out of Level 3 in the same period are excluded from the rollforward.
• Freestanding derivative assets and liabilities are presented net for purposes of the rollforward.
• Embedded derivative assets and liabilities are presented net for purposes of the rollforward.
• Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income. For the purpose of this disclosure, these changes are presented within net investment gains (losses).

FVO — Consolidated Securitization Entities

The Company has elected the FVO for the following assets and liabilities held by CSEs: commercial mortgage loans and long-term debt. The following table presents these commercial mortgage loans carried under the FVO at:

		June 30, 2011		December 31, 2010
		(In millions)
Unpaid principal balance		$	6,468	$	6,636
Excess of estimated fair value over unpaid principal balance			229		204
	Carrying value at estimated fair value	$	6,697	$	6,840

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

		June 30, 2011		December 31, 2010
		(In millions)
Contractual principal balance		$	6,373	$	6,541
Excess of estimated fair value over contractual principal balance			244		232
	Carrying value at estimated fair value	$	6,617	$	6,773

Interest income on commercial mortgage loans held by CSEs is recorded in net investment income. Interest expense on long-term debt of CSEs 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.

Non-Recurring Fair Value Measurements

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

	Three Months Ended June 30,
	2011						2010
			Estimated		Net				Estimated		Net
	Carrying		Fair		Investment		Carrying		Fair		Investment
	Value Prior to		Value After		Gains		Value Prior to		Value After		Gains
	Measurement		Measurement		(Losses)		Measurement		Measurement		(Losses)
	(In millions)
Mortgage loans, net (1)	$	0	$	8	$	8	$	23	$	23	$	0
Other limited partnership interests (2)	$	3	$	2	$	(1)	$	24	$	17	$	(7)
Real estate joint ventures (3)	$	0	$	0	$	0	$	7	$	3	$	(4)

	Six Months Ended June 30,
	2011						2010
			Estimated		Net				Estimated		Net
	Carrying		Fair		Investment		Carrying		Fair		Investment
	Value Prior to		Value After		Gains		Value Prior to		Value After		Gains
	Measurement		Measurement		(Losses)		Measurement		Measurement		(Losses)
		(In millions)
Mortgage loans, net (1)	$	0	$	8	$	8	$	31	$	23	$	(8)
Other limited partnership interests (2)	$	3	$	2	$	(1)	$	24	$	17	$	(7)
Real estate joint ventures (3)	$	0	$	0	$	0	$	25	$	5	$	(20)

____________

• Mortgage loans — The impaired mortgage loans presented above were written down to their estimated fair values at the date the impairments were recognized and are reported as losses above. Subsequent improvements in estimated fair value on previously impaired loans recorded through a reduction in the previously established valuation allowance are reported as gains above. 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 futurecash flows. Impairments to estimated fair value and decreases in previous impairments from subsequent improvements in 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.
• Other limited partnership interests — The impaired investments presented above were accounted for using the cost method. Impairments on these cost method 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 using certain investment strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and 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 and $19 million at June 30, 2011 and 2010, respectively.
• Real estate joint ventures — The impaired investments presented above were accounted for using the cost method. Impairments on these cost method 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. There were no unfunded commitments for these investments at June 30, 2011.Unfunded commitments for these investments were $8 million at June 30, 2010.

Fair Value of Financial Instruments

Amounts related to the Company's financial instruments that were not measured at fair value on a recurring basis were as follows:

		June 30, 2011						December 31, 2010
						Estimated						Estimated
		Notional		Carrying		Fair		Notional		Carrying		Fair
		Amount		Value		Value		Amount		Value		Value
		(In millions)
Assets:
Mortgage loans, net (1)				$	5,948	$	6,188			$	5,890	$	6,022
Policy loans				$	1,190	$	1,260			$	1,190	$	1,260
Real estate joint ventures (2)				$	87	$	120			$	79	$	102
Other limited partnership interests (2)				$	103	$	129			$	104	$	116
Short-term investments (3)				$	82	$	82			$	88	$	88
Cash and cash equivalents				$	1,220	$	1,220			$	1,928	$	1,928
Accrued investment income				$	534	$	534			$	559	$	559
Premiums, reinsurance and other receivables (2)				$	5,997	$	6,332			$	5,959	$	6,164
Liabilities:
Policyholder account balances (2)				$	24,273	$	25,952			$	24,622	$	26,061
Payables for collateral under securities loaned and
	other transactions			$	8,201	$	8,201			$	8,103	$	8,103
Long-term debt (4)				$	793	$	965			$	795	$	930
Other liabilities (2)				$	336	$	336			$	294	$	294
Separate account liabilities (2)				$	1,407	$	1,407			$	1,407	$	1,407
Commitments: (5)
Mortgage loan commitments		$	255	$	0	$	(2)	$	270	$	0	$	(2)
Commitments to fund bank credit facilities and
	private corporate bond investments	$	234	$	0	$	(10)	$	315	$	0	$	(12)

____________

• Mortgage loans as presented in the table above differs from the amounts presented in the consolidated balance sheets because this table does not include commercial mortgage loans held by CSEs, which are accounted for under the FVO.
• 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.
• Short-term investments as presented in the table above differ from the amounts presented in the consolidated balance sheets because this table does not include short-term investments that meet the definition of a security, which are measured at estimated fair value on a recurring basis.
• Long-term debt as presented in the table above differs from the amounts presented in the consolidated balance sheets because this table does not include long-term debt of CSEs, which are accounted for under the FVO.

• 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:

The assets and liabilities measured at estimated fair value on a recurring basis include: fixed maturity securities, equity securities, other securities, certain short-term investments, mortgage loans held by CSEs, derivative assets and liabilities, net embedded derivatives within asset and liability host contracts, separate account assets and long-term debt of CSEs. These assets and liabilities are described in the section “— Recurring Fair Value Measurements” and, therefore, are excluded from the table above. The estimated fair value for these financial instruments approximates carrying value.

Mortgage Loans

The Company originates mortgage loans principally for investment purposes. These loans are principally carried at amortized cost. The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk.

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 PartnershipInterests

Real estate joint ventures and other limited partnership interests included in the preceding table 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 carried at cost less accumulated depreciation, 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 real estate joint ventures and other limited partnership interests accounted for under the cost method are generally based on the Company's share of the 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.

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.

Premiums, Reinsurance and Other Receivables

Premiums, reinsurance and other receivables in the preceding tableare principally comprised of certain amounts recoverable under reinsurance contracts, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivative positions and amounts receivable for securities sold but not yet settled.

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.The estimated fair value is determined as the present value of expected future cash flows under the related contracts, which were 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.

Policyholder Account Balances

Policyholder account balances in the table 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 table above as they are separately presented in “— Recurring Fair Value Measurements.” 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 to reflect the nonperformance risk in the liability.

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 nonperformance risk are necessary.

Long-term Debt

The estimated fair value of long-term debt is generally determined by discounting expected future cash flows using market rates currently available for debt with similar 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. Risk-adjusted discount rates applied to the expected future cash flows can vary significantly based upon the specific terms of each individual arrangement, including, but not limited to: contractual interest rates in relation to current market rates; the structuring of the arrangement; and the nature and observability of the applicable valuation inputs. Use of different risk-adjusted discount rates could result in different estimated fair values.

Other Liabilities

Other liabilities 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 treaties accounted for as deposit type treaties. 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 carrying values.

Separate Account Liabilities

Separate account liabilities included in the preceding table represents those balances due to policyholders under contracts that are classified as investment contracts. The remaining amounts presented in the consolidated balance sheets represent those contracts classified as insurance contracts, which do not satisfy the definition of financial instruments.

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 are recognized in the consolidated balance sheets at an equivalent value of the related separate account assets. Separate account assets, which equal net deposits, net investment income and realized and unrealized investment 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 in the section “— Recurring Fair Value Measurements,” the Company believes the value of those assets approximates the estimated fair value of the related separate account liabilities.

