-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, FY+Jh3whQX13QdtPOUKunu5lQKFV9vTcrZhuHT3TUHA7Gd+f4wOj+SKiPVAz/drt 6Ey0Kb+4L7uYmk4tNZWbLQ== 0001193125-06-249609.txt : 20110301 0001193125-06-249609.hdr.sgml : 20110301 20061208154703 ACCESSION NUMBER: 0001193125-06-249609 CONFORMED SUBMISSION TYPE: N-6/A PUBLIC DOCUMENT COUNT: 11 FILED AS OF DATE: 20061208 DATE AS OF CHANGE: 20061215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL CENTRAL INDEX KEY: 0000858997 IRS NUMBER: 135581829 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-6/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-131664 FILM NUMBER: 061265701 BUSINESS ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2125788717 MAIL ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: METROPOLITAN LIFE SEPARATE ACCOUNT UL DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL CENTRAL INDEX KEY: 0000858997 IRS NUMBER: 135581829 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-6/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-06025 FILM NUMBER: 061265702 BUSINESS ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 2125788717 MAIL ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: METROPOLITAN LIFE SEPARATE ACCOUNT UL DATE OF NAME CHANGE: 19920703 0000858997 S000004219 Metropolitan Life Separate Account UL C000031440 MetLife Advantage Equity Options N-6/A 1 dn6a.txt METLIFE ADVANTAGE EQUITY OPTIONS PRE-EFFECTIVE AMENDMENT NO. 1 As filed with the Securities and Exchange Commission on December 8, 2006 Registration No. 333-131664 811-06025 - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-6 Registration Statement Under the Securities Act of 1933 [ ] Pre-Effective Amendment No. 1 [X] Post-Effective Amendment No. [ ] Registration Statement Under the Investment Company Act of 1940 Amendment No. 26 [X] Metropolitan Life Separate Account UL (Exact Name of Registrant) Metropolitan Life Insurance Company (Name of Depositor) 200 Park Avenue New York, NY 10166 (Address of depositor's principal executive offices) ----------------- James L. Lipscomb, Esq. Executive Vice President and General Counsel Metropolitan Life Insurance Company One MetLife Plaza 27-01 Queens Plaza North New York, NY 11101 (Name and address of agent for service) Copy to: Stephen E. Roth, Esquire Mary E. Thornton, Esquire Sutherland Asbill & Brennan LLP 1275 Pennsylvania Avenue, N.W. Washington, D.C. 20004-2415 Title of Securities Being Registered: Interests in Metropolitan Life Separate Account UL under Variable Additional Insurance Options. As soon as practicable after the effective date of this Registration Statement (Approximate date of proposed public offering) The Registrant hereby amends this Registration Statement under the Securities Act of 1933 on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. PROSPECTUS FOR THE ADVANTAGE EQUITY OPTIONS ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY ("METLIFE") DECEMBER 13, 2006 MetLife issues the Advantage Equity Options as optional benefits to a fixed benefit life insurance policy (the "base policy"). We also offer other optional benefits as additions to the base policy. For ease of reference, we refer to the base policy and all of the optional benefits that are added to the base policy as the "Policy." The Advantage Equity Options allow you to purchase additional insurance coverage through which you can experience the potential growth of the equity markets while maintaining your base policy. There are two different Advantage Equity Options: .. ADVANTAGE EQUITY ADDITIONS (also known as Variable Additional Insurance) .. ADVANTAGE EQUITY ENRICHER (also known as Variable Additional Benefits) You may elect to include either or both as optional benefits to your base policy. You purchase Advantage Equity Additions using the dividends paid on the underlying fixed benefit policy. You purchase Advantage Equity Enricher by making premium payments. You cannot make premium payments to Advantage Equity Additions. This prospectus provides you with important information about the Advantage Equity Options. However, we will also issue you a Policy, which is a separate document from the prospectus. The prospectus describes the Policy's important provisions. Amounts you allocate to the Advantage Equity Options can be invested in the available investment divisions of Metropolitan Life Separate Account UL ("Separate Account") and in a fixed interest account ("Fixed Account"). Each available investment division (sometimes referred to in this prospectus as "variable investment option") invests in a corresponding "Portfolio" of the Metropolitan Series Fund, Inc.: Lehman Brothers(R) Aggregate Bond Index Portfolio MetLife Mid Cap Stock Index Portfolio MetLife Stock Index Portfolio Morgan Stanley EAFE(R) Index Portfolio Russell 2000(R) Index Portfolio A separate prospectus for the Metropolitan Series Fund, Inc. ("Fund") is attached to this prospectus. It describes in greater detail an investment in the Portfolios listed above. Before purchasing an Advantage Equity Option, read the information in this prospectus and in the prospectus for the Fund. Keep these prospectuses for future reference. Neither the Securities and Exchange Commission ("SEC") nor any state securities authority has approved or disapproved of these securities, nor have they determined if this prospectus is accurate or complete. Any representation to the contrary is a criminal offense. Interests in the Separate Account and the Portfolios are not deposits or obligations of, or insured or guaranteed by, the U.S. Government, any bank or other depository institution including the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any other agency or entity or person. We do not authorize any representations about this offering other than as contained in this prospectus or its supplements or in our authorized supplemental sales material. We do not guarantee how any of the Portfolios will perform. TABLE OF CONTENTS
PAGE IN THIS SUBJECT PROSPECTUS - ------- ---------- Summary of Benefits and Risks............................................... 3 Benefits of the Advantage Equity Options................................. 3 Risks of the Advantage Equity Options.................................... 4 Risks of Investment in the Portfolios.................................... 5 Fee Tables.................................................................. 6 Transaction Fees......................................................... 6 Periodic Charges Other Than Portfolio Operating Expenses................. 6 Annual Portfolio Operating Expenses...................................... 7 MetLife..................................................................... 8 Our Separate Account That Supports the Advantage Equity Options............. 8 The Separate Account..................................................... 8 The Investment Divisions................................................. 9 Substitution of Investments.............................................. 9 The Fund and its Portfolios................................................. 9 Certain Payments We Receive with Regard to the Portfolios................ 9 Selection of Portfolios.................................................. 10 Management of the Portfolios............................................. 10 The Portfolio Share Class That We Offer.................................. 10 Purchase and Redemption of the Portfolio Shares by Our Separate Account.. 11 Voting Rights That You Will Have......................................... 11 The Fixed Account........................................................... 11 The Base Policy and its Benefit Options..................................... 12 Purchasing the Advantage Equity Options..................................... 13 Allocation of Dividends and Premiums to the Advantage Equity Options........ 14 Allocating Dividends and Paying Premiums................................. 14 Maximum and Minimum Premium Payments..................................... 15 Allocating Payments to the Advantage Equity Options...................... 16 Sending Communications and Payments To Us................................... 16 Contacting Us............................................................ 16 When Your Requests, Instructions and Notifications Become Effective...... 17 Third Party Requests..................................................... 18 Advantage Equity Options Insurance Proceeds Payable If the Insured Dies..... 18 Advantage Equity Options Death Benefits.................................. 19 Alternate Death Benefit That Automatically Applies in Some Cases......... 20 Conditional Guaranteed Minimum Death Benefit............................. 20 Advantage Equity Options Cash Value......................................... 20 Surrenders and Partial Withdrawals From the Advantage Equity Options........ 22 Transferring Cash Value..................................................... 22 Automatic Rebalancing.................................................... 25 Automated Withdrawals.................................................... 25 Transfers by Telephone................................................... 25 Borrowing From Your Policy.................................................. 25 Advantage Equity Options Termination and Reinstatement...................... 27 Termination.............................................................. 27 Reinstatement............................................................ 27 Charges and Deductions You Pay for the Advantage Equity Options............. 28 Deductions From Premiums--Advantage Equity Enricher Only................. 28 Charges Included in the Monthly Deduction................................ 28 Charges and Expenses of the Separate Account and the Portfolios.......... 29 Variations in Charges.................................................... 30 Net Single Premium.......................................................... 30 Federal Tax Matters......................................................... 30 Rights We Reserve........................................................... 34 Other Policy Provisions..................................................... 35 "Free Look" Period to Cancel Your Policy................................. 35 Suicide.................................................................. 35 Assignment and Change of Ownership....................................... 35 Payment and Deferment.................................................... 35 Dividends................................................................ 35 Sales and Administration of the Policies.................................... 36 Distributing the Policies................................................ 36 Commissions and Other Compensation....................................... 36 Additional Cash and Non-Cash Compensation................................ 37 Payments to Selling Firms................................................ 37 Legal Proceedings........................................................... 38 Restrictions on Financial Transactions...................................... 39 Independent Registered Public Accounting Firm............................... 39 Illustration of Advantage Equity Options Benefits........................... 39 Financial Statements........................................................ 39
2 SUMMARY OF BENEFITS AND RISKS This summary describes important benefits and risks of the Advantage Equity Options. The sections of this prospectus following this summary discuss the Policy and the Advantage Equity Options in more detail. BENEFITS OF THE ADVANTAGE EQUITY OPTIONS DEATH BENEFIT. The Advantage Equity Options are designed to provide insurance protection. If the Advantage Equity Options are in force, and upon receipt of satisfactory proof of the death of the insured, we will pay insurance proceeds to the beneficiary of the Policy. Insurance proceeds generally equal the Advantage Equity Options cash value divided by an applicable "net single premium amount" that is specified in your rider. RIGHT TO EXAMINE THE POLICY. During the ten-day period following your receipt of the Policy, you have the right to return the Policy to us. If you exercise this right, we will refund any premiums you paid. INVESTMENT OPTIONS. The dividends allocated to Advantage Equity Additions, and the premiums paid into Advantage Equity Enricher can be allocated among your choice of the available investment divisions and the Fixed Account. The Fixed Account provides guarantees of interest and principal. You may change your allocation of future dividends and premiums at any time. SURRENDER AND PARTIAL WITHDRAWALS. You may surrender (turn in) the Advantage Equity Options for their cash value or take a partial withdrawal of their cash value at any time. We will deem your request for surrender of the base policy also to be a request for surrender of the Advantage Equity Options. Your cash value in an Advantage Equity Option reflects your allocation of dividends or premiums to the Advantage Equity Option, the charges we deduct from the Advantage Equity Option's cash value, any investment experience you have in our Separate Account, any interest you earn in the Fixed Account, as well as your transfer, loan and withdrawal activity. A surrender or partial withdrawal may have tax consequences. TRANSFERS. You may make transfers among the available investment divisions, or between the investment divisions and the Fixed Account, subject to certain limits and restrictions, including restrictions on "market timing" transactions (see "Transferring Cash Value"). AUTOMATIC REBALANCING. You may elect our Rebalancer strategy under which your cash value in the investment divisions and the Fixed Account will be automatically reallocated on a quarterly basis to the percentages you select. LOANS. You may borrow from the Policy, including the Advantage Equity Options. The maximum loan amount you may take is the Policy's loan value. The loan value equals the Policy's cash surrender value at the end of the current Policy year, less anticipated loan interest and required premiums due for the remainder of the current Policy year. We will first secure any loan against the parts of your Policy other than the Advantage Equity Options. If we must secure a loan against the Advantage Equity Options, we will transfer the amount of cash value needed to secure the loan from the investment divisions and/or the Fixed Account to an account called the Loan Collateral Account, where we will hold the transferred cash value for as long as it is needed to secure the loan. We charge you a maximum annual interest rate of 6% on the amount you borrow. However, we credit you with an annual rate of 3 interest of at least 5.5% on amounts held in the Loan Collateral Account. Loans may have tax consequences. TAX ADVANTAGES. If you meet certain requirements, generally you will pay income taxes on the cash value you receive from your Advantage Equity Options (through withdrawals or surrenders) only to the extent that those amounts, together with dividends and distributions under your Policy, exceed the cumulative premiums you have paid on your Policy. The death benefit may be subject to Federal and state estate taxes, but your beneficiary will generally not be subject to income tax on the death benefit. PERSONALIZED ILLUSTRATIONS. You will receive personalized illustrations in connection with the purchase of the Advantage Equity Options that reflect your own particular circumstances. These hypothetical illustrations may help you to understand the long-term effects of different levels of investment performance, the possibility of termination, and the charges and deductions for the Advantage Equity Options. The personalized illustrations are based on hypothetical rates of return and are not a representation or guarantee of investment returns or cash value. RISKS OF THE ADVANTAGE EQUITY OPTIONS INVESTMENT RISK. MetLife does not guarantee the investment performance of the variable investment options and you should consider your risk tolerance before selecting any of these options. You will be subject to the risk that investment performance will be unfavorable and that your Advantage Equity Options cash value will decrease. Your Advantage Equity Options death benefit may also decrease unless the conditional guaranteed minimum death benefit is in effect. In addition, we deduct Advantage Equity Options fees and charges from your Advantage Equity Options cash value, which can significantly reduce your Advantage Equity Options cash value and death benefit. It is possible to lose your full investment in the Advantage Equity Options. The Advantage Equity Options are not suitable as a short-term savings vehicle. If you allocate cash value to the Fixed Account, we credit such cash value with a declared rate of interest. You assume the risk that the rate may decrease, although it will never be lower than the guaranteed minimum annual effective rate of 4%. CERTAIN TAX RISKS. We believe that the Policy should be deemed a life insurance contract under Federal tax law. Assuming that a Policy qualifies as a life insurance contract for Federal income tax purposes, except with respect to the Dividends with Interest option, you should not be deemed to be in receipt of any portion of your Policy's cash value (including any cash value in your Advantage Equity Options) until there is an actual distribution from the Policy (including those attributable to an Advantage Equity Option). Moreover, insurance proceeds payable under the Policy should be excludable from the gross income of the beneficiary. Although the beneficiary generally should not have to pay Federal income tax on the insurance proceeds, other taxes, such as estate taxes, may apply. If you pay more than a certain amount of premiums, you may cause your Policy to become a "modified endowment contract." If it does, you will pay income taxes on loans and other amounts we pay out to you (except for payment of insurance proceeds), to the extent of any gains in your Policy (which is generally the excess of cash value over the premiums paid). In this case, an additional 10% tax penalty may also apply. 4 If the Policy is not a modified endowment contract, distributions generally will be treated first as a return of basis or investment in the contract and then as taxable income. Moreover, loans will generally not be treated as distributions. Finally, neither distributions nor loans from a Policy that is not a modified endowment contract are subject to the 10% penalty tax. As with any tax matter, you should consult with and rely on the advice of your own tax adviser. LOAN RISKS. A policy loan that is secured by the Advantage Equity Options will affect the cash value of your Advantage Equity Options over time even if it is repaid. This is because cash value transferred to the Loan Collateral Account earns a fixed return, which could be less than the current interest rate credited to the Fixed Account, and does not participate in the investment experience of the investment divisions. Any unpaid loan (plus accrued interest) also reduces the Policy's insurance proceeds paid to your beneficiary. In addition, your Policy, including any Advantage Equity Option, may terminate if your outstanding loan and accrued loan interest equals or exceeds the cash value of your Policy. If you surrender your Policy or your Policy lapses while there is an outstanding loan, there will generally be Federal income tax payable on the amount by which loans from your Policy and partial withdrawals from your Policy exceed the premiums paid under your Policy. Since loans and partial withdrawals reduce your Policy's cash value, any remaining cash value may be insufficient to pay the income tax due. ADVANTAGE EQUITY OPTIONS CHARGE AND EXPENSE INCREASE. We have the right to increase certain Advantage Equity Options charges. TAX LAW CHANGES. Tax laws, regulations, and interpretations have often been changed in the past and such changes continue to be proposed. To the extent that you purchase a Policy or an Advantage Equity Option based on expected tax benefits, relative to other financial or investment products or strategies, there is no certainty that such advantages will always continue to exist. RISKS OF INVESTMENT IN THE PORTFOLIOS A comprehensive discussion of the risks associated with investment in the Portfolios can be found in the Fund prospectus attached at the end of this prospectus. There is a possibility that fees and expenses of the Portfolios may increase (or decrease). There is no assurance that any of the Portfolios will achieve its stated investment objective. 5 FEE TABLES The following tables describe the fees and expenses that a Policy owner will pay when buying and owning the Advantage Equity Options. In certain cases, we have the right to increase our charges for new Advantage Equity Options, as well as for Advantage Equity Options already outstanding. The maximum charges in such cases are shown in the far right-hand column of each of the next two tables below. TRANSACTION FEES This table describes the fees and expenses that a Policy owner will pay at the time that he or she buys the Advantage Equity Options or transfers Advantage Equity Options cash value.
WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT ---------------------------------------------------------------------- State Tax Imposed On payment of 2.00% of each Same as Current on Premiums* premium premium paid Amount ---------------------------------------------------------------------- Federal Tax On payment of 1.00% of each Same as Current Imposed on premium premium paid Amount Premiums* ---------------------------------------------------------------------- Transfer Fee On transfer of cash Not currently $25 per transfer value among the charged investment divisions and to or from the Fixed Account ----------------------------------------------------------------------
- -------- *These charges apply to Advantage Equity Enricher only. PERIODIC CHARGES OTHER THAN PORTFOLIO OPERATING EXPENSES This table describes the fees and expenses that a Policy owner will pay periodically during the time that he or she owns the Advantage Equity Options, not including fees and expenses for the Portfolios.
WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT - ----------------------------------------------------------------------------------- Cost of Insurance* Monthly, on the monthly deduction date FOR ADVANTAGE EQUITY ADDITIONS: Lowest and Highest $.03 to $2.40 each $.19 to $2.55 each Charge Among All month per $1000 of month per $1000 of Possible Insureds Advantage Equity Advantage Equity Additions cash value Additions cash value Charge for a female $.07 each month per $.33 each month per insured, age 35, in $1000 of Advantage $1000 of Advantage the preferred nonsmoker Equity Additions Equity Additions underwriting class in cash value cash value the first policy year FOR ADVANTAGE EQUITY ENRICHER: Lowest and Highest $.03 to $2.40 each $.19 to $2.55 each Charge Among All month per $1000 of month per $1000 of Possible Insureds Advantage Equity Advantage Equity Enricher cash value Enricher cash value Charge for a male $.10 each month per $.38 each month per insured, age 40, in $1000 of Advantage $1000 of Advantage the preferred nonsmoker Equity Enricher Equity Enricher underwriting class in cash value cash value the first policy year - -----------------------------------------------------------------------------------
6
WHEN CHARGE IS CURRENT AMOUNT MAXIMUM AMOUNT CHARGE DEDUCTED DEDUCTED WE CAN DEDUCT - ---------------------------------------------------------------------------------- Mortality and Monthly, on the Annual rate of .50% Same As Current Expense Risk monthly deduction of the cash value in Rate Charge date the Separate Account on each monthly anniversary** - ---------------------------------------------------------------------------------- Advantage Equity Monthly, on the Enricher Expense monthly deduction Charge date Lowest and Highest $.03 to $.21 each Same As Current Charge Among All month per $1000 of Rate Possible Insureds Advantage Equity Enricher death benefit Charge for a male $.08 each month per Same As Current insured, age 40, in $1000 of Advantage Rate the preferred Equity Enricher nonsmoker death benefit underwriting class in the first policy year - ---------------------------------------------------------------------------------- Loan Interest Annually (or on loan .50% in years 1-10 Same As Current Spread*** termination if earlier) .25% in years 11-20 Rate (on loan amount) .00% in years 21+
- -------- *The cost of insurance charge varies based on individual characteristics, including the insured's age, risk class and except for unisex policies, sex. The cost of insurance charges shown may not be representative of the charge that a particular Policy owner would pay. You can obtain more information about the cost of insurance or other charges that would apply for a particular insured by contacting your sales representative. **The Mortality and Expense Risk Charge is .25% for riders to base policies that have a face amount of $250,000 or greater. ***We charge interest on policy loans at an annual effective rate of 6% but we credit you with interest on the amount of cash value we hold as collateral for the loan at an effective rate of not less than 5.5% per year. The loan interest spread is the difference between these two rates. ANNUAL PORTFOLIO OPERATING EXPENSES This table describes the fees and expenses that the Portfolios will pay and that therefore a Policy owner will indirectly pay periodically during the time that he or she owns an Advantage Equity Option. The table shows the lowest and highest fees and expenses charged by the Portfolios offered with Advantage Equity Additions and Advantage Equity Enricher for the fiscal year ended December 31, 2005. More detail concerning each Portfolio's fees and expenses is contained in the table that follows this table and in the attached Fund prospectus.
LOWEST HIGHEST - -------------------------------------------------------------------------------------- Gross Total Annual Portfolio Operating Expenses .29% .52% (expenses that are deducted from Portfolio assets, including management fees and other expenses) - --------------------------------------------------------------------------------------
7 This table describes the annual operating expenses for each Portfolio for the year ended December 31, 2005, as a percentage of the Portfolio's average daily net assets for the year.
TOTAL GROSS FEE WAIVERS NET TOTAL MANAGEMENT OTHER ANNUAL AND EXPENSE ANNUAL PORTFOLIO FEES EXPENSES EXPENSES REIMBURSEMENTS EXPENSES* --------------------------------------------------------------------- Lehman Brothers Aggregate Bond Index .25% .06% .31% .00% .31% --------------------------------------------------------------------- MetLife Mid Cap Stock Index .25% .09% .34% .00% .34% --------------------------------------------------------------------- MetLife Stock Index .25% .04% .29% .00% .29% --------------------------------------------------------------------- Morgan Stanley EAFE Index .30% .22% .52% .00% .52% --------------------------------------------------------------------- Russell 2000 Index .25% .11% .36% .00% .36% ---------------------------------------------------------------------
- -------- *Our affiliate, MetLife Advisers, LLC, and the Metropolitan Series Fund, Inc. have entered into an Expense Agreement under which MetLife Advisers, LLC will waive, through April 30, 2007, .01% of the management fee payable by each of the Portfolios. THE FEE AND EXPENSE INFORMATION REGARDING THE PORTFOLIOS WAS PROVIDED BY THOSE PORTFOLIOS. FOR INFORMATION CONCERNING THE COMPENSATION PAID FOR THE SALE OF THE POLICIES AND THE ADVANTAGE EQUITY OPTIONS, SEE "SALES AND ADMINISTRATION OF THE POLICIES." METLIFE MetLife is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. Our main office is located at 200 Park Avenue, New York, New York 10166. We are obligated to pay all benefits under the Policies and the Advantage Equity Options. OUR SEPARATE ACCOUNT THAT SUPPORTS THE ADVANTAGE EQUITY OPTIONS THE SEPARATE ACCOUNT The Separate Account receives premium payments from the Advantage Equity Options and other variable life insurance products that we issue. Income and realized and unrealized capital gains and losses of the Separate Account are credited to the Separate Account without regard to any of our other income or capital gains and losses. Applicable law provides that the portion of the Separate Account assets equal to the reserves and other liabilities of the Separate Account may not be charged with liabilities that arise out of any other business that we conduct. Moreover, the charges that are deducted include only those that have already been earned and not those due at a future date or those contingent upon future events. We can also keep charges that we deducted and other excess amounts in the Separate Account or we can take the excess out of the Separate Account. Excess assets may include, without limitation, amounts representing fees and charges incurred, but not yet deducted from the Separate Account. The market value of assets in the Separate Account will always equal or exceed the market value of assets attributable to Policy owners. The assets in the Separate Account legally belong to us, but they are held solely for the benefit of investors in the Separate Account and no one else, including our other creditors. This means that, except for the excess assets described 8 above, which we would be free to withdraw, the assets of the Separate Account are not available to meet the claims of our general creditors, and must be used for the sole purpose of supporting the cash values of the variable life insurance products whose premiums the Separate Account receives. THE INVESTMENT DIVISIONS [SIDEBAR: EACH AVAILABLE INVESTMENT DIVISION INVESTS IN A CORRESPONDING PORTFOLIO OF THE FUND.] The Separate Account has subdivisions, called "investment divisions." Each investment division corresponds to one of our variable investment options and invests its assets exclusively in shares of a corresponding Portfolio of the Fund. You can designate how you would like your dividends and cash value, in the case of Advantage Equity Additions, or your premiums and cash value, in the case of Advantage Equity Enricher, to be allocated among the available investment divisions. Amounts you allocate to an investment division receive the investment experience of the investment division, and you bear this investment risk. SUBSTITUTION OF INVESTMENTS If investment in the Portfolios or a particular Portfolio is no longer possible, in our judgment becomes inappropriate for the purposes of the Advantage Equity Options, or for any other reason in our sole discretion, we may substitute another Portfolio without your consent. The substituted Portfolio may have different fees and expenses. Substitution may be made with respect to Advantage Equity Additions or Advantage Equity Enricher, or both, and may be made with respect to existing investments or the investment of future premium payments, or both. However, we will not make such substitution without any necessary approval of the Securities and Exchange Commission. Furthermore, we may make available or close investment divisions to allocation of premium payments or cash value, or both, for some or all Policies, at any time in our sole discretion. THE FUND AND ITS PORTFOLIOS The Metropolitan Series Fund, Inc. (the "Fund") is a "series" type of mutual fund, which is registered as an open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"). The Fund is divided into Portfolios, each of which represents a different class of stock in which a corresponding investment division of the Separate Account invests. [SIDEBAR: YOU SHOULD CAREFULLY REVIEW THE INVESTMENT OBJECTIVES, PRACTICES AND RISKS OF EACH AVAILABLE PORTFOLIO, WHICH ARE DESCRIBED IN THE FUND PROSPECTUS ATTACHED TO THIS PROSPECTUS.] You should read the Fund prospectus attached to this prospectus. It contains information about the Fund and the Portfolios, including the investment objectives, strategies, risks and sub-advisers associated with each Portfolio. It also contains information on the different separate accounts that invest in the Fund (which may or may not be related to MetLife) and certain risks that may arise when diverse separate accounts funding diverse types of insurance products all invest in the same Fund. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS We do not receive any compensation from our affiliate MetLife Advisers, LLC ("MetLife Advisers"), the adviser to the Fund, or from the sub-advisers of any of the Portfolios of the Fund (or their affiliates) for administrative or other services relating to the Portfolios. However, we, and certain of our affiliated insurance companies, are joint owners of MetLife Advisers, which is formed as a limited liability company. Our ownership interest entitles us to profit distributions if MetLife Advisers makes a profit with respect to a Portfolio. We may benefit accordingly from assets allocated to the Portfolios to the extent they result in profits to MetLife Advisers. (See "Fee Tables - Annual Portfolio Operating Expenses" for information on the management fees paid to MetLife Advisers and the Statement of Additional Information for the Fund for information on the management fees paid by MetLife Advisers to sub-advisers.) 9 Additionally, an investment adviser or sub-adviser of a Portfolio or its affiliates may provide us with wholesaling services that assist in the distribution of the Advantage Equity Options and may pay us and/or certain affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or sub-adviser (or other affiliates) with increased access to persons involved in the distribution of the Advantage Equity Options. SELECTION OF PORTFOLIOS We select the Portfolios offered through the Advantage Equity Options based on several criteria, including asset class coverage, the strength of the adviser's or sub-adviser's reputation and tenure, brand recognition, performance, and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Portfolio's adviser or sub-adviser is one of our affiliates or whether the Portfolio, its adviser, its sub-adviser(s), or an affiliate will compensate us or our affiliates for providing certain administrative and other services. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premium payments and/or transfers of Advantage Equity Options cash value if we determine that the Portfolio no longer meets one or more of the selection criteria, and/or if the Portfolio has not attracted significant allocations from Advantage Equity Options owners. We do not provide investment advice and do not recommend or endorse any particular Portfolio. MANAGEMENT OF THE PORTFOLIOS MetLife Advisers is the investment adviser responsible for overall management of the Fund. The sub-adviser responsible for day-to-day investment decisions for the Portfolios and the investment objective of each Portfolio are as follows:
PORTFOLIO CLASS A SHARES SUB-ADVISER INVESTMENT OBJECTIVE ----------------------------------------------------------------------------- Lehman Brothers Metropolitan Life Insurance To equal the performance of Aggregate Bond Index Company the Lehman Brothers Aggregate Bond Index ----------------------------------------------------------------------------- MetLife Mid Cap Stock Metropolitan Life Insurance To equal the performance of Index Company the Standard & Poor's Mid Cap 400 Composite Stock Price Index ----------------------------------------------------------------------------- MetLife Stock Index Metropolitan Life Insurance To equal the performance of Company the Standard & Poor's 500 Composite Stock Price Index ----------------------------------------------------------------------------- Morgan Stanley EAFE Metropolitan Life Insurance To equal the performance of Index Company the MSCI EAFE Index ----------------------------------------------------------------------------- Russell 2000 Index Metropolitan Life Insurance To equal the return of the Company Russell 2000 Index -----------------------------------------------------------------------------
A Portfolio may have a name and/or objective that is very similar to that of a publicly available mutual fund. The Portfolios are not publicly available and will not have the same performance as those publicly available mutual funds. Different performance will result from differences in implementation of investment policies, cash flows, fees and size of the Portfolio. THE PORTFOLIO SHARE CLASS THAT WE OFFER The Fund offers various classes of shares, each of which has a different level of expenses. The Fund prospectus may provide information for share classes or Portfolios that are not available through the Advantage Equity Options. When you consult the Fund prospectus, you should be careful to refer only to the information regarding the Portfolio and class of shares that is available through the Advantage Equity Options. Only Class A shares of the Portfolios are available through the Advantage Equity Options. 10 PURCHASE AND REDEMPTION OF THE PORTFOLIO SHARES BY OUR SEPARATE ACCOUNT As of the end of each Valuation Period (see "Sending Communications and Payments to Us--When Your Requests, Instructions and Notifications Become Effective"), we purchase and redeem Portfolio shares for the Separate Account at their net asset value without any sales or redemption charges. These purchases and redemptions reflect the amount of any of the following transactions that take effect at the end of the Valuation Period: .. The allocation of dividends and premiums (less any applicable charges) to the Separate Account. .. Dividends and distributions on Fund shares, which are reinvested as of the dates paid (which reduces the value of each share of the Fund and increases the number of Fund shares outstanding, but has no effect on the cash value in the Separate Account). .. Policy loans and loan repayments allocated to the Separate Account. .. Transfers between the Separate Account and the Fixed Account. .. Withdrawals or surrenders taken from the Separate Account. .. Transfers among the Advantage Equity Options' available investment divisions. [SIDEBAR: YOU CAN GIVE US VOTING INSTRUCTIONS ON SHARES OF THE FUND PORTFOLIO THAT ARE ATTRIBUTABLE TO YOUR ADVANTAGE EQUITY OPTION.] VOTING RIGHTS THAT YOU WILL HAVE The Fund has shareholder meetings from time to time to, for example, elect directors or trustees and approve some changes in investment management arrangements. We will vote the shares of each Portfolio that are attributed to your Advantage Equity Options based on your instructions. Should we determine that the 1940 Act no longer requires us to do this, we may decide to vote Fund shares in our own right, without input from you or any other owners of variable life insurance policies or variable annuity contracts that participate in the Fund. If you are eligible to give us voting instructions, we will send you informational material and a form to send back to us. We are entitled to disregard voting instructions in certain limited circumstances prescribed by the SEC. If we do so, we will give you our reasons in the next semi-annual report to Advantage Equity Option owners. If we do not receive timely voting instructions from you and other insurance and annuity owners that are entitled to give us voting instructions, we will vote those shares in the same proportion as the shares held in the same separate account for which we did receive voting instructions. Also, we will vote Fund shares that are not attributable to insurance or annuity owners (including shares that we hold in our general account) or that are held in separate accounts that are not registered under the 1940 Act in the same proportion as the aggregate of the shares for which we received voting instructions from all insurance and annuity owners. The effect of this proportional voting is that a small number of Policy owners may control the outcome of a vote. THE FIXED ACCOUNT The Fixed Account is part of our general assets that are not in any legally-segregated separate account. Amounts in the Fixed Account are credited with 11 interest at an effective annual rate of at least 4%. We may also credit excess interest on such amounts. Different excess interest rates may apply to different amounts, based upon the base policy face amount, when such amounts were allocated to the Fixed Account, and whether they were dividends, premium payments, or transfers from the investment divisions. Any partial amounts we remove from the Fixed Account (such as any portion of your Advantage Equity Option's monthly deduction that is allocable to the Fixed Account) will be taken from the most recently allocated amounts first. We reserve the right to restrict allocations and transfers to the Fixed Account at any time in our sole discretion. We can delay transfers, withdrawals, surrender and payment of Policy loans from the Fixed Account for up to 6 months. Since the Fixed Account is not registered under the federal securities laws, this prospectus contains only limited information about the Fixed Account. The Policy gives you more information on the operation of the Fixed Account. We have been advised that the Staff of the SEC does not review disclosure relating to the Fixed Account. THE BASE POLICY AND ITS BENEFIT OPTIONS [SIDEBAR: THE POLICY INCLUDES THE BASE POLICY AND ITS BENEFIT OPTIONS.] The base policy and all of its benefit options form the entire Policy. In this prospectus, we refer to each such portion of the Policy as a "part" of the Policy. The base policy provides a fixed amount of life insurance. Benefit options may be added to the base policy. We offer other life insurance policies, including variable life insurance policies, that have different death benefits, policy features, Portfolio selections, and optional programs. However, these other policies also have different charges that would affect your performance and cash values. To obtain more information about these other policies, contact our Designated Office or your sales representative. The Policy offers several benefit options that allow you to accumulate additional cash value and purchase additional death benefits. Some benefit options can only be purchased with dividends that become payable under your Policy, some are purchased through premium payments, and some can be purchased through dividends or premiums. The amount of dividends credited to your Policy changes annually, is not guaranteed, and is based on a variety of factors. These factors may include the base policy face amount, the death benefit and the rate class of the base policy, as well as the amount of our earnings. The available benefit options include: .. ADVANTAGE EQUITY ADDITIONS: a benefit option described in this prospectus where cash value varies based on the investment experience of the available Separate Account investment divisions and interest credited in the Fixed Account. .. FIXED ADDITIONAL INSURANCE: a benefit option that is similar to Advantage Equity Additions, except that it accumulates a guaranteed cash value that is eligible for a dividend. .. DIVIDENDS WITH INTEREST ("DWI"): a benefit option where cash value accumulates with currently taxable interest that we declare periodically. .. ADVANTAGE EQUITY ENRICHER: a benefit option described in this prospectus where cash value varies based on the investment experience of the available 12 Separate Account investment divisions and interest credited in the Fixed Account. .. ADVANTAGE ENRICHER: a paid-up additional insurance benefit option that is similar to Advantage Equity Enricher, except that it accumulates a guaranteed cash value that is eligible for a dividend. .. FLEXIBLE ADDITIONAL INSURANCE RIDER: a benefit option that provides additional fixed benefit insurance and has a term insurance element. Subject to certain limits and conditions, we guarantee the cash value in the base policy as well as all of the benefit options, other than the Advantage Equity Options. We make this guarantee because these parts of the Policy provide fixed benefits. Since these fixed benefits are not registered under the federal securities laws, this prospectus contains only limited information about them. The Policy gives you more information on the operation of these fixed benefits. PURCHASING THE ADVANTAGE EQUITY OPTIONS [SIDEBAR: WE WILL ISSUE AN ADVANTAGE EQUITY OPTION TO YOU AS OWNER. YOU WILL HAVE ALL THE RIGHTS UNDER THE OPTION.] If you want an Advantage Equity Option, you must complete an application. We will issue an Advantage Equity Option to you only if you are also the owner of the base policy. Your completed application must be received by the Designated Office. The Advantage Equity Options are available to base policies meeting the minimum face amount and eligibility requirements that we establish. You may not add the Advantage Equity Additions while any term insurance is in effect under the Flexible Additional Insurance Rider. Once the Flexible Additional Insurance Rider becomes fully funded, or you discontinue the term insurance provided by the Flexible Additional Insurance Rider, you may add the Advantage Equity Additions. We reserve the right to reject an application for any reason permitted by law, and our acceptance of an application is subject to our underwriting rules. The insured will be the same individual as the insured in the base policy. An "insured" is the person upon whose life we issue the Policy. You do not have to be the insured. The beneficiary is named in the application as the person who will receive the insurance proceeds upon the death of the insured. The beneficiary has no rights under the Policy or the Advantage Equity Options until the death of the insured (unless the beneficiary has been designated an irrevocable beneficiary) and must survive the insured in order to receive the insurance proceeds. For the purpose of computing the insured's age under the Policy, we start with the insured's age on the Policy Date, which is set forth in the base policy. The Policy Date is usually the same date as the Issue Date, which is the date the base policy application is approved. We use the Policy Date to calculate base policy years and months. Age under the Policy at any other time is then computed using that issue age and adding the number of full base policy years completed. To elect the Advantage Equity Options, you may generally complete the Advantage Equity Options application EITHER at the same time as the application for the base policy or after the base policy has been issued. However, if you purchase the policy through a broker-dealer that is unaffiliated with MetLife, you can elect the Advantage Equity Options ONLY at the time you apply for the base policy. If you decide to add an Advantage Equity Option after you own the base policy, it may reduce the amount of premiums that you could pay into your Policy before it would become a modified endowment contract. Adverse tax consequences may result if your Policy becomes a modified endowment contract. If you contact us, we will tell you what these premium limits are. 13 We will not require evidence of insurability for the Advantage Equity Additions other than that required in connection with the issuance of the base policy. For Advantage Equity Enricher, we will not require evidence of insurability beyond what is required at issue unless: .. the amount of premiums you actually pay for the Advantage Equity Enricher during the first year is greater than the cumulative voluntary planned periodic premium payments indicated in the application; .. you exceed certain other premium limitations described below after the first year; or .. you are adding the Advantage Equity Enricher after the base policy has been issued. Insurance coverage under Advantage Equity Additions commences on its Investment Start Date (see "Sending Communications and Payments To Us--When Your Requests, Instructions and Notifications Become Effective"), assuming coverage under the base policy is then in effect. Insurance coverage under Advantage Equity Enricher commences at the later of delivery of the option to you and our Date of Receipt of your first premium payment for that option. For coverage under Advantage Equity Enricher to be effective, the insured's health must be the same as stated in your application and the insured must not have sought medical advice or treatment after the date of the application. As to when charges under an Advantage Equity Option begin, see "Charges Included in the Monthly Deduction." It may not be in your best interest to surrender, lapse, change, or borrow from existing life insurance policies or annuity contracts in connection with the purchase of the Policy. You should compare your existing insurance and the Policy carefully. You should replace your existing insurance only when you determine that the Policy is better for you. You may have to pay a surrender charge on your existing insurance. You should talk to your financial professional or tax adviser to make sure the exchange will be tax-free. If you surrender your existing policy for cash and then buy the Policy, you may have to pay a tax, including possibly a penalty tax on the surrender. Because we will not issue the Policy until we have received an initial premium from your existing insurance company, the issuance of the Policy may be delayed. ALLOCATION OF DIVIDENDS AND PREMIUMS TO THE ADVANTAGE EQUITY OPTIONS The payments into the Advantage Equity Options won't guarantee that your Advantage Equity Option will have a death benefit. Rather, this depends on the Advantage Equity Option's cash value and the conditional guaranteed minimum death benefit. ALLOCATING DIVIDENDS AND PAYING PREMIUMS You can purchase the Advantage Equity Options as follows: .. For the ADVANTAGE EQUITY ADDITIONS: through dividends payable on the Policy (other than dividends payable on the Advantage Enricher). Any request to designate the Advantage Equity Additions as the option for receiving dividends under your Policy will take effect on the Policy anniversary following our Date of Receipt of your written request. Only one election may be made for any dividend payment date and that election will apply to all dividends payable under the Policy (other than dividends payable on the Advantage Enricher). 14 .. For the ADVANTAGE EQUITY ENRICHER: .. through a voluntary planned periodic premium schedule. You choose the schedule on your Advantage Equity Enricher application. The schedule sets forth the amount of premiums, fixed payment intervals, and the period of time that you intend to pay premiums. The schedule can be: (a) annual; (b) semi-annual; (c) quarterly; (d) periodic automatic pre-authorized transfers from your checking account ("pre-authorized checking arrangement"); (e) systematic through payment plans that your employer makes available; or (f) through another method to which we agree. You do not have to pay premiums in accordance with your voluntary planned periodic premium schedule. .. through unscheduled premium payments that you can make at any time. We will hold a premium payment received before its scheduled payment date in a non-interest bearing holding account until the scheduled payment date, if necessary to prevent a Policy from becoming a modified endowment contract. (See "Modified Endowment Contracts" under "Tax Matters" below.) We will send you an additional notice of this arrangement by letter immediately after receiving your payment. We will also give you the option to either have the money held until the scheduled payment date or applied on our Date of Receipt of your instructions to apply the money (unless the scheduled payment date has already passed). MAXIMUM AND MINIMUM PREMIUM PAYMENTS .. Total premium payments for the Advantage Enricher, the Flexible Additional Insurance Rider, and the Advantage Equity Enricher may not exceed $5 million in any Policy year. .. We will let you make premium payments that would turn your Policy into a modified endowment contract, but we will tell you of this status not later than in your annual statement, and if possible we will tell you how to reverse the status. .. The following additional limitations apply to your premiums under the ADVANTAGE EQUITY ENRICHER: I. You may not make any premium payments: A. After the date we approve your application for benefits under a disability waiver of benefits option or an acceleration of death benefit option. B. If we are paying benefits under one of the above options. C. If you have made no payments to the Advantage Equity Enricher during the first thirteen months after the effective date of the Advantage Equity Enricher, or for any two consecutive base policy years (unless, during any part of such period, your right to make payments was terminated for reasons described in A). In any of these cases, you may elect to receive the cash value or leave the cash value in the Advantage Equity Enricher. If you leave the cash value in the Advantage Equity Enricher, it will remain subject to applicable fees and charges. If investment performance is not sufficient to offset the amount of these expenses, the death benefit may decline or terminate. 15 II.Your voluntary planned periodic payments must be at least: A. $250 annually ($100 for policies with a base policy face amount of $50,000 to $100,000, or where the insured was under 18 when the base policy was issued). B. $125 semi-annually ($50 for policies with a base policy face amount of $50,000 to $100,000, or where the insured was under 18 when the base policy was issued). C. $75 quarterly ($25 for policies with a base policy face amount of $50,000 to $100,000, or where the insured was under 18 when the base policy was issued). D. $25 for all monthly methods of payment ($10 for policies with a base policy face amount of $50,000 to $100,000, or where the insured was under 18 when the base policy was issued). III.Each unscheduled premium payment should be at least $250 ($100 for policies with a base policy face amount of $50,000 to $100,000, or where the insured was under age 18 when the base policy was issued). IV.During the first base policy year, we reserve the right to reject any payment in excess of the cumulative amount of your first base policy year's voluntary planned periodic and unscheduled premiums selected at issue. V. During the first base policy year, the maximum total payment we currently permit to the Advantage Equity Enricher is 15 times the nonsmoker standard annual premium set forth in your base policy, excluding the policy fee. VI.After the first base policy year, the maximum total annual payment we permit to the Advantage Equity Enricher is 3 times the base policy's nonsmoker standard annual premium set forth in your base policy, excluding the policy fee. VII.If you pay less than 50 percent of the maximum allowable rider premium for two consecutive Policy years, we reserve the right to require evidence of insurability in order to accept premium payments that exceed the greater of the total payments made in either of the prior two Policy years. ALLOCATING PAYMENTS TO THE ADVANTAGE EQUITY OPTIONS Your allocations to the available Separate Account investment divisions or to the Fixed Account will be effective on the Investment Start Date. The percentage of your allocation into each investment division or the Fixed Account must be at least 1% and must be a whole number. You can change this allocation (effective after the Investment Start Date) by giving us written notice at our Designated Office or in any other manner that we may permit. SENDING COMMUNICATIONS AND PAYMENTS TO US CONTACTING US [SIDEBAR: YOU CAN CONTACT US AT OUR DESIGNATED OFFICE.] You can communicate all of your requests, instructions and notifications to us by contacting us in writing at our Designated Office. We may require that certain requests, instructions and notifications be made on forms that we provide. These include: changing your beneficiary; taking a Policy loan; taking a partial 16 withdrawal; surrendering your Policy or an Advantage Equity Option; making transfer requests; changing the benefit option to which you want to allocate your Policy dividends; or changing the allocation among the investment divisions and/or the Fixed Account for future dividends payable to Advantage Equity Additions or future premium payments that you make to Advantage Equity Enricher. Below are two lists of Designated Offices. You should consult the list that pertains to your Policy. As indicated in the column headings, the Designated Office to use depends on whether you purchased the Policy through a sales representative of MetLife or our affiliate New England Securities Corporation, or if you purchased the Policy through a sales representative of another broker-dealer. We may name additional or alternate Designated Offices. If we do, we will notify you in writing. You may also contact us at 1-800-MET-5000 for any function not listed below or for any other inquiry.
FOR POLICIES PURCHASED THROUGH SALES REPRESENTATIVES OF METROPOLITAN LIFE INSURANCE FOR POLICIES PURCHASED THROUGH COMPANY AND NEW ENGLAND SALES REPRESENTATIVES OF OTHER SECURITIES CORPORATION THE BROKER DEALERS THE DESIGNATED DESIGNATED OFFICES ARE: OFFICES ARE: ---------------------------------------------------------------------------- Premium MetLife, P.O. Box 371487, MetLife, P.O. Box 371862, Payments Pittsburgh, Pittsburgh, PA 15250-7487 PA 15250-7862 ---------------------------------------------------------------------------- Payment MetLife, P.O. Box 30375, MetLife, P.O. Box 990088, Inquiries Tampa, FL 33630-3074 Hartford, CT 06199-0088 ---------------------------------------------------------------------------- Surrenders, MetLife, P.O. Box 543, MetLife, P.O. Box 990088, Withdrawals, Warwick, RI 02887-0543 Hartford, CT 06199-0088 Loans, Investment Division Transfers, Premium Reallocation ---------------------------------------------------------------------------- Death Claims MetLife, P.O. Box 353, MetLife, P.O. Box 990088, Warwick, RI 02887-0353 Hartford, CT 06199-0088 ---------------------------------------------------------------------------- Beneficiary & MetLife, P.O. Box 313, MetLife, P.O. Box 990088, Assignment Warwick, RI 02887-0313 Hartford, CT 06199-0088 ---------------------------------------------------------------------------- "Free Look" MetLife MetLife, 185 Asylum Street, Cancellation 500 Schoolhouse Road Hartford, CT 06103 Johnstown, PA 15904 Attn: Free Look ---------------------------------------------------------------------------- Address MetLife MetLife, P.O. Box 990088, Changes 500 Schoolhouse Road Hartford, CT 06199-0088 Johnstown, PA 15904 Attn: Data Integrity ---------------------------------------------------------------------------- Reinstatements MetLife, P.O. Box 30375, MetLife, P.O. Box 990088, Tampa, FL 33630-3074 Hartford, CT 06199-0088 ----------------------------------------------------------------------------
WHEN YOUR REQUESTS, INSTRUCTIONS AND NOTIFICATIONS BECOME EFFECTIVE Generally, requests, premium payments and other instructions and notifications are effective on the Date of Receipt. In those cases, the effective time is at the end of a Valuation Period during which we receive them at our Designated Office. (Some exceptions to this general rule are noted below and elsewhere in this prospectus.) 17 A Valuation Period is the period between two successive Valuation Dates. It begins at the close of regular trading on the New York Stock Exchange on a Valuation Date and ends at the close of regular trading on the New York Stock Exchange on the next succeeding Valuation Date. The close of regular trading is 4:00 p.m., Eastern Time on most days. A Valuation Date is each day on which the New York Stock Exchange is open for trading. Accordingly, if we receive your request, premium, or instructions after the close of regular trading on the New York Stock Exchange, or if the New York Stock Exchange is not open that day, then we will treat it as received on the next day when the New York Stock Exchange is open. These rules apply regardless of the reason we did not receive your request, premium, or instructions by the close of regular trading on the New York Stock Exchange, even if due to our delay (such as a delay in answering your telephone call). The initial effective date of your Advantage Equity Options' investment in the Separate Account is the Investment Start Date. The Investment Start Date is: .. For ADVANTAGE EQUITY ADDITIONS, the dividend payment date of the first base policy dividend that is allocated to the option; and .. For the ADVANTAGE EQUITY ENRICHER, the later of: .. The 20th day following the Issue Date of the Policy; and .. The 20th day following the date we receive the first full premium for the Policy at our Designated Office. Prior to the Investment Start Date, we will place any premium payment you make to the Advantage Equity Enricher in the Fixed Account. There it will earn a fixed rate of interest from its date of receipt or, if later, the Date of Policy, until the Investment Start Date. If the Advantage Equity Enricher is added after the base policy is issued, the Investment Start Date is the later of the Issue Date of the rider or the date we receive the first premium for the rider. THIRD PARTY REQUESTS Generally, we accept requests for transactions or information only from you. We will accept a request to transfer cash value from your agent if you have asked your agent to make the transfer for you. However, we reserve the right to not process transactions requested on your behalf by your agent with a power of attorney or any other authorization. This includes processing transactions by an agent you designate, through a power of attorney or other authorization, who has the ability to control the amount and timing of transfers for a number of other Policy owners, and who simultaneously makes the same request or series of requests on behalf of other Policy owners. ADVANTAGE EQUITY OPTIONS INSURANCE PROCEEDS PAYABLE IF THE INSURED DIES We will pay your beneficiary any insurance proceeds as of the end of the Valuation Period that includes the insured's date of death. We will pay this amount after we receive documents that we request as due proof of the insured's death. 18 The beneficiary can receive the death benefit in a single sum or under various income plans described in the Statement of Additional Information. You may make this choice during the insured's lifetime. If you make no selection, we may place the amount in an account to which we will credit interest, and the beneficiary will have immediate access to all or part of that amount. This account is part of our general account. It is not a bank account and it is not insured by the FDIC or any other government agency. As part of our general account, it is subject to the claims of our creditors. We receive a benefit from all amounts left in this account. The beneficiary has one year from the date the insurance proceeds are paid to change the selection from a single sum payment to an income plan, as long as we have made no payments from the interest-bearing account. The insurance proceeds equal the Advantage Equity Option's death benefit. ADVANTAGE EQUITY OPTIONS DEATH BENEFITS The Advantage Equity Options death benefit is: .. the Advantage Equity Option's cash value (after we deduct the Mortality and Expense Risk Charge, the Cost of Insurance Charge, and, for the Advantage Equity Enricher only, the Advantage Equity Enricher Expense Charge, pro rated for the appropriate period) at the end of the Valuation Period in which the insured dies; divided by .. the net single premium for that day. (The "net single premium" does not refer to a premium you pay, but refers instead to the factor we use to calculate the amount of insurance provided under your Advantage Equity Option. For additional information about net single premiums, see "Net Single Premium.") Any increase or decrease in the cash value of an Advantage Equity Option also will generally increase or decrease the Advantage Equity Option's death benefit that otherwise would apply. In such cases, the Advantage Equity Option's death benefit will change by a larger amount than does the cash value of an Advantage Equity Option. FOR EXAMPLE: the Advantage Equity Options net single premium is .24351 at the base policy anniversary nearest a male insured's 40/th/ birthday. If the insured died on that date and the Advantage Equity Options cash value was then $5,000, the Advantage Equity Options death benefit would be $20,533 (I.E., $5,000 divided by .24351). But if the Advantage Equity Options cash value had been only $4,000, the Advantage Equity Options death benefit would have been only $16,426 (I.E., $4,000 divided by .24351); and if the Advantage Equity Options cash value had been $6,000, the Advantage Equity Options death benefit would have been $24,640 (I.E., $6,000 divided by .24351). Any increases in death benefit due to an increase in an Advantage Equity Option's cash value will be partially or wholly offset (and any decreases will be accentuated) by the fact that the net single premium increases as the insured ages. FOR EXAMPLE: in the example set out above, the Advantage Equity Options net single premium for a 40 year old male insured was .24351, which resulted in a $20,533 Advantage Equity Options death benefit, assuming a $5,000 Advantage Equity Options cash value. If that same insured had instead been age 45, the net single premium would have been .28921, which would have resulted in an Advantage Equity Options death benefit of only $17,288 (assuming the same $5,000 Advantage Equity Options cash value). On the 19 other hand, if the same insured had been only age 35, the net single premium would have been only .20443, which would have resulted in an Advantage Equity Options death benefit of $24,458 (again, assuming the same $5,000 Advantage Equity Options cash value). Therefore, in order for your Advantage Equity Option death benefit to increase or remain constant, your Advantage Equity Option cash value must increase enough to compensate for the effect of the increases in net single premium. If your Advantage Equity Option cash value declines to zero (due to adverse investment results, withdrawals from the Advantage Equity Option, the charges we deduct, and/or insufficient premium payments), your Advantage Equity Option death benefit also will be zero (unless the conditional guaranteed minimum death benefit is in effect). ALTERNATE DEATH BENEFIT THAT AUTOMATICALLY APPLIES IN SOME CASES In no event will the Policy death benefit be lower than the minimum amount required to maintain the Policy as life insurance under the federal income tax laws (which calculation shall exclude cash value provided under the DWI benefit option). CONDITIONAL GUARANTEED MINIMUM DEATH BENEFIT [SIDEBAR: THE ADVANTAGE EQUITY OPTIONS OFFER A CONDITIONAL GUARANTEED MINIMUM DEATH BENEFIT.] We provide a conditional guaranteed minimum death benefit that will be in effect during the first 7 years of your base policy or another 7 year period beginning from any date your policy is "materially modified" (within the meaning of the tax law test discussed under "Federal Tax Matters--Modified Endowment Contract Status," below). During any such 7 year period, the conditional guaranteed minimum death benefit generally will equal the Advantage Equity Option's death benefit at the beginning of each such 7 year period. The guaranteed minimum death benefit ends: .. if the Policy becomes a modified endowment contract; or .. for the Advantage Equity Additions, if you redirect your dividends to a different benefit option. The conditional guaranteed minimum death benefit is reduced for any: .. loan; or .. withdrawal. You should consult with your sales representative before taking any action listed above to find out whether (and by how much) the action will affect the conditional guaranteed minimum death benefit. If your conditional guaranteed minimum death benefit is reduced or ends, your Policy may become a modified endowment contract. ADVANTAGE EQUITY OPTIONS CASH VALUE [SIDEBAR: THE ADVANTAGE EQUITY OPTIONS ARE DESIGNED TO ACCUMULATE CASH VALUE.] An Advantage Equity Option's cash value equals that Advantage Equity Option's cash value in the Separate Account, the Fixed Account and the Loan Collateral Account. An Advantage Equity Option's cash value is calculated as follows: .. On the Investment Start Date, we will allocate your Advantage Equity Option's cash value to each applicable investment division and the Fixed Account. 20 .. Thereafter, at the end of each Valuation Period your Advantage Equity Option's cash value will equal: .. The cash value in the Fixed Account at the beginning of the Valuation Period credited with interest for the Valuation Period; plus .. The cash value in each investment division at the beginning of the Valuation Period multiplied by the investment division's experience factor for the Valuation Period; plus .. The cash value in the Loan Collateral Account at the beginning of the Valuation Period, credited with interest for the Valuation Period; plus .. Any dividends or premiums applied during the Valuation Period which are allocated to the Fixed Account and the investment divisions; plus .. All cash value transfers to the Loan Collateral Account during the Valuation Period; plus .. All cash value transfers to the Fixed Account from the investment divisions during the Valuation Period; plus .. All cash value transfers to each investment division from another investment division or the Fixed Account during the Valuation Period; minus .. All cash value transfers from the Loan Collateral Account during the Valuation Period; minus .. All cash value transfers from the Fixed Account to the investment divisions during the Valuation Period; minus .. All cash value transfers from each investment division to another investment division or the Fixed Account during the Valuation Period; minus .. All partial cash withdrawals from the investment divisions or the Fixed Account during the Valuation Period; minus .. The portion of any charges and deductions deducted from the cash value in the investment divisions or the Fixed Account during the Valuation Period; minus .. The portion of any charges not deducted during the current Valuation Period or any accrued charges not deducted in a prior Valuation Period due to insufficient cash value in the investment divisions and the Fixed Account. The experience factor for an investment division equals: .. The net asset value per share of the Portfolio in which the investment division invests, at the end of the current Valuation Period; plus .. The per share amount of any dividend or capital gain paid by the Portfolio during the Valuation Period; minus .. Any per share charge for taxes or any tax reserve; divided by .. The net asset value per share of the Portfolio at the end of the preceding Valuation Period. If your Advantage Equity Option has no cash value, and the conditional guaranteed minimum death benefit is not in effect, we will not provide any insurance coverage under your Advantage Equity Option, nor will we take a monthly deduction, until the Advantage Equity Option does have cash value. 21 SURRENDERS AND PARTIAL WITHDRAWALS FROM THE ADVANTAGE EQUITY OPTIONS [SIDEBAR: YOU CAN SURRENDER YOUR ADVANTAGE EQUITY OPTION FOR ITS CASH VALUE.] If you surrender (turn in) your Advantage Equity Option, we will pay you the option's cash value, net of the portion of any loan secured by the Advantage Equity Option. We will deem your request for surrender of the base policy also to be a request for surrender of the Advantage Equity Option. You may receive the surrender proceeds in a single sum or under an income plan. If you would like to make a partial withdrawal, you may direct from which part of the Policy the amount will be taken. If you do not identify the part of your Policy from which you want your withdrawal to be taken, we will take it from the available value in the parts of your Policy in the following order: .. DWI .. Advantage Enricher .. Advantage Equity Enricher .. Fixed Additional Insurance .. Advantage Equity Additions .. Flexible Additional Insurance Rider If you elect to take your partial withdrawal from an Advantage Equity Option, you can request that the withdrawal be taken from a specific investment division or from the Fixed Account. If you do not make such a request, we will take any withdrawals from your Advantage Equity Option proportionately from each investment division and the Fixed Account based on the percentage of cash value in each. If you request a partial withdrawal of an amount that exceeds the cash value in the chosen Advantage Equity Option, investment division, or the Fixed Account, we will tell you and we will honor your request only if you ask for a smaller withdrawal or a different allocation. Before surrendering your Advantage Equity Option or requesting a partial withdrawal you should consider the following: .. At least some amounts received may be taxable as income and, if your Policy is a modified endowment contract, subject to certain tax penalties. (See "Federal Tax Matters--Modified Endowment Contracts"). .. Your Policy could become a modified endowment contract. .. For partial withdrawals, your death benefit will decrease. .. In some cases you may be better off taking a Policy loan, rather than a withdrawal. .. The conditional guaranteed minimum death benefit will be reduced by the same proportion as the withdrawal reduces the Advantage Equity Option's cash value. TRANSFERRING CASH VALUE [SIDEBAR: YOU MAY TRANSFER CASH VALUE AMONG THE INVESTMENT DIVISIONS AT ANY TIME.] You may transfer your Advantage Equity Options' cash value (except for cash value in the Loan Collateral Account) among the available investment divisions and between the investment divisions and the Fixed Account. There is currently no charge for cash value transfers, although we reserve the right to impose a $25 charge on such transfers. Transfers among the investment divisions and between the investment divisions and the Fixed Account are not 22 currently taxable transactions. We may restrict transfers to the Fixed Account (see "The Fixed Account"). Frequent requests from Advantage Equity Options owners to transfer Advantage Equity Options cash value may dilute the value of a Portfolio's shares if the frequent trading involves an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the Portfolio and the reflection of that change in the Portfolio's share price ("arbitrage trading"). Regardless of the existence of pricing inefficiencies, frequent transfers may also increase brokerage and administrative costs of the underlying Portfolios and may disrupt portfolio management strategy, requiring a Portfolio to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations ("disruptive trading"). Accordingly, arbitrage trading and disruptive trading activities (referred to collectively as "market timing") may adversely affect the long-term performance of the Portfolios, which may in turn adversely affect Advantage Equity Options owners and other persons who may have an interest in the Policies (E.G., beneficiaries). We have policies and procedures that attempt to detect and deter frequent transfers in situations where we determine there is a potential for arbitrage trading. Currently, we believe that such situations may be presented in the international, small-cap, and high-yield Portfolios and we monitor transfer activity in those Portfolios (the "Monitored Portfolios"). We employ various means to monitor transfer activity, such as examining the frequency and size of transfers into and out of the Monitored Portfolios within given periods of time. For example, we currently monitor transfer activity to determine if, for each category of international, small-cap and high-yield Portfolios, in a 12-month period there were (1) six or more transfers involving the given category; (2) cumulative gross transfers involving the given category that exceed the current cash value; and (3) two or more "round-trips" involving any Portfolio in the given category. A round-trip generally is defined as a transfer in followed by a transfer out within the next seven calendar days or a transfer out followed by a transfer in within the next seven calendar days, in either case subject to certain other criteria. We do not believe that other Portfolios present a significant opportunity to engage in arbitrage trading and therefore do not monitor transfer activity in those Portfolios. Currently, there are no Monitored Portfolios available for the Advantage Equity Options. We may change the Monitored Portfolios at any time without notice in our sole discretion. In addition to monitoring transfer activity in certain Portfolios, we rely on the underlying Portfolios to bring any potential disruptive trading activity they identify to our attention for investigation on a case-by-case basis. We will also investigate any other harmful transfer activity that we identify from time to time. We may revise these policies and procedures in our sole discretion at any time without prior notice. Our policies and procedures may result in transfer restrictions being applied to deter market timing. Currently, when we detect transfer activity in the Monitored Portfolios that exceeds our current transfer limits, or other transfer activity that we believe may be harmful to other Advantage Equity Options owners or other persons who have an interest in the Policies, we require all future transfer requests, to and from a Monitored Portfolio or other identified Portfolios, under that Policy to be submitted either (i) in writing with an original signature or (ii) by telephone prior to 10:00 a.m. Transfers made under an automated investment strategy described in this prospectus are not treated as transfers when we evaluate trading patterns for market timing. 23 The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those Portfolios that we believe are susceptible to arbitrage trading, or the determination of the transfer limits. Our ability to detect and/or restrict such transfer activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by Policy owners to avoid such detection. Our ability to restrict such transfer activity may be limited by provisions of the Policy. Accordingly, there is no assurance that we will prevent all transfer activity that may adversely affect owners or other persons with interests in the Policies. We do not accommodate market timing in any Portfolios and there are no arrangements in place to permit any Advantage Equity Options owner to engage in market timing; we apply our policies and procedures without exception, waiver, or special arrangement. The Portfolios may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares, and we reserve the right to enforce these policies and procedures. For example, Portfolios may assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period. The prospectuses for the Portfolios describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Advantage Equity Options owners and other persons with interests in the Policies should be aware that we may not have the contractual obligation or the operational capacity to apply the frequent trading policies and procedures of the Portfolios. However, under rules recently adopted by the Securities and Exchange Commission, effective April 16, 2007 we will be required to (1) enter into a written agreement with each Portfolio or its principal underwriter that will obligate us to provide to the Portfolio promptly upon request certain information about the trading activity of individual Policy owners, and (2) execute instructions from the Portfolio to restrict or prohibit further purchases or transfers by specific Policy owners who violate the frequent trading policies established by the Portfolio. In addition, Advantage Equity Options owners and other persons with interests in the Policies should be aware that some Portfolios may receive "omnibus" purchase and redemption orders from other insurance companies or intermediaries such as retirement plans. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance policies and/or individual retirement plan participants. The omnibus nature of these orders may limit the Portfolios in their ability to apply their frequent trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Portfolios (and thus Advantage Equity Options owners) will not be harmed by transfer activity relating to the other insurance companies and/or retirement plans that may invest in the Portfolios. In accordance with applicable law, we reserve the right to modify or terminate the transfer privilege at any time. We also reserve the right to defer or restrict the transfer privilege at any time that we are unable to purchase or redeem shares of any of the Portfolios, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on market timing activities (even if an entire omnibus order is rejected due to the market timing activity of a single Advantage Equity Options owner). You should read the Portfolio prospectuses for more details. 24 AUTOMATIC REBALANCING You may elect our Rebalancer strategy under which your cash value in the investment divisions and the Fixed Account will be automatically reallocated on a quarterly basis to the percentages you select. AUTOMATED WITHDRAWALS We may in the future allow you to make automatic withdrawals of Advantage Equity Option cash values to pay the base policy premiums. If we do, we will set forth the terms and conditions in the forms we provide to you to establish the automatic withdrawals. TRANSFERS BY TELEPHONE Subject to our market timing procedures, we may, if permitted by state law, allow you to make transfer requests and changes to allocations of dividends or premiums to the Advantage Equity Options by phone. We generally allow you to authorize your sales representative to make such requests. The following procedures apply: .. We will institute reasonable procedures to confirm that instructions we receive are genuine. Our procedures will include receiving from the caller your personalized data. Any telephone instructions that we reasonably believe to be genuine are your responsibility, including losses arising from such instructions. Because telephone transactions may be available to anyone who provides certain information about you and your Policy, you should protect that information. We may not be able to verify that you are the person providing telephone instructions, or that you have authorized any such person to act for you. .. All telephone calls will be recorded. .. You will receive a written confirmation of any transaction. .. Neither the Separate Account nor we will be liable for any loss, expense or cost arising out of a telephone request if we reasonably believed the request to be genuine. .. You should contact our Designated Office with any questions regarding the procedures. Telephone, facsimile, and computer systems may not always be available. Any telephone, facsimile, or computer system, whether it is yours, your service provider's, your sales representative's, or ours, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request by writing to our Designated Office. BORROWING FROM YOUR POLICY [SIDEBAR: YOU CAN BORROW FROM US AND USE YOUR POLICY AS SECURITY FOR THE LOAN.] You may obtain a loan from us whenever your Policy has a loan value. The loan value equals the Policy's cash surrender value at the end of the current Policy year, less anticipated loan interest and required premiums due for the remainder of the current Policy year. We will first secure any loan against the parts of your Policy other than the Advantage Equity Options. If we must secure a loan against an Advantage Equity Option then, as of the Date of Receipt of the loan request, we will: .. Remove an amount equal to the loan from the investment divisions and/or the Fixed Account and transfer it to the Loan Collateral Account, where it 25 will be credited with interest at an annual effective rate of not less than 5.5%. The amount we transfer to the Loan Collateral Account will be taken from the investment divisions and/or the Fixed Account in proportion to the amount of cash value in each. .. Charge you interest, which will accrue daily, at a maximum annual effective rate of 6%. Your interest payments are due at the end of each Policy year. If you don't pay the interest, we will treat it as a new Policy loan. If your Policy has both Advantage Equity Options, any amount transferred to the Loan Collateral Account to secure a loan will be taken first from your Advantage Equity Enricher cash value and then from your Advantage Equity Additions cash value. You repay your loans (plus accrued interest) by sending us payments of at least $50. When we receive your repayment, we will transfer cash value from the Loan Collateral Account to the investment divisions and/or the Fixed Account based on the dividend allocation then in effect for Advantage Equity Additions, or the premium allocation then in effect for Advantage Equity Enricher. If your Policy has both Advantage Equity Options, we will transfer cash value first from the Advantage Equity Additions Loan Collateral Account and then from the Advantage Equity Enricher Loan Collateral Account. Before taking a Policy loan, you should consider the following: .. Interest payments on loans are generally not deductible for tax purposes. .. Under certain situations, Policy loans could be considered taxable distributions. .. If you surrender your Policy or if we terminate your Policy, any outstanding loan amounts (plus accrued interest) will be taxed as a distribution. Generally, there will be federal income tax payable on the amount by which withdrawals and loans exceed the premiums paid to date. (See "Federal Tax Matters--Loans" below.) In addition, the amounts borrowed and withdrawn reduce the Policy's cash value and any remaining cash value of the Policy may be insufficient to pay the income tax on your gains. .. A Policy loan increases the chances of our terminating your Policy due to insufficient cash value. .. An Advantage Equity Option's conditional guaranteed minimum death benefit will be reduced by the same proportion as the loan reduces the Advantage Equity Option's cash value. .. Your Policy's death benefit will be reduced by any unpaid loan (plus any accrued and unpaid interest). .. The amount taken from your Advantage Equity Options' cash value, as a result of a loan does not participate in the investment experience of the investment divisions. Therefore, a loan can permanently affect the death benefit and cash value of the Advantage Equity Options, even if it is repaid. .. Under some circumstances, the existence of a Policy loan can limit the amount of your Advantage Equity Option's cash value that is permitted to be surrendered or withdrawn. 26 ADVANTAGE EQUITY OPTIONS TERMINATION AND REINSTATEMENT TERMINATION We will terminate the Advantage Equity Options if you elect to terminate them, or if you reduce the face amount of your base policy below $50,000. We will terminate the Advantage Equity Additions (but not the Advantage Equity Enricher) if you elect to change your dividend option or if you convert your base policy to a fully paid-up policy. We will also terminate the Advantage Equity Options if your base policy lapses. Your base policy may lapse under two circumstances: (1) if you fail to pay a base policy premium when due; or (2) if your Policy has an excess loan. (An excess loan occurs when the policy loan balance exceeds the cash value of the Policy.) In either event you will have a grace period of 31 days in which to (1) pay the overdue premium or (2) make a loan repayment sufficient to reduce the loan balance to an amount less than the Policy's cash value. If the insured dies during the grace period, the insurance proceeds will still be payable, but we will deduct any due and unpaid base policy premiums and any Policy loan and loan interest from the proceeds. If you fail to pay the premium (or make a loan repayment) by the end of the grace period, your Policy will lapse. However, in the case of an unpaid premium, if you have elected to do so, and if there is sufficient cash value in your Policy to do so, we will pay your premium through an automatic loan feature. If the automatic loan feature is not used to pay the base policy premium and the Policy is terminated, we will transfer your Advantage Equity Options cash value into the Fixed Account in accordance with your Policy's provisions and our administrative practices. Under these circumstances, any cash surrender value in the policy and the Advantage Equity Options will be used to continue your insurance coverage either as extended term insurance or reduced paid-up insurance. The extended term insurance option will be automatic unless you elect the reduced paid-up insurance option. Regardless of any election, if the amount of insurance provided under the reduced paid-up insurance option would be equal to or greater than the amount of extended term insurance coverage, the reduced paid-up insurance option will be used. REINSTATEMENT We will reinstate (put back in force) the Advantage Equity Option if we reinstate your base policy. You may reinstate the base policy within three years of lapse, or later with our consent. To reinstate you must make your request in writing and provide satisfactory proof that the insured is insurable. You must also pay all unpaid premiums since the date of lapse, with interest, compounded annually. If there was an outstanding loan balance at the time of lapse, the loan must be repaid, or reinstated with interest. The reinstated Advantage Equity Option will have no cash value until a dividend is applied, or a premium payment is made, to the Advantage Equity Option. We will reinstate your base policy subject to certain terms and conditions that the base policy provides. We must receive your reinstatement request within 3 years after the end of the base policy's grace period and before its Final Date. 27 CHARGES AND DEDUCTIONS YOU PAY FOR THE ADVANTAGE EQUITY OPTIONS [SIDEBAR: CAREFULLY REVIEW THE "FEE TABLES" THAT SET FORTH THE CHARGES THAT YOU PAY UNDER THE ADVANTAGE EQUITY OPTIONS.] The Advantage Equity Option charges compensate us for the services and benefits we provide, the costs and expenses we incur, and the risks we assume. The name of a charge can suggest the purposes for which the charge is imposed. However, our revenues from any particular Advantage Equity Option charge may be more or less than any costs or expenses that charge may be intended primarily to cover. We may use our revenues from one Advantage Equity Option charge to pay other costs and expenses in connection with the Advantage Equity Options, including the cost of insurance and mortality and expense risk charge. We may also profit from our revenues from all the Advantage Equity Options charges combined. The following sets forth additional information about the Advantage Equity Options charges. DEDUCTIONS FROM PREMIUMS--ADVANTAGE EQUITY ENRICHER ONLY CHARGE FOR AVERAGE EXPECTED STATE TAXES ATTRIBUTABLE TO PREMIUMS: We deduct 2.00% from each premium to reimburse us for the state and local taxes that we must pay based on premiums we receive. Premium taxes vary from state to state. Our charge approximates the average tax rate we expect to pay on premiums we receive from all states. FEDERAL TAX CHARGE: We deduct 1.00% from each premium to reimburse us for our estimate of the Federal income tax liability related to premiums. CHARGES INCLUDED IN THE MONTHLY DEDUCTION We deduct the monthly deduction in arrears as of each base policy monthly anniversary, beginning with the first base policy monthly anniversary following the effective date of the Advantage Equity Option. We deduct a pro-rated portion of the monthly deduction in the event a withdrawal, transfer (including a transfer to the Loan Collateral Account) or premium payment is made between monthly anniversaries. We take the monthly deduction from the Fixed Account and each investment division you are using, in proportion to the allocation of that Advantage Equity Option's cash value. If there is no cash value in the Advantage Equity Option, there is no insurance coverage provided under the Option and therefore no monthly deduction is due. COST OF INSURANCE: This charge varies monthly based on many factors. Each month, we determine the charge by multiplying the applicable cost of insurance percent by the Advantage Equity Options cash value at the end of the prior Policy month. .. The cost of insurance percent is based on our expectations as to future experience, taking into account the insured's sex (if permitted by law), age, smoking status and rate class. The percentages will never exceed the guaranteed cost of insurance percentages set forth in your Advantage Equity Option rider. These guaranteed percentages are based on certain 2001 Commissioners Standard Ordinary Mortality Tables and the insured's sex (if permitted by law), age and rate class. Our current percentages are lower than the maximums in most cases. We review our percentages periodically and may adjust them, but we will apply the same percentages to everyone who has had their Advantage Equity Option for the same amount of time and who is the same age, sex and rate class. As a general rule, the cost of insurance 28 percentage increases each year you own your Advantage Equity Option, as the insured's age increases. Accordingly, your cost of insurance charge will generally increase as the insured ages, even though the death benefit will decrease (relative to cash value) over time. See "Net Single Premium." .. Rate class relates to the level of mortality risk we assume with respect to an insured. It can be the standard rate class, or one that is higher or lower (and, if the insured is 18 or older, we divide rate class by smoking status). The insured's rate class will affect your charge for insurance coverage. .. The cash value of an Advantage Equity Option (to which the cost of insurance percent is applied) depends on a number of factors that are discussed under "Advantage Equity Options Cash Value." The amounts that you allocate to your Advantage Equity Options and any Fixed Account interest or favorable investment performance on those amounts will tend to make such cash value go up. On the other hand, poor investment performance, the charges that we deduct each month, and any withdrawals or loans you take from your Advantage Equity Options cash value tend to make that cash value go down. MORTALITY AND EXPENSE RISK CHARGE: We make this monthly charge from the cash value in the investment divisions primarily to compensate us for: .. expenses we incur in the sale and administration of the Advantage Equity Options; .. mortality risks that insureds may live for a shorter period than we expect; and .. expense risks that our issuing and administrative expenses may be higher than we expect. The amount of the charge is lower if the base policy's face amount is at least $250,000 at the date we calculate the charge. Therefore, changes you make in your base policy's face amount could affect the rate at which this charge applies to you. ADVANTAGE EQUITY ENRICHER EXPENSE CHARGE: We deduct a monthly charge from your Advantage Equity Enricher cash value (other than the cash value in the Loan Collateral Account) to compensate us for the expenses we incur in selling and administering the Advantage Equity Enricher. If, in any month, an Advantage Equity Option has insufficient cash value in the investment divisions and the Fixed Account to pay the monthly deduction, the amount that we are unable to deduct will be accrued and will be deducted when that Advantage Equity Option has sufficient cash value in the investment divisions and the Fixed Account. Any accrued monthly deductions will reduce an Advantage Equity Option's cash value and death benefit. CHARGES AND EXPENSES OF THE SEPARATE ACCOUNT AND THE PORTFOLIOS CHARGES FOR INCOME TAXES: In general, we don't expect to incur federal, state or local taxes upon the earnings or realized capital gains attributable to the assets in the Separate Account relating to the Policies' cash value. If we do incur such taxes, we reserve the right to charge the cash value allocated to the Separate Account for these taxes. PORTFOLIO EXPENSES: There are daily charges against each Portfolio's assets for investment advisory services and fund operating expenses. These are 29 described under "Fee Tables--Annual Portfolio Operating Expenses" in this prospectus as well as in the Fund prospectuses attached to this prospectus. VARIATIONS IN CHARGES We may vary the amounts of charges described in this prospectus as a result of such factors as (1) differences in legal requirements in the jurisdiction where the Advantage Equity Options are sold, (2) differences in actual or expected risks, expenses, persistency of the Advantage Equity Options or mortality experience among different categories of purchasers or insureds, and (3) changes in Advantage Equity Options pricing that we may implement from time to time. Any such variations will be pursuant to administrative procedures that we establish and will not discriminate unfairly against any Policy owner. Any such variations may apply to existing Advantage Equity Options as well as to Advantage Equity Options issued in the future, except that the charges under any Advantage Equity Option may never exceed the maximums therein. NET SINGLE PREMIUM The net single premium varies from day to day and is based on the 2001 Commissioners Standard Ordinary Mortality Tables and the insured's sex (if permitted by law), issue age and duration. To determine an Advantage Equity Option's death benefit, we divide an Advantage Equity Option's cash value by the net single premium. While it is not a charge or expense, the lower the net single premium, the higher the death benefit, and vice versa. THE NET SINGLE PREMIUM UNDER YOUR ADVANTAGE EQUITY OPTION WILL INCREASE EACH MONTH, AS THE INSURED GROWS OLDER. ACCORDINGLY, YOUR DEATH BENEFIT (RELATIVE TO YOUR CASH VALUE) WILL DECREASE AS THE INSURED AGES. HOWEVER, YOUR COST OF INSURANCE CHARGE WILL GENERALLY INCREASE OVER THAT SAME PERIOD OF TIME. A schedule of your net single premiums is set forth in your Advantage Equity Options rider. FEDERAL TAX MATTERS [SIDEBAR: YOU SHOULD CONSULT WITH YOUR OWN TAX ADVISER TO FIND OUT HOW TAXES CAN AFFECT YOUR BENEFITS AND RIGHTS UNDER YOUR POLICY.] The following is a brief summary of some tax rules that may apply to your Policy. It does not purport to be complete or cover every situation. Because individual circumstances vary, you should consult with your own tax adviser to find out how taxes can affect your benefits and rights under your Policy, especially before you make unscheduled premium payments, change the coverage provided by the base policy or the benefit options, take a loan or withdrawal, or assign or surrender the Policy. INSURANCE PROCEEDS .. Generally excludable from your beneficiary's gross income. .. The proceeds may be subject to federal estate tax: (i) if paid to the insured's estate; or (ii) if paid to a different beneficiary if the insured possessed incidents of ownership at or within three years before death. .. If you die before the insured, the value of your Policy (determined under IRS rules) is included in your estate and may be subject to federal estate tax. .. Whether or not any federal estate tax is due is based on a number of factors including the estate size. .. The insurance proceeds payable upon death of the insured under a Policy issued on a standard risk basis should never be less than the minimum 30 amount required for the Policy to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. There is less guidance, however, with respect to Policies issued on a substandard risk basis, and it is not clear that such Policies will in all cases satisfy the applicable requirements to be treated as life insurance under section 7702 of the Internal Revenue Code. CASH VALUE (IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT) .. You are generally not taxed on your cash value (except with respect to the DWI option) until you withdraw it or surrender your Policy. In these cases, you are generally permitted to take withdrawals and receive other distributions up to the amount of premiums paid without any tax consequences. However, withdrawals and other distributions will be subject to income tax after you have received amounts equal to the total premiums you paid. Somewhat different rules apply in the first 15 Policy years, when a distribution may be subject to tax if there is a gain in your Policy (which is generally when your cash value exceeds the cumulative premiums you paid). .. There may be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if you are subject to that tax. .. For income tax purposes, if you surrender an Advantage Equity Option for its cash value but the base policy remains in force, you will be considered to have made a partial withdrawal. .. Amounts applied to the DWI option are treated as distributions from the Policy and interest credited on amounts applied to the DWI option is currently taxable as ordinary income. SPLIT DOLLAR INSURANCE PLANS The IRS has issued guidance on split dollar insurance plans. A tax adviser should be consulted with respect to this guidance if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. The Sarbanes-Oxley Act of 2002 (the "Act"), which was signed into law on July 30, 2002, prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on U.S. exchanges, from extending, directly or indirectly or through a subsidiary, many types of personal loans to their directors or executive officers. It is possible that this prohibition may be interpreted to apply to certain split-dollar life insurance arrangements for directors and executive officers of such companies, since at least some such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. Although the prohibition on loans generally took effect as of July 30, 2002, there is an exception for loans outstanding as of the date of enactment, so long as there is no material modification to the loan terms and the loan is not renewed after July 30, 2002. Any affected business contemplating the payment of a premium on an existing Policy or the purchase of a new Policy in connection with a split-dollar life insurance arrangement should consult legal counsel. Split dollar insurance plans that provide deferred compensation may be subject to recently enacted rules governing deferred compensation arrangements. Failure to adhere to these rules will result in adverse tax consequences. A tax adviser should be consulted with respect to such plans. 31 LOANS .. Loan amounts you receive will generally not be subject to income tax, unless your Policy is or becomes a modified endowment contract, is exchanged or terminates. .. Interest on loans is generally not deductible. For businesses that own a Policy, at least part of the interest deduction unrelated to the Policy may be disallowed unless the insured is a 20% owner, officer, director or employee of the business. .. If your Policy terminates (upon surrender, cancellation, lapse or, in most cases, exchange) while any Policy loan is outstanding, the amount of the loan plus accrued interest thereon will be deemed to be a "distribution" to you. Any such distribution will have the same tax consequences as any other Policy distribution. Since amounts borrowed reduce the cash value that will be distributed to you if the Policy is surrendered, canceled or lapses, any cash value distributed to you in these circumstances may be insufficient to pay the income tax on any gain. MODIFIED ENDOWMENT CONTRACTS These contracts are life insurance contracts where the premiums paid during the first 7 years after the Policy is issued, or after a material change in the Policy, exceed tax law limits referred to as the "7-pay test." Material changes in the Policy include changes in the level of benefits and certain other changes to your Policy after the issue date. Reductions in benefits during a 7-pay period may cause your Policy to become a modified endowment contract. Generally, a life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts. Due to the flexibility of the Policies as to premiums and benefits, the individual circumstances of each Policy will determine whether it is classified as a modified endowment contract. If your Policy is considered a modified endowment contract the following applies: .. The death benefit will generally be income tax free to your beneficiary, as discussed above. .. Amounts withdrawn or distributed before the insured's death, including (without limitation) loans, assignments and pledges, are treated as income first and subject to income tax (to the extent of any gain in your Policy). All modified endowment contracts you purchase from us and our affiliates during the same calendar year are treated as a single contract for purposes of determining the amount of any such income. .. An additional 10% income tax generally applies to the taxable portion of the amounts received before age 59 1/2, except generally if you are disabled or if the distribution is part of a series of substantially equal periodic payments. .. If a Policy becomes a modified endowment contract, distributions that occur during the contract year will be taxed as distributions from a modified endowment contract. In addition, distributions from a Policy within two years before it becomes a modified endowment contract will be taxed in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract. 32 DIVERSIFICATION In order for your Policy to qualify as life insurance, we must comply with certain diversification standards with respect to the investments underlying the Advantage Equity Options. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be able to be corrected. Failure to meet these standards would result in immediate taxation to Policy owners of gains under their Policies. INVESTOR CONTROL In some circumstances, owners of variable contracts who retain excessive control over the investment of the assets in an insurance company's separate account may be treated as the owners of those assets and may be subject to tax on income produced by those assets. The Advantage Equity Options are supported by assets held in our Separate Account. Although we believe that the owner of a Policy that purchases any Advantage Equity Options should not be treated as an owner of any assets in our Separate Account, we reserve the right to modify the Policies (including the Advantage Equity Options) to bring them into conformity with applicable standards should such modification be necessary to prevent owners of the policies from being treated as the owners of any assets in our Separate Account. ECONOMIC GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001 The Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") repeals the federal estate tax and replaces it with a carryover basis income tax regime effective for estates of decedents dying after December 31, 2009. EGTRRA also repeals the generation skipping transfer tax, but not the gift tax, for transfers made after December 31, 2009. EGTRRA contains a sunset provision, which essentially returns the federal estate, gift and generation-skipping transfer taxes to their pre-EGTRRA form, beginning in 2011. Congress may or may not enact permanent repeal between now and then. During the period prior to 2010, EGTRRA provides for periodic decreases in the maximum estate tax rate coupled with periodic increases in the estate tax exemption. For 2006, the maximum estate tax rate is 46% and the maximum rate for 2007-2009 is 45%. The estate tax exemption is $2,000,000 for 2006-2008 and $3,500,000 in 2009. The complexity of the new tax law, along with uncertainty as to how it might be modified in coming years, underscores the importance of seeking guidance from a qualified advisor to help ensure that your estate plan adequately addresses your needs and that of your beneficiaries under all possible scenarios. WITHHOLDING To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient's federal income tax liability. Recipients can generally elect however, not to have tax withheld from distributions. LIFE INSURANCE PURCHASES BY NONRESIDENT ALIENS AND FOREIGN CORPORATIONS Purchasers that are not U.S. citizens or residents will generally be subject to U.S. federal withholding tax on taxable distributions from life insurance policies at a 30% rate, unless a lower treaty rate applies. In addition, purchasers may be subject to state and/or municipal taxes and taxes that may be imposed by the purchaser's country of citizenship or residence. Prospective 33 purchasers that are not U.S. citizens or residents are advised to consult with a qualified tax adviser regarding U.S. and foreign taxation with respect to a Policy purchase. BUSINESS USES OF POLICY Businesses can use the policies in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. If you are purchasing the Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a qualified tax adviser. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax rules and interpretations can adversely affect the tax treatment of your Policy. These changes may take effect retroactively. We reserve the right to amend the Policy in any way necessary to avoid any adverse tax treatment. Examples of changes that could create adverse tax consequences include: .. Possible taxation of cash value transfers among the options within the Policy. .. Possible taxation as if you were the owner of your allocable portion of the Separate Account's assets. .. Possible changes in the tax treatment of Policy benefits and rights. FOREIGN TAX CREDITS To the extent permitted under the federal tax law, we may claim the benefit of certain foreign tax credits attributable to taxes paid by certain Portfolios to foreign jurisdictions. RIGHTS WE RESERVE We reserve the right to make certain changes if we believe the changes are in the best interest of our Policy owners or would help carry out the purposes of the Policy. We will make these changes in the manner permitted by applicable law and only after getting any necessary owner and regulatory approval. We will notify you of any changes that result in a material change in the underlying investments in the investment divisions, and you will have a chance to transfer out of the affected division (without charge). Some of the changes we may make include: .. Operating the Separate Account in any other form that is permitted by applicable law. .. Changes to obtain or continue exemptions from the 1940 Act. .. Transferring assets among investment divisions or to other separate accounts, or our general account or combining or removing investment divisions from the Separate Account. .. Substituting Fund shares in an investment division for shares of another Portfolio of the Fund or another fund or investment permitted by law. .. Changing the way we assess charges without exceeding the aggregate amount of the Advantage Equity Option's guaranteed maximum charges. .. Making any necessary technical changes to the Policy to conform it to the changes we have made. 34 OTHER POLICY PROVISIONS [SIDEBAR: CAREFULLY REVIEW YOUR POLICY WHICH CONTAINS A FULL DISCUSSION OF ALL ITS PROVISIONS.] You should read your Policy, including the Advantage Equity Options riders, for a full discussion of their provisions. The following is a brief discussion of some of the provisions that you should consider: "FREE LOOK" PERIOD TO CANCEL YOUR POLICY You can return the Policy during this period. The period is 10 days after you receive the Policy. If you return your Policy, we will send you a complete refund of any premiums paid within seven days. SUICIDE If the insured commits suicide within the first two base policy years, your beneficiary will receive all premiums paid to the Policy (without interest), less: any outstanding loans (plus accrued interest) and any dividends paid in cash or used to reduce premiums. ASSIGNMENT AND CHANGE OF OWNERSHIP You can designate a new owner or otherwise assign an Advantage Equity Option only as part of an assignment of your Policy. You can assign your Policy as collateral if you notify us in writing. The assignment or release of the assignment is effective when it is recorded at the Designated Office. We are not responsible for determining the validity of the assignment or its release. Also, there could be serious adverse tax consequences to you or your beneficiary, so you should consult with your tax adviser before making any change of ownership or other assignment. PAYMENT AND DEFERMENT Generally, we will pay or transfer amounts from the Separate Account within seven days after the Date of Receipt of all necessary documentation required for such payment or transfer. We can defer this if: .. The New York Stock Exchange has an unscheduled closing. .. There is an emergency so that we could not reasonably determine the investment experience of an Advantage Equity Option. .. The Securities and Exchange Commission determines that an emergency exists or by order permits us to do so for the protection of Advantage Equity Option owners (provided that the delay is permitted under New York State insurance law and regulations). .. With respect to the insurance proceeds, entitlement to a payment is being questioned or is uncertain. .. We are paying amounts attributable to a check. In that case we can wait for a reasonable time (15 days or less) to let the check clear. We currently pay interest on the amount of insurance proceeds at 3% per year from the date of death until the date we pay the benefit. DIVIDENDS The Advantage Equity Options are "nonparticipating," which means they are not eligible for dividends from us and do not share in any distributions of our surplus. 35 SALES AND ADMINISTRATION OF THE POLICIES [SIDEBAR: WE PERFORM THE SALES AND ADMINISTRATIVE SERVICES FOR THE POLICIES.] We serve as the "principal underwriter," as defined in the 1940 Act, for the Advantage Equity Options. We are registered under the Securities Exchange Act of 1934 as a broker-dealer and are a member of the National Association of Securities Dealers, Inc. DISTRIBUTING THE POLICIES We sell the Advantage Equity Options through licensed life insurance sales representatives: .. Registered through us or through a selling firm wholly owned by us; or .. Registered through other selling firms. We may also sell the Advantage Equity Options through sales representatives registered through our affiliated selling firms New England Securities Corporation, Walnut Street Securities, Inc. and Tower Square Securities, Inc. COMMISSIONS AND OTHER COMPENSATION We pay commissions and other compensation for the sale of our products to sales representatives registered through us or, for sales representatives not registered through us, to the selling firm through which they are registered. The commissions and other payments described below do not result in a charge against the Advantage Equity Options in addition to the charges already described elsewhere in this prospectus. We may require all or part of the commissions to be returned to us if you either make a withdrawal from your Advantage Equity Enricher or the base policy terminates. COMPENSATION TO METLIFE SALES REPRESENTATIVES AND THEIR MANAGERS FOR THE SALE OF THE POLICY MetLife sales representatives are sales representatives registered through us or through MetLife Securities, Inc., a wholly owned selling firm. MetLife sales representatives may be career sales representatives who are employees of MetLife or brokers who are not employees of MetLife. We make payments to MetLife sales representatives for the sale of the base policy and certain riders. We do not make any payments for the sale of the Advantage Equity Additions, but do make payments for the sale of the Advantage Equity Enricher. We make cash payments to MetLife sales representatives for the products they sell and service based upon a 'gross dealer concession' model. The cash payment is equal to a percentage of the gross dealer concession amount. For MetLife sales representatives, other than those in our MetLife Resources (MLR) Division, the percentage is determined by a formula that takes into consideration premiums and purchase payments applied to proprietary products sold and serviced by the MetLife sales representative. Proprietary products are those issued by us or our affiliates. The percentage could be as high as 100%. (MLR sales representatives receive compensation based upon premiums and purchase payments applied to all products sold and serviced by the representative, however they are entitled to the additional compensation described below based on sales of proprietary products.) Because sales of proprietary products are a factor in determining the percentage of the gross dealer concession amount and/or the amount of additional compensation (described below) to which MetLife sales representatives are entitled, they 36 have an incentive to favor the sale of proprietary products over similar products issued by non-affiliates. In addition, because their sales managers' compensation is based upon the sales made by the representatives they supervise, the sales managers also have an incentive to favor the sale of proprietary products. The gross dealer concession amount for the Advantage Equity Enricher is 2.35% of Advantage Equity Enricher premiums paid in all Policy years. ADDITIONAL CASH AND NON-CASH COMPENSATION Our sales representatives and their managers (and the sales representatives and managers of our affiliates) may be eligible for additional cash compensation such as bonuses, equity awards (for example, stock options), training allowances, supplemental salary, payments based on a percentage of policies' cash value, financing arrangements, marketing support, medical and retirement benefits and other insurance and non-insurance benefits. The amount of this additional compensation is based primarily on the amount of proprietary products sold. Sales representatives must meet a minimum level of sales of proprietary products in order to maintain their employment or agent status with us and in order to be eligible for most of the additional compensation listed above. Managers may be eligible for additional payments based on the performance (with emphasis on the sale of proprietary products) of the sales representatives that the manager supervises. For some of our affiliates, managers may pay a portion of their cash compensation to their sales representatives. Sales representatives and their managers (and the sales representatives and managers of our affiliates) are also eligible for various non-cash compensation programs that we offer such as conferences, trips, prizes, and awards. Other payments may be made for other services that do not directly involve the sale of products. These services may include the recruitment and training of personnel, production of promotional literature, and similar services. In addition to the payments listed above, MetLife makes certain payments to its business unit or to the business units of its affiliates that are responsible for the operation of the distribution systems through which the Advantage Equity Options are sold. This amount is part of the total compensation paid for the sale of the Advantage Equity Options. Receipt of the compensation described above may provide MetLife sales representatives and their managers and the sales representatives and managers of our affiliates with an incentive to favor the sale of proprietary products over similar products issued by non-affiliates. PAYMENTS TO SELLING FIRMS We pay compensation for the sale of the Advantage Equity Options by affiliated and unaffiliated selling firms. The compensation paid to selling firms for the sale of the Advantage Equity Options is generally not expected to exceed, on a present value basis, the aggregate amount of total compensation that is paid with respect to the sales made through MetLife's sales representatives. Selling firms pay their sales representatives all or a portion of the commissions received for their sales of the Advantage Equity Options; some firms may retain a portion of commissions. The amount that selling firms pass on to their sales representatives is determined in accordance with their internal compensation programs. Those programs may also include other 37 types of cash and non-cash compensation and other benefits. Sales representatives of affiliated selling firms and their managers may be eligible for various cash benefits and non-cash compensation items (as described above) that we may provide jointly with affiliated selling firms. Ask your sales representative for further information about what your sales representative and the selling firm for which he or she works may receive in connection with your purchase of an Advantage Equity Option. One of our affiliated selling firms, MetLife Investors Distribution Company ("MLID"), enters into selling agreements with other unaffiliated selling firms for the sale of the Advantage Equity Options and other variable insurance products, i.e., annuity contracts and life insurance policies, that we and our affiliates issue. MLID may enter into preferred distribution arrangements with certain of these selling firms, under which MLID may pay additional compensation, including marketing allowances, introduction fees, persistency payments, preferred status fees and industry conference fees. Marketing allowances are periodic payments to certain selling firms based on cumulative periodic (usually quarterly) sales of these variable insurance products. Introduction fees are payments to selling firms in connection with the addition of these variable products to the selling firm's line of investment products, including expenses relating to establishing the data communications systems necessary for the selling firm to offer, sell and administer these products. Persistency payments are periodic payments based on account and/or cash values of these variable insurance products. Preferred status fees are paid to obtain preferred treatment of these products in selling firms' marketing programs, which may include marketing services, participation in marketing meetings, listings in data resources and increased access to their sales representatives. Industry conference fees are amounts paid to cover in part the costs associated with sales conferences and educational seminars for selling firms' sales representatives. The preferred distribution arrangements discussed above are not offered to all selling firms. The terms of any particular agreement governing compensation may vary among selling firms and the amounts may be significant. We may enter into similar arrangements with our affiliates New England Securities Corporation, Walnut Street Securities, Inc. and Tower Square Securities, Inc. The prospect of receiving, or the receipt of, additional compensation as described above may provide selling firms or their representatives with an incentive to favor sales of the Advantage Equity Options and the base Policy over other variable insurance policies (or other investments) with respect to which the selling firm does not receive additional compensation, or lower levels of additional compensation. You may wish to take such payment arrangements into account when considering and evaluating any recommendation relating to the Advantage Equity Options. For more information about any such arrangements, ask your sales representative for further information about what your sales representative and the selling firm for which he or she works may receive in connection with your purchase of a Policy. LEGAL PROCEEDINGS In the ordinary course of business, MetLife, similar to other life insurance companies, is involved in lawsuits (including class action lawsuits), arbitrations and other legal proceedings. Also, from time to time, state and federal regulators or other officials conduct formal and informal examinations or undertake other actions dealing with various aspects of the financial services and insurance 38 industries. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. It is not possible to predict with certainty the ultimate outcome of any pending legal proceeding or regulatory action. However, MetLife does not believe that any such action or proceeding will have a material adverse effect upon the Separate Account or upon the ability of MetLife to meet its obligations under the Policies. RESTRICTIONS ON FINANCIAL TRANSACTIONS Federal laws designed to counter terrorism and prevent money laundering by criminals might, in certain circumstances, require us to reject a premium payment and/or block or "freeze" your account. If these laws apply in a particular situation, we would not be allowed to process any request for withdrawals, surrenders, loans or death benefits, make transfers, or continue making payments under your death benefit option until instructions are received from the appropriate regulator. We also may be required to provide additional information about you or your Policy to government regulators. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements of Metropolitan Life Separate Account UL included in this Prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. ILLUSTRATION OF ADVANTAGE EQUITY OPTIONS BENEFITS [SIDEBAR: PERSONALIZED ILLUSTRATIONS CAN HELP YOU UNDERSTAND HOW YOUR ADVANTAGE EQUITY OPTIONS VALUES CAN VARY.] In order to help you understand how your Advantage Equity Options values would vary over time under different sets of assumptions, we will provide you with certain illustrations upon request. These will be based on the age and insurance risk characteristics of the insured under your Policy and such factors as the premium payment amounts and rates of return (within limits) that you request. You can request such illustrations at any time. FINANCIAL STATEMENTS The financial statements of the Separate Account are attached to this prospectus. You can find the financial statements of MetLife in the Statement of Additional Information referred to on the following page. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. Additional information about the Advantage Equity Options and the Separate Account can be found in the Statement of Additional Information. You may view the Statement of Additional Information, by logging on to our website at WWW.METLIFE.COM or you may obtain a copy of the Statement of Information without charge, by calling 800-MET-5000. For current information about your Advantage Equity Option values, for transfers and premium reallocations, to change or update Advantage Equity Option information such as your billing address, billing mode, beneficiary or ownership, for information about other Advantage Equity Option transactions, and to ask questions about your Advantage Equity Option, you may call our TeleService Center at 800-MET-5000. You may also obtain, without charge, a personalized illustration of death benefits and cash values by contacting your sales representative or by calling our TeleService Center at 800-MET-5000. This prospectus incorporates by reference all of the information contained in the Statement of Additional Information, which is legally part of this prospectus. Information about the Advantage Equity Options and the Separate Account, including the Statement of Additional Information, is available for viewing and copying at the SEC's Public Reference Room in Washington, D.C. Information about the operation of the public reference room may be obtained by calling the SEC at 202-942-8090. The Statement of Additional Information, reports and other information about the Separate Account are available on the SEC Internet site as WWW.SEC.GOV. Copies of this information may be obtained upon payment of a duplicating fee, by writing to the SEC's Public Reference Section at 100 F Street, NE, Washington, DC 20549. MetLife was formed under the laws of New York State in 1868. MetLife Inc. is a leading provider of insurance and other financial services to millions of individual and institutional customers throughout the United States. Through its subsidiaries and affiliates, MetLife, Inc. offers life insurance, annuities, automobile and homeowner's insurance and retail banking services to individuals, as well as group insurance, reinsurance and retirement and savings products and services to corporations and other institutions. Outside the U.S., the MetLife companies have direct insurance operations in Asia Pacific, Latin America and Europe. For more information about MetLife, please visit our website at WWW.METLIFE.COM. FILE NO. 811-6025 40 ANNUAL REPORT OF METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY DECEMBER 31, 2005 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policyholders of Metropolitan Life Separate Account UL and the Board of Directors of Metropolitan Life Insurance Company: We have audited the accompanying statement of assets and liabilities of the investment divisions (as disclosed in Note 1 to the financial statements) comprising Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company ("Metropolitan Life") as of December 31, 2005, and the related statements of operations and changes in net assets for each of the periods in the three years then ended. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2005, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the investment divisions comprising the Separate Account of Metropolitan Life as of December 31, 2005, the results of their operations and the changes in their net assets for each of the periods in the three years then ended, in conformity with accounting principles generally accepted in the United States of America. DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida March 29, 2006 F-1 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES AT DECEMBER 31, 2005
BLACKROCK BLACKROCK INVESTMENT TRUST DIVERSIFIED INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Investment Trust Portfolio (14,445,292 shares; cost $430,808,062)............. $ 401,579,124 $ -- BlackRock Diversified Portfolio (19,579,913 shares; cost $315,918,793)............. -- 319,739,984 BlackRock Aggressive Growth Portfolio (9,898,140 shares; cost $230,823,866).............. -- -- MetLife Stock Index Portfolio (18,234,739 shares; cost $556,916,894)............. -- -- FI International Stock Portfolio (4,222,190 shares; cost $46,661,949)............... -- -- FI Mid Cap Opportunities Portfolio (14,174,528 shares; cost $260,321,348)............. -- -- T. Rowe Price Small Cap Growth Portfolio (5,328,462 shares; cost $64,292,906)............... -- -- Oppenheimer Global Equity Portfolio (2,751,633 shares; cost $31,905,233)............... -- -- Harris Oakmark Large Cap Value Portfolio (4,155,093 shares; cost $47,559,215)............... -- -- Neuberger Berman Mid Cap Value Portfolio (3,013,279 shares; cost $49,254,131)............... -- -- T. Rowe Price Large Cap Growth Portfolio (3,058,976 shares; cost $34,402,430)............... -- -- Lehman Brothers Aggregate Bond Index Portfolio (7,452,051 shares; cost $80,131,372)............... -- -- Morgan Stanley EAFE Index Portfolio (3,276,867 shares; cost $30,437,074)............... -- -- Russell 2000 Index Portfolio (3,063,111 shares; cost $33,227,529)............... -- -- Jennison Growth Portfolio (1,056,515 shares; cost $10,873,213)............... -- -- BlackRock Strategic Value Portfolio (4,852,649 shares; cost $71,185,711)............... -- -- MetLife Mid Cap Stock Index Portfolio (3,224,137 shares; cost $36,005,175)............... -- -- Franklin Templeton Small Cap Growth Portfolio (489,746 shares; cost $4,218,036).................. -- -- BlackRock Large Cap Value Portfolio (409,008 shares; cost $4,643,650).................. -- -- Davis Venture Value Portfolio (1,423,271 shares; cost $34,893,963)............... -- -- Loomis Sayles Small Cap Portfolio (34,857 shares; cost $6,332,001)................... -- -- BlackRock Legacy Large Cap Growth Portfolio (465,855 shares; cost $8,865,115).................. -- -- MFS Investors Trust Portfolio (430,223 shares; cost $3,548,717).................. -- -- BlackRock Bond Income Portfolio (857,050 shares; cost $93,224,839)................. -- -- FI Value Leaders Portfolio (16,899 shares; cost $2,927,434)................... -- -- Harris Oakmark Focused Value Portfolio (185,737 shares; cost $38,504,714)................. -- -- ---------------- ---------------- Total Investments................................... 401,579,124 319,739,984 Cash and Accounts Receivable........................ -- 10,439 ---------------- ---------------- Total Assets........................................ 401,579,124 319,750,423 LIABILITIES Due to/From Metropolitan Life Insurance Company..... (21,844) -- ---------------- ---------------- NET ASSETS.......................................... $ 401,557,280 $ 319,750,423 ================ ================ Outstanding Units................................... 16,488,159 13,638,816 Unit Fair Values.................................... $12.13 to $37.35 $13.18 to $33.65
See Notes to Financial Statements. F-2
BLACKROCK METLIFE FI FI MID CAP T. ROWE PRICE OPPENHEIMER AGGRESSIVE GROWTH STOCK INDEX INTERNATIONAL STOCK OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- 222,213,228 -- -- -- -- -- -- 605,393,327 -- -- -- -- -- -- 56,915,117 -- -- -- -- -- -- 247,629,002 -- -- -- -- -- -- 80,590,987 -- -- -- -- -- -- 41,604,692 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- ---------------- --------------- --------------- ---------------- 222,213,228 605,393,327 56,915,117 247,629,002 80,590,987 41,604,692 6,742 176,014 -- 116,970 41,059 104 ---------------- ---------------- ---------------- --------------- --------------- ---------------- 222,219,970 605,569,341 56,915,117 247,745,972 80,632,046 41,604,796 -- -- (59,403) -- -- -- ---------------- ---------------- ---------------- --------------- --------------- ---------------- $ 222,219,970 $ 605,569,341 $ 56,855,714 $ 247,745,972 $ 80,632,046 $ 41,604,796 ================ ================ ================ =============== =============== ================ 11,502,614 32,156,989 3,294,341 14,520,500 5,103,342 2,314,718 $14.64 to $20.73 $11.08 to $33.24 $13.71 to $18.97 $7.12 to $20.08 $8.20 to $17.21 $17.48 to $19.47
F-3 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
HARRIS OAKMARK NEUBERGER BERMAN LARGE CAP VALUE MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Investment Trust Portfolio (14,445,292 shares; cost $430,808,062)............. $ -- $ -- BlackRock Diversified Portfolio (19,579,913 shares; cost $315,918,793)............. -- -- BlackRock Aggressive Growth Portfolio (9,898,140 shares; cost $230,823,866).............. -- -- MetLife Stock Index Portfolio (18,234,739 shares; cost $556,916,894)............. -- -- FI International Stock Portfolio (4,222,190 shares; cost $46,661,949)............... -- -- FI Mid Cap Opportunities Portfolio (14,174,528 shares; cost $260,321,348)............. -- -- T. Rowe Price Small Cap Growth Portfolio (5,328,462 shares; cost $64,292,906)............... -- -- Oppenheimer Global Equity Portfolio (2,751,633 shares; cost $31,905,233)............... -- -- Harris Oakmark Large Cap Value Portfolio (4,155,093 shares; cost $47,559,215)............... 54,390,170 -- Neuberger Berman Mid Cap Value Portfolio (3,013,279 shares; cost $49,254,131)............... -- 63,218,591 T. Rowe Price Large Cap Growth Portfolio (3,058,976 shares; cost $34,402,430)............... -- -- Lehman Brothers Aggregate Bond Index Portfolio (7,452,051 shares; cost $80,131,372)............... -- -- Morgan Stanley EAFE Index Portfolio (3,276,867 shares; cost $30,437,074)............... -- -- Russell 2000 Index Portfolio (3,063,111 shares; cost $33,227,529)............... -- -- Jennison Growth Portfolio (1,056,515 shares; cost $10,873,213)............... -- -- BlackRock Strategic Value Portfolio (4,852,649 shares; cost $71,185,711)............... -- -- MetLife Mid Cap Stock Index Portfolio (3,224,137 shares; cost $36,005,175)............... -- -- Franklin Templeton Small Cap Growth Portfolio (489,746 shares; cost $4,218,036).................. -- -- BlackRock Large Cap Value Portfolio (409,008 shares; cost $4,643,650).................. -- -- Davis Venture Value Portfolio (1,423,271 shares; cost $34,893,963)............... -- -- Loomis Sayles Small Cap Portfolio (34,857 shares; cost $6,332,001)................... -- -- BlackRock Legacy Large Cap Growth Portfolio (465,855 shares; cost $8,865,115).................. -- -- MFS Investors Trust Portfolio (430,223 shares; cost $3,548,717).................. -- -- BlackRock Bond Income Portfolio (857,050 shares; cost $93,224,839)................. -- -- FI Value Leaders Portfolio (16,899 shares; cost $2,927,434)................... -- -- Harris Oakmark Focused Value Portfolio (185,737 shares; cost $38,504,714)................. -- -- ---------------- ---------------- Total Investments................................... 54,390,170 63,218,591 Cash and Accounts Receivable........................ 55,264 -- ---------------- ---------------- Total Assets........................................ 54,445,434 63,218,591 LIABILITIES Due to/From Metropolitan Life Insurance Company..... -- (66,196) ---------------- ---------------- NET ASSETS.......................................... $ 54,445,434 $ 63,152,395 ================ ================ Outstanding Units................................... 4,085,993 2,912,765 Unit Fair Values.................................... $12.55 to $15.72 $18.79 to $26.61
See Notes to Financial Statements. F-4
T. ROWE PRICE LEHMAN BROTHERS MORGAN STANLEY RUSSELL JENNISON BLACKROCK LARGE CAP GROWTH AGGREGATE BOND INDEX EAFE INDEX 2000 INDEX GROWTH STRATEGIC VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- -------------------- ------------------- ------------------- ------------------- ------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 41,387,943 -- -- -- -- -- -- 80,556,673 -- -- -- -- -- -- 42,435,427 -- -- -- -- -- -- 42,638,506 -- -- -- -- -- -- 13,079,653 -- -- -- -- -- -- 90,065,160 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --------------- --------------- --------------- ---------------- --------------- ---------------- 41,387,943 80,556,673 42,435,427 42,638,506 13,079,653 90,065,160 11,568 -- 22,132 -- 4,592 57,751 --------------- --------------- --------------- ---------------- --------------- ---------------- 41,399,511 80,556,673 42,457,559 42,638,506 13,084,245 90,122,911 -- (9,260) -- (1,660) -- -- --------------- --------------- --------------- ---------------- --------------- ---------------- $ 41,399,511 $ 80,547,413 $ 42,457,559 $ 42,636,846 $ 13,084,245 $ 90,122,911 =============== =============== =============== ================ =============== ================ 3,468,063 5,619,973 3,464,106 2,619,287 1,297,642 4,485,936 $9.47 to $14.21 $13.32 to 14.53 $10.45 to 14.05 $13.00 to $17.96 $5.65 to $12.19 $18.58 to $20.28
F-5 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
METLIFE FRANKLIN TEMPLETON MID CAP STOCK INDEX SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Investment Trust Portfolio (14,445,292 shares; cost $430,808,062)............. $ -- $ -- BlackRock Diversified Portfolio (19,579,913 shares; cost $315,918,793)............. -- -- BlackRock Aggressive Growth Portfolio (9,898,140 shares; cost $230,823,866).............. -- -- MetLife Stock Index Portfolio (18,234,739 shares; cost $556,916,894)............. -- -- FI International Stock Portfolio (4,222,190 shares; cost $46,661,949)............... -- -- FI Mid Cap Opportunities Portfolio (14,174,528 shares; cost $260,321,348)............. -- -- T. Rowe Price Small Cap Growth Portfolio (5,328,462 shares; cost $64,292,906)............... -- -- Oppenheimer Global Equity Portfolio (2,751,633 shares; cost $31,905,233)............... -- -- Harris Oakmark Large Cap Value Portfolio (4,155,093 shares; cost $47,559,215)............... -- -- Neuberger Berman Mid Cap Value Portfolio (3,013,279 shares; cost $49,254,131)............... -- -- T. Rowe Price Large Cap Growth Portfolio (3,058,976 shares; cost $34,402,430)............... -- -- Lehman Brothers Aggregate Bond Index Portfolio (7,452,051 shares; cost $80,131,372)............... -- -- Morgan Stanley EAFE Index Portfolio (3,276,867 shares; cost $30,437,074)............... -- -- Russell 2000 Index Portfolio (3,063,111 shares; cost $33,227,529)............... -- -- Jennison Growth Portfolio (1,056,515 shares; cost $10,873,213)............... -- -- BlackRock Strategic Value Portfolio (4,852,649 shares; cost $71,185,711)............... -- -- MetLife Mid Cap Stock Index Portfolio (3,224,137 shares; cost $36,005,175)............... 46,524,294 -- Franklin Templeton Small Cap Growth Portfolio (489,746 shares; cost $4,218,036).................. -- 5,108,051 BlackRock Large Cap Value Portfolio (409,008 shares; cost $4,643,650).................. -- -- Davis Venture Value Portfolio (1,423,271 shares; cost $34,893,963)............... -- -- Loomis Sayles Small Cap Portfolio (34,857 shares; cost $6,332,001)................... -- -- BlackRock Legacy Large Cap Growth Portfolio (465,855 shares; cost $8,865,115).................. -- -- MFS Investors Trust Portfolio (430,223 shares; cost $3,548,717).................. -- -- BlackRock Bond Income Portfolio (857,050 shares; cost $93,224,839)................. -- -- FI Value Leaders Portfolio (16,899 shares; cost $2,927,434)................... -- -- Harris Oakmark Focused Value Portfolio (185,737 shares; cost $38,504,714)................. -- -- ---------------- --------------- Total Investments................................... 46,524,294 5,108,051 Cash and Accounts Receivable........................ -- -- ---------------- --------------- Total Assets........................................ 46,524,294 5,108,051 LIABILITIES Due to/From Metropolitan Life Insurance Company..... (1,017) -- ---------------- --------------- NET ASSETS.......................................... $ 46,523,277 $ 5,108,051 ================ =============== Outstanding Units................................... 2,985,941 474,966 Unit Fair Values.................................... $14.39 to $15.80 $8.20 to $10.83
See Notes to Financial Statements. F-6
BLACKROCK DAVIS LOOMIS BLACKROCK MFS INVESTORS BLACKROCK LARGE CAP VALUE VENTURE VALUE SAYLES SMALL CAP LEGACY LARGE CAP GROWTH TRUST BOND INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ----------------------- ------------------- ------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 5,137,144 -- -- -- -- -- -- 43,993,297 -- -- -- -- -- -- 8,114,417 -- -- -- -- -- -- 10,109,046 -- -- -- -- -- -- 4,207,586 -- -- -- -- -- -- 94,695,466 -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- ----------------- --------------- -------------- ---------------- 5,137,144 43,993,297 8,114,417 10,109,046 4,207,586 94,695,466 -- -- -- -- 9,150 -- ---------------- ---------------- ----------------- --------------- -------------- ---------------- 5,137,144 43,993,297 8,114,417 10,109,046 4,216,736 94,695,466 -- (183) -- -- -- (2,337) ---------------- ---------------- ----------------- --------------- -------------- ---------------- $ 5,137,144 $ 43,993,114 $ 8,114,417 $ 10,109,046 $ 4,216,736 $ 94,693,129 ================ ================ ================= =============== ============== ================ 396,107 1,739,984 39,978 1,201,181 425,864 5,010,744 $12.63 to $13.05 $12.13 to $35.19 $11.54 to $255.61 $7.96 to $11.96 $9.51 to $9.95 $13.78 to $28.49
F-7 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2003
FI HARRIS OAKMARK VALUE LEADERS FOCUSED VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN SERIES FUND, INC. ("METROPOLITAN FUND") BlackRock Investment Trust Portfolio (14,445,292 shares; cost $430,808,062)............. $ -- $ -- BlackRock Diversified Portfolio (19,579,913 shares; cost $315,918,793)............. -- -- BlackRock Aggressive Growth Portfolio (9,898,140 shares; cost $230,823,866).............. -- -- MetLife Stock Index Portfolio (18,234,739 shares; cost $556,916,894)............. -- -- FI International Stock Portfolio (4,222,190 shares; cost $46,661,949)............... -- -- FI Mid Cap Opportunities Portfolio (14,174,528 shares; cost $260,321,348)............. -- -- T. Rowe Price Small Cap Growth Portfolio (5,328,462 shares; cost $64,292,906)............... -- -- Oppenheimer Global Equity Portfolio (2,751,633 shares; cost $31,905,233)............... -- -- Harris Oakmark Large Cap Value Portfolio (4,155,093 shares; cost $47,559,215)............... -- -- Neuberger Berman Mid Cap Value Portfolio (3,013,279 shares; cost $49,254,131)............... -- -- T. Rowe Price Large Cap Growth Portfolio (3,058,976 shares; cost $34,402,430)............... -- -- Lehman Brothers Aggregate Bond Index Portfolio (7,452,051 shares; cost $80,131,372)............... -- -- Morgan Stanley EAFE Index Portfolio (3,276,867 shares; cost $30,437,074)............... -- -- Russell 2000 Index Portfolio (3,063,111 shares; cost $33,227,529)............... -- -- Jennison Growth Portfolio (1,056,515 shares; cost $10,873,213)............... -- -- BlackRock Strategic Value Portfolio (4,852,649 shares; cost $71,185,711)............... -- -- MetLife Mid Cap Stock Index Portfolio (3,224,137 shares; cost $36,005,175)............... -- -- Franklin Templeton Small Cap Growth Portfolio (489,746 shares; cost $4,218,036).................. -- -- BlackRock Large Cap Value Portfolio (409,008 shares; cost $4,643,650).................. -- -- Davis Venture Value Portfolio (1,423,271 shares; cost $34,893,963)............... -- -- Loomis Sayles Small Cap Portfolio (34,857 shares; cost $6,332,001)................... -- -- BlackRock Legacy Large Cap Growth Portfolio (465,855 shares; cost $8,865,115).................. -- -- MFS Investors Trust Portfolio (430,223 shares; cost $3,548,717).................. -- -- BlackRock Bond Income Portfolio (857,050 shares; cost $93,224,839)................. -- -- FI Value Leaders Portfolio (16,899 shares; cost $2,927,434)................... 3,262,872 -- Harris Oakmark Focused Value Portfolio (185,737 shares; cost $38,504,714)................. -- 49,251,761 ---------------- ------------------ Total Investments................................... 3,262,872 49,251,761 Cash and Accounts Receivable........................ 2 -- ---------------- ------------------ Total Assets........................................ 3,262,874 49,251,761 LIABILITIES Due to/From Metropolitan Life Insurance Company..... -- -- ---------------- ------------------ NET ASSETS.......................................... $ 3,262,874 $ 49,251,761 ================ ================== Outstanding Units................................... 248,972 182,165 Unit Fair Values.................................... $10.54 to $13.29 $260.95 to $272.09
See Notes to Financial Statements. F-8 [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
SALOMON BROTHERS SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------- ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND-(CONTINUED) Salomon Brothers Strategic Bond Opportunities Portfolio (999,112 shares; cost $12,452,591).................................... $ 12,708,706 $ -- Salomon Brothers U.S. Government Portfolio (983,168 shares; cost $12,070,629).................................... -- 12,014,309 BlackRock Money Market Portfolio (280,415 shares; cost $28,041,514).................................... -- -- MFS Total Return Portfolio (14,569 shares; cost $2,121,146)...................................... -- -- MetLife Conservative Allocation Portfolio (11,401 shares; cost $117,671)........................................ -- -- MetLife Conservative to Moderate Allocation Portfolio (54,577 shares; cost $569,253)........................................ -- -- MetLife Moderate Allocation Portfolio (133,959 shares; cost $1,423,613)..................................... -- -- MetLife Moderate to Aggressive Allocation Portfolio (212,616 shares; cost $2,284,839)..................................... -- -- MetLife Aggressive Allocation Portfolio (40,417 shares; cost $441,948)........................................ -- -- JANUS ASPEN SERIES FUND ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio (236,736 shares; cost $4,086,107)..................................... -- -- Janus Aspen Balanced Portfolio (82 shares; cost $2,182).............................................. -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Stock Portfolio (12,026 shares; cost $212,657)........................................ -- -- AIM V. I. Government Securities Portfolio (678 shares; cost $8,145)............................................. -- -- AIM V.I. Real Estate Portfolio (83,446 shares; cost $1,500,371)...................................... -- -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCT SERIES ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio (407,349 shares; cost $5,108,135)..................................... -- -- Franklin Mutual Discovery Securities Portfolio (6,541 shares; cost $112,900)......................................... -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUNDS, INC. ("ALLIANCE FUND") AllianceBernstein Growth & Income Portfolio (166,930 shares; cost $3,365,517)..................................... -- -- AllianceBernstein Global Technology Portfolio (2,707 shares; cost $36,524).......................................... -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio (29,600 shares; cost $781,528)........................................ -- -- Fidelity VIP Asset Manager Growth Portfolio (55,266 shares; cost $684,734)........................................ -- -- Fidelity VIP Growth Portfolio (15,866 shares; cost $492,836)........................................ -- -- Fidelity VIP Investment Grade Bond Portfolio (2,641 shares; cost $33,842).......................................... -- -- Fidelity VIP Equity-Income Portfolio (997 shares; cost $24,698)............................................ -- -- ---------------- ---------------- Total Investments...................................................... 12,708,706 12,014,309 Cash and Accounts Receivable........................................... -- -- ---------------- ---------------- Total Assets........................................................... 12,708,706 12,014,309 LIABILITIES Due to/From Metropolitan Life Insurance Company........................ -- -- ---------------- ---------------- NET ASSETS............................................................. $ 12,708,706 $ 12,014,309 ================ ================ Outstanding Units...................................................... 843,296 879,572 Unit Fair Values....................................................... $14.56 to $15.19 $13.19 to $13.75
BLACKROCK MONEY MARKET INVESTMENT DIVISION ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND-(CONTINUED) Salomon Brothers Strategic Bond Opportunities Portfolio (999,112 shares; cost $12,452,591).................................... $ -- Salomon Brothers U.S. Government Portfolio (983,168 shares; cost $12,070,629).................................... -- BlackRock Money Market Portfolio (280,415 shares; cost $28,041,514).................................... 28,041,518 MFS Total Return Portfolio (14,569 shares; cost $2,121,146)...................................... -- MetLife Conservative Allocation Portfolio (11,401 shares; cost $117,671)........................................ -- MetLife Conservative to Moderate Allocation Portfolio (54,577 shares; cost $569,253)........................................ -- MetLife Moderate Allocation Portfolio (133,959 shares; cost $1,423,613)..................................... -- MetLife Moderate to Aggressive Allocation Portfolio (212,616 shares; cost $2,284,839)..................................... -- MetLife Aggressive Allocation Portfolio (40,417 shares; cost $441,948)........................................ -- JANUS ASPEN SERIES FUND ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio (236,736 shares; cost $4,086,107)..................................... -- Janus Aspen Balanced Portfolio (82 shares; cost $2,182).............................................. -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Stock Portfolio (12,026 shares; cost $212,657)........................................ -- AIM V. I. Government Securities Portfolio (678 shares; cost $8,145)............................................. -- AIM V.I. Real Estate Portfolio (83,446 shares; cost $1,500,371)...................................... -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCT SERIES ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio (407,349 shares; cost $5,108,135)..................................... -- Franklin Mutual Discovery Securities Portfolio (6,541 shares; cost $112,900)......................................... -- ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUNDS, INC. ("ALLIANCE FUND") AllianceBernstein Growth & Income Portfolio (166,930 shares; cost $3,365,517)..................................... -- AllianceBernstein Global Technology Portfolio (2,707 shares; cost $36,524).......................................... -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio (29,600 shares; cost $781,528)........................................ -- Fidelity VIP Asset Manager Growth Portfolio (55,266 shares; cost $684,734)........................................ -- Fidelity VIP Growth Portfolio (15,866 shares; cost $492,836)........................................ -- Fidelity VIP Investment Grade Bond Portfolio (2,641 shares; cost $33,842).......................................... -- Fidelity VIP Equity-Income Portfolio (997 shares; cost $24,698)............................................ -- ---------------- Total Investments...................................................... 28,041,518 Cash and Accounts Receivable........................................... 162 ---------------- Total Assets........................................................... 28,041,680 LIABILITIES Due to/From Metropolitan Life Insurance Company........................ (13,707) ---------------- NET ASSETS............................................................. $ 28,027,973 ================ Outstanding Units...................................................... 1,760,759 Unit Fair Values....................................................... $12.92 to $16.24
See Notes to Financial Statements. F-10
METLIFE METLIFE METLIFE CONSERVATIVE TO MODERATE TO METLIFE MFS CONSERVATIVE MODERATE METLIFE AGGRESSIVE AGGRESSIVE TOTAL RETURN ALLOCATION ALLOCATION MODERATE ALLOCATION ALLOCATION ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- 2,157,207 -- -- -- -- -- -- 118,225 -- -- -- -- -- -- 578,511 -- -- -- -- -- -- 1,449,435 -- -- -- -- -- -- 2,349,403 -- -- -- -- -- -- 452,673 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 2,157,207 118,225 578,511 1,449,435 2,349,403 452,673 3 -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- 2,157,210 118,225 578,511 1,449,435 2,349,403 452,673 -- -- -- -- -- -- ---------------- ---------------- ---------------- ---------------- ---------------- ---------------- $ 2,157,210 $ 118,225 $ 578,511 $ 1,449,435 $ 2,349,403 $ 452,673 ================ ================ ================ ================ ================ ================ 190,106 53,570 65,370 165,720 249,839 49,908 $11.21 to $11.38 $10.35 to $10.41 $10.58 to $10.64 $10.80 to $10.87 $11.03 to $11.09 $11.20 to $11.27
JANUS ASPEN LARGE CAP JANUS ASPEN GROWTH BALANCED INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 4,938,311 -- -- 2,186 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------- ------ 4,938,311 2,186 -- -- ---------- ------ 4,938,311 2,186 (4,237) -- ---------- ------ $4,934,074 $2,186 ========== ====== 563,653 187 $ 8.75 $11.68
F-11 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
AIM AIM V.I. CORE STOCK V.I. GOVERNMENT SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION ------------------- -------------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND-(CONTINUED) Salomon Brothers Strategic Bond Opportunities Portfolio (999,112 shares; cost $12,452,591).................................... $ -- $ -- Salomon Brothers U.S. Government Portfolio (983,168 shares; cost $12,070,629).................................... -- -- BlackRock Money Market Portfolio (280,415 shares; cost $28,041,514).................................... -- -- MFS Total Return Portfolio (14,569 shares; cost $2,121,146)...................................... -- -- MetLife Conservative Allocation Portfolio (11,401 shares; cost $117,671)........................................ -- -- MetLife Conservative to Moderate Allocation Portfolio (54,577 shares; cost $569,253)........................................ -- -- MetLife Moderate Allocation Portfolio (133,959 shares; cost $1,423,613)..................................... -- -- MetLife Moderate to Aggressive Allocation Portfolio (212,616 shares; cost $2,284,839)..................................... -- -- MetLife Aggressive Allocation Portfolio (40,417 shares; cost $441,948)........................................ -- -- JANUS ASPEN SERIES FUND ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio (236,736 shares; cost $4,086,107)..................................... -- -- Janus Aspen Balanced Portfolio (82 shares; cost $2,182).............................................. -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Stock Portfolio (12,026 shares; cost $212,657)........................................ 229,098 -- AIM V. I. Government Securities Portfolio (678 shares; cost $8,145)............................................. -- 8,008 AIM V.I. Real Estate Portfolio (83,446 shares; cost $1,500,371)...................................... -- -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCT SERIES ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio (407,349 shares; cost $5,108,135)..................................... -- -- Franklin Mutual Discovery Securities Portfolio (6,541 shares; cost $112,900)......................................... -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUNDS, INC. ("ALLIANCE FUND") AllianceBernstein Growth & Income Portfolio (166,930 shares; cost $3,365,517)..................................... -- -- AllianceBernstein Global Technology Portfolio (2,707 shares; cost $36,524).......................................... -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio (29,600 shares; cost $781,528)........................................ -- -- Fidelity VIP Asset Manager Growth Portfolio (55,266 shares; cost $684,734)........................................ -- -- Fidelity VIP Growth Portfolio (15,866 shares; cost $492,836)........................................ -- -- Fidelity VIP Investment Grade Bond Portfolio (2,641 shares; cost $33,842).......................................... -- -- Fidelity VIP Equity-Income Portfolio (997 shares; cost $24,698)............................................ -- -- -------- ------ Total Investments...................................................... 229,098 8,008 Cash and Accounts Receivable........................................... 1,019 247 -------- ------ Total Assets........................................................... 230,117 8,255 LIABILITIES Due to/From Metropolitan Life Insurance Company........................ -- -- -------- ------ NET ASSETS............................................................. $230,117 $8,255 ======== ====== Outstanding Units...................................................... 21,852 769 Unit Fair Values....................................................... $ 10.53 $10.73
AIM V.I. REAL ESTATE INVESTMENT DIVISION -------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND-(CONTINUED) Salomon Brothers Strategic Bond Opportunities Portfolio (999,112 shares; cost $12,452,591).................................... $ -- Salomon Brothers U.S. Government Portfolio (983,168 shares; cost $12,070,629).................................... -- BlackRock Money Market Portfolio (280,415 shares; cost $28,041,514).................................... -- MFS Total Return Portfolio (14,569 shares; cost $2,121,146)...................................... -- MetLife Conservative Allocation Portfolio (11,401 shares; cost $117,671)........................................ -- MetLife Conservative to Moderate Allocation Portfolio (54,577 shares; cost $569,253)........................................ -- MetLife Moderate Allocation Portfolio (133,959 shares; cost $1,423,613)..................................... -- MetLife Moderate to Aggressive Allocation Portfolio (212,616 shares; cost $2,284,839)..................................... -- MetLife Aggressive Allocation Portfolio (40,417 shares; cost $441,948)........................................ -- JANUS ASPEN SERIES FUND ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio (236,736 shares; cost $4,086,107)..................................... -- Janus Aspen Balanced Portfolio (82 shares; cost $2,182).............................................. -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Stock Portfolio (12,026 shares; cost $212,657)........................................ -- AIM V. I. Government Securities Portfolio (678 shares; cost $8,145)............................................. -- AIM V.I. Real Estate Portfolio (83,446 shares; cost $1,500,371)...................................... 1,757,368 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCT SERIES ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio (407,349 shares; cost $5,108,135)..................................... -- Franklin Mutual Discovery Securities Portfolio (6,541 shares; cost $112,900)......................................... -- ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUNDS, INC. ("ALLIANCE FUND") AllianceBernstein Growth & Income Portfolio (166,930 shares; cost $3,365,517)..................................... -- AllianceBernstein Global Technology Portfolio (2,707 shares; cost $36,524).......................................... -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio (29,600 shares; cost $781,528)........................................ -- Fidelity VIP Asset Manager Growth Portfolio (55,266 shares; cost $684,734)........................................ -- Fidelity VIP Growth Portfolio (15,866 shares; cost $492,836)........................................ -- Fidelity VIP Investment Grade Bond Portfolio (2,641 shares; cost $33,842).......................................... -- Fidelity VIP Equity-Income Portfolio (997 shares; cost $24,698)............................................ -- ---------- Total Investments...................................................... 1,757,368 Cash and Accounts Receivable........................................... -- ---------- Total Assets........................................................... 1,757,368 LIABILITIES Due to/From Metropolitan Life Insurance Company........................ (9,549) ---------- NET ASSETS............................................................. $1,747,819 ========== Outstanding Units...................................................... 63,997 Unit Fair Values....................................................... $ 27.61
See Notes to Financial Statements. F-12
FRANKLIN TEMPLETON FRANKLIN MUTUAL ALLIANCEBERNSTEIN ALLIANCEBERNSTEIN FIDELITY VIP FIDELITY VIP FOREIGN SECURITIES DISCOVERY SECURITIES GROWTH & INCOME GLOBAL TECHNOLOGY CONTRAFUND ASSET MANAGER GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- -------------------- ------------------- ------------------- ------------------- -------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 6,452,411 -- -- -- -- -- -- 121,664 -- -- -- -- -- -- 4,114,833 -- -- -- -- -- -- 42,308 -- -- -- -- -- -- 915,518 -- -- -- -- -- -- 711,828 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ---------- -------- ---------- ------- -------- -------- 6,452,411 121,664 4,114,833 42,308 915,518 711,828 -- -- 4,307 -- 5,596 -- ---------- -------- ---------- ------- -------- -------- 6,452,411 121,664 4,119,140 42,308 921,114 711,828 (14,331) -- -- -- -- (3,427) ---------- -------- ---------- ------- -------- -------- $6,438,080 $121,664 $4,119,140 $42,308 $921,114 $708,401 ========== ======== ========== ======= ======== ======== 488,477 9,138 338,034 8,553 74,414 80,752 $ 13.17 $ 13.31 $ 12.19 $ 4.95 $ 12.38 $ 8.79
F-13 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
FIDELITY FIDELITY VIP VIP GROWTH INVESTMENT GRADE BOND INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND-(CONTINUED) Salomon Brothers Strategic Bond Opportunities Portfolio (999,112 shares; cost $12,452,591).................................... $ -- $ -- Salomon Brothers U.S. Government Portfolio (983,168 shares; cost $12,070,629).................................... -- -- BlackRock Money Market Portfolio (280,415 shares; cost $28,041,514).................................... -- -- MFS Total Return Portfolio (14,569 shares; cost $2,121,146)...................................... -- -- MetLife Conservative Allocation Portfolio (11,401 shares; cost $117,671)........................................ -- -- MetLife Conservative to Moderate Allocation Portfolio (54,577 shares; cost $569,253)........................................ -- -- MetLife Moderate Allocation Portfolio (133,959 shares; cost $1,423,613)..................................... -- -- MetLife Moderate to Aggressive Allocation Portfolio (212,616 shares; cost $2,284,839)..................................... -- -- MetLife Aggressive Allocation Portfolio (40,417 shares; cost $441,948)........................................ -- -- JANUS ASPEN SERIES FUND ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio (236,736 shares; cost $4,086,107)..................................... -- -- Janus Aspen Balanced Portfolio (82 shares; cost $2,182).............................................. -- -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Stock Portfolio (12,026 shares; cost $212,657)........................................ -- -- AIM V. I. Government Securities Portfolio (678 shares; cost $8,145)............................................. -- -- AIM V.I. Real Estate Portfolio (83,446 shares; cost $1,500,371)...................................... -- -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCT SERIES ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio (407,349 shares; cost $5,108,135)..................................... -- -- Franklin Mutual Discovery Securities Portfolio (6,541 shares; cost $112,900)......................................... -- -- ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUNDS, INC. ("ALLIANCE FUND") AllianceBernstein Growth & Income Portfolio (166,930 shares; cost $3,365,517)..................................... -- -- AllianceBernstein Global Technology Portfolio (2,707 shares; cost $36,524).......................................... -- -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio (29,600 shares; cost $781,528)........................................ -- -- Fidelity VIP Asset Manager Growth Portfolio (55,266 shares; cost $684,734)........................................ -- -- Fidelity VIP Growth Portfolio (15,866 shares; cost $492,836)........................................ 532,466 -- Fidelity VIP Investment Grade Bond Portfolio (2,641 shares; cost $33,842).......................................... -- 33,484 Fidelity VIP Equity-Income Portfolio (997 shares; cost $24,698)............................................ -- -- -------- ------- Total Investments...................................................... 532,466 33,484 Cash and Accounts Receivable........................................... 997 -- -------- ------- Total Assets........................................................... 533,463 33,484 LIABILITIES Due to/From Metropolitan Life Insurance Company........................ -- -- -------- ------- NET ASSETS............................................................. $533,463 $33,484 ======== ======= Outstanding Units...................................................... 77,974 3,156 Unit Fair Values....................................................... $ 6.84 $ 10.64
FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION ------------------- ASSETS: INVESTMENTS AT FAIR VALUE: METROPOLITAN FUND-(CONTINUED) Salomon Brothers Strategic Bond Opportunities Portfolio (999,112 shares; cost $12,452,591).................................... $ -- Salomon Brothers U.S. Government Portfolio (983,168 shares; cost $12,070,629).................................... -- BlackRock Money Market Portfolio (280,415 shares; cost $28,041,514).................................... -- MFS Total Return Portfolio (14,569 shares; cost $2,121,146)...................................... -- MetLife Conservative Allocation Portfolio (11,401 shares; cost $117,671)........................................ -- MetLife Conservative to Moderate Allocation Portfolio (54,577 shares; cost $569,253)........................................ -- MetLife Moderate Allocation Portfolio (133,959 shares; cost $1,423,613)..................................... -- MetLife Moderate to Aggressive Allocation Portfolio (212,616 shares; cost $2,284,839)..................................... -- MetLife Aggressive Allocation Portfolio (40,417 shares; cost $441,948)........................................ -- JANUS ASPEN SERIES FUND ("JANUS FUND") Janus Aspen Large Cap Growth Portfolio (236,736 shares; cost $4,086,107)..................................... -- Janus Aspen Balanced Portfolio (82 shares; cost $2,182).............................................. -- AIM VARIABLE INSURANCE FUNDS ("AIM FUNDS") AIM V.I. Core Stock Portfolio (12,026 shares; cost $212,657)........................................ -- AIM V. I. Government Securities Portfolio (678 shares; cost $8,145)............................................. -- AIM V.I. Real Estate Portfolio (83,446 shares; cost $1,500,371)...................................... -- FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCT SERIES ("FRANKLIN FUND") Franklin Templeton Foreign Securities Portfolio (407,349 shares; cost $5,108,135)..................................... -- Franklin Mutual Discovery Securities Portfolio (6,541 shares; cost $112,900)......................................... -- ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUNDS, INC. ("ALLIANCE FUND") AllianceBernstein Growth & Income Portfolio (166,930 shares; cost $3,365,517)..................................... -- AllianceBernstein Global Technology Portfolio (2,707 shares; cost $36,524).......................................... -- FIDELITY VARIABLE INSURANCE PRODUCTS ("FIDELITY FUNDS") Fidelity VIP Contrafund Portfolio (29,600 shares; cost $781,528)........................................ -- Fidelity VIP Asset Manager Growth Portfolio (55,266 shares; cost $684,734)........................................ -- Fidelity VIP Growth Portfolio (15,866 shares; cost $492,836)........................................ -- Fidelity VIP Investment Grade Bond Portfolio (2,641 shares; cost $33,842).......................................... -- Fidelity VIP Equity-Income Portfolio (997 shares; cost $24,698)............................................ 25,303 ------- Total Investments...................................................... 25,303 Cash and Accounts Receivable........................................... 105 ------- Total Assets........................................................... 25,408 LIABILITIES Due to/From Metropolitan Life Insurance Company........................ -- ------- NET ASSETS............................................................. $25,408 ======= Outstanding Units...................................................... 2,190 Unit Fair Values....................................................... $ 11.66
See Notes to Financial Statements. F-14 [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
AMERICAN FUNDS AMERICAN FUNDS GROWTH GROWTH-INCOME INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio (1,226,369 shares; cost $55,481,669).............................. $ 72,331,242 $ -- American Funds Growth-Income Portfolio (1,227,564 shares; cost $39,716,414).............................. -- 46,794,725 American Funds Global Small Capitalization Portfolio (1,194,659 shares; cost $18,848,900).............................. -- -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio (1,157,486 shares; cost $7,648,975)............................... -- -- MFS Research International Portfolio (312,610 shares; cost $3,416,775)................................. -- -- PIMCO Total Return Portfolio (2,091,721 shares; cost $24,160,829).............................. -- -- RCM Global Technology Portfolio (1,335,556 shares; cost $5,967,822)............................... -- -- Lord Abbett Bond Debenture Portfolio (1,347,841 shares; cost $15,708,780).............................. -- -- Lazard Mid-Cap Portfolio (222,290 shares; cost $2,998,345)................................. -- -- Met/AIM Small Cap Growth Portfolio (116,196 shares; cost $1,424,496)................................. -- -- Harris Oakmark International Portfolio (614,532 shares; cost $8,788,752)................................. -- -- Janus Aggressive Growth Portfolio (841,976 shares; cost $5,472,418)................................. -- -- Lord Abbett Growth and Income Portfolio (1,477 shares; cost $40,501)...................................... -- -- Neuberger Berman Real Estate Portfolio (522,625 shares; cost $6,610,076)................................. -- -- Lord Abbett Mid-Cap Value Portfolio (1,450 shares; cost $32,209)...................................... -- -- Third Avenue Small Cap Value Portfolio (1,744 shares; cost $27,058)...................................... -- -- Oppenheimer Capital Appreciation Portfolio (13,385 shares; cost $113,595).................................... -- -- AMERICAN CENTURY VARIABLE PORTFOLIO, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio (1,006 shares; cost $13,622)...................................... -- -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio (4,226 shares; cost $127,456)..................................... -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Emerging Leaders Portfolio (478 shares; cost $11,044)........................................ -- -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio (9,388 shares; cost $150,954)..................................... -- -- Dreyfus Appreciation Portfolio (462 shares; cost $16,290)........................................ -- -- ---------------- ---------------- Total Investments.................................................. 72,331,242 46,794,725 Cash and Accounts Receivable....................................... -- -- ---------------- ---------------- Total Assets....................................................... 72,331,242 46,794,725 LIABILITIES Due to/From Metropolitan Life Insurance Company.................... -- -- ---------------- ---------------- NET ASSETS......................................................... $ 72,331,242 $ 46,794,725 ================ ================ Outstanding Units.................................................. 898,134 1,035,047 Unit Fair Values................................................... $77.72 to $81.04 $43.64 to $45.51
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION --------------------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio (1,226,369 shares; cost $55,481,669).............................. $ -- American Funds Growth-Income Portfolio (1,227,564 shares; cost $39,716,414).............................. -- American Funds Global Small Capitalization Portfolio (1,194,659 shares; cost $18,848,900).............................. 25,231,190 MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio (1,157,486 shares; cost $7,648,975)............................... -- MFS Research International Portfolio (312,610 shares; cost $3,416,775)................................. -- PIMCO Total Return Portfolio (2,091,721 shares; cost $24,160,829).............................. -- RCM Global Technology Portfolio (1,335,556 shares; cost $5,967,822)............................... -- Lord Abbett Bond Debenture Portfolio (1,347,841 shares; cost $15,708,780).............................. -- Lazard Mid-Cap Portfolio (222,290 shares; cost $2,998,345)................................. -- Met/AIM Small Cap Growth Portfolio (116,196 shares; cost $1,424,496)................................. -- Harris Oakmark International Portfolio (614,532 shares; cost $8,788,752)................................. -- Janus Aggressive Growth Portfolio (841,976 shares; cost $5,472,418)................................. -- Lord Abbett Growth and Income Portfolio (1,477 shares; cost $40,501)...................................... -- Neuberger Berman Real Estate Portfolio (522,625 shares; cost $6,610,076)................................. -- Lord Abbett Mid-Cap Value Portfolio (1,450 shares; cost $32,209)...................................... -- Third Avenue Small Cap Value Portfolio (1,744 shares; cost $27,058)...................................... -- Oppenheimer Capital Appreciation Portfolio (13,385 shares; cost $113,595).................................... -- AMERICAN CENTURY VARIABLE PORTFOLIO, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio (1,006 shares; cost $13,622)...................................... -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio (4,226 shares; cost $127,456)..................................... -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Emerging Leaders Portfolio (478 shares; cost $11,044)........................................ -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio (9,388 shares; cost $150,954)..................................... -- Dreyfus Appreciation Portfolio (462 shares; cost $16,290)........................................ -- ---------------- Total Investments.................................................. 25,231,190 Cash and Accounts Receivable....................................... -- ---------------- Total Assets....................................................... 25,231,190 LIABILITIES Due to/From Metropolitan Life Insurance Company.................... -- ---------------- NET ASSETS......................................................... $ 25,231,190 ================ Outstanding Units.................................................. 1,088,603 Unit Fair Values................................................... $22.41 to $23.37
See Notes to Financial Statements. F-16
T. ROWE PRICE MFS RESEARCH PIMCO RCM GLOBAL LORD ABBETT LAZARD MID-CAP GROWTH INTERNATIONAL TOTAL RETURN TECHNOLOGY BOND DEBENTURE MID-CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- 9,827,055 -- -- -- -- -- -- 4,063,925 -- -- -- -- -- -- 24,263,960 -- -- -- -- -- -- 6,824,691 -- -- -- -- -- -- 16,551,482 -- -- -- -- -- -- 3,034,264 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --------------- ---------------- ---------------- -------------- ---------------- ---------------- 9,827,055 4,063,925 24,263,960 6,824,691 16,551,482 3,034,264 -- -- -- -- -- -- --------------- ---------------- ---------------- -------------- ---------------- ---------------- 9,827,055 4,063,925 24,263,960 6,824,691 16,551,482 3,034,264 (9,253) (5,853) -- -- (20,273) -- --------------- ---------------- ---------------- -------------- ---------------- ---------------- $ 9,817,802 $ 4,058,072 $ 24,263,960 $ 6,824,691 $ 16,531,209 $ 3,034,264 =============== ================ ================ ============== ================ ================ 1,132,034 294,107 1,849,249 1,334,943 1,085,144 226,296 $8.37 to $13.11 $12.09 to $13.89 $12.67 to $13.21 $4.94 to $5.15 $13.96 to $16.51 $11.78 to $13.48
F-17 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
MET/AIM HARRIS OAKMARK JANUS SMALL CAP GROWTH INTERNATIONAL AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio (1,226,369 shares; cost $55,481,669).............................. $ -- $ -- $ -- American Funds Growth-Income Portfolio (1,227,564 shares; cost $39,716,414).............................. -- -- -- American Funds Global Small Capitalization Portfolio (1,194,659 shares; cost $18,848,900).............................. -- -- -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio (1,157,486 shares; cost $7,648,975)............................... -- -- -- MFS Research International Portfolio (312,610 shares; cost $3,416,775)................................. -- -- -- PIMCO Total Return Portfolio (2,091,721 shares; cost $24,160,829).............................. -- -- -- RCM Global Technology Portfolio (1,335,556 shares; cost $5,967,822)............................... -- -- -- Lord Abbett Bond Debenture Portfolio (1,347,841 shares; cost $15,708,780).............................. -- -- -- Lazard Mid-Cap Portfolio (222,290 shares; cost $2,998,345)................................. -- -- -- Met/AIM Small Cap Growth Portfolio (116,196 shares; cost $1,424,496)................................. 1,587,237 -- -- Harris Oakmark International Portfolio (614,532 shares; cost $8,788,752)................................. -- 9,973,856 -- Janus Aggressive Growth Portfolio (841,976 shares; cost $5,472,418)................................. -- -- 7,322,996 Lord Abbett Growth and Income Portfolio (1,477 shares; cost $40,501)...................................... -- -- -- Neuberger Berman Real Estate Portfolio (522,625 shares; cost $6,610,076)................................. -- -- -- Lord Abbett Mid-Cap Value Portfolio (1,450 shares; cost $32,209)...................................... -- -- -- Third Avenue Small Cap Value Portfolio (1,744 shares; cost $27,058)...................................... -- -- -- Oppenheimer Capital Appreciation Portfolio (13,385 shares; cost $113,595).................................... -- -- -- AMERICAN CENTURY VARIABLE PORTFOLIO, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio (1,006 shares; cost $13,622)...................................... -- -- -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio (4,226 shares; cost $127,456)..................................... -- -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Emerging Leaders Portfolio (478 shares; cost $11,044)........................................ -- -- -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio (9,388 shares; cost $150,954)..................................... -- -- -- Dreyfus Appreciation Portfolio (462 shares; cost $16,290)........................................ -- -- -- ---------------- ---------------- -------------- Total Investments.................................................. 1,587,237 9,973,856 7,322,996 Cash and Accounts Receivable....................................... -- -- -- ---------------- ---------------- -------------- Total Assets....................................................... 1,587,237 9,973,856 7,322,996 LIABILITIES Due to/From Metropolitan Life Insurance Company.................... -- -- -- ---------------- ---------------- -------------- NET ASSETS......................................................... $ 1,587,237 $ 9,973,856 $ 7,322,996 ================ ================ ============== Outstanding Units.................................................. 129,221 636,793 844,525 Unit Fair Values................................................... $11.71 to $12.31 $15.26 to $15.77 $7.50 to $8.74
See Notes to Financial Statements. F-18
LORD ABBETT NEUBERGER BERMAN LORD ABBETT THIRD AVENUE OPPENHEIMER AMERICAN GROWTH AND INCOME REAL ESTATE MID-CAP VALUE SMALL CAP VALUE CAPITAL APPRECIATION CENTURY VISTA INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- -------------------- ------------------- $ -- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 40,760 -- -- -- -- -- -- 7,394,991 -- -- -- -- -- -- 32,304 -- -- -- -- -- -- 28,860 -- -- -- -- -- -- 116,310 -- -- -- -- -- -- 14,583 -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------- ---------------- ------- ------- ---------------- ------- 40,760 7,394,991 32,304 28,860 116,310 14,583 687 -- -- -- -- -- ------- ---------------- ------- ------- ---------------- ------- 41,447 7,394,991 32,304 28,860 116,310 14,583 -- -- -- -- -- -- ------- ---------------- ------- ------- ---------------- ------- $41,447 $ 7,394,991 $32,304 $28,860 $ 116,310 $14,583 ======= ================ ======= ======= ================ ======= 4,368 503,432 2,543 2,073 10,588 1,252 $ 9.49 $14.52 to $14.74 $ 12.71 $ 13.92 $10.95 to $11.01 $ 11.65
DELAWARE SMALL CAP VALUE INVESTMENT DIVISION - ------------------- $ -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- 129,996 -- -- -- -------- 129,996 9,970 -------- 139,966 -- -------- $139,966 ======== 9,876 $ 14.17
F-19 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
DREYFUS DREYFUS DREYFUS EMERGING LEADERS INTERNATIONAL VALUE APPRECIATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- INVESTMENTS AT FAIR VALUE: AMERICAN FUNDS INSURANCE SERIES ("AMERICAN FUND") American Funds Growth Portfolio (1,226,369 shares; cost $55,481,669).............................. $ -- $ -- $ -- American Funds Growth-Income Portfolio (1,227,564 shares; cost $39,716,414).............................. -- -- -- American Funds Global Small Capitalization Portfolio (1,194,659 shares; cost $18,848,900).............................. -- -- -- MET INVESTORS SERIES TRUST ("MET INVESTORS FUND") T. Rowe Price Mid-Cap Growth Portfolio (1,157,486 shares; cost $7,648,975)............................... -- -- -- MFS Research International Portfolio (312,610 shares; cost $3,416,775)................................. -- -- -- PIMCO Total Return Portfolio (2,091,721 shares; cost $24,160,829).............................. -- -- -- RCM Global Technology Portfolio (1,335,556 shares; cost $5,967,822)............................... -- -- -- Lord Abbett Bond Debenture Portfolio (1,347,841 shares; cost $15,708,780).............................. -- -- -- Lazard Mid-Cap Portfolio (222,290 shares; cost $2,998,345)................................. -- -- -- Met/AIM Small Cap Growth Portfolio (116,196 shares; cost $1,424,496)................................. -- -- -- Harris Oakmark International Portfolio (614,532 shares; cost $8,788,752)................................. -- -- -- Janus Aggressive Growth Portfolio (841,976 shares; cost $5,472,418)................................. -- -- -- Lord Abbett Growth and Income Portfolio (1,477 shares; cost $40,501)...................................... -- -- -- Neuberger Berman Real Estate Portfolio (522,625 shares; cost $6,610,076)................................. -- -- -- Lord Abbett Mid-Cap Value Portfolio (1,450 shares; cost $32,209)...................................... -- -- -- Third Avenue Small Cap Value Portfolio (1,744 shares; cost $27,058)...................................... -- -- -- Oppenheimer Capital Appreciation Portfolio (13,385 shares; cost $113,595).................................... -- -- -- AMERICAN CENTURY VARIABLE PORTFOLIO, INC. ("AMERICAN CENTURY FUND") American Century Vista Portfolio (1,006 shares; cost $13,622)...................................... -- -- -- DELAWARE VIP TRUST ("DELAWARE FUND") Delaware Small Cap Value Portfolio (4,226 shares; cost $127,456)..................................... -- -- -- DREYFUS INVESTMENT PORTFOLIOS ("DREYFUS IP FUND") Dreyfus Emerging Leaders Portfolio (478 shares; cost $11,044)........................................ 10,821 -- -- DREYFUS VARIABLE INVESTMENT FUND ("DREYFUS FUND") Dreyfus International Value Portfolio (9,388 shares; cost $150,954)..................................... -- 164,014 -- Dreyfus Appreciation Portfolio (462 shares; cost $16,290)........................................ -- -- 17,045 ------- -------- ------- Total Investments.................................................. 10,821 164,014 17,045 Cash and Accounts Receivable....................................... -- 24,463 -- ------- -------- ------- Total Assets....................................................... 10,821 188,477 17,045 LIABILITIES Due to/From Metropolitan Life Insurance Company.................... -- -- -- ------- -------- ------- NET ASSETS......................................................... $10,821 $188,477 $17,045 ======= ======== ======= Outstanding Units.................................................. 916 14,559 1,591 Unit Fair Values................................................... $ 11.81 $ 12.95 $ 10.71
See Notes to Financial Statements. F-20 [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ASSETS AND LIABILITIES -- (CONTINUED) AT DECEMBER 31, 2005
GOLDMAN SACHS GOLDMAN SACHS MID CAP VALUE CORE SMALL CAP EQUITY INVESTMENT DIVISION INVESTMENT DIVISION ------------------- --------------------- GOLDMAN SACHS VARIABLE INSURANCE TRUST ("GOLDMAN SACHS FUND") Goldman Sachs Mid Cap Value Portfolio (3,088 shares; cost $48,202)................................ $47,962 $ -- Goldman Sachs CORE Small Cap Equity Portfolio (3,601 shares; cost $55,810)................................ -- 50,166 MFS VARIABLE INSURANCE TRUST ("MFS FUND") MFS High Income Portfolio (7,044 shares; cost $68,737)................................ -- -- VAN KAMPEN LIFE INVESTMENT TRUST ("VAN KAMPEN FUND") Van Kampen Government Portfolio (1,448 shares; cost $13,512)................................ -- -- WELLS FARGO VARIABLE TRUST ("WELLS FARGO FUND") Wells Fargo Advantage Total Return Bond Portfolio (1,745 shares; cost $17,183)................................ -- -- Wells Fargo Advantage Large Company Growth Portfolio (908 shares; cost $7,697)................................... -- -- Wells Fargo Advantage Equity Income Portfolio (488 shares; cost $7,977)................................... -- -- ------- ------- Total Investments............................................ 47,962 50,166 Cash and Accounts Receivable................................. -- -- ------- ------- Total Assets................................................. 47,962 50,166 LIABILITIES Due to/From Metropolitan Life Insurance Company.............. (1,316) -- ------- ------- NET ASSETS................................................... $46,646 $50,166 ======= ======= Outstanding Units............................................ 3,769 4,239 Unit Fair Values............................................. $ 12.38 $ 11.83
See Notes to Financial Statements. F-22
MFS VAN KAMPEN WELLS FARGO WELLS FARGO WELLS FARGO HIGH INCOME GOVERNMENT ADVANTAGE TOTAL RETURN BOND ADVANTAGE LARGE COMPANY GROWTH ADVANTAGE EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- --------------------------- ------------------------------ ----------------------- $ -- $ -- $ -- $ -- $ -- -- -- -- -- -- 69,027 -- -- -- -- -- 13,636 -- -- -- -- -- 17,199 -- -- -- -- -- 8,511 -- -- -- -- -- 8,282 ------- ------- ------- ------ ------ 69,027 13,636 17,199 8,511 8,282 -- -- -- -- -- ------- ------- ------- ------ ------ 69,027 13,636 17,199 8,511 8,282 -- -- -- -- -- ------- ------- ------- ------ ------ $69,027 $13,636 $17,199 $8,511 $8,282 ======= ======= ======= ====== ====== 6,238 1,272 1,620 772 727 $ 11.07 $ 10.72 $ 10.62 $11.02 $11.38
F-23 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS
BLACKROCK INVESTMENT TRUST INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 4,375,931 $ 2,717,041 $ 2,669,960 Expenses: Mortality and expense charges................................ 3,470,220 3,262,909 2,738,164 ----------- ----------- ----------- Net investment income (loss)................................... 905,711 (545,868) (68,204) ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 834,521 (689,999) (6,958,914) Change in unrealized appreciation (depreciation) of investments 8,704,485 37,215,298 88,855,777 ----------- ----------- ----------- Net realized and unrealized gains (losses) on investments...... 9,539,006 36,525,299 81,896,863 ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $10,444,717 $35,979,431 $81,828,659 =========== =========== ===========
See Notes to Financial Statements. F-24
BLACKROCK DIVERSIFIED BLACKROCK AGGRESSIVE GROWTH METLIFE STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- -------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $4,998,633 $ 5,543,155 $ 9,831,564 $ -- $ -- $ -- $ 8,971,609 $ 4,172,573 $ 6,468,236 2,728,213 2,975,584 2,320,042 1,824,382 1,651,256 1,367,678 4,641,173 3,998,379 3,080,678 ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ 2,270,420 2,567,571 7,511,522 (1,824,382) (1,651,256) (1,367,678) 4,330,436 174,194 3,387,558 ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ 655,141 (558,940) (2,593,687) (2,231,885) (3,443,419) (8,202,841) 3,573,660 (2,432,174) (10,060,006) 3,822,631 19,749,208 42,182,763 23,892,825 27,472,766 62,199,697 14,173,789 49,514,290 101,361,307 ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ 4,477,772 19,190,268 39,589,076 21,660,940 24,029,347 53,996,856 17,747,449 47,082,116 91,301,301 ---------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ------------ $6,748,192 $21,757,839 $47,100,598 $19,836,558 $22,378,091 $52,629,178 $22,077,885 $47,256,310 $ 94,688,859 ========== =========== =========== =========== =========== =========== =========== =========== ============
F-25 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
FI INTERNATIONAL STOCK INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 317,306 $ 606,588 $ 249,748 Expenses: Mortality and expense charges................................ 427,240 370,691 304,442 ---------- ---------- ----------- Net investment income (loss)................................... (109,934) 235,897 (54,694) ---------- ---------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 237,027 (367,092) (1,630,864) Change in unrealized appreciation (depreciation) of investments 8,151,109 7,284,341 10,924,390 ---------- ---------- ----------- Net realized and unrealized gains (losses) on investments...... 8,388,136 6,917,249 9,293,526 ---------- ---------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $8,278,202 $7,153,146 $ 9,238,832 ========== ========== ===========
See Notes to Financial Statements. F-26
FI MID CAP OPPORTUNITIES T. ROWE PRICE SMALL CAP GROWTH OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ -- $ 1,090,068 $ -- $ -- $ -- $ -- $ 209,625 $ 478,904 $ 501,419 2,011,441 1,721,436 1,297,757 595,465 530,571 408,933 299,169 246,310 189,917 - ----------- ----------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- (2,011,441) (631,368) (1,297,757) (595,465) (530,571) (408,933) (89,544) 232,594 311,502 - ----------- ----------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- (1,015,121) (717,628) (1,145,184) 37,997 (69,548) (326,259) 270,279 (301,695) (1,005,776) 17,191,699 33,098,684 46,019,342 7,936,747 7,181,746 18,001,752 5,277,659 4,666,310 7,242,152 - ----------- ----------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- 16,176,578 32,381,056 44,874,158 7,974,744 7,112,198 17,675,493 5,547,938 4,364,615 6,236,376 - ----------- ----------- ----------- ---------- ---------- ----------- ---------- ---------- ----------- $14,165,137 $31,749,688 $43,576,401 $7,379,279 $6,581,627 $17,266,560 $5,458,394 $4,597,209 $ 6,547,878 =========== =========== =========== ========== ========== =========== ========== ========== ===========
F-27 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
HARRIS OAKMARK LARGE CAP VALUE INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 367,539 $ 216,340 $ -- Expenses: Mortality and expense charges................................ 429,104 366,329 252,368 ----------- ---------- ---------- Net investment income (loss)................................... (61,565) (149,989) (252,368) ----------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 398,007 613,781 38,696 Change in unrealized appreciation (depreciation) of investments (1,475,339) 4,130,792 6,986,213 ----------- ---------- ---------- Net realized and unrealized gains (losses) on investments...... (1,077,332) 4,744,573 7,024,909 ----------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $(1,138,897) $4,594,584 $6,772,541 =========== ========== ==========
See Notes to Financial Statements. F-28
NEUBERGER BERMAN MID CAP VALUE T. ROWE PRICE LARGE CAP GROWTH LEHMAN BROTHERS AGGREGATE BOND INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $4,678,085 $1,060,839 $ 78,805 $ 211,319 $ 72,281 $ 30,610 $ 2,790,273 $1,838,871 $ 2,863,939 468,169 312,426 197,793 316,838 289,243 210,672 528,874 414,705 357,739 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- 4,209,916 748,413 (118,988) (105,519) (216,962) (180,062) 2,261,399 1,424,166 2,506,200 ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- 557,751 490,187 28,084 161,433 994,314 (489,389) 113,726 451,466 1,152,171 1,374,494 6,555,902 7,656,793 2,205,530 2,677,244 7,871,800 (1,403,001) 266,268 (2,185,014) ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- 1,932,245 7,046,089 7,684,877 2,366,963 3,671,558 7,382,411 (1,289,275) 717,734 (1,032,843) ---------- ---------- ---------- ---------- ---------- ---------- ----------- ---------- ----------- $6,142,161 $7,794,502 $7,565,889 $2,261,444 $3,454,596 $7,202,349 $ 972,124 $2,141,900 $ 1,473,357 ========== ========== ========== ========== ========== ========== =========== ========== ===========
F-29 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
MORGAN STANLEY EAFE INDEX INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 597,805 $ 202,506 $ 280,223 Expenses: Mortality and expense charges................................ 312,106 230,962 158,241 ---------- ---------- ---------- Net investment income (loss)................................... 285,699 (28,456) 121,982 ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 590,734 1,189,725 (497,564) Change in unrealized appreciation (depreciation) of investments 3,753,078 3,997,066 6,516,826 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments...... 4,343,812 5,186,791 6,019,262 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $4,629,511 $5,158,335 $6,141,244 ========== ========== ==========
See Notes to Financial Statements. F-30
RUSSELL 2000 INDEX MET/PUTNAM VOYAGER JENNISON GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ---------------------------------------- ------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED JANUARY 1, 2005 ENDED ENDED MAY 1, 2005 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, TO APRIL 30 DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 - ------------ ------------ ------------ --------------- ------------ ------------ ------------------- $1,731,843 $ 141,315 $ 134,309 $ 50,596 $ 10,121 $ -- $ -- 320,327 255,946 163,522 28,757 79,068 58,697 67,101 ---------- ---------- ---------- --------- -------- ---------- ---------- 1,411,516 (114,631) (29,213) 21,839 (68,947) (58,697) (67,101) ---------- ---------- ---------- --------- -------- ---------- ---------- 811,342 973,061 (125,595) (11,582) (75,290) (624,452) 36,398 (613,275) 4,412,786 7,938,110 (845,475) 560,180 2,271,140 2,206,440 ---------- ---------- ---------- --------- -------- ---------- ---------- 198,067 5,385,847 7,812,515 (857,057) 484,890 1,646,688 2,242,838 ---------- ---------- ---------- --------- -------- ---------- ---------- $1,609,583 $5,271,216 $7,783,302 $(835,218) $415,943 $1,587,991 $2,175,737 ========== ========== ========== ========= ======== ========== ==========
F-31 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 5,489,850 $ -- $ -- Expenses: Mortality and expense charges................................ 714,689 563,943 336,756 ----------- ----------- ----------- Net investment income (loss)................................... 4,775,161 (563,943) (336,756) ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 647,742 827,418 196,537 Change in unrealized appreciation (depreciation) of investments (2,502,234) 9,427,091 17,391,943 ----------- ----------- ----------- Net realized and unrealized gains (losses) on investments...... (1,854,492) 10,254,509 17,588,480 ----------- ----------- ----------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 2,920,669 $ 9,690,566 $17,251,724 =========== =========== ===========
See Notes to Financial Statements. F-32
METLIFE MID CAP STOCK INDEX FRANKLIN TEMPLETON SMALL CAP GROWTH BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ---------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED MAY 1, 2002 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -------------- $2,314,657 $ 237,989 $ 100,611 $154,763 $ -- $ -- $ 76,977 $ -- $ 8,880 340,784 259,163 164,774 39,601 31,464 16,641 34,801 18,736 4,290 ---------- ---------- ---------- -------- -------- -------- -------- -------- -------- 1,973,873 (21,174) (64,163) 115,162 (31,464) (16,641) 42,176 (18,736) 4,590 ---------- ---------- ---------- -------- -------- -------- -------- -------- -------- 682,809 992,035 12,063 129,715 40,690 (19,016) 81,656 105,597 41,938 1,900,535 3,817,899 6,538,587 (56,267) 404,946 796,643 110,740 229,787 156,144 ---------- ---------- ---------- -------- -------- -------- -------- -------- -------- 2,583,344 4,809,934 6,550,650 73,448 445,636 777,627 192,396 335,384 198,082 ---------- ---------- ---------- -------- -------- -------- -------- -------- -------- $4,557,217 $4,788,760 $6,486,487 $188,610 $414,172 $760,986 $234,572 $316,648 $202,672 ========== ========== ========== ======== ======== ======== ======== ======== ========
F-33 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
DAVIS VENTURE VALUE INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 244,019 $ 151,001 $ 69,175 Expenses: Mortality and expense charges................................ 290,656 210,672 144,858 ---------- ---------- ---------- Net investment income (loss)................................... (46,637) (59,671) (75,683) ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 226,016 508,082 (213,900) Change in unrealized appreciation (depreciation) of investments 3,304,528 2,678,225 5,610,390 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments...... 3,530,544 3,186,307 5,396,490 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $3,483,907 $3,126,636 $5,320,807 ========== ========== ==========
See Notes to Financial Statements. F-34
LOOMIS SAYLES SMALL CAP BLACKROCK LEGACY LARGE CAP GROWTH MFS INVESTORS TRUST INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 83,073 $ -- $ -- $ 32,623 $ -- $ 2,523 $ 15,998 $ 9,640 $ 2,817 60,646 44,015 28,298 43,887 30,183 26,251 36,252 23,709 10,528 -------- -------- ---------- -------- -------- ---------- -------- -------- -------- 22,427 (44,015) (28,298) (11,264) (30,183) (23,728) (20,254) (14,069) (7,711) -------- -------- ---------- -------- -------- ---------- -------- -------- -------- 74,135 142,373 (88,636) 84,949 117,304 (63,998) 75,511 10,690 13,432 365,753 718,393 1,169,772 498,307 394,196 1,339,908 189,614 322,040 221,187 -------- -------- ---------- -------- -------- ---------- -------- -------- -------- 439,888 860,766 1,081,136 583,256 511,500 1,275,910 265,125 332,730 234,619 -------- -------- ---------- -------- -------- ---------- -------- -------- -------- $462,315 $816,751 $1,052,838 $571,992 $481,317 $1,252,182 $244,871 $318,661 $226,908 ======== ======== ========== ======== ======== ========== ======== ======== ========
F-35 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
BLACKROCK BOND INCOME INVESTMENT DIVISION -------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 4,654,397 $ 5,389,446 $2,907,624 Expenses: Mortality and expense charges................................ 716,223 702,302 724,135 ----------- ----------- ---------- Net investment income (loss)................................... 3,938,174 4,687,144 2,183,489 ----------- ----------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 98,977 1,244,325 880,712 Change in unrealized appreciation (depreciation) of investments (2,577,646) (2,928,093) 1,572,001 ----------- ----------- ---------- Net realized and unrealized gains (losses) on investments...... (2,478,669) (1,683,768) 2,452,713 ----------- ----------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 1,459,505 $ 3,003,376 $4,636,202 =========== =========== ==========
See Notes to Financial Statements. F-36
FI VALUE LEADERS HARRIS OAKMARK FOCUSED VALUE SALOMON BROTHERS STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- --------------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED MAY 1, 2002 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ -------------- $ 23,066 $ 9,363 $ 1,560 $ 450,345 $ 318,400 $ 24,204 $ 521,127 $185,168 $ 62,248 19,333 6,936 2,368 369,999 261,670 151,516 90,184 55,535 29,146 -------- -------- ------- ---------- ---------- ---------- --------- -------- -------- 3,733 2,427 (808) 80,346 56,730 (127,312) 430,943 129,633 33,102 -------- -------- ------- ---------- ---------- ---------- --------- -------- -------- 80,493 13,334 24,426 647,285 205,940 31,214 55,156 74,022 97,650 177,601 106,438 58,141 3,071,366 2,796,718 5,537,632 (261,648) 217,644 233,146 -------- -------- ------- ---------- ---------- ---------- --------- -------- -------- 258,094 119,772 82,567 3,718,651 3,002,658 5,568,846 (206,492) 291,666 330,796 -------- -------- ------- ---------- ---------- ---------- --------- -------- -------- $261,827 $122,199 $81,759 $3,798,997 $3,059,388 $5,441,534 $ 224,451 $421,299 $363,898 ======== ======== ======= ========== ========== ========== ========= ======== ========
F-37 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
SALOMON BROTHERS U.S. GOVERNMENT INVESTMENT DIVISION --------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED MAY 1, 2002 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ -------------- INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 338,463 $187,882 $ 91,740 Expenses: Mortality and expense charges................................ 88,576 66,814 49,123 --------- -------- -------- Net investment income (loss)................................... 249,887 121,068 42,617 --------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... (2,681) 1,624 48,098 Change in unrealized appreciation (depreciation) of investments (152,454) 55,424 (40,677) --------- -------- -------- Net realized and unrealized gains (losses) on investments...... (155,135) 57,048 7,421 --------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 94,752 $178,116 $ 50,038 ========= ======== ========
See Notes to Financial Statements. F-38
BLACKROCK MONEY MARKET MFS TOTAL RETURN METLIFE CONSERVATIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- -------------------------- ------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE PERIOD ENDED ENDED ENDED ENDED MAY 3, 2004 TO MAY 1, 2005 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2005 - ------------ ------------ ------------ ------------ -------------- ------------------------------- $795,483 $291,356 $226,302 $39,188 $ -- $471 167,153 179,180 179,158 13,447 1,443 348 -------- -------- -------- ------- ------- ---- 628,330 112,176 47,144 25,741 (1,443) 123 -------- -------- -------- ------- ------- ---- -- -- (1) 18,142 429 271 -- -- 1 (3,131) 39,191 554 -------- -------- -------- ------- ------- ---- -- -- -- 15,011 39,620 825 -------- -------- -------- ------- ------- ---- $628,330 $112,176 $ 47,144 $40,752 $38,177 $948 ======== ======== ======== ======= ======= ====
F-39 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
METLIFE CONSERVATIVE TO METLIFE MODERATE ALLOCATION MODERATE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- FOR THE PERIOD FOR THE PERIOD MAY 1, 2005 TO MAY 1, 2005 TO DECEMBER 31, DECEMBER 31, 2005 2005 ------------------- ------------------- INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 2,332 $ 6,120 Expenses: Mortality and expense charges................................ 1,984 3,787 ------- ------- Net investment income (loss)................................... 348 2,333 ------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 1,644 3,556 Change in unrealized appreciation (depreciation) of investments 9,258 25,822 ------- ------- Net realized and unrealized gains (losses) on investments...... 10,902 29,378 ------- ------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $11,250 $31,711 ======= =======
See Notes to Financial Statements. F-40
METLIFE MODERATE TO AGGRESSIVE METLIFE ALLOCATION AGGRESSIVE ALLOCATION JANUS ASPEN LARGE CAP GROWTH JANUS ASPEN BALANCED INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ---------------------- --------------------- ------------------------------------- --------------------------- FOR THE PERIOD FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD MAY 1, 2005 TO MAY 1, 2005 TO ENDED ENDED ENDED ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2005 2005 2004 2003 2005 2004 - ---------------------- --------------------- ------------ ------------ ------------ ------------ -------------- $ 9,222 $ 2,884 $ 15,028 $ 5,939 $ 2,873 $25 $ 4 6,087 1,181 21,214 17,727 13,156 1 -- ------- ------- -------- --------- ---------- --- --- 3,135 1,703 (6,186) (11,788) (10,283) 24 4 ------- ------- -------- --------- ---------- --- --- 4,752 1,894 (62,709) (193,886) (263,013) 1 -- 64,564 10,725 263,241 407,058 1,041,007 1 4 ------- ------- -------- --------- ---------- --- --- 69,316 12,619 200,532 213,172 777,994 2 4 ------- ------- -------- --------- ---------- --- --- $72,451 $14,322 $194,346 $ 201,384 $ 767,711 $26 $ 8 ======= ======= ======== ========= ========== === ===
F-41 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
AIM V.I. CORE STOCK INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 982 $2,041 $ 1,951 Expenses: Mortality and expense charges................................ 1,116 951 662 ------ ------ ------- Net investment income (loss)................................... (134) 1,090 1,289 ------ ------ ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 5,489 (458) (4,599) Change in unrealized appreciation (depreciation) of investments 3,571 9,085 30,971 ------ ------ ------- Net realized and unrealized gains (losses) on investments...... 9,060 8,627 26,372 ------ ------ ------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $8,926 $9,717 $27,661 ====== ====== =======
See Notes to Financial Statements. F-42
AIM V.I. GOVERNMENT SECURITIES AIM V.I. REAL ESTATE FRANKLIN TEMPLETON FOREIGN SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ----------------------------- -------------------------------------- ------------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED MAY 3, 2004 ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2003 2005 2004 2003 - ------------ --------------- ------------ ------------ ------------ ------------ ------------ ------------ $ 239 $ 30 $ 82,883 $ 29,870 $ 2,672 $ 71,641 $ 52,419 $ 50,493 46 1 6,839 4,827 946 26,380 22,112 16,047 ----- ---- -------- -------- ------- -------- -------- -------- 193 29 76,044 25,043 1,726 45,261 30,307 34,446 ----- ---- -------- -------- ------- -------- -------- -------- 107 (2) 148,313 54,384 7,645 259,867 153,352 (71,786) (117) (20) 7,005 204,103 41,591 264,624 613,265 947,139 ----- ---- -------- -------- ------- -------- -------- -------- (10) (22) 155,318 258,487 49,236 524,491 766,617 875,353 ----- ---- -------- -------- ------- -------- -------- -------- $ 183 $ 7 $231,362 $283,530 $50,962 $569,752 $796,924 $909,799 ===== ==== ======== ======== ======= ======== ======== ========
F-43 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
FRANKLIN MUTUAL DISCOVERY SECURITIES INVESTMENT DIVISION ------------------------------------ FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, 2005 2004 ------------ -------------- INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 814 $-- Expenses: Mortality and expense charges................................ 268 -- ------ --- Net investment income (loss)................................... 546 -- ------ --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 132 -- Change in unrealized appreciation (depreciation) of investments 8,764 -- ------ --- Net realized and unrealized gains (losses) on investments...... 8,896 -- ------ --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $9,442 $-- ====== ===
See Notes to Financial Statements. F-44
ALLIANCEBERNSTEIN GROWTH AND INCOME ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FIDELITY VIP CONTRAFUND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 39,765 $ 14,971 $ 11,419 $ -- $ -- $ -- $ 1,981 $ 1,770 $ 830 16,636 11,504 7,030 135 77 181 3,729 3,453 3,285 -------- -------- -------- ------ ------ ------- -------- -------- -------- 23,129 3,467 4,389 (135) (77) (181) (1,748) (1,683) (2,455) -------- -------- -------- ------ ------ ------- -------- -------- -------- 19,259 8,499 (27,592) 255 108 (931) 170,001 62,282 6,303 116,879 301,218 441,306 1,638 2,247 13,613 (22,158) 45,971 139,867 -------- -------- -------- ------ ------ ------- -------- -------- -------- 136,138 309,717 413,714 1,893 2,355 12,682 147,843 108,253 146,170 -------- -------- -------- ------ ------ ------- -------- -------- -------- $159,267 $313,184 $418,103 $1,758 $2,278 $12,501 $146,095 $106,570 $143,715 ======== ======== ======== ====== ====== ======= ======== ======== ========
F-45 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
FIDELITY VIP ASSET MANAGER GROWTH INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 18,249 $12,700 $ 8,346 Expenses: Mortality and expense charges................................ 3,454 3,079 1,598 -------- ------- ------- Net investment income (loss)................................... 14,795 9,621 6,748 -------- ------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 38,662 3,245 (4,335) Change in unrealized appreciation (depreciation) of investments (29,733) 19,246 59,143 -------- ------- ------- Net realized and unrealized gains (losses) on investments...... 8,929 22,491 54,808 -------- ------- ------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 23,724 $32,112 $61,556 ======== ======= =======
See Notes to Financial Statements. F-46
FIDELITY VIP GROWTH FIDELITY VIP INVESTMENT GRADE FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION BOND INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ---------------------------- -------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2005 2004 - ------------ ------------ ------------ ------------ -------------- ------------ -------------- $1,319. $ 354 $ 174 $ 883 $-- $ 618 $-- 2,353.. 1,484 1,005 80 4 259 5 -------- ------- ------- ----- --- ------- --- (1,034)... (1,130) (831) 803 (4) 359 (5) -------- ------- ------- ----- --- ------- --- 26,347.... (5,015) (2,588) (59) 8 (5,940) -- 3,218..... 17,311 63,146 (370) 12 605 -- -------- ------- ------- ----- --- ------- --- 29,565.... 12,296 60,558 (429) 20 (5,335) -- -------- ------- ------- ----- --- ------- --- $ 28,531 $11,166 $59,727 $ 374 $16 $(4,976) $(5) ======== ======= ======= ===== === ======= ===
F-47 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
AMERICAN FUNDS GROWTH INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 437,807 $ 70,060 $ 22,917 Expenses: Mortality and expense charges................................ 489,519 294,065 141,220 ---------- ---------- ---------- Net investment income (loss)................................... (51,712) (224,005) (118,303) ---------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 115,149 53,047 (100,817) Change in unrealized appreciation (depreciation) of investments 8,793,861 4,445,539 5,264,250 ---------- ---------- ---------- Net realized and unrealized gains (losses) on investments...... 8,909,010 4,498,586 5,163,433 ---------- ---------- ---------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $8,857,298 $4,274,581 $5,045,130 ========== ========== ==========
See Notes to Financial Statements. F-48
AMERICAN FUNDS GROWTH-INCOME AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION T. ROWE PRICE MID-CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ----------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 750,695 $ 276,574 $ 170,202 $ 167,221 $ -- $ 19,214 $ 206,008 $ -- $ -- 343,213 227,511 112,608 151,245 73,946 27,847 62,726 35,600 17,818 ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- -------- 407,482 49,063 57,594 15,976 (73,946) (8,633) 143,282 (35,600) (17,818) ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- -------- 116,683 60,134 (26,406) 669,665 169,126 (33,362) 102,486 (21,255) (46,026) 1,688,136 2,605,294 3,852,340 3,507,811 1,710,690 1,513,502 895,073 874,468 776,010 ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- -------- 1,804,819 2,665,428 3,825,934 4,177,476 1,879,816 1,480,140 997,559 853,213 729,984 ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------- -------- $2,212,301 $2,714,491 $3,883,528 $4,193,452 $1,805,870 $1,471,507 $1,140,841 $817,613 $712,166 ========== ========== ========== ========== ========== ========== ========== ======== ========
F-49 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION -------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $206,092 $ 5,870 $ 10,739 Expenses: Mortality and expense charges................................ 27,070 17,381 7,953 -------- -------- -------- Net investment income (loss)................................... 179,022 (11,511) 2,786 -------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 80,066 226,740 148,987 Change in unrealized appreciation (depreciation) of investments 280,569 176,752 191,049 -------- -------- -------- Net realized and unrealized gains (losses) on investments...... 360,635 403,492 340,036 -------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $539,657 $391,981 $342,822 ======== ======== ========
See Notes to Financial Statements. F-50
PIMCO TOTAL RETURN RCM GLOBAL TECHNOLOGY LORD ABBETT BOND DEBENTURE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- -------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $167,134 $1,210,628 $255,223 $ 46,291 $ 4,399 $ -- $ 744,214 $ 580,234 $ 237,030 180,282 130,372 79,517 50,588 45,242 21,608 121,860 106,961 84,212 -------- ---------- -------- -------- --------- ---------- --------- ---------- ---------- (13,148) 1,080,256 175,706 (4,297) (40,843) (21,608) 622,354 473,273 152,818 -------- ---------- -------- -------- --------- ---------- --------- ---------- ---------- 52,949 58,068 175,963 194,566 (35,847) (195,867) 255,890 291,351 193,651 311,680 (439,697) (25,434) 445,709 (200,859) 1,260,206 (722,955) 258,228 1,482,057 -------- ---------- -------- -------- --------- ---------- --------- ---------- ---------- 364,629 (381,629) 150,529 640,275 (236,706) 1,064,339 (467,065) 549,579 1,675,708 -------- ---------- -------- -------- --------- ---------- --------- ---------- ---------- $351,481 $ 698,627 $326,235 $635,978 $(277,549) $1,042,731 $ 155,289 $1,022,852 $1,828,526 ======== ========== ======== ======== ========= ========== ========= ========== ==========
F-51 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