Mortgage Loan Commitments and Commitments to Fund Bank Credit Facilitiesand Private Corporate Bond Investments

The estimated fair values for mortgage loan commitments that will be held for investment and commitments to fund bank credit facilities and private corporate bonds that will be held for investment reflected in the above table represents 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 commitments.

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Contingencies, Commitments and Guarantees

6 Months Ended

Jun. 30, 2011

Contingencies, Commitments And Guarantees [Abstract]

Contingencies, Commitments and Guarantees

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 U.S. 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, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value.

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 difficult to ascertain.Uncertainties can include how fact finders will evaluatedocumentary evidence and the credibility and effectiveness of witness 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.

The Company establishes liabilities forlitigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for some of the matters below. 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 June 30, 2011.

Matters as to Which an Estimate Can Be Made

For some of the matters discussed below, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of June 30, 2011, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters is not material for the Company.

Matters as to Which an Estimate Cannot Be Made

For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews.

Sales Practices Claims

Over the past several years, the Company has facedclaims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds or other products. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys' fees. The Company continues to vigorously defend against the claims in all pending matters. The Company believes adequate provision has been made in its financial statements for all probable and reasonably estimable losses for sales practices matters.

Connecticut General Life Insurance Company and MetLife Insurance Company of Connecticut are engaged in an arbitration proceeding to determine whether MetLife Insurance Company of Connecticut is owed money from Connecticut General Life Insurance Company or is required to refund several million dollars it collected and/or should stop submitting certain claims under reinsurance contracts in which Connecticut General Life Insurance Company reinsured death benefits payable under certain MetLife Insurance Company of Connecticut annuities.

A former Tower Square 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 have conducted inquiries. Tower Square has made remediation to all the affected customers. The Illinois Securities Division has issued a Statement of Violations to Tower Square, and Tower Square is conducting discussions with the Illinois Securities Division.

Unclaimed Property Inquiries

More than 30 U.S. jurisdictions are auditing MetLife Insurance Company of Connecticut and certain of its affiliates for compliance with unclaimed property laws. Additionally, MetLife Insurance Company of Connecticut and certain of its affiliates have received subpoenas and other regulatory inquiries from certain regulators and other officials relating to claims-payment practices and compliance with unclaimed property laws. On July 5, 2011, the New York Insurance Department issued a letter requiring life insurers doing business in New York to use data available on the U.S. Social Security Administration's Death Master File or a similar database to identify instances where death benefits under life insurance policies, annuities, and retained asset accounts are payable, to locate and pay beneficiaries under such contracts, and to report the results of the use of the data. It is possible that other jurisdictions may pursue similar investigations or inquiries, or issue directives similar to the New York Insurance Department's letter. It is possible that the audits and related activity may result in additional payments to beneficiaries, additional escheatment of funds deemed abandoned under state laws, administrative penalties, and changes to the Company's procedures for the identification and escheatment of abandoned property. The Company is not currently able to estimate the reasonably possible amount of any such additional payments or the reasonably possible cost of any such changes in procedures, but it is possible that such costs may be substantial.

Summary

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. 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 $1.2 billionat bothJune 30,2011 and December 31, 2010. 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 $255million and $270 million at June 30, 2011 and December 31, 2010, respectively.

Commitments to Fund Bank Credit Facilities and Private CorporateBond Investments

The Company commits to lend funds under bank credit facilities and private corporate bond investments. The amounts of these unfunded commitments were $234 million and $315million at June 30, 2011 and December 31, 2010, respectively.

Other Commitments

The Company has entered into collateral arrangements with affiliates, which require the transfer of collateral in connection with secured demand notes. At June 30, 2011 and December 31, 2010, the Company had agreed to fund up to $90 million and $114 million, respectively, of cash upon the request by these affiliates and had transferred collateral consisting of various securities with a fair market value of $105million and $144 million, respectively, to custody accounts to secure the notes. Each of these affiliates is permitted by contract to sell or repledge this collateral.