LAZARD MID-CAP INVESTMENT DIVISION -------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 331,252 $ -- $ 8,411 Expenses: Mortality and expense charges................................ 22,544 12,732 4,773 --------- -------- -------- Net investment income (loss)................................... 308,708 (12,732) 3,638 --------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 96,120 127,885 6,414 Change in unrealized appreciation (depreciation) of investments (198,731) 100,268 140,733 --------- -------- -------- Net realized and unrealized gains (losses) on investments...... (102,611) 228,153 147,147 --------- -------- -------- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 206,097 $215,421 $150,785 ========= ======== ========
See Notes to Financial Statements. F-52
MET/AIM SMALL CAP GROWTH HARRIS OAKMARK INTERNATIONAL JANUS AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- -------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 32,434 $ -- $ -- $127,202 $ 1,007 $ 8,848 $ 7,588 $ -- $ -- 11,067 7,126 2,947 55,708 15,179 2,473 52,753 40,203 25,914 -------- ------- -------- -------- -------- -------- -------- -------- ---------- 21,367 (7,126) (2,947) 71,494 (14,172) 6,375 (45,165) (40,203) (25,914) -------- ------- -------- -------- -------- -------- -------- -------- ---------- 35,790 6,508 66,977 131,605 87,469 72,432 89,582 40,466 (314,628) 47,188 68,634 51,242 724,928 413,695 49,401 756,884 408,503 1,135,120 -------- ------- -------- -------- -------- -------- -------- -------- ---------- 82,978 75,142 118,219 856,533 501,164 121,833 846,466 448,969 820,492 -------- ------- -------- -------- -------- -------- -------- -------- ---------- $104,345 $68,016 $115,272 $928,027 $486,992 $128,208 $801,301 $408,766 $ 794,578 ======== ======= ======== ======== ======== ======== ======== ======== ==========
F-53 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
LORD ABBETT GROWTH AND INCOME INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ 1,239 $ 206 $ -- Expenses: Mortality and expense charges................................ 199 183 47 ------- ------ ------ Net investment income (loss)................................... 1,040 23 (47) ------- ------ ------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 5,959 37 20 Change in unrealized appreciation (depreciation) of investments (6,587) 3,095 3,750 ------- ------ ------ Net realized and unrealized gains (losses) on investments...... (628) 3,132 3,770 ------- ------ ------ NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 412 $3,155 $3,723 ======= ====== ======
See Notes to Financial Statements. F-54
NEUBERGER BERMAN REAL ESTATE LORD ABBETT MID-CAP VALUE THIRD AVENUE SMALL CAP VALUE OPPENHEIMER CAPITAL APPRECIATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - --------------------------- --------------------------- -------------------------- -------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO MAY 1, 2005 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2004 2005 - ------------ -------------- ------------ -------------- ------------ -------------- -------------------------------- $ 8,770 $ 73,660 $1,297 $ 6 $ 77 $ 95 $1,176 40,104 3,379 87 -- 51 1 275 -------- -------- ------ --- ------ ---- ------ (31,334) 70,281 1,210 6 26 94 901 -------- -------- ------ --- ------ ---- ------ 77,734 5,929 22 -- 111 21 442 660,111 124,804 85 10 1,856 (54) 2,715 -------- -------- ------ --- ------ ---- ------ 737,845 130,733 107 10 1,967 (33) 3,157 -------- -------- ------ --- ------ ---- ------ $706,511 $201,014 $1,317 $16 $1,993 $ 61 $4,058 ======== ======== ====== === ====== ==== ======
F-55 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
AMERICAN CENTURY VISTA INVESTMENT DIVISION --------------------------- FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, 2005 2004 ------------ -------------- INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ -- $-- Expenses: Mortality and expense charges................................ 47 -- ---- --- Net investment income (loss)................................... (47) -- ---- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 6 -- Change in unrealized appreciation (depreciation) of investments 961 -- ---- --- Net realized and unrealized gains (losses) on investments...... 967 -- ---- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $920 $-- ==== ===
See Notes to Financial Statements. F-56
DELAWARE SMALL CAP VALUE DREYFUS EMERGING LEADERS DREYFUS INTERNATIONAL VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - --------------------------- --------------------------- -------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2004 - ------------ -------------- ------------ -------------- ------------ -------------- $ 8,364 $-- $ 562 $-- $ 3,710 $1,264 539 -- 47 -- 850 4 ------- --- ------ --- ------- ------ 7,825 -- 515 -- 2,860 1,260 ------- --- ------ --- ------- ------ 45 -- 251 -- (8,588) 47 2,540 -- 711 -- 13,060 (934) ------- --- ------ --- ------- ------ 2,585 -- 962 -- 4,472 (887) ------- --- ------ --- ------- ------ $10,410 $-- $1,477 $-- $ 7,332 $ 373 ======= === ====== === ======= ======
F-57 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
DREYFUS APPRECIATION INVESTMENT DIVISION --------------------------- FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, 2005 2004 ------------ -------------- INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ -- $ 48 Expenses: Mortality and expense charges................................ 59 3 ---- ---- Net investment income (loss)................................... (59) 45 ---- ---- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... 114 -- Change in unrealized appreciation (depreciation) of investments 538 217 ---- ---- Net realized and unrealized gains (losses) on investments...... 652 217 ---- ---- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $593 $262 ==== ====
See Notes to Financial Statements. F-58
GOLDMAN SACHS GOLDMAN SACHS MFS MID CAP VALUE CORE SMALL CAP EQUITY HIGH INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - -------------------------- --------------------------- -------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2004 - ------------ -------------- ------------ -------------- ------------ -------------- $ 4,740 $1,224 $ 4,331 $-- $ 3,911 $ -- 222 6 20 -- 279 87 ------- ------ ------- --- ------- ------ 4,518 1,218 4,311 -- 3,632 (87) ------- ------ ------- --- ------- ------ (3,479) 1 1 -- 128 69 223 (464) (5,644) -- (2,862) 3,152 ------- ------ ------- --- ------- ------ (3,256) (463) (5,643) -- (2,734) 3,221 ------- ------ ------- --- ------- ------ $ 1,262 $ 755 $(1,332) $-- $ 898 $3,134 ======= ====== ======= === ======= ======
F-59 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED)
VAN KAMPEN GOVERNMENT INVESTMENT DIVISION --------------------------- FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, 2005 2004 ------------ -------------- INVESTMENT INCOME (LOSS) : Income: Dividends.................................................... $ -- $-- Expenses: Mortality and expense charges................................ 12 -- ---- --- Net investment income (loss)................................... (12) -- ---- --- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Net realized gains (losses) from security transactions......... (1) -- Change in unrealized appreciation (depreciation) of investments 124 -- ---- --- Net realized and unrealized gains (losses) on investments...... 123 -- ---- --- NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $111 $-- ==== ===
See Notes to Financial Statements. F-60
WELLS FARGO ADVANTAGE TOTAL RETURN WELLS FARGO ADVANTAGE LARGE WELLS FARGO ADVANTAGE EQUITY INCOME BOND INVESTMENT DIVISION COMPANY GROWTH INVESTMENT DIVISION INVESTMENT DIVISION - ---------------------------------- --------------------------------- ---------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2004 - ------------ -------------- ------------ -------------- ------------ -------------- $263 $-- $ 15 $-- $113 $-- 33 -- 31 1 31 1 ---- --- ---- --- ---- --- 230 -- (16) (1) 82 (1) ---- --- ---- --- ---- --- 238 -- (5) 6 25 10 16 -- 797 16 301 3 ---- --- ---- --- ---- --- 254 -- 792 22 326 13 ---- --- ---- --- ---- --- $484 $-- $776 $21 $408 $12 ==== === ==== === ==== ===
F-61 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS
BLACKROCK INVESTMENT TRUST BLACKROCK DIVERSIFIED INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------------- ---------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).......... $ 905,711 $ (545,868) $ (68,204) $ 2,270,420 $ 2,567,571 $ 7,511,522 Net realized gains (losses) from security transactions................ 834,521 (689,999) (6,958,914) 655,141 (558,940) (2,593,687) Change in unrealized appreciation (depreciation) of investments........ 8,704,485 37,215,298 88,855,777 3,822,631 19,749,208 42,182,763 ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations............ 10,444,717 35,979,431 81,828,659 6,748,192 21,757,839 47,100,598 ------------ ------------ ------------ ------------ ------------ ------------ From capital transactions: Net premiums.......................... 57,155,216 62,785,148 67,707,999 48,752,996 50,420,345 52,190,961 Redemptions........................... (19,141,006) (18,448,900) (15,137,546) (14,471,745) (13,235,955) (14,264,879) Net investment division transfers..... (10,123,918) (11,723,921) (7,863,696) (4,525,462) (1,916,785) (2,178,352) Other net transfers................... (36,594,242) (35,862,546) (36,428,084) (31,930,287) (30,882,102) (31,835,294) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from capital transactions.. (8,703,950) (3,250,219) 8,278,673 (2,174,498) 4,385,503 3,912,436 ------------ ------------ ------------ ------------ ------------ ------------ NET CHANGE IN NET ASSETS................ 1,740,767 32,729,212 90,107,332 4,573,694 26,143,342 51,013,034 NET ASSETS - BEGINNING OF PERIOD................................. 399,816,513 367,087,301 276,979,969 315,176,729 289,033,387 238,020,353 ------------ ------------ ------------ ------------ ------------ ------------ NET ASSETS - END OF PERIOD.............. $401,557,280 $399,816,513 $367,087,301 $319,750,423 $315,176,729 $289,033,387 ============ ============ ============ ============ ============ ============
See Notes to Financial Statements. F-62
BLACKROCK AGGRESSIVE GROWTH METLIFE STOCK INDEX FI INTERNATIONAL STOCK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ---------------------------------------- ---------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ (1,824,382) $ (1,651,256) $ (1,367,678) $ 4,330,436 $ 174,194 $ 3,387,558 $ (109,934) $ 235,897 $ (54,694) (2,231,885) (3,443,419) (8,202,841) 3,573,660 (2,432,174) (10,060,006) 237,027 (367,092) (1,630,864) 23,892,825 27,472,766 62,199,697 14,173,789 49,514,290 101,361,307 8,151,109 7,284,341 10,924,390 - ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 19,836,558 22,378,091 52,629,178 22,077,885 47,256,310 94,688,859 8,278,202 7,153,146 9,238,832 - ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 29,002,147 31,507,761 34,182,901 113,017,163 111,296,549 108,236,751 7,207,636 7,277,661 7,903,805 (10,279,695) (10,380,355) (7,318,523) (21,367,099) (21,662,848) (14,265,812) (2,380,519) (2,707,112) (1,780,012) (6,037,385) (5,174,527) (5,104,646) (5,222,960) 2,484,658 (11,228,029) (102,719) (3,803,574) (552,252) (18,051,017) (17,849,981) (17,936,155) (51,111,426) (48,313,238) (46,545,385) (4,221,810) (3,829,486) (3,792,182) - ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- (5,365,950) (1,897,102) 3,823,577 35,315,678 43,805,121 36,197,525 502,588 (3,062,511) 1,779,359 - ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- 14,470,608 20,480,989 56,452,755 57,393,563 91,061,431 130,886,384 8,780,790 4,090,635 11,018,191 207,749,362 187,268,373 130,815,618 548,175,778 457,114,347 326,227,963 48,074,924 43,984,289 32,966,098 - ------------ ------------ ------------ ------------ ------------ ------------ ----------- ----------- ----------- $222,219,970 $207,749,362 $187,268,373 $605,569,341 $548,175,778 $457,114,347 $56,855,714 $48,074,924 $43,984,289 ============ ============ ============ ============ ============ ============ =========== =========== ===========
F-63 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FI MID CAP OPPORTUNITIES T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ---------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).............. $ (2,011,441) $ (631,368) $ (1,297,757) $ (595,465) $ (530,571) $ (408,933) Net realized gains (losses) from security transactions............................. (1,015,121) (717,628) (1,145,184) 37,997 (69,548) (326,259) Change in unrealized appreciation (depreciation) of investments............ 17,191,699 33,098,684 46,019,342 7,936,747 7,181,746 18,001,752 ------------ ------------ ------------ ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations................ 14,165,137 31,749,688 43,576,401 7,379,279 6,581,627 17,266,560 ------------ ------------ ------------ ----------- ----------- ----------- From capital transactions: Net premiums.............................. 43,356,457 48,069,931 53,673,455 11,374,021 12,623,285 12,642,407 Redemptions............................... (9,351,459) (8,654,425) (5,340,392) (2,561,686) (3,606,677) (1,578,439) Net investment division transfers......... (7,897,866) (5,135,559) (5,185,372) (1,830,915) (1,032,512) (166,606) Other net transfers....................... (21,852,505) (20,781,515) (21,665,579) (5,762,687) (5,720,496) (5,656,171) ------------ ------------ ------------ ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions...... 4,254,627 13,498,432 21,482,112 1,218,733 2,263,600 5,241,191 ------------ ------------ ------------ ----------- ----------- ----------- NET CHANGE IN NET ASSETS.................... 18,419,764 45,248,120 65,058,513 8,598,012 8,845,227 22,507,751 NET ASSETS - BEGINNING OF PERIOD..................................... 229,326,208 184,078,088 119,019,575 72,034,034 63,188,807 40,681,056 ------------ ------------ ------------ ----------- ----------- ----------- NET ASSETS - END OF PERIOD.................. $247,745,972 $229,326,208 $184,078,088 $80,632,046 $72,034,034 $63,188,807 ============ ============ ============ =========== =========== ===========
See Notes to Financial Statements. F-64
OPPENHEIMER GLOBAL EQUITY HARRIS OAKMARK LARGE CAP VALUE NEUBERGER BERMAN MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ (89,544) $ 232,594 $ 311,502 $ (61,565) $ (149,989) $ (252,368) $ 4,209,916 $ 748,413 $ (118,988) 270,279 (301,695) (1,005,776) 398,007 613,781 38,696 557,751 490,187 28,084 5,277,659 4,666,310 7,242,152 (1,475,339) 4,130,792 6,986,213 1,374,494 6,555,902 7,656,793 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 5,458,394 4,597,209 6,547,878 (1,138,897) 4,594,584 6,772,541 6,142,161 7,794,502 7,565,889 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 5,253,047 5,683,708 6,014,790 12,688,012 13,168,295 11,430,624 11,535,409 9,617,754 8,682,614 (1,357,666) (1,588,385) (1,735,572) (1,712,292) (2,460,777) (991,704) (1,926,942) (2,004,438) (629,059) 942,030 (734,504) (125,590) (1,524,510) 3,020,747 1,835,698 5,790,659 4,985,822 650,401 (2,873,486) (2,471,269) (2,481,721) (5,000,031) (4,693,326) (4,616,084) (5,604,153) (4,123,930) (3,610,116) - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 1,963,925 889,550 1,671,907 4,451,179 9,034,939 7,658,534 9,794,973 8,475,208 5,093,840 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- 7,422,319 5,486,759 8,219,785 3,312,282 13,629,523 14,431,075 15,937,134 16,269,710 12,659,729 34,182,477 28,695,718 20,475,933 51,133,152 37,503,629 23,072,554 47,215,261 30,945,551 18,285,822 - ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- ----------- $41,604,796 $34,182,477 $28,695,718 $54,445,434 $51,133,152 $37,503,629 $63,152,395 $47,215,261 $30,945,551 =========== =========== =========== =========== =========== =========== =========== =========== ===========
F-65 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
T. ROWE PRICE LARGE CAP GROWTH LEHMAN BROTHERS AGGREGATE BOND INDEX INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).............. $ (105,519) $ (216,962) $ (180,062) $ 2,261,399 $ 1,424,166 $ 2,506,200 Net realized gains (losses) from security transactions............................. 161,433 994,314 (489,389) 113,726 451,466 1,152,171 Change in unrealized appreciation (depreciation) of investments............ 2,205,530 2,677,244 7,871,800 (1,403,001) 266,268 (2,185,014) ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations................ 2,261,444 3,454,596 7,202,349 972,124 2,141,900 1,473,357 ----------- ----------- ----------- ----------- ----------- ----------- From capital transactions: Net premiums.............................. 7,599,043 8,138,358 8,620,553 16,818,608 15,979,551 13,565,785 Redemptions............................... (1,367,041) (6,471,579) (982,056) (2,385,144) (4,291,570) (1,812,183) Net investment division transfers......... (276,979) 1,130,128 (78,277) 4,909,390 5,023,325 (6,698,353) Other net transfers....................... (3,405,337) (3,183,456) (3,337,120) (7,477,373) (6,137,705) (5,580,587) ----------- ----------- ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions...... 2,549,686 (386,549) 4,223,100 11,865,481 10,573,601 (525,338) ----------- ----------- ----------- ----------- ----------- ----------- NET CHANGE IN NET ASSETS.................... 4,811,130 3,068,047 11,425,449 12,837,605 12,715,501 948,019 NET ASSETS - BEGINNING OF PERIOD..................................... 36,588,381 33,520,334 22,094,885 67,709,808 54,994,307 54,046,288 ----------- ----------- ----------- ----------- ----------- ----------- NET ASSETS - END OF PERIOD.................. $41,399,511 $36,588,381 $33,520,334 $80,547,413 $67,709,808 $54,994,307 =========== =========== =========== =========== =========== ===========
See Notes to Financial Statements. F-66
MORGAN STANLEY EAFE INDEX RUSSELL 2000 INDEX MET/PUTNAM VOYAGER INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ---------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED JANUARY 1, 2005 ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, TO APRIL 30, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ --------------- ------------ ------------ $ 285,699 $ (28,456) $ 121,982 $ 1,411,516 $ (114,631) $ (29,213) $ 21,839 $ (68,947) $ (58,697) 590,734 1,189,725 (497,564) 811,342 973,061 (125,595) (11,582) (75,290) (624,452) 3,753,078 3,997,066 6,516,826 (613,275) 4,412,786 7,938,110 (845,475) 560,180 2,271,140 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- 4,629,511 5,158,335 6,141,244 1,609,583 5,271,216 7,783,302 (835,218) 415,943 1,587,991 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- 8,982,849 8,790,918 7,425,875 8,761,720 8,664,945 7,659,016 905,935 2,907,203 3,213,111 (1,234,980) (1,870,632) (362,211) (1,250,883) (1,577,160) (486,878) (71,083) (242,420) (93,468) 1,409,687 (311,398) 438,708 216,481 458,588 991,151 (10,092,131) (199,548) (151,453) (3,881,087) (3,505,821) (2,849,511) (3,785,816) (3,458,107) (3,048,846) (359,433) (1,080,005) (1,158,137) - ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- 5,276,469 3,103,067 4,652,861 3,941,502 4,088,266 5,114,443 (9,616,712) 1,385,230 1,810,053 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- 9,905,980 8,261,402 10,794,105 5,551,085 9,359,482 12,897,745 (10,451,930) 1,801,173 3,398,044 32,551,579 24,290,177 13,496,072 37,085,761 27,726,279 14,828,534 10,451,930 8,650,757 5,252,713 - ----------- ----------- ----------- ----------- ----------- ----------- ------------ ----------- ----------- $42,457,559 $32,551,579 $24,290,177 $42,636,846 $37,085,761 $27,726,279 $ -- $10,451,930 $ 8,650,757 =========== =========== =========== =========== =========== =========== ============ =========== ===========
F-67 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
JENNISON GROWTH BLACKROCK STRATEGIC VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------------------------- FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR MAY 1, 2005 ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2005 2004 2003 ------------------- ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).................................... $ (67,101) $ 4,775,161 $ (563,943) $ (336,756) Net realized gains (losses) from security transactions.......... 36,398 647,742 827,418 196,537 Change in unrealized appreciation (depreciation) of investments. 2,206,440 (2,502,234) 9,427,091 17,391,943 ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations. 2,175,737 2,920,669 9,690,566 17,251,724 ----------- ----------- ----------- ----------- From capital transactions: Net premiums.................................................... 1,741,473 18,598,115 19,308,810 16,618,731 Redemptions..................................................... (211,945) (3,019,612) (2,545,879) (920,139) Net investment division transfers............................... 10,052,349 (376,162) 4,975,092 1,566,557 Other net transfers............................................. (673,369) (8,341,738) (7,626,612) (7,037,769) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions................................................... 10,908,508 6,860,603 14,111,411 10,227,380 ----------- ----------- ----------- ----------- NET CHANGE IN NET ASSETS.......................................... 13,084,245 9,781,272 23,801,977 27,479,104 NET ASSETS - BEGINNING OF PERIOD.................................. -- 80,341,639 56,539,662 29,060,558 ----------- ----------- ----------- ----------- NET ASSETS - END OF PERIOD........................................ $13,084,245 $90,122,911 $80,341,639 $56,539,662 =========== =========== =========== ===========
See Notes to Financial Statements. F-68
METLIFE MID CAP STOCK INDEX FRANKLIN TEMPLETON SMALL CAP GROWTH BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 1,973,873 $ (21,174) $ (64,163) $ 115,162 $ (31,464) $ (16,641) $ 42,176 $ (18,736) $ 4,590 682,809 992,035 12,063 129,715 40,690 (19,016) 81,656 105,597 41,938 1,900,535 3,817,899 6,538,587 (56,267) 404,946 796,643 110,740 229,787 156,144 - ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- 4,557,217 4,788,760 6,486,487 188,610 414,172 760,986 234,572 316,648 202,672 - ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- 9,146,889 9,137,346 8,658,518 1,166,638 1,182,207 844,482 1,318,222 918,978 405,361 (1,237,944) (1,570,548) (315,294) (161,479) (73,602) (27,310) (128,839) (35,177) (5,862) 1,259,495 306,699 960,729 (104,904) 410,526 610,392 925,771 1,361,717 469,287 (4,087,764) (3,701,760) (3,433,510) (508,246) (444,118) (416,036) (533,475) (351,401) (149,915) - ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- 5,080,676 4,171,737 5,870,443 392,009 1,075,013 1,011,528 1,581,679 1,894,117 718,871 - ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- 9,637,893 8,960,497 12,356,930 580,619 1,489,185 1,772,514 1,816,251 2,210,765 921,543 36,885,384 27,924,887 15,567,957 4,527,432 3,038,247 1,265,733 3,320,893 1,110,128 188,585 - ----------- ----------- ----------- ---------- ---------- ---------- ---------- ---------- ---------- $46,523,277 $36,885,384 $27,924,887 $5,108,051 $4,527,432 $3,038,247 $5,137,144 $3,320,893 $1,110,128 =========== =========== =========== ========== ========== ========== ========== ========== ==========
F-69 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
DAVIS VENTURE VALUE LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).............. $ (46,637) $ (59,671) $ (75,683) $ 22,427 $ (44,015) $ (28,298) Net realized gains (losses) from security transactions............................. 226,016 508,082 (213,900) 74,135 142,373 (88,636) Change in unrealized appreciation (depreciation) of investments............ 3,304,528 2,678,225 5,610,390 365,753 718,393 1,169,772 ----------- ----------- ----------- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations................ 3,483,907 3,126,636 5,320,807 462,315 816,751 1,052,838 ----------- ----------- ----------- ---------- ---------- ---------- From capital transactions: Net premiums.............................. 10,136,134 7,205,230 6,492,659 1,717,028 1,479,121 1,387,309 Redemptions............................... (1,290,077) (2,608,194) (286,620) (250,927) (139,707) (49,105) Net investment division transfers......... 4,047,247 2,046,419 2,147,532 500,932 391,267 159,941 Other net transfers....................... (3,758,434) (2,825,249) (2,675,075) (721,406) (563,896) (536,437) ----------- ----------- ----------- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions...... 9,134,870 3,818,206 5,678,496 1,245,627 1,166,785 961,708 ----------- ----------- ----------- ---------- ---------- ---------- NET CHANGE IN NET ASSETS.................... 12,618,777 6,944,842 10,999,303 1,707,942 1,983,536 2,014,546 NET ASSETS - BEGINNING OF PERIOD..................................... 31,374,337 24,429,495 13,430,192 6,406,475 4,422,939 2,408,393 ----------- ----------- ----------- ---------- ---------- ---------- NET ASSETS - END OF PERIOD.................. $43,993,114 $31,374,337 $24,429,495 $8,114,417 $6,406,475 $4,422,939 =========== =========== =========== ========== ========== ==========
See Notes to Financial Statements. F-70
BLACKROCK LEGACY LARGE CAP GROWTH MFS INVESTORS TRUST BLACKROCK BOND INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- -------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ (11,264) $ (30,183) $ (23,728) $ (20,254) $ (14,069) $ (7,711) $ 3,938,174 $ 4,687,144 $ 2,183,489 84,949 117,304 (63,998) 75,511 10,690 13,432 98,977 1,244,325 880,712 498,307 394,196 1,339,908 189,614 322,040 221,187 (2,577,646) (2,928,093) 1,572,001 - ----------- ---------- ---------- ---------- ---------- ---------- ----------- ------------ ----------- 571,992 481,317 1,252,182 244,871 318,661 226,908 1,459,505 3,003,376 4,636,202 - ----------- ---------- ---------- ---------- ---------- ---------- ----------- ------------ ----------- 3,105,072 1,206,954 1,035,783 1,132,702 898,597 701,861 17,949,210 16,181,503 16,159,717 (66,501) (7,273) -- (129,349) (45,911) (14,052) (4,284,048) (10,462,036) (4,549,369) 801,381 276,437 359 239 975,437 164,766 (1,273,740) (8,366,427) (3,340,166) (760,422) (433,343) (337,622) (418,718) (303,839) (229,330) (8,331,881) (7,901,923) (9,344,726) - ----------- ---------- ---------- ---------- ---------- ---------- ----------- ------------ ----------- 3,079,530 1,042,775 698,520 584,874 1,524,284 623,245 4,059,541 (10,548,883) (1,074,544) - ----------- ---------- ---------- ---------- ---------- ---------- ----------- ------------ ----------- 3,651,522 1,524,092 1,950,702 829,745 1,842,945 850,153 5,519,046 (7,545,507) 3,561,658 6,457,524 4,933,432 2,982,730 3,386,991 1,544,046 693,893 89,174,083 96,719,590 93,157,932 - ----------- ---------- ---------- ---------- ---------- ---------- ----------- ------------ ----------- $10,109,046 $6,457,524 $4,933,432 $4,216,736 $3,386,991 $1,544,046 $94,693,129 $ 89,174,083 $96,719,590 =========== ========== ========== ========== ========== ========== =========== ============ ===========
F-71 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
HARRIS OAKMARK FI VALUE LEADERS FOCUSED VALUE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).......... $ 3,733 $ 2,427 $ (808) $ 80,346 $ 56,730 $ (127,312) Net realized gains (losses) from security transactions................ 80,493 13,334 24,426 647,285 205,940 31,214 Change in unrealized appreciation (depreciation) of investments........ 177,601 106,438 58,141 3,071,366 2,796,718 5,537,632 ---------- ---------- -------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations............ 261,827 122,199 81,759 3,798,997 3,059,388 5,441,534 ---------- ---------- -------- ----------- ----------- ----------- From capital transactions: Net premiums.......................... 766,467 394,566 167,405 10,775,287 9,971,788 8,198,287 Redemptions........................... (74,147) (3,529) (10,046) (1,470,016) (683,199) (450,269) Net investment division transfers..... 1,396,629 293,780 229,644 2,872,307 3,578,452 3,144,705 Other net transfers................... (278,459) (121,742) (56,377) (4,569,547) (3,947,334) (3,347,152) ---------- ---------- -------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from capital transactions.. 1,810,490 563,075 330,626 7,608,031 8,919,707 7,545,571 ---------- ---------- -------- ----------- ----------- ----------- NET CHANGE IN NET ASSETS................ 2,072,317 685,274 412,385 11,407,028 11,979,095 12,987,105 NET ASSETS - BEGINNING OF PERIOD................................. 1,190,557 505,283 92,898 37,844,733 25,865,638 12,878,533 ---------- ---------- -------- ----------- ----------- ----------- NET ASSETS - END OF PERIOD.............. $3,262,874 $1,190,557 $505,283 $49,251,761 $37,844,733 $25,865,638 ========== ========== ======== =========== =========== ===========
See Notes to Financial Statements. F-72
SALOMON BROTHERS SALOMON BROTHERS BLACKROCK STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 430,943 $ 129,633 $ 33,102 $ 249,887 $ 121,068 $ 42,617 $ 628,330 $ 112,176 $ 47,144 55,156 74,022 97,650 (2,681) 1,624 48,098 -- -- (1) (261,648) 217,644 233,146 (152,454) 55,424 (40,677) -- -- 1 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 224,451 421,299 363,898 94,752 178,116 50,038 628,330 112,176 47,144 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 3,710,450 2,921,606 1,996,763 3,487,915 3,283,565 3,454,837 3,943,073 6,959,659 4,560,820 (449,262) (184,201) (108,331) (369,706) (178,344) (137,457) (738,933) (6,466,006) (1,186,158) 1,981,025 1,525,465 1,486,748 764,728 190,342 916,767 (3,511,345) 2,796,932 (4,975,125) (1,500,505) (1,104,691) (749,672) (1,441,518) (1,300,443) (1,344,693) (1,455,275) (1,587,065) (1,910,867) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 3,741,708 3,158,179 2,625,508 2,441,419 1,995,120 2,889,454 (1,762,480) 1,703,520 (3,511,330) - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- 3,966,159 3,579,478 2,989,406 2,536,171 2,173,236 2,939,492 (1,134,150) 1,815,696 (3,464,186) 8,742,547 5,163,069 2,173,663 9,478,138 7,304,902 4,365,410 29,162,123 27,346,427 30,810,613 - ----------- ----------- ---------- ----------- ----------- ----------- ----------- ----------- ----------- $12,708,706 $ 8,742,547 $5,163,069 $12,014,309 $ 9,478,138 $ 7,304,902 $28,027,973 $29,162,123 $27,346,427 =========== =========== ========== =========== =========== =========== =========== =========== ===========
F-73 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
MFS METLIFE TOTAL RETURN CONSERVATIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION -------------------------- ----------------------- FOR THE YEAR FOR THE PERIOD FOR THE PERIOD ENDED MAY 3, 2004 TO MAY 1, 2005 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 ------------ -------------- ----------------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)......................... $ 25,741 $ (1,443) $ 123 Net realized gains (losses) from security transactions........................................ 18,142 429 271 Change in unrealized appreciation (depreciation) of investments......................................... (3,131) 39,191 554 ---------- -------- -------- Net increase (decrease) in net assets resulting from operations.......................................... 40,752 38,177 948 ---------- -------- -------- From capital transactions: Net premiums......................................... 657,976 133,508 11,888 Redemptions.......................................... (12,602) (793) (5,583) Net investment division transfers.................... 970,499 628,279 113,429 Other net transfers.................................. (266,342) (32,244) (2,457) ---------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions................................ 1,349,531 728,750 117,277 ---------- -------- -------- NET CHANGE IN NET ASSETS............................... 1,390,283 766,927 118,225 NET ASSETS - BEGINNING OF PERIOD....................... 766,927 -- -- ---------- -------- -------- NET ASSETS - END OF PERIOD............................. $2,157,210 $766,927 $118,225 ========== ======== ========
METLIFE CONSERVATIVE TO MODERATE ALLOCATION INVESTMENT DIVISION ---------------------- FOR THE PERIOD MAY 1, 2005 TO DECEMBER 31, 2005 ---------------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)......................... $ 348 Net realized gains (losses) from security transactions........................................ 1,644 Change in unrealized appreciation (depreciation) of investments......................................... 9,258 -------- Net increase (decrease) in net assets resulting from operations.......................................... 11,250 -------- From capital transactions: Net premiums......................................... 49,524 Redemptions.......................................... (7,199) Net investment division transfers.................... 566,129 Other net transfers.................................. (41,193) -------- Net increase (decrease) in net assets resulting from capital transactions................................ 567,261 -------- NET CHANGE IN NET ASSETS............................... 578,511 NET ASSETS - BEGINNING OF PERIOD....................... -- -------- NET ASSETS - END OF PERIOD............................. $578,511 ========
See Notes to Financial Statements. F-74
METLIFE METLIFE MODERATE TO METLIFE JANUS ASPEN MODERATE ALLOCATION AGGRESSIVE ALLOCATION AGGRESSIVE ALLOCATION LARGE CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- --------------------- --------------------- ------------------------------------- FOR THE PERIOD FOR THE PERIOD FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR MAY 1, 2005 TO MAY 1, 2005 TO MAY 1, 2005 TO ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2005 2005 2005 2004 2003 - ------------------- --------------------- --------------------- ------------ ------------ ------------ $ 2,333 $ 3,135 $ 1,703 $ (6,186) $ (11,788) $ (10,283) 3,556 4,752 1,894 (62,709) (193,886) (263,013) 25,822 64,564 10,725 263,241 407,058 1,041,007 ---------- ---------- -------- ---------- ---------- ---------- 31,711 72,451 14,322 194,346 201,384 767,711 ---------- ---------- -------- ---------- ---------- ---------- 246,532 350,076 77,484 743,854 846,747 839,829 (12,519) (5,994) (2,936) (42,168) (5,912) (88,894) 1,278,986 2,046,335 381,966 (38,037) (96,893) (5,665) (95,275) (113,465) (17,915) (200,556) (168,584) (176,510) ---------- ---------- -------- ---------- ---------- ---------- 1,417,724 2,276,952 438,351 463,093 575,358 568,760 ---------- ---------- -------- ---------- ---------- ---------- 1,449,435 2,349,403 452,673 657,439 776,742 1,336,471 -- -- -- 4,276,635 3,499,893 2,163,422 ---------- ---------- -------- ---------- ---------- ---------- $1,449,435 $2,349,403 $452,673 $4,934,074 $4,276,635 $3,499,893 ========== ========== ======== ========== ========== ==========
F-75 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
JANUS ASPEN BALANCED AIM V.I. CORE STOCK INVESTMENT DIVISION INVESTMENT DIVISION -------------------------- ------------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED MAY 3, 2004 TO ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2003 ------------ -------------- ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)......................... $ 24 $ 4 $ (134) $ 1,090 $ 1,289 Net realized gains (losses) from security transactions........................................ 1 -- 5,489 (458) (4,599) Change in unrealized appreciation (depreciation) of investments......................................... 1 4 3,571 9,085 30,971 ------ ---- -------- -------- -------- Net increase (decrease) in net assets resulting from operations.......................................... 26 8 8,926 9,717 27,661 ------ ---- -------- -------- -------- From capital transactions: Net premiums......................................... 234 234 49,677 51,947 44,937 Redemptions.......................................... -- -- (8,005) (1,369) (13,395) Net investment division transfers.................... 1,745 -- (55,334) -- 6,492 Other net transfers.................................. (56) (5) (5,066) (4,782) (6,352) ------ ---- -------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions................................ 1,923 229 (18,728) 45,796 31,682 ------ ---- -------- -------- -------- NET CHANGE IN NET ASSETS............................... 1,949 237 (9,802) 55,513 59,343 NET ASSETS - BEGINNING OF PERIOD....................... 237 -- 239,919 184,406 125,063 ------ ---- -------- -------- -------- NET ASSETS - END OF PERIOD............................. $2,186 $237 $230,117 $239,919 $184,406 ====== ==== ======== ======== ========
See Notes to Financial Statements. F-76
AIM V.I. GOVERNMENT SECURITIES AIM V.I. REAL ESTATE FRANKLIN TEMPLETON FOREIGN SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ----------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED MAY 3, 2004 TO ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2003 2005 2004 2003 - ------------ -------------- ------------ ------------ ------------ ------------ ------------ ------------ $ 193 $ 29 $ 76,044 $ 25,043 $ 1,726 $ 45,261 $ 30,307 $ 34,446 107 (2) 148,313 54,384 7,645 259,867 153,352 (71,786) (117) (20) 7,005 204,103 41,591 264,624 613,265 947,139 ------- ------ ---------- ---------- -------- ---------- ---------- ---------- 183 7 231,362 283,530 50,962 569,752 796,924 909,799 ------- ------ ---------- ---------- -------- ---------- ---------- ---------- 4,439 2,238 128,022 652,190 20,763 695,341 1,157,933 571,285 (6,644) -- (9,365) (86,973) (74,780) (189,719) (986,244) (219,304) 6,772 2,151 149,537 306,861 8,373 355,482 542,291 342,850 (805) (86) (59,793) (26,160) (5,943) (292,459) (264,753) (163,132) ------- ------ ---------- ---------- -------- ---------- ---------- ---------- 3,762 4,303 208,401 845,918 (51,587) 568,645 449,227 531,699 ------- ------ ---------- ---------- -------- ---------- ---------- ---------- 3,945 4,310 439,763 1,129,448 (625) 1,138,397 1,246,151 1,441,498 4,310 -- 1,308,056 178,608 179,233 5,299,683 4,053,532 2,612,034 ------- ------ ---------- ---------- -------- ---------- ---------- ---------- $ 8,255 $4,310 $1,747,819 $1,308,056 $178,608 $6,438,080 $5,299,683 $4,053,532 ======= ====== ========== ========== ======== ========== ========== ==========
F-77 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FRANKLIN MUTUAL DISCOVERY SECURITIES ALLIANCEBERNSTEIN GROWTH AND INCOME INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------ ------------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED MAY 3, 2004 TO ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2003 ------------ -------------- ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)..................... $ 546 $-- $ 23,129 $ 3,467 $ 4,389 Net realized gains (losses) from security transactions.................................... 132 -- 19,259 8,499 (27,592) Change in unrealized appreciation (depreciation) of investments.................................. 8,764 -- 116,879 301,218 441,306 -------- --- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations................................. 9,442 -- 159,267 313,184 418,103 -------- --- ---------- ---------- ---------- From capital transactions: Net premiums..................................... 3,124 -- 901,644 891,420 581,532 Redemptions...................................... -- -- (8,724) (3,193) (87,076) Net investment division transfers................ 110,323 -- (26,505) 32,466 41,687 Other net transfers.............................. (1,225) -- (106,490) (97,014) (82,296) -------- --- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions....................... 112,222 -- 759,925 823,679 453,847 -------- --- ---------- ---------- ---------- NET CHANGE IN NET ASSETS........................... 121,664 -- 919,192 1,136,863 871,950 NET ASSETS - BEGINNING OF PERIOD................... -- -- 3,199,948 2,063,085 1,191,135 -------- --- ---------- ---------- ---------- NET ASSETS - END OF PERIOD......................... $121,664 $-- $4,119,140 $3,199,948 $2,063,085 ======== === ========== ========== ==========
See Notes to Financial Statements. F-78
ALLIANCEBERNSTEIN GLOBAL TECHNOLOGY FIDELITY VIP CONTRAFUND FIDELITY VIP ASSET MANAGER GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ (135) $ (77) $ (181) $ (1,748) $ (1,683) $ (2,455) $ 14,795 $ 9,621 $ 6,748 255 108 (931) 170,001 62,282 6,303 38,662 3,245 (4,335) 1,638 2,247 13,613 (22,158) 45,971 139,867 (29,733) 19,246 59,143 ------- -------- ------- --------- --------- --------- --------- -------- -------- 1,758 2,278 12,501 146,095 106,570 143,715 23,724 32,112 61,556 ------- -------- ------- --------- --------- --------- --------- -------- -------- 6,941 5,469 15,245 159,311 134,841 53,210 202,315 261,139 194,197 -- (31,398) (316) (280,847) (325,384) (213,750) (28,961) (20,112) (1,698) 13,706 -- 727 112,842 34,413 657,697 (157,813) 38,214 74,992 (733) (1,308) (792) (35,179) (25,225) 3,584 (35,241) (39,605) (27,293) ------- -------- ------- --------- --------- --------- --------- -------- -------- 19,914 (27,237) 14,864 (43,873) (181,355) 500,741 (19,700) 239,636 240,198 ------- -------- ------- --------- --------- --------- --------- -------- -------- 21,672 (24,959) 27,365 102,222 (74,785) 644,456 4,024 271,748 301,754 20,636 45,595 18,230 818,892 893,677 249,221 704,377 432,629 130,875 ------- -------- ------- --------- --------- --------- --------- -------- -------- $42,308 $ 20,636 $45,595 $ 921,114 $ 818,892 $ 893,677 $ 708,401 $704,377 $432,629 ======= ======== ======= ========= ========= ========= ========= ======== ========
F-79 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
FIDELITY VIP GROWTH INVESTMENT DIVISION ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)................................. $ (1,034) $ (1,130) $ (831) Net realized gains (losses) from security transactions....... 26,347 (5,015) (2,588) Change in unrealized appreciation (depreciation) of investments................................................. 3,218 17,311 63,146 -------- -------- -------- Net increase (decrease) in net assets resulting from operations.................................................. 28,531 11,166 59,727 -------- -------- -------- From capital transactions: Net premiums................................................. 93,549 110,310 101,957 Redemptions.................................................. (42,768) (53,801) (738) Net investment division transfers............................ 91,078 12,180 6,224 Other net transfers.......................................... (8,288) (4,852) (4,423) -------- -------- -------- Net increase (decrease) in net assets resulting from capital transactions................................................ 133,571 63,837 103,020 -------- -------- -------- NET CHANGE IN NET ASSETS....................................... 162,102 75,003 162,747 NET ASSETS - BEGINNING OF PERIOD............................... 371,361 296,358 133,611 -------- -------- -------- NET ASSETS - END OF PERIOD..................................... $533,463 $371,361 $296,358 ======== ======== ========
FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION -------------------------- FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, 2005 2004 ------------ -------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)................................. $ 803 $ (4) Net realized gains (losses) from security transactions....... (59) 8 Change in unrealized appreciation (depreciation) of investments................................................. (370) 12 ------- ------- Net increase (decrease) in net assets resulting from operations.................................................. 374 16 ------- ------- From capital transactions: Net premiums................................................. 8,457 2,238 Redemptions.................................................. -- -- Net investment division transfers............................ 12,839 10,966 Other net transfers.......................................... (1,307) (99) ------- ------- Net increase (decrease) in net assets resulting from capital transactions................................................ 19,989 13,105 ------- ------- NET CHANGE IN NET ASSETS....................................... 20,363 13,121 NET ASSETS - BEGINNING OF PERIOD............................... 13,121 -- ------- ------- NET ASSETS - END OF PERIOD..................................... $33,484 $13,121 ======= =======
See Notes to Financial Statements. F-80
FIDELITY VIP EQUITY-INCOME AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - -------------------------- --------------------------------------- ------------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED MAY 3, 2004 TO ENDED ENDED MAY 1, 2002 TO ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2003 2005 2004 2003 - ------------ -------------- ------------ ------------ -------------- ------------ ------------ ------------ $ 359 $ (5) $ (51,712) $ (224,005) $ (118,303) $ 407,482 $ 49,063 $ 57,594 (5,940) -- 115,149 53,047 (100,817) 116,683 60,134 (26,406) 605 -- 8,793,861 4,445,539 5,264,250 1,688,136 2,605,294 3,852,340 --------- ------- ----------- ----------- ----------- ----------- ----------- ----------- (4,976) (5) 8,857,298 4,274,581 5,045,130 2,212,301 2,714,491 3,883,528 --------- ------- ----------- ----------- ----------- ----------- ----------- ----------- 5,510 2,238 17,644,031 13,227,421 8,746,040 12,314,898 10,343,250 7,049,440 (138,122) -- (1,512,503) (620,701) (274,455) (1,299,645) (577,432) (184,181) 158,037 7,499 8,768,204 7,788,495 5,353,241 3,766,503 5,800,181 3,708,586 (5,151) 378 (6,997,560) (4,857,964) (3,102,038) (4,901,035) (3,947,698) (2,495,963) --------- ------- ----------- ----------- ----------- ----------- ----------- ----------- 20,274 10,115 17,902,172 15,537,251 10,722,788 9,880,721 11,618,301 8,077,882 --------- ------- ----------- ----------- ----------- ----------- ----------- ----------- 15,298 10,110 26,759,470 19,811,832 15,767,918 12,093,022 14,332,792 11,961,410 10,110 -- 45,571,772 25,759,940 9,992,022 34,701,703 20,368,911 8,407,501 --------- ------- ----------- ----------- ----------- ----------- ----------- ----------- $ 25,408 $10,110 $72,331,242 $45,571,772 $25,759,940 $46,794,725 $34,701,703 $20,368,911 ========= ======= =========== =========== =========== =========== =========== ===========
F-81 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION T. ROWE PRICE MID-CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION ----------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).......... $ 15,976 $ (73,946) $ (8,633) $ 143,282 $ (35,600) $ (17,818) Net realized gains (losses) from security transactions................ 669,665 169,126 (33,362) 102,486 (21,255) (46,026) Change in unrealized appreciation (depreciation) of investments........ 3,507,811 1,710,690 1,513,502 895,073 874,468 776,010 ----------- ----------- ---------- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from operations............ 4,193,452 1,805,870 1,471,507 1,140,841 817,613 712,166 ----------- ----------- ---------- ---------- ---------- ---------- From capital transactions: Net premiums.......................... 5,167,339 3,240,987 1,663,445 2,046,729 1,669,261 1,283,521 Redemptions........................... (607,030) (154,532) (60,720) (236,915) (112,831) (26,453) Net investment division transfers..... 6,080,729 3,070,772 1,303,948 1,212,270 1,315,562 481,182 Other net transfers................... (2,131,167) (1,236,090) (610,233) (820,310) (589,688) (448,143) ----------- ----------- ---------- ---------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions.. 8,509,871 4,921,137 2,296,440 2,201,774 2,282,304 1,290,107 ----------- ----------- ---------- ---------- ---------- ---------- NET CHANGE IN NET ASSETS................ 12,703,323 6,727,007 3,767,947 3,342,615 3,099,917 2,003,273 NET ASSETS - BEGINNING OF PERIOD................................. 12,527,867 5,800,860 2,032,913 6,475,187 3,375,270 1,372,997 ----------- ----------- ---------- ---------- ---------- ---------- NET ASSETS - END OF PERIOD.............. $25,231,190 $12,527,867 $5,800,860 $9,817,802 $6,475,187 $3,375,270 =========== =========== ========== ========== ========== ==========
See Notes to Financial Statements. F-82
MFS RESEARCH INTERNATIONAL PIMCO TOTAL RETURN RCM GLOBAL TECHNOLOGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------------------------- ------------------------------------- ------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED ENDED DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ $ 179,022 $ (11,511) $ 2,786 $ (13,148) $ 1,080,256 $ 175,706 $ (4,297) $ (40,843) $ (21,608) 80,066 226,740 148,987 52,949 58,068 175,963 194,566 (35,847) (195,867) 280,569 176,752 191,049 311,680 (439,697) (25,434) 445,709 (200,859) 1,260,206 ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- 539,657 391,981 342,822 351,481 698,627 326,235 635,978 (277,549) 1,042,731 ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- 893,225 654,113 514,658 6,481,179 5,789,117 5,176,301 1,643,816 1,896,573 1,268,741 (95,918) (49,447) (15,626) (704,398) (352,146) (300,049) (221,407) (90,002) (47,295) 262,049 530,150 140,125 1,715,784 2,455,515 3,254,351 (451,962) 570,609 1,385,317 (321,773) (243,185) (198,441) (2,599,945) (2,268,320) (1,973,454) (630,894) (731,284) (437,762) ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- 737,583 891,631 440,716 4,892,620 5,624,166 6,157,149 339,553 1,645,896 2,169,001 ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- 1,277,240 1,283,612 783,538 5,244,101 6,322,793 6,483,384 975,531 1,368,347 3,211,732 2,780,832 1,497,220 713,682 19,019,859 12,697,066 6,213,682 5,849,160 4,480,813 1,269,081 ---------- ---------- ---------- ----------- ----------- ----------- ---------- ---------- ---------- $4,058,072 $2,780,832 $1,497,220 $24,263,960 $19,019,859 $12,697,066 $6,824,691 $5,849,160 $4,480,813 ========== ========== ========== =========== =========== =========== ========== ========== ==========
F-83 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
LORD ABBETT BOND DEBENTURE LAZARD MID-CAP INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- --------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED ENDED MAY 1, 2002 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 ------------ ------------ ------------ ------------ ------------ -------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).......... $ 622,354 $ 473,273 $ 152,818 $ 308,708 $ (12,732) $ 3,638 Net realized gains (losses) from security transactions................ 255,890 291,351 193,651 96,120 127,885 6,414 Change in unrealized appreciation (depreciation) of investments........ (722,955) 258,228 1,482,057 (198,731) 100,268 140,733 ----------- ----------- ----------- ---------- ---------- --------- Net increase (decrease) in net assets resulting from operations............ 155,289 1,022,852 1,828,526 206,097 215,421 150,785 ----------- ----------- ----------- ---------- ---------- --------- From capital transactions: Net premiums.......................... 3,151,962 2,983,780 2,591,207 900,458 685,733 376,221 Redemptions........................... (760,915) (964,051) (564,230) (48,378) (25,490) (9,516) Net investment division transfers..... 360,705 337,183 1,098,872 189,141 562,287 345,361 Other net transfers................... (1,517,556) (1,084,450) (1,180,205) (337,451) (302,486) (126,899) ----------- ----------- ----------- ---------- ---------- --------- Net increase (decrease) in net assets resulting from capital transactions.. 1,234,196 1,272,462 1,945,644 703,770 920,044 585,167 ----------- ----------- ----------- ---------- ---------- --------- NET CHANGE IN NET ASSETS................ 1,389,485 2,295,314 3,774,170 909,867 1,135,465 735,952 NET ASSETS - BEGINNING OF PERIOD................................. 15,141,724 12,846,410 9,072,240 2,124,397 988,932 252,980 ----------- ----------- ----------- ---------- ---------- --------- NET ASSETS - END OF PERIOD.............. $16,531,209 $15,141,724 $12,846,410 $3,034,264 $2,124,397 $ 988,932 =========== =========== =========== ========== ========== =========
See Notes to Financial Statements. F-84
MET/AIM SMALL CAP GROWTH HARRIS OAKMARK INTERNATIONAL JANUS AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - --------------------------------------- --------------------------------------- --------------------------------------- FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED MAY 1, 2002 TO ENDED ENDED MAY 1, 2002 TO ENDED ENDED MAY 1, 2002 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 2003 2005 2004 2003 - ------------ ------------ -------------- ------------ ------------ -------------- ------------ ------------ -------------- $ 21,367 $ (7,126) $ (2,947) $ 71,494 $ (14,172) $ 6,375 $ (45,165) $ (40,203) $ (25,914) 35,790 6,508 66,977 131,605 87,469 72,432 89,582 40,466 (314,628) 47,188 68,634 51,242 724,928 413,695 49,401 756,884 408,503 1,135,120 ---------- ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- 104,345 68,016 115,272 928,027 486,992 128,208 801,301 408,766 794,578 ---------- ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- 446,774 398,392 201,753 2,085,109 717,538 111,653 1,636,045 1,751,040 1,735,338 (18,607) (10,096) (5,605) (175,181) (18,505) (357) (169,578) (82,547) (28,560) 77,613 177,443 286,464 3,959,003 2,229,550 446,278 62,227 96,192 112,849 (166,246) (133,848) (70,229) (786,311) (265,382) (22,736) (664,452) (602,774) (614,940) ---------- ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- 339,534 431,891 412,383 5,082,620 2,663,201 534,838 864,242 1,161,911 1,204,687 ---------- ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- 443,879 499,907 527,655 6,010,647 3,150,193 663,046 1,665,543 1,570,677 1,999,265 1,143,358 643,451 115,796 3,963,209 813,016 149,970 5,657,453 4,086,776 2,087,511 ---------- ---------- -------- ---------- ---------- -------- ---------- ---------- ---------- $1,587,237 $1,143,358 $643,451 $9,973,856 $3,963,209 $813,016 $7,322,996 $5,657,453 $4,086,776 ========== ========== ======== ========== ========== ======== ========== ========== ==========
F-85 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
LORD ABBETT GROWTH & INCOME NEUBERGER BERMAN REAL ESTATE INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------- -------------------------- FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE YEAR FOR THE PERIOD ENDED ENDED ENDED ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2003 2005 2004 ------------ ------------ ------------ ------------ -------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss)......................... $ 1,040 $ 23 $ (47) $ (31,334) $ 70,281 Net realized gains (losses) from security transactions........................................ 5,959 37 20 77,734 5,929 Change in unrealized appreciation (depreciation) of investments......................................... (6,587) 3,095 3,750 660,111 124,804 -------- ------- ------- ---------- ---------- Net increase (decrease) in net assets resulting from operations.......................................... 412 3,155 3,723 706,511 201,014 -------- ------- ------- ---------- ---------- From capital transactions: Net premiums......................................... 6,483 15,555 4,885 2,008,005 228,551 Redemptions.......................................... (22,048) -- -- (83,109) (7,728) Net investment division transfers.................... 2,185 13,764 12,124 3,582,147 1,619,564 Other net transfers.................................. (269) 1,681 (203) (783,316) (76,648) -------- ------- ------- ---------- ---------- Net increase (decrease) in net assets resulting from capital transactions................................ (13,649) 31,000 16,806 4,723,727 1,763,739 -------- ------- ------- ---------- ---------- NET CHANGE IN NET ASSETS............................... (13,237) 34,155 20,529 5,430,238 1,964,753 NET ASSETS - BEGINNING OF PERIOD....................... 54,684 20,529 -- 1,964,753 -- -------- ------- ------- ---------- ---------- NET ASSETS - END OF PERIOD............................. $ 41,447 $54,684 $20,529 $7,394,991 $1,964,753 ======== ======= ======= ========== ==========
See Notes to Financial Statements. F-86
OPPENHEIMER CAPITAL APPRECIATION LORD ABBETT MID-CAP VALUE THIRD AVENUE SMALL CAP VALUE INVESTMENT AMERICAN CENTURY VISTA INVESTMENT DIVISION INVESTMENT DIVISION DIVISION INVESTMENT DIVISION - -------------------------- -------------------------- -------------- --------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO MAY 1, 2005 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2005 2004 - ------------ -------------- ------------ -------------- -------------- ------------ -------------- $ 1,210 $ 6 $ 26 $ 94 $ 901 $ (47) $-- 22 -- 111 21 442 6 -- 85 10 1,856 (54) 2,715 961 -- ------- ---- ------- ------ -------- ------- --- 1,317 16 1,993 61 4,058 920 -- ------- ---- ------- ------ -------- ------- --- 1,127 234 7,110 2,238 12,067 -- -- -- -- -- -- -- -- -- 30,132 -- 16,509 2,151 108,334 14,262 -- (518) (4) (1,159) (43) (8,149) (599) -- ------- ---- ------- ------ -------- ------- --- 30,741 230 22,460 4,346 112,252 13,663 -- ------- ---- ------- ------ -------- ------- --- 32,058 246 24,453 4,407 116,310 14,583 -- 246 -- 4,407 -- -- -- -- ------- ---- ------- ------ -------- ------- --- $32,304 $246 $28,860 $4,407 $116,310 $14,583 $-- ======= ==== ======= ====== ======== ======= ===
F-87 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
DELAWARE DREYFUS SMALL CAP VALUE EMERGING LEADERS INVESTMENT DIVISION INVESTMENT DIVISION --------------------------- --------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 ------------ -------------- ------------ -------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).................................... $ 7,825 $-- $ 515 $-- Net realized gains (losses) from security transactions.......... 45 -- 251 -- Change in unrealized appreciation (depreciation) of investments. 2,540 -- 711 -- -------- --- ------- --- Net increase (decrease) in net assets resulting from operations. 10,410 -- 1,477 -- -------- --- ------- --- From capital transactions: Net premiums.................................................... 6,852 -- -- -- Redemptions..................................................... (6,275) -- -- -- Net investment division transfers............................... 121,033 -- 11,018 -- Other net transfers............................................. 7,946 -- (1,674) -- -------- --- ------- --- Net increase (decrease) in net assets resulting from capital transactions................................................... 129,556 -- 9,344 -- -------- --- ------- --- NET CHANGE IN NET ASSETS.......................................... 139,966 -- 10,821 -- NET ASSETS - BEGINNING OF PERIOD.................................. -- -- -- -- -------- --- ------- --- NET ASSETS - END OF PERIOD........................................ $139,966 $-- $10,821 $-- ======== === ======= ===
See Notes to Financial Statements. F-88
DREYFUS DREYFUS GOLDMAN SACHS GOLDMAN SACHS INTERNATIONAL VALUE APPRECIATION MID CAP VALUE CORE SMALL CAP EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - -------------------------- -------------------------- -------------------------- --------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2004 2005 2004 - ------------ -------------- ------------ -------------- ------------ -------------- ------------ -------------- $ 2,860 $ 1,260 $ (59) $ 45 $ 4,518 $ 1,218 $ 4,311 $-- (8,588) 47 114 -- (3,479) 1 1 -- 13,060 (934) 538 217 223 (464) (5,644) -- -------- ------- ------- ------ -------- ------- ------- --- 7,332 373 593 262 1,262 755 (1,332) -- -------- ------- ------- ------ -------- ------- ------- --- 19,214 2,238 341 341 3,107 -- -- -- (93,516) -- -- -- (73,952) -- -- -- 243,471 12,947 14,262 2,943 107,030 12,663 51,421 -- (3,564) (18) (1,488) (209) (3,077) (1,142) 77 -- -------- ------- ------- ------ -------- ------- ------- --- 165,605 15,167 13,115 3,075 33,108 11,521 51,498 -- -------- ------- ------- ------ -------- ------- ------- --- 172,937 15,540 13,708 3,337 34,370 12,276 50,166 -- 15,540 -- 3,337 -- 12,276 -- -- -- -------- ------- ------- ------ -------- ------- ------- --- $188,477 $15,540 $17,045 $3,337 $ 46,646 $12,276 $50,166 $-- ======== ======= ======= ====== ======== ======= ======= ===
F-89 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED)
MFS HIGH INCOME VAN KAMPEN GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION -------------------------- --------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 ------------ -------------- ------------ -------------- INCREASE (DECREASE) IN NET ASSETS From operations: Net investment income (loss).................................... $ 3,632 $ (87) $ (12) $-- Net realized gains (losses) from security transactions.......... 128 69 (1) -- Change in unrealized appreciation (depreciation) of investments. (2,862) 3,152 124 -- ------- ------- ------- --- Net increase (decrease) in net assets resulting from operations. 898 3,134 111 -- ------- ------- ------- --- From capital transactions: Net premiums.................................................... 2,055 -- 2,678 -- Redemptions..................................................... -- -- -- -- Net investment division transfers............................... 16,844 48,923 10,908 -- Other net transfers............................................. (1,736) (1,091) (61) -- ------- ------- ------- --- Net increase (decrease) in net assets resulting from capital transactions................................................... 17,163 47,832 13,525 -- ------- ------- ------- --- NET CHANGE IN NET ASSETS.......................................... 18,061 50,966 13,636 -- NET ASSETS - BEGINNING OF PERIOD.................................. 50,966 -- -- -- ------- ------- ------- --- NET ASSETS - END OF PERIOD........................................ $69,027 $50,966 $13,636 $-- ======= ======= ======= ===
See Notes to Financial Statements. F-90
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE TOTAL RETURN BOND LARGE COMPANY GROWTH WELLS FARGO ADVANTAGE EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - --------------------------- -------------------------- ---------------------------------- FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD FOR THE YEAR FOR THE PERIOD ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO ENDED MAY 3, 2004 TO DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31, 2005 2004 2005 2004 2005 2004 - ------------ -------------- ------------ -------------- ------------ -------------- $ 230 $-- $ (16) $ (1) $ 82 $ (1) 238 -- (5) 6 25 10 16 -- 797 16 301 3 ------- --- ------ ------ ------- ------ 484 -- 776 21 408 12 ------- --- ------ ------ ------- ------ 3,570 -- 4,434 2,238 4,436 2,238 -- -- -- -- -- -- 13,581 -- (49) 2,151 110 2,151 (436) -- (985) (75) (1,013) (60) ------- --- ------ ------ ------- ------ 16,715 -- 3,400 4,314 3,533 4,329 ------- --- ------ ------ ------- ------ 17,199 -- 4,176 4,335 3,941 4,341 -- -- 4,335 -- 4,341 -- ------- --- ------ ------ ------- ------ $17,199 $-- $8,511 $4,335 $ 8,282 $4,341 ======= === ====== ====== ======= ======
F-91 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2005 1. BUSINESS Metropolitan Life Separate Account UL (the "Separate Account"), a separate account of Metropolitan Life Insurance Company ("Metropolitan Life"), was established by the Board of Directors of Metropolitan Life Insurance Company on December 13, 1988 to support Metropolitan Life's operations with respect to certain variable universal life insurance policies ("Policies"). Metropolitan Life is a wholly owned subsidiary of MetLife, Inc. ("MetLife"). The Separate Account was registered as a unit investment trust on January 5, 1990 under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York Insurance Department. The Separate Account supports six variable universal life insurance policies: Flexible Premium Multifunded Life ("UL II"), MetLife Flexible Premium Variable Life ("MetFlex"), Group Variable Universal Life ("GVUL"), Flexible Premium Multifunded Life ("Equity Advantage VUL"), Variable Additional Insurance ("VAI") and Variable Additional Benefits Rider ("VABR"). The Separate Account is divided into eighty-nine investment divisions. The Separate Account presently does not have assets invested in each of the investment divisions but each investment division is available as an investment option. Each investment division invests its assets exclusively in shares of corresponding portfolios, series or funds (with the same name) within the Metropolitan Fund, Janus Fund, AIM Funds, Franklin Fund, Alliance Fund, Fidelity Funds, American Fund, Met Investors Fund, American Century Fund, Delaware Fund, Dreyfus IP Fund, Dreyfus Fund, Goldman Sachs Fund, MFS Fund, Van Kampen Fund, or Wells Fargo Fund (collectively, the "Funds"). For convenience, the portfolios, series, and funds are referred to as "portfolios." The assets of the Separate Account are registered in the name of Metropolitan Life. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from Metropolitan Life's other assets and liabilities. The portion of the Separate Account's assets attributable to the variable universal life policies is not chargeable with liabilities arising out of any other business Metropolitan Life may conduct. The table below presents the investment divisions within the Separate Account: BlackRock Investment AllianceBernstein Global Trust Investment Division Technology Investment Division BlackRock Diversified AllianceBernstein U.S. Investment Division Government/High Grade BlackRock Aggressive Securities Growth Investment Division Investment Division (a)* MetLife Stock Index Fidelity VIP Contrafund Investment Division Investment Division FI International Stock Fidelity VIP Asset Investment Division Manager Growth Investment Division FI Mid Cap Opportunities Fidelity VIP Growth Investment Division Investment Division T. Rowe Price Small Cap Fidelity VIP Investment Growth Investment Division Grade Bond Investment Division (a) Oppenheimer Global Equity Fidelity VIP Investment Division Equity-Income Investment Division (a) Harris Oakmark Large Cap American Funds Growth Value Investment Division Investment Division Neuberger Berman Mid Cap American Funds Value Investment Division Growth-Income Investment Division T. Rowe Price Large Cap American Funds Global Growth Investment Division Small Capitalization Investment Division Lehman Brothers Aggregate Bond Index Investment T. Rowe Price Mid-Cap Division Growth Investment Division Morgan Stanley EAFE Index MFS Research Investment Division International Investment Division Russell 2000 Index PIMCO Total Return Investment Division Investment Division Met/Putnam Voyager RCM Global Technology Investment Division** Investment Division Jennison Growth Lord Abbett Bond Investment Division (b) Debenture Investment Division BlackRock Strategic Value Lazard Mid-Cap Investment Investment Division Division MetLife Mid Cap Stock Met/AIM Small Cap Growth Index Investment Division Investment Division Franklin Templeton Small Harris Oakmark Cap Growth Investment International Investment Division Division BlackRock Large Cap Value Janus Aggressive Growth Investment Division Investment Division Davis Venture Value Lord Abbett Growth & Investment Division Income Investment Division Loomis Sayles Small Cap Neuberger Berman Real Investment Division Estate Investment Division (a) BlackRock Legacy Large Lord Abbett Growth Cap Growth Investment Opportunities Investment Division Division (a)* MFS Investors Trust Lord Abbett Mid-Cap Value Investment Division Investment Division (a) BlackRock Bond Income Third Avenue Small Cap Investment Division Value Investment Division (a) FI Value Leaders Oppenheimer Capital Investment Division Appreciation Investment Division (b) Harris Oakmark Focused American Century Vista Value Investment Division Investment Division (a) AllianceBernstein Growth Salomon Brothers & Income Investment Strategic Bond Division Opportunities Investment Division F-92 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 1. BUSINESS -- (CONTINUED) Salomon Brothers U.S. Government Dreyfus MidCap Stock Investment Investment Division Division (a)* BlackRock Money Market Investment Dreyfus Emerging Leaders Investment Division Division (a) MFS Total Return Investment Dreyfus International Value Division (a) Investment Division (a) MetLife Conservative Allocation Dreyfus Appreciation Investment Investment Division (b) Division (a) MetLife Conservative to Moderate Goldman Sachs Mid Cap Value Allocation Investment Division (b) Investment Division (a) MetLife Moderate Allocation Goldman Sachs CORE Small Cap Equity Investment Division (b) Investment Division (a) MetLife Moderate to Aggressive MFS High Income Investment Allocation Investment Division (b) Division (a) MetLife Aggressive Allocation MFS Global Equity Investment Investment Division (b) Division (a)* Janus Aspen Large Cap Growth Investment Division MFS Value Investment Division (a)* Janus Aspen Balanced Investment MFS New Discovery Investment Division (a) Division (a)* Janus Aspen Forty Investment Van Kampen Government Investment Division (a)* Division (a) AIM V.I Core Stock Investment Division Wells Fargo Advantage Total Return Bond Investment Division (a) AIM V.I. Government Securities Wells Fargo Advantage Money Market Investment Division (a) Investment Division (a)* AIM V.I. Real Estate Investment Wells Fargo Advantage Asset Division Allocation Investment Division (a)* Franklin Templeton Foreign Securities Wells Fargo Advantage Large Company Investment Division Core Investment Division (a)* Franklin Templeton Growth Securities Wells Fargo Advantage Large Company Investment Division (a)* Growth Investment Division (a) Franklin Mutual Discovery Securities Wells Fargo Advantage Equity Income Investment Division (a) Investment Division (a) Delaware Small Cap Value Investment Division (a) - -------- (a) Operations commenced on May 3, 2004, for thirty-two investment divisions added to the Separate Account on that date. (b) Operations commenced on May 1, 2005 for seven new investment divisions added to the Separate Account on that date. * These Investment Divisions had no assets at December 31, 2005. ** These Investment Divisions will no longer be an available option within the separate account. 2. SIGNIFICANT ACCOUNTING POLICIES The financial statements included herein have been provided in accordance with accounting principles generally accepted in the United States of America for variable universal life separate accounts registered as unit investment trusts. A. VALUATION OF INVESTMENTS Investments are made in the portfolios of the Funds and are valued at the reported net asset values of these portfolios. The investments of the portfolios are valued at fair value. Money market portfolio investments are valued utilizing the amortized cost method of valuation. B. SECURITY TRANSACTIONS Purchases and sales are recorded on the trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the identified cost of the investment sold. Income from dividends and gains from realized gain distributions are recorded on the ex-distribution date. C. FEDERAL INCOME TAXES The operations of the Separate Account are included in the Federal income tax return of Metropolitan Life, which is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, Metropolitan Life does not expect to incur Federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the contracts. Accordingly, no charge is being made currently to the Separate Account for Federal income taxes. Metropolitan Life will review periodically the status of this policy in the event of changes in the tax law. A charge may be made in future years for any Federal income taxes that would be attributable to the contracts. F-93 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 2. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) D. NET PREMIUMS Metropolitan Life deducts a sales load and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain policies, Metropolitan Life also deducts a Federal income tax charge before amounts are allocated to the Separate Account. The Federal income tax charge is imposed in connection with certain policies to recover a portion of the Federal income tax adjustment attributable to policy acquisition expenses. E. USE OF ESTIMATES The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. F. PREMIUM PAYMENTS Premium payments by Metropolitan Life are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus. G. NET INVESTMENT DIVISION AND NET OTHER TRANSFERS Transfers among investment divisions and fixed fund of the general account are presented under the caption net investment division transfers. Cost of insurance charges, policy loan activity benefit payments, and miscellaneous gains and losses are presented under the caption net other transfers. 3. EXPENSES With respect to assets in the Separate Account that support certain policies, Metropolitan Life deducts a charge from the assets of the Separate Account for the assumption of general administrative expenses and mortality and expense risks. This charge is equivalent to an effective annual rate of 0.45% of the average daily values of the assets in the Separate Account for GVUL policies, 0.90% for UL II & UL 2001 policies, 0.75% for VAI and VABR policies less than $250,000, and 0.50% for VAI and VABR policies $250,000 and greater. A charge of 0.60% is assessed against the cash value of the assets in the Separate Account for MetFlex policies, 0.48% for MetFlex C policies and 0.40% for MetFlex Experience policies. F-94 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 4. PURCHASES AND SALES OF INVESTMENTS The cost of purchases and the proceeds from sales of investments for the year ended December 31, 2005 were as follows:
PURCHASES SALES --------- ------- (IN THOUSANDS) BlackRock Investment Trust Investment Division..................... $15,164 $22,925 BlackRock Diversified Investment Division.......................... 18,340 17,926 BlackRock Aggressive Growth Investment Division.................... 5,862 13,066 MetLife Stock Index Investment Division............................ 60,005 20,388 FI International Stock Investment Division......................... 3,838 3,433 FI Mid Cap Opportunities Investment Division....................... 12,058 9,820 T. Rowe Price Small Cap Growth Investment Division................. 4,748 4,164 Oppenheimer Global Equity Investment Division...................... 4,340 2,464 Harris Oakmark Large Cap Value Investment Division................. 8,255 3,858 Neuberger Berman Mid Cap Value Investment Division................. 15,878 1,877 T. Rowe Price Large Cap Growth Investment Division................. 5,287 2,855 Lehman Brothers Aggregate Bond Index Investment Division........... 17,497 3,364 Morgan Stanley EAFE Index Investment Division...................... 8,283 2,737 Russell 2000 Index Investment Division............................. 7,694 2,337 Met/Putnam Voyager Investment Division (a)......................... 551 10,144 Jennison Growth Investment Division (b)............................ 11,182 345 BlackRock Strategic Value Investment Division...................... 15,072 3,438 MetLife Mid Cap Stock Index Investment Division.................... 9,354 2,296 Franklin Templeton Small Cap Growth Investment Division............ 919 412 BlackRock Large Cap Value Investment Division...................... 2,001 377 Davis Venture Value Investment Division............................ 10,459 1,370 Loomis Sayles Small Cap Investment Division........................ 1,657 389 BlackRock Legacy Large Cap Growth Investment Division.............. 4,055 983 MFS Investors Trust Investment Division............................ 857 299 BlackRock Bond Income Investment Division.......................... 16,878 8,895 FI Value Leaders Investment Division............................... 2,159 344 Harris Oakmark Focused Value Investment Division................... 9,535 1,847 Salomon Brothers Strategic Bond Opportunities Investment Division.. 4,642 469 Salomon Brothers U.S. Government Investment Division............... 3,186 494 BlackRock Money Market Investment Division......................... 8,142 9,273 MFS Total Return Investment Division............................... 1,694 319 MetLife Conservative Allocation Investment Division (b)............ 688 570 MetLife Conservative to Moderate Allocation Investment Division (b) 639 71 MetLife Moderate Allocation Investment Division (b)................ 1,526 106 MetLife Moderate to Aggressive Allocation Investment Division (b).. 2,382 102 MetLife Aggressive Allocation Investment Division (b).............. 498 58 Janus Aspen Large Cap Growth Investment Division................... 785 324 Janus Aspen Balanced Investment Division........................... 2 1 AIM V.I. Core Stock Income Investment Division..................... 173 193 AIM V.I.Government Securities Investment Division.................. 17 13 AIM V.I. Real Estate Investment Division........................... 1,261 975 Franklin Templeton Foreign Securities Investment Division.......... 1,675 1,060 Franklin Mutual Discovery Securities Investment Division........... 119 7 AllianceBernstein Growth and Income Investment Division............ 941 159 AllianceBernstein Global Technology Investment Division............ 20 1 Fidelity VIP Contrafund Investment Division........................ 1,124 1,171 Fidelity VIP Asset Manager Growth Investment Division.............. 1,026 1,029 Fidelity VIP Growth Investment Division............................ 658 526 Fidelity VIP Investment Grade Bond Investment Division............. 22 1 Fidelity VIP Equity-Income Investment Division..................... 271 240 American Funds Growth Investment Division.......................... 18,342 481 American Funds Growth-Income Investment Division................... 11,026 735 American Funds Global Small Capitalization Investment Division..... 9,884 1,358 T. Rowe Price Mid-Cap Growth Investment Division................... 2,978 627
F-95 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 4. PURCHASES AND SALES OF INVESTMENTS -- (CONTINUED)
PURCHASES SALES --------- -------- (IN THOUSANDS) MFS Research International Investment Division................ $ 1,362 $ 444 PIMCO Total Return Investment Division........................ 5,779 898 RCM Global Technology Investment Division..................... 1,055 719 Lord Abbett Bond Debenture Investment Division................ 3,770 1,913 Lazard Mid-Cap Investment Division............................ 1,499 486 Met/AIM Small Cap Growth Investment Division.................. 575 215 Harris Oakmark International Investment Division.............. 5,876 722 Janus Aggressive Growth Investment Division................... 1,142 323 Lord Abbett Growth and Income Investment Division............. 46 50 Neuberger Berman Real Estate Investment Division.............. 5,075 383 Lord Abbett Mid-Cap Value Investment Division................. 33 1 Third Avenue Small Cap Value Investment Division.............. 24 1 Oppenheimer Capital Appreciation Investment Division (b)...... 130 17 American Century Vista Investment Division.................... 14 -- Delaware Small Cap Value Investment Division.................. 136 9 Dreyfus Emerging Leaders Investment Division.................. 68 74 Dreyfus International Value Investment Division............... 340 180 Dreyfus Appreciation Investment Division...................... 14 1 Goldman Sachs Mid Cap Value Investment Division............... 115 77 Goldman Sachs CORE Small Cap Equity Investment Division....... 56 -- MFS High Income Investment Division........................... 23 2 Van Kampen Government Investment Division..................... 14 -- Wells Fargo Advantage Total Return Bond Investment Division... 36 19 Wells Fargo Advantage Large Company Growth Investment Division 4 1 Wells Fargo Advantage Equity Income Investment Division....... 5 1 -------- -------- Total......................................................... $372,840 $169,252 ======== ========
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-96 [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 were as follows:
BLACKROCK BLACKROCK BLACKROCK METLIFE INVESTMENT TRUST DIVERSIFIED AGGRESSIVE GROWTH STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- Outstanding at December, 2004... 16,507,025 13,455,017 11,775,258 29,475,869 Activity during 2005: Issued........................ 3,207,492 2,906,692 1,944,636 8,538,465 Redeemed...................... (3,226,358) (2,722,893) (2,217,280) (5,857,345) ---------- ---------- ---------- ---------- Outstanding at December 31, 2005 16,488,159 13,638,816 11,502,614 32,156,989 ========== ========== ========== ========== Outstanding at December, 2003... 16,150,806 12,880,974 11,833,051 25,746,955 Activity during 2004: Issued........................ 3,924,235 3,355,335 2,392,708 9,695,680 Redeemed...................... (3,568,016) (2,781,292) (2,450,501) (5,966,766) ---------- ---------- ---------- ---------- Outstanding at December 31, 2004 16,507,025 13,455,017 11,775,258 29,475,869 ========== ========== ========== ========== Outstanding at December, 2002... 15,059,725 12,267,711 11,447,188 22,139,983 Activity during 2003: Issued........................ 5,136,368 3,873,184 3,342,849 10,343,323 Redeemed...................... (4,045,287) (3,259,921) (2,956,986) (6,736,351) ---------- ---------- ---------- ---------- Outstanding at December 31, 2003 16,150,806 12,880,974 11,833,051 25,746,955 ========== ========== ========== ========== Outstanding at December, 2001... 13,263,581 11,138,476 10,502,846 17,014,963 Activity during 2002: Issued........................ 5,072,114 3,677,180 3,343,155 9,909,472 Redeemed...................... (3,275,970) (2,547,945) (2,398,813) (4,784,452) ---------- ---------- ---------- ---------- Outstanding at December 31, 2002 15,059,725 12,267,711 11,447,188 22,139,983 ========== ========== ========== ========== Outstanding at December 31, 2000 11,053,851 9,234,112 9,253,699 11,688,875 Activity during 2001: Issued........................ 2,828,029 2,199,532 1,392,039 6,525,284 Redeemed...................... (618,299) (295,168) (142,892) (1,199,196) ---------- ---------- ---------- ---------- Outstanding at December 31, 2001 13,263,581 11,138,476 10,502,846 17,014,963 ========== ========== ========== ==========
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-98
FI FI MID CAP T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER BERMAN INTERNATIONAL STOCK OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 681,133 3,117,992 928,886 507,092 1,297,280 1,131,537 (628,162) (2,881,655) (882,149) (394,736) (978,617) (654,171) ---------- ---------- ---------- --------- --------- --------- 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 ========== ========== ========== ========= ========= ========= 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 836,252 3,915,991 1,398,854 581,796 1,553,632 1,037,887 (1,078,946) (2,979,500) (1,244,173) (520,764) (846,601) (548,501) ---------- ---------- ---------- --------- --------- --------- 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 ========== ========== ========== ========= ========= ========= 3,295,967 11,520,986 4,424,009 1,978,122 2,346,360 1,567,159 1,223,657 5,468,760 1,519,683 768,113 1,638,761 891,629 (1,035,560) (3,642,074) (1,041,768) (605,905) (924,821) (512,775) ---------- ---------- ---------- --------- --------- --------- 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 ========== ========== ========== ========= ========= ========= 3,106,074 8,480,928 3,525,259 2,000,284 1,241,734 1,076,200 1,175,721 5,867,396 1,743,406 687,358 1,697,444 906,176 (985,828) (2,827,338) (844,656) (709,520) (592,818) (415,217) ---------- ---------- ---------- --------- --------- --------- 3,295,967 11,520,986 4,424,009 1,978,122 2,346,360 1,567,159 ========== ========== ========== ========= ========= ========= 2,709,428 5,366,963 2,995,187 1,848,336 219,792 456,316 1,578,452 3,700,863 880,371 209,233 1,076,397 790,365 (1,181,806) (586,898) (350,299) (57,285) (54,455) (170,481) ---------- ---------- ---------- --------- --------- --------- 3,106,074 8,480,928 3,525,259 2,000,284 1,241,734 1,076,200 ========== ========== ========== ========= ========= =========
T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION - ------------------- 3,297,088 940,963 (769,988) ---------- 3,468,063 ========== 3,290,117 1,152,778 (1,145,807) ---------- 3,297,088 ========== 2,852,995 1,407,833 (970,711) ---------- 3,290,117 ========== 2,123,783 1,288,960 (559,748) ---------- 2,852,995 ========== 632,411 2,004,268 (512,895) ---------- 2,123,783 ==========
F-99 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 were as follows:
LEHMAN BROTHERS MORGAN STANLEY RUSSELL 2000 MET/PUTNAM AGGREGATE BOND INDEX EAFE INDEX INDEX VOYAGER INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION (A) -------------------- ------------------- ------------------- ----------------------- Outstanding at December, 2004... 4,812,639 3,014,776 2,380,540 2,202,130 Activity during 2005: Issued........................ 1,885,856 1,268,548 809,404 254,937 Redeemed...................... (1,078,522) (819,218) (570,657) (2,457,067) ---------- ---------- --------- ---------- Outstanding at December 31, 2005 5,619,973 3,464,106 2,619,287 -- ========== ========== ========= ========== Outstanding at December, 2003... 4,063,920 2,675,762 2,084,869 1,913,297 Activity during 2004: Issued........................ 2,029,620 1,731,659 1,029,824 769,919 Redeemed...................... (1,280,901) (1,392,645) (734,153) (481,086) ---------- ---------- --------- ---------- Outstanding at December 31, 2004 4,812,639 3,014,776 2,380,540 2,202,130 ========== ========== ========= ========== Outstanding at December, 2002... 4,147,462 2,043,759 1,614,358 1,462,795 Activity during 2003: Issued........................ 2,096,788 2,173,974 1,137,815 1,235,498 Redeemed...................... (2,180,330) (1,541,971) (667,304) (784,996) ---------- ---------- --------- ---------- Outstanding at December 31, 2003 4,063,920 2,675,762 2,084,869 1,913,297 ========== ========== ========= ========== Outstanding at December, 2001... 3,152,509 1,351,803 920,213 792,111 Activity during 2002: Issued........................ 1,775,342 1,484,630 1,015,335 1,074,526 Redeemed...................... (780,389) (792,674) (321,190) (403,842) ---------- ---------- --------- ---------- Outstanding at December 31, 2002 4,147,462 2,043,759 1,614,358 1,462,795 ========== ========== ========= ========== Outstanding at December 31, 2000 1,730,248 543,960 512,462 131,399 Activity during 2001: Issued........................ 2,266,805 1,864,843 1,180,953 704,179 Redeemed...................... (844,544) (1,057,000) (773,202) (43,467) ---------- ---------- --------- ---------- Outstanding at December 31, 2001 3,152,509 1,351,803 920,213 792,111 ========== ========== ========= ==========
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-100
JENNISON BLACKROCK METLIFE MID FRANKLIN TEMPLETON BLACKROCK DAVIS GROWTH STRATEGIC VALUE CAP STOCK INDEX SMALL CAP GROWTH LARGE CAP VALUE VENTURE VALUE INVESTMENT DIVISION (B) INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ----------------------- ------------------- ------------------- ------------------- ------------------- ------------------- -- 4,164,014 2,658,110 440,124 271,012 1,365,956 1,299,954 1,327,411 949,998 163,769 238,963 643,359 (2,312) (1,005,489) (622,167) (128,927) (113,868) (269,331) --------- ---------- --------- -------- -------- --------- 1,297,642 4,485,936 2,985,941 474,966 396,107 1,739,984 ========= ========== ========= ======== ======== ========= -- 3,371,798 2,338,101 328,803 102,570 1,321,574 -- 1,705,456 1,211,510 240,018 263,903 446,367 -- (913,240) (891,501) (128,697) (95,461) (401,985) --------- ---------- --------- -------- -------- --------- -- 4,164,014 2,658,110 440,124 271,012 1,365,956 ========= ========== ========= ======== ======== ========= -- 2,598,639 1,762,240 198,385 23,496 900,662 -- 1,831,813 1,300,500 265,917 146,238 650,200 -- (1,058,654) (724,639) (135,499) (67,164) (229,288) --------- ---------- --------- -------- -------- --------- -- 3,371,798 2,338,101 328,803 102,570 1,321,574 ========= ========== ========= ======== ======== ========= -- 1,316,864 866,858 51,873 -- 297,193 -- 1,943,755 1,231,436 214,974 27,193 753,643 -- (661,980) (336,054) (69,162) (3,697) (150,174) --------- ---------- --------- -------- -------- --------- -- 2,598,639 1,762,240 197,685 23,496 900,662 ========= ========== ========= ======== ======== ========= -- 163,715 209,870 -- -- 38,970 -- 1,201,369 693,141 54,353 -- 267,331 -- (48,220) (36,153) (2,480) -- (9,108) --------- ---------- --------- -------- -------- --------- -- 1,316,864 866,858 51,873 -- 297,193 ========= ========== ========= ======== ======== =========
LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION - ------------------- 37,547 13,626 (11,195) ------- 39,978 ======= 30,184 16,531 (9,168) ------- 37,547 ======= 18,232 21,304 (9,352) ------- 30,184 ======= 10,705 12,460 (4,933) ------- 18,232 ======= 2,113 9,852 (1,260) ------- 10,705 =======
F-101 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 are as follows:
BLACKROCK MFS BLACKROCK FI LEGACY LARGE CAP GROWTH INVESTORS TRUST BOND INCOME VALUE LEADERS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------- ------------------- ------------------- ------------------- Outstanding at December, 2004... 851,014 366,699 4,716,266 101,071 Activity during 2005: Issued........................ 506,273 159,329 1,284,065 221,903 Redeemed...................... (156,106) (100,164) (989,587) (74,002) --------- -------- ---------- ------- Outstanding at December 31, 2005 1,201,181 425,864 5,010,744 248,972 ========= ======== ========== ======= Outstanding at December, 2003... 721,385 185,957 5,516,605 48,986 Activity during 2004: Issued........................ 210,673 271,608 1,298,199 78,162 Redeemed...................... (81,044) (90,867) (2,098,538) (26,077) --------- -------- ---------- ------- Outstanding at December 31, 2004 851,014 366,699 4,716,266 101,071 ========= ======== ========== ======= Outstanding at December, 2002... 589,478 103,733 5,564,010 11,904 Activity during 2003: Issued........................ 200,025 272,147 1,493,801 75,250 Redeemed...................... (68,118) (189,922) (1,541,206) (38,168) --------- -------- ---------- ------- Outstanding at December 31, 2003 721,385 185,957 5,516,605 48,986 ========= ======== ========== ======= Outstanding at December, 2001... 6,142 42,646 4,202,226 2,905 Activity during 2002: Issued........................ 624,223 110,194 2,093,319 14,522 Redeemed...................... (40,887) (49,107) (731,534) (5,523) --------- -------- ---------- ------- Outstanding at December 31, 2002 589,478 103,733 5,564,010 11,904 ========= ======== ========== ======= Outstanding at December 31, 2000 -- -- 3,979,594 -- Activity during 2001: Issued........................ 6,142 46,829 1,197,151 2,905 Redeemed...................... -- (4,183) (974,519) -- --------- -------- ---------- ------- Outstanding at December 31, 2001 6,142 42,646 4,202,226 2,905 ========= ======== ========== =======
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-102
SALOMON BROTHERS HARRIS OAKMARK STRATEGIC BOND SALOMON BROTHERS BLACKROCK MFS METLIFE FOCUSED VALUE OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET TOTAL RETURN CONSERVATIVE ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION (B) - ------------------- ------------------- ------------------- ------------------- ------------------- ----------------------- 153,755 595,935 705,185 1,880,485 69,547 -- 71,513 474,609 399,842 380,493 201,160 53,570 (43,103) (227,248) (225,455) (500,219) (80,601) -- ------- -------- -------- ---------- ------- ------ 182,165 843,296 879,572 1,760,759 190,106 53,570 ======= ======== ======== ========== ======= ====== 115,343 374,682 559,100 1,760,371 -- -- 73,501 412,201 424,585 965,141 78,798 -- (35,089) (190,947) (278,500) (845,027) (9,251) -- ------- -------- -------- ---------- ------- ------ 153,755 595,935 705,185 1,880,485 69,547 -- ======= ======== ======== ========== ======= ====== 76,067 177,044 340,014 1,980,526 -- -- 72,160 429,416 625,967 526,412 -- -- (32,884) (231,778) (406,881) (746,567) -- -- ------- -------- -------- ---------- ------- ------ 115,343 374,682 559,100 1,760,371 -- -- ======= ======== ======== ========== ======= ====== 22,681 41,474 71,098 2,156,130 -- -- 71,897 194,389 393,248 1,769,735 -- -- (18,511) (58,819) (124,332) (1,945,339) -- -- ------- -------- -------- ---------- ------- ------ 76,067 177,044 340,014 1,980,526 -- -- ======= ======== ======== ========== ======= ====== -- -- -- 1,478,851 -- -- 23,760 42,074 99,284 2,982,743 -- -- (1,079) (600) (28,186) (2,305,464) -- -- ------- -------- -------- ---------- ------- ------ 22,681 41,474 71,098 2,156,130 -- -- ======= ======== ======== ========== ======= ======
METLIFE CONSERVATIVE TO MODERATE ALLOCATION INVESTMENT DIVISION (B) - ----------------------- -- 65,370 -- ------ 65,370 ====== -- -- -- ------ -- ====== -- -- -- ------ -- ====== -- -- -- ------ -- ====== -- -- -- ------ -- ======
F-103 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 are as follows:
METLIFE METLIFE METLIFE JANUS ASPEN MODERATE ALLOCATION MODERATE TO AGGRESSIVE AGGRESSIVE ALLOCATION LARGE CAP GROWTH INVESTMENT DIVISION (B) INVESTMENT DIVISION (B) INVESTMENT DIVISION (B) INVESTMENT DIVISION ----------------------- ----------------------- ----------------------- ------------------- Outstanding at December, 2004...... -- -- -- 509,009 Activity during 2005: Issued........................... 165,720 249,839 49,908 87,782 Redeemed......................... -- -- -- (33,138) ------- ------- ------ -------- Outstanding at December 31, 2005... 165,720 249,839 49,908 563,653 ======= ======= ====== ======== Outstanding at December, 2003...... -- -- -- 435,309 Activity during 2004: Issued........................... -- -- -- 109,707 Redeemed......................... -- -- -- (36,007) ------- ------- ------ -------- Outstanding at December 31, 2004... -- -- -- 509,009 ======= ======= ====== ======== Outstanding at December, 2002...... -- -- -- 354,373 Activity during 2003: Issued........................... -- -- -- 122,611 Redeemed......................... -- -- -- (41,675) ------- ------- ------ -------- Outstanding at December 31, 2003... -- -- -- 435,309 ======= ======= ====== ======== Outstanding at December, 2001...... -- -- -- 235,634 Activity during 2002: Issued........................... -- -- -- 149,284 Redeemed......................... -- -- -- (30,545) ------- ------- ------ -------- Outstanding at December 31, 2002... -- -- -- 354,373 ======= ======= ====== ======== Outstanding at December 31, 2000... -- -- -- 472,795 Activity during 2001: Issued........................... -- -- -- 83,668 Redeemed......................... -- -- -- (320,829) ------- ------- ------ -------- Outstanding at December 31, 2001. -- -- -- 235,634 ======= ======= ====== ========
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-104
JANUS ASPEN AIM V.I. AIM V.I. AIM V.I. FRANKLIN TEMPLETON FRANKLIN MUTUAL BALANCED CORE STOCK GOVERNMENT SECURITIES REAL ESTATE FOREIGN SECURITIES DISCOVERY SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- --------------------- ------------------- ------------------- -------------------- 22 23,651 420 54,709 444,204 -- 171 4,977 1,092 25,913 97,898 9,276 (6) (6,776) (743) (16,625) (53,625) (138) --- ------ ----- ------- -------- ----- 187 21,852 769 63,997 488,477 9,138 === ====== ===== ======= ======== ===== -- 18,859 -- 10,108 403,047 -- 23 5,644 428 54,984 183,668 -- (1) (852) (8) (10,383) (142,511) -- --- ------ ----- ------- -------- ----- 22 23,651 420 54,709 444,204 -- === ====== ===== ======= ======== ===== -- 15,365 -- 14,055 344,105 -- -- 5,885 -- 1,901 117,960 -- -- (2,391) -- (5,848) (59,018) -- --- ------ ----- ------- -------- ----- -- 18,859 -- 10,108 403,047 -- === ====== ===== ======= ======== ===== -- 12,483 -- 7,465 188,768 -- -- 4,795 -- 60,533 183,240 -- -- (1,913) -- (53,943) (27,903) -- --- ------ ----- ------- -------- ----- -- 15,365 -- 14,055 344,105 -- === ====== ===== ======= ======== ===== -- 2,456 -- 9,542 98,800 -- -- 11,546 -- 595 118,324 -- -- (1,519) -- (2,672) (28,356) -- --- ------ ----- ------- -------- ----- -- 12,483 -- 7,465 188,768 -- === ====== ===== ======= ======== =====
ALLIANCEBERNSTEIN GROWTH AND INCOME INVESTMENT DIVISION - ------------------- 274,728 77,584 (14,278) ------- 338,034 ======= 197,000 90,253 (12,524) ------- 274,728 ======= 150,344 67,017 (20,361) ------- 197,000 ======= 64,535 95,064 (9,255) ------- 150,344 ======= 5,619 60,373 (1,457) ------- 64,535 =======
F-105 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 are as follows:
ALLIANCEBERNSTEIN FIDELITY VIP FIDELITY VIP FIDELITY VIP GLOBAL TECHNOLOGY CONTRAFUND ASSET MANAGER GROWTH GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- -------------------- ------------------- Outstanding at December, 2004... 4,324 77,301 83,331 57,359 Activity during 2005: Issued........................ 4,400 24,890 24,061 50,495 Redeemed...................... (171) (27,777) (26,640) (29,880) ------- ------- ------- ------- Outstanding at December 31, 2005 8,553 74,414 80,752 77,974 ======= ======= ======= ======= Outstanding at December, 2003... 10,005 97,404 53,872 47,360 Activity during 2004: Issued........................ 1,377 19,035 37,333 20,007 Redeemed...................... (7,058) (39,138) (7,874) (10,008) ------- ------- ------- ------- Outstanding at December 31, 2004 4,324 77,301 83,331 57,359 ======= ======= ======= ======= Outstanding at December, 2002... 5,945 34,844 19,894 28,321 Activity during 2003: Issued........................ 4,561 90,132 38,810 20,181 Redeemed...................... (501) (27,572) (4,832) (1,142) ------- ------- ------- ------- Outstanding at December 31, 2003 10,005 97,404 53,872 47,360 ======= ======= ======= ======= Outstanding at December, 2001... 2,312 3,000 12,946 12,892 Activity during 2002: Issued........................ 3,633 32,421 15,169 18,447 Redeemed...................... -- (577) (8,221) (3,018) ------- ------- ------- ------- Outstanding at December 31, 2002 5,945 34,844 19,894 28,321 ======= ======= ======= ======= Outstanding at December 31, 2000 -- -- -- -- Activity during 2001: Issued........................ 26,384 3,068 13,596 16,938 Redeemed...................... (24,072) (68) (650) (4,046) ------- ------- ------- ------- Outstanding at December 31, 2001 2,312 3,000 12,946 12,892 ======= ======= ======= =======
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-106
FIDELITY VIP FIDELITY VIP AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS T. ROWE PRICE INVESTMENT GRADE BOND EQUITY-INCOME GROWTH GROWTH-INCOME GLOBAL SMALL CAPITALIZATION MID-CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - --------------------- ------------------- ------------------- ------------------- --------------------------- ------------------- 1,268 928 656,749 811,401 676,191 856,351 2,025 19,013 429,219 460,047 728,909 562,461 (137) (17,751) (187,834) (236,401) (316,497) (286,778) ----- ------- -------- --------- --------- --------- 3,156 2,190 898,134 1,035,047 1,088,603 1,132,034 ===== ======= ======== ========= ========= ========= -- -- 417,055 524,999 377,860 526,964 1,268 928 378,500 469,450 517,429 519,499 -- -- (138,806) (183,048) (219,098) (190,112) ----- ------- -------- --------- --------- --------- 1,268 928 656,749 811,401 676,191 856,351 ===== ======= ======== ========= ========= ========= -- -- 221,157 286,757 202,753 293,610 -- -- 312,863 387,399 374,722 387,383 -- -- (116,965) (149,157) (199,615) (154,029) ----- ------- -------- --------- --------- --------- -- -- 417,055 524,999 377,860 526,964 ===== ======= ======== ========= ========= ========= -- -- 52,867 68,422 49,334 67,548 -- -- 216,988 285,959 225,504 327,750 -- -- (48,698) (67,623) (72,085) (101,688) ----- ------- -------- --------- --------- --------- -- -- 221,157 286,757 202,753 293,610 ===== ======= ======== ========= ========= ========= -- -- -- -- -- -- -- -- 66,595 76,008 55,145 70,583 -- -- (13,728) (7,587) (5,811) (3,035) ----- ------- -------- --------- --------- --------- -- -- 52,867 68,422 49,334 67,548 ===== ======= ======== ========= ========= =========
MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION - ------------------- 234,898 152,985 (93,776) -------- 294,107 ======== 151,293 415,775 (332,169) -------- 234,898 ======== 95,230 397,254 (341,191) -------- 151,293 ======== 27,998 238,633 (171,401) -------- 95,230 ======== -- 112,621 (84,623) -------- 27,998 ========
F-107 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 are as follows:
PIMCO RCM LORD ABBETT LAZARD TOTAL RETURN GLOBAL TECHNOLOGY BOND DEBENTURE MID CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- ------------------- Outstanding at December, 2004... 1,483,392 1,273,073 1,015,708 171,772 Activity during 2005: Issued........................ 818,646 518,666 328,926 136,196 Redeemed...................... (452,789) (456,796) (259,490) (81,672) --------- --------- --------- ------- Outstanding at December 31, 2005 1,849,249 1,334,943 1,085,144 226,296 ========= ========= ========= ======= Outstanding at December, 2003... 1,041,644 932,206 963,357 91,521 Activity during 2004: Issued........................ 865,523 888,971 444,003 171,923 Redeemed...................... (423,775) (548,104) (391,651) (91,672) --------- --------- --------- ------- Outstanding at December 31, 2004 1,483,392 1,273,073 1,015,708 171,772 ========= ========= ========= ======= Outstanding at December, 2002... 533,674 415,928 812,767 29,655 Activity during 2003: Issued........................ 1,055,297 896,499 477,823 95,790 Redeemed...................... (547,327) (380,221) (327,234) (33,924) --------- --------- --------- ------- Outstanding at December 31, 2003 1,041,644 932,206 963,357 91,521 ========= ========= ========= ======= Outstanding at December, 2001... 103,173 121,238 810,764 -- Activity during 2002: Issued........................ 622,404 436,505 216,200 32,741 Redeemed...................... (191,903) (141,815) (214,197) (3,086) --------- --------- --------- ------- Outstanding at December 31, 2002 533,674 415,928 812,767 29,655 ========= ========= ========= ======= Outstanding at December 31, 2000 -- -- 602,510 -- Activity during 2001: Issued........................ 123,449 127,903 291,500 -- Redeemed...................... (20,276) (6,665) (83,247) -- --------- --------- --------- ------- Outstanding at December 31, 2001 103,173 121,238 810,764 -- ========= ========= ========= =======
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-108
MET/AIM HARRIS OAKMARK JANUS LORD ABBETT NEUBERGER BERMAN LORD ABBETT SMALL CAP GROWTH INTERNATIONAL AGGRESSIVE GROWTH GROWTH AND INCOME REAL ESTATE MID-CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 101,110 289,245 741,720 5,975 151,740 21 72,111 536,478 290,526 943 536,011 2,575 (44,000) (188,930) (187,721) (2,550) (184,319) (53) ------- -------- --------- ------ -------- ----- 129,221 636,793 844,525 4,368 503,432 2,543 ======= ======== ========= ====== ======== ===== 60,439 71,528 582,357 2,532 -- -- 79,501 431,218 350,164 3,572 172,116 21 (38,830) (213,501) (190,802) (128) (20,376) (1) ------- -------- --------- ------ -------- ----- 101,110 289,245 741,720 5,975 151,740 21 ======= ======== ========= ====== ======== ===== 15,245 17,743 389,441 -- -- -- 98,694 179,732 1,093,048 2,572 -- -- (53,500) (125,947) (900,132) (40) -- -- ------- -------- --------- ------ -------- ----- 60,439 71,528 582,357 2,532 -- -- ======= ======== ========= ====== ======== ===== -- -- 135,682 -- -- -- 16,778 22,058 413,804 -- -- -- (1,533) (4,315) (160,044) -- -- -- ------- -------- --------- ------ -------- ----- 15,245 17,743 389,441 -- -- -- ======= ======== ========= ====== ======== ===== -- -- -- -- -- -- -- -- 162,214 -- -- -- -- -- (26,533) -- -- -- ------- -------- --------- ------ -------- ----- -- -- 135,682 -- -- -- ======= ======== ========= ====== ======== =====
THIRD AVENUE SMALL CAP VALUE INVESTMENT DIVISION - ------------------- 366 1,821 (114) ----- 2,073 ===== -- 373 (7) ----- 366 ===== -- -- -- ----- -- ===== -- -- -- ----- -- ===== -- -- -- ----- -- =====
F-109 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 are as follows:
OPPENHEIMER CAPITAL AMERICAN CENTURY DELAWARE DREYFUS EMERGING APPRECIATION VISTA SMALL CAP VALUE LEADERS INVESTMENT DIVISION (B) INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------- ------------------- ------------------- ------------------- Outstanding at December, 2004... -- -- -- -- Activity during 2005: Issued........................ 13,476 1,295 10,566 940 Redeemed...................... (2,888) (43) (690) (24) ------ ----- ------ --- Outstanding at December 31, 2005 10,588 1,252 9,876 916 ====== ===== ====== === Outstanding at December, 2003... -- -- -- -- Activity during 2004: Issued........................ -- -- -- -- Redeemed...................... -- -- -- -- ------ ----- ------ --- Outstanding at December 31, 2004 -- -- -- -- ====== ===== ====== === Outstanding at December, 2002... -- -- -- -- Activity during 2003: Issued........................ -- -- -- -- Redeemed...................... -- -- -- -- ------ ----- ------ --- Outstanding at December 31, 2003 -- -- -- -- ====== ===== ====== === Outstanding at December, 2001... -- -- -- -- Activity during 2002: Issued........................ -- -- -- -- Redeemed...................... -- -- -- -- ------ ----- ------ --- Outstanding at December 31, 2002 -- -- -- -- ====== ===== ====== === Outstanding at December 31, 2000 -- -- -- -- Activity during 2001: Issued........................ -- -- -- -- Redeemed...................... -- -- -- -- ------ ----- ------ --- Outstanding at December 31, 2001 -- -- -- -- ====== ===== ====== ===
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-110
DREYFUS DREYFUS GOLDMAN SACHS GOLDMAN SACHS MFS VAN KAMPEN INTERNATIONAL VALUE APPRECIATION MID CAP VALUE CORE SMALL CAP EQUITY HIGH INCOME GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- --------------------- ------------------- ------------------- 1,371 324 1,123 -- 4,700 -- 25,402 1,387 9,745 4,244 1,719 1,280 (12,214) (120) (7,099) (5) (181) (8) ------- ----- ------ ----- ----- ----- 14,559 1,591 3,769 4,239 6,238 1,272 ======= ===== ====== ===== ===== ===== -- -- -- -- -- -- 1,371 336 1,123 -- 4,700 -- -- (12) -- -- -- -- ------- ----- ------ ----- ----- ----- 1,371 324 1,123 -- 4,700 -- ======= ===== ====== ===== ===== ===== -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------- ----- ------ ----- ----- ----- -- -- -- -- -- -- ======= ===== ====== ===== ===== ===== -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------- ----- ------ ----- ----- ----- -- -- -- -- -- -- ======= ===== ====== ===== ===== ===== -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- ------- ----- ------ ----- ----- ----- -- -- -- -- -- -- ======= ===== ====== ===== ===== =====
WELLS FARGO ADVANTAGE TOTAL RETURN BOND INVESTMENT DIVISION - --------------------- -- 1,631 (11) ----- 1,620 ===== -- -- -- ----- -- ===== -- -- -- ----- -- ===== -- -- -- ----- -- ===== -- -- -- ----- -- =====
F-111 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 5. CHANGES IN OUTSTANDING UNITS The changes in units outstanding for the years ended December 31, 2005, 2004, 2003, 2002 and 2001 are as follows:
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE LARGE COMPANY GROWTH EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION --------------------- --------------------- Outstanding at December, 2004... 416 402 Activity during 2005: Issued........................ 464 422 Redeemed...................... (108) (97) ---- --- Outstanding at December 31, 2005 772 727 ==== === Outstanding at December, 2003... -- -- Activity during 2004: Issued........................ 424 410 Redeemed...................... (8) (8) ---- --- Outstanding at December 31, 2004 416 402 ==== === Outstanding at December, 2002... -- -- Activity during 2003: Issued........................ -- -- Redeemed...................... -- -- ---- --- Outstanding at December 31, 2003 -- -- ==== === Outstanding at December, 2001... -- -- Activity during 2002: Issued........................ -- -- Redeemed...................... -- -- ---- --- Outstanding at December 31, 2002 -- -- ==== === Outstanding at December 31, 2000 -- -- Activity during 2001: Issued........................ -- -- Redeemed...................... -- -- ---- --- Outstanding at December 31, 2001 -- -- ==== ===
- -------- (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-112 [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
BLACKROCK BLACKROCK BLACKROCK INVESTMENT TRUST DIVERSIFIED AGGRESSIVE GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- 2005 Units................................................. 16,488,159 13,638,816 11,502,614 Unit Fair Value, Lowest to Highest (1)................ $12.13 to $37.35 $13.18 to $33.65 $14.64 to $20.73 Net Assets (In Thousands)............................. $401,557 $319,750 $222,220 Investment Income Ratio to Net Assets (2)............. 1.09% 1.57% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 2.67% to 3.59% 2.13% to 3.05% 9.72% to 10.70% 2004 Units................................................. 16,507,025 13,455,017 11,775,258 Unit Fair Value, Lowest to Highest (1)................ $11.71 to $36.38 $12.79 to $32.95 $13.23 to $18.89 Net Assets (In Thousands)............................. $399,817 $315,177 $207,749 Investment Income Ratio to Net Assets (2)............. 0.71% 1.83% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 9.87% to 10.86% 7.54% to 8.51% 11.97% to 12.98% 2003 Units................................................. 16,150,806 12,880,974 11,833,051 Unit Fair Value, Lowest to Highest (1)................ $10.57 to $33.12 $11.79 to $30.64 $11.71 to $16.87 Net Assets (In Thousands)............................. $367,087 $289,033 $187,268 Investment Income Ratio to Net Assets (2)............. 0.83% 3.73% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 29.08% to 30.24% 19.48% to 20.56% 39.53% to 40.79% 2002 Units................................................. 15,059,725 12,267,711 11,447,188 Unit Fair Value, Lowest to Highest (1)................ $8.11 to $25.66 $9.78 to $25.64 $8.32 to $12.09 Net Assets (In Thousands)............................. $276,980 $238,020 $130,816 Investment Income Ratio to Net Assets (2)............. 0.54% 2.27% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... -27% to -26% -15% to -14% -29% 2001 Units................................................. 13,263,581 11,138,476 10,502,846 Unit Fair Value, Lowest to Highest (1)................ $10.98 to $35.04 $11.35 to $30.04 $11.67 to $17.12 Net Assets (In Thousands)............................. $356,701 $265,724 $171,692 Investment Income Ratio to Net Assets (2)............. 13.53% 9.67% 24.84% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... -18% to -17% -7% to -6% -24%
METLIFE STOCK INDEX INVESTMENT DIVISION ------------------- 2005 Units................................................. 32,156,989 Unit Fair Value, Lowest to Highest (1)................ $11.08 to $33.24 Net Assets (In Thousands)............................. $605,569 Investment Income Ratio to Net Assets (2)............. 1.56% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 3.71% to 4.64% 2004 Units................................................. 29,475,869 Unit Fair Value, Lowest to Highest (1)................ $10.59 to $32.05 Net Assets (In Thousands)............................. $548,176 Investment Income Ratio to Net Assets (2)............. 0.83% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 9.55% to 10.53% 2003 Units................................................. 25,746,955 Unit Fair Value, Lowest to Highest (1)................ $9.58 to $29.26 Net Assets (In Thousands)............................. $457,114 Investment Income Ratio to Net Assets (2)............. 1.65% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 27.06% to 28.20% 2002 Units................................................. 22,139,983 Unit Fair Value, Lowest to Highest (1)................ $7.48 to $23.03 Net Assets (In Thousands)............................. $326,228 Investment Income Ratio to Net Assets (2)............. 1.61% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% Total Return, Lowest to Highest (4)................... -23% to -22% 2001 Units................................................. 17,014,963 Unit Fair Value, Lowest to Highest (1)................ $9.62 to $29.91 Net Assets (In Thousands)............................. $346,931 Investment Income Ratio to Net Assets (2)............. 1.17% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% Total Return, Lowest to Highest (4)................... -13% to -12%
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-114
FI FI T. ROWE PRICE OPPENHEIMER HARRIS OAKMARK NEUBERGER BERMAN INTERNATIONAL STOCK MID CAP OPPORTUNITIES SMALL CAP GROWTH GLOBAL EQUITY LARGE CAP VALUE MID CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- --------------------- ------------------- ------------------- ------------------- ------------------- 3,294,341 14,520,500 5,103,342 2,314,718 4,085,993 2,912,765 $13.71 to $18.97 $7.12 to $20.08 $8.20 to $17.21 $17.48 to $19.47 $12.55 to $15.72 $18.79 to $26.61 $56,856 $247,746 $80,632 $41,605 $54,445 $63,152 0.60% 0.00% 0.00% 0.55% 0.70% 8.48% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 16.95% to 18.00% 5.97% to 6.92% 10.02% to 11.01% 15.19% to 16.22% -2.26% to -1.38% 11.27% to 12.27% 3,241,370 14,284,163 5,056,605 2,201,362 3,767,330 2,435,399 $11.67 to $16.22 $6.66 to $18.87 $7.41 to $15.57 $15.04 to $16.76 $12.79 to $16.08 $16.88 to $23.70 $48,075 $229,326 $72,034 $34,182 $51,133 $47,215 1.32% 0.53% 0.00% 1.52% 0.49% 2.71% 0.40% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.40% to 0.90% 0.40% to 0.90% 17.14% to 18.19% 16.15% to 17.19% 9.58% to 11.08% 15.38% to 16.42% 10.42% to 11.42% 21.81% to 22.91% 3,484,064 13,347,672 4,901,924 2,140,330 3,060,299 1,946,013 $9.92 to $13.85 $5.69 to $16.17 $6.76 to $14.08 $12.92 to $14.39 $11.53 to $14.56 $13.86 to $19.29 $43,984 $184,078 $63,189 $28,696 $37,504 $30,946 0.65% 0.00% 0.00% 2.04% 0.00% 0.32% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.60% to 0.90% 26.90% to 28.04% 33.38% to 35.10% 37.24% to 40.87% 29.29% to 30.45% 24.38% to 25.49% 35.30% to 36.52% 3,295,967 11,520,986 4,424,009 1,978,122 2,346,360 1,567,159 $7.78 to $10.91 $4.22 to $12.07 $4.93 to $10.04 $9.90 to $11.03 $9.23 to $11.71 $10.24 to $14.13 $32,966 $119,020 $40,681 $20,476 $23,073 $18,286 0.89% 0.00% 0.51% 1.68% 3.31% 0.31% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% -18% to -17% -30% to -29% -29% to -27% -17% to -16% -15% to -14% -10% 3,106,074 8,480,928 3,525,259 2,000,284 1,241,734 1,076,200 $9.47 to $13.35 $5.95 to $17.08 $6.91 to $13.76 $11.79 to $12.88 $10.80 to $13.76 $11.44 to $15.63 $38,281 $125,185 $44,763 $21,106 $14,336 $14,115 3.67% 0.00% 0.05% to 8.16% 11.32% 0.15% 1.94% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% 0.60% to 0.90% -21% to -20% -37% to -33% -10% to 2% -16% to -15% 17% to 20% -3% to 0%
T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION - ------------------- 3,468,063 $9.47 to $14.21 $41,400 0.54% 0.40% to 0.90% 5.64% to 6.59% 3,297,088 $8.97 to $13.33 $36,588 0.21% 0.40% to 0.90% 8.94% to 9.93% 3,290,117 $8.23 to $12.13 $33,520 0.11% 0.60% to 0.90% 29.64% to 30.81% 2,852,995 $6.35 to $9.27 $22,095 0.26% 0.45% to 0.90% -24% to 23% 2,123,783 $8.35 to $12.08 $21,111 0.06% 0.60% to 0.90% -11% to -6%
F-115 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
LEHMAN BROTHERS MORGAN STANLEY RUSSELL AGGREGATE BOND INDEX EAFE INDEX 2000 INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ------------------- 2005 Units................................................. 5,619,973 3,464,106 2,619,287 Unit Fair Value, Lowest to Highest (1)................ $13.32 to 14.53 $10.45 to 14.05 $13.00 to $17.96 Net Assets (In Thousands)............................. $80,547 $42,458 $42,637 Investment Income Ratio to Net Assets (2)............. 3.76% 1.59% 4.34% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 1.16% to 2.06% 12.24% to 13.24% 3.57% to 4.50% 2004 Units................................................. 4,812,639 3,014,776 2,380,540 Unit Fair Value, Lowest to Highest (1)................ $13.17 to $14.23 $9.31 to 12.41 $12.55 to $17.19 Net Assets (In Thousands)............................. $67,710 $32,552 $37,086 Investment Income Ratio to Net Assets (2)............. 3.00% 0.71% 0.44% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.40% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 3.17% to 4.10% 18.58% to 19.64% 16.71% to 17.77% 2003 Units................................................. 4,063,920 2,675,762 2,084,869 Unit Fair Value, Lowest to Highest (1)................ $12.77 to $13.67 $7.85 to $10.37 $10.75 to $14.59 Net Assets (In Thousands)............................. $54,994 $24,290 $27,726 Investment Income Ratio to Net Assets (2)............. 5.25% 1.48% 0.63% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 2.71% to 3.63% 36.41% to 37.70% 44.77% to 46.07% 2002 Units................................................. 4,147,462 2,043,759 1,614,358 Unit Fair Value, Lowest to Highest (1)................ $12.43 to $13.19 $5.76 to $7.53 $7.43 to $9.99 Net Assets (In Thousands)............................. $54,046 $13,496 $14,829 Investment Income Ratio to Net Assets (2)............. 2.81% 0.49% 0.59% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 9% to 10% -17% -21% to -20% 2001 Units................................................. 3,152,509 1,351,803 920,213 Unit Fair Value, Lowest to Highest (1)................ $11.38 to $11.97 $6.97 to $9.04 $9.42 to $12.56 Net Assets (In Thousands)............................. $37,322 $10,800 $10,625 Investment Income Ratio to Net Assets (2)............. 1.29% 0.31% 0.26% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.45% to 0.90% 0.45% to 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 7% -22% to -21% 0% to 6%
MET/PUTNAM VOYAGER INVESTMENT DIVISION (A) ----------------------- 2005 Units................................................. -- Unit Fair Value, Lowest to Highest (1)................ $-- Net Assets (In Thousands)............................. $-- Investment Income Ratio to Net Assets (2)............. 0.97% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.90% Total Return, Lowest to Highest (4)................... 11.65% to 12.65% 2004 Units................................................. 2,202,130 Unit Fair Value, Lowest to Highest (1)................ $4.56 to $5.02 Net Assets (In Thousands)............................. $10,452 Investment Income Ratio to Net Assets (2)............. 0.11% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.90% Total Return, Lowest to Highest (4)................... 4.04% to 4.98% 2003 Units................................................. 1,913,297 Unit Fair Value, Lowest to Highest (1)................ $4.38 to $4.78 Net Assets (In Thousands)............................. $8,651 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% to 0.90% Total Return, Lowest to Highest (4)................... 24.78% to 25.91% 2002 Units................................................. 1,462,795 Unit Fair Value, Lowest to Highest (1)................ $3.51 to $3.79 Net Assets (In Thousands)............................. $5,253 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.50% to 0.90% Total Return, Lowest to Highest (4)................... -30% to -29% 2001 Units................................................. 792,111 Unit Fair Value, Lowest to Highest (1)................ $4.98 to $5.04 Net Assets (In Thousands)............................. $4,001 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% to 0.90% Total Return, Lowest to Highest (4)................... -46% to -31%
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-116
JENNISON BLACKROCK METLIFE MID FRANKLIN TEMPLETON BLACKROCK DAVIS GROWTH STRATEGIC VALUE CAP STOCK INDEX SMALL CAP GROWTH LARGE CAP VALUE VENTURE VALUE INVESTMENT DIVISION (B) INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ----------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 1,297,642 4,485,936 2,985,941 474,966 396,107 1,739,984 $5.65 to $12.19 $18.58 to $20.28 $14.39 to $15.80 $8.20 to $10.83 $12.63 to $13.05 $12.13 to $35.19 $13,084 $90,123 $46,523 $5,108 $5,137 $43,993 0.00% 6.44% 5.55% 3.21% 1.82% 0.65% 0.40% to 0.90% 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% 20.77% to 21.49% 3.23% to 4.15% 11.28% to 12.27% 3.72% to 10.71% 5.04% to 5.98% 9.32% to 10.30% -- 4,164,014 2,658,110 440,124 271,012 1,365,956 $-- $17.84 to $19.48 $12.82 to $14.07 $10.01 to $10.35 $12.02 to $12.31 $11.00 to $31.91 $-- $80,342 $36,885 $4,527 $3,321 $31,374 -- 0.00% 0.73% 0.00% 0.00% 0.54% -- 0.40% to 0.90% 0.48% to 0.90% 0.90% 0.90% 0.40% to 0.90% -- 14.31% to 15.34% 15.01% to 16.05% 10.41% to 11.41% 12.39% to 13.40% 11.36% to 12.37% -- 3,371,798 2,338,101 328,803 102,570 1,321,574 $-- $15.46 to $16.89 $11.04 to $12.13 $9.07 to $9.29 $10.70 to $10.86 $9.79 to $28.40 $-- $56,540 $27,925 $3,038 $1,110 $24,429 -- 0.00% 0.46% 0.00% 1.37% 0.37% -- 0.60% to 0.90% 0.60% to 0.90% 0.90% 0.90% 0.60% to 0.90% -- 48.80% to 50.14% 33.76% to 34.96% 43.64% to 44.93% 34.47% to 35.68% 29.70% to 30.87% -- 2,598,639 1,762,240 197,685 23,496 900,662 $-- $10.30 to $11.25 $8.18 to $8.98 $6.31 to $6.41 $7.96 to $8.00 $7.48 to $21.70 $-- $29,061 $15,568 $1,268 $189 $13,430 -- 0.52% 0.35% 0.00% 0.92% 0.88% -- 0.50% to 0.90% 0.50% to 0.90% 0.90% 0.90% 0.50% to 0.90% -- -22% to -21% -16% to -15% -28% -20% -17% to -16% -- 1,316,864 866,858 51,873 -- 297,193 $-- $13.09 to $14.29 $9.62 to $10.56 $8.83 to $8.88 $-- $8.94 to $25.95 $-- $20,005 $9,019 $457 $-- $7,498 -- 0.38% 0.43% 0.00% -- 4.47% -- 0.60% to 0.90% 0.60% to 0.90% 0.60% -- 0.60% to 0.90% -- 16% to 19% -1% to 3% -12% to -11% -- -11% to -9%
LOOMIS SAYLES SMALL CAP INVESTMENT DIVISION - ------------------- 39,978 $11.54 to $255.61 $8,114 1.14% 0.40% to 0.90% 6.00% to 6.96% 37,547 $10.79 to $238.98 $6,406 0.00% 0.40% to 0.90% 15.31% to 16.35% 30,184 $9.27 to $205.39 $4,423 0.00% 0.60% to 0.90% 35.25% to 36.47% 18,232 $6.80 to $150.51 $2,408 0.11% 0.50% to 0.90% -22% 10,705 $8.66 to $191.87 $1,926 7.28% 0.60% to 0.90% -9% to -4%
F-117 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
BLACKROCK MFS BLACKROCK LEGACY LARGE CAP GROWTH INVESTORS TRUST BOND INCOME INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ----------------------- ------------------- ------------------- 2005 Units................................................. 1,201,181 425,864 5,010,744 Unit Fair Value, Lowest to Highest (1)................ $7.96 to $11.96 $9.51 to $9.95 $13.78 to $28.49 Net Assets (In Thousands)............................. $10,109 $4,217 $94,693 Investment Income Ratio to Net Assets (2)............. 0.39% 0.76% 5.06% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.90% 0.48% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 6.05% to 7.00% 6.32% to 7.27% 1.50% to 2.41% 2004 Units................................................. 851,014 366,699 4,716,266 Unit Fair Value, Lowest to Highest (1)................ $7.44 to $11.17 $8.87 to $9.28 $13.46 to $28.07 Net Assets (In Thousands)............................. $6,458 $3,387 $89,174 Investment Income Ratio to Net Assets (2)............. 0.00% 0.39% 5.80% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.90% 0.48% to 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 8.81% to 11.74% 10.37% to 11.37% 3.50% to 4.43% 2003 Units................................................. 721,385 185,957 5,516,605 Unit Fair Value, Lowest to Highest (1)................ $6.84 $7.96 to $8.33 $12.89 to $27.12 Net Assets (In Thousands)............................. $4,933 $1,544 $96,720 Investment Income Ratio to Net Assets (2)............. 0.06% 0.25% 3.06% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% 0.60% to 0.90% 0.60% to 0.90% Total Return, Lowest to Highest (4)................... 35.15% 20.76% to 21.85% 4.91% to 5.85% 2002 Units................................................. 589,478 103,733 5,564,010 Unit Fair Value, Lowest to Highest (1)................ $5.06 $6.54 to $6.84 $12.18 to $25.85 Net Assets (In Thousands)............................. $2,983 $694 $93,158 Investment Income Ratio to Net Assets (2)............. 0.00% 0.72% 5.72% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% 0.60% to 0.90% 0.60% to 0.90% Total Return, Lowest to Highest (4)................... -33% -21% to -20% 7% to 8% 2001 Units................................................. 6,142 42,646 4,202,226 Unit Fair Value, Lowest to Highest (1)................ $7.57 $8.19 to $8.57 $11.23 to $24.08 Net Assets (In Thousands)............................. $45 $322 $79,483 Investment Income Ratio to Net Assets (2)............. 0.00% 0.00% 5.64% to 7.28% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% 0.60% to 0.90% .45% to 0.90% Total Return, Lowest to Highest (4)................... -16% -14% to -3% 7% to 8%
FI VALUE LEADERS INVESTMENT DIVISION ------------------- 2005 Units................................................. 248,972 Unit Fair Value, Lowest to Highest (1)................ $10.54 to $13.29 Net Assets (In Thousands)............................. $3,263 Investment Income Ratio to Net Assets (2)............. 1.04% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 9.71% to 10.69% 2004 Units................................................. 101,071 Unit Fair Value, Lowest to Highest (1)................ $9.52 to $12.01 Net Assets (In Thousands)............................. $1,191 Investment Income Ratio to Net Assets (2)............. 1.10% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 12.71% to 13.73% 2003 Units................................................. 48,986 Unit Fair Value, Lowest to Highest (1)................ $8.37 to $10.56 Net Assets (In Thousands)............................. $505 Investment Income Ratio to Net Assets (2)............. 0.52% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% to .90% Total Return, Lowest to Highest (4)................... 25.79% to 26.92% 2002 Units................................................. 11,904 Unit Fair Value, Lowest to Highest (1)................ $6.59 to $8.32 Net Assets (In Thousands)............................. $93 Investment Income Ratio to Net Assets (2)............. 0.89% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% to .90% Total Return, Lowest to Highest (4)................... -19% to -17% 2001 Units................................................. 2,905 Unit Fair Value, Lowest to Highest (1)................ $8.19 Net Assets (In Thousands)............................. $25 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... -11%
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-118
HARRIS OAKMARK SALOMON BROTHERS SALOMON BROTHERS BLACKROCK MFS FOCUSED VALUE STRATEGIC BOND OPPORTUNITIES U.S. GOVERNMENT MONEY MARKET TOTAL RETURN INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ---------------------------- ------------------- ------------------- ------------------- 182,165 843,296 879,572 1,760,759 190,106 $260.95 to $272.09 $14.56 to $15.19 $13.19 to $13.75 $12.92 to $16.24 $11.21 to $11.38 $49,252 $12,709 $12,014 $28,028 $2,157 1.03% 4.86% 3.15% 2.78% 2.68% 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 9.00% to 9.98% 1.92% to 2.83% 0.82% to 1.72% 1.97% to 2.89% 2.20% to 3.12% 153,755 595,935 705,185 1,880,485 69,547 $239.40 to $247.40 $14.29 to $14.77 $13.08 to $13.52 $15.36 to $15.93 $10.97 to $11.04 $37,845 $8,743 $9,478 $29,162 $767 1.00% 2.66% 2.24% 1.03% 0.00% 0.90% 0.90% 0.90% 0.40% to 0.90% 0.40% to 0.90% 8.95% to 9.93% 5.66% to 6.61% 2.09% to 3.01% 0.08% to 0.99% 9.73% to 10.39% 115,343 374,682 559,100 1,760,371 -- $219.73 to $225.05 $13.52 to $13.85 $12.82 to $13.13 $15.21 to $15.92 $-- $25,866 $5,163 $7,305 $27,346 $-- 0.12% 1.70% 1.57% 0.78% -- 0.90% 0.90% 0.90% 0.60% to 0.90% -- 31.47% to 32.66% 11.62% to 12.62% 0.77% to 1.68% -0.09% to 0.81% -- 76,067 177,044 340,014 1,980,526 -- $167.13 to $169.65 $12.12 to $12.30 $12.72 to $12.91 $13.09 to $15.93 $-- $12,879 $2,174 $4,365 $30,811 $-- 0.18% 6.33% 3.47% 1.57% -- 0.90% 0.90% 0.90% 0.45% to 0.90% -- -10% to -9% 9% to 10% 7% to 8% 0% to 1% -- 22,681 41,474 71,098 2,156,130 -- $184.98 to $186.09 $11.15 to $11.22 $11.89 to $11.96 $14.88 to $15.85 $-- $4,215 $465 $849 $32,726 $-- 0.00% 0.00% 0.00% 4.18% -- 0.90% 0.90% 0.90% 0.60% to 0.90% -- 12% to 13% 3% to 4% 4% 3% to 4% --
METLIFE METLIFE CONSERVATIVE CONSERVATIVE ALLOCATION TO MODERATE ALLOCATION INVESTMENT DIVISION (B) INVESTMENT DIVISION (B) - ----------------------- ----------------------- 53,570 65,370 $10.35 to $10.41 $10.58 to $10.64 $118 $ 579 0.80% 0.81% 0.90% 0.90% 3.51% to 4.13% 5.80% to 6.43% -- -- $-- $-- $-- $-- -- -- -- -- -- -- -- -- $-- $-- $-- $-- -- -- -- -- -- -- -- -- $-- $-- $-- $-- -- -- -- -- -- -- -- -- $-- $-- $-- $-- -- -- -- -- -- --
F-119 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
METLIFE METLIFE MODERATE TO AGGRESSIVE METLIFE MODERATE ALLOCATION ALLOCATION AGGRESSIVE ALLOCATION INVESTMENT DIVIDION (B) INVESTMENT DIVIDION (B) INVESTMENT DIVIDION (B) ----------------------- ----------------------- ----------------------- 2005 Units................................................. 165,720 249,839 49,908 Unit Fair Value, Lowest to Highest (1)................ $10.80 to $10.87 $11.03 to $11.09 $11.20 to $11.27 Net Assets (In Thousands)............................. $1,449 $ 2,349 $453 Investment Income Ratio to Net Assets (2)............. 0.84% 0.79% 1.27% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.90% 0.90% Total Return, Lowest to Highest (4)................... 8.02% to 8.66% 10.28% to 10.94% 12.05% to 12.72% 2004 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- -- 2003 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- -- 2002 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- -- 2001 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- --
JANUS ASPEN LARGE CAP GROWTH INVESTMENT DIVISION ------------------- 2005 Units................................................. 563,653 Unit Fair Value, Lowest to Highest (1)................ $8.75 Net Assets (In Thousands)............................. $4,934 Investment Income Ratio to Net Assets (2)............. 0.33% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.60% Total Return, Lowest to Highest (4)................... 4.29% 2004 Units................................................. 509,009 Unit Fair Value, Lowest to Highest (1)................ $8.39 Net Assets (In Thousands)............................. $4,277 Investment Income Ratio to Net Assets (2)............. 0.15% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.60% Total Return, Lowest to Highest (4)................... 4.52% 2003 Units................................................. 435,309 Unit Fair Value, Lowest to Highest (1)................ $8.03 Net Assets (In Thousands)............................. $3,500 Investment Income Ratio to Net Assets (2)............. 0.10% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... 31.73% 2002 Units................................................. 354,373 Unit Fair Value, Lowest to Highest (1)................ $6.10 Net Assets (In Thousands)............................. $2,163 Investment Income Ratio to Net Assets (2)............. 0.03% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... -27% 2001 Units................................................. 235,634 Unit Fair Value, Lowest to Highest (1)................ $8.30 Net Assets (In Thousands)............................. $1,959 Investment Income Ratio to Net Assets (2)............. 6.04% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... -19%
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-120
JANUS ASPEN AIM V.I. AIM V.I. AIM V.I. FRANKLIN TEMPLETON FRANKLIN MUTUAL BALANCED CORE STOCK GOVERNMENT SECURITIES REAL ESTATE FOREIGN SECURITIES DISCOVERY SECURITIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- --------------------- ------------------- ------------------- -------------------- 187 21,852 769 63,997 488,477 9,138 $11.68 $10.53 $10.73 $27.61 $13.17 $13.31 $2 $230 $8 $1,748 $6,438 $122 2.06% 0.42% 3.80% 5.42% 1.22% 1.34% 0.60% 0.48% 0.40% 0.40% to 0.60% 0.48% to 0.60% 0.40% to 0.48% 7.66% 3.79% 4.57% 15.46% 10.48% 15.97% 22 23,651 420 54,709 444,204 -- $10.85 $10.15 $10.26 $23.91 $11.92 $-- .237 $240 $4 $1,308 $5,300 $-- 3.38% 0.96% 1.39% 4.02% 1.12% -- 0.60% 0.48% 0.40% 0.40% to 0.60% 0.48% to 0.60% -- 8.52% 4.24% 2.60% 34.40% 18.87% -- -- 18,859 -- 10,108 403,047 -- $-- $9.73 $-- $17.79 $10.03 $-- $-- $184 $-- $179 $4,054 $-- -- 1.26% -- 1.49% 1.52% -- -- 0.60% -- 0.60% 0.60% -- -- 22.60% -- 38.82% 32.55% -- -- 15,365 -- 14,055 344,105 -- $-- $7.94 $-- $12.82 $7.57 $-- $-- $125 $-- $179 $2,612 $-- -- 1.74% -- 1.40% 2.03% -- -- 0.60% -- 0.60% 0.60% -- -- -19% -- -6% -18% -- -- 12,483 -- 7,465 188,768 -- $-- $9.81 $-- $12.05 $9.27 $-- $-- $122 $-- $89 $1,767 $-- -- 2.61% -- 1.16% 14.19% -- -- 0.60% -- 0.60% 0.60% -- -- -7% -- 1% -16% --
ALLIANCEBERNSTIEN GROWTH AND INCOME INVESTMENT DIVISION - ------------------- 338,034 $12.19 $4,119 1.09% 0.40% to 0.60% 4.62% 274,728 $11.65 $3,200 0.57% 0.48% to 0.60% 11.22% 197,000 $10.47 $2,063 0.70% 0.60% 32.18% 150,344 $7.92 $1,191 3.31% 0.60% -22% 64,535 $10.19 $656 0.91% 0.60% 2%
F-121 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
ALLIANCEBERNSTIEN FIDELITY VIP FIDELITY VIP GLOBAL TECHNOLOGY CONTRAFUND ASSET MANAGER GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- -------------------- 2005 Units................................................. 8,553 74,414 80,752 Unit Fair Value, Lowest to Highest (1)................ $4.95 $12.38 $8.79 Net Assets (In Thousands)............................. $42 $921 $708 Investment Income Ratio to Net Assets (2)............. 0.00% 0.23% 2.58% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)................... 3.65% 16.85% 3.79% 2004 Units................................................. 4,324 77,301 83,331 Unit Fair Value, Lowest to Highest (1)................ $4.77 $10.59 $8.47 Net Assets (In Thousands)............................. $21 $819 $704 Investment Income Ratio to Net Assets (2)............. 0.00% 0.21% 2.23% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.48% to 0.60% 0.40% to 0.60% 0.48% Total Return, Lowest to Highest (4)................... 5.09% 15.34% 5.85% 2003 Units................................................. 10,005 97,404 53,872 Unit Fair Value, Lowest to Highest (1)................ $4.54 $9.18 $8.00 Net Assets (In Thousands)............................. $46 $894 $433 Investment Income Ratio to Net Assets (2)............. 0.00% .15% 2.96% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)................... 43.79% 28.35% 23.15% 2002 Units................................................. 5,945 34,844 19,894 Unit Fair Value, Lowest to Highest (1)................ $3.16 $7.16 $6.50 Net Assets (In Thousands)............................. $18 $249 $131 Investment Income Ratio to Net Assets (2)............. 5.08% 0.14% 3.23% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)................... -42% -10% -18% 2001 Units................................................. 2,312 3,000 12,946 Unit Fair Value, Lowest to Highest (1)................ $5.43 $7.96 $7.89 Net Assets (In Thousands)............................. $13 $24 $95 Investment Income Ratio to Net Assets (2)............. 6.23% 0.00% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% 0.60% 0.60% Total Return, Lowest to Highest (4)................... -35% -12% -10%
FIDELITY VIP GROWTH INVESTMENT DIVISION ------------------- 2005 Units................................................. 77,974 Unit Fair Value, Lowest to Highest (1)................ $6.84 Net Assets (In Thousands)............................. $533 Investment Income Ratio to Net Assets (2)............. 0.29% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.60% Total Return, Lowest to Highest (4)................... 5.67% 2004 Units................................................. 57,359 Unit Fair Value, Lowest to Highest (1)................ $6.47 Net Assets (In Thousands)............................. $371 Investment Income Ratio to Net Assets (2)............. 0.11% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.40% to 0.60% Total Return, Lowest to Highest (4)................... 3.26% 2003 Units................................................. 47,360 Unit Fair Value, Lowest to Highest (1)................ $6.27 Net Assets (In Thousands)............................. $296 Investment Income Ratio to Net Assets (2)............. 0.08% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... 32.78% 2002 Units................................................. 28,321 Unit Fair Value, Lowest to Highest (1)................ $4.72 Net Assets (In Thousands)............................. $134 Investment Income Ratio to Net Assets (2)............. 0.12% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... -30% 2001 Units................................................. 12,892 Unit Fair Value, Lowest to Highest (1)................ $6.77 Net Assets (In Thousands)............................. $87 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... -20%
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-122
FIDELITY VIP FIDELITY VIP AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS T. ROWE PRICE INVESTMENT GRADE BOND EQUITY-INCOME GROWTH GROWTH-INCOME GLOBAL SMALL CAPITALIZATION MID-CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - --------------------- ------------------- ------------------- ------------------- --------------------------- ------------------- 3,156 2,190 898,134 1,035,047 1,088,603 1,132,034 $10.64 $11.66 $77.72 to $81.04 $43.64 to $45.51 $22.41 to $23.37 $8.37 to $13.11 $33 $25 $72,331 $46,795 $25,231 $9,818 3.79% 3.48% 0.74% 1.84% 0.89% 2.53% 0.40% to 0.48% 0.40% to 0.48% 0.90% 0.90% 0.90% 0.60% to 0.90% 2.08% 5.76% 15.16% to 16.19% 4.89% to 5.83% 24.24% to 25.35% 13.85% to 14.87% 1,268 928 656,749 811,401 676,191 856,351 $10.43 $11.02 $67.49 to $69.75 $41.61 to $43.00 $18.04 to $18.64 $7.35 to $11.44 $13 $10 $45,572 $34,702 $12,528 $6,475 0.00% 0.00% 0.20% 1.00% 0.00% 0.00% .40% .40% 0.90% 0.90% 0.90% 0.60% to 0.90% 4.27% 10.25% 11.49% to 12.50% 9.39% to 10.37% 19.80% to 20.88% 14.40% to 18.15% -- -- 417,055 524,999 377,860 526,964 $-- $-- $60.53 to $62.00 $38.04 to $38.96 $15.06 to $15.42 $6.28 to $6.43 $-- $-- $25,760 $20,369 $5,801 $3,375 -- -- 0.13% 1.18% 0.49% 0.00% -- -- 0.90% 0.90% 0.90% 0.90% -- -- 35.59% to 36.81% 31.25% to 32.43% 52.16% to 53.53% 35.90% to 37.12% -- -- 221,157 286,757 202,753 293,610 $-- $-- $44.64 to $45.32 $28.98 to $29.42 $9.90 to $10.05 $4.62 to $4.69 $-- $-- $9,992 $8,408 $2,033 $1,373 -- -- 0.05% 1.74% 0.81% 0.82% -- -- 0.90% 0.90% 0.90% 0.90% -- -- -25% to -24% -19% to -18% -20% to -19% -44% -- -- 52,867 68,422 49,334 67,548 $-- $-- $59.63 to $59.99 $35.81 to $36.03 $12.34 to $12.41 $8.32 to $8.37 $-- $-- $3,176 $2,453 $619 $564 -- -- 4.25% 0.82% 1.15% 0.00% -- -- 0.90% 0.90% 0.90% 0.90% -- -- -15% to -14% -3% -9% to -8% -16% to -15%
MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION - ------------------- 294,107 $12.09 to $13.89 $4,058 6.03% 0.90% 6.38% to 16.77% 234,898 $11.51 to $11.90 $2,781 0.27% 0.90% 18.65% to 19.72% 151,293 $9.70 to $9.94 $1,497 0.97% 0.90% 31.01% to 32.19% 95,230 $7.41 to $7.52 $714 0.25% 0.90% -12% 27,998 $8.44 to $8.50 $238 0.07% 0.90% -13% to -12%
F-123 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
PIMCO RCM GLOBAL LORD ABBETT TOTAL RETURN TECHNOLOGY BOND DEBENTURE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- ------------------- 2005 Units................................................. 1,849,249 1,334,943 1,085,144 Unit Fair Value, Lowest to Highest (1)................ $12.67 to $13.21 $4.94 to $5.15 $13.96 to $16.51 Net Assets (In Thousands)............................. $24,264 $6,825 $16,531 Investment Income Ratio to Net Assets (2)............. 0.77% 0.73% 4.70% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.90% .40% to .90% Total Return, Lowest to Highest (4)................... 1.55% to 2.46% 10.36% to 11.35% 0.90% to 1.81% 2004 Units................................................. 1,483,392 1,273,073 1,015,708 Unit Fair Value, Lowest to Highest (1)................ $12.48 to $12.90 $4.47 to 4.62 $10.84 to $16.22 Net Assets (In Thousands)............................. $19,020 $5,849 $15,193 Investment Income Ratio to Net Assets (2)............. 7.63% 0.09% 4.15% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.90% 0.40% to 0.90% Total Return, Lowest to Highest (4)................... 4.31% to 5.25% -5.13% to -4.28% 7.46% to 9.61% 2003 Units................................................. 1,041,644 932,206 963,357 Unit Fair Value, Lowest to Highest (1)................ $11.96 to $12.25 $4.72 to $4.83 $9.21 to $14.95 Net Assets (In Thousands)............................. $12,697 $4,481 $12,846 Investment Income Ratio to Net Assets (2)............. 2.70% 0.00% 1.85% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 3.59% to 4.52% 56.44% to 57.84% 17.17% to 25.04% 2002 Units................................................. 533,674 415,928 812,767 Unit Fair Value, Lowest to Highest (1)................ $11.55 to $11.72 $3.01 to $3.06 $7.37 to $12.51 Net Assets (In Thousands)............................. $6,214 $1,269 $9,072 Investment Income Ratio to Net Assets (2)............. 0.00% 0.00% 11.50% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.90% -2% to 0.90% Total Return, Lowest to Highest (4)................... 9% to 10% -51% -1% to 1% 2001 Units................................................. 103,173 121,238 810,764 Unit Fair Value, Lowest to Highest (1)................ $10.64 to $10.70 $6.15 to $6.19 $7.46 to $12.35 Net Assets (In Thousands)............................. $1,103 $749 $9,119 Investment Income Ratio to Net Assets (2)............. 2.37% 0.00% 11.73% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.90% 0.45% to 0.90% Total Return, Lowest to Highest (4)................... 6% -25% -2% to -1%
LAZARD MID-CAP INVESTMENT DIVISION ------------------- 2005 Units................................................. 226,296 Unit Fair Value, Lowest to Highest (1)................ $11.78 to $13.48 Net Assets (In Thousands)............................. $3,034 Investment Income Ratio to Net Assets (2)............. 12.84% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% Total Return, Lowest to Highest (4)................... 7.44% to 8.40% 2004 Units................................................. 171,772 Unit Fair Value, Lowest to Highest (1)................ $12.14 to $12.43 Net Assets (In Thousands)............................. $2,124 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% Total Return, Lowest to Highest (4)................... 13.57% to 14.60% 2003 Units................................................. 91,521 Unit Fair Value, Lowest to Highest (1)................ $10.69 to $10.85 Net Assets (In Thousands)............................. $989 Investment Income Ratio to Net Assets (2)............. 1.35% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% Total Return, Lowest to Highest (4)................... 25.29% to 26.42% 2002 Units................................................. 29,655 Unit Fair Value, Lowest to Highest (1)................ $8.53 to $8.58 Net Assets (In Thousands)............................. $253 Investment Income Ratio to Net Assets (2)............. 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% Total Return, Lowest to Highest (4)................... -15% to -14% 2001 Units................................................. -- Unit Fair Value, Lowest to Highest (1)................ $-- Net Assets (In Thousands)............................. $-- Investment Income Ratio to Net Assets (2)............. -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- Total Return, Lowest to Highest (4)................... --
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-124
MET/AIM HARRIS OAKMARK JANUS LORD ABBETT NEUBERGER BERMAN LORD ABBETT SMALL CAP GROWTH INTERNATIONAL AGGRESSIVE GROWTH GROWTH AND INCOME REAL ESTATE MID-CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- ------------------- ------------------- ------------------- 129,221 636,793 844,525 4,368 503,432 2,543 $11.71 to $12.31 $15.26 to $15.77 $7.50 to $8.74 $9.49 $14.52 to $14.74 $12.71 $1,587 $9,974 $7,323 $41 $7,395 $32 2.38% 1.83% 0.12% 0.27% 0.19% 7.97% 0.90% 0.90% 0.48% to 0.90% .48% to .60% 0.40& to 0.90% .48% to .60% 7.63% to 10.16% 13.47% to 14.48% 12.83% to 13.84% 3.68% 12.60% to 13.61% 8.05% 101,110 289,245 741,720 5,975 151,740 21 $11.06 to $11.33 $13.45 to $13.77 $6.60 to $7.68 $9.15 $12.90 to $12.97 $11.76 $1,143 $3,963 $5,657 $54,684 $1,965 .246 0.00% 0.04% 0.00% 0.55% 7.50% 4.88% 0.90% 0.90% 0.48% to 0.90% 0.40% to 0.60% 0.40& to 0.90% 0.60% 5.78% to 6.73% 19.73% to 20.80% 7.85% to 8.82% 12.92% 28.97% to 29.74% 17.59% 60,439 71,528 582,357 2,532 -- -- $10.46 to $10.62 $11.23 to $11.40 $6.10 to $7.06 $8.10 $-- $-- $643 $814 $4,087 $20,529 $-- $-- 0.00% 1.84% 0.00% 0.00% -- -- 0.90% 0.90% 0.60& to 0.90% 0.60% -- -- 37.84% to 39.08% 34.16% to 35.37% 23.37% to 29.93% 29.15% -- -- 15,245 17,743 389,441 -- -- -- $7.59 to $7.63 $8.37 to $8.42 $4.94 to $5.43 $-- $-- $-- $116 $150 $2,088 $-- $-- $-- 0.00% 0.00% 0.00% -- -- -- 0.90% 0.90% 0.60& to 0.90% -- -- -- -24% -16% -31% -- -- -- -- -- 135,682 -- -- -- $-- $-- $7.15 to $7.82 $-- $-- $-- $-- $-- $1,051 $-- $-- $-- -- -- 0.00% -- -- -- -- -- 0.60& to 0.90% -- -- -- -- -- -23% to -14% -- -- --
THIRD AVENUE SMALLCAP VALUE INVESTMENT DIVISION - ------------------- 2,073 $13.92 $29 0.46% .40% to .60% 15.48% 366 $12.06 $4 4.31% 0.40% 20.58% -- $-- $-- -- -- -- -- $-- $-- -- -- -- -- $-- $-- -- -- --
F-125 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
OPPENHEIMER CAPITAL AMERICAN DELAWARE APPRECIATION CENTURY VISTA SMALL CAP VALUE INVESTMENT DIVISION (B) INVESTMENT DIVISION INVESTMENT DIVISION ----------------------- ------------------- ------------------- 2005 Units................................................. 10,588 1,252 9,876 Unit Fair Value, Lowest to Highest (1)................ $10.95 to $11.01 $11.65 $14.17 Net Assets (In Thousands)............................. $116 $15 $140 Investment Income Ratio to Net Assets (2)............. 2.02% 0.00% 11.95% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.90% 0.40% 0.48% Total Return, Lowest to Highest (4)................... 9.21% to 9.86% 8.13% 17.85% 2004 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- -- 2003 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- -- 2002 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- -- 2001 Units................................................. -- -- -- Unit Fair Value, Lowest to Highest (1)................ $-- $-- $-- Net Assets (In Thousands)............................. $-- $-- $-- Investment Income Ratio to Net Assets (2)............. -- -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- -- -- Total Return, Lowest to Highest (4)................... -- -- --
DREYFUS EMERGING LEADERS INVESTMENT DIVISION ------------------- 2005 Units................................................. 916 Unit Fair Value, Lowest to Highest (1)................ $11.81 Net Assets (In Thousands)............................. $11 Investment Income Ratio to Net Assets (2)............. 10.39% Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... 0.60% Total Return, Lowest to Highest (4)................... 4.75% 2004 Units................................................. -- Unit Fair Value, Lowest to Highest (1)................ $-- Net Assets (In Thousands)............................. $-- Investment Income Ratio to Net Assets (2)............. -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- Total Return, Lowest to Highest (4)................... -- 2003 Units................................................. -- Unit Fair Value, Lowest to Highest (1)................ $-- Net Assets (In Thousands)............................. $-- Investment Income Ratio to Net Assets (2)............. -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- Total Return, Lowest to Highest (4)................... -- 2002 Units................................................. -- Unit Fair Value, Lowest to Highest (1)................ $-- Net Assets (In Thousands)............................. $-- Investment Income Ratio to Net Assets (2)............. -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- Total Return, Lowest to Highest (4)................... -- 2001 Units................................................. -- Unit Fair Value, Lowest to Highest (1)................ $-- Net Assets (In Thousands)............................. $-- Investment Income Ratio to Net Assets (2)............. -- Expenses as a percent of Average Net Assets, Lowest to Highest (3).......................................... -- Total Return, Lowest to Highest (4)................... --
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-126
DREYFUS DREYFUS GOLDMAN SACHS GOLDMAN SACHS MFS VAN KAMPEN INTERNATIONAL VALUE APPRECIATION MID CAP VALUE CORE SMALL CAP EQUITY HIGH INCOME GOVERNMENT INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION - ------------------- ------------------- ------------------- --------------------- ------------------- ------------------- 14,559 1,591 3,769 4,239 6,238 1,272 $12.95 $10.71 $12.38 $11.83 $11.07 $10.72 $188 $17 $47 $50 $69 14 3.64% 0.00% 16.09% 17.27% 11.32% 0.00% -- 0.40% to 0.48% 0.40% to 0.60% 0.40% to 0.48% 0.48% 0.40% to 0.48% 0.40% 11.69% 4.12% 12.83% 6.07% 2.05% 3.28% 1,371 324 1,123 -- 4,700 -- $11.60 $10.29 $10.97 $-- $10.84 $-- $16 $3 $12 $-- $51 $-- 16.27% 2.88% 19.94% -- 0.00% -- 0.40% 0.60% 0.40% to 0.48% -- 0.48% -- 15.99% 2.91% 9.71% -- 8.43% -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- $-- $-- $-- $-- $-- $-- $-- $-- $-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
WELLS FARGO ADVANTAGE TOTAL RETURN BOND INVESTMENT DIVISION - --------------------- 1,620 $10.62 17 3.06% 0.40% 1.90% -- $-- $-- -- -- -- -- $-- $-- -- -- -- $-- -- -- -- -- -- $-- -- -- -- --
F-127 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 6. UNIT VALUES The following table is a summary of unit values and units outstanding for the Policies and the expenses as a percentage of average net assets, excluding expenses for the underlying portfolios, for the year ended December 31, 2005, 2004, 2003 and 2002 and 2001 respectively, or lesser time period if applicable.
WELLS FARGO ADVANTAGE WELLS FARGO ADVANTAGE LARGE COMPANY GROWTH EQUITY INCOME INVESTMENT DIVISION INVESTMENT DIVISION --------------------- --------------------- 2005 Units............................................................. 772 727 Unit Fair Value, Lowest to Highest (1)............................ $11.02 $11.38 Net Assets (In Thousands)......................................... $9 $8 Investment Income Ratio to Net Assets (2)......................... 0.23% 1.79% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% 0.40% Total Return, Lowest to Highest (4)............................... 5.70% 5.38% 2004 Units............................................................. 416 402 Unit Fair Value, Lowest to Highest (1)............................ $10.42 $10.80 Net Assets (In Thousands)......................................... $4 $4 Investment Income Ratio to Net Assets (2)......................... 0.00% 0.00% Expenses as a percent of Average Net Assets, Lowest to Highest (3) 0.40% 0.40% Total Return, Lowest to Highest (4)............................... 4.23% 8.03% 2003 Units............................................................. -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- Net Assets (In Thousands)......................................... $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- Total Return, Lowest to Highest (4)............................... -- -- 2002 Units............................................................. -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- Net Assets (In Thousands)......................................... $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- Total Return, Lowest to Highest (4)............................... -- -- 2001 Units............................................................. -- -- Unit Fair Value, Lowest to Highest (1)............................ $-- $-- Net Assets (In Thousands)......................................... $-- $-- Investment Income Ratio to Net Assets (2)......................... -- -- Expenses as a percent of Average Net Assets, Lowest to Highest (3) -- -- Total Return, Lowest to Highest (4)............................... -- --
- -------- (1) Metropolitan Life sells a number of variable life products, which have unique combinations of features and fees that are charged against the policy owners cash value. Differences in the fee structures result in a variety of unit values, expense ratios and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the investment division from the underlying portfolio, net of management fees assessed by the portfolio manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner cash value either through the reduction of unit values or the redemption of units. The recognition of investment income by the investment division is affected by the timing of the declaration of dividends by the underlying portfolio in which the investment divisions invest. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit value. Charges made directly to policy owner cash value through the redemption of units and expenses of the underlying portfolio are excluded. (4) These amounts represent the total return for the period indicated including changes in the value of the underlying portfolio and expenses assessed through the reduction of unit values. The total return does not include any expenses assessed through the redemption of units. Investment options with a date notation indicate the effective date of that investment option in the Separate Account. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. (a) For the Period January 1, 2005 to April 30, 2005 (b) For the Period May 1, 2005 to December 31, 2005 F-128 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONTINUED) 7. CHANGE OF PORTFOLIO NAME, PORTFOLIO MERGERS, AND SHARE SUBSTITUTIONS Effective December 19, 2005, Lazard Asset Management LLC became the sub-investment manager for the Met/AIM Mid Cap Core Portfolio, which changed its name to Lazard Mid-Cap Portfolio. Effective February 1, 2005, American Century International Investment Division and American Century Value Investment Division were closed. Effective May 1, 2005, Neuberger Berman Partners Mid Cap Value Portfolio of the Metropolitan Fund changed its name to Neuberger Berman Mid Cap Value Portfolio. Effective May 1, 2005, Janus Aspen Capital Appreciation Portfolio and Janus Aspen Growth Portfolio of the Janus Fund changed their names to Janus Aspen Forty Portfolio and Janus Aspen Large Cap Growth Portfolio, respectively. Effective May 1, 2005, AllianceBernstein Technology Portfolio changed its name to AllianceBernstein Global Technology Portfolio. Effective May 1, 2005, Oppenheimer Funds, Inc. became sub-investment manager for the Scudder Global Equity Portfolio, which changed its name to the Oppenheimer Global Equity Portfolio. Effective May 1, 2005, Invesco VIF Core Portfolio of the AIM Funds changed its name to the AIM V.I. Core Stock Portfolio. Effective May 1, 2005, Met/Putnam Voyager Portfolio of the Metropolitan Fund merged into the Jennison Growth Portfolio of the Metropolitan Fund. Effective May 1, 2005, the Wells Fargo Fund changed the names of all its portfolios as follows: OLD PORTFOLIO NAME NEW PORTFOLIO NAME ------------------ ------------------ Wells Fargo Total Return Portfolio Wells Fargo Advantage Total Return Bond Portfolio Wells Fargo Money Market Portfolio Wells Fargo Advantage Money Market Portfolio Wells Fargo Asset Allocation Portfolio Wells Fargo Advantage Asset Allocation Portfolio Wells Fargo Growth Portfolio Wells Fargo Advantage Large Company Core Portfolio Wells Fargo Large Company Growth Wells Fargo Advantage Large Company Portfolio Growth Portfolio Wells Fargo Equity Income Portfolio Wells Fargo Advantage Equity Income Portfolio Effective January 31, 2005, BlackRock Advisors, Inc. replaced State Street Research & Management Company as subadvisor to all portfolios previously managed by State Street Research & Management Company and changed the names of the portfolios as follows: OLD PORTFOLIO NAME NEW PORTFOLIO NAME ------------------ ------------------ State Street Research Investment Trust BlackRock Investment Portfolio Trust Portfolio State Street Research BlackRock Diversified Diversified Portfolio Portfolio State Street Research Aggressive Growth BlackRock Aggressive Portfolio Growth Portfolio State Street Research BlackRock Large Cap Value Large Cap Value Portfolio Portfolio State Street Research BlackRock Bond Income Bond Income Portfolio Portfolio State Street Research BlackRock Money Market Money Market Portfolio Portfolio State Street Research Large Cap Growth BlackRock Legacy Large Portfolio Cap Growth Portfolio State Street Research BlackRock Strategic Value Aurora Portfolio Portfolio Effective January 15, 2005, RCM Capital Management LLC became sub-investment manager for the PIMCO PEA Innovation Portfolio, which changed its name to RCM Global Technology Portfolio. F-129 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO FINANCIAL STATEMENTS -- (CONCLUDED) 7. CHANGE OF PORTFOLIO NAME, PORTFOLIO MERGERS, AND SHARE SUBSTITUTIONS -- (CONTINUED) Effective May 3, 2004, FI Mid Cap Opportunities Portfolio and MFS Research Managers Portfolio merged into Janus Mid Cap Portfolio and MFS Investors Trust Portfolio, respectively. Janus Mid Cap Portfolio subsequently changed its name to FI Mid Cap Opportunities Portfolio. Effective May 3, 2004, Invesco Real Estate Opportunities Portfolio, PIMCO Innovation Portfolio and FI Structured Equity Portfolio changed their names to AIM Real Estate Portfolio, PIMCO PEA Innovation Portfolio and FI Value Leaders Portfolio, respectively. Effective May 3, 2004, Alger Equity Growth Investment Division and Franklin Templeton Small Cap Valuemark Investment Division substituted all of their shares in Alger Equity Growth Portfolio of the Metropolitan Fund and Franklin Templeton Small Cap Valuemark Portfolio of the Franklin Fund, respectively for shares in Wells Fargo Large Cap Growth Portfolio and T. Rowe Price Small Cap Growth Portfolio of the Metropolitan Fund, respectively and subsequently changed their names to Wells Fargo Large Cap Growth Investment Division and T. Rowe Price Small Cap Investment Division. Effective May 3, 2004, Alliance Premier Growth Investment Division and Invesco High Yield Investment Division substituted all of their shares in Alliance Premier Growth Portfolio of the Alliance Fund and Invesco High Yield Portfolio of the Invesco Fund, respectively, for shares in Janus Aggressive Growth Portfolio and Lord Abbett Bond Debenture Portfolio of the Met Investors Fund, respectively and subsequently changed their names to Janus Aggressive Growth Investment Division and Lord Abbett Bond Debenture Investment Division. Effective December 16, 2003, Putnam International Stock Portfolio of the Metropolitan Fund changed its name to FI International Stock Portfolio. Effective May 1, 2003, Putnam Large Cap Growth Portfolio changed its name to Met/Putnam Voyager Portfolio and all series of the New England Zenith Fund became newly organized portfolios of the Metropolitan Fund. The reorganization had no effect on the investment objectives, policies or advisory fees of any series, nor was there any change in investment adviser or sub-adviser. Effective April 28, 2003, Janus Growth Portfolio of the Metropolitan Fund merged into the Janus Aggressive Growth Portfolio of the Met Investors Fund. Effective January 1, 2003, MFS Mid Cap Growth Portfolio changed sub-advisers from Massachusetts Financial Services to T. Rowe Price Associates Inc. and changed its name to T. Rowe Price Mid Cap Growth Portfolio. Wells Fargo Concentrated International Portfolio changed sub-advisers from Wells Fargo & Management Company to Harris Associates L.P. and changed its name to Harris Oakmark International Portfolio. F-130 Advantage Equity Options VARIABLE ADDITIONAL INSURANCE RIDER AND VARIABLE ADDITIONAL BENEFITS RIDER METROPOLITAN LIFE SEPARATE ACCOUNT UL ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY ("METLIFE") STATEMENT OF ADDITIONAL INFORMATION (PART B) DECEMBER 13, 2006 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the prospectus dated December 13, 2006 and should be read in conjunction therewith. A copy of the prospectus for Advantage Equity Options may be obtained by writing to Metlife, P.O. Box 543, Warwick, RI 02887-0543. SAI-1 TABLE OF CONTENTS The Company and the Separate Account.................................. SAI-3 Distribution of the Policies that Include the Advantage Equity Options SAI-3 Income Plans.......................................................... SAI-3 Limits to MetLife's Right to Challenge the Policy..................... SAI-3 Misstatement of Age or Sex............................................ SAI-4 Reports............................................................... SAI-4 Performance Data...................................................... SAI-4 Personalized Illustrations............................................ SAI-4 Independent Registered Public Accounting Firm......................... SAI-5 Financial Statements.................................................. SAI-5
SAI-2 THE COMPANY AND THE SEPARATE ACCOUNT MetLife is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. Our main office is located at 200 Park Avenue, New York, New York 10166. MetLife was formed under the laws of New York State in 1868. MetLife, Inc., through its subsidiaries and affiliates, provides insurance and other financial services to individual and group customers. We established the Separate Account under New York law on December 13, 1988. The Separate Account receives premium payments from the Advantage Equity Options described in the prospectus and other variable life insurance policies that we issue. We have registered the Separate Account as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). DISTRIBUTION OF THE POLICIES THAT INCLUDE THE ADVANTAGE EQUITY OPTIONS We serve as the "principal underwriter," as defined in the 1940 Act, for the Advantage Equity Options. We are registered under the Securities Exchange Act of 1934 as a broker-dealer and are a member of the National Association of Securities Dealers, Inc. We perform the sales and administrative services for the Policies. We offer the Advantage Equity Options through licensed life insurance sales representatives who are either registered through us, or registered through other broker-dealers, including a wholly owned subsidiary. We offer the Advantage Equity Options to the public on a continuous basis. We anticipate continuing to offer the Advantage Equity Options, but reserve the right to discontinue the offering. INCOME PLANS Generally, you can receive the Policy's insurance proceeds or amounts paid upon surrender of your Policy or your Advantage Equity Option under an income plan instead of in a lump sum. Before you choose an income plan you should consider: .. The tax consequences associated with insurance or surrender proceeds, which can vary considerably, depending on whether a plan is chosen. You or your beneficiary should consult with a qualified tax adviser about tax consequences. .. That your Policy or Advantage Equity Option will terminate at the time you commence an income plan and you will receive a new contract, which describes the terms of the income plan. You should carefully review the terms of the new contract, because it contains important information about the terms and conditions of the income plan. .. The rates of return that we credit under these plans are not based on any of the Portfolios. Generally, we currently make the following income plans available: . Single Life Income . Single Life Income--10-Year Guaranteed Payment Period . Joint and Survivor Life Income LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY We will not contest your Policy after two years from the base policy's issue or reinstatement (excluding riders added later). We will not contest your Advantage Equity Option after two years from its date of issue. SAI-3 MISSTATEMENT OF AGE OR SEX We will adjust benefits to reflect the correct age and sex of the insured, if this information is not correct in any Policy application. REPORTS Generally, you will promptly receive statements confirming your significant transactions such as: .. Transfers between investment divisions or between the investment divisions and the Fixed Account. .. Partial withdrawals. .. Loan amounts you request. .. Premium payments. If your premium payments are made through pre-authorized checking arrangement or another systematic payment method, we will not send you any confirmation in addition to the one you receive from your bank or employer. We will also send you an annual statement within 30 days after a Policy year. The statement will summarize the year's transactions and include information on: .. Deductions and charges. .. Status of the death benefit. .. Cash values. .. Amounts in the Fixed Account and in each investment division you are using. .. Status of Policy loans. .. Automatic loans to pay interest. .. Information on your modified endowment contract status (if applicable). We will also send you a Fund's annual and semi-annual reports to shareholders. PERFORMANCE DATA We may provide information concerning the historical investment experience of the investment divisions, including average annual net rates of return for periods of one, three, five, and ten years, as well as average annual net rates of return and total net rates of return since inception of the Portfolios. These net rates of return represent past performance and are not an indication of future performance. Cost of insurance, sales, premium tax, and mortality and expense risk charges, which can significantly reduce the return to the Advantage Equity Options owner, are not reflected in these rates. The rates of return reflect only the fees and expenses of the underlying Portfolios. The net rates of return show performance from the inception of the Portfolios, which in some instances, may precede the inception date of the corresponding investment division. PERSONALIZED ILLUSTRATIONS We may provide personalized illustrations showing how the Advantage Equity Options work based on assumptions about investment returns and the Policy owner's and/or insured's characteristics. The illustrations are intended to show how the death benefit and cash value for the Advantage Equity SAI-4 Options could vary over an extended period of time assuming hypothetical gross rates of return (I.E., investment income and capital gains and losses, realized or unrealized) for the Separate Account equal to specified constant after-tax rates of return. One of the gross rates of return will be 0%. Gross rates of return do not reflect the deduction of any charges and expenses. The illustrations will be based on specified assumptions, such as face amount, premium payments, insured, underwriting class, and death benefit option. Illustrations will disclose the specific assumptions upon which they are based. Values will be given based on guaranteed mortality and expense risk and other charges and may also be based on current mortality and expense risk and other charges. The illustrated death benefit and cash value for a hypothetical Advantage Equity Option would be different, either higher or lower, from the amounts shown in the illustration if the actual gross rates of return averaged the gross rates of return upon which the illustration is based, but varied above and below the average during the period, or if premiums were paid in other amounts or at other than annual intervals. For Advantage Equity Additions, they would also differ depending on the level of dividends declared by MetLife on the base policy. For both Advantage Equity Options, they would also be different depending on the allocation of cash value among the Separate Account's investment divisions, if the actual gross rate of return for all investment divisions averaged 0%, 6% or 10%, but varied above or below that average for individual investment divisions. They would also differ if a Policy loan or partial surrender were made during the period of time illustrated. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements of Metropolitan Life Insurance Company (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the change in the method of accounting for certain non-traditional long duration contracts and separate accounts, and for embedded derivatives in certain insurance products as required by new accounting guidance which became effective on January 1, 2004 and October 1, 2003, respectively), included in this Statement of Additional Information have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their report appearing herein, and are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. FINANCIAL STATEMENTS The financial statements of MetLife are attached to this Statement of Additional Information. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. SAI-5 INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
PAGE ---- Report of Independent Registered Public Accounting Firm..... F-1 Financial Statements at December 31, 2005 and 2004 and for the years ended December 31, 2005, 2004 and 2003: Consolidated Balance Sheets............................... F-2 Consolidated Statements of Income......................... F-3 Consolidated Statements of Stockholder's Equity........... F-4 Consolidated Statements of Cash Flows..................... F-5 Notes to Consolidated Financial Statements................ F-7
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The Board of Directors and Shareholder of Metropolitan Life Insurance Company New York, New York: We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2005 and 2004, and the related consolidated statements of income, stockholder's equity, and cash flows for each of the three years in the period ended December 31, 2005. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Metropolitan Life Insurance Company and subsidiaries at December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 1, the Company changed its method of accounting for certain non-traditional long duration contracts and separate accounts, and for embedded derivatives in certain insurance products as required by new accounting guidance which became effective on January 1, 2004 and October 1, 2003, respectively, and recorded the impact as cumulative effects of changes in accounting principles. /s/ DELOITTE & TOUCHE LLP New York, New York April 17, 2006 (October 18, 2006 as to Note 19) F-1 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2005 AND 2004 (IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)
2005 2004 -------- -------- ASSETS Investments: Fixed maturities available-for-sale, at fair value (amortized cost: $141,929 and $141,496, respectively)... $147,897 $150,229 Trading securities, at fair value (cost: $373 and $0, respectively)........................................... 373 -- Equity securities available-for-sale, at fair value (cost: $1,989 and $1,646, respectively)........................ 2,217 1,903 Mortgage and consumer loans............................... 33,094 31,571 Policy loans.............................................. 8,412 8,256 Real estate and real estate joint ventures held-for-investment..................................... 4,087 2,643 Real estate held-for-sale................................. -- 678 Other limited partnership interests....................... 3,256 2,891 Short-term investments.................................... 883 1,194 Other invested assets..................................... 5,839 4,908 -------- -------- Total investments....................................... 206,058 204,273 Cash and cash equivalents................................... 1,787 2,370 Accrued investment income................................... 2,030 2,006 Premiums and other receivables.............................. 6,678 5,497 Deferred policy acquisition costs and value of business acquired.................................................. 11,438 11,062 Assets of subsidiaries held-for-sale........................ -- 410 Other assets................................................ 6,183 5,863 Separate account assets..................................... 73,152 68,507 -------- -------- Total assets............................................ $307,326 $299,988 ======== ======== LIABILITIES AND STOCKHOLDER'S EQUITY Liabilities: Future policy benefits.................................... $ 94,372 $ 91,598 Policyholder account balances............................. 72,793 68,357 Other policyholder funds.................................. 6,918 6,730 Policyholder dividends payable............................ 915 885 Policyholder dividend obligation.......................... 1,607 2,243 Short-term debt........................................... 453 1,445 Long-term debt............................................ 2,961 2,050 Shares subject to mandatory redemption.................... 278 278 Liabilities of subsidiaries held-for-sale................. -- 268 Current income taxes payable.............................. 444 709 Deferred income taxes payable............................. 2,729 2,671 Payables for collateral under securities loaned and other transactions............................................ 21,009 25,230 Other liabilities......................................... 11,228 10,025 Separate account liabilities.............................. 73,152 68,507 -------- -------- Total liabilities....................................... 288,859 280,996 -------- -------- Stockholder's Equity: Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding at December 31, 2005 and 2004................. 5 5 Additional paid-in capital.................................. 13,808 13,827 Retained earnings........................................... 2,749 2,696 Accumulated other comprehensive income...................... 1,905 2,464 -------- -------- Total stockholder's equity................................ 18,467 18,992 -------- -------- Total liabilities and stockholder's equity................ $307,326 $299,988 ======== ========
See accompanying notes to consolidated financial statements. F-2 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) CONSOLIDATED STATEMENTS OF INCOME FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (IN MILLIONS)
2005 2004 2003 ------- ------- ------- REVENUES Premiums.................................................... $19,256 $17,437 $18,099 Universal life and investment-type product policy fees...... 1,948 2,009 1,920 Net investment income....................................... 11,750 10,818 10,267 Other revenues.............................................. 820 862 980 Net investment gains (losses)............................... 179 282 (526) ------- ------- ------- Total revenues............................................ 33,953 31,408 30,740 ------- ------- ------- EXPENSES Policyholder benefits and claims............................ 20,445 18,736 18,590 Interest credited to policyholder account balances.......... 2,596 2,357 2,379 Policyholder dividends...................................... 1,647 1,636 1,699 Other expenses.............................................. 5,717 5,583 5,771 ------- ------- ------- Total expenses............................................ 30,405 28,312 28,439 ------- ------- ------- Income from continuing operations before provision for income taxes.............................................. 3,548 3,096 2,301 Provision for income taxes.................................. 1,105 876 643 ------- ------- ------- Income from continuing operations........................... 2,443 2,220 1,658 Income from discontinued operations, net of income taxes.... 810 71 369 ------- ------- ------- Income before cumulative effect of a change in accounting... 3,253 2,291 2,027 Cumulative effect of a change in accounting, net of income taxes..................................................... -- (52) (26) ------- ------- ------- Net income.................................................. $ 3,253 $ 2,239 $ 2,001 ======= ======= =======
See accompanying notes to consolidated financial statements. F-3 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (IN MILLIONS)
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) PARENT'S ------------------------------------- INTEREST IN NET PREFERRED UNREALIZED FOREIGN MINIMUM STOCK ADDITIONAL INVESTMENT CURRENCY PENSION OF A COMMON PAID-IN RETAINED GAINS TRANSLATION LIABILITY SUBSIDIARY STOCK CAPITAL EARNINGS (LOSSES) ADJUSTMENT ADJUSTMENT TOTAL ----------- ------ ---------- -------- ---------- ----------- ---------- ------- Balance at January 1, 2003....... $ -- $5 $13,474 $ 708 $1,991 $(67) $ (46) $16,065 Issuance of preferred stock by subsidiary to the Holding Company......................... 93 93 Issuance of shares -- by subsidiary...................... 24 24 Issuance of stock options -- by subsidiary...................... 2 2 Sale of subsidiaries to the Holding Company or affiliate.... 261 261 Capital contribution from the Holding Company................. 2 2 Return of capital to the Holding Company......................... (33) (33) Dividends on common stock........ (1,448) (1,448) Comprehensive income (loss): Net income...................... 2,001 2,001 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income taxes............. (228) (228) Unrealized investment gains (losses), net of related offsets and income taxes.... 642 642 Foreign currency translation adjustments................. 174 174 Minimum pension liability adjustment.................. (82) (82) ------- Other comprehensive income (loss)...................... 506 ------- Comprehensive income (loss)..... 2,507 ---- -- ------- ------- ------ ---- ----- ------- Balance at December 31, 2003..... 93 5 13,730 1,261 2,405 107 (128) 17,473 Contribution of preferred stock by Holding Company to subsidiary and retirement thereof.......... (93) (93) Issuance of shares -- by subsidiary...................... 4 4 Issuance of stock options -- by subsidiary...................... 2 2 Capital contribution from the Holding Company................. 94 94 Return of capital to the Holding Company......................... (3) (3) Dividends on preferred stock..... (7) (7) Dividends on common stock........ (797) (797) Comprehensive income (loss): Net income...................... 2,239 2,239 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income taxes............. (77) (77) Unrealized investment gains (losses), net of related offsets and income taxes.... 19 19 Cumulative effect of a change in accounting, net of income taxes....................... 61 61 Foreign currency translation adjustments................. 79 79 Minimum pension liability adjustment.................. (2) (2) ------- Other comprehensive income (loss)...................... 80 ------- Comprehensive income (loss)..... 2,319 ---- -- ------- ------- ------ ---- ----- ------- Balance at December 31, 2004..... -- 5 13,827 2,696 2,408 186 (130) 18,992 Treasury stock transactions, net -- by subsidiary............ (15) (15) Issuance of stock options -- by subsidiary...................... (4) (4) Dividends on common stock........ (3,200) (3,200) Comprehensive income (loss): Net income...................... 3,253 3,253 Other comprehensive income (loss): Unrealized gains (losses) on derivative instruments, net of income taxes............. 184 184 Unrealized investment gains (losses), net of related offsets and income taxes.... (783) (783) Foreign currency translation adjustments................. (49) (49) Minimum pension liability adjustment.................. 89 89 ------- Other comprehensive income (loss)...................... (559) ------- Comprehensive income (loss)..... 2,694 ---- -- ------- ------- ------ ---- ----- ------- Balance at December 31, 2005..... $ -- $5 $13,808 $ 2,749 $1,809 $137 $ (41) $18,467 ==== == ======= ======= ====== ==== ===== =======
See accompanying notes to consolidated financial statements. F-4 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (IN MILLIONS)
2005 2004 2003 --------- -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income.................................................. $ 3,253 $ 2,239 $ 2,001 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization expenses.................... 299 344 394 Amortization of premiums and accretion of discounts associated with investments, net........................ (203) (15) (162) (Gains) losses from sales of investments and businesses, net..................................................... (1,379) (289) 96 Equity of earnings of real estate joint ventures and other limited partnership interests........................... (399) (167) 19 Interest credited to policyholder account balances........ 2,596 2,357 2,379 Universal life and investment-type product policy fees.... (1,948) (2,009) (1,920) Change in accrued investment income....................... (24) (67) (93) Change in premiums and other receivables.................. (734) 460 (81) Change in deferred policy acquisition costs, net.......... (504) (752) (904) Change in insurance-related liabilities................... 3,794 3,829 3,989 Change in trading securities.............................. (375) -- -- Change in income taxes payable............................ 147 (101) 250 Change in other assets.................................... (236) (390) (455) Change in other liabilities............................... 1,878 1,288 637 Other, net................................................ 24 29 (61) --------- -------- -------- Net cash provided by operating activities................... 6,189 6,756 6,089 --------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Sales, maturities and repayments of: Fixed maturities.......................................... 118,459 78,494 69,292 Equity securities......................................... 777 1,587 576 Mortgage and consumer loans............................... 7,890 3,961 3,221 Real estate and real estate joint ventures................ 1,922 436 1,087 Other limited partnership interests....................... 953 800 330 Purchases of: Fixed maturities.......................................... (119,375) (83,243) (90,077) Equity securities......................................... (1,057) (2,107) (149) Mortgage and consumer loans............................... (9,473) (8,639) (4,354) Real estate and real estate joint ventures................ (1,323) (737) (278) Other limited partnership interests....................... (1,012) (893) (643) Net change in short-term investments........................ 409 215 (183) Proceeds from sales of businesses, net of cash disposed of $43, $7 and $(13), respectively........................... 260 18 1,995 Net change in policy loans.................................. (156) (77) (154) Net change in other invested assets......................... (598) (379) (1,108) Net change in property, equipment and leasehold improvements.............................................. (114) 17 (45) Other, net.................................................. (76) -- (2) --------- -------- -------- Net cash used in investing activities....................... (2,514) (10,547) (20,492) --------- -------- --------
F-5 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) CONSOLIDATED STATEMENTS OF CASH FLOWS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2005, 2004 AND 2003 (IN MILLIONS)
2005 2004 2003 --------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Policyholder account balances: Deposits................................................ 30,008 28,344 29,132 Withdrawals............................................. (26,732) (22,801) (22,339) Net change in payables for collateral under securities loaned and other transactions........................... (4,221) 1,166 7,744 Net change in short-term debt............................. (992) (2,072) 2,624 Long-term debt issued..................................... 1,216 28 137 Long-term debt repaid..................................... (395) (38) (714) Capital contribution from the Parent Company.............. -- -- 148 Proceeds from offering of common stock by subsidiary, net..................................................... -- -- 398 Dividends on preferred stock.............................. -- (7) -- Dividends on common stock................................. (3,200) (797) (1,448) Other, net................................................ -- 3 8 --------- -------- -------- Net cash (used in) provided by financing activities......... (4,316) 3,826 15,690 --------- -------- -------- Change in cash and cash equivalents......................... (641) 35 1,287 Cash and cash equivalents, beginning of year................ 2,428 2,393 1,106 --------- -------- -------- CASH AND CASH EQUIVALENTS, END OF YEAR...................... $ 1,787 $ 2,428 $ 2,393 ========= ======== ======== Cash and cash equivalents, subsidiaries held-for-sale, beginning of year......................................... $ 58 $ 57 $ 66 ========= ======== ======== CASH AND CASH EQUIVALENTS, SUBSIDIARIES HELD-FOR-SALE, END OF YEAR................................................... $ -- $ 58 $ 57 ========= ======== ======== Cash and cash equivalents, from continuing operations, beginning of year......................................... $ 2,370 $ 2,336 $ 1,040 ========= ======== ======== CASH AND CASH EQUIVALENTS, FROM CONTINUING OPERATIONS, END OF YEAR................................................... $ 1,787 $ 2,370 $ 2,336 ========= ======== ======== Supplemental disclosures of cash flow information: Net cash paid during the year for: Interest................................................ $ 203 $ 140 $ 307 ========= ======== ======== Income taxes............................................ $ 1,385 $ 950 $ 789 ========= ======== ======== Non-cash transactions during the year: Business Dispositions: Assets disposed....................................... $ 366 $ 42 $ 5,493 Less: liabilities disposed............................ 269 17 3,511 --------- -------- -------- Net assets disposed................................... $ 97 $ 25 $ 1,982 Plus: equity securities received...................... 43 -- -- Less: cash disposed................................... 43 7 (13) --------- -------- -------- Business disposition, net of cash disposed............ $ 97 $ 18 $ 1,995 ========= ======== ======== Contribution of equity securities to MetLife Foundation............................................ $ 1 $ 50 $ -- ========= ======== ======== Purchase money mortgage on real estate sale............. $ -- $ 2 $ 196 ========= ======== ======== Real estate acquired in satisfaction of debt............ $ 1 $ 7 $ 14 ========= ======== ======== Transfer from funds withheld at interest to fixed maturities............................................ $ -- $ 606 $ -- ========= ======== ========
See Note 5 for non-cash reinsurance transaction See accompanying notes to consolidated financial statements. F-6 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES. (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. SUMMARY OF ACCOUNTING POLICIES BUSINESS Metropolitan Life Insurance Company ("Metropolitan Life") and its subsidiaries (collectively the "Company") is a leading provider of insurance and other financial services to millions of individual and institutional customers throughout the United States. The Company offers life insurance and annuities to individuals, as well as group insurance, reinsurance and retirement & savings products and services to corporations and other institutions. Metropolitan Life is a wholly-owned subsidiary of MetLife, Inc. (the "Holding Company"). The Company offered automobile and homeowners insurance through Metropolitan Property and Casualty Insurance Company and its subsidiaries ("Met P&C"), which was sold to the Holding Company in 2003. Outside the United States, the Company has direct insurance operations in Canada and Asia. BASIS OF PRESENTATION The accompanying consolidated financial statements include the accounts of (i) Metropolitan Life and its subsidiaries; (ii) partnerships and joint ventures in which the Company has control; and (iii) variable interest entities ("VIEs") for which the Company is deemed to be the primary beneficiary. Closed block assets, liabilities, revenues and expenses are combined on a line-by-line basis with the assets, liabilities, revenues and expenses outside the closed block based on the nature of the particular item. See Note 6. Assets, liabilities, revenues and expenses of the general account for 2005 and 2004 include amounts related to certain separate accounts previously reported in separate account assets and liabilities. See "-- Application of Recent Accounting Pronouncements." Intercompany accounts and transactions have been eliminated. Met P&C, Metropolitan Tower Life Insurance Company ("MTL"), MetLife General Insurance Agency, Inc. and its subsidiaries, MetLife Securities, Inc. and N.L. Holding Corporation and its subsidiaries, which were sold to the Holding Company in 2003; and Newbury Insurance Company, Limited which was sold to the Holding Company and New England Pension and Annuity Company which was sold to MTL, both in 2004, are included in the accompanying consolidated financial statements until the respective dates of sale. The Company completed the sales of its wholly owned subsidiaries SSRM Holdings, Inc. ("SSRM") and P.T. Sejahtera ("MetLife Indonesia") to third parties on January 31, 2005, and September 29, 2005, respectively. The Company has reclassified the assets, liabilities and operations of SSRM and MetLife Indonesia into discontinued operations for all years presented in the consolidated financial statements. See Notes 15 and 16. The Company uses the equity method of accounting for investments in equity securities in which it has 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 minor influence over the 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 real estate joint ventures and other limited partnership interests in which it has a minor equity investment and virtually no influence over the partnership's operations. Minority interest related to consolidated entities included in other liabilities was $1,388 million and $1,325 million at December 31, 2005 and 2004, respectively. Certain amounts in the prior years' consolidated financial statements have been reclassified to conform with the 2005 presentation. Such reclassifications include $1,166 million and $7,744 million relating to the net change in payables for collateral under securities loaned and other transactions reclassified from cash flows from investing activities to cash flows from financing activities on the consolidated statements of cash flows for the years ended December 31, 2004 and 2003, respectively. F-7 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) SUMMARY OF CRITICAL ACCOUNTING ESTIMATES 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 consolidated financial statements. The most critical estimates include those used in determining: (i) investment impairments; (ii) the fair value of investments in the absence of quoted market values; (iii) application of the consolidation rules to certain investments; (iv) the fair value of and accounting for derivatives; (v) the capitalization and amortization of deferred policy acquisition costs ("DAC"), including value of business acquired ("VOBA"); (vi) the measurement of goodwill and related impairment, if any; (vii) the liability for future policyholder benefits; (viii) accounting for reinsurance transactions; (ix) the liability for litigation and regulatory matters; and (x) accounting for employee benefit plans. In applying these 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. Investments The Company's principal investments are in fixed maturities, mortgage and consumer loans, other limited partnerships, and real estate and real estate joint ventures, all of which are exposed to three primary sources of investment risk: credit, interest rate and market valuation. The financial statement risks are those associated with the recognition of impairments and income, as well as the determination of fair values. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in fair value. Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used by the Company in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the market value has been below cost or amortized cost; (ii) the potential for impairments of securities when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources; (vi) the Company's ability and intent to hold the security for a period of time sufficient to allow for the recovery of its value to an amount equal to or greater than cost or amortized cost; (vii) unfavorable changes in forecasted cash flows on asset-backed securities; and (viii) other subjective factors, including concentrations and information obtained from regulators and rating agencies. In addition, the earnings on certain investments are dependent upon market conditions, which could result in prepayments and changes in amounts to be earned due to changing interest rates or equity markets. The determination of fair values in the absence of quoted market values is based on: (i) valuation methodologies; (ii) securities the Company deems to be comparable; and (iii) assumptions deemed appropriate given the circumstances. The use of different methodologies and assumptions may have a material effect on the estimated fair value amounts. In addition, the Company enters into certain structured investment transactions, real estate joint ventures and limited partnerships for which the Company may be deemed to be the primary beneficiary and, therefore, may be required to consolidate such investments. The accounting rules for the determination of the primary beneficiary are complex and require evaluation of the contractual rights and obligations associated with each party involved in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party. F-8 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Derivatives The Company enters into freestanding derivative transactions primarily to manage the risk associated with variability in cash flows or changes in fair values related to the Company's financial assets and liabilities. The Company also uses derivative instruments to hedge its currency exposure associated with net investments in certain foreign operations. The Company also purchases investment securities, issues certain insurance policies and engages in certain reinsurance contracts that have embedded derivatives. The associated financial statement risk is the volatility in net income which can result from (i) changes in fair value of derivatives not qualifying as accounting hedges; (ii) ineffectiveness of designated hedges; and (iii) counterparty default. In addition, there is a risk that embedded derivatives requiring bifurcation are not identified and reported at fair value in the consolidated financial statements. Accounting for derivatives is complex, as evidenced by significant authoritative interpretations of the primary accounting standards which continue to evolve, as well as the significant judgments and estimates involved in determining fair value in the absence of quoted market values. These estimates are based on valuation methodologies and assumptions deemed appropriate under the circumstances. Such assumptions include estimated volatility and interest rates used in the determination of fair value where quoted market values are not available. The use of different assumptions may have a material effect on the estimated fair value amounts. Deferred Policy Acquisition Costs and Value of Business Acquired The Company incurs significant costs in connection with acquiring new and renewal insurance business. These costs, which vary with and are primarily related to the production of that business, are deferred. The recovery of DAC is dependent upon the future profitability of the related business. The amount of future profit is dependent principally on investment returns in excess of the amounts credited to policyholders, mortality, morbidity, persistency, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns are most likely to impact the rate of amortization of such costs. The aforementioned factors enter into management's estimates of gross margins and profits, which generally are used to amortize such costs. VOBA, included in DAC reflects the estimated fair value of in-force contracts in a life insurance company acquisition and represents the portion of the purchase price that is allocated to the value of the right to receive future cash flows from the insurance and annuity contracts in force at the acquisition date. VOBA is based on actuarially determined projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns and other factors. Actual experience on the purchased business may vary from these projections. Revisions to estimates result in changes to the amounts expensed in the reporting period in which the revisions are made and could result in the impairment of the asset and a charge to income if estimated future gross margins and profits are less than amounts deferred. In addition, the Company utilizes the reversion to the mean assumption, a common industry practice, in its determination of the amortization of DAC. This practice assumes that the expectation for long-term appreciation in equity markets is not changed by minor short-term market fluctuations, but that it does change when large interim deviations have occurred. Liability for Future Policy Benefits The Company establishes liabilities for amounts payable under insurance policies, including traditional life insurance, traditional annuities and non-medical health insurance. Generally, amounts are payable over an extended period of time and liabilities are established based on methods and underlying assumptions in accordance with GAAP and applicable actuarial standards. Principal assumptions used in the establishment of liabilities for future policy benefits are mortality, morbidity, expenses, persistency, investment returns and inflation. Utilizing these assumptions, liabilities are established on a block of business basis. Differences between actual experience and the assumptions used in pricing these policies and in the establishment of F-9 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) liabilities result in variances in profit and could result in losses. The effects of changes in such estimated liabilities are included in the results of operations in the period in which the changes occur. Reinsurance The Company enters into reinsurance transactions as both a provider and a purchaser of reinsurance. Accounting for reinsurance requires extensive use of assumptions and estimates, particularly related to the future performance of the underlying business and the potential impact of counterparty credit risks. The Company periodically reviews actual and anticipated experience compared to the aforementioned assumptions used to establish assets and liabilities relating to ceded and assumed reinsurance and evaluates the financial strength of counterparties to its reinsurance agreements using criteria similar to that evaluated in the security impairment process discussed previously. Additionally, for each of its reinsurance contracts, the Company must determine if the contract provides indemnification against loss or liability relating to insurance risk, in accordance with applicable accounting standards. The Company must review all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. If the Company determines that a reinsurance contract does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the contract using the deposit method of accounting. Litigation The Company is a party to a number of legal actions and regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's consolidated financial position. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities related to certain lawsuits, including the Company's asbestos-related liability, are especially difficult to estimate due to the limitation of available data and uncertainty regarding numerous variables used to determine amounts recorded. The data and variables that impact the assumptions used to estimate the Company's asbestos-related liability include the number of future claims, the cost to resolve claims, the disease mix and severity of disease, the jurisdiction of claims filed, tort reform efforts and the impact of any possible future adverse verdicts and their amounts. On a quarterly and annual basis the Company reviews relevant information with respect to liabilities for litigation, regulatory investigations and litigation-related contingencies to be reflected in the Company's consolidated financial statements. The review includes senior legal and financial personnel. It is possible that an adverse outcome in certain of the Company's litigation and regulatory investigations, including asbestos-related cases, or the use of different assumptions in the determination of amounts recorded could have a material effect upon the Company's consolidated net income or cash flows in particular quarterly or annual periods. Employee Benefit Plans The Company sponsors pension and other retirement plans in various forms covering employees who meet specified eligibility requirements. The reported expense and liability associated with these plans require an extensive use of assumptions which include the discount rate, expected return on plan assets and rate of future compensation increases as determined by the Company. Management determines these assumptions based upon currently available market and industry data, historical performance of the plan and its assets, and consultation with an independent consulting actuarial firm. These assumptions used by the Company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of the participants. These differences may have a significant effect on the Company's consolidated financial statements and liquidity. F-10 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) SIGNIFICANT ACCOUNTING POLICIES Investments The Company's fixed maturity and equity securities are classified as available-for-sale and are reported at their estimated fair value. Unrealized investment gains and losses on securities are recorded as a separate component of other comprehensive income or loss, net of policyholder related amounts and deferred income taxes. The cost of fixed maturity and equity securities is adjusted for impairments in value deemed to be other-than-temporary in the period in which the determination is made. These adjustments are recorded as investment losses. The assessment of whether such impairment has occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in fair value. Management considers a wide range of factors, as described in "-- Summary of Critical Accounting Estimates-Investments," about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management's evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. The Company's review of its fixed maturities and equity securities for impairments also includes an analysis of the total gross unrealized losses by three categories of securities: (i) securities where the estimated fair value had declined and remained below cost or amortized cost by less than 20%; (ii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for less than six months; and (iii) securities where the estimated fair value had declined and remained below cost or amortized cost by 20% or more for six months or greater. Investment gains and losses on sales of securities are determined on a specific identification basis. All security transactions are recorded on a trade date basis. Amortization of premium and accretion of discount on fixed maturity securities is recorded using the effective interest method. Mortgage and consumer loans are stated at amortized cost, net of valuation allowances. Loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the contractual terms of the loan agreement. Valuation allowances are established for the excess carrying value of the loan over the present value of expected future cash flows discounted at the loan's original effective interest rate, the value of the loan's collateral or the loan's market value if the loan is being sold. The Company also establishes allowances for loan loss when a loss contingency exists for pools of loans with similar characteristics, for example, mortgage loans based on similar property types and loan to value risk factors. A loss contingency exists when the likelihood that a future event will occur is probable based on past events. Changes in valuation allowances are included in net investment gains and losses. Interest income earned on impaired loans is accrued on the principal amount of the loan based on the loan's contractual interest rate. However, interest ceases to be accrued for loans on which interest is generally more than 60 days past due and/or where the collection of interest is not considered probable. Cash receipts on impaired loans are recorded as a reduction of the recorded investment. Real estate held-for-investment, including related improvements, is stated at cost less accumulated depreciation. Depreciation is provided on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Once the Company identifies a property that is expected to be sold within one year and commences a firm plan for marketing the property, the Company, if applicable, classifies the property as held-for-sale and reports the related net investment income and any resulting investment gains and losses as discontinued operations. Real estate held-for-sale is stated at the lower of depreciated cost or fair value less expected disposition costs. Real estate is not depreciated while it is classified as held-for-sale. Cost of real estate held-for-investment is adjusted for impairment whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. Impaired real estate is written down to estimated fair value with the impairment loss being included in net investment gains and losses. Impairment losses are based F-11 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) upon the estimated fair value of real estate, which is generally computed using the present value of expected future cash flows from the real estate discounted at a rate commensurate with the underlying risks. Real estate acquired upon foreclosure of commercial and agricultural mortgage loans is recorded at the lower of estimated fair value or the carrying value of the mortgage loan at the date of foreclosure. Policy loans are stated at unpaid principal balances. Short-term investments are stated at amortized cost, which approximates fair value. Other invested assets consist principally of leveraged leases and funds withheld at interest. The leveraged leases are recorded net of non-recourse debt. The Company participates in lease transactions which are diversified by industry, asset type and geographic area. The Company regularly reviews residual values and impairs residuals to expected values as needed. Funds withheld represent amounts contractually withheld by ceding companies in accordance with reinsurance agreements. For agreements written on a modified coinsurance basis and certain agreements written on a coinsurance basis, assets supporting the reinsured policies and equal to the net statutory reserves are withheld and continue to be legally owned by the ceding companies. Other invested assets also includes derivative revaluation gains and the fair value of embedded derivatives related to funds withheld and modified coinsurance contracts. The Company recognizes interest on funds withheld in accordance with the treaty terms as investment income is earned on the assets supporting the reinsured policies. Interest on funds withheld is reported in net investment income in the consolidated financial statements. The Company participates in structured investment transactions, primarily asset securitizations and structured notes. These transactions enhance the Company's total return on its investment portfolio principally by generating management fee income on asset securitizations and by providing equity-based returns on debt securities through structured notes and similar instruments. The Company sponsors financial asset securitizations of high yield debt securities, investment grade bonds and structured finance securities and also is the collateral manager and a beneficial interest holder in such transactions. As the collateral manager, the Company earns management fees on the outstanding securitized asset balance, which are recorded in income as earned. When the Company transfers assets to a bankruptcy-remote special purpose entity ("SPE") and surrenders control over the transferred assets, the transaction is accounted for as a sale. Gains or losses on securitizations are determined with reference to the carrying amount of the financial assets transferred, which is allocated to the assets sold and the beneficial interests retained based on relative fair values at the date of transfer. Beneficial interests in securitizations are carried at fair value in fixed maturities. Income on these beneficial interests is recognized using the prospective method. The SPEs used to securitize assets are not consolidated by the Company because the Company has determined that it is not the primary beneficiary of these entities. Prior to the adoption of Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 46, Consolidation of Variable Interest Entities -- An Interpretation of Accounting Research Bulletin ("ARB") No. 51 ("FIN 46"), and its December 2003 revision ("FIN 46(r)"), such SPEs were not consolidated because they did not meet the criteria for consolidation under previous accounting guidance. The Company purchases or receives beneficial interests in SPEs, which generally acquire financial assets, including corporate equities, debt securities and purchased options. The Company has not guaranteed the performance, liquidity or obligations of the SPEs and the Company's exposure to loss is limited to its carrying value of the beneficial interests in the SPEs. The Company uses the beneficial interests as part of its risk management strategy, including asset-liability management. These SPEs are not consolidated by the Company because the Company has determined that it is not the primary beneficiary of these entities based on the framework provided in FIN 46(r). These beneficial interests are generally structured notes, which are included in fixed maturities, and their income is recognized using the retrospective interest method or the level F-12 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) yield method, as appropriate. Impairments of these beneficial interests are included in net investment gains (losses). Trading Securities During 2005, the Company established a trading securities portfolio to support investment strategies that involve the active and frequent purchase and sale of securities. Trading securities are recorded at fair value with subsequent changes in fair value recognized in net investment income. Derivative Financial Instruments Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, or other financial indices. Derivatives may be exchange traded or contracted in the over-the-counter market. The Company uses a variety of derivatives, including swaps, forwards, futures and option contracts, to manage its various risks. Additionally, the Company enters into income generation and replication derivatives as permitted by its Derivatives Use Plans approved by the applicable state insurance departments. 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 fair value as determined by quoted market prices or through the use of pricing models. Values can be affected by changes in interest rates, foreign exchange rates, financial indices, credit spreads, market volatility, and liquidity. Values can also be affected by changes in estimates and assumptions used in pricing models. If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting pursuant to Statement of Financial Accounting Standards ("SFAS") No. 133, Accounting for Derivative Instruments and Hedging Activities ("SFAS 133"), as amended, changes in the fair value of the derivative are reported in net investment gains (losses). 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 fair value of a recognized asset or liability or an unrecognized firm commitment ("fair value hedge"); (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"); or (iii) a hedge of a net investment in a foreign operation. 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. Under a fair value hedge, changes in the fair value of the hedging derivative, including amounts measured as ineffective, and changes in the fair value of the hedged item related to the designated risk being hedged, are reported within net investment gains (losses). The fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the consolidated statement of income within interest income or interest expense to match the location of the hedged item. Under a cash flow hedge, changes in the fair value of the hedging derivative measured as effective are reported within other comprehensive income (loss), a separate component of shareholder's equity, and the deferred gains or losses on the derivative are reclassified into the consolidated statement of income when the Company's earnings are affected by the variability in cash flows of the hedged item. Changes in the fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The fair values of the hedging derivatives are exclusive of any accruals that are separately reported in the F-13 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) consolidated statement of income within interest income or interest expense to match the location of the hedged item. In a hedge of a net investment in a foreign operation, changes in the fair value of the hedging derivative that are measured as effective are reported within other comprehensive income (loss) consistent with the translation adjustment for the hedged net investment in the foreign operation. Changes in the fair value of the hedging instrument measured as ineffectiveness are reported within net investment gains (losses). The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the 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; (iv) a hedged firm commitment no longer meets the definition of a firm commitment; or (v) 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 fair value or cash flows of a hedged item, the derivative continues to be carried on the consolidated balance sheets at its fair value, with changes in fair value recognized currently in net investment gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its 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 fair value of derivatives recorded in other comprehensive income (loss) related to discontinued cash flow hedges are released into the consolidated statement of income 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 by the end of the specified time period or the hedged item no longer meets the definition of a firm commitment, the derivative continues to be carried on the consolidated balance sheets at its fair value, with changes in fair value recognized currently in net investment gains (losses). Any asset or liability associated with a recognized firm commitment is derecognized from the consolidated balance sheets, and recorded currently in net investment gains (losses). Deferred gains and losses of a derivative recorded in other comprehensive income (loss) pursuant to the cash flow hedge of a forecasted transaction are recognized immediately in net investment gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its fair value on the consolidated balance sheets, with changes in its fair value recognized in the current period as net investment gains (losses). The Company is also a party to financial instruments that contain terms which are deemed to be embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated under SFAS 133. If the instrument would not be accounted for in its entirety at 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 on the consolidated balance sheets at fair value with the host contract and changes in their fair value are reported currently in net investment gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at fair value, with changes in fair value recognized in the current period in net investment gains (losses). F-14 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Property, Equipment, Leasehold Improvements and Computer Software Property, equipment and leasehold improvements, which are included in other assets, are stated at cost, less accumulated depreciation and amortization. Depreciation is determined using either the straight-line or sum-of-the-years-digits method over the estimated useful lives of the assets, as appropriate. The estimated life for company occupied real estate property is generally 40 years. Estimated lives generally range from five to ten years for leasehold improvements and three to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold improvements was $1,069 million and $1,054 million at December 31, 2005 and 2004, respectively. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $445 million and $438 million at December 31, 2005 and 2004, respectively. Related depreciation and amortization expense was $94 million, $93 million and $99 million for the years ended December 31, 2005, 2004 and 2003, respectively. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as internal and external costs incurred to develop internal-use computer software during the application development stage, are capitalized. Such costs are amortized generally over a four-year period using the straight-line method. The cost basis of computer software was $877 million and $749 million at December 31, 2005 and 2004, respectively. Accumulated amortization of capitalized software was $584 million and $490 million at December 31, 2005 and 2004, respectively. Related amortization expense was $97 million, $126 million and $143 million for the years ended December 31, 2005, 2004 and 2003, respectively. Deferred Policy Acquisition Costs and Value of Business Acquired The costs of acquiring new and renewal insurance business that vary with, and are primarily related to, the production of that business are deferred. Such costs consist principally of commissions and agency and policy issue expenses. VOBA represents the present value of estimated future profits to be generated from existing insurance contracts in-force at the date of acquisition. DAC is amortized with interest over the expected life of the contract for participating traditional life, universal life and investment-type products. Generally, DAC and VOBA are amortized in proportion to the present value of estimated gross margins or profits from investment, mortality, expense margins and surrender charges. Interest rates used to compute the present value of estimated gross margins and profits are based on rates in effect at the inception or acquisition of the contracts. Actual gross margins or profits can vary from management's estimates resulting in increases or decreases in the rate of amortization. Management utilizes the reversion to the mean assumption, a common industry practice, in its determination of the amortization of DAC and VOBA. This practice assumes that the expectation for long-term equity investment appreciation is not changed by minor short-term market fluctuations, but that it does change when large interim deviations have occurred. Management periodically updates these estimates and evaluates the recoverability of DAC and VOBA. When appropriate, management revises its assumptions of the estimated gross margins or profits of these contracts, and the cumulative amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. DAC and VOBA are for non-participating traditional life, non-medical health and annuity policies with life contingencies is amortized in proportion to anticipated premiums. Assumptions as to anticipated premiums are made at the date of policy issuance or acquisition and are consistently applied during the lives of F-15 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the contracts. Deviations from estimated experience are included in operations when they occur. For these contracts, the amortization period is typically the estimated life of the policy. Policy acquisition costs related to internally replaced contracts are expensed at the date of replacement. Sales Inducements The Company has two different types of sales inducements which are included in other assets: (i) the policyholder receives a bonus whereby the policyholder's initial account balance is increased by an amount equal to a specified percentage of the customer's deposit; and (ii) the policyholder receives a higher interest rate using a dollar cost averaging method than would have been received based on the normal general account interest rate credited. The Company defers sales inducements and amortizes them over the life of the policy using the same methodology and assumptions used to amortize DAC. Goodwill Goodwill is the excess of cost over the fair value of net assets acquired. The Company tests goodwill for impairment at least annually or more frequently if events or circumstances, such as adverse changes in the business climate, indicate that there may be justification for conducting an interim test. Impairment testing is performed using the fair value approach, which requires the use of estimates and judgment, at the "reporting unit" level. A reporting unit is the operating segment, or a business that is one level below the operating segment if discrete financial information is prepared and regularly reviewed by management at that level. For purposes of goodwill impairment testing, goodwill within Corporate & Other is allocated to reporting units within the Company's business segments. If the carrying value of a reporting unit's goodwill exceeds its fair value, the excess is recognized as an impairment and recorded as a charge against net income. The fair values of the reporting units are determined using a market multiple or discounted cash flow model. The critical estimates necessary in determining fair value are projected earnings, comparative market multiples and the discount rate. Changes in goodwill are as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2005 2004 2003 ------ ------ ------- (IN MILLIONS) Balance, beginning of year.................................. $217 $218 $ 405 Acquisitions................................................ 1 1 3 Dispositions and other...................................... (18) (2) (190) ---- ---- ----- Balance, end of year........................................ $200 $217 $ 218 ==== ==== =====