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 $297 million at bothJune 30, 2011 and December 31, 2010. The Company does not hold any collateral related to this guarantee, but has a recorded liability of $1 million that was based on the total account value of the guaranteed policies plus the amounts retained per policy at both June 30, 2011 and December 31, 2010. The remainder of the risk was ceded to external reinsurers.

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Consolidated Statements of Equity (Unaudited) (USD $) In Millions	Total	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Net Unrealized Investment Gain (Loss) [Member]	Accumulated Other Comprehensive Income (Loss) Other-Than-Temporary Impairments [Member]	Accumulated Other Comprehensive Income (Loss) Foreign Currency Translation Adjustments [Member]
Beginning Balance at Dec. 31, 2008		$ 86
Cumulative effect of change in accounting principle, net of income tax	0	0	0	(34)	23	11	0
Ending Balance at Dec. 31, 2009 (Scenario, Previously Reported [Member])	6,561	86	6,719	541	(593)	(83)	(109)
Ending Balance at Dec. 31, 2009	6,561	86	6,719	507	(570)	(72)	(109)
Comprehensive income (loss):
Net income	374			374
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax	16				16
Unrealized investment gains (losses), net of related offsets and income tax	1,050				1,041	9
Foreign currency translation adjustments, net of income tax	(52)						(52)
Other comprehensive income (loss)	1,014
Comprehensive income (loss)	1,388
Ending Balance at Jun. 30, 2010	7,949	86	6,719	881	487	(63)	(161)
Beginning Balance at Dec. 31, 2010	7,951	86	6,719	934	388	(51)	(125)
Return of capital (Note 6)	(52)		(52)
Comprehensive income (loss):
Net income	376			376
Other comprehensive income (loss):
Unrealized gains (losses) on derivative instruments, net of income tax	6				6
Unrealized investment gains (losses), net of related offsets and income tax	268				275	(7)
Foreign currency translation adjustments, net of income tax	20						20
Other comprehensive income (loss)	294
Comprehensive income (loss)	670
Ending Balance at Jun. 30, 2011	$ 8,569	$ 86	$ 6,667	$ 1,310	$ 669	$ (58)	$ (105)

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Business, Basis of Presentation and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2011

Business, Basis of Presentation and Summary of Significant Accounting Policies [Abstract]

Business, Basis of Presentation and Summary of Significant Accounting Policies

1.Business,BasisofPresentationandSummaryofSignificantAccountingPolicies

Business

“MICC”orthe“Company”referstoMetLife Insurance Company of Connecticut,aConnecticutcorporationincorporatedin1863,anditssubsidiaries,includingMetLife Investors USA Insurance Company (“MLI-USA”).MetLife Insurance Company of Connecticutisasubsidiary of MetLife, Inc. (“MetLife”).The Company offers individual annuities, individuallifeinsurance,and institutional protection and asset accumulation products.

BasisofPresentation

ThepreparationoffinancialstatementsinconformitywithaccountingprinciplesgenerallyacceptedintheUnitedStatesofAmerica(“GAAP”)requiresmanagementtoadoptaccountingpoliciesandmakeestimatesandassumptionsthataffectamountsreportedintheinterimcondensedconsolidatedfinancialstatements.

InapplyingtheCompany'saccountingpolicies,managementmakessubjectiveandcomplexjudgmentsthatfrequentlyrequireestimatesaboutmattersthatareinherentlyuncertain.Manyofthesepolicies,estimatesandrelatedjudgmentsarecommonintheinsuranceandfinancialservicesindustries;othersarespecifictotheCompany'sbusinessesandoperations.Actualresultscoulddifferfromtheseestimates.

TheaccompanyinginterimcondensedconsolidatedfinancialstatementsincludetheaccountsofMetLife Insurance Company of Connecticutanditssubsidiaries,aswellaspartnershipsandjointventuresinwhichtheCompanyhascontrol, andvariableinterestentities(“VIEs”)forwhichtheCompanyistheprimarybeneficiary.Intercompanyaccountsandtransactionshavebeeneliminated.