Liability for Future Policy Benefits and Policyholder Account Balances Future policy benefit liabilities for participating traditional life insurance policies are equal to the aggregate of (i) net level premium reserves for death and endowment policy benefits (calculated based upon the non-forfeiture interest rate, ranging from 3% to 7%, and mortality rates guaranteed in calculating the cash surrender values described in such contracts); and (ii) the liability for terminal dividends, and (iii) premium deficiency reserves, which are established when the liabilities for future policy benefits plus the value of expected future gross premiums are insufficient to provide for expected future policy benefits and expenses after DAC is written off. Future policy benefits for non-participating traditional life insurance policies are equal to the aggregate of (i) the present value of future benefit payments and related expenses less the present value of future net F-16 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) premiums and (ii) premium deficiency reserve. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rates for the aggregate future policy benefit liabilities range from 5% to 7%. Participating business represented approximately 10% and 12% of the Company's life insurance in-force, and 86% and 87% of the number of life insurance policies in-force, at December 31, 2005 and 2004, respectively. Participating policies represented approximately 35% and 34%, 37% and 37%, and 40% and 41% of gross and net life insurance premiums for the years ended December 31, 2005, 2004 and 2003, respectively. The percentages indicated are calculated excluding the business of the Reinsurance segment. Future policy benefit liabilities for individual and group traditional fixed annuities after annuitization are equal to the present value of expected future payments and premium deficiency reserves. Interest rates used in establishing such liabilities range from 3% to 11%. Future policy benefit liabilities for non-medical health insurance are calculated using the net level premium method and assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rates used in establishing such liabilities range from 3% to 7%. Future policy benefit liabilities for disabled lives are estimated using the present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rates used in establishing such liabilities range from 3% to 8%. Policyholder account balances relate to investment-type contracts and universal life-type policies. Investment-type contracts principally include traditional individual fixed annuities in the accumulation phase and non-variable group annuity contracts. Policyholder account balances are equal to (i) policy account values, which consist of an accumulation of gross premium payments; and (ii) credited interest, ranging from 1% to 14%, less expenses, mortality charges, and withdrawals. The Company issues fixed and floating rate obligations under its guaranteed interest contract ("GIC") program which are denominated in either U.S. dollars or foreign currencies. During the years ended December 31, 2005, 2004 and 2003, the Company issued $4,018 million, $3,958 million and $4,349 million, respectively, in such obligations. During the years ended December 31, 2005, 2004 and 2003, there were repayments of $1,052 million, $150 million and $47 million respectively, of GICs under this program. Accordingly, the GICs outstanding, which are included in policyholder account balances in the accompanying consolidated balance sheets, were $12,149 million and $9,017 million at December 31, 2005 and 2004, respectively. Interest credited on the contracts for the years ended December 31, 2005, 2004 and 2003 was $384 million, $142 million and $58 million, respectively. The Company establishes future policy benefit liabilities for minimum death and income benefit guarantees relating to certain annuity contracts and secondary and paid up guarantees relating to certain life policies as follows: - Annuity guaranteed death benefit liabilities are determined by estimating the expected value of death benefits in excess of the projected account balance and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the liabilities are consistent with those used for amortizing DAC, including the mean reversion assumption. The assumptions of investment performance and volatility are consistent with the historical experience of the Standard & Poor's 500 Index ("S&P"). The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. F-17 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - Guaranteed income benefit liabilities are determined by estimating the expected value of the income benefits in excess of the projected account balance at the date of annuitization and recognizing the excess ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balance, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used for calculating such guaranteed income benefit liabilities are consistent with those used for calculating the guaranteed death benefit liabilities. In addition, the calculation of guaranteed annuitization benefit liabilities incorporates a percentage of the potential annuitizations that may be elected by the contractholder. - Liabilities for universal and variable life secondary guarantees and paid-up guarantees are determined by estimating the expected value of death benefits payable when the account balance is projected to be zero and recognizing those benefits ratably over the accumulation period based on total expected assessments. The Company regularly evaluates estimates used and adjusts the additional liability balances, with a related charge or credit to benefit expense, if actual experience or other evidence suggests that earlier assumptions should be revised. The assumptions used in estimating the secondary and paid up guarantee liabilities are consistent with those used for amortizing DAC. The assumptions of investment performance and volatility for variable products are consistent with historical S&P experience. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. The Company offers certain variable annuity products with guaranteed minimum benefit riders as follows: - Guaranteed minimum withdrawal benefit riders ("GMWB"s) guarantee a policyholder return of the purchase payment plus a bonus amount via partial withdrawals, even if the account value is reduced to zero, provided that the policyholder's cumulative withdrawals in a contract year do not exceed a certain limit. The initial guaranteed withdrawal amount is equal to the initial benefit base as defined in the contract. When an additional purchase payment is made, the guaranteed withdrawal amount is set equal to the greater of (i) the guaranteed withdrawal amount before the purchase payment or (ii) the benefit base after the purchase payment. The benefit base increases by additional purchase payments plus a bonus amount and decreases by benefits paid and/or withdrawal amounts. After a specified period of time, the benefit base may also change as a result of an optional reset as defined in the contract. The benefit base can be reset to the account balance on the date of the reset if greater than the benefit base before the reset. The GMWB is an embedded derivative, which is measured at fair value separately from the host variable annuity product. - Guaranteed minimum accumulation benefit riders ("GMAB"s) provide the contract holder with a minimum accumulation of their purchase payments deposited within a specific time period, adjusted proportionately for withdrawals, after a specified period of time determined at the time of issuance of the variable annuity contract. The GMAB is also an embedded derivative, which is measured at fair value separately from the host variable annuity product. - The fair value of the GMWBs and GMABs is calculated based on actuarial and capital market assumptions related to the projected cash flows, including benefits and related contract charges, over the lives of the contracts, incorporating expectations concerning policyholder behavior. In measuring the fair value of GMWBs and GMABs, the Company attributes a portion of the fees collected from the policyholder equal to the present value of expected future guaranteed minimum withdrawal and accumulation benefits. GMWBs and GMABs are reported in policyholder account balances and the changes in fair value are reported in net investment gains (losses). Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. F-18 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Other Policyholder Funds Other policyholder funds includes policy and contract claims and unearned policy and contract fees. Recognition of Insurance Revenue and Related Benefits Premiums related to traditional life and annuity policies with life contingencies are recognized as revenues when due. Benefits and expenses are provided against such revenues to recognize profits over the estimated lives of the policies. When premiums are due over a significantly shorter period than the period over which benefits are provided, any excess profit is deferred and recognized into operations in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. Premiums related to non-medical health and disability contracts are recognized on a pro rata basis over the applicable contract term. Deposits related to universal life-type and investment-type products are credited to policyholder account balances. Revenues from such contracts consist of amounts assessed against policyholder account balances for mortality, policy administration and surrender charges and are recorded in universal life and investment-type product policy fees in the period in which services are provided. Amounts that are charged to operations include interest credited and benefit claims incurred in excess of related policyholder account balances. Other Revenues Other revenues include advisory fees, broker/dealer commissions and fees, and administrative service fees. Such fees and commissions are recognized in the period in which services are performed. Other revenues also include changes in account value relating to corporate-owned life insurance ("COLI"). Under certain COLI contracts, if the Company reports certain unlikely adverse results in its consolidated financial statements, withdrawals would not be immediately available and would be subject to market value adjustment, which could result in a reduction of the account value. Policyholder Dividends Policyholder dividends are approved annually by Metropolitan Life and its insurance subsidiaries' boards of directors. The aggregate amount of policyholder dividends is related to actual interest, mortality, morbidity and expense experience for the year, as well as management's judgment as to the appropriate level of statutory surplus to be retained by Metropolitan Life and its insurance subsidiaries. Federal Income Taxes The Company joins with the Holding Company and its includable affiliates in filing a consolidated U.S. federal income tax return. The consolidating companies have executed a tax allocation agreement. Under the agreement, current federal income tax expense (benefit) is computed on a separate return basis and provides that members shall make payments (receive reimbursement) to (from) the Holding Company to the extent that their income (losses and other credits) contributes to (reduce) the consolidated federal income tax expense. The consolidating companies are reimbursed for net operating losses or other tax attributes they have generated when utilized in the consolidated return. The Company files state income tax returns on an individual corporate basis. The future tax consequences of temporary differences between financial reporting and tax bases of assets and liabilities are measured at the balance sheet dates and are recorded as deferred income tax assets and liabilities. Valuation allowances are established when management assesses, based on available information, that it is more likely than not that deferred income tax assets will not be realized. F-19 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Reinsurance The Company has reinsured certain of its life insurance contracts with other insurance companies under various agreements. For reinsurance contracts that transfer sufficient underwriting risk, reinsurance premiums, commissions, expense reimbursements, benefits and liabilities related to reinsured long-duration contracts are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts. The cost of reinsurance related to short-duration contracts is accounted for over the reinsurance contract period. Amounts due from reinsurers, for both short- and long-duration arrangements, are estimated based upon assumptions consistent with those used in establishing the liabilities related to the underlying reinsured contracts. Policy and contract liabilities are reported gross of reinsurance credits. DAC is reduced by amounts recovered under reinsurance contracts. Amounts received from reinsurers for policy administration are reported in other revenues. The Company assumes and retrocedes financial reinsurance contracts, which represent low mortality risk reinsurance treaties. These contracts are reported as deposits and are included in other assets. The amount of revenue reported on these contracts represents fees and the cost of insurance under the terms of the reinsurance agreement and is reported in other revenues. Separate Accounts Separate accounts are established in conformity with insurance laws and are generally not chargeable with liabilities that arise from any other business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the separate account liabilities. Effective with the adoption of Statement of Position 03-1, Accounting and Reporting by Insurance Enterprises for Certain Nontraditional Long-Duration Contracts and for Separate Accounts ("SOP 03-1"), on January 1, 2004, the Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if (i) such separate accounts are legally recognized; (ii) assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; (iii) investments are directed by the contractholder; and (iv) all investment performance, net of contact fees and assessments, is passed through to the contractholder. The Company reports separate account assets meeting such criteria at their fair value. Investment performance (including investment income, net investment gains (losses) and changes in unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line in the consolidated statements of income. In connection with the adoption of SOP 03-1, separate account assets with a fair value of $1.7 billion were reclassified to general account investments with a corresponding transfer of separate account liabilities to future policy benefits and policyholder account balances. See "-- Application of Recent Accounting Pronouncements." The Company's revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees, investment management fees and surrender charges. Separate accounts not meeting the above criteria are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses. Stock-Based Compensation MetLife, Inc. and the Company account for stock-based compensation plans using the prospective fair value accounting method prescribed by SFAS No. 123, Accounting for Stock-Based Compensation ("SFAS 123"), as amended by SFAS No. 148, Accounting for Stock-Based Compensation -- Transition and Disclosure ("SFAS 148"). The fair value method requires compensation cost to be measured based on the fair value of the equity instrument at the grant or award date. MetLife, Inc. allocates substantially all of the stock option expense to the Company. F-20 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Stock-based compensation grants prior to January 1, 2003 are accounted for using the intrinsic value method prescribed by Accounting Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees ("APB 25"). Note 12 includes the pro forma disclosures required by SFAS No. 123, as amended. The intrinsic value method represents the quoted market price or fair value of the equity award at the measurement date less the amount, if any, the employee is required to pay. Stock-based compensation is accrued over the vesting period of the grant or award. Foreign Currency Balance sheet accounts of foreign operations are translated at the exchange rates in effect at each year-end and income and expense accounts are translated at the average rates of exchange prevailing during the year. The local currencies of foreign operations are the functional currencies unless the local economy is highly inflationary. Translation adjustments are charged or credited directly to other comprehensive income or loss. Gains and losses from foreign currency transactions are reported as gains (losses) in the period in which they occur. Discontinued Operations The results of operations of a component of the Company that either has been disposed of or is classified as held-for-sale are reported in discontinued operations if the operations and cash flows of the component have been or will be eliminated from the ongoing operations of the Company as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction. APPLICATION OF RECENT ACCOUNTING PRONOUNCEMENTS In February 2006, the FASB issued SFAS No. 155, Accounting for Certain Hybrid Instruments ("SFAS 155"). SFAS 155 amends SFAS 133 and SFAS No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities ("SFAS 140"). SFAS 155 allows financial instruments that have embedded derivatives to be accounted for as a whole, eliminating the need to bifurcate the derivative from its host, if the holder elects to account for the whole instrument on a fair value basis. In addition, among other changes, SFAS 155 (i) clarifies which interest-only strips and principal-only strips are not subject to the requirements of SFAS 133; (ii) establishes a requirement to evaluate interests in securitized financial assets to identify interests that are freestanding derivatives or that are hybrid financial instruments that contain an embedded derivative requiring bifurcation, (iii) clarifies that concentrations of credit risk in the form of subordination are not embedded derivatives, and (iv) eliminates the prohibition on a qualifying special- purpose entity ("QSPE") from holding a derivative financial instrument that pertains to a beneficial interest other than another derivative financial interest. SFAS 155 will be applied prospectively and is effective for all financial instruments acquired or issued for fiscal years beginning after September 15, 2006. SFAS 155 is not expected to have a material impact on the Company's consolidated financial statements. The FASB has issued additional guidance relating to derivative financial instruments as follows: - In June 2005, the FASB cleared SFAS 133 Implementation Issue No. B38, Embedded Derivatives: Evaluation of Net Settlement with Respect to the Settlement of a Debt Instrument through Exercise of an Embedded Put Option or Call Option ("Issue B38") and SFAS 133 Implementation Issue No. B39, Embedded Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable Only by the Debtor ("Issue B39"). Issue B38 clarified that the potential settlement of a debtor's obligation to a creditor occurring upon exercise of a put or call option meets the net settlement criteria of SFAS No. 133. Issue B39 clarified that an embedded call option, in which the underlying is an interest rate or interest rate index, that can accelerate the settlement of a debt host financial instrument F-21 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) should not be bifurcated and fair valued if the right to accelerate the settlement can be exercised only by the debtor (issuer/borrower) and the investor will recover substantially all of its initial net investment. Issues B38 and B39, which must be adopted as of the first day of the first fiscal quarter beginning after December 15, 2005, did not have a material impact on the Company's consolidated financial statements. - Effective October 1, 2003, the Company adopted SFAS 133 Implementation Issue No. B36, Embedded Derivatives: Modified Coinsurance Arrangements and Debt Instruments That Incorporate Credit Risk Exposures That Are Unrelated or Only Partially Related to the Creditworthiness of the Obligor under Those Instruments ("Issue B36"). Issue B36 concluded that (i) a company's funds withheld payable and/or receivable under certain reinsurance arrangements; and (ii) a debt instrument that incorporates credit risk exposures that are unrelated or only partially related to the creditworthiness of the obligor include an embedded derivative feature that is not clearly and closely related to the host contract. Therefore, the embedded derivative feature is measured at fair value on the balance sheet and changes in fair value are reported in income. As a result of the adoption of Issue B36, the Company recorded a cumulative effect of a change in accounting of $26 million, net of income taxes, for the year ended December 31, 2003. - Effective July 1, 2003, the Company adopted SFAS No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities ("SFAS 149"). SFAS 149 amended and clarified the accounting and reporting for derivative instruments, including certain derivative instruments embedded in other contracts, and for hedging activities. Except for certain previously issued and effective guidance, SFAS 149 was effective for contracts entered into or modified after June 30, 2003. The Company's adoption of SFAS 149 did not have a significant impact on its consolidated financial statements. Effective November 9, 2005, the Company prospectively adopted the guidance in FASB Staff Position ("FSP") FAS 140-2, Clarification of the Application of Paragraphs 40(b) and 40(c) of FAS 140 ("FSP 140-2"). FSP 140-2 clarified certain criteria relating to derivatives and beneficial interests when considering whether an entity qualifies as a QSPE. Under FSP 140-2, the criteria must only be met at the date the QSPE issues beneficial interests or when a derivative financial instrument needs to be replaced upon the occurrence of a specified event outside the control of the transferor. FSP 140-2 did not have a material impact on the Company's consolidated financial statements. In September 2005, the American Institute of Certified Public Accountants ("AICPA") issued SOP 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts ("SOP 05-1"). SOP 05-1 provides guidance on accounting by insurance enterprises for deferred acquisition costs on internal replacements of insurance and investment contracts other than those specifically described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and For Realized Gains and Losses from the Sale of Investments. SOP 05-1 defines an internal replacement as a modification in product benefits, features, rights, or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. Under SOP 05-1, modifications that result in a substantially unchanged contract will be accounted for as a continuation of the replaced contract. A replacement contract that is substantially changed will be accounted for as an extinguishment of the replaced contract resulting in a release of unamortized deferred acquisition costs, unearned revenue and deferred sales inducements associated with the replaced contract. The guidance in SOP 05-1 will be applied prospectively and is effective for internal replacements occurring in fiscal years beginning after December 15, 2006. The Company is currently evaluating the impact of SOP 05-1 and does F-22 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) not expect that the pronouncement will have a material impact on the Company's consolidated financial statements. In September 2005, the Emerging Issues Task Force ("EITF") reached consensus on Issue No. 05-7, Accounting for Modifications to Conversion Options Embedded in Debt Instruments and Related Issues ("EITF 05-7"). EITF 05-7 provides guidance on whether a modification of conversion options embedded in debt results in an extinguishment of that debt. In certain situations, companies may change the terms of an embedded conversion option as part of a debt modification. The EITF concluded that the change in the fair value of an embedded conversion option upon modification should be included in the analysis of EITF Issue No. 96-19, Debtor's Accounting for a Modification or Exchange of Debt Instruments, to determine whether a modification or extinguishment has occurred and that a change in the fair value of a conversion option should be recognized upon the modification as a discount (or premium) associated with the debt, and an increase (or decrease) in additional paid-in capital. EITF 05-7 will be applied prospectively and is effective for all debt modifications occurring in periods beginning after December 15, 2005. EITF 05-7 did not have a material impact on the Company's consolidated financial statements. In September 2005, the EITF reached consensus on Issue No. 05-8, Income Tax Consequences of Issuing Convertible Debt with a Beneficial Conversion Feature ("EITF 05-8"). EITF 05-8 concludes that (i) the issuance of convertible debt with a beneficial conversion feature results in a basis difference that should be accounted for as a temporary difference and (ii) the establishment of the deferred tax liability for the basis difference should result in an adjustment to additional paid in capital. EITF 05-8 will be applied retrospectively for all instruments with a beneficial conversion feature accounted for in accordance with EITF Issue No. 98-5, Accounting for Convertible Securities with Beneficial Conversion Features or Contingently Adjustable Conversion Ratios, and EITF Issue No. 00-27, Application of Issue No. 98-5 to Certain Convertible Instruments, and is effective for periods beginning after December 15, 2005. EITF 05-8 did not have a material impact on the Company's consolidated financial statements. Effective July 1, 2005, the Company adopted SFAS No. 153, Exchanges of Nonmonetary Assets, an amendment of APB Opinion No. 29 ("SFAS 153"). SFAS 153 amended prior guidance to eliminate the exception for nonmonetary exchanges of similar productive assets and replaced it with a general exception for exchanges of nonmonetary assets that do not have commercial substance. A nonmonetary exchange has commercial substance if the future cash flows of the entity are expected to change significantly as a result of the exchange. The provisions of SFAS 153 were required to be applied prospectively for fiscal periods beginning after June 15, 2005. The adoption of SFAS 153 did not have a material impact on the Company's consolidated financial statements. Effective July 1, 2005, the Company adopted EITF Issue No. 05-6, Determining the Amortization Period for Leasehold Improvements ("EITF 05-6"). EITF 05-6 provides guidance on determining the amortization period for leasehold improvements acquired in a business combination or acquired subsequent to lease inception. As required by EITF 05-6, the Company adopted this guidance on a prospective basis which had no material impact on the Company's consolidated financial statements. In June 2005, the FASB completed its review of EITF Issue No. 03-1, The Meaning of Other-Than-Temporary Impairment and Its Application to Certain Investments ("EITF 03-1"). EITF 03-1 provides accounting guidance regarding the determination of when an impairment of debt and marketable equity securities and investments accounted for under the cost method should be considered other-than-temporary and recognized in income. EITF 03-1 also requires certain quantitative and qualitative disclosures for debt and marketable equity securities classified as available-for-sale or held-to-maturity under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities ("SFAS 115"), that are impaired at the balance sheet date but for which an other-than-temporary impairment has not been recognized. The FASB decided not to provide additional guidance on the meaning of other-than-temporary impairment but has issued F-23 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) FSP 115-1, The Meaning of Other-Than-Temporary Impairment and its Application to Certain Investments ("FSP 115-1"), which nullifies the accounting guidance on the determination of whether an investment is other-than-temporarily impaired as set forth in EITF 03-1. As required by FSP 115-1, the Company adopted this guidance on a prospective basis, which had no material impact on the Company's consolidated financial statements, and has provided the required disclosures. In June 2005, the EITF reached consensus on Issue No. 04-5, Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights ("EITF 04-5"). EITF 04-5 provides a framework for determining whether a general partner controls and should consolidate a limited partnership or a similar entity in light of certain rights held by the limited partners. The consensus also provides additional guidance on substantive rights. EITF 04-5 was effective after June 29, 2005 for all newly formed partnerships and for any pre-existing limited partnerships that modified their partnership agreements after that date. EITF 04-5 must be adopted by January 1, 2006 for all other limited partnerships through a cumulative effect of a change in accounting principle recorded in opening equity or it may be applied retrospectively by adjusting prior period financial statements. The adoption of this provision of EITF 04-5 did not have a material impact on the Company's consolidated financial statements. In May 2005, the FASB issued SFAS No. 154, Accounting Changes and Error Corrections, a replacement of APB Opinion No. 20 and FASB Statement No. 3 ("SFAS 154"). The statement requires retrospective application to prior periods' financial statements for a voluntary change in accounting principle unless it is deemed impracticable. It also requires that a change in the method of depreciation, amortization, or depletion for long-lived, non-financial assets be accounted for as a change in accounting estimate rather than a change in accounting principle. SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The adoption of SFAS 154 did not have a material impact on the Company's consolidated financial statements. In December 2004, the FASB issued SFAS 123 (revised 2004), Share-Based Payment ("SFAS 123(r)"), which revised SFAS 123 and supersedes APB 25. SFAS 123(r) provides additional guidance on determining whether certain financial instruments awarded in share-based payment transactions are liabilities. SFAS 123(r) also requires that the cost of all share-based transactions be measured at fair value and recognized over the period during which an employee is required to provide service in exchange for an award. The SEC issued a final ruling in April 2005 allowing a public company that is not a small business issuer to implement SFAS 123(r) at the beginning of the next fiscal year after June 15, 2005. Thus, the revised pronouncement must be adopted by the Company by January 1, 2006. As permitted under SFAS 148, Accounting for Stock-Based Compensation -- Transition and Disclosure -- an amendment of FASB Statement No. 123, the Company elected to use the prospective method of accounting for stock options granted subsequent to December 31, 2002. Options granted prior to January 1, 2003 will continue to be accounted for under the intrinsic value method until the adoption of SFAS 123(r). In addition, the pro forma impact of accounting for these options at fair value continued to be accounted for under the intrinsic value method until the last of those options vested in 2005. As all stock options currently accounted for under the intrinsic value method vested prior to the effective date, implementation of SFAS 123(r) will not have a significant impact on the Company's consolidated financial statements. See Note 12. Effective July 1, 2004, the Company prospectively adopted FSP No. 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 ("FSP 106-2"). FSP 106-2 provides accounting guidance to employers that sponsor postretirement health care plans that provide prescription drug benefits. The Company expects to receive subsidies on prescription drug benefits beginning in 2006 under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 based on the Company's determination that the prescription drug benefits offered under certain F-24 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) postretirement plans are actuarially equivalent to the benefits offered under Medicare Part D. The postretirement benefit plan assets and accumulated benefit obligation were remeasured to determine the effect of the expected subsidies on net periodic postretirement benefit cost. As a result, the accumulated postretirement benefit obligation was reduced by $213 million at July 1, 2004. See Note 11. Effective July 1, 2004, the Company adopted EITF Issue No. 03-16, Accounting for Investments in Limited Liability Companies ("EITF 03-16"). EITF 03-16 provides guidance regarding whether a limited liability company should be viewed as similar to a corporation or similar to a partnership for purposes of determining whether a noncontrolling investment should be accounted for using the cost method or the equity method of accounting. EITF 03-16 did not have a material impact on the Company's consolidated financial statements. Effective April 1, 2004, the Company adopted EITF Issue No. 03-6, Participating Securities and the Two -- Class Method under FASB Statement No. 128 ("EITF 03-6"). EITF 03-6 provides guidance on determining whether a security should be considered a participating security for purposes of computing earnings per common share and how earnings should be allocated to the participating security. EITF 03-6 did not have an impact on the Company's earnings per common share calculations or amounts. Effective January 1, 2004, the Company adopted SOP 03-1, as interpreted by a Technical Practice Aid ("TPA"), issued by the AICPA. SOP 03-1 provides guidance on (i) the classification and valuation of long-duration contract liabilities; (ii) the accounting for sales inducements; and (iii) separate account presentation and valuation. In June 2004, the FASB released FSP No. 97-1, Situations in Which Paragraphs 17(b) and 20 of FASB Statement No. 97, Accounting and Reporting by Insurance Enterprises for Certain Long-Duration Contracts and for Realized Gains and Losses from the Sale of Investments, Permit or Require Accrual of an Unearned Revenue Liability ("FSP 97-1"), which included clarification that unearned revenue liabilities should be considered in determining the necessary insurance benefit liability required under SOP 03-1. Since the Company had considered unearned revenue in determining its SOP 03-1 benefit liabilities, FSP 97-1 did not impact its consolidated financial statements. As a result of the adoption of SOP 03-1, effective January 1, 2004, the Company decreased the liability for future policyholder benefits for changes in the methodology relating to various guaranteed death and annuitization benefits and for determining liabilities for certain universal life insurance contracts by $8 million, which has been reported as a cumulative effect of a change in accounting. This amount is net of corresponding changes in DAC, including VOBA and unearned revenue liability ("offsets"), under certain variable annuity and life contracts and income taxes. Certain other contracts sold by the Company provide for a return through periodic crediting rates, surrender adjustments or termination adjustments based on the total return of a contractually referenced pool of assets owned by the Company. To the extent that such contracts are not accounted for as derivatives under the provisions of SFAS No. 133 and not already credited to the contract account balance, under SOP 03-1 the change relating to the fair value of the referenced pool of assets is recorded as a liability with the change in the liability recorded as policyholder benefits and claims. Prior to the adoption of SOP 03-1, the Company recorded the change in such liability as other comprehensive income. At adoption, this change decreased net income and increased other comprehensive income by $33 million, net of income taxes, which were recorded as cumulative effects of changes in accounting. Effective with the adoption of SOP 03-1, costs associated with enhanced or bonus crediting rates to contractholders must be deferred and amortized over the life of the related contract using assumptions consistent with the amortization of DAC. Since the Company followed a similar approach prior to adoption of SOP 03-1, the provisions of SOP 03-1 relating to sales inducements had no significant impact on the Company's consolidated financial statements. In accordance with SOP 03-1's guidance for the reporting of certain separate accounts, at adoption, the Company also reclassified $1.7 billion of separate account assets to general account investments and $1.7 billion of separate account liabilities to future policy benefits and policyholder account balances. This reclassification decreased net income and increased other comprehensive income by $27 million, net of income taxes, which were reported as cumulative F-25 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) effects of changes in accounting. Due to the adoption of SOP 03-1, the Company recorded a cumulative effect of a change in accounting of $52 million, net of income taxes of $27 million, for the year ended December 31, 2004. In December 2003, FASB revised SFAS No. 132, Employers' Disclosures about Pensions and Other Postretirement Benefits -- an Amendment of FASB Statements No. 87, 88 and 106 ("SFAS 132(r)"). SFAS 132(r) retains most of the disclosure requirements of SFAS 132 and requires additional disclosure about assets, obligations, cash flows and net periodic benefit cost of defined benefit pension plans and other postretirement plans. SFAS 132(r) was primarily effective for fiscal years ending after December 15, 2003; however, certain disclosures about foreign plans and estimated future benefit payments were effective for fiscal years ending after June 15, 2004. The Company's adoption of SFAS 132(r) did not have a significant impact on its consolidated financial statements since it only revised disclosure requirements. During 2003, the Company adopted FIN 46 and FIN 46(r). Certain of the Company's investments in real estate joint ventures and other limited partnership interests meet the definition of a variable interest entity ("VIE") and have been consolidated, in accordance with the transition rules and effective dates, because the Company is deemed to be the primary beneficiary. A VIE is defined as (i) any entity in which the equity investments at risk in such entity do not have the characteristics of a controlling financial interest; or (ii) any entity that does not have sufficient equity at risk to finance its activities without additional subordinated support from other parties. Effective February 1, 2003, the Company adopted FIN 46 for VIEs created or acquired on or after February 1, 2003 and, effective December 31, 2003, the Company adopted FIN 46(r) with respect to interests in entities formerly considered special purpose entities ("SPEs"), including interests in asset-backed securities and collateralized debt obligations. The adoption of FIN 46 as of February 1, 2003 did not have a significant impact on the Company's consolidated financial statements. The adoption of the provisions of FIN 46(r) at December 31, 2003 did not require the Company to consolidate any additional VIEs that were not previously consolidated. In accordance with the provisions of FIN 46(r), the Company elected to defer until March 31, 2004 the consolidation of interests in VIEs for non-SPEs acquired prior to February 1, 2003 for which it is the primary beneficiary. As of March 31, 2004, the Company consolidated assets and liabilities relating to real estate joint ventures of $78 million and $11 million, respectively, and assets and liabilities relating to other limited partnerships of $29 million and less than $1 million, respectively, for VIEs for which the Company was deemed to be the primary beneficiary. There was no impact to net income from the adoption of FIN 46. Effective January 1, 2003, the Company adopted FIN No. 45, Guarantor's Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others ("FIN 45"). FIN 45 requires entities to establish liabilities for certain types of guarantees and expands financial statement disclosures for others. The initial recognition and initial measurement provisions of FIN 45 were applicable on a prospective basis to guarantees issued or modified after December 31, 2002. The adoption of FIN 45 did not have a significant impact on the Company's consolidated financial statements. See Note 10. Effective January 1, 2003, the Company adopted SFAS No. 146, Accounting for Costs Associated with Exit or Disposal Activities ("SFAS 146"). SFAS 146 requires that a liability for a cost associated with an exit or disposal activity be recorded and measured initially at fair value only when the liability is incurred rather than at the date of an entity's commitment to an exit plan as required by EITF Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity Including Certain Costs Incurred in a Restructuring ("EITF 94-3"). As required by SFAS 146, the Company adopted this guidance on a prospective basis which had no material impact on the Company's consolidated financial statements. Effective January 1, 2003, the Company adopted SFAS No. 145, Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections ("SFAS 145"). In addition to F-26 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) amending or rescinding other existing authoritative pronouncements to make various technical corrections, clarify meanings, or describe their applicability under changed conditions, SFAS 145 generally precludes companies from recording gains and losses from the extinguishment of debt as an extraordinary item. SFAS 145 also requires sale-leaseback treatment for certain modifications of a capital lease that result in the lease being classified as an operating lease. The adoption of SFAS 145 did not have a significant impact on the Company's consolidated financial statements. 2. INVESTMENTS FIXED MATURITIES BY SECTOR AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables set forth the cost or amortized cost, gross unrealized gain and loss, and estimated fair value of the Company's fixed maturities by sector and equity securities, the percentage of the total fixed maturities holdings that each sector represents and the percentage of the total equity securities at:
DECEMBER 31, 2005 -------------------------------------------------- COST OR GROSS UNREALIZED AMORTIZED ----------------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- ------- ------- ---------- ----- (IN MILLIONS) U.S. corporate securities...................... $ 47,966 $2,506 $ 358 $ 50,114 33.9% Residential mortgage-backed securities......... 30,213 315 292 30,236 20.4 Foreign corporate securities................... 22,873 1,625 257 24,241 16.4 U.S. Treasury/agency securities................ 17,858 1,333 18 19,173 13.0 Commercial mortgage-backed securities.......... 10,793 194 102 10,885 7.4 Asset-backed securities........................ 6,412 74 29 6,457 4.4 Foreign government securities.................. 4,734 999 10 5,723 3.9 State and political subdivision securities..... 738 21 10 749 0.5 Other fixed maturity securities................ 203 10 33 180 0.1 -------- ------ ------ -------- ----- Total bonds.................................. 141,790 7,077 1,109 147,758 100.0 Redeemable preferred stocks.................... 139 1 1 139 -- -------- ------ ------ -------- ----- Total fixed maturities....................... $141,929 $7,078 $1,110 $147,897 100.0% ======== ====== ====== ======== ===== Common stocks.................................. $ 1,616 $ 229 $ 25 $ 1,820 82.1% Nonredeemable preferred stocks................. 373 27 3 397 17.9 -------- ------ ------ -------- ----- Total equity securities...................... $ 1,989 $ 256 $ 28 $ 2,217 100.0% ======== ====== ====== ======== =====
F-27 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2004 -------------------------------------------------- COST OR GROSS UNREALIZED AMORTIZED ----------------- ESTIMATED % OF COST GAIN LOSS FAIR VALUE TOTAL --------- -------- ------ ---------- ----- (IN MILLIONS) U.S. corporate securities........................ $ 51,398 $3,561 $144 $ 54,815 36.5% Residential mortgage-backed securities........... 28,155 573 52 28,676 19.1 Foreign corporate securities..................... 21,545 2,381 65 23,861 15.9 U.S. Treasury/agency securities.................. 14,938 1,271 19 16,190 10.8 Commercial mortgage-backed securities............ 10,395 408 30 10,773 7.2 Asset-backed securities.......................... 9,282 115 29 9,368 6.2 Foreign government securities.................... 4,650 766 12 5,404 3.6 State and political subdivision securities....... 340 16 1 355 0.2 Other fixed maturity securities.................. 519 46 33 532 0.3 -------- ------ ---- -------- ----- Total bonds.................................... 141,222 9,137 385 149,974 99.8 Redeemable preferred stocks...................... 274 -- 19 255 0.2 -------- ------ ---- -------- ----- Total fixed maturities......................... $141,496 $9,137 $404 $150,229 100.0% ======== ====== ==== ======== ===== Common stocks.................................... $ 1,329 $ 238 $ 5 $ 1,562 82.1% Nonredeemable preferred stocks................... 317 24 -- 341 17.9 -------- ------ ---- -------- ----- Total equity securities........................ $ 1,646 $ 262 $ 5 $ 1,903 100.0% ======== ====== ==== ======== =====
The Company held foreign currency derivatives with notional amounts of $4,946 million and $4,642 million to hedge the exchange rate risk associated with foreign bonds and loans at December 31, 2005 and 2004, respectively. Excluding investments in U.S. Treasury securities and obligations of U.S. government corporations and agencies, the Company is not exposed to any significant concentration of credit risk in its fixed maturities portfolio. The Company held fixed maturities at estimated fair values that were below investment grade or not rated by an independent rating agency that totaled $10,160 million and $11,199 million at December 31, 2005 and 2004, respectively. These securities had a net unrealized gain of $388 million and $876 million at December 31, 2005 and 2004, respectively. Non-income producing fixed maturities at fair value were $10 million and $84 million at December 31, 2005 and 2004, respectively. Unrealized gains (losses) associated with non-income producing fixed maturities were $1 million and $(11) million at December 31, 2005 and 2004, respectively. F-28 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The cost or amortized cost and estimated fair value of bonds at December 31, 2005 and 2004, by contractual maturity date (excluding scheduled sinking funds), are shown below:
DECEMBER 31, ----------------------------------------------- 2005 2004 ---------------------- ---------------------- COST OR COST OR AMORTIZED ESTIMATED AMORTIZED ESTIMATED COST FAIR VALUE COST FAIR VALUE --------- ---------- --------- ---------- (IN MILLIONS) Due in one year or less.................... $ 4,271 $ 4,320 $ 5,490 $ 5,577 Due after one year through five years...... 20,419 20,899 24,322 25,487 Due after five years through ten years..... 29,365 30,335 28,842 31,041 Due after ten years........................ 40,317 44,626 34,736 39,052 -------- -------- -------- -------- Subtotal................................. 94,372 100,180 93,390 101,157 Mortgage-backed, commercial mortgage-backed and other asset-backed securities........ 47,418 47,578 47,832 48,817 -------- -------- -------- -------- Subtotal................................. 141,790 147,758 141,222 149,974 Redeemable preferred stock................. 139 139 274 255 -------- -------- -------- -------- Total fixed maturities................... $141,929 $147,897 $141,496 $150,229 ======== ======== ======== ========
Bonds not due at a single maturity date have been included in the above table in the year of final contractual maturity. Actual maturities may differ from contractual maturities due to the exercise of prepayment options. Sales or disposals of fixed maturities and equity securities classified as available-for-sale were as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ------- ------- ------- (IN MILLIONS) Proceeds................................................ $97,347 $53,639 $48,390 Gross investment gains.................................. $ 623 $ 792 $ 446 Gross investment losses................................. $ (956) $ (468) $ (452)
Gross investment losses above exclude writedowns recorded during 2005, 2004 and 2003 for other-than-temporarily impaired available-for-sale fixed maturities and equity securities of $64 million, $93 million and $328 million, respectively. The Company periodically disposes of fixed maturity and equity securities at a loss. Generally, such losses are insignificant in amount or in relation to the cost basis of the investment or are attributable to declines in fair value occurring in the period of disposition. F-29 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) UNREALIZED LOSSES FOR FIXED MATURITIES AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables show the estimated fair values and gross unrealized losses of the Company's fixed maturities (aggregated by sector) and equity securities in an unrealized loss position, aggregated by length of time that the securities have been in a continuous unrealized loss position at December 31, 2005 and 2004:
DECEMBER 31, 2005 ------------------------------------------------------------------------ EQUAL TO OR GREATER LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL ---------------------- ---------------------- ---------------------- ESTIMATED GROSS ESTIMATED GROSS ESTIMATED GROSS FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED VALUE LOSS VALUE LOSS VALUE LOSS --------- ---------- --------- ---------- --------- ---------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities............ $12,171 $275 $2,295 $ 83 $14,466 $ 358 Residential mortgage-backed securities......................... 18,839 267 884 25 19,723 292 Foreign corporate securities......... 6,947 199 1,621 58 8,568 257 U.S. Treasury/agency securities...... 2,856 16 107 2 2,963 18 Commercial mortgage-backed securities......................... 5,323 89 401 13 5,724 102 Asset-backed securities.............. 2,289 21 239 8 2,528 29 Foreign government securities........ 429 9 161 1 590 10 State and political subdivision securities......................... 327 10 -- -- 327 10 Other fixed maturity securities...... -- 29 38 4 38 33 ------- ---- ------ ---- ------- ------ Total bonds........................ 49,181 915 5,746 194 54,927 1,109 Redeemable preferred stocks.......... 48 1 -- -- 48 1 ------- ---- ------ ---- ------- ------ Total fixed maturities............. $49,229 $916 $5,746 $194 $54,975 $1,110 ======= ==== ====== ==== ======= ====== Equity securities.................... $ 409 $ 24 $ 57 $ 4 $ 466 $ 28 ======= ==== ====== ==== ======= ====== Total number of securities in an unrealized loss position........... 3,607 675 4,282 ======= ====== =======
DECEMBER 31, 2004 ------------------------------------------------------------------------ EQUAL TO OR GREATER LESS THAN 12 MONTHS THAN 12 MONTHS TOTAL ---------------------- ---------------------- ---------------------- ESTIMATED GROSS ESTIMATED GROSS ESTIMATED GROSS FAIR UNREALIZED FAIR UNREALIZED FAIR UNREALIZED VALUE LOSS VALUE LOSS VALUE LOSS --------- ---------- --------- ---------- --------- ---------- (IN MILLIONS, EXCEPT NUMBER OF SECURITIES) U.S. corporate securities............ $ 8,122 $ 97 $1,081 $ 47 $ 9,203 $144 Residential mortgage-backed securities......................... 7,257 49 215 3 7,472 52 Foreign corporate securities......... 3,234 52 413 13 3,647 65 U.S. Treasury/agency securities...... 4,399 19 1 -- 4,400 19 Commercial mortgage-backed securities......................... 3,137 27 136 3 3,273 30 Asset-backed securities.............. 3,424 22 203 7 3,627 29 Foreign government securities........ 490 8 39 4 529 12 State and political subdivision securities......................... 37 -- 14 1 51 1 Other fixed maturity securities...... 37 33 12 -- 49 33 ------- ---- ------ ---- ------- ---- Total bonds........................ 30,137 307 2,114 78 32,251 385 Redeemable preferred stocks.......... 255 19 -- -- 255 19 ------- ---- ------ ---- ------- ---- Total fixed maturities............. $30,392 $326 $2,114 $ 78 $32,506 $404 ======= ==== ====== ==== ======= ==== Equity securities.................... $ 78 $ 5 $ 4 $ -- $ 82 $ 5 ======= ==== ====== ==== ======= ==== Total number of securities in an unrealized loss position........... 2,896 248 3,144 ======= ====== =======
F-30 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) AGING OF GROSS UNREALIZED LOSSES FOR FIXED MATURITIES AND EQUITY SECURITIES AVAILABLE-FOR-SALE The following tables present the cost or amortized cost, gross unrealized losses and number of securities for fixed maturities and equity securities at December 31, 2005 and 2004, where the estimated fair value had declined and remained below cost or amortized cost by less than 20%, or 20% or more for:
DECEMBER 31, 2005 ------------------------------------------------------------ COST OR GROSS NUMBER OF AMORTIZED COST UNREALIZED LOSSES 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) Less than six months............ $43,966 $68 $ 732 $18 2,827 89 Six months or greater but less than nine months.............. 2,666 4 82 2 268 7 Nine months or greater but less than twelve months............ 3,874 -- 106 -- 415 1 Twelve months or greater........ 5,980 21 193 5 668 7 ------- --- ------ --- ----- --- Total......................... $56,486 $93 $1,113 $25 4,178 104 ======= === ====== === ===== ===
DECEMBER 31, 2004 ------------------------------------------------------------ COST OR GROSS NUMBER OF AMORTIZED COST UNREALIZED LOSSES 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) Less than six months............ $22,449 $51 $194 $12 2,020 117 Six months or greater but less than nine months.............. 7,039 8 94 1 593 5 Nine months or greater but less than twelve months............ 1,235 19 26 4 156 5 Twelve months or greater........ 2,176 20 63 15 241 7 ------- --- ---- --- ----- --- Total......................... $32,899 $98 $377 $32 3,010 134 ======= === ==== === ===== ===
As of December 31, 2005, $1,113 million of unrealized losses related to securities with an unrealized loss position less than 20% of cost or amortized cost, which represented 2% of the cost or amortized cost of such securities. As of December 31, 2004, $377 million of unrealized losses related to securities with an unrealized loss position less than 20% of cost or amortized cost, which represented 1% of the cost or amortized cost of such securities. As of December 31, 2005, $25 million of unrealized losses related to securities with an unrealized loss position greater than 20% of cost or amortized cost, which represented 27% of the cost or amortized cost of such securities. Of such unrealized losses of $25 million, $18 million have been in an unrealized loss position for a period of less than six months. As of December 31, 2004, $32 million of unrealized losses related to securities with an unrealized loss position greater than 20% of cost or amortized cost, which represented 33% of the cost or amortized cost of such securities. Of such unrealized losses of $32 million, $12 million have been in an unrealized loss position for a period of less than six months. As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its investment holdings in accordance with its impairment policy in order to evaluate whether such securities are other-than-temporarily impaired. The increase in the unrealized losses during 2005 is principally F-31 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) driven by an increase in interest rates during the year. Based upon the Company's evaluation of the securities in accordance with its impairment policy, the cause of the decline being principally attributable to the general rise in rates during the year, and the Company's intent and ability to hold the fixed income and equity securities with unrealized losses for a period of time sufficient for them to recover; the Company has concluded that the aforementioned securities are not other-than-temporarily impaired. SECURITIES LENDING PROGRAM The Company participates in a securities lending program whereby blocks of securities, which are included in fixed maturities, are loaned to third parties, primarily major brokerage firms. The Company requires a minimum of 102% of the fair value of the loaned securities to be separately maintained as collateral for the loans. Securities with a cost or amortized cost of $19,479 million and $23,325 million and an estimated fair value of $20,417 million and $24,625 million were on loan under the program at December 31, 2005 and 2004, respectively. Securities loaned under such transactions may be sold or repledged by the transferee. The Company was liable for cash collateral under its control of $20,975 million and $25,230 million at December 31, 2005 and 2004, respectively. Securities loaned transactions are accounted for as financing arrangements on the Company's consolidated balance sheets and consolidated statements of cash flows and the income and expenses associated with the program are reported in net investment income as investment income and investment expenses, respectively. Security collateral of $33 million and $17 million, respectively, at December 31, 2005 and 2004 on deposit from customers in connection with the securities lending transactions may not be sold or repledged and is not reflected in the consolidated financial statements. ASSETS ON DEPOSIT AND HELD IN TRUST The Company had investment assets on deposit with regulatory agencies with a fair market value of $1,473 million and $1,315 million at December 31, 2005 and 2004, respectively, consisting primarily of fixed maturity securities. Company securities held in trust to satisfy collateral requirements had an amortized cost of $1,492 million and $1,880 million at December 31, 2005 and 2004, respectively, consisting primarily of fixed maturity securities. MORTGAGE AND CONSUMER LOANS Mortgage and consumer loans were categorized as follows:
DECEMBER 31, ------------------------------------- 2005 2004 ----------------- ----------------- AMOUNT PERCENT AMOUNT PERCENT ------- ------- ------- ------- (IN MILLIONS) Commercial mortgage loans........................ $26,574 80% $25,432 80% Agricultural mortgage loans...................... 6,242 19 5,654 18 Consumer loans................................... 427 1 639 2 ------- --- ------- --- Total.......................................... 33,243 100% 31,725 100% === === Less: Valuation allowances....................... 149 154 ------- ------- Mortgage and consumer loans.................... $33,094 $31,571 ======= =======
Mortgage loans are collateralized by properties primarily located in the United States. At December 31, 2005, approximately 20%, 9% and 7% of the properties were located in California, New York and Illinois, respectively. Generally, the Company, as the lender, only loans up to 75% of the purchase price of the underlying real estate. F-32 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Of the mortgage loans held at December 31, 2005 and 2004, $781 million and $1,480 million, respectively, of the loans granted, were in connection with Metropolitan Insurance and Annuity Company's ("MIAC"), a related party, purchase of real estate from the Company in 2001 and 2003. MIAC was merged into MTL, also a related party, in 2004. In 2005, MTL sold its 200 Park Avenue real estate property located in New York City, to a third party for $1.72 billion. Concurrent with the sale, MTL repaid the related $690 million mortgage, including accrued interest, it owed to the Company. Based on the terms of the loan agreement, the Company also received a $120 million prepayment fee from MTL, which was recognized as investment income when received. In addition, the Company has also loaned money to certain real estate joint ventures which are recorded as mortgage loans. The carrying values of such mortgages were $379 million and $641 million at December 31, 2005 and 2004, respectively. Changes in loan valuation allowances for mortgage and consumer loans were as follows:
YEARS ENDED DECEMBER 31, ------------------ 2005 2004 2003 ---- ---- ---- (IN MILLIONS) Balance, beginning of year.................................. $154 $126 $122 Additions................................................... 43 56 50 Deductions.................................................. (48) (28) (46) ---- ---- ---- Balance, end of year........................................ $149 $154 $126 ==== ==== ====
A portion of the Company's mortgage and consumer loans was impaired and consisted of the following:
DECEMBER 31, ------------- 2005 2004 ----- ----- (IN MILLIONS) Impaired mortgage loans with valuation allowances........... $11 $178 Impaired mortgage loans without valuation allowances........ 86 115 --- ---- Total..................................................... 97 293 Less: Valuation allowances on impaired loans................ 2 40 --- ---- Impaired loans............................................ $95 $253 === ====
The average investment in impaired loans was $152 million, $376 million and $615 million for the years ended December 31, 2005, 2004 and 2003, respectively. Interest income on impaired loans was $6 million, $25 million and $55 million for the years ended December 31, 2005, 2004 and 2003, respectively. The investment in restructured loans was $37 million and $121 million at December 31, 2005 and 2004, respectively. Interest income of $2 million, $9 million and $19 million was recognized on restructured loans for the years ended December 31, 2005, 2004 and 2003, respectively. Gross interest income that would have been recorded in accordance with the original terms of such loans amounted to $3 million, $11 million and $24 million for the years ended December 31, 2005, 2004 and 2003, respectively. Mortgage and consumer loans with scheduled payments of 60 days (90 days for agricultural mortgages) or more past due or in foreclosure had an amortized cost of $30 million and $35 million at December 31, 2005 and 2004, respectively. F-33 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) REAL ESTATE AND REAL ESTATE JOINT VENTURES Real estate and real estate joint ventures consisted of the following:
DECEMBER 31, --------------- 2005 2004 ------ ------ (IN MILLIONS) Real estate and real estate joint ventures held-for-investment....................................... $4,205 $2,761 Impairments................................................. (118) (118) ------ ------ Total..................................................... 4,087 2,643 ------ ------ Real estate held-for-sale................................... -- 694 Impairments................................................. -- (16) ------ ------ Total..................................................... -- 678 ------ ------ Real estate and real estate joint ventures............. $4,087 $3,321 ====== ======
Accumulated depreciation on real estate was $993 million and $1,222 million at December 31, 2005 and 2004, respectively. Related depreciation expense was $103 million, $116 million and $124 million for the years ended December 31, 2005, 2004 and 2003, respectively. These amounts include $9 million, $37 million and $51 million of depreciation expense related to discontinued operations for the years ended December 31, 2005, 2004 and 2003, respectively. Real estate and real estate joint ventures were categorized as follows:
DECEMBER 31, ----------------------------------- 2005 2004 ---------------- ---------------- AMOUNT PERCENT AMOUNT PERCENT ------ ------- ------ ------- (IN MILLIONS) Office............................................. $2,529 62% $1,800 55% Retail............................................. 612 15 556 17 Apartments......................................... 447 11 514 15 Land............................................... 40 1 47 1 Agriculture........................................ 2 -- 1 -- Other.............................................. 457 11 403 12 ------ --- ------ --- Total............................................ $4,087 100% $3,321 100% ====== === ====== ===
The Company's real estate holdings are primarily located in the United States. At December 31, 2005, approximately 26%, 17% and 15% of the Company's real estate holdings were located in California, Texas and New York, respectively. F-34 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Changes in the real estate and real estate joint ventures held-for-sale valuation allowance were as follows:
YEARS ENDED DECEMBER 31, ------------------ 2005 2004 2003 ---- ---- ---- (IN MILLIONS) Balance, beginning of year.................................. $ 4 $ 12 $ 11 Additions................................................... 5 13 17 Deductions.................................................. (9) (21) (16) --- ---- ---- Balance, end of year........................................ $-- $ 4 $ 12 === ==== ====
Investment income related to impaired real estate and real estate joint ventures held-for-investment was $7 million, $15 million and $34 million for the years ended December 31, 2005, 2004 and 2003, respectively. There was no investment income (expense) related to impaired real estate and real estate joint ventures held-for-sale for the year ended December 31, 2005. Investment income (expense) related to impaired real estate and real estate joint ventures held-for-sale was ($1) million and $1 million for the years ended December 31, 2004 and 2003, respectively. The carrying value of non-income producing real estate and real estate joint ventures was $30 million and $38 million at December 31, 2005 and 2004, respectively. The Company owned no real estate acquired in satisfaction of debt at December 31, 2005. The Company owned real estate acquired in satisfaction of debt of $1 million at December 31, 2004. LEVERAGED LEASES Leveraged leases, included in other invested assets, consisted of the following:
DECEMBER 31, --------------- 2005 2004 ------ ------ (IN MILLIONS) Investment.................................................. $ 991 $1,059 Estimated residual values................................... 735 480 ------ ------ Total..................................................... 1,726 1,539 Unearned income............................................. (645) (424) ------ ------ Leveraged leases.......................................... $1,081 $1,115 ====== ======
The investment amounts set forth above are generally due in monthly installments. The payment periods generally range from one to 15 years, but in certain circumstances are as long as 30 years. These receivables are generally collateralized by the related property. The Company's deferred income tax liability related to leveraged leases was $605 million and $757 million at December 31, 2005 and 2004, respectively. FUNDS WITHHELD AT INTEREST Included in other invested assets at December 31, 2005 and 2004, were funds withheld at interest of $3,479 million and $2,788 million, respectively. F-35 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET INVESTMENT INCOME The components of net investment income were as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ------- ------- ------- (IN MILLIONS) Fixed maturities........................................ $ 8,600 $ 8,085 $ 7,765 Equity securities....................................... 42 65 27 Mortgage and consumer loans............................. 2,246 1,957 1,932 Real estate and real estate joint ventures.............. 592 484 425 Policy loans............................................ 497 492 510 Other limited partnership interests..................... 676 324 80 Cash, cash equivalents and short-term investments....... 113 64 83 Other................................................... 381 179 175 ------- ------- ------- Total................................................. 13,147 11,650 10,997 Less: Investment expenses............................... 1,397 832 730 ------- ------- ------- Net investment income................................. $11,750 $10,818 $10,267 ======= ======= =======
NET INVESTMENT GAINS (LOSSES) Net investment gains (losses) were as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ (IN MILLIONS) Fixed maturities............................................ $(518) $ 81 $(373) Equity securities........................................... 121 150 39 Mortgage and consumer loans................................. 31 54 (51) Real estate and real estate joint ventures.................. 7 5 20 Other limited partnership interests......................... 43 53 (84) Derivatives................................................. 415 (232) (91) Other....................................................... 80 171 14 ----- ----- ----- Total net investment gains (losses)....................... $ 179 $ 282 $(526) ===== ===== =====
F-36 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) NET UNREALIZED INVESTMENT GAINS (LOSSES) The components of net unrealized investment gains (losses), included in accumulated other comprehensive income, were as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ------- ------- ------- (IN MILLIONS) Fixed maturities........................................ $ 5,972 $ 8,571 $ 8,094 Equity securities....................................... 225 270 353 Derivatives............................................. (207) (494) (395) Minority Interest....................................... (171) (103) (61) Other................................................... (82) 34 6 ------- ------- ------- Total................................................. 5,737 8,278 7,997 ------- ------- ------- Amounts related to: Future policy benefit loss recognition................ (1,259) (1,953) (1,453) DAC and VOBA.......................................... (148) (407) (495) Participating contracts............................... -- -- (117) Policyholder dividend obligation...................... (1,492) (2,119) (2,130) ------- ------- ------- Total................................................. (2,899) (4,479) (4,195) ------- ------- ------- Deferred income taxes................................... (1,029) (1,391) (1,397) ------- ------- ------- Total................................................. (3,928) (5,870) (5,592) ------- ------- ------- Net unrealized investment gains (losses)........... $ 1,809 $ 2,408 $ 2,405 ======= ======= =======
The changes in net unrealized investment gains (losses) were as follows:
YEARS ENDED DECEMBER 31, ------------------------- 2005 2004 2003 ------- ------ ------ (IN MILLIONS) Balance, beginning of year................................ $ 2,408 $2,405 $1,991 Unrealized investment gains (losses) during the year...... (2,556) 281 994 Unrealized investment gains (losses) of subsidiaries at date of sale............................................ 15 -- 269 Unrealized investment gains (losses) relating to: Future policy benefit gains (losses) recognition........ 694 (500) (211) DAC and VOBA............................................ 259 88 (129) Participating contracts................................. -- 117 12 Policyholder dividend obligation........................ 627 11 (248) Deferred income taxes..................................... 362 6 (273) ------- ------ ------ Balance, end of year...................................... $ 1,809 $2,408 $2,405 ------- ------ ------ Net change in unrealized investment gains (losses)........ $ (599) $ 3 $ 414 ======= ====== ======
F-37 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) TRADING SECURITIES Net investment income for the year ended December 31, 2005 includes $3 million of losses on securities classified as trading. The $3 million primarily relates to net losses recognized on trading securities sold during the year ended December 31, 2005. For the year ended December 31, 2005, changes in fair value on trading securities held at December 31, 2005 were less than $1 million. The Company did not hold any trading securities during the years ended December 31, 2004 and 2003. STRUCTURED INVESTMENT TRANSACTIONS The Company invests in structured notes and similar type instruments, which generally provide equity-based returns on debt securities. The carrying value of such investments was approximately $362 million and $636 million at December 31, 2005 and 2004, respectively. The related net investment income recognized was $28 million, $44 million and $78 million for the years ended December 31, 2005, 2004 and 2003, respectively. VARIABLE INTEREST ENTITIES The following table presents the total assets of and maximum exposure to loss relating to VIEs for which the Company has concluded that (i) it is the primary beneficiary and which are consolidated in the Company's consolidated financial statements at December 31, 2005; and (ii) it holds significant variable interests but it is not the primary beneficiary and which have not been consolidated:
DECEMBER 31, 2005 ----------------------------------------------------------- PRIMARY BENEFICIARY NOT PRIMARY BENEFICIARY ---------------------------- ---------------------------- TOTAL MAXIMUM EXPOSURE TOTAL MAXIMUM EXPOSURE ASSETS(1) TO LOSS(2) ASSETS(1) TO LOSS(2) --------- ---------------- --------- ---------------- (IN MILLIONS) Asset-backed securitizations and collateralized debt obligations..................... $ -- $ -- $ 3,728 $ 394 Real estate joint ventures(3)..... 304 114 150 -- Other limited partnerships(4)..... 48 35 15,030 1,966 Other investments(5).............. -- -- 3,522 177 ---- ---- ------- ------ Total........................... $352 $149 $22,430 $2,537 ==== ==== ======= ======
- --------------- (1) The assets of the asset-backed securitizations and collateralized debt obligations are reflected at fair value at December 31, 2005. The assets of the real estate joint ventures, other limited partnerships and other investments are reflected at the carrying amounts at which such assets would have been reflected on the Company's balance sheet had the Company consolidated the VIE from the date of its initial investment in the entity. (2) The maximum exposure to loss of the asset-backed securitizations and collateralized debt obligations is equal to the carrying amounts of participation or retained interests. In addition, the Company provides collateral management services for certain of these structures for which it collects a management fee. The maximum exposure to loss relating to real estate joint ventures, other limited partnerships and other investments is equal to the carrying amounts plus any unfunded commitments, reduced by amounts guaranteed by other partners. (3) Real estate joint ventures include partnerships and other ventures which engage in the acquisition, development, management and disposal of real estate investments. F-38 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) (4) Other limited partnerships include partnerships established for the purpose of investing in real estate funds, public and private debt and equity securities, as well as limited partnerships established for the purpose of investing in low-income housing that qualifies for federal tax credits. (5) Other investments include securities that are not asset-backed securitizations or collateralized debt obligations. 3. DERIVATIVE FINANCIAL INSTRUMENTS TYPES OF DERIVATIVE INSTRUMENTS The following table provides a summary of the notional amounts and current market or fair value of derivative financial instruments held at:
DECEMBER 31, 2005 DECEMBER 31, 2004 ------------------------------- ------------------------------- CURRENT MARKET OR CURRENT MARKET OR FAIR VALUE FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Interest rate swaps............ $12,857 $294 $ 12 $12,215 $276 $ 19 Interest rate floors........... 6,515 80 -- 2,065 24 -- Interest rate caps............. 24,970 224 -- 7,045 12 -- Financial futures.............. 63 1 -- 417 -- 5 Foreign currency swaps......... 9,256 74 852 7,457 149 1,274 Foreign currency forwards...... 2,333 26 41 888 -- 57 Options........................ 221 2 2 263 8 7 Financial forwards............. 2,446 13 1 326 -- -- Credit default swaps........... 4,789 11 9 1,879 10 5 Synthetic GICs................. 5,477 -- -- 5,869 -- -- Other.......................... 250 9 -- 450 1 1 ------- ---- ---- ------- ---- ------ Total........................ $69,177 $734 $917 $38,874 $480 $1,368 ======= ==== ==== ======= ==== ======
The above table does not include notional values for equity financial forwards. At December 31, 2005 and 2004, the Company owned 132,000 and no equity financial forwards, respectively. Equity financial forwards market values are included in financial forwards in the preceding table. F-39 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table provides a summary of the notional amounts of derivative financial instruments by maturity at December 31, 2005:
REMAINING LIFE -------------------------------------------------------- AFTER AFTER ONE YEAR FIVE YEARS ONE YEAR THROUGH THROUGH AFTER OR LESS FIVE YEARS TEN YEARS TEN YEARS TOTAL -------- ---------- ---------- --------- ------- (IN MILLIONS) Interest rate swaps................ $ 3,679 $ 3,607 $ 2,429 $3,142 $12,857 Interest rate floors............... -- 325 6,190 -- 6,515 Interest rate caps................. 12,900 12,070 -- -- 24,970 Financial futures.................. 63 -- -- -- 63 Foreign currency swaps............. 216 3,812 4,350 878 9,256 Foreign currency forwards.......... 2,333 -- -- -- 2,333 Options............................ 220 -- 1 -- 221 Financial forwards................. 446 -- -- 2,000 2,446 Credit default swaps............... 580 3,960 249 -- 4,789 Synthetic GICs..................... 4,751 726 -- -- 5,477 Other.............................. 250 -- -- -- 250 ------- ------- ------- ------ ------- Total............................ $25,438 $24,500 $13,219 $6,020 $69,177 ======= ======= ======= ====== =======
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 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. Interest rate caps and floors are used by the Company 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 exchange-traded interest rate (Treasury and swap) 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. F-40 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The value of interest rate futures is substantially impacted in interest rates and they can be used to modify or hedge existing interest rate risk. Foreign currency derivatives, including foreign currency swaps, foreign currency forwards and currency option contracts, 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. The Company also uses foreign currency forwards and swaps to hedge the foreign currency risk associated with certain of its net investments in foreign operations. 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 forward exchange rate 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. 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 enters into currency option contracts that give it the right, but not the obligation, to sell the foreign currency amount in exchange for a functional currency amount within a limited time at a contracted price. The contracts may also be net settled in cash, based on differentials in the foreign exchange rate and the strike price. Currency option contracts are included in options in the preceding table. Swaptions are used by the Company primarily to sell, or monetize, embedded call options in its fixed rate liabilities. A swaption is an option to enter into a swap with an effective date equal to the exercise date of the embedded call and a maturity date equal to the maturity date of the underlying liability. The Company receives a premium for entering into the swaption. Swaptions are included in options in the preceding table. The Company enters into financial 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. 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 financial forwards in the preceding table. Swap spread locks are used by the Company to hedge invested assets on an economic basis against the risk of changes in credit spreads. Swap spread locks are forward starting swaps 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. Swap spread locks are included in financial forwards in the preceding table. 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 insure 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. Credit default swaps are also used in replication synthetic asset transactions ("RSATs") to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. F-41 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) RSATs are a combination of a derivative and usually a U.S. Treasury or Agency security. RSATs that involve the use of credit default swaps are included in such classification in the preceding table. 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 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. TRRs can be used as hedges or RSATs and are included in the other classification in the preceding table. A synthetic GIC is a contract that simulates the performance of a traditional GIC through the use of financial instruments. Under a synthetic GIC, the policyholder owns the underlying assets. The Company guarantees a rate return on those assets for a premium. HEDGING The table below provides a summary of the notional amount and fair value of derivatives by type of hedge designation at:
DECEMBER 31, 2005 DECEMBER 31, 2004 ------------------------------- ------------------------------- FAIR VALUE FAIR VALUE NOTIONAL -------------------- NOTIONAL -------------------- AMOUNT ASSETS LIABILITIES AMOUNT ASSETS LIABILITIES -------- ------ ----------- -------- ------ ----------- (IN MILLIONS) Fair value..................... $ 4,419 $ 50 $104 $ 4,850 $173 $ 233 Cash flow...................... 6,233 29 437 8,057 40 664 Foreign operations............. 834 2 37 535 -- 47 Non-qualifying................. 57,691 653 339 25,432 267 424 ------- ---- ---- ------- ---- ------ Total........................ $69,177 $734 $917 $38,874 $480 $1,368 ======= ==== ==== ======= ==== ======
The following table provides the settlement payments recorded in income for the:
YEARS ENDED DECEMBER 31, ------------------------- 2005 2004 2003 ------ ------- ------ (IN MILLIONS) Qualifying hedges: Net investment income..................................... $ 42 $(144) $(61) Interest credited to policyholder account balances........ 17 45 -- Non-qualifying hedges: Net investment gains (losses)............................. 86 51 84 ---- ----- ---- Total.................................................. $145 $ (48) $ 23 ==== ===== ====
FAIR VALUE HEDGES The Company designates and accounts for the following as fair value hedges when they have met the requirements of SFAS 133: (i) interest rate swaps to convert fixed rate investments to floating rate investments; (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated investments and liabilities; and (iii) interest rate futures to hedge against changes in value of fixed rate securities. F-42 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company recognized net investment gains (losses) representing the ineffective portion of all fair value hedges as follows:
YEARS ENDED DECEMBER 31, -------------------------- 2005 2004 2003 ------- ------ ------- (IN MILLIONS) Changes in the fair value of derivatives.................... $(118) $ 64 $(184) Changes in the fair value of the items hedged............... 116 (49) 158 ----- ---- ----- Net ineffectiveness of fair value hedging activities........ $ (2) $ 15 $ (26) ===== ==== =====
All components of each derivative's gain or loss were included in the assessment of hedge ineffectiveness. There were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge. CASH FLOW HEDGES The Company designates and accounts for the following as cash flow hedges, when they have met the requirements of SFAS 133: (i) interest rate swaps to convert floating rate investments to fixed rate investments; (ii) interest rate swaps to convert floating rate liabilities into fixed rate liabilities; (iii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated investments and liabilities; (iv) interest rate futures to hedge against changes in value of securities to be acquired; (v) interest rate futures to hedge against changes in interest rates on liabilities to be issued; and (vi) financial forwards to buy and sell securities. For the years ended December 31, 2005, 2004 and 2003, the Company recognized net investment gains (losses) of ($21) million, ($31) million, and ($67) million, respectively, which represented the ineffective portion of all cash flow hedges. All components of each derivative's gain or loss were included in the assessment of hedge ineffectiveness. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions did not occur on the anticipated date or in the additional time period permitted by SFAS 133. The net amounts reclassified into net investment gains (losses) for the years ended December 31, 2005, 2004 and 2003 related to such discontinued cash flow hedges were losses of $42 million, $29 million and $0 million, respectively. There were no hedged forecasted transactions, other than the receipt or payment of variable interest payments. Presented below is a roll forward of the components of other comprehensive income (loss), before income taxes, related to cash flow hedges:
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ (IN MILLIONS) Other comprehensive income (loss) balance at the beginning of the year............................................... $(447) $(385) $ (24) Gains (losses) deferred in other comprehensive income (loss) on the effective portion of cash flow hedges.............. 196 (98) (367) Amounts reclassified to net investment gains (losses)....... 44 41 12 Amounts reclassified to net investment income............... 2 2 2 Amortization of transition adjustment....................... (2) (7) (8) ----- ----- ----- Other comprehensive income (loss) balance at the end of the year...................................................... $(207) $(447) $(385) ===== ===== =====
F-43 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) At December 31, 2005, approximately $7 million of the deferred net loss on derivatives accumulated in other comprehensive income (loss) is expected to be reclassified to earnings during the year ending December 31, 2006. HEDGES OF NET INVESTMENTS IN FOREIGN OPERATIONS The Company uses forward exchange contracts, foreign currency swaps and options to hedge portions of its net investment in foreign operations against adverse movements in exchange rates. The Company measures ineffectiveness on the forward exchange contracts based upon the change in forward rates. There was no ineffectiveness recorded in 2005, 2004 or 2003. The Company's consolidated statements of stockholder's equity for the years ended December 31, 2005, 2004 and 2003 include losses of $27 million, $47 million and $10 million, respectively, related to foreign currency contracts used to hedge its net investments in foreign operations. At December 31, 2005 and 2004, the cumulative foreign currency translation loss recorded in Accumulated other comprehensive income ("AOCI") related to these hedges was approximately $84 million and $57 million, respectively. When substantially all of the net investments in foreign operations are sold or liquidated, the amounts in AOCI are reclassified to the consolidated statements of income, while a pro rata portion will be reclassified upon partial sale of the net investments in foreign operations. NON-QUALIFYING DERIVATIVES AND DERIVATIVES FOR PURPOSES OTHER THAN HEDGING The Company enters into the following derivatives that do not qualify for hedge accounting under SFAS 133 or for purposes other than hedging: (i) interest rate swaps, purchased caps and floors, and interest rate futures to minimize its exposure to interest rate volatility; (ii) foreign currency forwards, swaps and option contracts to minimize its exposure to adverse movements in exchange rates; (iii) swaptions to sell embedded call options in fixed rate liabilities; (iv) credit default swaps to minimize its exposure to adverse movements in credit; (v) credit default swaps to diversify its credit risk exposure in certain portfolios; (vi) interest rate futures and equity variance swaps to economically hedge liabilities embedded in certain variable annuity products; (vii) swap spread locks to hedge invested assets against the risk of changes in credit spreads; (viii) financial forwards to buy and sell securities; (ix) synthetic GICs to synthetically create traditional GICs; (x) RSATs and TRRs to synthetically create investments; and (xi) basis swaps to better match the cash flows from assets and related liabilities. For the years ended December 31, 2005, 2004 and 2003, the Company recognized as net investment gains (losses) changes in fair value of $401 million, ($107) million and ($110) million, respectively, related to derivatives that do not qualify for hedge accounting. EMBEDDED DERIVATIVES The Company has certain embedded derivatives which are required to be separated from their host contracts and accounted for as derivatives. These host contracts include guaranteed rate of return contracts, guaranteed minimum withdrawal, accumulation, and interest benefit contracts, and modified coinsurance contracts. The fair value of the Company's embedded derivative assets was $50 million and $43 million at December 31, 2005 and 2004, respectively. The fair value of the Company's embedded derivative liabilities was $10 million and $26 million at December 31, 2005 and 2004, respectively. The amounts recorded in net investment gains (losses) during the years ended December 31, 2005, 2004 and 2003 were gains of $29 million, $34 million and $19 million, respectively. F-44 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) CREDIT RISK 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 fair value at the reporting date. The credit exposure of the Company's derivative transactions is represented by the fair value of contracts with a net positive fair value at the reporting date. As noted above, the Company manages its credit risk related to over-the-counter derivatives by entering into transactions with creditworthy counterparties, maintaining collateral arrangements and through the use of master agreements that provide for a single net payment to be made by one counterparty to another at each due date and upon termination. Because exchange traded futures are effected through regulated exchanges, and positions are marked to market on a daily basis, the Company has minimal exposure to credit related losses in the event of nonperformance by counterparties to such derivative instruments. The Company enters into various collateral arrangements, which require both the pledging and accepting of collateral in connection with its derivative instruments. As of December 31, 2005, the Company was obligated to return cash collateral under its control of $34 million, but held no non-cash collateral. This unrestricted cash collateral is included in cash and cash equivalents and the obligation to return it is included in payables for collateral under securities loaned and other transactions in the consolidated balance sheets. The Company did not have any cash or other collateral related to derivative instruments at December 31, 2004. As of December 31, 2005 and 2004, the Company had not pledged any collateral related to derivative instruments. F-45 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 4. INSURANCE DEFERRED POLICY ACQUISITION COSTS AND VALUE OF BUSINESS ACQUIRED Information regarding DAC and VOBA for the years ended December 31, 2005, 2004 and 2003 is as follows:
DEFERRED POLICY VALUE OF ACQUISITION BUSINESS COSTS ACQUIRED TOTAL ----------- -------- ------- (IN MILLIONS) Balance at January 1, 2003.............................. $ 8,790 $871 $ 9,661 Capitalizations....................................... 1,982 -- 1,982 Acquisitions.......................................... 218 -- 218 ------- ---- ------- Total............................................ 10,990 871 11,861 ------- ---- ------- Less: Amortization related to: Net investment gains (losses)...................... 10 (5) 5 Unrealized investment gains (losses)............... 138 (9) 129 Other expenses..................................... 1,332 49 1,381 ------- ---- ------- Total amortization............................... 1,480 35 1,515 ------- ---- ------- Less: Dispositions and other.......................... (120) -- (120) ------- ---- ------- Balance at December 31, 2003............................ 9,390 836 10,226 Capitalizations....................................... 1,817 -- 1,817 ------- ---- ------- Total............................................ 11,207 836 12,043 ------- ---- ------- Less: Amortization related to: Net investment gains (losses)...................... 5 1 6 Unrealized investment gains (losses)............... (12) (76) (88) Other expenses..................................... 1,058 81 1,139 ------- ---- ------- Total amortization............................... 1,051 6 1,057 ------- ---- ------- Less: Dispositions and other.......................... 99 (23) 76 ------- ---- ------- Balance at December 31, 2004............................ 10,255 807 11,062 Capitalizations....................................... 1,619 -- 1,619 ------- ---- ------- Total............................................ 11,874 807 12,681 ------- ---- ------- Less: Amortization related to: Net investment gains (losses)...................... 13 2 15 Unrealized investment gains (losses)............... (244) (15) (259) Other expenses..................................... 1,304 66 1,370 ------- ---- ------- Total amortization............................... 1,073 53 1,126 ------- ---- ------- Less: Dispositions and other.......................... (120) 3 (117) ------- ---- ------- Balance at December 31, 2005............................ $10,681 $757 $11,438 ======= ==== =======
F-46 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The estimated future amortization expense for the next five years allocated to other expenses for VOBA is $65 million in 2006, $63 million in 2007, $61 million in 2008, $61 million in 2009 and $37 million in 2010. Amortization of DAC and VOBA is related to (i) investment gains and losses and the impact of such gains and losses on the amount of the amortization; (ii) unrealized investment gains and losses to provide information regarding the amount that would have been amortized if such gains and losses had been recognized; and (iii) other expenses to provide amounts related to the gross margins or profits originating from transactions other than investment gains and losses. SALES INDUCEMENTS Changes in deferred sales inducements, which are reported within other assets in the consolidated balance sheets, are as follows:
YEARS ENDED DECEMBER 31, ------------- 2005 2004 ----- ----- (IN MILLIONS) Balance at January 1........................................ $75 $52 Capitalization............................................ 29 29 Amortization.............................................. (9) (6) --- --- Balance at December 31...................................... $95 $75 === ===
F-47 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) LIABILITIES FOR UNPAID CLAIMS AND CLAIM EXPENSES The following table provides an analysis of the activity in the liability for unpaid claims and claim expenses relating to property and casualty, group accident and non-medical health policies and contracts, which are reported within future policyholder benefits in the consolidated balance sheets:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ------- ------- ------- (IN MILLIONS) Balance at January 1.................................... $ 3,847 $ 3,560 $ 4,821 Less: Reinsurance recoverables........................ (287) (284) (496) ------- ------- ------- Net balance at January 1................................ 3,560 3,276 4,325 ------- ------- ------- Incurred related to: Current year.......................................... 2,791 2,491 3,816 Prior years........................................... (41) (9) 28 ------- ------- ------- 2,750 2,482 3,844 ------- ------- ------- Paid related to: Current year.......................................... (1,667) (1,519) (2,153) Prior years........................................... (742) (679) (1,290) ------- ------- ------- (2,409) (2,198) (3,443) ------- ------- ------- Dispositions............................................ -- -- (1,450) Net Balance at December 31.............................. 3,901 3,560 3,276 Add: Reinsurance recoverables......................... 290 287 284 ------- ------- ------- Balance at December 31.................................. $ 4,191 $ 3,847 $ 3,560 ======= ======= =======
As a result of changes in estimates of insured events in the prior years, the claims and claim adjustment expenses decreased $41 million in 2005 due to a refinement in the estimation methodology for non-medical health long-term care claim reserves, improved loss ratio reserves for non-medical health claim reserves and improved claim management. In 2004, the claims and claim adjustment expense decreased by $9 million due to improved loss ratios in non-medical health claim reserves and improved claims management. In 2003, prior to the sale of Met P&C, the claims and claim adjustment expense increased by $28 million as a result of the re-evaluation of loss trends related to the automobile line of business. GUARANTEES The Company issues annuity contracts which may include contractual guarantees to the contractholder for: (i) return of no less than total deposits made to the contract less any partial withdrawals ("return of net deposits") and (ii) the highest contract value on a specified anniversary date minus any withdrawals following the contract anniversary, or total deposits made to the contract less any partial withdrawals plus a minimum return ("anniversary contract value" or "minimum return"). The Company also issues annuity contracts that apply a lower rate of funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize ("two tier annuities"). These guarantees include benefits that are payable in the event of death or at annuitization. F-48 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company also issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid up benefit. The Company had the following types of guarantees relating to annuity and universal and variable life contracts at: ANNUITY CONTRACTS
DECEMBER 31, --------------------------------------------------------------- 2005 2004 ------------------------------ ------------------------------ IN THE AT IN THE AT EVENT OF DEATH ANNUITIZATION EVENT OF DEATH ANNUITIZATION -------------- ------------- -------------- ------------- (IN MILLIONS) RETURN OF NET DEPOSITS Account value.......................... $ 2,527 N/A $ 2,039 N/A Net amount at risk..................... $ 1(1) N/A $ 11(1) N/A Average attained age of contractholders..................... 58 years N/A 58 years N/A ANNIVERSARY CONTRACT VALUE OR MINIMUM RETURN Account value.......................... $ 31,646 $ 3,847 $ 29,834 $ 2,659 Net amount at risk..................... $ 521(1) $ 17(2) $ 735(1) $ 7(2) Average attained age of contractholders..................... 60 years 57 years 61 years 56 years TWO TIER ANNUITIES General account value.................. N/A $ 299 N/A $ 301 Net amount at risk..................... N/A $ 36(3) N/A $ 36(3) Average attained age of contractholders..................... N/A 58 years N/A 58 years
UNIVERSAL AND VARIABLE LIFE CONTRACTS
DECEMBER 31, ---------------------------------------------------- 2005 2004 ------------------------ ------------------------ SECONDARY PAID UP SECONDARY PAID UP GUARANTEES GUARANTEES GUARANTEES GUARANTEES ---------- ---------- ---------- ---------- (IN MILLIONS) Account value (general and separate account).................................... $ 5,413 $ 1,680 $ 4,715 $ 1,659 Net amount at risk............................ $ 98,907(1) $ 15,633(1) $ 94,163(1) $ 16,830(1) Average attained age of policyholders......... 45 years 52 years 45 years 51 years
- --------------- (1) The net amount at risk for guarantees of amounts in the event of death is defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. (2) The net amount at risk for guarantees of amounts at annuitization is defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. (3) The net amount at risk for two tier annuities is based on the excess of the upper tier, adjusted for a profit margin, less the lower tier. The net amount at risk is based on the direct amount at risk (excluding reinsurance). F-49 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The Company's annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the amounts listed above may not be mutually exclusive. Liabilities for guarantees (excluding base policy liabilities) relating to annuity and universal and variable life contracts are as follows:
ANNUITY CONTRACTS UNIVERSAL AND VARIABLE ------------------------------ LIFE CONTRACTS GUARANTEED ----------------------- GUARANTEED ANNUITIZATION SECONDARY PAID UP DEATH BENEFITS BENEFITS GUARANTEES GUARANTEES TOTAL -------------- ------------- ---------- ---------- ----- (IN MILLIONS) Balance at January 1, 2004..... $ 8 $16 $ 6 $ 6 $ 36 Incurred guaranteed benefits... 4 (9) 4 1 -- Paid guaranteed benefits....... (6) -- (4) -- (10) --- --- --- --- ---- Balance at December 31, 2004... 6 7 6 7 26 Incurred guaranteed benefits... 4 -- 2 5 11 Paid guaranteed benefits....... (2) -- (1) -- (3) --- --- --- --- ---- Balance at December 31, 2005... $ 8 $ 7 $ 7 $12 $ 34 === === === === ====
Account balances of contracts with insurance guarantees are invested in separate account asset classes as follows at:
DECEMBER 31, ----------------- 2005 2004 ------- ------- (IN MILLIONS) Mutual Fund Groupings Equity.................................................... $21,143 $18,873 Bond...................................................... 2,606 2,270 Balanced.................................................. 1,074 886 Money Market.............................................. 206 212 Specialty................................................. 229 79 ------- ------- TOTAL.................................................. $25,258 $22,320 ======= =======
SEPARATE ACCOUNTS Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $57,406 million and $53,382 million at December 31, 2005 and 2004, respectively, for which the policyholder assumes all investment risk, and separate accounts with a minimum return or account value for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $15,746 million and $15,125 million at December 31, 2005 and 2004, respectively. The latter category consisted primarily of Met Managed Guaranteed Interest Contracts and participating close-out contracts. The average interest rates credited on these contracts were 4.5% and 4.7% at December 31, 2005 and 2004, respectively. Fees charged to the separate accounts by the Company (including mortality charges, policy administration fees and surrender charges) are reflected in the Company's revenues as universal life and investment-type product policy fees and totaled $1,058 million, $998 million and $899 million for the years ended December 31, 2005, 2004 and 2003, respectively. F-50 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) At December 31, 2005, fixed maturities, equity securities, and cash and cash equivalents reported on the consolidated balance sheets include $0 million, $30 million and $1 million, respectively, of the Company's proportional interest in separate accounts. At December 31, 2004, fixed maturities, equity securities, and cash and cash equivalents reported on the consolidated balance sheets include $27 million, $20 million and $1 million, respectively, of the Company's proportional interest in separate accounts. For both the years ended December 31, 2005 and 2004, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 5. REINSURANCE The Company's life insurance operations participate in reinsurance activities in order to limit losses, minimize exposure to large risks, and provide additional capacity for future growth. The Company has historically reinsured the mortality risk on new life insurance policies primarily on an excess of retention basis or a quota share basis. Until 2005, the Company reinsured up to 90% of the mortality risk for all new individual life insurance policies that it wrote through its various franchises. This practice was initiated by the different franchises for different products starting at various points in time between 1992 and 2000. During 2005, the Company changed its retention practices for individual life insurance. Amounts reinsured in prior years remain reinsured under the original reinsurance; however, under the new retention guidelines, the Company reinsures up to 90% of the mortality risk in excess of $1 million for most new life insurance policies that it writes through its various franchises and for certain individual life policies the retention limits remained unchanged. On a case by case basis, the Company may retain up to $25 million per life on single life policies and $30 million per life on survivorship policies and reinsure 100% of amounts in excess of the Company's retention limits. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. In addition, the Company reinsures a significant portion of the mortality risk on its universal life policies issued since 1983. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specific characteristics. In addition to reinsuring mortality risk, the Company reinsures other risks and specific coverages. The Company routinely reinsures certain classes of risks in order to limit its exposure to particular travel, avocation and lifestyle hazards. The Company has exposure to catastrophes, which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of loss and quota share reinsurance arrangements to limit its maximum loss, provide greater diversification of risk and minimize exposure to larger risks. The Company had also protected itself through the purchase of combination risk coverage. This reinsurance coverage pooled risks from several lines of business and included individual and group life claims in excess of $2 million per policy. This combination risk coverage was commuted during 2005, resulting in a $2 million reduction in premiums and annuity considerations. The Company reinsures its business through a diversified group of reinsurers. No single unaffiliated reinsurer has a material obligation to the Company nor is the Company's business substantially dependent upon any reinsurance contracts. The Company is contingently liable with respect to ceded reinsurance should any reinsurer be unable to meet its obligations under these agreements. In the Reinsurance Segment, Reinsurance Group of America, Incorporated ("RGA") retains a maximum of $6 million of coverage per individual life with respect to its assumed reinsurance business. F-51 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The amounts in the consolidated statements of income are presented net of reinsurance ceded. The effects of reinsurance were as follows:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ------- ------- ------- (IN MILLIONS) Direct premiums earned.................................. $16,466 $15,347 $16,794 Reinsurance assumed..................................... 5,046 4,330 3,565 Reinsurance ceded....................................... (2,256) (2,240) (2,260) ------- ------- ------- Net premiums earned..................................... $19,256 $17,437 $18,099 ======= ======= ======= Reinsurance recoveries netted against policyholder benefits and claims................................... $ 1,495 $ 1,626 $ 2,032 ======= ======= =======
Written premiums are not materially different than earned premiums presented in the preceding table. For the years ended December 31, 2005, 2004, and 2003, ceded and assumed include affiliated transactions of $529 million, $457 million and $436 million, respectively. Reinsurance recoverables, included in premiums and other receivables, were $3,796 million and $3,735 million at December 31, 2005 and 2004, respectively, including $1,261 million and $1,302 million, respectively, relating to reinsurance of long-term guaranteed interest contracts and structured settlement lump sum contracts accounted for as a financing transaction. Reinsurance and ceded commissions payables, included in other liabilities, were $263 million and $100 million at December 31, 2005 and 2004, respectively. Included in premiums and other receivables are reinsurance due from Exeter Reassurance Company, Ltd., Texas Life Insurance Company, First MetLife Investors Insurance Company, MetLife Investors USA Insurance Company ("MLI USA"), The Travelers Insurance Company, and MetLife Investors Insurance Company related parties of $1,422 million and $269 million at December 31, 2005 and 2004. Included in future policy benefits, other policyholder funds, policyholder account balances, and other liabilities are reinsurance liabilities assumed from COVA Corporation, Metropolitan Tower Life Insurance Company, MetLife Investors Group, Inc., First MetLife Investors Insurance Company, MetLife Investors Insurance Company, Exeter Reassurance Company, Ltd. and Traveler's Insurance Company related parties of $1,228 million, $268 million, $389 million and $3,064 million at December 31, 2005. Included in future policy benefits, other policyholder funds, policyholder account balances, and other liabilities are reinsurance liabilities assumed from COVA Corporation, Metropolitan Tower Life Insurance Company, MetLife Investors Group, Inc., First MetLife Investors Insurance Company, MetLife Investors Insurance Company, Exeter Reassurance Company, Ltd. and Metropolitan Life and Annuity Company related parties of $863 million, $415 million, $256 million and $2,215 million at December 31, 2004. Effective January 1, 2005, a subsidiary of the Company, General American Life Insurance Company ("General American") entered into a reinsurance agreement to cede an in force block of business to MLI USA, an affiliate. This agreement covered certain term and universal life policies issued by General American on and after January 1, 2000 through December 31, 2004. This agreement also covers certain term and universal life policies issued on or after January 1, 2005. Under this agreement, General American transferred $797 million of liabilities and $411 million in assets to MLI USA related to the policies in-force as of December 31, 2004. As a result of the transfer of assets, General American recognized a realized gain of $19 million, net of income taxes. General American also received and deferred 100% of a $386 million ceding commission resulting in no gain or loss on the transfer of the in-force business as of January 1, 2005. For the policies issued on or after January 1, 2005, General American ceded premiums and related fees of $192 million and ceded benefits and related costs of F-52 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) $143 million for the year ended December 31, 2005. Reinsurance recoverables, included in premiums and other receivables, related to this reinsurance agreement as of December 31, 2005 were $932 million. For the years ended December 31, 2005 and 2004, premiums, policyholder benefits and claims, and commission expenses include assumed related party transactions of $37 million, $106 million, and $137 million and $38 million, $50 million, and $5 million, respectively. 6. CLOSED BLOCK On April 7, 2000 (the "date of demutualization"), Metropolitan Life established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life. Assets have been allocated to the closed block in an amount that has been determined to produce cash flows which, together with anticipated revenues from the policies included in the closed block, are reasonably expected to be sufficient to support obligations and liabilities relating to these policies, including, but not limited to, provisions for the payment of claims and certain expenses and taxes, and to provide for the continuation of policyholder dividend scales in effect for 1999, if the experience underlying such dividend scales continues, and for appropriate adjustments in such scales if the experience changes. At least annually, the Company compares actual and projected experience against the experience assumed in the then-current dividend scales. Dividend scales are adjusted periodically to give effect to changes in experience. The closed block assets, the cash flows generated by the closed block assets and the anticipated revenues from the policies in the closed block will benefit only the holders of the policies in the closed block. To the extent that, over time, cash flows from the assets allocated to the closed block and claims and other experience related to the closed block are, in the aggregate, more or less favorable than what was assumed when the closed block was established, total dividends paid to closed block policyholders in the future may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect for 1999 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to closed block policyholders and will not be available to stockholders. If the closed block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the closed block. The closed block will continue in effect as long as any policy in the closed block remains in-force. The expected life of the closed block is over 100 years. The Company uses the same accounting principles to account for the participating policies included in the closed block as it used prior to the date of demutualization. However, the Company establishes a policyholder dividend obligation for earnings that will be paid to policyholders as additional dividends as described below. The excess of closed block liabilities over closed block assets at the effective date of the demutualization (adjusted to eliminate the impact of related amounts in accumulated other comprehensive income) represents the estimated maximum future earnings from the closed block expected to result from operations attributed to the closed block after income taxes. Earnings of the closed block are recognized in income over the period the policies and contracts in the closed block remain in-force. Management believes that over time the actual cumulative earnings of the closed block will approximately equal the expected cumulative earnings due to the effect of dividend changes. If, over the period the closed block remains in existence, the actual cumulative earnings of the closed block is greater than the expected cumulative earnings of the closed block, the Company will pay the excess of the actual cumulative earnings of the closed block over the expected cumulative earnings to closed block policyholders as additional policyholder dividends unless offset by future unfavorable experience of the closed block and, accordingly, will recognize only the expected cumulative earnings in income with the excess recorded as a policyholder dividend obligation. If over such period, the actual cumulative earnings of the closed block is less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may F-53 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) change policyholder dividend scales in the future, which would be intended to increase future actual earnings until the actual cumulative earnings equal the expected cumulative earnings. For the years ended December 31, 2005 and 2004, premiums, policyholder benefits and claims, and commission expenses include ceded related party transactions of $141 million, $48 million, and $550 million and $130 million, $25 million and $20 million. Closed block liabilities and assets designated to the closed block are as follows:
DECEMBER 31, ----------------- 2005 2004 ------- ------- (IN MILLIONS) CLOSED BLOCK LIABILITIES Future policy benefits...................................... $42,759 $42,348 Other policyholder funds.................................... 257 258 Policyholder dividends payable.............................. 693 690 Policyholder dividend obligation............................ 1,607 2,243 Payables for collateral under securities loaned and other transactions.............................................. 4,289 4,287 Other liabilities........................................... 200 199 ------- ------- Total closed block liabilities......................... 49,805 50,025 ------- ------- ASSETS DESIGNATED TO THE CLOSED BLOCK Investments: Fixed maturities available-for-sale, at fair value (amortized cost: $27,892 and $27,757, respectively).... 29,270 29,766 Trading securities, at fair value (cost: $3 and $0, respectively).......................................... 3 -- Equity securities available-for-sale, at fair value (cost: $1,180 and $898, respectively)......................... 1,341 979 Mortgage loans on real estate............................. 7,790 8,165 Policy loans.............................................. 4,148 4,067 Short-term investments.................................... 41 101 Other invested assets..................................... 477 221 ------- ------- Total investments...................................... 43,070 43,299 Cash and cash equivalents................................... 512 325 Accrued investment income................................... 506 511 Deferred income taxes....................................... 902 1,002 Premiums and other receivables.............................. 270 103 ------- ------- Total assets designated to the closed block............ 45,260 45,240 ------- ------- Excess of closed block liabilities over assets designated to the closed block.......................................... 4,545 4,785 ------- -------
F-54 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, ----------------- 2005 2004 ------- ------- (IN MILLIONS) Amounts included in accumulated other comprehensive income (loss): Net unrealized investment gains, net of deferred income tax of $554 and $752, respectively..................... 985 1,338 Unrealized derivative gains (losses), net of deferred income tax benefit of ($17) and ($31), respectively.... (31) (55) Allocated to policyholder dividend obligation, net of deferred income tax benefit of ($538) and ($763), respectively........................................... (954) (1,356) ------- ------- Total amounts included in accumulated other comprehensive income (loss)........................... -- (73) ------- ------- Maximum future earnings to be recognized from closed block assets and liabilities.................................... $ 4,545 $ 4,712 ======= =======
Information regarding the policyholder dividend obligation is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ (IN MILLIONS) Balance at beginning of year............................... $2,243 $2,130 $1,882 Impact on revenues, net of expenses and income taxes....... (9) 124 -- Change in unrealized investment and derivative gains (losses)................................................. (627) (11) 248 ------ ------ ------ Balance at end of year..................................... $1,607 $2,243 $2,130 ====== ====== ======
Closed block revenues and expenses were as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ (IN MILLIONS) REVENUES Premiums................................................... $3,062 $3,156 $3,365 Net investment income and other revenues................... 2,382 2,504 2,554 Net investment gains (losses).............................. 10 (19) (128) ------ ------ ------ Total revenues........................................... 5,454 5,641 5,791 ------ ------ ------ EXPENSES Policyholder benefits and claims........................... 3,478 3,480 3,660 Policyholder dividends..................................... 1,465 1,458 1,509 Change in policyholder dividend obligation................. (9) 124 -- Other expenses............................................. 263 275 297 ------ ------ ------ Total expenses........................................... 5,197 5,337 5,466 ------ ------ ------ Revenues, net of expenses before income taxes.............. 257 304 325 Income taxes............................................... 90 109 118 ------ ------ ------ Revenues, net of expenses and income taxes................. $ 167 $ 195 $ 207 ====== ====== ======
F-55 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The change in maximum future earnings of the closed block is as follows:
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ (IN MILLIONS) Balance at end of year..................................... $4,545 $4,712 $4,907 Balance at beginning of year............................... 4,712 4,907 5,114 ------ ------ ------ Change during year......................................... $ (167) $ (195) $ (207) ====== ====== ======
Metropolitan Life charges the closed block with federal income taxes, state and local premium taxes, and other additive state or local taxes, as well as investment management expenses relating to the closed block as provided in the plan of demutualization. Metropolitan Life also charges the closed block for expenses of maintaining the policies included in the closed block. 7. DEBT At December 31, 2005 and 2004, debt outstanding is as follows:
INTEREST RATES ---------------------- DECEMBER 31, WEIGHTED --------------- RANGE AVERAGE MATURITY 2005 2004 ----------- -------- --------- ------ ------ (IN MILLIONS) Surplus notes -- affiliated...... 5.00% 5.00% 2007 $ 800 $ -- Surplus notes.................... 7.63%-7.88% 7.76% 2015-2025 696 946 Capital notes -- affiliated...... 7.13% 7.13% 2032-2033 500 500 Junior subordinated debentures... 6.75% 6.75% 2065 399 -- Senior notes..................... 6.75%-7.25% 6.92% 2006-2011 300 300 Fixed rate notes................. 4.20%-6.32% 4.96% 2006-2010 102 106 Other notes with varying interest rates.......................... 4.45%-5.89% 5.45% 2006-2012 93 133 Capital lease obligations........ 71 65 ------ ------ Total long-term debt............. 2,961 2,050 Total short-term debt............ 453 1,445 ------ ------ $3,414 $3,495 ====== ======
LONG-TERM DEBT On December 8, 2005, RGA issued junior subordinated debentures with a face amount of $400 million. Interest is payable semi-annually at a fixed interest rate of 6.75% until December 15, 2015. Subsequent to December 15, 2015, interest on these debentures will accrue at an annual rate of 3-month LIBOR plus a margin equal to 266.5 basis points, payable quarterly until maturity in 2065. On December 22, 2005, the Company issued an $800 million, 5% surplus note to the Holding Company which matures on December 31, 2007. The Company repaid a $250 million, 7% surplus note which matured on November 1, 2005. The aggregate maturities of long-term debt as of December 31, 2005 for the next five years are $183 million in 2006, $837 million in 2007, $13 million in 2008, $8 million in 2009, $98 million in 2010 and $1,822 million thereafter. F-56 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Collateralized debt, which consists of capital lease obligations, ranks highest in priority; followed by unsecured senior debt which consist of senior notes, fixed rate notes, other notes with varying interest rates; followed by subordinated debt which consists of junior subordinated debentures; followed by surplus and capital notes. Payments of interest and principal on the Company's surplus notes may be made only with the prior approval of the insurance department of the state of domicile. SHORT-TERM DEBT At December 31, 2005 and 2004, the Company's short-term debt consisted of commercial paper with a weighted average interest rate of 3.3% and 2.3%, respectively. The debt was outstanding for an average of 47 days and 27 days at December 31, 2005 and 2004, respectively. CREDIT FACILITIES AND LETTERS OF CREDIT The Company maintains committed and unsecured credit facilities aggregating $3.65 billion as of December 31, 2005. When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements. The facilities can be used for general corporate purposes and $3.0 billion of the facilities also serve as back-up lines of credit for the Company's commercial paper programs. The following table provides details on these facilities as of December 31, 2005:
COMPANY METLIFE, INC. LETTERS OF LETTERS OF CREDIT CREDIT UNUSED BORROWER(S) EXPIRATION CAPACITY ISSUANCES ISSUANCES DRAWDOWN COMMITMENTS - ----------- ---------- -------- ---------- ------------- -------- ----------- (IN MILLIONS) MetLife, Inc., MetLife Funding, Inc. and Metropolitan Life Insurance Company........ April 2009 $1,500 $218 $156 $ -- $1,126 MetLife, Inc. and MetLife Funding, Inc............. April 2010 1,500 -- -- -- 1,500 Reinsurance Group of America, Incorporated.... January 2006 26 -- -- 26 -- Reinsurance Group of America, Incorporated.... May 2007 26 -- -- 26 -- Reinsurance Group of America, Incorporated.... September 2010 600 320 -- 50 230 ------ ---- ---- ---- ------ Total.................... $3,652 $538 $156 $102 $2,856 ====== ==== ==== ==== ======
At December 31, 2005 and 2004 the Company had outstanding $717 million and $584 million, respectively, in letters of credit from various banks, of which $538 million and $135 million, respectively were part of committed facilities. The Company's letters of credit outstanding at December 31, 2005 and 2004 all automatically renew for one year periods. Since commitments associated with letters of credit and financing arrangements may expire unused, these amounts do not necessarily reflect the Company's actual future cash funding requirements. OTHER Interest expense related to the Company's indebtedness included in other expenses was $189 million, $201 million and $265 million for the years ended December 31, 2005, 2004 and 2003, respectively. F-57 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 8. SHARES SUBJECT TO MANDATORY REDEMPTION AND COMPANY-OBLIGATED MANDATORILY REDEEMABLE SECURITIES OF SUBSIDIARY TRUSTS GenAmerica Capital I. In June 1997, GenAmerica Corporation ("GenAmerica") issued $125 million of 8.525% capital securities through a wholly-owned subsidiary trust, GenAmerica Capital I. GenAmerica has fully and unconditionally guaranteed, on a subordinated basis, the obligation of the trust under the capital securities and is obligated to mandatorily redeem the securities on June 30, 2027. GenAmerica may prepay the securities any time after June 30, 2007. Capital securities outstanding were $119 million, net of unamortized discounts of $6 million, at both December 31, 2005 and 2004. Interest expense on these instruments is included in other expenses and was $11 million for each of the years ended December 31, 2005, 2004 and 2003. RGA Capital Trust I. In December 2001, RGA, through its wholly-owned trust, RGA Capital Trust I (the "Trust"), issued 4,500,000 Preferred Income Equity Redeemable Securities ("PIERS") Units. Each PIERS unit consists of (i) a preferred security issued by the Trust, having a stated liquidation amount of $50 per unit, representing an undivided beneficial ownership interest in the assets of the Trust, which consist solely of junior subordinated debentures issued by RGA which have a principal amount at maturity of $50 and a stated maturity of March 18, 2051; and (ii) a warrant to purchase, at any time prior to December 15, 2050, 1.2508 shares of RGA stock at an exercise price of $50. The fair market value of the warrant on the issuance date was $14.87 and is detachable from the preferred security. RGA fully and unconditionally guarantees, on a subordinated basis, the obligations of the Trust under the preferred securities. The preferred securities and subordinated debentures were issued at a discount (original issue discount) to the face or liquidation value of $14.87 per security. The securities will accrete to their $50 face/liquidation value over the life of the security on a level yield basis. The weighted average effective interest rate on the preferred securities and the subordinated debentures is 8.25% per annum. Capital securities outstanding were $159 million, net of unamortized discounts of $66 million, at both December 31, 2005 and 2004. 9. INCOME TAXES The provision for income taxes from continuing operations was as follows:
YEARS ENDED DECEMBER 31, -------------------------- 2005 2004 2003 -------- ------ ------ (IN MILLIONS) Current: Federal................................................... $ 576 $820 $321 State and local........................................... 64 45 19 Foreign................................................... 21 5 2 ------ ---- ---- 661 870 342 ------ ---- ---- Deferred: Federal................................................... 433 13 274 State and local........................................... 11 (7) 27 Foreign................................................... -- -- -- ------ ---- ---- 444 6 301 ------ ---- ---- Provision for income taxes.................................. $1,105 $876 $643 ====== ==== ====
F-58 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Reconciliations of the income tax provision at the U.S. statutory rate to the provision for income taxes as reported for continuing operations were as follows:
YEARS ENDED DECEMBER 31, -------------------------- 2005 2004 2003 ------- ------- ------ (IN MILLIONS) Tax provision at U.S. statutory rate........................ $1,242 $1,084 $ 805 Tax effect of: Tax exempt investment income.............................. (84) (69) (101) State and local income taxes.............................. 33 17 42 Prior year taxes.......................................... (20) (104) (25) Foreign operations net of foreign income taxes............ (25) (25) (17) Other, net................................................ (41) (27) (61) ------ ------ ----- Provision for income taxes.................................. $1,105 $ 876 $ 643 ====== ====== =====
The Company is under continuous examination by the Internal Revenue Service ("IRS") and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction. In 2004, the Company recorded an adjustment of $91 million for the settlement of all federal income tax issues relating to the IRS's audit of the Company's tax returns for the years 1997-1999. Such settlement is reflected in the 2004 tax expense as an adjustment to prior year taxes. The Company also received $22 million in interest on such settlement and incurred an $8 million tax expense on such settlement for a total impact to net income of $105 million. The current IRS examination covers the years 2000-2002 and the Company expects it to be completed in 2006. The Company regularly assesses the likelihood of additional assessments in each taxing jurisdiction resulting from current and subsequent years' examinations. Liabilities for income taxes have been established for future income tax assessments when it is probable there will be future assessments and the amount thereof can be reasonably estimated. Once established, liabilities for uncertain tax positions are adjusted only when there is more information available or when an event occurs necessitating a change to the liabilities. The Company believes that the resolution of income tax matters for open years will not have a material effect on its consolidated financial statements although the resolution of income tax matters could impact the Company's effective tax rate for a particular future period. F-59 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Deferred income taxes represent the tax effect of the differences between the book and tax basis of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following:
DECEMBER 31, ----------------- 2005 2004 ------- ------- (IN MILLIONS) Deferred income tax assets: Policyholder liabilities and receivables.................. $ 2,477 $ 2,998 Net operating losses...................................... 574 216 Capital loss carryforwards................................ 59 108 Tax credit carryover...................................... 100 -- Litigation related........................................ 62 84 Other..................................................... 42 124 ------- ------- 3,314 3,530 Less: Valuation allowance................................. 9 16 ------- ------- 3,305 3,514 ------- ------- Deferred income tax liabilities: Investments............................................... 1,802 1,554 Deferred policy acquisition costs......................... 3,134 3,095 Net unrealized investment gains........................... 1,029 1,391 Other..................................................... 69 145 ------- ------- 6,034 6,185 ------- ------- Net deferred income tax liability........................... $(2,729) $(2,671) ======= =======
Domestic net operating loss carryforwards amount to $1,614 million at December 31, 2005 and will expire beginning in 2016. Foreign net operating loss carryforwards amount to $27 million at December 31, 2005 and were generated in various foreign countries with expiration periods of five years to infinity. Capital loss carryforwards amount to $168 million at December 31, 2005 and will expire beginning in 2006. Tax credit carryforwards amount to $100 million at December 31, 2005 and will expire beginning in 2006. The Company has recorded a valuation allowance related to tax benefits of certain foreign net operating loss carryforwards. The valuation allowance reflects management's assessment, based on available information, that it is more likely than not that the deferred income tax asset for certain foreign net operating loss carryforwards will not be realized. The tax benefit will be recognized when management believes that it is more likely than not that these deferred income tax assets are realizable. In 2005, the Company's $7 million reduction in the deferred income tax valuation allowance resulted from the sale of the subsidiary to which the foreign net operating loss carryforwards and valuation allowance resulted. 10. CONTINGENCIES, COMMITMENTS, AND GUARANTEES CONTINGENCIES LITIGATION The Company is a defendant in a large number of litigation matters. In some of the matters, very large and/or indeterminate amounts, including punitive and treble damages, are sought. Modern pleading practice in the United States permits considerable variation in the assertion of monetary damages or other relief. F-60 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrate to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Thus, unless stated below, the specific monetary relief sought is not noted. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be inherently impossible to ascertain with any degree of certainty. Inherent uncertainties can include how fact finders will view individually and in their totality documentary evidence, the credibility and effectiveness of witnesses' testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. On a quarterly and yearly basis, the Company reviews relevant information with respect to liabilities for litigation and contingencies to be reflected in the Company's consolidated financial statements. The review includes senior legal and financial personnel. Unless stated below, estimates of possible additional losses or ranges of loss for particular matters cannot in the ordinary course be made with a reasonable degree of certainty. Liabilities are established when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for a number of the matters noted 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 as of December 31, 2005. Sales Practices Claims Over the past several years, Metropolitan Life, New England Mutual Life Insurance Company ("New England Mutual") and General American have faced numerous claims, including class action lawsuits, alleging improper marketing and sales of individual life insurance policies or annuities. These lawsuits generally are referred to as "sales practices claims." In December 1999, a federal court approved a settlement resolving sales practices claims on behalf of a class of owners of permanent life insurance policies and annuity contracts or certificates issued pursuant to individual sales in the United States by Metropolitan Life, MIAC or MTL between January 1, 1982 and December 31, 1997. Similar sales practices class actions against New England Mutual, with which Metropolitan Life merged in 1996, and General American, which was acquired in 2000, have been settled. In October 2000, a federal court approved a settlement resolving sales practices claims on behalf of a class of owners of permanent life insurance policies issued by New England Mutual between January 1, 1983 through August 31, 1996. A federal court has approved a settlement resolving sales practices claims on behalf of a class of owners of permanent life insurance policies issued by General American between January 1, 1982 through December 31, 1996. An appellate court has affirmed the order approving the settlement. Certain class members have opted out of the class action settlements noted above and have brought or continued non-class action sales practices lawsuits. In addition, other sales practices lawsuits, including lawsuits or other proceedings relating to the sale of mutual funds and other products, have been brought. As of December 31, 2005, there are approximately 338 sales practices litigation matters pending against Metropolitan Life; approximately 45 sales practices litigation matters pending against New England Mutual, New F-61 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) England Life Insurance Company ("NELICO"), and New England Securities Corporation (collectively, "New England") and approximately 34 sales practices litigation matters pending against General American. Metropolitan Life, New England, and General American continue to defend themselves vigorously against these litigation matters. Some individual sales practices claims have been resolved through settlement, won by dispositive motions, or, in a few instances, have gone to trial. Most of the current cases seek substantial damages, including in some cases punitive and treble damages and attorneys' fees. Additional litigation relating to the Company's marketing and sales of individual life insurance, mutual funds and other products may be commenced in the future. The Metropolitan Life class action settlement did not resolve two putative class actions involving sales practices claims filed against Metropolitan Life in Canada, and these actions remain pending. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices claims against Metropolitan Life, New England and General American. Regulatory authorities in a small number of states have had investigations or inquiries relating to Metropolitan Life's, New England's and General American's sales of individual life insurance policies or annuities or other products. Over the past several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments and certain other relief. The Company may continue to resolve investigations in a similar manner. Asbestos-Related Claims Metropolitan Life is also a defendant in thousands of lawsuits seeking compensatory and punitive damages for personal injuries allegedly caused by exposure to asbestos or asbestos-containing products. Metropolitan Life has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life issued liability or workers' compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. Rather, these lawsuits principally have been based upon allegations relating to certain research, publication and other activities of one or more of Metropolitan Life's employees during the period from the 1920's through approximately the 1950's and have alleged that Metropolitan Life learned or should have learned of certain health risks posed by asbestos and, among other things, improperly publicized or failed to disclose those health risks. Metropolitan Life believes that it should not have legal liability in such cases. Legal theories asserted against Metropolitan Life have included negligence, intentional tort claims and conspiracy claims concerning the health risks associated with asbestos. Although Metropolitan Life believes it has meritorious defenses to these claims, and has not suffered any adverse monetary judgments in respect of these claims, due to the risks and expenses of litigation, almost all past cases have been resolved by settlements. Metropolitan Life's defenses (beyond denial of certain factual allegations) to plaintiffs' claims include that: (i) Metropolitan Life owed no duty to the plaintiffs -- it had no special relationship with the plaintiffs and did not manufacture, produce, distribute or sell the asbestos products that allegedly injured plaintiffs; (ii) plaintiffs cannot demonstrate justifiable detrimental reliance; and (iii) plaintiffs cannot demonstrate proximate causation. In defending asbestos cases, Metropolitan Life selects various strategies depending upon the jurisdictions in which such cases are brought and other factors which, in Metropolitan Life's judgment, best protect Metropolitan Life's interests. Strategies include seeking to settle or compromise claims, motions challenging the legal or factual basis for such claims or defending on the merits at trial. Since 2002, trial courts in California, Utah, Georgia, New York, Texas, and Ohio granted motions dismissing claims against Metropolitan Life on some or all of the above grounds. Other courts have denied motions brought by Metropolitan Life to dismiss cases without the necessity of trial. There can be no assurance that Metropolitan F-62 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Life will receive favorable decisions on motions in the future. Metropolitan Life intends to continue to exercise its best judgment regarding settlement or defense of such cases, including when trials of these cases are appropriate. Metropolitan Life continues to study its claims experience, review external literature regarding asbestos claims experience in the United States and consider numerous variables that can affect its asbestos liability exposure, including bankruptcies of other companies involved in asbestos litigation and legislative and judicial developments, to identify trends and to assess their impact on the recorded asbestos liability. Bankruptcies of other companies involved in asbestos litigation, as well as advertising by plaintiffs' asbestos lawyers, may be resulting in an increase in the cost of resolving claims and could result in an increase in the number of trials and possible adverse verdicts Metropolitan Life may experience. Plaintiffs are seeking additional funds from defendants, including Metropolitan Life, in light of such bankruptcies by certain other defendants. In addition, publicity regarding legislative reform efforts may result in an increase or decrease in the number of claims. Metropolitan Life previously reported that it had received approximately 23,500 asbestos-related claims in 2004. In the context of reviewing in the third quarter of 2005 certain pleadings received in 2004, it was determined that there was a small undercount of Metropolitan Life's asbestos-related claims in 2004. Accordingly, Metropolitan Life now reports that it received approximately 23,900 asbestos-related claims in 2004. The total number of asbestos personal injury claims pending against Metropolitan Life as of the dates indicated, the number of new claims during the years ended on those dates and the total settlement payments made to resolve asbestos personal injury claims during those years are set forth in the following table:
AT OR FOR THE YEARS ENDED DECEMBER 31, ------------------------------ 2005 2004 2003 -------- -------- -------- (DOLLARS IN MILLIONS) Asbestos personal injury claims at year end (approximate)...................................... 100,250 108,000 111,700 Number of new claims during the year (approximate)... 18,500 23,900 58,750 Settlement payments during the year(1)............... $ 74.3 $ 85.5 $ 84.2
- --------------- (1) Settlement payments represent payments made by Metropolitan Life during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life's attorneys' fees and expenses and do not reflect amounts received from insurance carriers. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. The ability of Metropolitan Life to estimate its ultimate asbestos exposure is subject to considerable uncertainty due to numerous factors. The availability of data is limited and it is difficult to predict with any certainty numerous variables that can affect liability estimates, including the number of future claims, the cost to resolve claims, the disease mix and severity of disease, the jurisdiction of claims filed, tort reform efforts and the impact of any possible future adverse verdicts and their amounts. The number of asbestos cases that may be brought or the aggregate amount of any liability that Metropolitan Life may ultimately incur is uncertain. Accordingly, it is reasonably possible that the Company's total exposure to asbestos claims may be greater than the liability recorded by the Company in its consolidated financial statements and that future charges to income may be necessary. While the potential future charges could be material in particular quarterly or annual periods in which they are recorded, based on information currently known by management, management does not believe any such charges are likely to have a material adverse effect on the Company's consolidated financial position. F-63 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Metropolitan Life increased its recorded liability for asbestos-related claims by $402 million from approximately $820 million to $1,225 million at December 31, 2002. This total recorded asbestos-related liability (after the self-insured retention) was within the coverage of the excess insurance policies discussed below. Metropolitan Life regularly reevaluates its exposure from asbestos litigation and has updated its liability analysis for asbestos-related claims through December 31, 2005. During 1998, Metropolitan Life paid $878 million in premiums for excess insurance policies for asbestos-related claims. The excess insurance policies for asbestos-related claims provide for recovery of losses up to $1,500 million, which is in excess of a $400 million self-insured retention. The asbestos-related policies are also subject to annual and per-claim sublimits. Amounts are recoverable under the policies annually with respect to claims paid during the prior calendar year. Although amounts paid by Metropolitan Life in any given year that may be recoverable in the next calendar year under the policies will be reflected as a reduction in the Company's operating cash flows for the year in which they are paid, management believes that the payments will not have a material adverse effect on the Company's liquidity. Each asbestos-related policy contains an experience fund and a reference fund that provides for payments to Metropolitan Life at the commutation date if the reference fund is greater than zero at commutation or pro rata reductions from time to time in the loss reimbursements to Metropolitan Life if the cumulative return on the reference fund is less than the return specified in the experience fund. The return in the reference fund is tied to performance of the Standard & Poor's 500 Index and the Lehman Brothers Aggregate Bond Index. A claim with respect to the prior year was made under the excess insurance policies in 2003, 2004 and 2005 for the amounts paid with respect to asbestos litigation in excess of the retention. As the performance of the indices impacts the return in the reference fund, it is possible that loss reimbursements to the Company and the recoverable with respect to later periods may be less than the amount of the recorded losses. Such foregone loss reimbursements may be recovered upon commutation depending upon future performance of the reference fund. If at some point in the future, the Company believes the liability for probable and reasonably estimable losses for asbestos-related claims should be increased, an expense would be recorded and the insurance recoverable would be adjusted subject to the terms, conditions and limits of the excess insurance policies. Portions of the change in the insurance recoverable would be recorded as a deferred gain and amortized into income over the estimated remaining settlement period of the insurance policies. The foregone loss reimbursements were approximately $8.3 million with respect to 2002 claims, $15.5 million with respect to 2003 claims and $15.1 million with respect to 2004 claims and estimated as of December 31, 2005, to be approximately $45.4 million in the aggregate, including future years. Demutualization Actions Several lawsuits were brought in 2000 challenging the fairness of Metropolitan Life's plan of reorganization, as amended (the "plan") and the adequacy and accuracy of Metropolitan Life's disclosure to policyholders regarding the plan. These actions named as defendants some or all of Metropolitan Life, the Holding Company, the individual directors, the New York Superintendent of Insurance (the "Superintendent") and the underwriters for MetLife, Inc.'s initial public offering, Goldman Sachs & Company and Credit Suisse First Boston. In 2003, a trial court within the commercial part of the New York State court granted the defendants' motions to dismiss two purported class actions. In 2004, the appellate court modified the trial court's order by reinstating certain claims against Metropolitan Life, the Holding Company and the individual directors. Plaintiffs in these actions have filed a consolidated amended complaint. Plaintiffs' motion to certify a litigation class is pending. Another purported class action filed in New York State court in Kings County has been consolidated with this action. The plaintiffs in the state court class actions seek compensatory relief and punitive damages. Five persons brought a proceeding under Article 78 of New York's Civil Practice Law and Rules challenging the Opinion and Decision of the Superintendent who approved the plan. In this proceeding, petitioners sought to vacate the Superintendent's Opinion and Decision and enjoin him from granting final F-64 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) approval of the plan. On November 10, 2005, the trial court granted respondents' motions to dismiss this proceeding. Petitioners have filed a notice of appeal. In a class action against Metropolitan Life and the Holding Company pending in the United States District Court for the Eastern District of New York, plaintiffs served a second consolidated amended complaint in 2004. In this action, plaintiffs assert violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 in connection with the plan, claiming that the Policyholder Information Booklets failed to disclose certain material facts and contained certain material misstatements. They seek rescission and compensatory damages. On June 22, 2004, the court denied the defendants' motion to dismiss the claim of violation of the Securities Exchange Act of 1934. The court had previously denied defendants' motion to dismiss the claim for violation of the Securities Act of 1933. In 2004, the court reaffirmed its earlier decision denying defendants' motion for summary judgment as premature. On July 19, 2005, this federal trial court certified a class action against Metropolitan Life and the Holding Company. Metropolitan Life and the Holding Company have filed a petition seeking permission for an interlocutory appeal from this order. On or about March 29, 2006, the United States Court of Appeals for the Second Circuit denied the petition. Metropolitan Life, the Holding Company and the individual defendants believe they have meritorious defenses to the plaintiffs' claims and are contesting vigorously all of the plaintiffs' claims in these actions. In 2001, a lawsuit was filed in the Superior Court of Justice, Ontario, Canada on behalf of a proposed class of certain former Canadian policyholders against the Holding Company, Metropolitan Life, and Metropolitan Life Insurance Company of Canada. Plaintiffs' allegations concern the way that their policies were treated in connection with the demutualization of Metropolitan Life; they seek damages, declarations, and other non-pecuniary relief. The defendants believe they have meritorious defenses to the plaintiffs' claims and will contest vigorously all of plaintiffs' claims in this matter. On April 30, 2004, a lawsuit was filed in New York state court in New York County against the Holding Company and Metropolitan Life on behalf of a proposed class comprised of the settlement class in the Metropolitan Life sales practices class action settlement approved in December 1999 by the United States District Court for the Western District of Pennsylvania. In their amended complaint, plaintiffs challenged the treatment of the cost of the sales practices settlement in the demutualization of Metropolitan Life and asserted claims of breach of fiduciary duty, common law fraud, and unjust enrichment. In an order dated July 13, 2005, the court granted the defendants' motion to dismiss the action and the plaintiffs have filed a notice of appeal. Other A putative class action lawsuit which commenced in October 2000 is pending in the United States District Court for the District of Columbia, in which plaintiffs allege that they were denied certain ad hoc pension increases awarded to retirees under the Metropolitan Life retirement plan. The ad hoc pension increases were awarded only to retirees (i.e., individuals who were entitled to an immediate retirement benefit upon their termination of employment) and not available to individuals like these plaintiffs whose employment, or whose spouses' employment, had terminated before they became eligible for an immediate retirement benefit. The plaintiffs seek to represent a class consisting of former Metropolitan Life employees, or their surviving spouses, who are receiving deferred vested annuity payments under the retirement plan and who were allegedly eligible to receive the ad hoc pension increases. In September 2005, Metropolitan Life's motion for summary judgment was granted. Plaintiffs have moved for reconsideration. On February 21, 2006, the SEC and New England Securities Corporation ("NES"), a subsidiary of NELICO, resolved a formal investigation of NES that arose in response to NES informing the SEC that certain systems and controls relating to one NES advisory program were not operating effectively. NES previously provided restitution to the affected clients and the settlement includes additional client payments to be made by NES in the total amount of approximately $2,615,000. No penalties were imposed. F-65 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Prior to filing MetLife, Inc's June 30, 2003 Form 10-Q, MetLife, Inc. announced a $31 million after-tax charge related to New England Financial. MetLife notified the SEC about the nature of this charge prior to its announcement. The SEC opened a formal investigation of the matter and, in December 2004, NELICO received a Wells Notice in connection with the SEC investigation. The staff of the SEC has notified NELICO that no enforcement action has been recommended against NELICO. In May 2003, the American Dental Association and three individual providers sued the Holding Company and/or its subsidiaries and Cigna in a purported class action lawsuit brought in a Florida federal district court. The plaintiffs purport to represent a nationwide class of in-network providers who allege that their claims are being wrongfully reduced by downcoding, bundling, and the improper use and programming of software. The complaint alleges federal racketeering and various state law theories of liability. The Holding Company and/or its subsidiaries are vigorously defending the matter. The district court has granted in part and denied in part the defendant's motion to dismiss. The Holding Company and/or its subsidiaries has filed another motion to dismiss. The court has issued a tag-along order, related to a medical managed care trial, which will stay the lawsuit indefinitely. In a lawsuit commenced in June 1998, a New York state court granted in 2004 plaintiffs' motion to certify a litigation class of owners of certain participating life insurance policies and a sub-class of New York owners of such policies in an action asserting that Metropolitan Life breached their policies and violated New York's General Business Law in the manner in which it allocated investment income across lines of business during a period ending with the 2000 demutualization. Plaintiffs sought compensatory damages. In January 2006, the appellate court reversed the class certification order. On November 23, 2005, the trial court issued a Memorandum Decision granting Metropolitan Life's motion for summary judgment. Plaintiffs have filed a notice of appeal of the trial's court's decision. Regulatory bodies have contacted the Company and have requested information relating to market timing and late trading of mutual funds and variable insurance products and, generally, the marketing of products. The Company believes that many of these inquiries are similar to those made to many financial services companies as part of industry-wide investigations by various regulatory agencies. The SEC has commenced an investigation with respect to market timing and late trading in a limited number of privately-placed variable insurance contracts that were sold through General American. As previously reported, in May 2004, General American received a Wells Notice stating that the SEC staff is considering recommending that the SEC bring a civil action alleging violations of the U.S. securities laws against General American. Under the SEC procedures, General American can avail itself of the opportunity to respond to the SEC staff before it makes a formal recommendation regarding whether any action alleging violations of the U.S. securities laws should be considered. General American has responded to the Wells Notice. The Company is fully cooperating with regard to these information requests and investigations. The Company at the present time is not aware of any systemic problems with respect to such matters that may have a material adverse effect on the Company's consolidated financial position. On April 10, 2006, the SEC and Metropolitan Life resolved a formal investigation of Metropolitan Life relating to certain sales by a former Company sales representative to the Sheriff's Department of Fulton County, Georgia. Metropolitan Life previously provided partial restitution to the Fulton County Sheriff's office, and the settlement includes a payment to the SEC of a $250,000 fine. The Holding Company and/or affiliates has received a number of subpoenas and other requests from the Office of the Attorney General of the State of New York seeking, among other things, information regarding and relating to compensation agreements between insurance brokers and the Holding Company and/or affiliates, whether the Holding Company and/or affiliates has provided or is aware of the provision of "fictitious" or "inflated" quotes, and information regarding tying arrangements with respect to reinsurance. Based upon an internal review, the Attorney General for the State of New York was advised that the Holding F-66 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Company and/or affiliates was not aware of any instance in which the Holding Company and/or affiliates had provided a "fictitious" or "inflated" quote. The Holding Company and/or affiliates also has received subpoenas, including sets of interrogatories, from the Office of the Attorney General of the State of Connecticut seeking information and documents including contingent commission payments to brokers and the Holding Company and/or affiliates' awareness of any "sham" bids for business. The Holding Company and/or affiliates also has received a Civil Investigative Demand from the Office of the Attorney General for the State of Massachusetts seeking information and documents concerning bids and quotes that were submitted to potential customers in Massachusetts, the identity of agents, brokers, and producers to whom were submitted such bids or quotes, and communications with a certain broker. The Holding Company and/or affiliates has received two subpoenas from the District Attorney of the County of San Diego, California. The subpoenas seek numerous documents including incentive agreements entered into with brokers. The Florida Department of Financial Services and the Florida Office of Insurance Regulation also have served subpoenas on the Holding Company and/or affiliates asking for answers to interrogatories and document requests concerning topics that include compensation paid to intermediaries. The Office of the Attorney General for the State of Florida has also served a subpoena on the Holding Company and/or affiliates seeking, among other things, copies of materials produced in response to the subpoenas discussed above. The Holding Company and/or affiliates has received a subpoena from the Office of the U.S. Attorney for the Southern District of California asking for documents regarding the insurance broker, Universal Life Resources. The Insurance Commissioner of Oklahoma has served a subpoena, including a set of interrogatories, on the Holding Company and/or affiliates seeking, among other things, documents and information concerning the compensation of insurance producers for insurance covering Oklahoma entities and persons. The Ohio Department of Insurance has requested documents regarding a broker and certain Ohio public entity groups. The Holding Company and/or affiliates continues to cooperate fully with these inquiries and is responding to the subpoenas and other requests. The Holding Company and/or affiliates are continuing to conduct an internal review of its commission payment practices. Approximately sixteen broker-related lawsuits in which the Holding Company and/or affiliates was named as a defendant were filed. Voluntary dismissals and consolidations have reduced the number of pending actions to four. In one of these, the California Insurance Commissioner is suing in California state court Metropolitan Life, Paragon Life Insurance Company and other companies alleging that the defendants violated certain provisions of the California Insurance Code. Another of these actions is pending in a multi-district proceeding established in the federal district court in the District of New Jersey. In this proceeding, plaintiffs have filed an amended class action complaint consolidating the claims from separate actions that had been filed in or transferred to the District of New Jersey. The consolidated amended complaint alleges that the Holding Company, Metropolitan Life, several other insurance companies and several insurance brokers violated RICO, ERISA, and antitrust laws and committed other misconduct in the context of providing insurance to employee benefit plans and to persons who participate in such employee benefit plans. Plaintiffs seek to represent classes of employers that established employee benefit plans and persons who participated in such employee benefit plans. A motion for class certification has been filed. Plaintiffs in several other actions have voluntarily dismissed their claims. The Holding Company and/or affiliates intends to vigorously defend these cases. In addition to those discussed above, regulators and others have made a number of inquiries of the insurance industry regarding industry brokerage practices and related matters and other inquiries may begin. It is reasonably possible that the Holding Company and/or affiliates will receive additional subpoenas, interrogatories, requests and lawsuits. The Holding Company and/or affiliates will fully cooperate with all regulatory inquiries and intends to vigorously defend all lawsuits. The Holding Company has received a subpoena from the Connecticut Attorney General requesting information regarding its participation in any finite reinsurance transactions. The Holding Company and/or F-67 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) affiliates has also received information requests relating to finite insurance or reinsurance from other regulatory and governmental authorities. The Holding Company and/or affiliates believe it has appropriately accounted for its transactions of this type and intends to cooperate fully with these information requests. The Company believes that a number of other industry participants have received similar requests from various regulatory and governmental authorities. It is reasonably possible that Holding Company and/or affiliates may receive additional requests. The Holding Company and any such affiliates will fully cooperate with all such requests. The NASD staff notified NES that it has made a preliminary determination to file charges of violations of the NASD's and the SEC's rules. The pending investigation was initiated after NES and certain affiliates reported to the NASD that a limited number of mutual fund transactions processed by firm representatives and at the firms' consolidated trading desk, during the period April through December 2003, had been received from customers after 4:00 p.m., Eastern time, and received the same day's net asset value. The potential charges of violations of the NASD's and the SEC's rules relate to the processing of transactions received after 4:00 p.m., the firms' maintenance of books and records, supervisory procedures and responses to the NASD's information requests. Under the NASD's procedures, the firm has submitted a response to the NASD staff. The NASD staff has not made a formal recommendation regarding whether any action alleging violations of the rules should be filed. NES continues to cooperate fully with the NASD. In February 2006, the Company learned that the SEC commenced a formal investigation of NES in connection with the suitability of its sales of various universal life insurance policies. The Company believes that others in the insurance industry are the subject of similar investigations by the SEC. NES is cooperating fully with the SEC. Metropolitan Life also has been named as a defendant in a number of silicosis, welding and mixed dust cases in various states. The Company intends to defend itself vigorously against these cases. Various litigation, including purported or certified class actions, and various claims and assessments against the Company, in addition to those discussed above 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. Summary It is not feasible to predict or determine the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of potential losses, except as noted above in connection with specific matters. In some of the matters referred to above, very 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 consolidated 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. F-68 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) INSOLVENCY ASSESSMENTS Most of the jurisdictions in which the Company is admitted to transact business require life insurers doing business within the jurisdiction to participate in guaranty associations, which are organized to pay contractual benefits owed pursuant to insurance policies issued by impaired, insolvent or failed life insurers. These associations levy assessments, up to prescribed limits, on all member insurers in a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assessments levied against the Company were $1 million for the year ended December 31, 2005. There were no assessments levied against the Company for the years ended December 31, 2004 and 2003. The Company maintained a liability of $48 million, and a related asset for premium tax offsets of $34 million, at December 31, 2005 for undiscounted future assessments in respect of currently impaired, insolvent or failed insurers. IMPACT OF HURRICANES On August 29, 2005, Hurricane Katrina made landfall in the states of Louisiana, Mississippi and Alabama causing catastrophic damage to these coastal regions. As of December 31, 2005, the Institutional segment recorded net losses of $14 million, net of income taxes and reinsurance recoverables related to the catastrophe. Additional hurricane-related losses may be recorded in future periods as claims are received from insureds. Based on information currently known by management, it does not believe that additional claim losses resulting from the hurricane will have a material adverse impact on the Company's consolidated financial statements. COMMITMENTS LEASES In accordance with industry practice, certain of the Company's income from lease agreements with retail tenants is contingent upon the level of the tenants' sales revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for office space, data processing and other equipment. Future minimum rental and sublease income, and minimum gross rental payments relating to these lease agreements were as follows:
RENTAL SUBLEASE RENTAL INCOME INCOME PAYMENTS ------ -------- -------- (IN MILLIONS) 2006...................................................... $418 $18 $174 2007...................................................... $376 $14 $152 2008...................................................... $309 $11 $122 2009...................................................... $251 $ 5 $101 2010...................................................... $199 $ 4 $ 86 Thereafter................................................ $595 $10 $485
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 $1,956 million and $1,320 million at December 31, 2005 F-69 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) and 2004, respectively. The Company anticipates that these amounts will be invested in partnerships over the next five years. MORTGAGE LOAN COMMITMENTS The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $2,603 million and $1,161 million at December 31, 2005 and 2004, respectively. OTHER COMMITMENTS On December 12, 2005, RGA repurchased 1.6 million shares of its outstanding common stock at an aggregate price of approximately $76 million under an accelerated share repurchase agreement with a major bank. The bank borrowed the stock sold to RGA from third parties and is purchasing the shares in the open market over the subsequent few months to return to the lenders. RGA will either pay or receive an amount based on the actual amount paid by the bank to purchase the shares. These repurchases resulted in an increase in the Company's ownership percentage of RGA to approximately 53% at December 31, 2005 from approximately 52% at December 31, 2004. In February 2006, the final purchase price was determined resulting in a cash settlement substantially equal to the aggregate cost. RGA recorded the initial repurchase of shares as treasury stock and recorded the amount received as an adjustment to the cost of the treasury stock. GUARANTEES In the course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties pursuant to which it may be required to make payments now or in the future. In the context of acquisition, disposition, investment and other transactions, the Company has provided indemnities and guarantees, including those related to tax, environmental and other specific liabilities, and other indemnities and guarantees that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. In addition, in the normal course of business, the Company provides indemnifications to counterparties in contracts with triggers similar to the foregoing, as well as for certain other liabilities, such as third party lawsuits. These obligations are often subject to time limitations that vary in duration, including contractual limitations and those that arise by operation of law, such as applicable statutes of limitation. In some cases, the maximum potential obligation under the indemnities and guarantees is subject to a contractual limitation ranging from less than $1 million to $1.7 billion, with a cumulative maximum of $3.1 billion, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, the Company does not believe that it is possible to determine the maximum potential amount due under these guarantees in the future. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies other of its agents for liabilities incurred as a result of their representation of the Company's interests. Since these indemnities are generally not subject to limitation with respect to duration or amount, the Company does not believe that it is possible to determine the maximum potential amount due under these indemnities in the future. In the first quarter of 2005, the Company recorded a liability of $4 million with respect to indemnities provided in connection with a certain disposition. The approximate term for this liability is 18 months. The maximum potential amount of future payments the Company could be required to pay under these indemnities is approximately $500 million. Due to the uncertainty in assessing changes to the liability over the term, the liability on the Company's consolidated balance sheets will remain until either expiration or settlement of the guarantee unless evidence clearly indicates that the estimates should be revised. The Company's recorded liabilities at December 31, 2005 for indemnities, guarantees and commitments were F-70 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) $4 million. The Company had no liability at December 31, 2004 for indemnities, guarantees and commitments. In connection with RSATs, the Company writes credit default swap obligations requiring payment of principal due in exchange for the reference credit obligation, depending on the nature or occurrence of specified credit events for the referenced entities. In the event of a specified credit event, the Company's maximum amount at risk, assuming the value of the referenced credits becomes worthless, is $444 million at December 31, 2005. The credit default swaps expire at various times during the next six years. 11. EMPLOYEE BENEFIT PLANS PENSION AND OTHER POSTRETIREMENT BENEFIT PLANS The Company has both qualified and non-qualified defined benefit pension plans that together cover eligible employees and sales representatives of the Company. The Company is both the sponsor and administrator of the Metropolitan Life Retirement Plan for United States Employees and the Metropolitan Life Auxiliary Plan, (collectively "the Plans"). The Plans cover eligible employees and retirees of the sponsor and its participating affiliates. Participating affiliates have no legal obligation for benefits under the Plans; however, participating affiliates are allocated a proportionate share of net expense related to the Plans. The Company's proportionate share of net expense related to the Plans was $134 million or 95%. Other defined benefit pension plans are sponsored and administered by subsidiaries of the Company and the related expense is immaterial to the Company. Retirement benefits under the plans are based upon years of credited service and final average or career average earnings history. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees through insurance contracts. The Company is both the sponsor and administrator of the Postretirement Health and Life Plan, ("the Postretirement Plan"). The Postretirement Plan covers eligible employees and retirees of the sponsor and its participating affiliates who were hired prior to 2003 (or, in certain cases, rehired during or after 2003). Participating affiliates have no legal obligation for benefits under the Postretirement Plan; however, participating affiliates are allocated a proportionate share of net expense related to the Postretirement Plan. The Company's proportionate share of net expense related to the Postretirement Plan was $60 million or 87% for the year ended December 31, 2005. Other postretirement plans are sponsored and administered by subsidiaries of the Company and the related expense is immaterial to the Company. Substantially all of the employees of the Company and its participating affiliates may, in accordance with the plans applicable to the postretirement benefits, become eligible for these benefits if they attain retirement age, with sufficient service, while working for the Company or its participating affiliates. A December 31 measurement date is used for all of the defined benefit pension and other postretirement benefit plans. F-71 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OBLIGATIONS, FUNDED STATUS AND NET PERIODIC BENEFIT COSTS
DECEMBER 31, ---------------------------------------- OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS ----------------- -------------------- 2005 2004 2005 2004 ------- ------- --------- -------- (IN MILLIONS) Change in projected benefit obligation: Projected benefit obligation at beginning of year............................................ $5,481 $5,233 $ 1,962 $2,078 Service cost.................................... 141 128 36 31 Interest cost................................... 315 308 120 118 Plan participants' contributions................ -- -- 28 25 Acquisitions and divestitures................... -- (3) 1 -- Actuarial losses (gains)........................ 90 143 168 (139) Change in benefits.............................. -- -- 3 2 Benefits paid................................... (310) (328) (158) (153) ------ ------ ------- ------ Projected benefit obligation at end of year....... 5,717 5,481 2,160 1,962 ------ ------ ------- ------ Change in plan assets: Contract value of plan assets at beginning of year............................................ 5,351 4,690 1,059 1,001 Actual return on plan assets.................... 397 410 61 95 Acquisitions and divestitures................... -- (3) -- -- Employer contribution........................... 3 524 1 1 Benefits paid................................... (280) (270) (30) (38) ------ ------ ------- ------ Fair value of plan assets at end of year.......... 5,471 5,351 1,091 1,059 ------ ------ ------- ------ Underfunded....................................... (246) (130) (1,069) (903) Unrecognized net asset at transition.............. -- -- -- -- Unrecognized net actuarial losses................. 1,526 1,506 376 198 Unrecognized prior service cost................... 52 68 (123) (164) ------ ------ ------- ------ Prepaid (accrued) benefit cost.................... $1,332 $1,444 $ (816) $ (869) ====== ====== ======= ====== Qualified plan prepaid pension cost............... $1,689 $1,777 $ -- $ -- Non-qualified plan accrued pension cost........... (435) (477) (816) (869) Intangible assets................................. 12 14 -- -- Accumulated other comprehensive loss.............. 66 130 -- -- ------ ------ ------- ------ Prepaid (accrued) benefit cost.................... $1,332 $1,444 $ (816) $ (869) ====== ====== ======= ======
The prepaid (accrued) benefit cost for pension benefits presented in the above table consists of prepaid benefit costs of $1,691 million and $1,778 million as of December 31, 2005 and 2004, respectively, and accrued benefit costs of $359 million and $334 million as of December 31, 2005 and 2004, respectively. F-72 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The aggregate projected benefit obligation and aggregate fair value of plan assets for the pension plans were as follows:
NON-QUALIFIED QUALIFIED PLAN PLAN TOTAL --------------- ------------- --------------- 2005 2004 2005 2004 2005 2004 ------ ------ ----- ----- ------ ------ (IN MILLIONS) Aggregate fair value of plan assets (principally Company contracts)....................... $5,471 $5,351 $ -- $ -- $5,471 $5,351 Aggregate projected benefit obligation....................... 5,209 4,957 508 524 5,717 5,481 ------ ------ ----- ----- ------ ------ Over (under) funded................ $ 262 $ 394 $(508) $(524) $ (246) $ (130) ====== ====== ===== ===== ====== ======
The accumulated benefit obligation for all defined benefit pension plans was $5,308 million and $5,111 million at December 31, 2005 and 2004, respectively. Information for pension plans with an accumulated benefit obligation in excess of plan assets:
2005 2004 ----- ----- (IN MILLIONS) Projected benefit obligation................................ $530 $542 Accumulated benefit obligation.............................. $442 $476 Fair value of plan assets................................... $ 16 $ 14
Information for pension and other postretirement plans with a projected benefit obligation in excess of plan assets:
DECEMBER 31, ----------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS ----------- --------------- 2005 2004 2005 2004 ---- ---- ------ ------ (IN MILLIONS) Projected benefit obligation.......................... $530 $542 $2,160 $1,962 Fair value of plan assets............................. $ 16 $ 14 $1,091 $1,059
The components of net periodic benefit cost were as follows:
OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS --------------------- --------------------- 2005 2004 2003 2005 2004 2003 ----- ----- ----- ----- ----- ----- (IN MILLIONS) Service cost............................ $ 141 $ 128 $ 122 $ 36 $ 31 $ 38 Interest cost........................... 315 308 311 120 118 122 Expected return on plan assets.......... (443) (425) (331) (78) (77) (71) Amortization of prior actuarial losses................................ 116 102 86 14 7 8 Amortization of prior service cost...... 16 16 16 (18) (19) (20) Curtailment cost........................ -- -- 10 -- -- 3 ----- ----- ----- ---- ---- ---- Net periodic benefit cost............... $ 145 $ 129 $ 214 $ 74 $ 60 $ 80 ===== ===== ===== ==== ==== ====
The Company expects to receive subsidies on prescription drug benefits beginning in 2006 under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the "Prescription Drug Act"). The other postretirement benefit plan accumulated benefit obligation were remeasured effective July 1, 2004 F-73 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) in order to determine the effect of the expected subsidies on net periodic other postretirement benefit cost. As a result, the accumulated other postretirement benefit obligation was reduced by $213 million at July 1, 2004 and net periodic other postretirement benefit cost from July 1, 2004 through December 31, 2004 was reduced by $17 million. The reduction of net periodic benefit cost was due to reductions in service cost of $3 million, interest cost of $6 million, and amortization of prior actuarial loss of $8 million. The reduction in the accumulated postretirement benefit obligation related to the Prescription Drug Act was $298 million and $230 million as of December 31, 2005 and 2004, respectively. For the year ended December 31, 2005, the reduction of net periodic postretirement benefit cost was $45 million, which was due to reductions in service cost of $6 million, interest cost of $16 million and amortization of prior actuarial loss of $23 million. An additional $23 million reduction in the December 31, 2005 accumulated other postretirement benefit obligation is the result of an actuarial loss recognized during the year resulting from updated assumptions including a January 1, 2005 participant census and new claims cost experience and the effect of a December 31, 2005 change in the discount rate. ASSUMPTIONS Assumptions used in determining benefit obligations were as follows:
DECEMBER 31, ----------------------------------- OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS ----------------- --------------- 2005 2004 2005 2004 ------- ------- ------ ------ Weighted average discount rate..................... 5.80% 5.86% 5.79% 5.86% Rate of compensation increase...................... 4%-8% 4%-8% N/A N/A
Assumptions used in determining net periodic benefit cost were as follows:
DECEMBER 31, ------------------------------------------------------ PENSION BENEFITS OTHER POSTRETIREMENT BENEFITS --------------------- ------------------------------ 2005 2004 2003 2005 2004 2003 ----- ----- ----- -------- -------- -------- Weighted average discount rate.......................... 5.85% 6.10% 6.75% 5.83% 6.74% 6.74% Weighted average expected rate of return on plan assets...... 8.49% 8.49% 8.50% 7.50% 7.91% 7.77% Rate of compensation increase... 4%-8% 4%-8% 4%-8% N/A N/A N/A
The discount rate is based on the yield of a hypothetical portfolio of high-quality debt instruments available on the valuation date, measured on a yield to worst basis, which would provide the necessary future cash flows to pay the aggregate projected benefit obligation when due. The expected rate of return on plan assets is based on anticipated performance of the various asset sectors in which the plan invests, weighted by target allocation percentages. Anticipated future performance is based on long-term historical returns of the plan assets by sector, adjusted for the Company's long-term expectations on the performance of the markets. While the precise expected return derived using this approach will fluctuate from year to year, the Company's policy is to hold this long-term assumption constant as long as it remains within reasonable tolerance from the derived rate. The weighted expected return on plan assets for use in that plan's valuation in 2006 is currently anticipated to be 8.25% for pension benefits and other postretirement medical benefits and 6.25% for other postretirement life benefits. F-74 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The assumed health care cost trend rates used in measuring the accumulated other postretirement benefit obligation were as follows:
DECEMBER 31, ------------------------------------------------- 2005 2004 ------------------------ ---------------------- Pre-Medicare eligible claims....... 9.5% down to 5% in 2014 8% down to 5% in 2010 Medicare eligible claims........... 11.5% down to 5% in 2018 10% down to 5% in 2014
Assumed health care cost trend rates may have a significant effect on the amounts reported for health care plans. A one-percentage point change in assumed health care cost trend rates would have the following effects:
ONE PERCENT ONE PERCENT INCREASE DECREASE ----------- ----------- (IN MILLIONS) Effect on total of service and interest cost components..... $ 15 $ (12) Effect of accumulated postretirement benefit obligation..... $182 $(153)
PLAN ASSETS The weighted average allocation of pension plan and other postretirement benefit plan assets is as follows:
DECEMBER 31, ---------------------------- OTHER PENSION POSTRETIREMENT BENEFITS BENEFITS ----------- -------------- 2005 2004 2005 2004 ---- ---- ----- ----- ASSET CATEGORY Equity securities.......................................... 47% 50% 42% 41% Fixed maturities........................................... 37% 36% 53% 57% Other (Real Estate and Alternative Investments)............ 16% 14% 5% 2% --- --- --- --- Total.................................................... 100% 100% 100% 100% === === === ===
The weighted average target allocation of pension plan and other postretirement benefit plan assets for 2006 is as follows:
OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS ---------------- -------------------- ASSET CATEGORY Equity securities.................................... 30%-65% 30%-45% Fixed maturities..................................... 20%-70% 45%-70% Other (Real Estate and Alternative Investments)...... 0%-25% 0%-10%
Target allocations of assets are determined with the objective of maximizing returns and minimizing volatility of net assets through adequate asset diversification. Adjustments are made to target allocations based on an assessment of the impact of economic factors and market conditions. The account values of the group annuity and life insurance contracts issued by the Company were $6,471 million and $6,335 million as of December 31, 2005 and 2004, respectively. Total revenue from these contracts recognized in the consolidated statements of income was $28 million, $28 million and $90 million for the years ended December 31, 2005, 2004 and 2003, respectively, and includes policy charges, net investment income from investments backing the contracts and administrative fees. Total investment income, including F-75 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) realized and unrealized gains and losses, credited to the account balances were $460 million, $519 million and $776 million for the years ended December 31, 2005, 2004 and 2003, respectively. The terms of these contracts are consistent in all material respects with what the Company offers to unaffiliated parties which are similarly situated. CASH FLOWS The Company expects to contribute $186 million to its pension plans and $126 million to its other postretirement benefit plans during 2006. Gross benefit payments for the next ten years, which reflect expected future service as appropriate, are expected to be as follows:
OTHER POSTRETIREMENT PENSION BENEFITS BENEFITS ---------------- -------------------- (IN MILLIONS) 2006................................................. $ 318 $126 2007................................................. $ 323 $132 2008................................................. $ 334 $137 2009................................................. $ 348 $142 2010................................................. $ 352 $148 2011-2015............................................ $1,968 $820
Gross subsidy payments expected to be received for the next ten years under the Medicare Prescription Drug, Improvement and Modernization Act of 2003 are as follows:
OTHER POSTRETIREMENT BENEFITS -------------------- (IN MILLIONS) 2006........................................................ $11 2007........................................................ $12 2008........................................................ $13 2009........................................................ $13 2010........................................................ $14 2011-2015................................................... $83
SAVINGS AND INVESTMENT PLANS The Company sponsors savings and investment plans for substantially all employees under which a portion of employee contributions are matched. The Company contributed $62 million, $55 million and $49 million for the years ended December 31, 2005, 2004 and 2003, respectively. 12. EQUITY PARENT'S INTEREST IN PREFERRED STOCK OF A SUBSIDIARY On December 16, 2003, the Holding Company contributed 2,532,600 shares of RGA's common stock to a subsidiary of the Company in exchange for 93,402 shares of Series A Cumulative Preferred Stock ("the Preferred Shares"). Holders of the Preferred Shares are entitled to receive cumulative cash dividends at the annual applicable rate of 7% times the Liquidation Preference of $1,000 per share payable quarterly, when and if declared by the Board of Directors. Holders of the Preferred Shares have no voting rights, except as required by applicable law. The Preferred Shares rank senior to the common stock. F-76 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) On December 21, 2004, the Holding Company contributed the 93,402 Preferred Shares to a subsidiary of the Company. The subsidiary of the Company retired the shares and recorded a contribution of capital of $93 million from MetLife, Inc. DIVIDEND RESTRICTIONS Under New York State Insurance Law, Metropolitan Life is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to the Holding Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of (i) 10% of its surplus to policyholders as of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). Metropolitan Life will be permitted to pay a cash dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the New York Superintendent of Insurance (the "Superintendent") and the Superintendent does not disapprove the distribution within 30 days of its filing. Under New York State Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its shareholders. The New York State Department of Insurance has established informal guidelines for such determinations. The guidelines, among other things, focus on the insurer's overall financial condition and profitability under statutory accounting practices. During the years ended December 31, 2005, 2004 and 2003, Metropolitan Life paid to the Holding Company $880 million, $797 million and $698 million, respectively, in ordinary dividends, the maximum amount which could be paid to the Holding Company without prior regulatory approval, and an additional $2,320 million, $0 million and $750 million, respectively, in special dividends, as approved by the Superintendent. The maximum amount of the dividend which Metropolitan Life may pay to the Holding Company in 2006 without prior regulatory approval is $863 million. Stockholder dividends or other distributions proposed to be paid by NELICO to its parent, Metropolitan Life, must be approved by the Massachusetts Commissioner of Insurance (the "Commissioner") if such dividends or distributions, together with other dividends or distributions made within the preceding calendar year, exceed the greater of (i) 10% of NELICO's statutory surplus as of the immediately preceding calendar year or (ii) NELICO's statutory net gain from operations for the immediately preceding calendar year. In addition, dividends cannot be paid from a source other than statutory unassigned funds surplus without prior approval of the Commissioner. Since NELICO's statutory unassigned funds surplus is less than zero, NELICO cannot pay any dividends without prior approval of the Commissioner. NELICO paid no common stockholder dividends for the years ended December 31, 2005, 2004 and 2003. For the years ended December 31, 2005, 2004, and 2003, Metropolitan Life received dividends from subsidiaries of $77 million, $14 million and $32 million, respectively. STOCK COMPENSATION PLANS The MetLife, Inc. 2000 Stock Incentive Plan, as amended (the "Stock Incentive Plan"), authorized the granting of awards in the form of non-qualified or incentive stock options qualifying under Section 422A of the Internal Revenue Code. Under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan, as amended (the "2005 Stock Plan"), awards granted may be in the form of non-qualified stock options or incentive stock options qualifying under Section 422A of the Internal Revenue Code, Stock Appreciation Rights, Restricted Stock or Restricted Stock Units, Performance Shares or Performance Share Units, Cash-Based Awards, and Stock-Based Awards (each as defined in the 2005 Stock Plan). The Stock Incentive Plan, 2005 Stock Plan and the Long-Term Performance Compensation Plan ("LTPCP"), as described below, are hereinafter collectively referred to as the "Incentive Plans." F-77 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The aggregate number of Holding Company shares reserved for issuance under the 2005 Stock Plan is 68,000,000 plus those shares available but not utilized under the Stock Incentive Plan and those shares utilized under the Stock Incentive Plan that are recovered due to forfeiture of stock options. At the commencement of the 2005 Stock Plan, additional shares carried forward from the Stock Incentive Plan and available for issuance under the 2005 Stock Plan were 11,917,472. Each share issued under the 2005 Stock Plan in connection with a stock option or Stock Appreciation Right reduces the number of shares remaining for issuance under that plan by one, and each share issued under the 2005 Stock Plan in connection with awards other than stock options or Stock Appreciation Rights reduces the number of shares remaining for issuance under that plan by 1.179 shares. All stock options granted have an exercise price equal to the fair market value price of the Holding Company's common stock on the date of grant, and a maximum term of ten years. Certain stock options granted under the Stock Incentive Plan and the 2005 Stock Plan become exercisable over a three year period commencing with the date of grant, while other stock options become exercisable three years after the date of grant. MetLife, Inc. allocated 92%, 91%, and 100% of stock option expense to the Company in each of the years ended December 31, 2005, 2004 and 2003, respectively. Options outstanding attributable to the expense allocated to Company were as follows:
YEARS ENDED DECEMBER 31, ------------------------------------ 2005 2004 2003 ---------- ---------- ---------- Outstanding Options.............................. 22,249,654 21,428,975 20,213,034 Exercisable Options.............................. 14,014,006 12,576,753 4,484,271
Effective January 1, 2003, MetLife, Inc. and the Company elected to prospectively apply the fair value method of accounting for stock options granted by the Holding Company subsequent to December 31, 2002. As permitted under SFAS 148, stock options granted prior to January 1, 2003 will continue to be accounted for under APB 25. Had compensation expense for grants awarded prior to January 1, 2003 been determined based on fair value at the date of grant in accordance with SFAS 123, the Company's net income would have been reduced to the following pro forma amounts:
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ (IN MILLIONS) Net income................................................. $3,253 $2,239 $2,001 Add: Stock option-based employee compensation expense included in reported net income, net of income taxes..... 30 24 11 Deduct: Total stock option-based employee compensation determined under fair value based method for all awards, net of income taxes...................................... (32) (42) (40) ------ ------ ------ Pro forma net income(1).................................... $3,251 $2,221 $1,972 ====== ====== ======
- --------------- (1) The pro forma earnings disclosures are not necessarily representative of the effects on net income in future years. Prior to January 1, 2005, the Black-Scholes model was used to determine the fair value of options granted as recognized in the financial statements or as reported in the pro forma disclosure above. The fair value of stock options issued on or after January 1, 2005 was estimated on the date of grant using a binomial lattice model. The Company made this change because lattice models produce more accurate option values due to F-78 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) the ability to incorporate assumptions about employee exercise behavior resulting from changes in the price of the underlying shares. In addition, lattice models allow for changes in critical assumptions over the life of the option in comparison to closed-form models like Black-Scholes, which require single-value assumptions at the time of grant. The expected volatility used in the binomial lattice model is based on an analysis of historical prices of the Holding Company's stock and options on the Holding Company's shares traded on the open market. The Company used a weighted-average of the implied volatility for traded call options with the longest remaining maturity nearest to the money as of each valuation date and the historical volatility, calculated using monthly share prices. The Company chose a monthly measurement interval for historical volatility as it believes this better depicts the nature of employee option exercise decisions being based on longer-term trends in the price of the Holding Company's shares rather than on daily price movements. The risk-free rate is based on observed interest rates for instruments with maturities similar to the expected term of the employee stock options. The Black-Scholes model requires a single spot rate, therefore the weighted-average of these rates for all grants in the year indicated is presented in the table below. The binomial lattice model allows for the use of different rates for different years. The table below presents the range of imputed forward rates for US Treasury Strips that was input over the contractual term of the options. Dividend yield is determined based on historical dividend distributions compared to the price of the underlying shares as of the valuation date, adjusted for any expected future changes in the dividend rate. For options valued using the binomial lattice model during the year ended December 31, 2005, the dividend yield as of the measurement date was held constant throughout the life of the option. Use of the Black-Scholes model requires an input of the expected life of the options, or the average number of years before options will be exercised or expired. The Company's management estimated expected life using the historical average years to exercise or cancellation and average remaining years outstanding for vested options. Alternatively, the binomial model used by the Company incorporates the contractual term of the options and then considers expected exercise behavior and a post-vesting termination rate, or the rate at which vested options are exercised or expire prematurely due to termination of employment, to derive an expected life. Exercise behavior in the Company's binomial lattice model is expressed using an exercise multiple, which reflects the ratio of exercise price to the strike price of options granted at which employees are expected to exercise. The exercise multiple is derived from actual historical exercise activity. The following weighted-average assumptions, with the exception of risk-free rates used in 2005 which are expressed as a range, were used in the applicable option-pricing model to determine the fair value of stock options issued for the:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ----------- ----- ----- Dividend yield.......................................... 1.20% 0.70% 0.79% Risk-free rate of return................................ 3.33%-4.70% 3.69% 3.62% Volatility.............................................. 23.23% 34.85% 38.56% Expected life (years)................................... 6 6 6 Exercise multiple....................................... 1.48 N/A N/A Post-vesting termination rate........................... 5.19% N/A N/A Contractual term (years)................................ 10 N/A N/A
F-79 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
YEARS ENDED DECEMBER 31, ------------------------ 2005 2004 2003 ------ ------ ------ Weighted average fair value of options granted............. $10.09 $13.25 $10.41 ====== ====== ======
Certain levels of Company management also received awards of long-term stock-based compensation. Under the LTPCP, awards are payable in their entirety at the end of a three-year performance period. Each participant was assigned a target compensation amount at the inception of the performance period with the final compensation amount determined based on the total shareholder return on the Holding Company's stock over the three-year performance period, subject to limited further adjustment approved by the Holding Company's Board of Directors. Final awards may be paid in whole or in part with shares of the Holding Company's stock, as approved by the Holding Company's Board of Directors. Beginning in 2005, no further LTPCP target compensation amounts were set. Instead, certain members of management were awarded Performance Shares under the 2005 Stock Plan. Participants are awarded an initial target number of Performance Shares with the final number of Performance Shares payable being determined by the product of the initial target multiplied by a factor of 0.0 to 2.0. The factor applied is based on measurements of the Holding Company's performance with respect to (i) change in annual net operating earnings per share; and (ii) proportionate total shareholder return, as defined, with reference to the three-year performance period relative to other companies in the Standard and Poor's Insurance Index with reference to the same three-year period. Performance Share awards will normally vest in their entirety at the end of the three-year performance period (subject to certain contingencies) and will be payable entirely in shares of the Holding Company's stock. On April 15, 2005, 995,150 Performance Shares were awarded to members of Company management, for which the total fair value on the date of grant was approximately $38 million. For the years ended December 31, 2005, 2004 and 2003, compensation expense related to the LTPCP and Performance Shares was $65 million, $45 million, and $42 million, respectively. For the years ended December 31, 2005, 2004 and 2003, the aggregate stock-based compensation expense related to the Incentive Plans was $112 million, $82 million and $60 million, respectively, including stock-based compensation for non-employees of $235 thousand, $468 thousand and $550 thousand, respectively. STATUTORY EQUITY AND INCOME Each insurance company's state of domicile imposes minimum risk-based capital requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). The formulas for determining the amount of risk-based capital specify various weighting factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by a ratio of total adjusted capital, as defined by the NAIC, to authorized control level risk-based capital, as defined by the NAIC. Companies below specific trigger points or ratios are classified within certain levels, each of which requires specified corrective action. Metropolitan Life and each of its U.S. insurance subsidiaries exceeded the minimum risk-based capital requirements for all periods presented herein. The NAIC adopted the Codification of Statutory Accounting Principles ("Codification") in 2001. Codification was intended to standardize regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual state laws and permitted practices. The New York State Department of Insurance has adopted Codification with certain modifications for the preparation of statutory financial statements of insurance companies domiciled in New York. Modifications by the various state insurance departments may impact the effect of Codification on the statutory capital and surplus of Metropolitan Life and its insurance subsidiaries. F-80 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Statutory accounting practices differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt and valuing securities on a different basis. Statutory net income of Metropolitan Life, a New York domiciled insurer, was $2,155 million, $2,648 million and $2,169 million for the years ended December 31, 2005, 2004 and 2003, respectively. Statutory capital and surplus, as filed with the New York State Department of Insurance, was $8,639 million and $8,804 million at December 31, 2005 and 2004, respectively. OTHER COMPREHENSIVE INCOME The following table sets forth the reclassification adjustments required for the years ended December 31, 2005, 2004 and 2003 in other comprehensive income (loss) that are included as part of net income for the current year that have been reported as a part of other comprehensive income (loss) in the current or prior year:
YEARS ENDED DECEMBER 31, -------------------------- 2005 2004 2003 -------- ------ ------ (IN MILLIONS) Holding gains on investments arising during the year....... $(2,222) $ 520 $ 814 Income tax effect of holding gains......................... 837 (182) (335) Reclassification adjustments: Recognized holding (gains) losses included in current year income........................................... (148) (236) 332 Amortization of premiums and accretion of discounts associated with investments........................... (186) (3) (152) Income tax effect........................................ 126 86 (72) Allocation of holding losses on investments relating to other policyholder amounts............................... 1,580 (284) (576) Income tax effect of allocation of holding losses to other policyholder amounts..................................... (596) 102 228 Unrealized investment gains of subsidiary at date of sale..................................................... 15 -- 269 Deferred income taxes on unrealized investment gains of subsidiary at date of sale............................... (5) -- (94) ------- ----- ----- Net unrealized investment gains (losses)................... (599) 3 414 ------- ----- ----- Foreign currency translation adjustments arising during the year..................................................... (54) 79 174 Reclassification adjustment for sale of investment in foreign operation........................................ 5 -- -- ------- ----- ----- Foreign currency translation adjustment.................... (49) 79 174 Minimum pension liability adjustment....................... 89 (2) (82) ------- ----- ----- Other comprehensive income (losses)........................ $ (559) $ 80 $ 506 ======= ===== =====
F-81 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) 13. OTHER EXPENSES Other expenses were comprised of the following:
YEARS ENDED DECEMBER 31, --------------------------- 2005 2004 2003 ------- ------- ------- (IN MILLIONS) Compensation............................................ $ 2,235 $ 2,205 $ 2,305 Commissions............................................. 1,278 1,729 1,694 Interest and debt issue costs........................... 245 183 313 Amortization of DAC and VOBA............................ 1,385 1,145 1,386 Capitalization of DAC................................... (1,619) (1,817) (1,982) Rent, net of sublease income............................ 227 216 226 Minority interest....................................... 181 168 119 Other................................................... 1,785 1,754 1,710 ------- ------- ------- Total other expenses.................................. $ 5,717 $ 5,583 $ 5,771 ======= ======= =======
14. BUSINESS SEGMENT INFORMATION The Company provides insurance and financial services to customers in the United States, Canada and Asia. At December 31, 2005 and 2004, the Company's business is divided into three operating segments: Institutional, Individual and Reinsurance, as well as Corporate & Other. These segments are managed separately because they either provide different products and services, require different strategies or have different technology requirements. Auto & Home, operated through Met P&C, was sold to the Holding Company in October 2003. See Note 1. The Company's international operations, consisting of the Company's Canadian branch and a joint venture in China, are reported in Corporate & Other for the years ended December 31, 2005 and 2004. For the year ended December 31, 2003, the Company's international operations were reported in a separate International segment. MetLife Indonesia was reported in Corporate & Other through the date of sale, September 29, 2005. See Note 16. On July 1, 2005, the Holding Company completed the acquisition of The Travelers Insurance Company ("TIC"), excluding certain assets, most significantly, Primerica, from Citigroup Inc. ("Citigroup"), and substantially all of Citigroup's international insurance business (collectively, "Travelers"). In connection with the Travelers acquisition by the Holding Company, management realigned certain products and services within its segments to better conform to the way it manages and assesses the business. Accordingly, all prior period segment results have been adjusted to reflect such product reclassifications. Also, in connection with the Travelers acquisition by the Holding Company, management has utilized its economic capital model to evaluate the deployment of capital based upon the unique and specific nature of the risks inherent in the Company's existing and newly acquired businesses and has adjusted such allocations based upon this model. 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 the Company's businesses. As a part of the economic capital process a portion of net investment income is credited to the segments based on the level of allocated equity. Institutional offers a broad range of group insurance and retirement & savings products and services, including group life insurance, non-medical health insurance, such as short and long-term disability, long-term care, and dental insurance, and other insurance products and services. Individual offers a wide variety of F-82 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) protection and asset accumulation products, including life insurance, annuities and mutual funds. Through the Company's majority-owned subsidiary, RGA, Reinsurance provides reinsurance of life and annuity policies in North America and various international markets. Additionally, reinsurance of critical illness policies is provided in select international markets. Auto & Home provides personal lines property and casualty insurance, including private passenger automobile, homeowners and personal excess liability insurance in 2003. International provided life insurance, accident and health insurance, annuities and retirement & savings products to both individuals and groups in 2003. Corporate & Other contains the excess capital not allocated to the business segments, various start-up and run-off entities, the Company's ancillary international operations in 2005 and 2004, as well as 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 all intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings, as well as intersegment transactions. Additionally, the Company's asset management business, including amounts reported as discontinued operations, is included in the results of operations for Corporate & Other. See Note 16 for disclosures regarding discontinued operations, including real estate. F-83 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Set forth in the tables below is certain financial information with respect to the Company's segments, as well as Corporate & Other, for the years ended December 31, 2005, 2004 and 2003. 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. The Company allocates capital to each segment based upon an internal capital allocation system that allows the Company to effectively manage its capital. The Company evaluates the performance of each operating segment based upon net income excluding net investment gains (losses), net of income taxes, adjustments related to net investment gains (losses), net of income taxes, the impact from the cumulative effect of changes in accounting, net of income taxes and discontinued operations, other than discontinued real estate, net of income taxes. Scheduled periodic settlement payments on derivative instruments not qualifying for hedge accounting are included in net investment gains (losses). The Company allocates certain non-recurring items, such as expenses associated with certain legal proceedings, to Corporate & Other.