TheCompanyusestheequitymethodofaccountingforinvestmentsinequitysecuritiesinwhichithasasignificantinfluenceormorethana20%interestandforrealestatejointventuresandotherlimitedpartnershipinterestsinwhichithasmorethanaminorequityinterestormorethanaminorinfluenceoverthejointventure'sorpartnership'soperations,butdoesnothaveacontrollinginterestandisnottheprimarybeneficiary.TheCompanyusesthecostmethodofaccountingforinvestmentsinrealestatejointventuresandotherlimitedpartnershipinterestsinwhichithasaminorequityinvestmentandvirtuallynoinfluenceoverthejointventure'sorthepartnership'soperations.

Certainamountsintheprioryearperiods'interimcondensedconsolidatedfinancialstatementshavebeenreclassifiedtoconformwiththe2011presentation.Suchreclassificationsinclude:

•       Reclassification from other net investment gains (losses) of $563million and $255 million to net derivative gains (losses) in the interim condensed consolidated statements of operations for the three months and six months ended June 30, 2010, respectively;

•       Reclassifications related to operating revenues and expenses that affected results of operations on a segment and consolidated basis. See Note 8.

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 June 30, 2011, its consolidated results of operations for the three months and six months ended June 30, 2011 and 2010, its consolidated statements of stockholders' equity for the six months ended June 30, 2011 and 2010, and its consolidated statements of cash flows for the six months ended June 30, 2011 and 2010, in conformity with GAAP. Interim results are not necessarily indicative of full year performance. The December 31, 2010 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, 2010 (the “2010 Annual Report”), filed with the U.S. Securities and Exchange Commission, which include all disclosures required by GAAP. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the consolidated financial statements of the Company included in the 2010 Annual Report.

AdoptionofNewAccountingPronouncements

Effective January 1, 2011, the Company adopted new guidance that addresses when a business combination should be assumed to have occurred for the purpose of providing pro forma disclosure. Under the new guidance, if an entity presents comparative financial statements, the entity should disclose revenue and earnings of the combined entity as though the business combination that occurred during the current year had occurred as of the beginning of the comparable prior annual reporting period. The guidance also expands the supplemental pro forma disclosures to include additional narratives. The adoption did not have an impact on the Company's consolidated financial statements.

Effective January 1, 2011, the Company adopted new guidance regarding goodwill impairment testing. This guidance modifies Step 1 of the goodwill impairment test for reporting units with zero or negative carrying amounts. For those reporting units, an entity would be required to perform Step 2 of the test if qualitative factors indicate that it is more likely than not that goodwill impairment exists. The adoption did not have an impact on the Company's consolidated financial statements.

Effective January 1, 2011, the Company adopted new guidance regarding accounting for investment funds determined to be VIEs. 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 separate accounts for the benefit of policyholders in the insurer's evaluation of its economics in a VIE, unless the separate account contractholder is a related party. The adoption did not have a material impact on the Company's consolidated financial statements.

Future Adoption of New Accounting Pronouncements

In June 2011, the Financial Accounting Standards Board (“FASB”) issued new guidance regarding comprehensive income (Accounting Standards Update (“ASU”) 2011-05, Comprehensive Income (Topic 220):Presentation of Comprehensive Income), effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. The guidance should be applied retrospectively and early adoption is permitted. The new guidance provides companies with the option to present the total of comprehensive income, components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The objective of the standard is to increase the prominence of items reported in other comprehensive income and to facilitate convergence of GAAP and International Financial Reporting Standards (“IFRS”). The standard eliminates the option to present components of other comprehensive income as part of the statement of changes in stockholders' equity. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In May 2011, theFASBissued new guidance regarding fair value measurement (ASU 2011- 04, Fair Value Measurement (Topic 820):Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs), effective for the first interim or annual period beginning after December 15, 2011. The guidance should be applied prospectively. The amendments in this ASU are intended to establish common requirements for measuring fair value and for disclosing information about fair value measurements in accordance with GAAP and IFRS. Some of the amendments clarify the FASB's intent on the application of existing fair value measurement requirements. Other amendments change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements.The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In April 2011, the FASB issued new guidance regarding effective control in repurchase agreements (ASU 2011-03, Transfers and Servicing (Topic 860): Reconsideration ofEffective Control for Repurchase Agreements), effective for the first interim or annual period beginning on or after December 15, 2011. The guidance should be applied prospectively to transactions or modifications of existing transactions that occur on or after the effective date. The amendments in this ASU remove from the assessment of effective control the criterion requiring the transferor to have the ability to repurchase or redeem the financial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements.