CORPORATE & YEAR ENDED DECEMBER 31, 2005 INSTITUTIONAL INDIVIDUAL REINSURANCE OTHER(1) TOTAL - ---------------------------- ------------- ---------- ----------- ----------- -------- (IN MILLIONS) Premiums............................. $ 11,271 $ 4,113 $ 3,869 $ 3 $ 19,256 Universal life and investment-type product policy fees................ 753 1,193 -- 2 1,948 Net investment income................ 5,249 5,558 606 337 11,750 Other revenues....................... 642 92 58 28 820 Net investment gains (losses)........ 76 83 22 (2) 179 Policyholder benefits and claims..... 12,448 4,823 3,206 (32) 20,445 Interest credited to policyholder account balances................... 1,347 1,029 220 -- 2,596 Policyholder dividends............... 1 1,644 -- 2 1,647 Other expenses....................... 2,199 2,173 991 354 5,717 Income from continuing operations before provision for income taxes.............................. 1,996 1,370 138 44 3,548 Income from discontinued operations, net of income taxes................ 162 295 -- 353 810 Cumulative effect of a change in accounting, net of income taxes.... -- -- -- -- -- Net income........................... 1,491 1,176 92 494 3,253 Total assets......................... 139,680 141,201 16,049 10,396 307,326 DAC and VOBA......................... 1,098 7,513 2,815 12 11,438 Separate account assets.............. 42,063 31,075 14 -- 73,152 Policyholder liabilities............. 78,011 86,565 11,751 278 176,605 Separate account liabilities......... 42,063 31,075 14 -- 73,152
F-84 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CORPORATE & YEAR ENDED DECEMBER 31, 2004 INSTITUTIONAL INDIVIDUAL REINSURANCE OTHER(1) TOTAL - ---------------------------- ------------- ---------- ----------- ----------- -------- (IN MILLIONS) Premiums........................................... $ 10,037 $ 4,046 $ 3,348 $ 6 $ 17,437 Universal life and investment-type product policy fees............................................. 710 1,299 -- -- 2,009 Net investment income.............................. 4,580 5,352 538 348 10,818 Other revenues..................................... 654 131 56 21 862 Net investment gains (losses)...................... 162 85 59 (24) 282 Policyholder benefits and claims................... 11,172 4,836 2,694 34 18,736 Interest credited to policyholder account balances......................................... 1,014 1,131 212 -- 2,357 Policyholder dividends............................. -- 1,634 1 1 1,636 Other expenses..................................... 1,972 2,348 957 306 5,583 Income from continuing operations before provision for income taxes................................. 1,985 964 137 10 3,096 Income from discontinued operations, net of income taxes............................................ 19 22 -- 30 71 Cumulative effect of a change in accounting, net of income taxes..................................... (59) 9 -- (2) (52) Net income......................................... 1,267 682 91 199 2,239 Total assets....................................... 132,832 137,756 13,850 15,550 299,988 DAC and VOBA....................................... 997 7,485 2,567 13 11,062 Separate account assets............................ 40,462 28,045 14 (14) 68,507 Policyholder liabilities........................... 72,934 86,175 10,464 240 169,813 Separate account liabilities....................... 40,462 28,045 14 (14) 68,507
CORPORATE & AUTO & YEAR ENDED DECEMBER 31, 2003 INSTITUTIONAL INDIVIDUAL REINSURANCE OTHER INTERNATIONAL(1) HOME(2) TOTAL - ---------------------------- ------------- ---------- ----------- ----------- ---------------- ------- ------- (IN MILLIONS) Premiums.......................... $ 9,063 $4,221 $2,648 $ (6) $ 5 $2,168 $18,099 Universal life and investment-type product policy fees............. 658 1,262 -- -- -- -- 1,920 Net investment income............. 4,144 5,421 431 104 48 119 10,267 Other revenues.................... 618 240 47 38 14 23 980 Net investment gains (losses)..... (289) (303) 62 16 (8) (4) (526) Policyholder benefits and claims.......................... 10,022 4,844 2,109 (4) 15 1,604 18,590 Interest credited to policyholder account balances................ 973 1,222 184 -- -- -- 2,379 Policyholder dividends............ (1) 1,698 -- (1) 3 -- 1,699 Other expenses.................... 1,853 2,425 764 140 17 572 5,771 Income from continuing operations before provision for income taxes........................... 1,347 652 131 17 24 130 2,301 Income from discontinued operations, net of income taxes........................... 49 51 -- 274 (5) -- 369 Cumulative effect of a change in accounting, net of income taxes........................... (26) -- -- -- -- -- (26) Net income........................ 886 482 86 424 12 111 2,001
F-85 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) - --------------- (1) Ancillary international results are reported in Corporate & Other for the years ended December 31, 2005 and 2004. (2) Auto & Home, operated through Met P&C, was sold to the Holding company in October 2003. See Note 1. Net investment income and net investment gains (losses) are based upon the actual results of each segment's specifically identifiable asset portfolio adjusted for allocated capital. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company's product pricing. Revenues derived from any customer did not exceed 10% of consolidated revenues. Revenues from U.S. operations were $32,351 million, $30,102 million and $29,740 million for the years ended December 31, 2005, 2004 and 2003, respectively, which represented 95%, 96% and 97%, respectively, of consolidated revenues. 15. ACQUISITIONS AND DISPOSITIONS See Note 16 for information on the dispositions of MetLife Indonesia and SSRM. In 2003, RGA entered into a coinsurance agreement under which it assumed the traditional U.S. life reinsurance business of Allianz Life Insurance Company of North America. The transaction added approximately $278 billion of life reinsurance in-force, $246 million of premium and $11 million of income before income tax expense, excluding minority interest expense, in 2003. The effects of such transaction are included within the Reinsurance segment. In October 2003, the Company completed its sale of MTL, MetLife General Insurance Agency, Inc., MetLife Securities, Inc. and N.L. Holding Corporation to the Holding Company. The amount received in excess of book value of $28 million was recorded as a capital contribution from the Holding Company. Total revenues of the entities sold included in the consolidated statements of income was $156 million for the year ended December 31, 2003. In October 2003, the Company also sold Metropolitan Property and Casualty Insurance Company's common stock to the Holding Company for $1,990 million. The amount received in excess of book value of $120 million was recorded as a capital contribution from the Holding Company. Total revenues of the entity sold included in the consolidated statements of income was $2,343 million for the year ended December 31, 2003. See Note 1. 16. DISCONTINUED OPERATIONS REAL ESTATE The Company actively manages its real estate portfolio with the objective of maximizing earnings through selective acquisitions and dispositions. Income related to real estate classified as held-for-sale or sold is presented in discontinued operations. These assets are carried at the lower of depreciated cost or fair value less expected disposition costs. F-86 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The following table presents the components of income from discontinued real estate operations:
YEARS ENDED DECEMBER 31, ------------------------- 2005 2004 2003 ------- ------ ------ (IN MILLIONS) Investment income........................................... $ 87 $ 179 $ 308 Investment expense.......................................... (47) (114) (170) Net investment gains........................................ 961 27 420 ------ ----- ----- Total revenues............................................ 1,001 92 558 Interest expense............................................ -- -- 1 Provision for income taxes.................................. 359 31 204 ------ ----- ----- Income from discontinued operations, net of income taxes.... $ 642 $ 61 $ 353 ====== ===== =====
There was no carrying value of real estate related to discontinued operations at December 31, 2005. The carrying value of real estate related to discontinued operations was $678 million at December 31, 2004. The following table shows the discontinued real estate operations by segment:
YEARS ENDED DECEMBER 31, ------------------ 2005 2004 2003 ---- ---- ---- (IN MILLIONS) Net investment income Institutional............................................. $ 11 $21 $ 31 Individual................................................ 17 26 39 Corporate & Other......................................... 12 18 68 ---- --- ---- Total net investment income............................ $ 40 $65 $138 ==== === ==== Net investment gains (losses) Institutional............................................. $242 $ 9 $ 45 Individual................................................ 443 4 43 Corporate & Other......................................... 276 14 332 ---- --- ---- Total net investment gains (losses).................... $961 $27 $420 ==== === ==== Interest Expense Individual................................................ $ -- $-- $ 1 ---- --- ---- Total interest expense................................. $ -- $-- $ 1 ==== === ====
In the second quarter of 2005, the Company sold its One Madison Avenue property in Manhattan, New York for $918 million, resulting in a gain, net of income taxes, of $431 million. The gain is included in income from discontinued operations in the accompanying consolidated statements of income. In the fourth quarter of 2003, the Company sold its Eleven Madison Avenue property in Manhattan, New York for $675 million resulting in a gain, net of income taxes, of $166 million. The gain is included in income from discontinued operations in the accompanying consolidated statements of income. F-87 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) OPERATIONS On September 29, 2005, the Company completed the sale of MetLife Indonesia to a third party resulting in a gain upon disposal of $10 million, net of income taxes. As a result of this sale, the Company recognized income from discontinued operations of $5 million, net of income taxes, for the year ended December 31, 2005. The Company reclassified the assets, liabilities and operations of MetLife Indonesia into discontinued operations for all periods presented. The following tables present the amounts related to the operations and financial position of MetLife Indonesia that has been combined with the discontinued real estate operations in the consolidated income statements:
YEARS ENDED DECEMBER 31, ------------------ 2005 2004 2003 ---- ---- ---- (IN MILLIONS) Revenues from discontinued operations....................... $ 5 $ 5 $ 4 Expenses from discontinued operations....................... 10 14 9 --- ---- --- Income from discontinued operations before provision for income taxes.............................................. (5) (9) (5) Provision for income taxes.................................. -- -- -- --- ---- --- Loss from discontinued operations, net of income taxes.... (5) (9) (5) Net investment gain, net of income taxes.................... 10 -- -- --- ---- --- Income (loss) from discontinued operations, net of income taxes.................................................. $ 5 $ (9) $(5) === ==== ===
DECEMBER 31, 2004 ------------- (IN MILLIONS) Fixed maturities............................................ $17 Short-term investments...................................... 1 Cash and cash equivalents................................... 3 Deferred policy acquisition costs........................... 9 Premiums and other receivables.............................. 1 --- Total assets held-for-sale................................ $31 === Future policy benefits...................................... $ 5 Policyholder account balances............................... 12 Other policyholder funds.................................... 7 Other liabilities........................................... 4 --- Total liabilities held-for-sale........................... $28 ===
On January 31, 2005, the Company completed the sale of SSRM to a third party for $328 million in cash and stock. As a result of the sale of SSRM, the Company recognized income from discontinued operations of approximately $157 million, net of income taxes, comprised of a realized gain of $165 million, net of income taxes, and an operating expense related to a lease abandonment of $8 million, net of income taxes. Under the terms of the sale agreement, MetLife will have an opportunity to receive, prior to the end of 2006, additional payments aggregating up to approximately 25% of the base purchase price, based on, among other things, certain revenue retention and growth measures. The purchase price is also subject to reduction over five years, F-88 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) depending on retention of certain Company-related business. Also under the terms of such agreement, the Company had the opportunity to receive additional consideration for the retention of certain customers for a specific period in 2005. In the fourth quarter of 2005, upon finalization of the computation, the Company received a payment of $12 million, net of income taxes, due to the retention of these specific customer accounts. The Company reclassified the assets, liabilities and operations of SSRM into discontinued operations for all periods presented. Additionally, the sale of SSRM resulted in the elimination of the Company's Asset Management segment. The remaining asset management business, which is insignificant, has been reclassified into Corporate & Other. The Company's discontinued operations for the year ended December 31, 2005 also includes expenses of approximately $6 million, net of income taxes, related to the sale of SSRM. The operations of SSRM include affiliated revenues of $5 million, $59 million and $54 million for the years ended December 31, 2005, 2004 and 2003, respectively, related to asset management services provided by SSRM to the Company that have not been eliminated from discontinued operations as these transactions continue after the sale of SSRM. The following tables present the amounts related to operations and financial position of SSRM that have been combined with the discontinued real estate operations in the consolidated income statements:
YEARS ENDED DECEMBER 31, ------------------ 2005 2004 2003 ---- ---- ---- (IN MILLIONS) Revenues from discontinued operations....................... $ 19 $328 $231 Expenses from discontinued operations....................... 38 296 197 ---- ---- ---- Income from discontinued operations before provision for income taxes.............................................. (19) 32 34 Provision for income taxes.................................. (5) 13 13 ---- ---- ---- Income (loss) from discontinued operations, net of income taxes.................................................. (14) 19 21 Net investment gain, net of income taxes.................... 177 -- -- ---- ---- ---- Income from discontinued operations, net of income taxes.................................................. $163 $ 19 $ 21 ==== ==== ====
F-89 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
DECEMBER 31, 2004 ------------- (IN MILLIONS) Equity securities........................................... $ 49 Real estate and real estate joint ventures.................. 96 Short-term investments...................................... 33 Other invested assets....................................... 20 Cash and cash equivalents................................... 55 Premiums and other receivables.............................. 38 Other assets................................................ 88 ---- Total assets held-for-sale................................ $379 ==== Short-term debt............................................. $ 19 Current income taxes payable................................ 1 Deferred income taxes payable............................... 1 Other liabilities........................................... 219 ---- Total liabilities held-for-sale........................... $240 ====
17. FAIR VALUE INFORMATION The estimated fair values of financial instruments have been determined by using available market information and the valuation methodologies described below. Considerable judgment is often required in interpreting market data to develop estimates of fair value. Accordingly, the estimates presented herein may not necessarily be indicative of amounts that could be realized in a current market exchange. The use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. F-90 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Amounts related to the Company's financial instruments were as follows:
NOTIONAL CARRYING ESTIMATED AMOUNT VALUE FAIR VALUE -------- -------- ---------- (IN MILLIONS) DECEMBER 31, 2005 Assets: Fixed maturities..................................... $147,897 $147,897 Trading securities................................... $ 373 $ 373 Equity securities.................................... $ 2,217 $ 2,217 Mortgage and consumer loans.......................... $ 33,094 $ 33,710 Policy loans......................................... $ 8,412 $ 8,412 Short-term investments............................... $ 883 $ 883 Cash and cash equivalents............................ $ 1,787 $ 1,787 Mortgage loan commitments............................ $2,603 $ -- $ (3) Commitments to fund partnership investments.......... $1,956 $ -- $ -- Liabilities: Policyholder account balances........................ $ 62,943 $ 61,849 Short-term debt...................................... $ 453 $ 453 Long-term debt....................................... $ 2,961 $ 3,246 Shares subject to mandatory redemption............... $ 278 $ 362 Payables for collateral under securities loaned and other transactions................................ $ 21,009 $ 21,009
NOTIONAL CARRYING ESTIMATED AMOUNT VALUE FAIR VALUE -------- -------- ---------- (IN MILLIONS) DECEMBER 31, 2004 Assets: Fixed maturities..................................... $150,229 $150,229 Equity securities.................................... $ 1,903 $ 1,903 Mortgage and consumer loans.......................... $ 31,571 $ 33,006 Policy loans......................................... $ 8,256 $ 8,256 Short-term investments............................... $ 1,194 $ 1,194 Cash and cash equivalents............................ $ 2,370 $ 2,370 Mortgage loan commitments............................ $1,161 $ -- $ 4 Commitments to fund partnership investments.......... $1,320 $ -- $ -- Liabilities: Policyholder account balances........................ $ 59,150 $ 58,180 Short-term debt...................................... $ 1,445 $ 1,445 Long-term debt....................................... $ 2,050 $ 2,293 Shares subject to mandatory redemption............... $ 278 $ 361 Payables for collateral under securities loaned and other transactions................................ $ 25,230 $ 25,230
F-91 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) The methods and assumptions used to estimate the fair values of financial instruments are summarized as follows: FIXED MATURITIES, TRADING SECURITIES AND EQUITY SECURITIES The fair value of fixed maturities, trading securities and equity securities are based upon quotations published by applicable stock exchanges or received from other reliable sources. For securities for which the market values were not readily available, fair values were estimated using quoted market prices of comparable investments. MORTGAGE AND CONSUMER LOANS, MORTGAGE LOAN COMMITMENTS AND COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS Fair values for mortgage and consumer loans are estimated by discounting expected future cash flows, using current interest rates for similar loans with similar credit risk. For mortgage loan commitments, the estimated fair value is the net premium or discount of the commitments. Commitments to fund partnership investments have no stated interest rate and are assumed to have a fair value of zero. POLICY LOANS The carrying values for policy loans approximate fair value. CASH AND CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS The carrying values for cash and cash equivalents and short-term investments approximated fair values due to the short-term maturities of these instruments. POLICYHOLDER ACCOUNT BALANCES The fair value of policyholder account balances which have final contractual maturities are estimated by discounting expected future cash flows based upon interest rates currently being offered for similar contracts with maturities consistent with those remaining for the agreements being valued. The fair value of policyholder account balances without final contractual maturities are assumed to equal their current net surrender. SHORT-TERM AND LONG-TERM DEBT, PAYABLES FOR COLLATERAL UNDER SECURITIES LOANED AND OTHER TRANSACTIONS AND SHARES SUBJECT TO MANDATORY REDEMPTION The fair values of short-term and long-term debt, and shares subject to mandatory redemption are determined by discounting expected future cash flows using risk rates currently available for debt with similar terms and remaining maturities. The carrying values of payables for collateral under securities loaned and other transactions approximate fair value. DERIVATIVE FINANCIAL INSTRUMENTS The fair value of derivative instruments is based upon quotations obtained from dealers or other reliable sources. See Note 3 for derivative fair value disclosures. 18. RELATED PARTIES Effective January 1, 2003, MetLife Group, Incorporated, a New York corporation and wholly owned subsidiary of the Holding Company, was formed as a personnel services company to provide personnel, as needed, to support the activities of the Company. Charges for these services were approximately $1,934 million, $1,711 million and $1,677 million in 2005, 2004 and 2003, respectively. As of December 31, 2005 and 2004, the Company held $103 million and $144 million, respectively, of assets in the Metropolitan Money Market Pool of affiliated companies. These amounts are recorded as short-term investments on the consolidated balance sheets of the Company. In the normal course of business, the Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. The Company transferred assets with a cost or amortized cost and F-92 METROPOLITAN LIFE INSURANCE COMPANY AND SUBSIDIARIES (A Wholly-Owned Subsidiary of Metlife, Inc.) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) fair market value of $686 million and $720 million, and $367 million and $382 million, for the years ended December 31, 2005 and 2004, respectively. The realized capital gains (losses) recognized on these transfers were $34 million, $15 million and less than $1 million for the years ended December 31, 2005, 2004 and 2003, respectively. The Company purchased assets from affiliates with a fair market value of $691 million and $563 million for the years ended December 31, 2005 and 2004, respectively. See Notes 2 and 5 for additional related party transactions. 19. SUBSEQUENT EVENTS On October 17, 2006, the Holding Company announced the sale by one of its subsidiaries, MTL, of its Peter Cooper Village and Stuyvesant Town properties for $5.4 billion. It is anticipated that the sale will close in the fourth quarter of 2006, subject to customary closing conditions. Upon the closing of the transaction, MTL will repay the mortgage of approximately $772 million, including accrued interest, held by the Company on these properties and will pay a prepayment fee of approximately $63 million which will be recognized as affiliated investment income. During the third quarter of 2006, Metropolitan Life's Board of Directors approved a plan to merge a subsidiary of the Holding Company, Citicorp Life Insurance Company, and its subsidiary First Citicorp Life Insurance Company, with and into Metropolitan Life during the fourth quarter of 2006. The Company has also received regulatory approval for the merger. The consolidated book value of Citicorp Life Insurance Company was $148 million at December 31, 2005. The transaction will be accounted for using the pooling-of-interests method from July 1, 2005, the date of acquisition by the Holding Company, in accordance with SFAS No. 141, Business Combinations ("SFAS 141"). On September 30, 2006, the Company received a capital contribution from the Holding Company of $377 million in the form of assets related to the value of distribution agreements ("VODA"), net of deferred income taxes, for which the Company receives the benefit. The VODA is related to the Holding Company's acquisition of Travelers. On September 30, 2006, the Company acquired the assets and liabilities of MetLife Retirement Services LLC ("MRS") (formerly CitiStreet Retirement Services LLC), for approximately $56 million. The assets include $52 million, net of $2 million accumulated amortization, related to the value of customer relationships acquired for which the Company will receive the benefit. Subsequently, the Company acquired MRS and its subsidiaries from MTL. On June 28, 2006, Timberlake Financial L.L.C., a subsidiary of RGA, completed an offering of $850 million of Series A Floating Rate Insured Notes due June 2036, which is included in the Company's long-term debt. Interest on the notes will accrue at an annual rate of 1-month LIBOR plus a base margin, payable monthly. The notes represent senior, secured indebtedness of Timberlake Financial, L.L.C. and its assets with no recourse to RGA or its subsidiaries. Up to $150 million of additional notes may be offered in the future. The proceeds of the offering will provide long-term collateral to support Regulation Triple X reserves on approximately 1.5 million term life insurance policies with guaranteed level premium periods reinsured by RGA Reinsurance Company, a U.S. subsidiary of RGA. On May 1, 2006, General American, an indirect insurance subsidiary of the Company, sold its wholly-owned insurance subsidiary, Paragon, to its ultimate parent, the Holding Company. Immediately following the sale, the Holding Company merged Paragon, an affiliate of the Company, with and into the Company. F-93 Metropolitan Life Separate Account UL PART C. OTHER INFORMATION ITEM 26. EXHIBITS (a) Resolution of the Board of Directors of Metropolitan Life effecting the establishment of Metropolitan Life Separate Account UL/2/ (b) None (c) (i) Form of Broker Agreement/2/ (ii) Schedule of Sales Commissions/1/ (iii) Forms of Selling Agreement/6/ (d) (i) Variable Additional Insurance Rider (ii) Variable Additional Benefit Rider (iii) Advantage Whole Life Insurance Policy (e) Enterprise Application for the Policy and Riders (f) (i) Restated Charter and By-Laws of Metropolitan Life/3/ (ii) Amended Restated Charter and By-laws of Metropolitan Life/5/ (iii) Amended and Restated By-Laws of Metropolitan Life/7/ (g) None (h) Participation Agreement among Metropolitan Series Fund, Inc., MetLife Advisers, LLC and Metropolitan Life Insurance Company (7/1/2004)/8/ (i) None (j) None (k) Opinion and Consent of Marie C. Swift as to the legality of the securities being registered (l) None (m) None (n) Consent of Independent Registered Public Accounting Firm (o) None (p) None (q) (i) Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii)/2/ (ii) Addendum to Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii)/4/ (r) Powers of Attorney /1/ Incorporated by reference from "Sales and Administration of the Policies" in the Prospectus included herein and "Distribution of the Policies that include the Advantage Equity Options" in the Statement of Additional Information included herein. /2/ Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registration Statement (File No. 033-47927) filed on April 30, 1997. /3/ Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registration Statement on Form S-6 (File No. 333-40161) filed on April 6, 2000. /4/ Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registration Statement on Form S-6 (File No. 033-40161) filed on April 10, 2001. /5/ Incorporated herein by reference to the Registration Statement of MetLife Separate Account E on Form N-4 (File No. 333-83716) filed on March 5, 2002. /6/ Incorporated herein by reference to the Post-Effective Amendment No. 18 to the Registration Statement on Form N-6 (File No. 033-47927) filed on April 30, 2004. /7/ Incorporated herein by reference to the Registration Statement of MetLife Separate Account E on Form N-4 (File No. 333-122883) filed on February 17, 2005. /8/ Incorporated herein by reference to the Registration Statement on Form N-6 (File No. 333-131664) filed on February 8, 2006. ITEM 27. DIRECTORS AND OFFICERS OF DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR - ----------------------------------- ------------------------------------ C. Robert Henrikson Chairman of the Board, President and MetLife, Inc. and Metropolitan Life Insurance Co. Chief Executive Officer One MetLife Plaza 27-01 Queens Plaza North Long Island City, NY 11101 Curtis H. Barnette Director Chairman Emeritus Bethlehem Steel Corporation 1170 Eighth Avenue, Martin Tower 2118 Bethlehem, PA 18016-7699 Burton A. Dole, Jr. Director Pauma Valley Country Club Pauma Valley Drive Pauma Valley, CA 92061 Cheryl W. Grise Director President Northeast Utilities P.O. Box 270 Hartford, CT 06141 James R. Houghton Director Chairman and Chief Executive Officer Corning Incorporated One Riverfront Plaza, MP HQ E2-6 Corning, NY 14831 Harry P. Kamen Director Retired Chairman and Chief Executive Officer Metropolitan Life Insurance Company 200 Park Avenue, Suite 5700 New York, NY 10166 Helene L. Kaplan Director Of Counsel, Skadden, Arps, Slate, Meagher and Flom Four Times Square
New York, NY 10036 John M. Keane Director 2200 Wilson Blvd., Suite 102-542 Arlington, VA 22201-3324 James M. Kilts Director The Gillette Company Prudential Tower Building - 48th floor Boston, MA 02199 Charles H. Leighton Director Retired Chairman and Chief Executive Officer CML Group, Inc. 330 Gray Craig Road Middletown, RI 02842 Sylvia M. Mathews Director Chief Operating Officer and Executive Director The Bill & Melinda Gates Foundation 1551 Eastlake Avenue East Seattle, WA 98102 Hugh B. Price Director Piper Rudnick LLP 1251 Avenue of the Americas New York, NY 10020-1104 Kenton J. Sicchitano Director Retired Global Managing Partner PricewaterhouseCoopers 101 Jericho Road Weston, MA 02493 William C. Steere, Jr. Director Retired Chairman of the Board Pfizer, Inc. 235 East 42nd Street New York, NY 10017
Set forth below is a list of certain principal officers of Metropolitan Life. The principal business address of each officer of Metropolitan Life is One MetLife Plaza, 27-01 Queens Plaza North, Long Island City, New York 11101.
Name Position with Metropolitan Life C. Robert Henrikson Chairman of the Board, President and Chief Executive Officer Gwenn L. Carr Vice President and Secretary Steven A. Kandarian Executive Vice President and Chief Investment Officer Leland C. Launer, Jr. President- Institutional Business James L. Lipscomb Executive Vice President and General Counsel Joseph J. Prochaska, Jr. Executive Vice President and Chief Accounting Officer Catherine A. Rein Senior Executive Vice President and Chief Administrative Officer Stanley J. Talbi Executive Vice President William J. Toppeta President, International Lisa M. Weber President, Individual Business Judy E. Weiss Executive Vice President and Chief Actuary William J. Wheeler Executive Vice President and Chief Financial Officer Anthony J. Williamson Senior Vice President and Treasurer
ITEM 28. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE DEPOSITOR OR THE REGISTRANT The registrant is a separate account of Metropolitan Life Insurance Company under the New York Insurance law. Under said law the assets allocated to the separate account are the property of Metropolitan Life Insurance Company. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. a publicly traded company. The following outline indicates those persons who are controlled by or under common control with Metropolitan Life Insurance Company: ORGANIZATIONAL STRUCTURE OF METLIFE, INC. AND SUBSIDIARIES AS OF SEPTEMBER 30, 2006 The following is a list of subsidiaries of MetLife, Inc. updated as of September 30, 2006. Those entities which are listed at the left margin (labeled with capital letters) are direct subsidiaries of MetLife, Inc. Unless otherwise indicated, each entity which is indented under another entity is a subsidiary of that other entity and, therefore, an indirect subsidiary of MetLife, Inc. Certain inactive subsidiaries have been omitted from the MetLife, Inc. organizational listing. The voting securities (excluding directors' qualifying shares, (if any)) of the subsidiaries listed are 100% owned by their respective parent corporations, unless otherwise indicated. The jurisdiction of domicile of each subsidiary listed is set forth in the parenthetical following such subsidiary. A. MetLife Group, Inc. (NY) B. MetLife Bank National Association (USA) C. Exeter Reassurance Company, Ltd. (Bermuda) D. MetLife Taiwan Insurance Company Limited (Taiwan) E. Metropolitan Tower Life Insurance Company (DE) 1. TH Tower NGP, LLC (DE) 2. Partners Tower, L.P. (DE) - a 99% limited partnership interest of Partners Tower, L.P. is held by Metropolitan Tower Life Insurance Company and 1% general partnership interest is held by TH Tower NGP, LLC (DE) 3. TH Tower Leasing, LLC (DE) 4. MetLife Retirement Services LLC (NJ) a) MetLife Investment Funds Services LLC (NJ) b) MetLife Investment Funds Management LLC (NJ) c) MetLife Associates LLC (DE) 1) CitiStreet Equities LLC (NJ) F. MetLife Pensiones S.A. (Mexico)- 97.4738% is owned by Metlife, Inc. and 2.5262% is owned by Metropolitan Asset Management Corporation. G. MetLife Chile Inversiones Limitada (Chile)- 99.9999999% is owned by MetLife, Inc. and 0.0000001% is owned by Natiloportem Holdings, Inc. 1. MetLife Chile Seguros de Vida S.A. (Chile)- 99.99% is owned by MetLife Chile Inversiones Limitada, and 0.01% is owned by MetLife International Holdings, Inc. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile)- 99.99% is owned by MetLife Chile Seguros de Vida S.A., and 0.01% is owned by MetLife Chile Inversiones Limitada. H. MetLife Mexico S.A. (Mexico)- 98.70541% is owned by Metlife, Inc., 1.27483% is owned by Metropolitan Asset Management Corporation and 0.01976% is owned by Metlife International Holdings, Inc. 1. MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. (Mexico) and 0.01% is owned by MetLife Pensiones S.A. a) Met1 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. (Mexico) b) Met2 SIEFORE, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. (Mexico) c) Met3 SIEFORE, S.A. de C.V. (Mexico)- 99.9% is owned by MetLife Afore, S.A. de C.V. and 0.01% is owned by MetLife Mexico S.A. (Mexico) I. MetLife Mexico Servicios, S.A. de C.V. (Mexico)- 98% is owned by MetLife, Inc. and 2% is owned by MetLife International Holdings, Inc. J. Metropolitan Life Seguros de Vida S.A. (Uruguay) K. MetLife Securities, Inc. (DE) L. Enterprise General Insurance Agency, Inc. (DE) 1. MetLife General Insurance Agency of Texas, Inc. (DE) 2. MetLife General Insurance Agency of Massachusetts, Inc. (MA) 1 M. Metropolitan Property and Casualty Insurance Company (RI) 1. Metropolitan General Insurance Company (RI) 2. Metropolitan Casualty Insurance Company (RI) 3. Metropolitan Direct Property and Casualty Insurance Company (RI) 4. Met P&C Managing General Agency, Inc. (TX) 5. MetLife Auto & Home Insurance Agency, Inc. (RI) 6. Metropolitan Group Property and Casualty Insurance Company (RI) a) Metropolitan Reinsurance Company (U.K.) Limited (United Kingdom) 7. Metropolitan Lloyds, Inc. (TX) a) Metropolitan Lloyds Insurance Company of Texas (TX)- Metropolitan Lloyds Insurance Company of Texas, an affiliated association, provides automobile, homeowner and related insurance for the Texas market. It is an association of individuals designated as underwriters. Metropolitan Lloyds, Inc., a subsidiary of Metropolitan Property and Casualty Insurance Company, serves as the attorney-in-fact and manages the association. 8. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) N. Cova Corporation (MO) 1. Texas Life Insurance Company (TX) 2. Cova Life Management Company (DE) O. MetLife Investors Insurance Company (MO) 1. MetLife Investors Insurance Company of California (CA) P. First MetLife Investors Insurance Company (NY) Q. Walnut Street Securities, Inc. (MO) 1. Walnut Street Advisers, Inc. (MO) R. Newbury Insurance Company, Limited (BERMUDA) S. MetLife Investors Group, Inc. (DE) 1. MetLife Investors USA Insurance Company (DE) 2. MetLife Investors Distribution Company (MO) 3. Met Investors Advisory, LLC (DE) 4. MetLife Investors Financial Agency, Inc. (TX) 2 T. MetLife International Holdings, Inc. (DE) 1. MetLife Mexico Cares, S.A. de C.V. (Mexico) a) Fundacion MetLife Mexico, A.C. (Mexico) 2. Natiloportem Holdings, Inc. (DE) a) Servicios Administrativos Gen, S.A. de C.V. (Mexico) (1) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. (2) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Servicios Administrativos Gen, S.A. de C.V. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. 3. MetLife India Insurance Company Private Limited (India)- 26% is owned by MetLife International Holdings, Inc. and 74% is owned by third parties. 4. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.9989% is owned by MetLife International Holdings, Inc. and 0.0011% is owned by Natiloporterm Holdings, Inc. 5. Metropolitan Life Seguros de Retiro S.A. (Argentina)- 95.2319% is owned by MetLife International Holdings, Inc. and 4.7680% is owned by Natiloportem Holdings, Inc. 6. Metropolitan Life Seguros de Vida S.A. (Argentina)- 95.2499% is owned by MetLife International Holdings, Inc. and 4.7473% is owned by Natiloportem Holdings, Inc. 7. MetLife Insurance Company of Korea Limited (South Korea)- 21.22% of MetLife Insurance Company of Korea Limited is owned by MetLife, Mexico, S.A. and 78.78% is owned by Metlife International Holdings, Inc. 8. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)- 99.999999% is owned by MetLife International Holdings, Inc. and 0.000001% is owned by Natiloportem Holdings, Inc. 9. MetLife Global, Inc. (DE) 10. MetLife Administradora de Fundos Multipatrocinados Ltda (Brazil) - 95.4635% is owned by MetLife International Holdings, Inc. and 4.5364% is owned by Natiloportem Holdings, Inc. 11. MetLife Insurance Limited (United Kingdom) 12. MetLife General Insurance Limited (Australia) 13. MetLife Limited (United Kingdom) 14. MetLife Insurance S.A./NV (Belgium) - 99.9% is owned by MetLife International Holdings, Inc. and 0.1% is owned by third parties. 15. MetLife Services Limited (United Kingdom) 16. Siembra Seguros de Vida S.A. (Argentina) - 97.9327% is owned by MetLife International Holdings, Inc. and 2.0672% is owned by Natiloportem Holdings, Inc. 17. MetLife International Insurance Ltd. (Bermuda) 18. MetLife Insurance Limited (Australia) a) MetLife Insurance and Investment Trust (Australia) b) MetLife Investments Pty Limited (Australia) c) MetLife Trustee Pty Limited (Australia) d) MetLife Services (Singapore) PTE Limited (Australia) 19. Siembra Seguros de Retiro S.A. (Argentina) - 96.8819% is owned by MetLife International Holdings, Inc. and 3.1180% is owned by; Natiloportem Holdings, Inc. 20. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, Inc., and 94.9999% is owned by MetLife International Holdings Inc. 21. Compania Previsional MetLife S.A. (Brazil) - 95.4635% is owned by MetLife International Holdings, Inc. and 4.5364% is owned by Natiloportem Holdings, Inc. (a) Met AFJP S.A. (Argentina) - 75.4088% of the shares of Met AFJP S.A. are held by Compania Previsional MetLife SA, 19.5912% is owned by Metropolitan Life Seguros de Vida SA, 3.9689% is held by Natiloportem Holdings, Inc., and 1.0310% is held by Metropolitan Life Seguros de Retiro SA. 22. MetLife Worldwide Holdings, Inc. (DE) a) MetLife Towarzystwo Ubezpieczen na Zycie S.A. (Poland) b) MetLife Reinsurance (Bermuda) Ltd. (Bermuda) c) MetLife Direct Co., Ltd. (Japan) d) MetLife Vida e Previdencia S.A. (Brazil) U. Metropolitan Life Insurance Company (NY) 1. 334 Madison Avenue BTP-D Holdings, LLC (DE) 2. 334 Madison Avenue BTP-E Holdings, LLC (DE) 3. 334 Madison Euro Investments, Inc. (DE) a) Park Twenty Three Investments Company (United Kingdom)- 1% voting control of Park Twenty Three Investments Company is held by St. James Fleet Investments Two Limited. (1) Convent Station Euro Investments Four Company (United Kingdom)- 1% voting control of Convent Station Euro Investments Four Company is held by 334 Madison Euro Investments, Inc. as nominee for Park Twenty Three Investments Company. 4. St. James Fleet Investments Two Limited (Cayman Islands)- 34% of the shares of St. James Fleet Investments Two Limited is held by Metropolitan Life Insurance Company. 5. One Madison Investments (Cayco) Limited (Cayman Islands)- 10.1% voting control of One Madison Investments (Cayco) Limited is held by Convent Station Euro Investments Four Company. 6. CRB Co, Inc. (MA)- AEW Real Estate Advisors, Inc. holds 49,000 preferred non-voting shares and AEW Advisors, Inc. holds 1,000 preferred non-voting shares of CRB, Co., Inc. 7. GA Holding Corp. (MA) 3 8. L/C Development Corporation (CA) 9. Thorngate, LLC (DE) 10. Alternative Fuel I, LLC (DE) 11. Transmountain Land & Livestock Company (MT) 12. MetPark Funding, Inc. (DE) 13. HPZ Assets LLC (DE) 14. Missouri Reinsurance (Barbados), Inc. (Barbados) 15. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 16. MetLife (India) Private Ltd. (India) 17. Metropolitan Marine Way Investments Limited (Canada) 18. MetLife Private Equity Holdings, LLC (DE) 19. 23rd Street Investments, Inc. (DE) a) Mezzanine Investment Limited Partnership-BDR (DE). Metropolitan Life Insurance Company holds a 99% limited partnership interest in Mezzanine Investment Limited Partnership-BDR and 23rd Street Investments, Inc. is a 1% general partner. b) Mezzanine Investment Limited Partnership-LG (DE). 23rd Street Investments, Inc. is a 1% general partner of Mezzanine Investment Limited Partnership-LG. Metropolitan Life Insurance Company holds a 99% limited partnership interest in Mezzanine Investment Limited Partnership-LG. 20. Metropolitan Realty Management, Inc. (DE) 21. Dewey Square South, LLC (NY) 22. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 23. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 4 24. Bond Trust Account A (MA) 25. Metropolitan Asset Management Corporation (DE) a) MetLife Capital Credit L.P. (DE)- 90% of MetLife Capital Credit L.P. is held directly by Metropolitan Life Insurance Company. b) MetLife Capital Limited Partnership (DE)- 73.78% Limited Partnership interest is held directly by Metropolitan Life Insurance Company. c) MetLife Investments Asia Limited (Hong Kong)- One share of MetLife Investments Asia Limited is held by W&C Services, Inc., a nominee of Metropolitan Asset Management Corporation. d) MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited and LA Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. e) LA Investments, S.A. (Argentina)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited and LA Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. f) MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited and LA Investments, S.A. and 1% of MetLife Latin America Asesorias e Inversiones Limitada. 26. New England Life Insurance Company (MA) a) MetLife Advisers, LLC (MA) b) New England Securities Corporation (MA) c) Omega Reinsurance Corporation (AZ) 27. GenAmerica Financial, LLC (MO) a) GenAmerica Capital I (DE) b) General American Life Insurance Company (MO) (1) GenAmerica Management Corporation (MO) 5 (3) Reinsurance Group of America, Incorporated (MO) - (52.8%) (a) Reinsurance Company of Missouri, Incorporated (MO) (i) Timberlake Financial, L.L.C. (DE) (A) Timberlake Reinsurance Company II (SC) (ii) RGA Reinsurance Company (MO) (A) Fairfield Management Group, Inc. (MO) (aa) Reinsurance Partners, Inc. (MO) (b) RGA Worldwide Reinsurance Company, Ltd. (Barbados) (c) RGA Sigma Reinsurance SPC (Cayman Islands) (d) RGA Americas Reinsurance Company, Ltd. (Barbados) (e) RGA Reinsurance Company (Barbados) Ltd. (Barbados) (80%) (i) RGA Financial Group, L.L.C. (DE)- RGA Reinsurance Company also owns a 20% non- equity membership in RGA Financial Group, L.L.C. (f) RGA Life Reinsurance Company of Canada (Canada) (g) RGA International Corporation (Nova Scotia) (h) RGA Holdings Limited (U.K.) (United Kingdom) (i) RGA UK Services Limited (United Kingdom) (ii) RGA Capital Limited U.K. (United Kingdom) (iii) RGA Reinsurance (UK) Limited (United Kingdom) (iv) RGA Services India Private Limited (India) (i) RGA South African Holdings (Pty) Ltd. (South Africa) (i) RGA Reinsurance Company of South Africa Limited (South Africa) (j) RGA Australian Holdings PTY Limited (Australia) (i) RGA Reinsurance Company of Australia Limited (Australia) (ii) RGA Asia Pacific PTY, Limited (Australia) (k) General American Argentina Seguros de Vida, S.A. (Argentina) - 95% of General American Argentina Seguros de Vida, S.A. is owned by Reinsurance Group of America, Incorporated and 5% is owned by RGA Reinsurance Company (Barbados) Ltd. 6 (l) RGA Technology Partners, Inc. (MO) (m) RGA International Reinsurance Company (Ireland) (n) RGA Capital Trust I (DE) (o) RGA Global Reinsurance Company, Ltd. (Bermuda) 28. Corporate Real Estate Holdings, LLC (DE) 29. Ten Park SPC (CAYMAN ISLANDS ) - 1% voting control of Ten Park SPC is held by Metropolitan Asset Management Corporation 30. MetLife Tower Resources Group, Inc. (DE) 31. Headland - Pacific Palisades, LLC (CA) 32. Headland Properties Associates (CA) 33. Krisman, Inc. (MO) 34. Special Multi-Asset Receivables Trust (DE) 35. White Oak Royalty Company (OK) 36. 500 Grant Street GP LLC (DE) 37. 500 Grant Street Associates Limited Partnership (CT) - 99% of 500 Grant Street Associates Limited Partnership is held by Metropolitan Life Insurance Company and 1% by 500 Grant Street GP LLC 38. MetLife Canada/MetVie Canada (Canada) V. MetLife Capital Trust II (DE) W. MetLife Capital Trust III (DE) X. MetLife Insurance Company of Connecticut (Life Department) (Accident Department) (CT) 1. 440 South LaSalle LLC (DE) 2. Pilgrim Investments Oakmont Lane, LLC (DE) - 50% is owned by MetLife Insurance Company of Connecticut and 50% is owned by a third party 3. Pilgrim Alternative Investments Opportunity Fund I, LLC (DE) - 67% is owned by MetLife Insurance Company of Connecticut, and 33% is owned by third party 4. Pilgrim Alternative Investments Opportunity Fund III Associates, LLC (CT) - 67% is owned by MetLife Insurance Company of Connecticut, and 33% is owned by third party 5. Pilgrim Investments Highland Park, LLC (DE) 6. Pilgrim Investments Schaumberg Windy Point, LLC (DE) 7. Pilgrim Investments York Road, LLC (DE) 8. Euro TI Investments LLC (DE) 9. Greenwich Street Investments, LLC (DE) a) Greenwich Street Capital Offshore Fund, Ltd. (Virgin Islands) b) Greenwich Street Investments, L.P. (DE) 10. Hollow Creek, L.L.C. (CT) 11. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company of Connecticut and MetLife Life and Annuity Company of Connecticut. a) One Financial Place, LP (DE) 12. One Financial Place Holdings, LLC (DE)-100% is owned in the aggregate by MetLife Insurance Company of Connecticut and MetLife Life and Annuity Company of Connecticut. 13. Plaza LLC (CT) a) Travelers Asset Management International Company LLC (NY) b) Tower Square Securities, Inc. (CT) 1) Tower Square Securities Insurance Agency of Alabama, Inc. (AL) 2) Tower Square Securities Insurance Agency of New Mexico, Inc. (NM) 3) Tower Square Securities Insurance Agency of Ohio, Inc. (OH) (99%) c) MLI Distribution LLC (DE) d) Travelers Investment Adviser, Inc. (DE) 14. TIC European Real Estate LP, LLC (DE) 15. MetLife European Holdings, Inc. (UK) a) MetLife Europe Limited, Inc. (UK) b) MetLife Pensions Trustees Limited (UK) 16. Travelers European Investments LLC (CT) 17. Travelers International Investments Ltd. (Cayman Islands) 18. Trumbull Street Equity Investments LLC (DE) a) Tandem EGI/C Investments, L.P. (DE) - The General Partner is Trumbull Street Equity Investments LLC. 19. MetLife Life and Annuity Company of Connecticut (CT) a) Euro TL Investments LLC (DE) b) SSB Private Selections, LLC (DE) (50%) -- SSB Private Selections, LLC ("SSB") is 45% owned by MIC and 5% owned by MLAC (the remaining 50% of SSB is owned by a third party). The capital commitment of SSB in Solomon Smith Barney Private Selection Fund I, LLC represents 24.5% of total commitments. 1) Solomon Smith Barney Private Selection Fund I, LLC (NY) 20. TLA Holdings LLC (DE) a) The Prospect Company (DE) 1) Panther Valley, Inc. (NJ) 21. TRAL & Co. (CT) - TRAL & Co.is a general partnership. Its partners are MetLife Insurance Company of Connecticut and MetLife Life and Annuity Company of Connecticut. 22. Tribeca Distressed Securities L.L.C. (DE) Y. MetLife Reinsurance Company of South Carolina (SC) Z. Citicorp Life Insurance Company (AZ) 1. First Citicorp Life Insurance Company (NY) 2. Euro CL Investments LLC (DE) AA. Trumbull Street Investments LLC (DE) BB. MetLife Standby I, LLC (DE) CC. MetLife Exchange Trust I (DE) The voting securities (excluding directors' qualifying shares, if any) of each subsidiary shown on the organizational chart are 100% owned by their respective parent corporation, unless otherwise indicated. In addition to the entities shown on the organizational chart, MetLife, Inc. (or where indicated, a subsidiary) also owns interests in the following entities: 1) Metropolitan Life Insurance Company owns varying interests in certain mutual funds distributed by its affiliates. These ownership interests are generally expected to decrease as shares of the funds are purchased by unaffiliated investors. 2) Metropolitan Life Insurance Company indirectly owns 100% of the non-voting preferred stock of Nathan and Lewis Associates Ohio, Incorporated, an insurance agency. 100% of the voting common stock of this company is held by an individual who has agreed to vote such shares at the direction of N.L. HOLDING CORP. (DEL), a direct wholly owned subsidiary of MetLife, Inc. 3) Mezzanine Investment Limited Partnerships ("MILPs"), Delaware limited partnerships, are investment vehicles through which investments in certain entities are held. A wholly owned subsidiary of Metropolitan Life Insurance Company serves as the general partner of the limited partnerships and Metropolitan Life Insurance Company directly owns a 99% limited partnership interest in each MILP. The MILPs have various ownership and/or debt interests in certain companies. 4) New England Life Insurance Company ("NELICO"), owns 100% of the voting common stock of Omega Reinsurance Corporation which has the right to elect 5 of 7 directors and other shareholders hold 100% of the participating common stock classes A and B of such corporation, which classes have the right collectively to elect 2 out of a total of 7 directors. 5) The Metropolitan Money Market Pool and MetLife Intermediate Income Pool are pass-through investment pools, of which Metropolitan Life Insurance Company and/or its subsidiaries and/or affiliates are general partners. NOTE: THE METLIFE, INC. ORGANIZATIONAL CHART DOES NOT INCLUDE REAL ESTATE JOINT VENTURES AND PARTNERSHIPS OF WHICH METLIFE, INC. AND/OR ITS SUBSIDIARIES IS AN INVESTMENT PARTNER. IN ADDITION, CERTAIN INACTIVE SUBSIDIARIES HAVE ALSO BEEN OMITTED. 7 ITEM 29. INDEMNIFICATION MetLife, Inc. has secured a Financial Institutions Bond in the amount of $50,000,000 subject to a $5,000,000 deductible. MetLife, Inc. also maintains a Directors' and Officers' Liability and Corporate Reimbursement Insurance Policy with limits of $400 million. The Directors and Officers of Metropolitan Life Insurance Company ("Metropolitan"), as well as certain other subsidiaries of MetLife, Inc. are covered under the Financial Institutions Bond as well as under the Directors' and Officers' Liability Policy. A provision in Metropolitan's by-laws provides for the indemnification (under certain circumstances) of individuals serving as directors or officers of Metropolitan. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of Metropolitan pursuant to the foregoing provisions, or otherwise, Metropolitan Life Insurance Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by Metropolitan of expenses incurred or paid by a director, officer or controlling person or Metropolitan Life Insurance Company in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, Metropolitan will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. ITEM 30. PRINCIPAL UNDERWRITERS (a)Other Activity. The principal underwriter for the registrant is Metropolitan Life Insurance Company. Metropolitan Life Insurance Company acts in the following capacities with respect to the following investment companies: Metropolitan Tower Life Separate Account One (principal underwriter) Metropolitan Tower Life Separate Account Two (principal underwriter) Metropolitan Life Separate Account E (principal underwriter and depositor) Metropolitan Series Fund, Inc. (principal underwriter and sub-investment manager) New England Variable Annuity Fund I (depositor) New England Life Retirement Investment Account (depositor) The New England Variable Account (depositor) Paragon Separate Account A (principal underwriter and depositor) Paragon Separate Account B (principal underwriter and depositor) Paragon Separate Account C (principal underwriter and depositor) Paragon Separate Account D (principal underwriter and depositor) Security Equity Separate Account Thirteen (depositor) Security Equity Separate Account Twenty-Six (depositor) Security Equity Separate Account Twenty-Seven (depositor) (b)Management. See response to Item 27 above. (c)Compensation from the Registrant.
(3) Compensation on (2) Events Occasioning (1) Net Underwriting the Deduction of a (4) (5) Name of Principal Discounts and Deferred Sales Brokerage Other Underwriter Commissions Load Commissions Compensation ----------------- ---------------- ------------------ ----------- ------------ Metropolitan Life Insurance Company $ -- -- --
Commissions are paid by the Company directly to agents who are registered representatives of the Principal Underwriter or to broker-dealers that have entered into a selling agreement with the principal underwriter with respect to sales of the Contracts. ITEM 31. LOCATION OF ACCOUNTS AND RECORDS The following companies will maintain possession of the documents required by Section 31(a) of the Investment Company Act of 1940 and the Rules thereunder: (a)Registrant (b)Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 ITEM 32. MANAGEMENT SERVICES Not applicable ITEM 33. FEE REPRESENTATION Metropolitan Life represents that the fees and charges deducted under the "Advantage Equity Options" riders described in this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Metropolitan Life under the riders. SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant, Metropolitan Life Separate Account UL, has caused this Registration Statement to be signed on its behalf, in the City of New York, and the State of New York on the 8th day of December, 2006. Metropolitan Life Separate Account UL By: Metropolitan Life Insurance Company By: /s/ Paul G. Cellupica ------------------------------------ Paul G. Cellupica Chief Counsel, Securities Products & Regulation SIGNATURES Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, Metropolitan Life Insurance Company has caused this Registration Statement to be signed on its behalf, in the City of New York, and the State of New York on the 8th day of December, 2006. Metropolitan Life Insurance Company BY: /s/ Paul G. Cellupica -------------------------------------- Paul G. Cellupica Chief Counsel, Securities Products & Regulation Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons, in the capacities indicated, on December 8, 2006. SIGNATURE TITLE --------- ----- * Chairman of the Board, President and - -------------------------- Chief Executive Officer C. Robert Henrikson * Executive Vice President and - -------------------------- Chief Accounting Officer Joseph J. Prochaska, Jr. * Director - -------------------------- Curtis H. Barnette * Director - -------------------------- Burton A. Dole, Jr. * Director - -------------------------- Cheryl W. Grise * Director - -------------------------- James R. Houghton * Director - -------------------------- Harry P. Kamen * Director - -------------------------- Helene L. Kaplan * Director - -------------------------- John M. Keane * Director - -------------------------- James M. Kilts * Director - -------------------------- Charles M. Leighton * Director - -------------------------- Sylvia M. Mathews * Director - --------------------------- Hugh B. Price * Director - --------------------------- Kenton J. Sicchitano * Director - --------------------------- William C. Steere, Jr. * Executive Vice President and - --------------------------- Chief Financial Officer William J. Wheeler /s/ Marie C. Swift - --------------------------- Marie C. Swift, Esq. Attorney- in - fact * Executed by Marie C. Swift, Esq. on behalf of those indicated pursuant to Powers of Attorney filed herewith. Exhibit Index (d) (i) Variable Additional Insurance Rider (ii) Variable Additional Benefit Rider (iii) Advantage Whole Life Insurance Policy (e) Enterprise Application for the Policy and Riders (k) Opinion and Consent of Counsel (n) Consent of Independent Registered Public Accounting Firm (r) Powers of Attorney EX-99.(D)(I) 2 dex99di.txt VARIABLE ADDITIONAL INSURANCE RIDER OPTION FOR VARIABLE ADDITIONAL INSURANCE RIDER Metropolitan Life Insurance Company THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROVIDED BY THIS RIDER IS VARIABLE AND MAY INCREASE OR DECREASE BASED ON SEPARATE ACCOUNT PERFORMANCE. SEE THE VARIABLE ADDITIONAL INSURANCE DEATH BENEFIT PROVISION. THE CASH VALUE OF EACH INVESTMENT DIVISION OF THE SEPARATE ACCOUNT IS BASED ON THE INVESTMENT EXPERIENCE OF THAT INVESTMENT DIVISION AND MAY INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED. IF THIS RIDER IS ADDED AFTER THE POLICY IS ISSUED, THE WAITING PERIODS FOR INCONTESTABILITY AND SUICIDE ARE DIFFERENT FROM THOSE IN THE POLICY AND BEGIN ON THE ISSUE DATE OF THIS RIDER. This Rider is a part of the Policy if it is listed on the Policy Specifications page; or on the Policy Specifications for Policy Change page. A copy of the application for this Rider is attached to and made part of the Rider. This Rider provides an additional dividend option. While this option is in effect, we will use the annual dividends credited to your policy to buy variable life insurance. DEFINITIONS ISSUE DATE OF THIS RIDER. The Issue Date of this Rider is shown on the Policy Specifications page or Policy Specification for Policy Change page. It is the effective date of this Rider. DIVIDENDS. Dividends mean all dividends credited under your policy, except for dividends credited to an Option to Purchase Additional Insurance Rider. They include any dividends from any optional benefit Rider in your policy, as well as any dividend amounts transferred or converted from other dividend options. ALLOCATION DATE. The Allocation Date is the date the first dividend under this option is applied to the Separate Account or Fixed Account. VALUATION DATE. A Valuation Date is each day on which the New York Stock Exchange is open for trading. We reserve the right, on 30 days notice, to change the basis for such Valuation Date, as long as the basis is not inconsistent with applicable law and with the approval of the Superintendent of the New York Insurance Department. VALUATION PERIOD. A Valuation Period is the period between two successive Valuation Dates starting at 4:00 P.M., New York City time, on each Valuation Date and ending at 4:00 P.M., New York City time, on the next succeeding Valuation Date. We reserve the right, on 30 days notice, to change the basis for such Valuation Period as long as the basis is not inconsistent with applicable law. SEPARATE ACCOUNT. The Separate Account is Metropolitan Life Separate Account UL. INVESTMENT DIVISIONS. The Investment Divisions are part of the Separate Account. Each division holds a separate class (or series) of stock of a designated investment company or companies. Each class of stock represents a separate portfolio of an investment company. The Investment Divisions available on the Issue Date of this Rider are shown in the application for this Rider. We may from time to time make other Investment Divisions available to you. We will provide you with written notice of all material details including investment objectives and all charges. FIXED ACCOUNT. The Fixed Account is the account to which we apply the dividends that you allocate to the Fixed Account. Interest will be credited at a rate not less than the Fixed Account Guaranteed Interest Rate shown on the Option for Variable Additional Insurance Rider Schedule (called "Schedule"). Interest is compounded daily. The Fixed Account is part of our general account. LOAN COLLATERAL ACCOUNT. The Loan Collateral Account is the account to which we will transfer any cash value from the Fixed and Separate Accounts needed as collateral for a policy loan.
CASH VALUE. The Cash Value is the sum of: (a) the value of the Fixed Account; (b) the value in each investment division of the Separate Account; and (c) the value of the Loan Collateral Account. CONDITIONAL GUARANTEED DEATH BENEFIT. The Conditional Guaranteed Death Benefit is the amount of death benefit needed to prevent the Policy from becoming a Modified Endowment Contract under the Internal Revenue Code due to a decrease in death benefit because of adverse investment performance during any 7-year pay test period. It protects you from the adverse tax consequences associated with the Policy being treated as a Modified Endowment Contract instead of a life insurance policy as defined by the Internal Revenue Code. After the first seven years, your death benefit during any 7-year pay test period will not be less than your death benefit at the beginning of that 7-year test period. The amount of the Conditional Guaranteed Death Benefit is determined at the beginning of any 7-year pay test period by dividing the cash value of this Rider by the appropriate Net Single Premium. Any Cash withdrawal under this option will reduce or eliminate the Conditional Guaranteed Death Benefit. This guarantee will also end if your policy becomes a Modified Endowment Contract for any other reason. NET SINGLE PREMIUMS. Net Single Premiums are used to calculate the amount of variable additional insurance under this benefit. The net single premiums are shown in the Table of Net Single Premiums For Each $1000 Of Death Benefit. COST OF INSURANCE CHARGE. A Cost of Insurance Charge is deducted each month from the Cash Value of the Fixed Account and the Investment Divisions. These charges will be based on the Insured's attained age, sex and underwriting class. We may change these charges, but they will never be more than the guaranteed monthly percentages shown in the Table of Guaranteed Maximum Cost of Insurance Charges. The method of computing these charges is on file with the Superintendent of the New York Insurance Department. OTHER CHARGES. Mortality and expense risks charge and any transfer fee charge are shown on the Schedule. CASH VALUE. The Cash Value is calculated as follows: 1. The cash value in the Fixed Account on the preceding valuation date credited with interest for the current valuation period; plus 2. The cash value in each Investment Division on the preceding valuation date multiplied by the experience factor for the current valuation period; plus 3. The cash value in the Loan Collateral Account on the preceding valuation date credited with interest for the current valuation period; plus 4. Any dividend applied during the current valuation period and allocated to the Fixed Account and any Investment Division; plus 5. Any cash value transferred to the Fixed Account from an Investment Division during the current valuation period; plus 6. Any cash value transferred to the Loan Collateral Account from the Fixed Account or an Investment Division; plus 7. Any cash value transferred to an Investment Division from the Fixed Account or another Investment Division during the current valuation period; less 8. Any cash value transferred from the Loan Collateral Account to the Fixed Account or an Investment Division; less 9. Any cash value transferred from the Fixed Account to an Investment Division during the current valuation period; less 10. Any cash value transferred from an Investment Division to the Fixed Account or another Investment Division during the current valuation period; less 11. Any cash withdrawals from the Fixed Account and Investment Divisions during the current valuation period; less
12. The portion of any Monthly Deduction not deducted during the current Valuation Period or any accrued Monthly Deductions not deducted during a prior Valuation Period due to insufficient Cash Value in the Investment Divisions and the Fixed Account; less 13. The portion of any monthly Cost of Insurance and Separate Account charges deducted from the Fixed Account and each Investment Division during the current valuation period. EXPERIENCE 1. The "experience factor" for a valuation period is the net asset value per Investment FACTOR Company share at the end of the current valuation period; plus 2. The per share amount of any investment dividend or capital gain paid by the investment company during the current valuation period; less 3. Any per share charge for taxes or any reserve for taxes. This amount is then divided by the net asset value per investment company share at the end of the preceding valuation period. VARIABLE We will use your dividends to buy variable life insurance that will be included in the insurance ADDITIONAL proceeds payable on the death of the Insured. The amount of insurance is subject to change on INSURANCE each Valuation Date. We determine the amount of the death benefit on the date of death of the DEATH Insured as follows: BENEFIT 1. On the Allocation Date, we take the sum of all dividend amounts and then divide by the applicable Net Single Premium at the Insured's attained age to provide the variable additional insurance death benefit. 2. For each day in the Valuation Period until another dividend amount is credited, the variable additional insurance death benefit is the Cash Value divided by the Net Single Premium for that day. If the Conditional Guaranteed Death Benefit is larger, we will pay that amount instead. 3. On a policy anniversary, we take all the dividends credited on that anniversary and add them to the Cash Value of the variable additional insurance determined on the last Valuation Date of the last policy year and then divide that sum by the Net Single Premium for the Insured's attained age. This is the total variable additional insurance death benefit for the first day of the new policy year. MONTHLY Each month the following amounts will be deducted from the Cash Value of this Rider: DEDUCTION 1. Cost of Insurance Charge; 2. Mortality and expense risks charge; and 3. Any accrued Monthly Deductions. You may choose to have the Monthly Deduction charged proportionately to the Fixed Account and each Investment Division of the Separate Account or all to the Fixed Account. If you choose to have the Monthly Deduction charged to the Fixed Account and its value is not sufficient, the remainder will be charged proportionately to each Investment Division of the Separate Account. If during any month the Cash Value, less the Loan Collateral Account, is less than the Monthly Deduction, the uncollected amount will accrue without interest until the Cash Value, less the Loan Collateral Account, is large enough to cover the accrued Monthly Deduction. Accrued Monthly Deductions will reduce the Cash Value and Death Benefit under this Rider. LOAN The Cash Value of this Rider is available as part of the collateral for loan under the Policy. Any cash value needed as collateral for a policy loan will be transferred into the Loan Collateral Account. It will be credited with interest at a rate of not less than the Loan Collateral Interest Rate shown on the Schedule.
SEPARATE Metropolitan Life Separate Account UL is an investment account set up and kept by us, apart ACCOUNT from our general account or other separate investment accounts. It is used for variable additional insurance and for other policies and contracts as permitted by law. We own the assets of the Separate Account. Assets equal to our reserves and other liabilities of the Separate Account will not be charged with the liabilities that arise from any other business that we conduct. We may from time to time transfer to our general account assets in excess of such reserves and liabilities. Income and realized and unrealized gains or losses from the assets of the Separate Account are credited to or charged against the Separate Account without regard to our other income, gains or losses. The Separate Account will be valued at the end of each Valuation Period, but at least monthly. OUR RIGHT We reserve the right to make certain changes if, in our judgment, they would best serve the TO MAKE interests of the owners of benefits such as this one, or would be appropriate in carrying out the CHANGES purposes of such benefits. Any changes will be made only to the extent and in the manner permitted by applicable laws. Also, when required by law, we will obtain your approval of the changes and the approval of any appropriate regulatory authority. Some examples of the changes we may make include: 1. To operate the Separate Account in any form permitted under the Investment Company Act of 1940, or in any other form permitted by law. 2. To take any action necessary to comply with or obtain any exemptions from the Investment Company Act of 1940. 3. To transfer any assets in the Investment Division to one or more separate accounts, or to our general account, or to add Investment Divisions to the Separate Account. 4. To substitute, for the investment company shares held in the Investment Division, the shares of another class of the investment company or the shares of another investment company or any other investment permitted by law. 5. To change the way we assess charges, but without increasing the aggregate charged to the Separate Account. 6. To make any other necessary technical changes in this benefit in order to conform to any action this provision permits us to take. If any of these changes result in a material change in the underlying investments of the Separate Account, we will notify you of such change. If you have funds allocated to that division, you may then make a new choice of Investment Divisions. RIGHT TO You may change the allocation of future dividends to the Fixed Account and the Investment CHANGE Divisions of the Separate Account. You must allocate at least 1% of the dividends to each ALLOCATION alternative you choose. Percentages must be in whole numbers. (For example, 33 1/3% may not be chosen.) You must notify us in writing, or by other means as determined by us, of a change in allocation. The change will take effect immediately upon receipt at our Designated Office. You may also change the allocation of the Cash Value. To do this, you may transfer amounts among the alternatives at any time, but we reserve the right to limit transfers to and from the Fixed Account. While we do not impose a charge currently, in the future (depending on the volume and amount of transfers), a transfer charge of not more than the charge shown on the Schedule for each transfer may be deducted from the Cash Value from which amounts are transferred proportionately among the Fixed Account and the Investment Divisions of the Separate Account when each transfer is made. However, no charge will be assessed for transfers arising from policy loans and loan repayments or from an automatic investment strategy. Transfers must be in either dollar amounts or a percentage in whole numbers. The minimum amount that may be transferred is shown on the Schedule or, if less, the entire value in an Investment Division of the Separate Account or the entire value in the Fixed Account. There is no limit on the number of transfers among the Investment Divisions of the Separate Account. The change will take effect on the date we receive written notice from you at our designated office. No restrictions on transfers will apply it you have selected an automatic investment strategy.
WITHDRAWALS You may withdraw all or part of the Cash Value of this option at any time, except for any Cash Value needed as collateral for a policy loan. To do so, you must send us a written request. A withdrawal will reduce the amount of variable additional insurance payable as of the date of withdrawal. The reduced amount of insurance will be the amount of additional insurance that the remaining Cash Value, if any, will buy at the net single premium for the Insured's sex and attained age on the date of withdrawal. DEFERMENT We reserve the right to defer the calculation and payment of the variable additional insurance benefit under certain circumstances. Generally, it will not be practical for us to determine the value of an Investment Division of the Separate Account during any period when the New York Stock Exchange is closed for trading (except for customary weekend and holiday closings) or when the Securities and Exchange Commission restricts trading or determines an emergency exists. In these cases, we reserve the right to defer: (a) the determination, application, or payment of a cash withdrawal; (b) the determination or payment of a loan (except when used to pay premiums on policies issued by us); (c) the transfer of a cash value amount; and (d) the payment of the variable additional insurance as part of the Policy's insurance proceeds. We may also defer paying a cash withdrawal, a loan (except when used to pay premiums on policies issued by us) or transferring cash from the Fixed Account for up to 6 months from the date we receive your request. If payment is deferred for more than 10 working days, it will be credited with interest from the date your written request was received by us at our Designated Office unless the amount of interest would be less than $25.00. NON-PAYMENT If your policy lapses, we will automatically transfer the cash value of the Investment Divisions OF POLICY to the Fixed Account. PREMIUMS REINSTATEMENT If your policy has ended because premiums due were not paid before the end of the grace period, you may reinstate this Rider when you reinstate your policy. AGE AND If the Insured's age or sex on the Issue Date of this Rider is not correct, we will recalculate the SEX amount of variable additional insurance by using the Cost of Insurance Charges and the Net Single Premiums applicable to the Insured's correct age and sex. INCONTESTABILITY We cannot contest this Rider with respect to material misrepresentations made in the application after it has been in force during the life of the Insured for two years. SUICIDE If the Insured dies by suicide within two years from the Issue Date of this Rider, this Rider will EXCLUSION terminate and no benefits will be payable under this Rider. ANNUAL Each year we will send you a report showing the current amount of variable additional insurance REPORTS and Cash Value. The report will also show the amount and type of credits to and deductions from the cash value during the past year. It will also include any other information required by state laws and regulations.
TERMINATION Your dividends will continue to buy variable additional insurance under this Rider until the earlier of: 1. The monthly anniversary on or following receipt at our Designated Office of your written request, in a form acceptable to use, to terminate this Rider or to change to another dividend option; and 2. The date the Policy lapses for nonpayment of premiums or otherwise terminates. We will then pay you any remaining Cash Value, less any amount needed to repay a loan.
The Issue Date and effective date of this Rider and the Policy are the same unless another Issue Date is shown on the Policy Specifications for Policy Change page. METROPOLITAN LIFE INSURANCE COMPANY /s/ Gwenn L. Carr ----------------------------------- SECRETARY OPTION FOR VARIABLE ADDITIONAL INSURANCE RIDER SCHEDULE INSURED: [JOHN DOE] POLICY NUMBER: [SPECIMEN] FIXED ACCOUNT GUARANTEED INTEREST RATE 4.0% MORTALITY AND EXPENSE RISKS CHARGE [.0415710%] OF THE CASH VALUE OF THE SEPARATE ACCOUNT MAXIMUM TRANSFER CHARGE $25.00 MINIMUM TRANSFER AMOUNT $50.00 LOAN COLLATERAL INTEREST RATE RIDER YEARS 1-10 5.50% RIDER YEARS 11-20 5.75% THEREAFTER 6.00% We have the right to change the rate of interest for amounts applied to the Fixed Account, but the rate will not be less than the Fixed Account Guaranteed Interest Rate. Any change in the rate is not guaranteed. We have the right to change the Cost of Insurance Rates, but the rates will not be greater than those shown in the Table of Guaranteed Maximum Cost of Insurance Charges. We also have the right to change the cost of the Mortality and Risk Expense Charge but the charge will not be more than the maximum charges shown above. It is possible that the actual Cash Value will be less than that illustrated. TABLE OF NET SINGLE PREMIUMS FOR EACH $1000 OF DEATH BENEFIT
AGE RATE AGE RATE AGE RATE - --- -------------- -------------- -------------- -------------- -------------- 35 248.93 64 581.39 93 896.04 36 257.36 65 594.26 94 901.27 37 266.07 66 607.03 95 906.20 38 275.05 67 619.80 96 910.67 39 284.29 68 632.64 97 914.96 40 293.79 69 645.57 98 919.05 41 303.56 70 658.66 99 922.89 42 313.56 71 671.81 100 926.40 43 323.79 72 685.03 101 929.40 44 334.21 73 698.04 102 932.39 45 344.79 74 710.93 103 935.40 46 355.55 75 723.78 104 938.48 47 366.51 76 736.50 105 941.76 48 377.67 77 749.11 106 944.97 49 389.17 78 761.52 107 948.09 50 401.01 79 773.63 108 951.13 51 413.13 80 785.33 109 954.08 52 425.52 81 796.63 110 956.95 53 438.09 82 807.46 111 959.72 54 450.80 83 817.93 112 962.41 55 463.58 84 828.09 113 965.01 56 476.39 85 837.94 114 967.51 57 489.23 86 847.27 115 969.93 58 502.12 87 856.03 116 972.27 59 515.21 88 864.17 117 974.53 60 528.47 89 871.65 118 976.85 61 541.82 90 878.48 119 980.64 62 555.15 91 884.67 120 1,000.00 63 568.36 92 890.51
THE NET SINGLE PREMIUM ON A DATE DURING A POLICY YEAR IS DETERMINED BY INTERPOLATION BETWEEN THE VALUES FOR THE ANNIVERSARIES IMMEDIATELY PRECEDING AND IMMEDIATELY FOLLOWING THAT DATE. TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE CHARGES
GUARANTEED GUARANTEED GUARANTEED MAXIMUM MAXIMUM MAXIMUM MONTHLY MONTHLY MONTHLY AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE - --- -------------- -------------- -------------- -------------- -------------- 35 0.050100 64 0.145200 93 0.246200 36 0.050600 65 0.150300 94 0.246500 37 0.051100 66 0.153900 95 0.247700 38 0.052600 67 0.156400 96 0.247000 39 0.053800 68 0.158600 97 0.246400 40 0.055300 69 0.159900 98 0.245800 41 0.057700 70 0.162200 99 0.245500 42 0.060500 71 0.164500 100 0.245800 43 0.064000 72 0.169700 101 0.244100 44 0.068100 73 0.173700 102 0.242000 45 0.072100 74 0.176700 103 0.239600 46 0.075100 75 0.180400 104 0.236500 47 0.078300 76 0.183700 105 0.234100 48 0.078200 77 0.187700 106 0.231500 49 0.078400 78 0.192500 107 0.228700 50 0.079900 79 0.197900 108 0.225600 51 0.082000 80 0.202900 109 0.222300 52 0.085800 81 0.208300 110 0.218600 53 0.089900 82 0.212300 111 0.214800 54 0.095300 83 0.215600 112 0.210500 55 0.101300 84 0.218700 113 0.206000 56 0.106500 85 0.223000 114 0.201100 57 0.111600 86 0.227500 115 0.195800 58 0.113800 87 0.232000 116 0.190000 59 0.116600 88 0.236200 117 0.183800 60 0.120300 89 0.240100 118 0.175900 61 0.125600 90 0.243500 119 0.163000 62 0.132100 91 0.244800 120 0 63 0.139000 92 0.245700
MONTHLY COST OF INSURANCE CHARGES IS ASSESSED AS A PERCENTAGE OF THE BEGINNING OF MONTH CASH VALUE. MONTHLY COST OF INSURANCE CHARGES WILL NEVER BE LESS THAN $0.01. EX-99.(D)(II) 3 dex99dii.txt VARIABLE ADDITIONAL BENEFIT RIDER OPTION FOR VARIABLE ADDITIONAL BENEFITS RIDER Metropolitan Life Insurance Company THE AMOUNT OR DURATION OF THE DEATH BENEFIT PROVIDED BY THIS RIDER IS VARIABLE AND MAY INCREASE OR DECREASE BASED ON SEPARATE ACCOUNT PERFORMANCE. (SEE THE VARIABLE ADDITIONAL DEATH BENEFIT PROVISION.) THE CASH VALUE IN EACH INVESTMENT DIVISION OF THE SEPARATE ACCOUNT IS BASED ON THE INVESTMENT EXPERIENCE OF THAT INVESTMENT DIVISION AND MAY INCREASE OR DECREASE DAILY. IT IS NOT GUARANTEED. IF THIS RIDER IS ADDED AFTER THE POLICY IS ISSUED, THE WAITING PERIODS FOR INCONTESTABILITY AND SUICIDE ARE DIFFERENT FROM THOSE IN THE POLICY AND BEGIN ON THE ISSUE DATE OF THIS RIDER. This Rider is a part of the Policy if it is listed on: the Policy Specifications page or; on the Policy Specifications for Policy Change page. A copy of the application for this Rider is attached to and made part of the Rider. This Rider allows you to buy variable life insurance on the life of the Insured. You may buy this variable life insurance if: the Policy is in force; and your right to make premium payments for this Rider has not been terminated. DEFINITIONS ISSUE DATE OF THIS RIDER. The Issue Date of this Rider is shown on the Policy Specifications page or Policy Specification for Policy Change page. It is the effective date of this Rider. INVESTMENT START DATE. The Investment Start Date is the date the first net premium paid for this Rider is applied to the Separate Account. This date will be the latest of: 1. The 20th day following the Issue Date of the Policy; 2. The 20th day following the date we receive the full first premium due for the Policy at our Designated Office; and 3. The date we receive the first premium for this Rider at our Designated Office. Prior to the Investment Start Date, we will place any payment you make to this Rider in the Fixed Account where it will earn a fixed rate of interest until the Investment Start Date. VALUATION DATE. A Valuation Date is each day that the New York Stock Exchange is open for trading. We reserve the right, on 30 days notice, to change the basis of such Valuation date, as long as the basis is not inconsistent with applicable laws and with the approval of the Superintendent of the New York Insurance Department. VALUATION PERIOD. A Valuation Period is the period between two successive Valuation Dates starting at 4:00 P.M., New York City time, on each Valuation Date and ending at 4:00 P.M., New York City time, on the next succeeding Valuation Date. We reserve the right, on 30 days notice, to change the basis for such Valuation Period as long as the basis is not inconsistent with applicable law. SEPARATE ACCOUNT. The Separate Account is Metropolitan Life Separate Account UL. INVESTMENT DIVISIONS. The Investment Divisions are part of the Separate Account. Each division holds a separate class (or series) of stock of a designated investment company or companies. Each class of stock represents a separate portfolio of an investment company. The Investment Divisions available on the Issue Date of this Rider are shown in the application for this Rider. We may from time to time make other Investment Divisions available to you. We will provide you with written notice of all material details including investment objectives and all charges. FIXED ACCOUNT. The Fixed Account is an account to which you can allocate Scheduled or Unscheduled Premium Payments. Interest will be credited at a rate of not less than the Fixed Account Guaranteed Interest Rate shown on the Option for Variable Additional Benefits Rider Schedule (called "Schedule"). Interest is compounded daily. The Fixed Account is part of our general account.