In April 2011, the FASB issued new guidance regarding accounting for troubled debt restructuring (ASU 2011-02, Receivables (Topic 310): A Creditor's Determinationof Whether a Restructuring Is a Troubled Debt Restructuring), effective for the first interim or annual period beginning on or after June 15, 2011 and which should be applied retrospectively to the beginning of the annual period of adoption. This guidance clarifies whether a creditor has granted a concession and whether a debtor is experiencing financial difficulties for the purpose of determining when a restructuring constitutes a troubled debt restructuring. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements and related disclosures.

In October 2010, the FASB issued new guidance regarding accounting for deferred acquisition costs (ASU 2010-26, Financial Services— Insurance (Topic 944):Accounting for Costs Associated with Acquiringor Renewing Insurance Contracts) effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011. The guidance should be applied prospectively upon adoption. Retrospective application to all prior periods presented upon the date of adoption also is permitted, but not required. This guidance clarifies the costs that should be deferred by insurance entities when issuing and renewing insurance contracts. The guidance also specifies that only costs related directly to successful acquisition of new or renewal contracts can be capitalized. All other acquisition-related costs should be expensed as incurred. The Company is currently evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

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Consolidated Balance Sheets (Unaudited) (USD $) In Millions	Jun. 30, 2011	Dec. 31, 2010
Investments:
Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $45,548 and $44,132, respectively)	$ 46,837	$ 44,924
Equity securities available-for-sale, at estimated fair value (cost: $293 and $427, respectively)	308	405
Other securities, at estimated fair value	3,089	2,247
Mortgage loans (net of valuation allowances of $70 and $87, respectively; includes $6,697 and $6,840, respectively, at estimated fair value, relating to variable interest entities)	12,645	12,730
Policy loans	1,190	1,190
Real estate and real estate joint ventures	519	501
Other limited partnership interests	1,610	1,538
Short-term investments, principally at estimated fair value	2,203	1,235
Other invested assets, principally at estimated fair value	1,673	1,716
Total investments	70,074	66,486
Cash and cash equivalents, principally at estimated fair value	1,220	1,928
Accrued investment income (includes $32 and $31, respectively, relating to variable interest entities)	534	559
Premiums, reinsurance and other receivables	17,006	17,008
Deferred policy acquisition costs and value of business acquired	5,264	5,099
Current income tax recoverable	113	38
Deferred income tax assets	(10)	356
Goodwill	953	953
Other assets	851	839
Separate account assets	69,467	61,619
Total assets	165,482	154,885
Liabilities
Future policy benefits	24,056	23,198
Policyholder account balances	40,659	39,291
Other policy-related balances	2,753	2,652
Payables for collateral under securities loaned and other transactions	8,201	8,103
Long-term debt (includes $6,617 and $6,773, respectively, at estimated fair value relating to variable interest entities)	7,410	7,568
Deferred income tax liability	10	(356)
Other liabilities (includes $31 and $31, respectively, relating to variable interest entities)	4,357	4,503
Separate account liabilities	69,467	61,619
Total liabilities	156,913	146,934
Stockholders' Equity
Common stock, par value $2.50 per share; 40,000,000 shares authorized; 34,595,317 shares issued and outstanding at June 30, 2011 and December 31, 2010	86	86
Additional paid-in capital	6,667	6,719
Retained earnings	1,310	934
Accumulated other comprehensive income (loss)	506	212
Total stockholders' equity	8,569	7,951
Total liabilities and stockholders' equity	$ 165,482	$ 154,885