LOAN COLLATERAL ACCOUNT. The Loan Collateral Account is the account to which we will transfer any cash value from the Fixed and Separate Accounts needed for a policy loan CASH VALUE. The Cash Value is the sum of: (a) the value of the Fixed Account; (b) the value in each investment division of the Separate Account; and (c) the value of the Loan Collateral Account. CONDITIONAL GUARANTEED DEATH BENEFIT. The Conditional Guaranteed Death Benefit is the amount of death benefit needed to prevent the Policy from becoming a Modified Endowment Contract under the Internal Revenue Code due to a decrease in the death benefit because of adverse investment performance during any 7-year test period. It protects you from the adverse tax consequences associated with the Policy being treated as a Modified Endowment Contract instead of a life insurance policy as defined by the Internal Revenue Code. After the first seven years, your death benefit during any 7-year pay test period will not be less than your death benefit at the beginning of that 7-year test period. The amount of Conditional Guaranteed Death Benefit is determined at the beginning of any 7-year pay test period by dividing the cash value of this rider by the appropriate Net Single Premium. Any Cash withdrawal under this option will reduce or eliminate the Conditional Guaranteed Death Benefit. This guarantee will also end if the Policy becomes a Modified Endowment Contract for any other reason. NET PREMIUMS. Net Premiums are Scheduled and Unscheduled premiums minus the Premium Load shown on the Schedule. NET SINGLE PREMIUMS. Net Single Premiums are used to calculate the amount of variable additional insurance under this benefit. A table showing the net single premiums for each $1000 of death benefit is attached to this Rider. COST OF INSURANCE CHARGE. A Cost of Insurance Charge is deducted each month from the Cash Value of the Fixed Account and of the Investment Divisions. These charges will be based on the Insured's attained age, sex and underwriting class. We may change these charges, but they will never be more than the guaranteed monthly percentages shown in the Table of Guaranteed Maximum Cost of Insurance Charges. The method of computing these charges is on file with the Superintendent of the New York Insurance Department. OTHER CHARGES. The Premium Load, the Expense Charge for each $1,000 of Variable Additional Insurance Death Benefit, Mortality and Expense Risks Charges and any Transfer Fee Charge are shown on the Schedule. The Expense Charge and the Transfer Fee Charge may be less than the charges shown on the Schedule. CASH VALUE. The Cash Value is calculated as follows: 1. On the Investment Start Date, the Cash Value is equal to the sum of any Net Premiums. 2. For each Valuation Date, the Cash Value will equal: a. The cash value in the Fixed Account on the preceding valuation date credited with interest for the current valuation period; plus b. The cash value in each Investment Division on the preceding valuation date multiplied by the experience factor for the current valuation period; plus c. The cash value in the Loan Collateral Account on the preceding valuation date credited with interest for the current valuation period; plus d. Any Net Premium received during the current valuation period and allocated to the Fixed Account and any Investment Division; plus e. Any cash value transferred to the Fixed Account from an Investment Division during the current valuation period; plus f. Any cash value transferred to the Loan Collateral Account from the Fixed Account or another Investment Division; plus g. Any cash value transferred to an Investment Division from the Fixed Account or another Investment Division during the current valuation period; less h. Any cash value transferred from the Fixed Account to an Investment Division during the current valuation period; less i. Any cash value transferred from the Loan Collateral Account to the Fixed Account or an Investment Division; less j. Any cash value transferred from an Investment Division to the Fixed Account or another Investment Division during the current valuation period; less k. Any cash withdrawals from the Fixed Account and Investment Divisions during the current valuation period; less l. The portion of any Monthly Deduction not deducted during the current Valuation Period or any Monthly Deductions not deducted during a prior Valuation Period, due to insufficient Cash Value in the Investment Divisions and the Fixed Account; less m. The portion of any monthly Cost of Insurance and Separate Account charges deducted from the Fixed Account and each Investment Division during the current valuation period. EXPERIENCE FACTOR 1. The "experience factor" for a Valuation Period is the net asset value per Investment Company share at the end of the current Valuation Period: plus 2. The per share amount of any investment dividend or capital gain paid by the Investment Company during the current Valuation Period: less 3. Any per share charge for taxes or any reserve for taxes. This amount is then divided by the net asset value per investment company share at the end of the preceding Valuation Period. MONTHLY Each month the following amounts will be deducted from DEDUCTION the Cash Value of this Rider: 1. Cost of Insurance Charge; 2. Expense Charge for each $1,000 of Variable Additional Insurance Death Benefit; 3. Mortality and Expense Risks Charge; and 4. Any accrued Monthly Deductions. You may choose to have the Monthly Deduction charged proportionately to the Fixed Account and each Investment Division of the Separate Account or all to the Fixed Account. If you choose to have the Monthly Deduction charged to the Fixed Account and its value is not sufficient, the remainder will be charged proportionately to each Investment Division of the Separate Account. If during any month the Cash Value, less any loan collateral, is less than the Monthly Deduction, the unpaid amount will accrue without interest until the Cash Value, less the Loan Collateral Account, is large enough to cover the accrued Monthly Deduction. Accrued Monthly Deductions will reduce Cash Value and Death Benefit under this Rider. VARIABLE The Variable Additional Insurance Death Benefit is the ADDITIONAL Cash Value divided by the Net Single Premium for that INSURANCE DEATH day. The amount of the benefit is subject to change on each BENEFIT Valuation Date. The Variable Additional Insurance Death Benefit will be included in the Policy Proceeds. However, if the Conditional Guaranteed Death Benefit is larger, we will pay that amount instead. PAYMENTS FOR You may make either Scheduled Premium payments or THIS RIDER Unscheduled Premium payments as described below. SCHEDULED Premiums for this Rider are payable as shown in the PREMIUM Schedule. The first premium is due on the Issue Date of the PAYMENTS Rider. However, you may change the amount of or stop your Scheduled Premium payments at any time, subject to the maximum and minimum limits shown on the Schedule. You may resume making Scheduled Premium payments that have been stopped provided your right to make payments for this Rider has not been terminated under the Termination of Right to Make Payments provision. UNSCHEDULED You may make Unscheduled payments for this Rider PAYMENTS provided that the total payments (Scheduled and Unscheduled) for this Rider do not exceed maximum amounts shown in the Schedule. We will send you a statement confirming the amount of any Unscheduled Premium payment, the date we received it, and the amount of insurance your payment purchased. We will refund any premium payment that exceeds these limits unless you provide us with further satisfactory evidence of the Insured's insurability. ACCEPTANCE OF The Insured must be alive on the date we receive your PREMIUM premium payment. We will accept your premium PAYMENTS payments for this Rider if: 1. We receive your premium payments for the Policy and any other benefit riders as due; 2. The payment is at least equal to our Minimum Scheduled Premium limit for this Rider; 3. Your total premium payments for the year for this Rider do not exceed our Maximum Premium Payment limit; 4. We have not paid benefits under a Rider that provides for the accelerated payment of your insurance proceeds; 5. Premium payments for the Policy are not being waived under an Insured's disability waiver of premiums benefit; 6. A preliminary term insurance rider is not in effect; and 7. Your right to make premium payments for this Rider has not been terminated. We will refund any unaccepted premium payments. If premium payments for the policy are being waived under an insured's waiver of premiums benefit and you have elected on the application for this Rider to waive your Scheduled Premium payment or the maximum premium payable, if less, this amount will also be waived up until the Insured's age 65, subject to the maximum and minimum limits. You may not make any Scheduled or Unscheduled Premium payments while any premium payments for the Policy are being waived. However, you may make unscheduled payments under this Rider while premium payments for the Policy are being waived under an applicant's waiver of premiums benefit. If premiums for the policy are being paid under an automatic premium loan provision, your Scheduled Premium payments for this Rider will not be automatically paid. You may continue to make Unscheduled Premium payments for this Rider while premiums for the policy are being paid under the automatic premium loan provision. Unless you tell us otherwise, we will apply all payments received for your policy and Benefit Riders in the following order: 1. To pay any premium due for the Policy and any other Benefit Riders other than the Option to Purchase Additional Insurance Rider attached to the policy; 2. To pay the interest due on a policy loan; 3. To purchase additional insurance under this Rider and the Option to Purchase Additional Insurance Rider. The amounts credited to this Rider and the Option to Purchase Additional Insurance will be in the same proportion that the Scheduled Premium Payments in effect for these two Riders bear to one another. SEPARATE ACCOUNT Metropolitan Life Separate Account UL is an investment account set up and kept by us, apart from our general account or other separate investment accounts. It is used for variable additional insurance and for other policies and contracts as permitted by law. We own the assets of the Separate Account. Assets equal to our reserves and other liabilities of the Separate Account will not be charged with the liabilities that arise from any other business that we conduct. We may from time to time transfer to our general account assets in excess of such reserves and liabilities. Income and realized and unrealized gains or losses from the assets of the Separate Account are credited to or charged against the Separate Account without regard to our other income, gains or losses. The Separate Account will be valued at the end of each Valuation Period, but at least monthly. OUR RIGHT TO We reserve the right to make certain changes if, in our MAKE CHANGES judgment, they would best serve the interests of the owners of benefits such as this one, or would be appropriate in carrying out the purposes of such benefits. Any changes will be made only to the extent and in the manner permitted by applicable laws. Also, when required by law, we will obtain your approval of the changes and the approval of any appropriate regulatory authority. We may make the following changes: 1. To operate the Separate Account in any form permitted under the Investment Company Act of 1940, or in any form permitted by law. 2. To take any action necessary to comply with or obtain any exemptions from the Investment Company Act of 1940. 3. To transfer any assets in the Investment Division to one or more separate accounts, or to our general account, or to add Investment Divisions to the Separate Account. 4. To substitute, for the investment company shares held in the Investment Division, the shares of another class of the investment company or the shares of another investment company or any other investment permitted by law. 5. To change the way we assess charges, but without increasing the aggregate charged to the Separate Account. 6. To make any other necessary technical changes in this benefit in order to conform to any action this provision permits us to take. If any of these changes result in a material change in the underlying investments of the Separate Account, we will notify you of such change. If you have funds allocated to that division, you may then make a new choice of Investment Divisions. RIGHT TO CHANGE You may change the allocation of future net premiums ALLOCATION to the Fixed Account and the Investment Divisions of the Separate Account. You must allocate at least 1% of net premiums to each alternative you choose. Percentages must be in whole numbers. (For example, 33 1/3% may not be chosen.) You must notify us in writing, or by other means as determined by us, of a change in allocation. The change will take effect immediately upon receipt at our designated office. You may also change the allocation of the net cash value. To do this, you may transfer amounts among the alternatives at any time, but we reserve the right to limit transfers to and from the Fixed Account. While we do not impose a charge currently, in the future (depending on the volume and amount of transfers), a Transfer Fee Charge of not more than the Charge shown on the Schedule for each transfer may be deducted from the Cash Value from which amounts are transferred proportionately among the Fixed Account and the Investment Divisions of the Separate Account when each transfer is made. However, no charge will be assessed for transfers arising from policy loans and loan repayments or from an automatic investment strategy. Transfers must be in either dollar amounts or a percentage in whole numbers. The minimum amount that may be transferred is shown on the Schedule or, if less, the entire value in an Investment Division of the Separate Account or the entire value in the Fixed Account. There is no limit on the number of transfers among the Investment Divisions of the Separate Account. The change will take effect on the date we receive written notice from you at our Designated Office. No restrictions on transfers will apply it you have selected an automatic investment strategy. WITHDRAWALS You may withdraw all or part of the Cash Value of this Rider at any time, except for any Cash Value needed as collateral for a policy loan. To do so, you must request the withdrawal in writing, or by other means as determined by us. A withdrawal will reduce the amount of variable additional insurance payable as of the date of withdrawal. The reduced amount of insurance will be the amount of additional insurance that the remaining cash value, if any, will buy at the Net Single Premium for the Insured's sex and attained age on the date of withdrawal. LOAN The Cash Value of this Rider is available as part of the collateral for a loan under the Policy. Any cash value needed for a policy loan will be transferred into the Loan Collateral Account. It will be credited with interest at a rate of not less than the Loan Collateral Interest Rate shown on the Schedule. DEFERMENT We reserve the right to defer the calculation and payment of the variable additional benefits under certain circumstances. Generally, it will not be practical for us to determine the value of the Investment Divisions of the Separate Account during any period when the New York Stock Exchange is closed for trading (except for customary weekend and holiday closings) or when the Securities and Exchange Commission restricts trading or determines an emergency exists. In these cases, we reserve the right to defer: (a) the determination, application, or payment of a cash withdrawal; (b) the determination or payment of a loan (except when used to pay premiums on policies issued by us); (c) the transfer of a cash value amount; and (d) the payment of the variable additional insurance as part of the policy's insurance proceeds. We may also defer paying a cash withdrawal, a loan (except when used to pay premiums on policies issued by us), or transferring cash from the Fixed Account for up to 6 months from the date we receive your request. If payment is deferred for more than 10 working days, it will be credited with interest from the date your written request was received by us at our Designated Office unless the amount of interest would be less than $25.00. ANNUAL REPORT Each year we will send you an annual statement. The statement will show the current death benefit and cash value of this Rider. It will show the amount and type of credits to, and deductions from, the cash value during the past policy year. The statement will also include any other information required by federal and state laws and regulations. DIVIDENDS This Rider is eligible for dividends if the Policy participates in the distribution of our surplus and is eligible for dividends. However, at this time we do not know when any dividends might be payable on this Rider. If the Policy does not participate in any distribution of our surplus and is not eligible for dividends then this Rider is not eligible for dividends. NON-PAYMENT OF If your policy lapses, we will automatically transfer POLICY PREMIUMS the cash value of the Investment Divisions to the Fixed Account. REINSTATEMENT If your right to make premium payments for this Rider has ended solely because premiums due on your policy were not paid in the grace period, you may continue to make premium payments for this Rider once the policy and this Rider have been reinstated. Also, if your right to make premium payments had ended solely because you have not made a payment within the time periods specified in items 3 or 4 in the Termination of Right to Make Payments provision, your right may be reinstated upon proof of insurability satisfactory to us. AGE AND SEX If the Insured's age or sex on the Date of Rider is not correct, we will recalculate the amount of variable additional insurance by using the Cost of Insurance Charges and the Net Single Premiums applicable to the Insured's correct age and sex. INCONTESTABILITY We cannot contest this Rider with respect to material misrepresentations made in the application after it has been in force during the life of the Insured for two years. SUICIDE EXCLUSION If the Insured dies by suicide within two years from the Issue Date of this Rider: 1. This Rider will terminate; and 2. The premiums paid for this Rider will be included in the Policy Proceeds. TERMINATION OF You may continue to make premium payments for this RIGHT TO MAKE Rider until the earliest of: PAYMENTS 1. The date your policy becomes fully paid-up; 2. The date on which benefits are exhausted under an Acceleration of Death Benefits rider; 3. The 31st day after one full year from the Issue Date of this Rider if you have not made a Scheduled or Unscheduled premium payment for this Rider during the policy year; and 4. The 31st day after any 2 full consecutive years during which you have not made a Scheduled or Unscheduled premium payment for this Rider. TERMINATION OF This Rider will terminate and any remaining Net Cash RIDER Value will be paid to you on the earlier of the following: 1. The monthly anniversary on or following receipt by us at our Designated Office of your written request, in a form acceptable to us, to terminate this Rider; and 2. The date the Policy lapses for nonpayment of premiums or otherwise terminates. The Issue Date and effective date of this Rider and the Policy are the same unless another Issue Date is shown on the Policy Specifications for Policy Change Page. METROPOLITAN LIFE INSURANCE COMPANY /s/ Gwenn L. Carr ----------------------------------- SECRETARY OPTION FOR VARIABLE ADDITIONAL BENEFITS RIDER SCHEDULE INSURED: [JOHN DOE] POLICY NUMBER: [SPECIMEN] SCHEDULED PREMIUM [$420.90 Annually] UNSCHEDULED PREMIUM [$0] MINIMUM SCHEDULED PREMIUM [$100.00] ANNUAL MAXIMUM PREMIUM PAYMENTS FIRST RIDER YEAR [$420.90] THEREAFTER [$420.90]* COMBINED MAXIMUM PREMIUM [$5,000,000.00]** FIXED ACCOUNT GUARANTEED 4.0% INTEREST RATE LOAN COLLATERAL ACCOUNT INTEREST RATE RIDER YEARS 1-10 5.50% RIDER YEARS 11-20 5.75% THEREAFTER 6.00% PREMIUM LOAD 3.0% MORTALITY AND EXPENSE RISKS [.0415710%] OF THE CASH VALUE OF THE CHARGE SEPARATE ACCOUNT EXPENSE CHARGE FOR EACH $1,000 OF VARIABLE ADDITIONAL INSURANCE DEATH BENEFIT RIDER YEARS 1-15 [$.0625] THEREAFTER $.0000 MAXIMUM TRANSFER CHARGE $25.00 MINIMUM TRANSFER AMOUNT $50.00
We have the right to change the rate of interest for amounts applied to the Fixed Account, but the rate will not be less than the Fixed Account Guaranteed Interest Rate. Any change in the rate is not guaranteed. We have the right to change the Cost of Insurance Rates, but the rates will not be greater than those shown in the Table of Guaranteed Maximum Cost of Insurance Charges. We also have the right to change the cost of the Mortality and Risk Expense Charge and the Expense Charge but the charges will not be more than the maximum charges shown above. It is possible that the actual Cash Value will be less than that illustrated. * IF LESS THAN 50% OF THE MAXIMUM PREMIUM IS RECEIVED FOR TWO CONSECUTIVE YEARS, THE MAXIMUM PREMIUM AMOUNT WILL BE THE GREATER OF THE TOTAL PREMIUMS RECEIVED IN EITHER OF THE TWO PREVIOUS YEARS. ** THIS MAXIMUM APPLIES TO THIS RIDER AND TO ANY OPTION FOR FLEXIBLE ADDITIONAL INSURANCE OR OPTION FOR PAID UP ADDITIONAL INSURANCE INCLUDED IN THIS POLICY. THIS MAXIMUM APPLIES TO ALL THESE RIDERS COMBINED. TABLE OF NET SINGLE PREMIUMS FOR EACH $1,000 OF DEATH BENEFIT
AGE RATE AGE RATE AGE RATE - --- -------------- -------------- -------------- -------------- -------------- 35 248.93 64 581.39 93 896.04 36 257.36 65 594.26 94 901.27 37 266.07 66 607.03 95 906.20 38 275.05 67 619.80 96 910.67 39 284.29 68 632.64 97 914.96 40 293.79 69 645.57 98 919.05 41 303.56 70 658.66 99 922.89 42 313.56 71 671.81 100 926.40 43 323.79 72 685.03 101 929.40 44 334.21 73 698.04 102 932.39 45 344.79 74 710.93 103 935.40 46 355.55 75 723.78 104 938.48 47 366.51 76 736.50 105 941.76 48 377.67 77 749.11 106 944.97 49 389.17 78 761.52 107 948.09 50 401.01 79 773.63 108 951.13 51 413.13 80 785.33 109 954.08 52 425.52 81 796.63 110 956.95 53 438.09 82 807.46 111 959.72 54 450.80 83 817.93 112 962.41 55 463.58 84 828.09 113 965.01 56 476.39 85 837.94 114 967.51 57 489.23 86 847.27 115 969.93 58 502.12 87 856.03 116 972.27 59 515.21 88 864.17 117 974.53 60 528.47 89 871.65 118 976.85 61 541.82 90 878.48 119 980.64 62 555.15 91 884.67 120 1,000.00 63 568.36 92 890.51
THE NET SINGLE PREMIUM ON A DATE DURING A POLICY YEAR IS DETERMINED BY INTERPOLATION BETWEEN THE VALUES FOR THE ANNIVERSARIES IMMEDIATELY PRECEDING AND IMMEDIATELY FOLLOWING THAT DATE. TABLE OF GUARANTEED MAXIMUM COST OF INSURANCE CHARGES
GUARANTEED GUARANTEED GUARANTEED MAXIMUM MAXIMUM MAXIMUM MONTHLY MONTHLY MONTHLY AGE PERCENTAGE AGE PERCENTAGE AGE PERCENTAGE - --- -------------- -------------- -------------- -------------- -------------- 35 0.050100 64 0.145200 93 0.246200 36 0.050600 65 0.150300 94 0.246500 37 0.051100 66 0.153900 95 0.247700 38 0.052600 67 0.156400 96 0.247000 39 0.053800 68 0.158600 97 0.246400 40 0.055300 69 0.159900 98 0.245800 41 0.057700 70 0.162200 99 0.245500 42 0.060500 71 0.164500 100 0.245800 43 0.064000 72 0.169700 101 0.244100 44 0.068100 73 0.173700 102 0.242000 45 0.072100 74 0.176700 103 0.239600 46 0.075100 75 0.180400 104 0.236500 47 0.078300 76 0.183700 105 0.234100 48 0.078200 77 0.187700 106 0.231500 49 0.078400 78 0.192500 107 0.228700 50 0.079900 79 0.197900 108 0.225600 51 0.082000 80 0.202900 109 0.222300 52 0.085800 81 0.208300 110 0.218600 53 0.089900 82 0.212300 111 0.214800 54 0.095300 83 0.215600 112 0.210500 55 0.101300 84 0.218700 113 0.206000 56 0.106500 85 0.223000 114 0.201100 57 0.111600 86 0.227500 115 0.195800 58 0.113800 87 0.232000 116 0.190000 59 0.116600 88 0.236200 117 0.183800 60 0.120300 89 0.240100 118 0.175900 61 0.125600 90 0.243500 119 0.163000 62 0.132100 91 0.244800 120 0 63 0.139000 92 0.245700
MONTHLY COST OF INSURANCE CHARGES IS ASSESSED AS A PERCENTAGE OF THE BEGINNING OF MONTH CASH VALUE. MONTHLY COST OF INSURANCE CHARGES WILL NEVER BE LESS THAN $0.01. EX-99.(D)(III) 4 dex99diii.txt ADVANTAGE WHOLE LIFE INSURANCE POLICY [LOGO OF METLIFE] METROPOLITAN LIFE INSURANCE COMPANY POLICY NUMBER: [SPECIMEN] INSURED: [JOHN DOE] LIFE POLICY PARTICIPATING Premiums are payable for a specified period. If the Insured dies while this Policy is in force, we will pay the Policy Proceeds to the Beneficiary. We must receive due proof of the Insured's death. Any payment will be subject to all of the provisions of this Policy. RIGHT TO EXAMINE POLICY PLEASE READ THIS POLICY. YOU MAY RETURN THIS POLICY TO US OR TO OUR REPRESENTATIVE THROUGH WHOM IT WAS PURCHASED WITHIN [10] DAYS FROM THE DATE YOU RECEIVE IT. IF YOU RETURN IT WITHIN THIS PERIOD, WE WILL REFUND ANY PREMIUM PAID AND THE POLICY WILL BE VOID FROM THE START. This Policy is a legal contract between the owner and Metropolitan Life Insurance Company. PLEASE READ YOUR CONTRACT CAREFULLY. Signed for the Company at its [Home Office, 200 Park Avenue, New York, NY 10166] /s/ C. Robert Henrikson /s/ Gwenn L. Carr - ---------------------------------- ----------------- PRESIDENT SECRETARY 1 ALPHABETIC GUIDE TO YOUR CONTRACT Section - ------- 2 Assignments 1 Attained Age 5 Automatic Premium Loan 7 Basis of Computation 2 Beneficiary 7 Cash Surrender Value 7 Cash Value 2 Change of Owner or Beneficiary 10 Choice of Payment Options; Option Date 3 Claims of Creditors 3 Contract 10 Death of Payee 1 Definitions in This Policy 1 Designated Office 2 Designation of Owner and Beneficiary 9 Dividends 9 Dividend at Death 9 Dividend Options 9 Election of Dividend Option 6 Election of Lapse Option 1 Excess Loan 6 Extended Term Insurance Option 8 Fixed Loan Interest Rate 7 Fully Paid-Up 5 Grace Period 3 Illustration of Benefits and Values 3 Incontestability 1 Insured 1 Issue Age 1 Issue Date 11, 12 Joint and Survivor Life Income 6 Lapse of Policy 6 Lapse Options 10 Life Income Options 12 Life Income Tables 10 Limitations 8 Loans 8 Loan and Loan Interest Repayments 12 Minimum Payments under Payment Options 3 Misstatement of Age or Sex 11 Other Frequencies and Options 2 Owner 10 Payee 10 Payment 10 Payment of Policy Benefits 5 Payment of Premiums 11 Payment Options 3 Payments Under the Contract 1 Policy Date 8 Policy Loan Affects Dividends 1 Policy Loan Balance 4 Policy Proceeds 1 Premiums 6 Reduced Paid-Up Insurance Option 6 Reinstatement 2 Requests for Changes and/or Information 11, 12 Single Life Income 11, 12 Single Life Income - 10 Year Guaranteed Payment Period 3 Statements in Application 3 Suicide Exclusion 7 Surrender 1 We, Us and Our 1 You and Your Additional Benefit Riders, Modifications and Amendments, if any, and copies of the Applications are found following the final section. 2 POLICY SPECIFICATIONS INSURED [JOHN DOE] POLICY NUMBER [SPECIMEN] POLICY DATE [JUNE 16, 2006] ISSUE DATE [JUNE 16, 2006] PLAN WHOLE LIFE FACE AMOUNT [$10,000] ISSUE AGE OF INSURED [35] SEX [MALE] FIXED LOAN INTEREST RATE 6.0% MAXIMUM FEE FOR ILLUSTRATION OF BENEFITS $25 GUARANTEED FULLY PAID-UP DATE [JUNE 16, 2071]* BENEFITS - AS SPECIFIED IN POLICY AND IN ANY RIDER SCHEDULE OF BENEFITS AND ANNUAL PREMIUMS
YEARS RISK BENEFIT ANNUAL PREMIUM PAYABLE CLASSIFICATION ------- -------------- ------- -------------- WHOLE LIFE PAID-UP AT 100 [$258.10] [65] [STANDARD SMOKER] TOTAL PREMIUM ON POLICY DATE: ANNUAL [$258.10]
* This is the date on which the Policy is guaranteed to qualify to be changed to a fully Paid-Up policy. See the Fully Paid-Up provision. This guarantee is based on the assumption: no dividends will be paid on the Policy; all premiums for the Policy are paid in the amount and on the schedule indicated; all Scheduled Premiums for an Option to Purchase Additional Insurance Rider are paid in the amount and on the schedule indicated on the initial application; and no Policy Loan is taken prior to this date. This Policy will participate in our divisible surplus. We will determine the share, if any, for this Policy each year and credit it as a dividend. Dividends are not guaranteed. We have the right to change the amount credited each year. Therefore, dividends credited may be less than what was illustrated. Depending on the dividend option illustrated, cash values may be less than what was illustrated or more premiums may be required than what was illustrated. 3 TABLE OF GUARANTEED VALUES INSURED: [JOHN DOE] POLICY NUMBER: [SPECIMEN] POLICY DATE: [JUNE 16, 2006] NONFORFEITURE INTEREST 4.0% RATE: MORTALITY TABLE: 2001 CSO MORTALITY TABLE FOR A [MALE SMOKER, AGE NEAREST BIRTHDAY]
EXTENDED TERM INSURANCE END OF POLICY ------------------------------- YEAR CASH VALUE REDUCED PAID-UP INSURANCE YEARS DAYS - ------------- -------------- ------------------------- -------------- -------------- 1 $-- $-- 0 0 2 10.00 -- 0 164 3 100.00 -- 4 14 4 230.00 810.00 7 245 5 360.00 1,226.00 10 131 6 490.00 1,615.00 12 12 7 630.00 2,010.00 14 83 8 770.00 2,379.00 15 168 9 910.00 2,723.00 16 164 10 1,060.00 3,075.00 17 119 11 1,200.00 3,376.00 17 314 12 1,350.00 3,684.00 18 112 13 1,510.00 3,999.00 18 266 14 1,660.00 4,266.00 18 350 15 1,820.00 4,539.00 19 60 16 1,990.00 4,817.00 19 138 17 2,160.00 5,077.00 19 189 18 2,330.00 5,319.00 19 213 19 2,500.00 5,546.00 19 213 20 2,680.00 5,782.00 19 220 25 Age 60 3,560.00 6,737.00 18 349 30 Age 65 4,460.00 7,506.00 17 216 35 Age 70 5,340.00 8,108.00 15 313
On request, we will provide values for dates not shown. 4 1. DEFINITIONS IN THIS POLICY ATTAINED AGE The Issue Age plus the number of completed policy years. This includes any period during which this Policy was lapsed. DESIGNATED OFFICE Our Home Office or any other office we designate. EXCESS LOAN An Excess Loan occurs when the Policy Loan Balance exceeds: the Cash Value of the Policy; plus the Cash Value of any Paid-Up Additions; plus any Dividend Accumulations; plus the Cash Value of any other rider attached to this Policy. INSURED The person whose life is covered under this Policy. See the Policy Specifications page. ISSUE AGE The age of the Insured as of his or her birthday nearest to the Policy Date. ISSUE DATE The effective date of the coverage under this Policy is the Issue Date shown on the Policy Specifications page. It is also the date from which the contestable and suicide provisions for the coverage are measured. POLICY DATE Policy years, months and anniversaries are all measured from the Policy Date. It is shown on the Policy Specifications page. POLICY LOAN BALANCE The Policy Loan Balance at any time equals the outstanding Loan plus Loan Interest accrued to date. PREMIUMS Premiums are your payments to us. If you pay premiums on an annual mode, the due date is your policy anniversary each year. If you pay premiums on other than an annual mode, the due date is the policy anniversary and each semi-annual, quarterly or monthly anniversary as applicable. YOU AND YOUR The Owner of this Policy. In the Application the words "you" and "your" refer to the proposed insured person(s). WE, US AND OUR Metropolitan Life Insurance Company 5 2. PERSONS WITH AN INTEREST IN THE POLICY OWNER The Owner of the Policy is named in the Application (see copy attached); but the Owner can be changed before the death of the Insured. The new Owner will succeed to all rights of the Owner, including the right to make a further change of Owner. If there is more than one Owner at a given time, all must exercise the rights of ownership by joint action. Ownership may be changed in accordance with the Change of Owner or Beneficiary provision. The Owner may be someone other than the Insured and may be a person, a partnership, a corporation, a fiduciary or any other legal entity. At the death of the Owner, his or her estate will be the Owner, unless a successor Owner has been named. The rights of the Owner will end at the death of the Insured. BENEFICIARY The Beneficiary is named in the Application (see copy attached); but the Beneficiary can be changed before the death of the Insured. An irrevocable Beneficiary cannot be changed without his or her consent. The Beneficiary can be a person, a corporation, a partnership, a fiduciary or any other legal entity. A person must survive the Insured to qualify as Beneficiary. If none survives, the proceeds will be paid to the Owner. Any payment we make will terminate our liability with respect to such payment. CHANGE OF OWNER OR During the Insured's lifetime you may change the BENEFICIARY ownership and beneficiary designations, subject to any restrictions as stated in the Owner and Beneficiary provisions. You must make the change in written form satisfactory to us. If acceptable to us, the change will take effect as of the time you signed the request, whether or not the Insured is living when we receive your request at our Designated Office. The change will be subject to any assignment of this Policy or other legal restrictions. It will also be subject to any payment we made or action we took before we recorded the change. A change of ownership will void any prior Beneficiary designation. ASSIGNMENTS An absolute assignment of the Policy by you is a change of Owner and Beneficiary to the assignee. A collateral assignment of the Policy by you is not a change of Owner or Beneficiary; but their rights will be subject to the terms of the assignment. Assignments will be subject to all payments made and actions taken by us before a signed copy of the assignment form is recorded by us at our Designated Office. We will not be responsible for determining whether or not an assignment is valid. DESIGNATION OF A numbered sequence can be used to name successive OWNER AND Owners or Beneficiaries. Co-Beneficiaries will receive BENEFICIARY equal shares unless otherwise stated. In naming Owners or Beneficiaries, unless otherwise stated: 1. "Child" includes an adopted or posthumous child; 2. "Provision for issue" means that if a Beneficiary does not survive the Insured, the share of that Beneficiary will be taken by his or her living issue by right of representation; and 3. A family relation such as "wife", "husband" or "child" means relation to the Insured. At the time of payment of benefits, we can rely on an affidavit of any Owner or other responsible person to determine family relations or members of a class. REQUESTS FOR Submit all requests for change and/or information in CHANGES AND/OR writing to our Designated Office. INFORMATION 6 3. GENERAL PROVISIONS THE CONTRACT We have issued this Policy in consideration of the Application and payment of premiums. The Policy, the Application, any riders, any endorsements, and any Application for adjustment of the Policy constitute the entire contract and are made a part of the Policy when the insurance applied for is accepted. The Policy may be changed by mutual agreement. Any change must be in writing and approved by our President or Secretary. Our representatives have no authority to alter or modify any terms, conditions, or agreements of this Policy, or to waive any of its provisions. PAYMENTS UNDER THE All contract amounts are in U.S. currency. Payments CONTRACT by us under the contract will be made by the Designated Office. Our obligations are subject to all payments made and actions taken by us under the Policy before we record proof of the Insured's death at our Designated Office. STATEMENTS IN All statements made by the Insured or on his or her APPLICATION behalf, or by the applicant, will be deemed representations and not warranties. Material misrepresentations will not be used to void this Policy or any rider or to deny a claim unless made in the application for this Policy or a rider. CLAIMS OF CREDITORS To the extent permitted by law, neither the Policy nor any payment under it will be subject to the claim of creditors or to any legal process. MISSTATEMENT OF AGE If there is a misstatement of age or sex in the OR SEX Application, the values and benefits will be the amounts that the premiums paid would have purchased for the correct age and sex. If we make any payment or policy changes in good faith, relying on our records or evidence supplied to us, our duty will be fully discharged. We reserve the right to correct any errors in this Policy. INCONTESTABILITY We cannot contest the coverage after this Policy has been in force during the lifetime of the Insured for two years from its Issue Date. This provision will not apply to any rider that contains its own incontestability clause. If this Policy was issued as the result of the exercise of an option given in another policy and proof of insurability was not required, the contestable period for that coverage will end at the same time as it would have under the original policy. SUICIDE EXCLUSION If the Insured dies by suicide within two years from the Issue Date, the amount payable will be limited to: the amount of premiums paid; less any Policy Loan Balance on the date of death; and less any dividends paid in cash or used to reduce premiums. If this Policy was issued as the result of the exercise of an option given in another policy and proof of insurability was not required, the suicide period for that coverage will end at the same time as it would have under the original policy. ILLUSTRATION OF You may make a written request to us for an BENEFITS Illustration of Benefits. We may charge a nominal fee for any requested illustration after the first in each policy year. This fee will not exceed the Maximum Fee for Illustration of Benefits shown on the Policy Specifications page. 7 4. POLICY BENEFITS POLICY PROCEEDS The Policy Proceeds are equal to: 1. The Face Amount ; plus 2. Any insurance on the life of the Insured provided by a rider; plus 3. Any Paid-Up Additions; plus 4. Any Dividend Accumulations; plus 5. Any dividend we credit at death; plus 6. Any part of a premium paid for coverage beyond the date of death; less 7. Any premium due to the date of death; less 8. Any Policy Loan Balance. In no event will the amount payable upon the death of the Insured be less than the minimum amount required to permit the Policy to qualify as life insurance under the Federal income tax rules in effect on the Issue Date of the Policy. 8 5. PREMIUMS AND GRACE PERIOD PAYMENT OF Your first premium is due as of the Policy Date. While PREMIUMS the Insured is living, premiums after the first premium must be paid at our Designated Office. A premium receipt will be furnished upon request. If this Policy is in your possession and you have not paid the first premium, it is not in force. It will be considered that you have the Policy for inspection only. Premiums for the Policy are shown on the Policy Specifications page. No payment is due or payable for any period after the death of the Insured. Payment can be at any premium mode we make available. A change in premium mode will be processed on the paid-to-date on or following our approval of your request to change the mode. You may request to pay premiums with: yearly dividends (see the Dividend Options provision); the cash value of any Paid-Up Additions; any Dividend Accumulations; or any combination thereof. GRACE PERIOD There is a Grace Period of 31 days in which to pay a premium, without interest, after its due date. The insurance remains in force during the Grace Period. AUTOMATIC PREMIUM If this option has been elected in writing and if a LOAN premium is not paid by the end of its Grace Period, a premium will be paid automatically to the next due date by using any available Loan Value of the Policy. (See the Loans Section.) The automatic premium loan will be effective on the last day of the Grace Period for that premium. If the available Loan Value is not sufficient to pay a premium to the next due date, no premium will be paid and the Policy will lapse. You may cancel the automatic premium loan at any time by writing to us. Your request to cancel will apply as of the date we receive it. 9 6. NONPAYMENT OF PREMIUMS LAPSE OF POLICY Any premium that is not paid by its due date is in default. If it remains unpaid at the end of its Grace Period and is not paid automatically under the Automatic Premium Loan described in the Premiums and Grace Period Section, the Policy will lapse. LAPSE OPTIONS If the Policy lapses because a premium is not paid, any Cash Surrender Value of the Policy will be used to continue the Policy in force either as Extended Term Insurance or Reduced Paid-Up Insurance as stated below. Any riders will lapse unless otherwise stated in the rider. Any Dividend Accumulations, Paid-Up Additions and Policy Loan will terminate when the Cash Surrender Value is used for this purpose. ELECTION OF LAPSE The use of the Extended Term Insurance Option will OPTION be automatic unless you elect the Reduced Paid-Up Insurance Option. You can make or change your election at any time in writing, but not later than 90 days after the due date of the premium in default. Regardless of any election, if the Cash Surrender Value will provide an amount of Reduced Paid-Up Insurance equal to or greater than the amount of Extended Term Insurance, the Reduced Paid-Up Insurance Option will be used. Regardless of any election, if the amount of Reduced Paid-Up Insurance that would be provided by the Cash Surrender Value would be less than $500, the Extended Term Insurance Option will be used. EXTENDED TERM Extended Term Insurance is life insurance for a INSURANCE OPTION limited term with no further premiums due. It has decreasing cash value but no loan value. It does not share in dividends. The amount of Extended Term Insurance is payable only if the Insured dies prior to the end of the term. At the end of the term, this Policy will be void. Extended Term Insurance will be measured from the due date of the premium in default. We compute the length of Extended Term Insurance provided by using the Cash Surrender Value of the Policy to purchase a term insurance benefit. The amount of Extended Term Insurance will equal: the Face Amount of the Policy; plus the amount of any rider, if specified in the rider; plus the amount of any Paid-Up Additions; plus the amount of any Dividend Accumulations; and less any Policy Loan Balance on the due date of the premium in default. Any Loan or cash paid to you during the Grace Period will not be included in the Cash Surrender Value applied. The Table of Values shows samples of the length of the term that the Cash Value could provide. REDUCED PAID-UP (Available only if the amount of Reduced Paid-Up INSURANCE OPTION Insurance that would be provided by the Cash Surrender Value would be $500 or greater.) Reduced Paid-Up Insurance is permanent life insurance with no further premiums due. It has increasing cash value and loan value and shares in dividends. The amount of Reduced Paid-Up Insurance is payable at the death of the Insured. The amount of Reduced Paid-Up Insurance will be provided by using the Cash Surrender Value of the Policy as a net single premium at the age of the Insured on the due date of the premium in default. The Table of Values shows samples of the amount of Reduced Paid-Up Insurance which the Cash Value could provide. 10 REINSTATEMENT You may reinstate your lapsed Policy within three years after the date of lapse, or later if we consent. The Policy cannot be reinstated if it has been surrendered. To reinstate, you must submit the following items: 1. A written request for reinstatement. 2. Proof satisfactory to us that the Insured is insurable. 3. Payment, while the Insured is living, of each unpaid premium, plus interest at the rate of 6% per year compounded yearly. 4. Payment or reinstatement of any Policy Loan Balance on the due date of the premium in default, plus interest from that date to the date of reinstatement of the Policy at the Fixed Loan Interest Rate per year compounded yearly. The Insured must be alive on the date we approve the request for reinstatement. If the Insured is not alive, such approval is void. Any Loan Value that would be available after reinstatement may be used toward the payment required to make reinstatement. Policy Loans may have been made while the Policy was in force as Reduced Paid-Up Insurance. If the Loans are not repaid, they will continue in force after the Policy is reinstated. Upon reinstatement the Policy will be credited with any additional dividends which would have been credited if the Policy had not lapsed. Any Paid-Up Additions and Dividend Accumulations at the time of lapse will also be reinstated. Riders can be reinstated only as stated in the rider or with our consent. 11 7. CASH VALUES CASH VALUE The Table of Values shows samples of the Cash Value of the Policy at various dates. The Cash Values shown assume: that all premiums due have been paid; that no dividends or Paid-Up Additions have been credited to the Policy; and that there is no Policy Loan Balance. The Cash Value of the Policy is not increased by the Cash Value of any rider, unless stated in the rider. The Cash Value of any Reduced Paid-Up Insurance (including Paid-Up Additions) or any Extended Term Insurance is equal to the net single premium which would be required to provide the insurance at the age of the Insured on the date of the valuation. For 31 days after each policy anniversary, the Cash Value will not be less than on the anniversary. CASH SURRENDER The Cash Surrender Value of the Policy is equal to: VALUE 1. The Cash Value of the Policy; plus 2. The Cash Value of any Paid-Up Additions purchased by policy dividends; plus 3. Any Dividend Accumulations; plus 4. The Cash Value of any rider attached to this Policy; less 5. Any Policy Loan Balance. SURRENDER You may surrender your Policy for its Cash Surrender Value during the lifetime of the Insured. We will determine the Cash Surrender Value as of the date we receive your request in a form acceptable to us at our Designated Office. You may elect in writing to apply all or part of the proceeds to a Payment Option. The portion of the Cash Surrender Value not applied to a Payment Option will be paid to you in one sum or placed into an account that earns interest. (See Payment Options provision.) Any part of a premium paid for coverage beyond the date you surrender the Policy will be refunded to you. The Policy will terminate on the date of surrender. If you surrender the Policy within 31 days after the policy anniversary date, the Cash Surrender Value of your Policy will not be less than the Cash Surrender Value on that anniversary date, adjusted for any Loans or any Cash Value paid to you during the 31-day period. We may defer payment of the Cash Surrender Value for up to six months. If payment is deferred for more than 10 working days, it will be credited with interest from the date your written request was received by us at our Designated Office unless the amount of interest would be less than $25.00. We will pay interest at a rate at least equal to the minimum required by the state in which this Policy is delivered. BASIS OF Cash values, reserves and net single premiums are based COMPUTATION on the mortality table and the Nonforfeiture Interest Rate as shown on the Table of Values page. All values are at least equal to those required by any applicable law or the state in which this Policy is delivered. We have filed a detailed statement of the method of calculating cash values and paid-up nonforfeiture benefits with the insurance supervisory official of that state. 12 FULLY PAID-UP You can elect in writing to have this Policy changed to a fully Paid-Up policy, with no further premiums due, when the cost of the Paid-Up Insurance for the Face Amount equals or is less than: 1. The Cash Value of the Policy; plus 2. The Cash Value of any riders attached to the Policy; plus 3. The Cash Value of dividend values; less 4. The cost to fully pay up any Accidental Death Benefit rider attached to the Policy; less 5. The cost to fully pay up any Guaranteed Survivor Income Benefit rider attached to the Policy. The cost of Paid-Up Insurance means the net single premium for the Paid-Up Insurance at the age of the Insured on the date the Policy is changed to a fully Paid- Up policy. The Paid-Up Additions plus any dividend values will terminate to the extent their Cash Value is used for the net single premium. Any Policy Loan will continue in force. The following will terminate on the date of the change: 1. The right to make payments into: any Flexible Additional Insurance rider; any Option to Purchase Additional Insurance rider; or any Option for Variable Additional Benefits rider; 2. All riders, except for any Accidental Death Benefit rider, any Flexible Additional Insurance rider, any Option to Purchase Additional Insurance rider, any Option for Variable Additional Benefits rider, and any Guaranteed Survivor Income Benefit rider. 13 8. LOANS LOANS Unless your Policy is in force as Extended Term Insurance, you may borrow an amount not in excess of the Loan Value of your Policy upon written request. You may request that policy Loans be charged automatically against the Policy to pay premiums. (See Automatic Premium Loan provision.) After receipt of your Loan request, we have the right to defer your Loan for up to six months, except for a loan to pay premiums to us. If payment is deferred for more than 10 working days, it will be credited with interest from the date your written request was received by us at our Designated Office unless the amount of interest would be less than $25.00. Your Policy will be the sole security for such Loan. The Loan Value on the date the Loan is made is: 1. The Cash Surrender Value at the end of the current year; less 2. Loan Interest to the next policy anniversary; less 3. Any unpaid premiums for that year. FIXED LOAN INTEREST Loan Interest will be charged on Loans and will accrue daily. Loan Interest will be computed using the Fixed Loan Interest Rate shown on the Policy Specifications page. The Loan Interest is due each year on the policy anniversary. LOAN AND LOAN You may repay your Policy Loan Balance in whole or in INTEREST REPAYMENTS part at any time before the death of the Insured while this Policy is in force. Unpaid Loan and Loan Interest will be deducted from any settlement of your Policy. Any loan repayment must be at least $50 unless you are paying the Policy Loan Balance in whole. If there is an Excess Loan (see Definitions in This Policy Section), we will mail a notice to your last known address and that of any assignee of record. We will allow you a Grace Period for payment of the excess due. If the excess due remains unpaid at the end of the Grace Period, your Policy will lapse without value. The Grace Period will expire 31 days from the date the notice is sent. If you do not pay the Loan Interest when it is due on a policy anniversary, we will add it to your existing Policy Loan. POLICY LOAN AFFECTS The Policy Loan on this Policy will affect the amount of DIVIDENDS dividends for the Policy. (See the Dividends Section.) 14 9. DIVIDENDS DIVIDENDS The Policy will share in our divisible surplus. We will determine the share, if any, for this Policy each year and credit it as a dividend. Each dividend for the Policy will be affected by the average daily Policy Loan Balance on the Policy. The Policy will not share in dividends while it is in force as Extended Term Insurance. (See the Extended Term Insurance Option provision.) The dividend date will be the annual premium anniversary date each year. DIVIDEND OPTIONS You can elect to have dividends applied under any one of the following Options: 1. Paid-Up Additions; 2. Dividend Accumulations; 3. Reduction of Premiums; or 4. Cash. Under the Paid-Up Additions Option, each dividend will be used as a net single premium at the Insured's age on the dividend date to provide additional paid-up insurance. Paid-up insurance is permanent life insurance with no further premiums due. It has increasing cash values and loan values and shares in dividends. You may withdraw the cash value of your paid-up insurance at any time. Under the Dividend Accumulations Option, we will hold the dividends at interest at the rate we set from time to time, but the interest rate will never be less than 3%. You can withdraw the Dividend Accumulations in cash at any time. Under the Reduction of Premiums Option, each dividend will be applied toward the payment of premiums. Any excess will be used to buy Paid-Up Additions unless you elect otherwise. If the dividend is not sufficient to pay the entire premium, the difference will be payable by you. Under the Cash Option, each dividend will be paid to you by check. ELECTION OF You may elect the Dividend Option on the Application or DIVIDEND OPTION in writing at a later date. You can change the Dividend Option from time to time by notice to us in writing at our Designated Office. A change in Dividend Option will be in effect on the policy anniversary following our receipt of your written request, in a form acceptable to us, to make the change. If no choice has been made, we will provide Paid-Up Additions unless you make a different choice within 3 months after a dividend is credited. If a dividend check has not been cashed within one year, a choice of Paid-Up Additions will be deemed to have been made. DIVIDEND AT DEATH A pro rata portion of the dividend, if any, for the year in which the Insured dies will be added to the Policy Proceeds. 15 10. PAYMENT OF POLICY BENEFITS PAYMENT Unless otherwise requested, we will pay the Policy Proceeds when the Insured dies to the Payee in one sum. On request, all or part of the proceeds payable in one sum at the death of the Insured can be applied to any Payment Option at the choice of the Payee. Further, with our consent, any Payee who is entitled to receive proceeds in one sum when a Payment Option ends, or at the death of a prior Payee, or when the proceeds are withdrawn, can choose to apply the proceeds to a Payment Option. CHOICE OF PAYMENT The choice of a Payment Option and the naming of the OPTIONS; OPTION DATE Payee must be in written form satisfactory to us. You can make or change or revoke the choice before the death of the Insured. The Option Date is the effective date of the Payment Option, as chosen. When a Payment Option starts, a contract will be issued by us or by an affiliate that will describe the terms of the Option. PAYEE A Payee is a person, a corporation, a partnership, a fiduciary or any other legal entity entitled to receive the Policy Proceeds or surrender proceeds in one sum or under a Payment Option. If the Payee is not a natural person, the choice of a Payment Option will be subject to our approval. A collateral assignment will modify a prior choice of a Payment Option. The amount due the assignee will be payable in one sum and the balance will be applied under the Payment Option. LIFE INCOME OPTIONS Guaranteed Life Income Options are based on the age of the Payee on the Option Date. We will require proof of age. The Life Income payments will be based on the rates shown in the Life Income Tables; or, if they are greater, our Payment Option rates on the Option Date. If the rates at a given age are the same for different periods certain, the longest period certain will be deemed to have been chosen. DEATH OF PAYEE Amounts to be paid after the death of a Payee under a Payment Option will be paid as due to the successor Payee. If there is no successor Payee, amounts will be paid in one sum to the estate of the last Payee to die. If a Payee under a Life Income Option dies within 30 days after the Option Date, the amount applied to the Option, less any payments made, will be paid in one sum, unless a Payment Option is chosen. LIMITATIONS If instalments under an Option would be less than $50, proceeds can be applied to a Payment Option only with our consent. 16 11. PAYMENT OPTIONS SINGLE LIFE INCOME Monthly payments will be made during the lifetime of the Payee. SINGLE LIFE INCOME - Monthly payments will be made during the 10 YEAR GUARANTEED lifetime of the Payee with a guaranteed payment PAYMENT PERIOD period of 10 years. JOINT AND SURVIVOR Monthly payments will be made: LIFE INCOME 1. While either of two Payees is living, called "Joint and Survivor Life Income", or 2. While either of two Payees is living, but for at least 10 years, called "Joint and Survivor Life Income, 10 Years Certain". OTHER FREQUENCIES Other Payment Options and payment frequencies AND OPTIONS may be arranged with us. 12. LIFE INCOME TABLES MINIMUM PAYMENTS Monthly payments for each $1,000 applied will UNDER PAYMENT not be less than the amounts shown in the OPTIONS following Tables. On request, we will provide additional information about amounts of minimum payments. The rates shown below are based on: an interest rate of 1.5% per year; and the 2000 Individual Annuity Mortality Table. 10 YEAR GUARANTEED LIFE INCOME PAYMENT PERIOD SINGLE LIFE INCOME Payee's ---------------- ----------------- Age Male Female Male Female --------- ----- ------ ----- ------ 50 $2.83 $2.65 $2.82 $2.64 55 3.11 2.89 3.10 2.88 60 3.47 3.19 3.44 3.18 65 3.92 3.59 3.87 3.56 70 4.54 4.11 4.43 4.05 75 5.40 4.83 5.13 4.69 80 6.57 5.86 5.96 5.53 85 8.20 7.37 6.87 6.52 90 & over 10.48 9.62 7.72 7.52 JOINT AND SURVIVOR JOINT AND SURVIVOR 10 YEARS CERTAIN Age of ---------------- ----------------- Both One Male and One Male and JOINT AND SURVIVOR Payees One Female One Female LIFE INCOME --------- ---------------- ----------------- 50 $2.43 $2.43 55 2.63 2.63 60 2.87 2.87 65 3.17 3.17 70 3.58 3.57 75 4.12 4.11 80 4.87 4.82 85 5.94 5.76 90 & over 7.47 6.84 17 LIFE POLICY Participating 18 EX-99.(E) 5 dex99e.txt ENTERPRISE APPLICATION FOR THE POLICY AND RIDERS PART I CHECK THE APPROPRIATE COMPANY. OFFICE USE ONLY: 1 ___________________________________________________________________________________________________________________________________ APPLICATION FOR [ ] METROPOLITAN LIFE INSURANCE COMPANY [ ] METLIFE INVESTORS INSURANCE COMPANY INDIVIDUAL AND 200 Park Avenue, New York, NY 10166 13045 Tesson Ferry Road, St. Louis, MO 63128 MULTI-LIFE LIFE INSURANCE [ ] NEW ENGLAND LIFE INSURANCE COMPANY [ ] GENERAL AMERICAN LIFE INSURANCE COMPANY 501 Boylston Street, Boston, MA 02116-3700 13045 Tesson Ferry Road, St. Louis, MO 63128 [ ] METLIFE INVESTORS USA INSURANCE COMPANY 222 Delaware Avenue, Suite 900, PO Box 25130, Wilmington, DE 19899 THE COMPANY INDICATED ABOVE IS REFERRED TO AS "THE COMPANY". ___________________________________________________________________________________________________________________________________ 1. PROPOSED INSURED #1 SECTION 1 PROPOSED Name________________FIRST__________________________MIDDLE______________________LAST_________________________ INSURED(S) Street______________________________________________________________________________________________________ City____________________________________________________________________________ State _____ Zip ___________ *If less than 3 years, Years at this address* ___________ SSN/Tax ID ______________________________________________________________ add prior residence Home Phone Number (_________________________) Best TIME to call: FROM ______________________________ address in Additional Work Phone Number (_________________________) [ ] Daytime [ ] Evening TO ________________________________ Information Section, Cell Phone Number (_________________________) Best NUMBER to call: [ ] Home [ ] Work [ ] Cell Page 13. Driver's License Number ___________________________________________________ State __________________________ License Issue Date____________________________________ License Expiration Date _____________________________ Marital Status [ ] Single [ ] Married [ ] Separated [ ] Divorced [ ] Widowed Date of Birth MONTH __ DAY __ YEAR ____ State/Country of Birth ____________________________________________ Sex [ ] Male [ ] Female Net Worth $________________________________ Annual Earned Income $____________________ Annual Unearned Income $_________________________________________ Employer's Name ____________________________________________________________________________________________ NOTE: Street _____________________________________________________________________________________________________ P.O. Box numbers City ___________________________________________________________________________ State _____ Zip ___________ CANNOT be accepted Position/Title/Duties________________________________________ Length of Employment__________________________ for street addresses. ____________________________________________________________________________________________________________ 2. PROPOSED INSURED #2 Life 2, Spouse, Designated Life, Person to be covered under Applicant's Waiver of Premium Benefit Relationship to Proposed Insured #1 Name _______________FIRST__________________________MIDDLE______________________LAST_________________________ IF ADDRESS IS SAME Street _____________________________________________________________________________________________________ AS PROPOSED City ___________________________________________________________________________ State _____ Zip ___________ INSURED #1, Years at this address* ___________ SSN/Tax ID ______________________________________________________________ WRITE "SAME". Home Phone Number (_________________________) Best TIME to call: Work Phone Number (_________________________) [ ] Daytime [ ] Evening Cell Phone Number (_________________________) Best NUMBER to call: [ ] Home [ ] Work [ ] Cell Driver's License Number ___________________________________________________ State __________________________ ADDITIONAL Issue Date _________________________________________ Expiration Date _______________________________________ INSUREDS: Marital Status [ ] Single [ ] Married [ ] Separated [ ] Divorced [ ] Widowed See Supplemental Date of Birth MONTH __ DAY __ YEAR ____ State/Country of Birth ____________________________________________ Forms Package. Sex [ ] Male [ ] Female Net Worth $________________________________ Annual Earned Income $____________________ Annual Unearned Income $_________________________________________ Employer's Name ____________________________________________________________________________________________ Street _____________________________________________________________________________________________________ City ___________________________________________________________________________ State _____ Zip ___________ Position/Title/Duties________________________________________ Length of Employment__________________________
[BAR CODE] ENB-7-05 FF (05/05) 2 IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. ___________________________________________________________________________________________________________________________________ SECTION 1 3. DEPENDENT SPOUSE OR MINOR PROPOSED A. Are any persons to be insured a dependent spouse? [ ] YES [ ] NO INSURED(S) IF YES, please provide: (CONTINUED) Amount of EXISTING insurance on spouse of Proposed Insured $______________ Amount of insurance APPLIED FOR on spouse of Proposed Insured $______________ B. 1. Are any persons to be insured a dependent minor? [ ] YES [ ] NO IF YES, please provide: Amount of EXISTING insurance on father/guardian $______________ Amount of insurance APPLIED FOR on father/guardian $______________ Amount of EXISTING insurance on mother/guardian $______________ Amount of insurance APPLIED FOR on mother/guardian $______________ 2. Are all siblings of this dependent minor equally insured? [ ] YES [ ] NO IF NO, please provide details: ____________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ SECTION 2 1. EXISTING OR APPLIED FOR INSURANCE EXISTING OR A. Do any of the Proposed Insureds or Owners have any exisitng or applied APPLIED FOR for life insurance (L) or annuity (A) contracts with this or any other company? INSURANCE PROPOSED INSURED [ ] YES [ ] NO OWNER [ ] YES [ ] NO IF YES IF YES, provide details on PROPOSED INSURED ONLY: Some states require ____________________________________________________________________________________________________________ the completion of an PROPOSED additional form. INSURED TYPE AMOUNT OF YEAR OF ACCIDENTAL EXISTING OR See instructions on (#1, #2, OTHER) COMPANY (L, A) INSURANCE ISSUE DEATH AMOUNT APPLIED FOR the cover of the ____________________________________________________________________________________________________________ Replacement [ ] E Forms Package. [ ] A ____________________________________________________________________________________________________________ [ ] E [ ] A ____________________________________________________________________________________________________________ [ ] E [ ] A ____________________________________________________________________________________________________________ [ ] E [ ] A ____________________________________________________________________________________________________________ [ ] E [ ] A ____________________________________________________________________________________________________________ B. Do any of the Proposed Insureds have any application for disability insurance (D) or critical illness insurance (C) or long term care insurance (LTC) applied for or planned with THIS Company or its affiliates? [ ] YES [ ] NO IF YES, provide: Proposed Insured(#1, #2, other)_______ Type (D,C,LTC)__________ ____________________________________________________________________________________________________________ Applicable replacement 2. REPLACEMENT and 1035 exchange A. In connection with this application, has there been, or will there be with this or forms can be found any other company any: surrender transaction; loan; withdrawal; lapse; reduction or in Replacement redirection of premium/consideration; or change transaction (except conversions) Forms Package. involving an annuity or other life insurance? [ ] YES [ ] NO IF YES, complete Replacement Questionnaire and Disclosure AND any other state required replacement forms. B. Is this an exchange under Internal Revenue code section 1035? [ ] YES [ ] NO IF YES, Complete the 1035 Exchange Authorization FOR EACH AFFECTED POLICY.
[BAR CODE] ENB-7-05 FF (05/05) IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. 3 ___________________________________________________________________________________________________________________________________ SECTION 3 IDENTITY OF PRIMARY OWNER (Check One.) OWNER [ ] Proposed Insured #1 COMPLETE QUESTION 1 ONLY. [ ] Proposed Insured #2 COMPLETE QUESTION 1 ONLY. [ ] Other Person COMPLETE QUESTIONS 1 AND 2. [ ] Entity COMPLETE QUESTION 3 ONLY. ____________________________________________________________________________________________________________ 1. OWNER IDENTIFICATION IF U.S. DRIVER'S [ ] U.S. Driver's License already provided on page 1 (Proposed Insured) LICENSE ALREADY [ ] U.S. Driver's License [ ] Green Card [ ] Passport [ ] Other_________GOVERNMENT ISSUED_______________ PROVIDED, NO FURTHER Issuer of ID ____________________________________________ ID Issue Date ____________________________________ INFORMATION ID Reference Number _____________________________________ ID Expiration Date _______________________________ IS REQUIRED. ____________________________________________________________________________________________________________ 2. OWNER OTHER THAN PROPOSED INSURED(S) NOTE: Name _______________FIRST__________________________MIDDLE______________________LAST_________________________ P.O. Box numbers Street _____________________________________________________________________________________________________ CANNOT be accepted City ___________________________________________________________________________ State _____ Zip ___________ for street addresses. Phone Number (_____________________) IF CUSTODIAN Citizenship ______________________________ Country of Permanent Residence __________________________________ is acting on behalf Date of Birth MONTH __ DAY __ YEAR ____ SSN/Tax ID ________________________________________________________ of a minor under UTMA/ Relationship to Proposed Insured(s) ________________________________________________________________________ UGMA, please complete Employer's Name ____________________________________________________________________________________________ Additional Owner Form Street _____________________________________________________________________________________________________ in Supplemental City ___________________________________________________________________________ State _____ Zip ___________ Forms package. Position/Title/Duties ________________________________________ Length of Employment ________________________ [ ] Check if you wish ownership to revert to Insured upon Owner and Contingent Owner's death. ____________________________________________________________________________________________________________ 3. ENTITY/TRUST AS OWNER Entity/Trust Type: [ ] C Corporation [ ] S Corporation [ ] LLC [ ] Partnership [ ] Sole Proprietorship [ ] Trust IF TRUST Tax ID Number _____________________________________________________ Date of Trust MONTH __ DAY __ YEAR ____ Complete Trust Name of Entity/Trust _______________________________________________________________________________________ Certification form Name of Trustee(s) _________________________________________________________________________________________ in Supplemental Street _____________________________________________________________________________________________________ Forms Package. City ___________________________________________________________________________ State _____ Zip ___________ IF BUSINESS Proposed Insured(s) Relationship to Entity _________________________________________________________________ Complete Business Nature of Business ___________________________________ Business Phone ______________________________________ Supplement form Is entity publicly traded? [ ] YES [ ] NO in Supplemental IF NO, please supply one of the following documents: (INDICATE WHICH ONE YOU ARE SUPPLYING.) Forms Package. [ ] Articles of Incorporation/Government Issued Business License [ ] LLC Operating Agreement [ ] Partnership Agreement [ ] Government Issued Certificate of Good Standing
[BAR CODE] ENB-7-05 FF (05/05) 4 IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. ___________________________________________________________________________________________________________________________________ SECTION 4 NOTE: Federal law states if you leave someone with special needs any assets over BENEFICIARY(IES) $2,000, they may lose eligibility for most government benefits. ____________________________________________________________________________________________________________ CONTINGENT BENEFICIARIES ONLY [ ] Check here if you want any and all living and future natural or adopted children of Proposed Insured #1 to be included as Contingent Beneficiaries. Name any living children As beneficiaries below. ____________________________________________________________________________________________________________ [ ] PRIMARY [ ] CHECK HERE AND Name _______________FIRST__________________________MIDDLE______________________LAST_________________________ DO NOT COMPLETE Street _____________________________________________________________________________________________________ IF PRIMARY City ___________________________________________________________________________ State _____ Zip ___________ BENEFICIARY IS Date of Birth MONTH __ DAY __ YEAR ____ SSN/Tax ID ____________________________________________NOT REQUIRED SAME AS TRUST OR Relationship to Proposed Insured(s) ________________________________________________________________________ ENTITY OWNER. Percent of Proceeds _____ (Multiple Beneficiaries will receive an equal percentage of proceeds unless otherwise instructed.) If there is a court appointed legal [ ] PRIMARY [ ] CONTINGENT Guardian for Beneficiary, provide Name _______________FIRST__________________________MIDDLE______________________LAST_________________________ name and address in Street _____________________________________________________________________________________________________ Additional Information City ___________________________________________________________________________ State _____ Zip ___________ Section, Page 13. Date of Birth MONTH __ DAY __ YEAR ____ SSN/Tax ID ____________________________________________NOT REQUIRED Relationship to Proposed Insured(s) ________________________________________________________________________ Percent of Proceeds _____ (Multiple Beneficiaries will receive an equal percentage of proceeds unless otherwise instructed.) [ ] PRIMARY [ ] CONTINGENT Name _______________FIRST__________________________MIDDLE______________________LAST_________________________ Street _____________________________________________________________________________________________________ City ___________________________________________________________________________ State _____ Zip ___________ Date of Birth MONTH __ DAY __ YEAR ____ SSN/Tax ID ____________________________________________NOT REQUIRED Relationship to Proposed Insured(s) ________________________________________________________________________ Percent of Proceeds _____ (Multiple Beneficiaries will receive an equal percentage of proceeds unless otherwise instructed.) SECTION 5 Custodian's name ___________FIRST____________________MIDDLE____________________LAST_________________________ CUSTODIAN as custodian for __________________________________NAME(S) OF MINOR(S)______________________________________ ACTING under the _____________ NAME OF STATE__________________________ Uniform Transfers [or Gifts] to Minors Act. FOR MINOR Street _____________________________________________________________________________________________________ BENEFICIARY(IES) City ___________________________________________________________________________ State _____ Zip ___________ Relationship to Minor(s)____________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. 5 ___________________________________________________________________________________________________________________________________ SECTION 6 1. PRODUCT & FACE AMOUNT INFORMATION Product Name________________________________________________________________________________________________ REGARDING Face Amount $_______________________________ (COMPLETE PERSONAL FINANCIAL SUPPLEMENT IF $1,000,000 OR MORE.) INSURANCE [ ] Group Conversion* APPLIED FOR Optional Benefits and Riders: [ ] Guaranteed Survivor Plus Purchase Options (GSPO+)* Option Period(s): _____COMPLETE FOR FIRST DESIGNATED LIFE____ $___________________ [ ] Guaranteed Survivor Income Benefit (GSIB) [ ] Term Rider SPECIFY: __________________________________________ $___________________ [ ] Life Guaranteed Purchase Option (LGPO) [ ] Acceleration of Death Benefit Rider (ADBR)* *Complete these forms, [ ] Enricher Options (PAIR/VABR)* SPECIFY: _______________________ $___________________ if applicable: [ ] Long Term Care Guaranteed Purchase Option (LTC-GPO) .. ADBR [ ] Disability Waiver (DW) SPECIFY: ______________________________ $___________________ .. Enricher/Equity Additions [ ] Other .. Group Conversion .. GSPO+ Special Requests/Other: These forms can [ ] Save Age [ ] Specific Policy Date ________________________________________________________________ be found in the Supplemental [ ] Other___________________________________________________________________________________________________ Forms Package. Check here if [ ] alternate OR [ ] additional policy is requested and provide full details below. Include SIGNED & DATED illustration for each policy requested. ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 2. ADDITIONAL INFORMATION FOR WHOLE LIFE PRODUCTS Do you request automatic payment of premium in default by Policy Loan (FOR TRADITIONAL PLANS), if available? [ ] YES [ ] NO Dividend Options: [ ] Paid-up Additions [ ] VAI Equity Additions* [ ] Premium Reduction [ ] Cash [ ] Accumulations/DWI [ ] Other___________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 3. ADDITIONAL INFORMATION FOR UNIVERSAL LIFE/VARIABLE LIFE PRODUCTS For Variable Life, Planned Premium Amount: Year 1 $_______________ Excess/Lump Sum $__________________________________________ also complete Variable Life Supplement. Duration of premium payments________________________________________________________________________________ Planned annual unscheduled payment (IF APPLICABLE) : $______________________________________________________ Renewal Premium (IF APPLICABLE): $__________________________________________________________________________ Death Benefit Option/Contract Type__________________________________________________________________________ Definition of Life Insurance Test: [ ] Guideline Premium Test [ ] Cash Value Accumulation Test (IF AVAILABLE UNDER POLICY APPLIED FOR) Guaranteed to age: (VUL ONLY) [ ] 65 [ ] 75 [ ] 85 [ ] 5 years [ ] Other________________________________ ____________________________________________________________________________________________________________ 4. ADDITIONAL INFORMATION FOR QUALIFIED PLANS Qualified/Non-Qualified Plan number ______________EGN/ PENSION NUMBER_______________________________________
[BAR CODE] ENB-7-05 FF (05/05) 6 IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. ___________________________________________________________________________________________________________________________________ SECTION 7 1. PAYMENT MODE (CHECK ONE.) PAYMENT INFORMATION DIRECT BILL: [ ] Annual [ ] Semi-Annual [ ] Quarterly ELECTRONIC PAYMENT: [ ] Monthly If MONTHLY ELECTRONIC SPECIAL ACCOUNT: [ ] Government Allotment [ ] Salary Deduction PAYMENT is chosen, complete Electronic Additional Details: Payment Account ____________________________________________________________________________________________________________ Agreement. ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 2. SOURCE OF CURRENT AND FUTURE PAYMENTS (CHECK ALL THAT APPLY.) [ ] Earned Income [ ] Mutual Fund/Brokerage Account [ ] Money Market Fund [ ] Savings [ ] Use of Values in another Life Insurance/Annuity Contract [ ] Certificate of Deposit [ ] Loans [ ] Other________________________________________________________________________________________ ____________________________________________________________________________________________________________ NOTE: 3. PAYMENT It is Company Policy Amount collected with application $_________________________________________________________________________ to not accept cash, (MUST EQUAL AT LEAST ONE MONTHLY PREMIUM.) traveler's checks, or money orders Premium Payor: as a form of payment [ ] Proposed Insured #1 [ ] Proposed Insured #2 [ ] Primary Owner for Variable Life [ ] Other Products. Name____________________________________________________________________________________________________ Relationship to Proposed Insured(s) and Owner___________________________________________________________ Reason this person is the Payor_________________________________________________________________________ ____________________________________________________________________________________________________________ 4. BILLING ADDRESS INFORMATION [ ] Proposed Insured #1 Address [ ] Proposed Insured #2 Address [ ] Primary Owner's Address [ ] Other Premium Payor's/Alternate Billing Address (PROVIDE DETAILS HERE.) Street _____________________________________________________________________________________________________ City ___________________________________________________________________________ State _____ Zip ___________ [ ] Special Arrangements ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ E-MAIL Proposed Insured #1_________________________________________________________________________________________ ADDRESSES Proposed Insured #2_________________________________________________________________________________________ (OPTIONAL) Primary Owner_______________________________________________________________________________________________ Joint/Contingent Owner______________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. 7 ___________________________________________________________________________________________________________________________________ SECTION 8 The following questions are to be answered for ALL persons to be insured, including those GENERAL RISK covered by any riders applied for. QUESTIONS ____________________________________________________________________________________________________________ 1. Within the past three years has ANY person to be insured flown in a plane other than as a passenger on a scheduled airline or have plans for such activity within the next year? [ ] YES [ ] NO IF YES, complete a separate Aviation Supplement for each applicable Proposed Insured. ____________________________________________________________________________________________________________ 2. Within the past three years has ANY person to be insured participated in or intend to participate in ANY of the following: Underwater sports - (SCUBA diving, skin diving, or similar activities); Sky sports - (skydiving, hang gliding, parachuting, ballooning or similar activities); Racing sports - (motorcycle, auto, motor boat or similar activities); If you need more Rock or mountain climbing or similar activities; space, please use the Bungee jumping or similar activities? [ ] YES [ ] NO Additional Information IF YES, complete a separate Avocation Supplement for each Section, Page 13. applicable Proposed Insured. ____________________________________________________________________________________________________________ 3. Within the PAST TWO YEARS has ANY person to be insured TRAVELED or RESIDED outside the U.S. or Canada? [ ] YES [ ] NO IF YES, for each occurence, please provide Proposed Insured, duration, country and purpose. _________________________________________________________________________________________________________ _________________________________________________________________________________________________________ _________________________________________________________________________________________________________ 4. Within the NEXT TWO YEARS does ANY person to be insured INTEND TO TRAVEL or RESIDE outside the U.S. or Canada? [ ] YES [ ] NO IF YES, for each occurence, please provide proposed insured, duration, country and purpose. _________________________________________________________________________________________________________ _________________________________________________________________________________________________________ _________________________________________________________________________________________________________ 5. CITIZENSHIP/RESIDENCY A. Are all persons to be Insured U.S. Citizens? [ ] Yes [ ] no IF NO, please provide details: Proposed Insured(s)____________________________ Country of Citizenship______________________________________ Visa Type/ID___________________________________ Visa Number_________________________________________________ Expiration Date________________________________ Length of Time in U.S.______________________________________ [ ] Check here if currently applying for a Social Security number. B. Are all persons to be insured permanent residents of the United States? [ ] YES [ ] NO IF NO, please provide details: Proposed Insured(s)_________________________________________________________________________________________ Country of Residence________________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) 8 IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. ___________________________________________________________________________________________________________________________________ SECTION 8 The following questions are to be answered for ALL persons to be insured, including those GENERAL RISK covered by any riders applied for. QUESTIONS ____________________________________________________________________________________________________________ (CONTINUED) 6. In the last five years, has ANY person to be insured used tobacco products (e.g., cigarettes; cigars; pipes; smokeless tobacco; chew; etc.) or nicotine substitutes (e.g., patch, gum)? [ ] YES [ ] NO IF YES, please provide details: Proposed Insured(s)_____________________________________ Date Last Used_____________________________________ Type________________________________________________________________________________________________________ Amount/Frequency____________________________________________________________________________________________ ____________________________________________________________________________________________________________ 7. Has ANY person to be insured: EVER had a driver's license suspended or If you need more revoked; EVER been convicted of DUI or DWI; or had, in the last five space, please years, any moving violations? [ ] YES [ ] NO use the Additional IF YES, please provide Proposed Insured, date and violation. Information Section, Page 13. Proposed Insured(s)_________________________________________________________________________________________ Details:____________________________________________________________________________________________________ ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 8. Has any person to be insured EVER had an application for life, disability income or health insurance declined, postponed, rated or modified or required an extra premium? [ ] YES [ ] NO IF YES, please provide details: Proposed Insured(s)_________________________________________________________________________________________ Details:____________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 9. Are all persons to be insured: actively at work; or a homemaker performing regular household duties; or a student attending school regularly? [ ] YES [ ] NO IF NO, please provide details: Proposed Insured(s)_________________________________________________________________________________________ Details:____________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 10. LONG TERM CARE GUARANTEED PURCHASE OPTION RIDER Please answer these questions ONLY IF A. Does any person to be insured under this rider currently use any REQUESTING THE mechanical equipment such as: a walker; a wheelchair; long leg braces; LONG TERM CARE or crutches? [ ] YES [ ] NO GUARANTEED PURCHASE IF YES, please note which and the reason. OPTION RIDER. ____________________________________________________________________________________________________________ Proposed Insured(s)_________________________________________________________________________________________ B. Does any person to be insured under this rider need any assistance or supervision with any of the following activities: bathing; dressing; walking; moving in/out of a chair or bed; toileting; continence; or taking medication? [ ] YES [ ] NO Proposed Insured(s)_________________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) PART II IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. 9 ___________________________________________________________________________________________________________________________________ SECTION 1 1. PHYSICIAN PHYSICIAN Please provide name of doctor, practitioner, or health care facility who can provide the most INFORMATION complete and up to date information concerning the present health of the Proposed Insured(s). PHYSICIAN INFORMATION FOR PROPOSED INSURED #1 [ ] Check here if no doctor, practitioner or health care facility is known. PLEASE NOTE: Physician Name__________________________________________ Phone Number (____________________________________) If FULL PARAMEDICAL Name of Practice/Clinic_________________________________ Fax Number (______________________________________) exam is required, Street _____________________________________________________________________________________________________ completion of Medical City ___________________________________________________________________________ State _____ Zip ___________ questions is OPTIONAL Date Last Consulted____ MONTH__ DAY__ YEAR____ Reason_______________________________________________________ but will expedite your application. Findings, treatment given, medication prescribed.If None, check here [ ]. ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ PHYSICIAN INFORMATION [ ] PROPOSED INSURED #1 [ ] PROPOSED INSURED #2 [ ] Check here if no doctor, practitioner or health care facility is known. Physician Name__________________________________________ Phone Number (____________________________________) Name of Practice/Clinic_________________________________ Fax Number (______________________________________) Street _____________________________________________________________________________________________________ City ___________________________________________________________________________ State _____ Zip ___________ Date Last Consulted____ MONTH__ DAY__ YEAR____ Reason_______________________________________________________ Findings, treatment given, medication prescribed.If None, check here [ ]. ____________________________________________________________________________________________________________ ____________________________________________________________________________________________________________ 1. HEIGHT/WEIGHT SECTION 2 Proposed Insured #1 Height__________________ Weight__________________ MEDICAL Proposed Insured #2 Height__________________ Weight__________________ QUESTIONS Has any Proposed Insured experienced a change in weight (greater than 10 pounds) in the past 12 months? [ ] YES [ ] NO IF YES, specify: Proposed Insured #1 Pounds lost__________________ Pounds gained__________________ Proposed Insured #2 Pounds lost__________________ Pounds gained__________________ Reason______________________________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) 10 IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. ___________________________________________________________________________________________________________________________________ SECTION 2 2. Has a parent (P) or sibling (S) of any person to be insured ever had: heart disease; MEDICAL coronary artery disease; high blood pressure; diabetes; or mental illness? [ ] YES [ ] NO QUESTIONS IF YES, indicate below: (CONTINUED) ____________________________________________________________________________________________________________ STATE OF HEALTH, PROPOSED RELATIONSHIP TO AGE IF AGE AT SPECIFIC CONDITIONS, INSURED (#1, #2) PROPOSED INSURED LIVING DEATH CAUSE OF DEATH PLEASE NOTE: ____________________________________________________________________________________________________________ If FULL PARAMEDICAL [ ] P [ ] S exam is required, ____________________________________________________________________________________________________________ completion of Medical [ ] P [ ] S questions is OPTIONAL ____________________________________________________________________________________________________________ but will expedite [ ] P [ ] S your application. ____________________________________________________________________________________________________________ [ ] P [ ] S ____________________________________________________________________________________________________________ 3. Has ANY person to be insured EVER received treatment, attention, or advice from any physician, practitioner or health facility for, or been told by any physician, practitioner or health facility that he/she had: OTHER PROPOSED PROPOSED PROPOSED INSURED #1 INSURED #2 INSURED YES NO YES NO YES NO A. High blood pressure; chest pain; heart attack; or any other disease or disorder of the heart or circulatory system? [ ] [ ] [ ] [ ] [ ] [ ] B. Asthma; bronchitis; emphysema; sleep apnea; shortness of breath; or any other disease or disorder of the lungs or respiratory system? [ ] [ ] [ ] [ ] [ ] [ ] C. Seizures; stroke; paralysis; Alzheimer's disease; multiple sclerosis; memory loss; Parkinson's disease; progressive neurological disorder; headaches; or any other disease or disorder of the brain or nervous system? [ ] [ ] [ ] [ ] [ ] [ ] ___________________________________________________________________________________________________________________________________ DETAILS: If you ANSWERED YES to any of the above questions, please provide details here. QUESTION PROPOSED INSURED NAME OF PHYSICIAN DATE/DURATION DIAGNOSIS/SEVERITY NUMBER NAME ADDRESS IF NOT ALREADY PROVIDED OF ILLNESS MEDICATIONS/TREATMENT ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. 11 ___________________________________________________________________________________________________________________________________ SECTION 2 3. Has ANY person to be insured EVER received treatment, attention, or advice from any MEDICAL physician, practitioner or health facility for, or been told by any physician, practitioner or QUESTIONS health facility that he/she had: (CONTINUED) OTHER PROPOSED PROPOSED PROPOSED INSURED #1 INSURED #2 INSURED YES NO YES NO YES NO PLEASE NOTE: D. Ulcers; colitis; hepatitis; cirrhosis; or any If FULL PARAMEDICAL other disease or disorder of the liver; exam is required, gallbladder; stomach; or intestines? [ ] [ ] [ ] [ ] [ ] [ ] completion of Medical questions is OPTIONAL E. Any disease or disorder of: the kidney; but will expedite bladder; or prostate; or blood, protein or pus your application. in the urine? [ ] [ ] [ ] [ ] [ ] [ ] F. Diabetes; thyroid disorder; or any other endocrine problem(s)? [ ] [ ] [ ] [ ] [ ] [ ] G. Arthritis; gout; or disorder of the muscles, bones or joints? [ ] [ ] [ ] [ ] [ ] [ ] H. Cancer; tumor; polyp; cyst or any skin disease or disorder? [ ] [ ] [ ] [ ] [ ] [ ] I. Anemia; leukemia; or any other disorder of the blood or lymph glands? [ ] [ ] [ ] [ ] [ ] [ ] J. Depression; stress; anxiety; or any other psychological or emotional disorder or symptoms? [ ] [ ] [ ] [ ] [ ] [ ] K. Any disease or disorder of the eyes, ears, nose, or throat? [ ] [ ] [ ] [ ] [ ] [ ] ___________________________________________________________________________________________________________________________________ DETAILS: If you ANSWERED YES to any of the above questions, please provide details here. QUESTION PROPOSED INSURED NAME OF PHYSICIAN DATE/DURATION DIAGNOSIS/SEVERITY NUMBER NAME ADDRESS IF NOT ALREADY PROVIDED OF ILLNESS MEDICATIONS/TREATMENT ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) 12 IF MORE SPACE IS NEEDED, PLEASE USE THE ADDITIONAL INFORMATION SECTION, PAGE 13. ___________________________________________________________________________________________________________________________________ SECTION 2 4. Has ANY person to be insured: MEDICAL OTHER QUESTIONS PROPOSED PROPOSED PROPOSED (CONTINUED) INSURED #1 INSURED #2 INSURED YES NO YES NO YES NO A. Currently, or within the past six months, been under observation or received treatment or taken any medication? (Including over-the-counter medications, vitamins, herbal supplements, etc.) [ ] [ ] [ ] [ ] [ ] [ ] B. For the next six months, scheduled any doctor's visits, medical care, or surgery? PLEASE NOTE: [ ] [ ] [ ] [ ] [ ] [ ] If FULL PARAMEDICAL exam is required, C. During the past five years, had a: checkup; completion of Medical electrocardiogram; chest x-ray; or medical questions is OPTIONAL test? [ ] [ ] [ ] [ ] [ ] [ ] but will expedite your application. D. During the past five years, had any illness, injury or health condition not revealed above; or have been recommended to have any: hospitalization; surgery; medical test; or medication? [ ] [ ] [ ] [ ] [ ] [ ] E. EVER been diagnosed with or treated by a member of the medical profession for Acquired Immune Deficiency Syndrome (AIDS)? [ ] [ ] [ ] [ ] [ ] [ ] F. EVER tested positive for the AIDS human Immunodeficiency Virus (HIV) or for antibodies to the AIDS (HIV) virus? [ ] [ ] [ ] [ ] [ ] [ ] G. EVER used heroin, cocaine, barbituates, or other drugs, except as prescribed by a physician or other licensed practitioner? [ ] [ ] [ ] [ ] [ ] [ ] H. EVER received treatment from a physician or counselor regarding the use of alcohol, or the use of drugs, except for medicinal purposes; or received treatment or advice from an organization that assists those who have an alcohol or drug problem? [ ] [ ] [ ] [ ] [ ] [ ] ___________________________________________________________________________________________________________________________________ DETAILS: If you ANSWERED YES to any of the above questions, please provide details here. QUESTION PROPOSED INSURED NAME OF PHYSICIAN DATE/DURATION DIAGNOSIS/SEVERITY NUMBER NAME ADDRESS IF NOT ALREADY PROVIDED OF ILLNESS MEDICATIONS/TREATMENT ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________ ___________________________________________________________________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) 13 ________________________________________________________________________________ ADDITIONAL USE THIS PAGE FOR ANY ADDITIONAL INFORMATION. INFORMATION ATTACH A SEPARATE SHEET IF NECESSARY. ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ ________________________________________________________________________________ [BAR CODE] ENB-7-05 FF (05/05) 14 ___________________________________________________________________________________________________________________________________ CERTIFICATION/ AGREEMENT/ DISCLOSURE ___________________________________________________________________________________________________________________________________ CERTIFICATION REGARDING SALES ILLUSTRATION Agent must check the appropriate statement below. [ ] Agent certifies that a signed illustration is NOT REQUIRED by law or the policy applied for is not illustrated in this state. [ ] An illustration was signed and MATCHES THE POLICY APPLIED FOR. It is included with this application. [ ] An illustration was shown or provided but is DIFFERENT FROM THE POLICY APPLIED FOR. An illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. [ ] NO ILLUSTRATION CONFORMING TO THE POLICY as applied for was shown or provided prior to or at the time of this application. An illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. [ ] If illustration was ONLY SHOWN ON A COMPUTER SCREEN, check and complete details below. ___________________________________________________________________________________________________________________________________ An illustration was displayed on a computer screen. The displayed illustration MATCHES THE POLICY APPLIED FOR but no printed copy of the illustration was provided. An illustration conforming to the policy as issued will be provided no later than at the time of policy delivery. The illustration on the screen included the following personal and policy information: 1. Gender (as illustrated) [ ] M [ ] F [ ] Unisex Age____________________________________________ 2. Rating class (e.g. standard, smoker) [ ] Preferred [ ] Standard [ ] Non-smoker [ ] Smoker [ ] Other__________________________________________________________________ 3 Type of policy (e.g. L-98, Whole Life)_____________________________________________________________________________________ 4. Initial Death Benefit $_____________________________ Death Benefit Option__________________________________________________ 5. Guaranteed Minimum Death Benefit [ ] age 55 [ ] age 65 [ ] age 75 [ ] age 85 [ ] 5 years 6. Dividend Option____________________________________________________________________________________________________________ 7. Riders_________________________________________________________________________ $__________________________________________ _________________________________________________________________________ $__________________________________________ _________________________________________________________________________ $__________________________________________ FRAUD WARNINGS ARKANSAS, KENTUCKY, LOUISIANA, NEW MEXICO, OHIO, OKLAHOMA Any person who knowingly and with intent to defraud any insurance company or any other person files an application for insurance or statement of claim containing any materially false information, or conceals for the purpose of misleading information concerning any fact material thereto, commits a fraudulent insurance act which is a crime and subjects such person to criminal and civil penalties. WASHINGTON D.C., TENNESSEE, VIRGINIA It is a crime to knowingly provide false, incomplete, or misleading information to an insurance company for the purpose of defrauding the company. Penalties may include imprisonment, fines, or denial of insurance benefits. AGREEMENT/DISCLOSURE I HAVE READ THIS APPLICATION FOR LIFE INSURANCE INCLUDING ANY AMENDMENTS AND SUPPLEMENTS AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, ALL STATEMENTS ARE TRUE AND COMPLETE. I ALSO AGREE THAT: .. My statements in this application and any amendment(s), paramedical/medical exam and supplement(s) are the basis of any policy issued. .. This application and any: amendment(s); paramedical/medical exam; and supplement(s) to this application, will be attached to and become part of the new policy. .. No information will be deemed to have been given to the Company unless it is stated in this application and paramedical/medical exam, and any supplement(s). .. Only the Company's President, Secretary or Vice-President may: (a) make or change any contract of insurance; (b) make a binding promise about insurance; or (c) change or waive any term of an application, receipt, or policy. .. Except as stated in the Temporary Insurance Agreement and Receipt, no insurance will take effect until a policy is delivered to the Owner and the full first premium due is paid. It will only take effect at the time it is delivered if: (a) the condition of health of each person to be insured is the same as stated in the application; and (b) no person to be insured has received any medical advice or treatment from a medical practitioner since the date of the application.
[BAR CODE] ENB-7-05 FF (05/05) 15 ___________________________________________________________________________________________________________________________________ CERTIFICATION/ (CONTINUED) AGREEMENT/ DISCLOSURE ___________________________________________________________________________________________________________________________________ .. I understand that paying my insurance premiums more frequently than annually may result in a higher yearly out-of-pocket cost or different cash values. .. IF I INTEND TO REPLACE EXISTING INSURANCE OR ANNUITIES, I HAVE SO INDICATED IN SECTION 2, QUESTION 2 OF THIS APPLICATION. .. I HAVE RECEIVED THE COMPANY'S CONSUMER PRIVACY NOTICE AND, AS REQUIRED, THE LIFE INSURANCE BUYER'S GUIDE. .. IF I WAS REQUIRED TO SIGN AN HIV INFORMED CONSENT AUTHORIZATION, I HAVE RECEIVED A COPY OF THAT AUTHORIZATION. ___________________________________________________________________________________________________________________________________ TAXPAYER IDENTIFICATION NUMBER CERTIFICATION Under penalties of perjury, I, the Owner, certify that: The number shown in this application is my correct taxpayer identification number, and I am not subject to backup withholding because: (a) I have not been notified by the IRS that I am subject to backup withholding as a result of a failure to report all interest or dividends; OR (b) the IRS has notified me that I am not subject to backup withholding. (IF YOU HAVE BEEN NOTIFIED BY THE IRS THAT YOU ARE CURRENTLY SUBJECT TO BACKUP WITHHOLDING BECAUSE OF UNDER REPORTING INTEREST OR DIVIDENDS ON YOUR TAX RETURN, YOU MUST CROSS OUT AND INITIAL THIS ITEM.) I am a U.S. citizen or a U.S. resident alien for tax purposes. (IF YOU ARE NOT A U.S. CITIZEN OR A U.S. RESIDENT ALIEN FOR TAX PURPOSES, PLEASE CROSS OUT THIS CERTIFICATION AND COMPLETE FORM W-8BEN). PLEASE NOTE: The Internal Revenue Service does not require your consent to any provision of this document other than the certifications required to avoid backup withholding. ___________________________________________________________________________________________________________________________________ SIGNATURES: Signed at City, State_____________________________________ Date__________________________________________ If not witnessing all signatures, => PROPOSED INSURED #1______________________________________________________________________________________ Witness should (age 15 or over) sign next to the signature being Signed at City, State_____________________________________ Date__________________________________________ witnessed. => PROPOSED INSURED #2______________________________________________________________________________________ (age 15 or over) Signed at City, State_____________________________________ Date__________________________________________ => OWNER____________________________________________________________________________________________________ (If other than Proposed Insured) (If age 15 or over) If the Owner is a firm or corporation, include Officer's title with signature. Signed at City, State_____________________________________ Date__________________________________________ => PARENT OR GUARDIAN_______________________________________________________________________________________ (If Owner or Proposed Insured(s) is/are under 18, sign here if not signed above.) Signed at City, State_____________________________________ Date__________________________________________ => WITNESS TO SIGNATURES____________________________________________________________________________________ (Licensed Agent/Producer) PLEASE PRINT AGENT/PRODUCER NAME_________________________________________________________________________
[BAR CODE] ENB-7-05 FF (05/05) ___________________________________________________________________________________________________________________________________ PROPOSED INSURED:___________________________________________________________________________________________ [ ] METROPOLITIAN LIFE INSURANCE COMPANY [ ] METLIFE INVESTORS USA INSURANCE COMPANY VARIABLE RIDERS THE COMPANY INDICATED ABOVE IS REFERRED TO AS "THE COMPANY". SUPPLEMENT This supplement will be attached to and become part of the application with which it is used. OWNER'S INFORMATION Tax bracket ____% Liquid Net Worth $__________________________________________ (EXCLUDE PERSONAL RESIDENCE, AUTOMOBILES & HOME FURNISHINGS.) Prior Investment Experience (CHOOSE ALL THAT APPLY AND INDICATE YOUR YEARS OF EXPERIENCE.) [ ] Certificate of Deposit ______ years [ ] Stocks ______ years [ ] Mutual Funds _____ years [ ] Money Markets ______ years [ ] Bonds ______ years [ ] Other_______________________________________________________________________________________ _____ years Is Owner(s) an associated person of a broker dealer? [ ] YES [ ] NO INVESTMENT OBJECTIVE INVESTMENT OBJECTIVE RISK TOLERANCE AND RISK TOLERANCE Indicate the investment Indicate risk tolerance below. (Choose only one.) Be sure it supports YOUR ALLOCATION FOR objective for your the investment objective and your risk tolerance for the rider(s). EACH RIDER APPLIED rider's (or riders') FOR SHOULD MATCH THE funding options. INVESTMENT OBJECTIVE INDICATED HERE. [ ] Capital Preservation [ ] Conservative [ ] Conservative to Moderate ____________________________________________________________________________________________________________ [ ] Income [ ] Conservative [ ] Conservative to Moderate [ ] Moderate ____________________________________________________________________________________________________________ [ ] Growth & Income [ ] Moderate [ ] Moderate to Aggressive ____________________________________________________________________________________________________________ [ ] Growth [ ] Moderate to Aggressive [ ] Aggressive ____________________________________________________________________________________________________________ [ ] Aggressive Growth [ ] Moderate to Aggressive [ ] Aggressive ____________________________________________________________________________________________________________ Capital Preservation: Seeks income and stability with minimal risk. Income: Seeks current income over time. Growth & Income: Seeks capital appreciation over long term combined with current dividend income. Growth: Seeks capital appreciation over long term. Aggressive Growth: Seeks maximum capital appreciation over time by investing in speculative and/or higher risk securities. ___________________________________________________________________________________________________________________________________ IMPORTANT OWNER Have you received a prospectus for the rider(s) applied for? [ ] YES [ ] NO INFORMATION IF YES, please indicate: Date of prospectus__________________________________________________________________________________________ Date of any prospectus supplement package:__________________________________________________________________ CAREFULLY READ THE FOLLOWING: 1. I understand that the initial Net Premium will be allocated to a fixed interest account of a maximum of 20 calendar days until the investment start date as described in the prospectus. 2. I understand that under the rider(s) cited on the next page, the death benefit and cash value attributed to the rider(s) are not guaranteed and may increase or decrease, even to the extent of being reduced to zero, depending upon its investment experience. 3. Upon request, the Company will provide illustration of benefits, including death benefits and cash values.
EFND-5-06 (xx/xx) eF VARIABLE RIDERS SUPPLEMENT PAGE 2 (CONTINUED) ___________________________________________________________________________________________________________________________________ I REQUEST THE FOLLOWING VARIABLE INSURANCE RIDER(S): ___________________________________________________________________________________________________________________________________ [ ] ENRICHER OPTIONS ALLOCATION FOR ENRICHER OPTIONS: (L98 ONLY) Indicate percentage of Net Premium to be allocated to each funding option. For each funding EQUITY ENRICHER option to which an allocation is made, the percentage must be a whole number. Total allocation (OPTION FOR VARIABLE must equal 100%. The percentage will apply to future premiums unless changed by the Owner. ADDITIONAL BENEFITS) ENRICHER Enricher _____________ .0% (OPTION TO PURCHASE FI Mid Cap Opportunities _____________ .0% ADDITIONAL INSURANCE) MetLife Stock Index _____________ .0% ___________________________________________________________________________________________________________________________________ [ ] EQUITY ADDITIONS ALLOCATION FOR EQUITY ADDITIONS: - DIVIDEND OPTION (L98 ONLY) MetLife Stock Index ______100_____.0% VAI - VARIABLE ADDITIONAL INSURANCE ___________________________________________________________________________________________________________________________________ [ ] ADVANTAGE EQUITY ALLOCATION FOR ADVANTAGE EQUITY ENRICHER: ENRICHER Indicate percentage of Net Premium to be allocated to each funding option. For each funding (AWL ONLY) option to which an allocation is made, the percentage must be a whole number. Total allocation OPTION FOR VARIABLE must equal 100%. The percentage will apply to future permiums unless changed by the Owner. ADDITIONAL BENEFITS Fixed Account _________________ .0% Lehman Brothers(R) Aggregate Bond Index _________________ .0% MetLife Mid Cap Stock Index _________________ .0% MetLife Stock Index _________________ .0% Morgan Stanley EAFE(R) Index _________________ .0% Russell 2000(R) Index _________________ .0% ___________________________________________________________________________________________________________________________________ [ ] ADVANTAGE ALLOCATION FOR ADVANTAGE EQUITY ADDITIONS: EQUITY ADDITIONS Indicate percentage of dividends to be allocated to each funding option. For each funding option - DIVIDEND OPTION to which an allocation is made, the percentage must be a whole number. Total allocation must equal (AWL ONLY) 100%. The percentage will apply to future dividends unless changed by the Owner. VAI - VARIABLE ADDITIONAL INSURANCE Fixed Account _________________ .0% Lehman Brothers(R) Aggregate Bond Index _________________ .0% MetLife Mid Cap Stock Index _________________ .0% MetLife Stock Index _________________ .0% Morgan Stanley EAFE(R) Index _________________ .0% Russell 2000(R) Index _________________ .0% ___________________________________________________________________________________________________________________________________ OPTIONAL AUTOMATED REBALANCER INVESTMENT STRATEGY Available only with the Advantage Equity Enricher and Advantage Equity Additions. Automatically rebalances the cash value in the funding options in the same proportion that the Net Premiums or the dividends are then being allocated. Rebalancing occurs at the end of each calendar quarter (as described in the prospectus). [ ] Advantage Equity Enricher [ ] Advantage Equity Additions EFND-5-06 (xx/xx) eF
EX-99.(K) 6 dex99k.txt OPINION AND CONSENT OF COUNSEL EXHIBIT (K) December 8, 2006 Metropolitan Life Separate Account UL Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166 Ladies and Gentlemen: In my capacity as Associate General Counsel of Metropolitan Life Insurance Company (the "Company"), I am rendering the following opinion in connection with the filing with the Securities and Exchange Commission of an amendment to the registration statement on Form N-6 (File No. 333-131664) under the Securities Act of 1933 and the Investment Company Act of 1940. This Amendment to the Registration Statement is being filed with respect to individual variable additional insurance options issued by Metropolitan Life Separate Account UL (the "Account"). It is my professional opinion that: 1. The Account is a separate investment account of the Company and validly existing pursuant to the laws of the State of New York. 2. The Advantage Equity Options, when issued in accordance with the prospectus contained in the amendment to the Registration Statement and in compliance with applicable local law, are and will be legal and binding obligations of the Company in accordance with their terms; and 3. Assets attributable to reserves and other contract liabilities and held in the Account will not be chargeable with liabilities arising out of any other business the Company may conduct. In forming this opinion, I have made such examination of law and examined such records and other documents as in my judgment are necessary and appropriate. I consent to the filing of this opinion letter as an exhibit to the Registration Statement. Very truly yours. /s/ Marie C. Swift Marie C. Swift Associate General Counsel EX-99.(N) 7 dex99n.txt CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM EXHIBIT (N) CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use in this Pre-Effective Amendment No. 1 /Amendment No. 26 to the Registration Statement No. 333-131664 /811-06025 of Metropolitan Life Separate Account UL on Form N-6 of our report dated March 29, 2006, relating to the financial statements of Metropolitan Life Separate Account UL appearing in the Prospectus, which is part of such Registration Statement, and our report on the financial statements dated April 17, 2006 (October 18, 2006 as to Note 19), relating to Metropolitan Life Insurance Company (which report expresses an unqualified opinion and includes an explanatory paragraph referring to the change in the method of accounting for certain non-traditional long duration contracts and separate accounts, and for embedded derivatives in certain insurance products as required by new accounting guidance which became effective on January 1, 2004, and October 1, 2003, respectively), appearing in the Statement of Additional Information, which is part of such Registration Statement, and to the reference to us under the headings "Independent Registered Public Accounting Firm" in the Prospectus and "Independent Registered Public Accounting Firm" in the Statement of Additional Information, which are parts of such Registration Statement. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida December 7, 2006 EX-99.(R) 8 dex99r.txt POWERS OF ATTORNEY Metropolitan Life Insurance Company Power of Attorney C. Robert Henrikson Chairman of the Board, Chief Executive Officer and President KNOW ALL MEN BY THESE PRESENTS, that I, the Chairman of the Board, Chief Executive Officer and President of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Advantage VUL File No. 333-135659, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), . Paragon Separate Account A (Group American Plus File No. 333-133699 and AFIS File No. 333-133674), . Paragon Separate Account B (Scudder Direct, Multi Manager Direct, Multi Manager II File No 333-133675, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon File No. 333-133671), . Paragon Separate Account C (Fidelity Direct File No. 333-133678 and Fidelity Commission File No. 333-133673), . Paragon Separate Account D (Joint Survivor VUL File No. 333-133698 and Individual Variable Life File No. 333-133672) and at such time as the following separate accounts are merged into the Company: . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 24th day of July, 2006. /s/ C. Robert Henrikson ------------------------- C. Robert Henrikson Metropolitan Life Insurance Company Power of Attorney Curtis H. Barnette Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ Curtis H. Barnette ------------------------- Curtis H. Barnette Metropolitan Life Insurance Company Power of Attorney Burton A. Dole, Jr. Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of April, 2006. /s/ Burton A. Dole ------------------------- Burton A. Dole, Jr. Metropolitan Life Insurance Company Power of Attorney Cheryl W. Grise Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ Cheryl W. Grise ------------------------- Cheryl W. Grise Metropolitan Life Insurance Company Power of Attorney James R. Houghton Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of April, 2006. /s/ James R. Houghton ------------------------- James R. Houghton Metropolitan Life Insurance Company Power of Attorney Harry P. Kamen Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ Harry P. Kamen ------------------------- Harry P. Kamen Metropolitan Life Insurance Company Power of Attorney Helene L. Kaplan Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ Helene L. Kaplan ------------------------- Helene L. Kaplan Metropolitan Life Insurance Company Power of Attorney John M. Keane Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 7th day of April, 2006. /s/ John M. Keane ------------------------- John M. Keane Metropolitan Life Insurance Company Power of Attorney James M. Kilts Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 11th day of April, 2006. /s/ James M. Kilts ----------------------------- James M. Kilts Metropolitan Life Insurance Company Power of Attorney Charles M. Leighton Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of April, 2006. /s/ Charles M. Leighton ------------------------- Charles M. Leighton Metropolitan Life Insurance Company Power of Attorney Sylvia M. Mathews Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ Sylvia M. Mathews ------------------------- Sylvia M. Mathews Metropolitan Life Insurance Company Power of Attorney Hugh B. Price Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ Hugh B. Price ------------------------- Hugh B. Price Metropolitan Life Insurance Company Power of Attorney Kenton J. Sicchitano Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of April, 2006. /s/ Kenton J. Sicchitano ------------------------- Kenton J. Sicchitano Metropolitan Life Insurance Company Power of Attorney William C. Steere, Jr. Director KNOW ALL MEN BY THESE PRESENTS, that I, a Director of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 6th day of April, 2006. /s/ William C. Steere, Jr. -------------------------- William C. Steere, Jr. Metropolitan Life Insurance Company Power of Attorney William J. Wheeler Executive Vice President and Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that I, an Executive Vice President and Chief Financial Officer of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 17th day of April, 2006. /s/ William J. Wheeler ------------------------- William J. Wheeler Metropolitan Life Insurance Company Power of Attorney Joseph J. Prochaska, Jr. Executive Vice President and Chief Accounting Officer KNOW ALL MEN BY THESE PRESENTS, that I, an Executive Vice President and Chief Accounting Officer of Metropolitan Life Insurance Company, a New York company, do hereby appoint Gwenn L. Carr, John E. Connolly, Jr., James L. Lipscomb, Myra L. Saul and Marie C. Swift, and each of them severally, my true and lawful attorney-in-fact, for me and in my name, place and stead to execute and file any instrument or document to be filed as part of or in connection with or in any way related to the Registration Statements and any and all amendments thereto, filed by said Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, in connection with: . Metropolitan Life Separate Account UL (Equity Advantage VUL File No. 033-47927, Equity Options File No. 333-40161, Advantage Equity Options File No. 333-131664, MetFlex File No. 033-57320, Group VUL File No. 033-91226, UL II File No. 033-32813), . Metropolitan Life Separate Account E (Preference Plus File No. 002-90380, Settlement Plus File No. 333-80547, Income Security Plan File No. 333-43970, Preference Plus Select File No. 333-52366, Asset Builder VA File 333-69320, Financial Freedom Select File No. 333-83716, Income Security Plan File 333-105692, Personal Pension Builder Select File No. 333-118214, Preference Plus Income Advantage File No. 333-122883, Personal IncomePlus File No. 333-122897), . The New England Variable Account (Zenith Accumulator File No. 333-11131), . New England Variable Annuity Fund I (File No. 333-11137), . New England Life Retirement Investment Account (Preference File No. 333-11133), . Security Equity Separate Account Thirteen (File No. 333-110185), . Security Equity Separate Account Twenty-Six (File No. 333-110183), and . Security Equity Separate Account Twenty-Seven (File No. 333-110184), and at such time as the following separate accounts are merged into the Company: . Metropolitan Life Separate Account Paragon A (Group America Plus and AFIS Group) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon B (Scudder Direct, Multi Manager Direct, Multi Manager II, Scudder Commission, Multi Manager Commission, Morgan Stanley product, Putnam product, MFS product, Multi Manager Aon) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon C (Fidelity Direct and Fidelity Commission) (expected on or about May 1, 2006), . Metropolitan Life Separate Account Paragon D (Joint Survivor VUL and Individual Variable Life) (expected on or about May 1, 2006), . Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and . First Citicorp Life Variable Annuity Separate Account (CitiVariable Variable Annuity and CitiElite Annuity) (expected on or about October, 2006), and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. Each said attorney-in-fact shall have power to act hereunder with or without the others. IN WITNESS WHEREOF, I have hereunto set my hand this 18th day of April, 2006. /s/ Joseph J. Prochaska, Jr. ---------------------------- Joseph J. Prochaska, Jr. COVER 9 filename9.txt [SUTHERLAND ASBILL & BRENNAN LLP] MARY E. THORNTON DIRECT LINE: 202.383.0698 Internet: mary.thornton@sablaw.com December 8, 2006 VIA EDGAR TRANSMISSION ______________________ Robert S. Lamont, Jr., Esq. Office of Insurance Products Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Re: Pre-Effective Amendments No. 1 to the Registration Statements on Form N-6 for Metropolitan Life Separate Account UL (File No. 333-131664) and MetLife Investors USA Variable Life Account A (File No. 333-131665) ___________________________________________________________________ Dear Mr. Lamont: On behalf of Metropolitan Life Insurance Company ("MetLife") and MetLife Investors USA Insurance Company ("MLI") (together, the "Companies"), enclosed for filing are the Pre-Effective Amendments No. 1 (the "Amendments") to the above captioned Registration Statements on Form N-6. In the Amendments, the Companies have made changes in response to your comments, have included financial statements and all required exhibits, have updated certain information, and have made other stylistic and formatting changes. Also, we are providing responses to your comments of April 20, 2006. Each of your comments is set forth below followed by the Companies' responses. The Companies and their principal underwriters are seeking acceleration of the effectiveness of these registration statements to December 13, 2006, or as soon thereafter as is reasonably practicable. (Copies of these acceleration requests are attached.) Any assistance you and the Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 2 of 9 Staff can provide to the Companies to assist them in meeting this request would be very much appreciated. 1. General Comment COMMENT: Generally, when the value of or benefits under a contract are dependent on investments in securities, the contract itself is a security. Therefore, supplementally, please explain why it is appropriate to register only the variable portion of a life insurance contract and not the entire contract. In this connection please also explain why the contract associated with this filing together with the portion of the contract being registered, differs from other registered variable contracts that offer a fixed or general account option. RESPONSE: The Advantage Equity Options are optional benefits provided by policy rider, which can be elected by an owner of a specific fixed benefit insurance contract issued by either of the Companies. The fixed benefit insurance contract is a separate stand-alone traditional insurance contract and no part of its cash value or death benefit varies in any way based on investments in securities. The Advantage Equity Options riders, if elected, are not part of the underlying fixed benefit insurance contract and the cash values and death benefits associated with the riders are completely separate from the cash value and the death benefit provided under the base contract. Under these circumstances, we feel it is appropriate that only the riders be registered, and not the underlying fixed benefit insurance contract. As noted above, the underlying fixed benefit insurance contract is not a security and should not be registered as such. Although this structure may be unique, we believe it is functionally equivalent to the general or fixed account options available under many variable insurance products. Although the variable contact itself is registered, the general or fixed account option that provides fixed benefits is not registered. Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 3 of 9 2. Cover Page COMMENT: The statements that the prospectus is not the policy and that the actual policy and any endorsements are the controlling documents implies that the prospectus may be incomplete or inaccurate. Also, those statements could mislead policy owners with respect to their rights under the Federal Securities Laws. Accordingly, the disclosure must be revised or deleted. RESPONSE: The statements in question, or some variation thereof, are standard in most variable contract prospectuses. They are included in the prospectus to put contract owners on notice that the contract is first and foremost an insurance contract under state law, and that the contract owner's rights and benefits are defined in that contract. They are also intended to alert contract owners to the fact that there are state variations among contracts and that contract owners must therefore consult their own contract for the terms that apply in their state. We do not believe that such disclosure should be deleted and do not think that it implies that the prospectus is incomplete. Nonetheless, we have revised the language of the MLI version of the prospectus as follows: This prospectus provides you with important information about the Advantage Equity Options. However, we will also issue you a Policy, which is a separate document from the prospectus. There may be differences between the description of the Policy (including the Advantage Equity Options) contained in this prospectus and the Policy issued to you due to differences in state law. Please consult your Policy (and the Advantage Equity Options rider attached to your Policy) for the provisions that apply in your state. In view of the fact that MetLife will only offer the Advantage Equity Options in the state of New York, we have revised the language of the MetLife version of the prospectus to read as follows: This prospectus provides you with important information about the Advantage Equity Options. However, we will also issue you a Policy, which is a separate document from the prospectus. The prospectus describes the Policy's important provisions. 3. Summary of Benefits and Risks (Page 3) Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 4 of 9 COMMENT: Please define Loan Collateral Account. RESPONSE: We have modified the description of loans as follows: LOANS. You may borrow from the Policy, including the Advantage Equity Options. The maximum loan amount you may take is the Policy's loan value. The loan value equals the Policy's cash surrender value at the end of the current Policy year, less anticipated loan interest and required premiums due for the remainder of the current Policy year. We will first secure any loan against the parts of your Policy other than the Advantage Equity Options. If we must secure a loan against the Advantage Equity Options, we will transfer the amount of cash value needed to secure the loan from the investment divisions and/or the Fixed Account to an account called the Loan Collateral Account, where we will hold the transferred cash value for as long as it is needed to secure the loan. We charge you a maximum annual interest rate of 6% on the amount you borrow. However, we credit you with an annual rate of interest of at least 4% on the amounts held in the Loan Collateral Account. Loans may have tax consequences. 4. Transaction Fees (Page 6) COMMENT: According to the disclosure on page 8, premiums may be paid into the Advantage Equity Options and, according to the disclosure on page 35, the gross dealer concession amount is 4.75% of the Advantage Equity Enricher premiums in all Policy years. However, the fee tables do not disclose distribution charges of any type. Please explain. RESPONSE: The gross dealer concession is a measure of the compensation that may be paid to a sales representative for the sale of the Advantage Equity Enricher. It is not a Policy charge and therefore should not be disclosed in the fee table. All charges imposed on the contract owner are disclosed in the fee table. There is no sales load imposed for either the Advantage Equity Enricher or Advantage Equity Additions. As shown in the fee table, however, there is an expense charge that applies to Advantage Equity Enricher (but not Advantage Equity Additions). 5. Periodic Charges Other than Portfolio Operating Expenses (Page 6) Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 5 of 9 COMMENT: Please explain why the representative policy owner under the Advantage Equity Additions and the Advantage Equity Enricher are different. RESPONSE: The representative insured information set forth in the table is taken directly from the representative insured information that appears in the current prospectus for the existing Equity Options. It reflects the characteristics of the insureds under the Equity Additions and Equity Enricher riders that MetLife has previously issued. 6. The Fixed Account (Pages 7 and 12) COMMENT: The disclosure that the company can restrict allocations to the Fixed Account if the effective annual rate on those amounts would be 4% is confusing in light of the preceding disclosure that interest will be at an effective annual rate of at least 4%. Please clarify the disclosure. RESPONSE: We have revised the disclosure as follows: We reserve the right to restrict allocations and transfers to the Fixed Account at any time in our sole discretion. 7. Annual Portfolio Operating Expenses (Page 7; footnote *) COMMENT: Net total expenses may only be included in the fee table if the fee waivers and expense reimbursements are contractual and extend for a period of one year from the date of the prospectus. Voluntary waivers or those for less than one year may be included in a footnote. Therefore, a contractual arrangement that ends on December 31, 2006 can not be reflected in the fee table. RESPONSE: We have removed this footnote. 8. Separate Account (page 8) COMMENT: Please explain to the staff the meaning of the phrase "the value of our commitments." In the text of the prospectus, please clarify that charges deducted include only those that have already been earned and not those due at a future date or those contingent on future events. In addition, please disclose the nature of "other excess amounts" that may be taken out of the separate account. Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 6 of 9 RESPONSE: We have replaced the sentence containing the reference to "the value of our commitment" with the following: Applicable law provides that the portion of the Separate Account assets equal to the reserves and other liabilities of the Separate Account may not be charged with liabilities that arise out of any other business we conduct. Moreover, the charges that are deducted include only those that have already been earned and not those due a future date or those contingent upon future events. We have revised the sentence containing the phrase "the excess amount" as follows: Excess assets may include, without limitation, amounts representing fees and charges incurred, but not yet deducted from the Separate Account. The market value of assets in the Separate Account will always equal or exceed the market value of assets attributable to Policy Owners. 9. Voting Rights (page 11) COMMENT: Please disclose that the effect of proportional voting is that a small number of policy owners may control the outcome of a vote. RESPONSE: We have added this disclosure. 10. The Base Policy and its Benefit Options (page 12) COMMENT: Please disclose and explain why someone would choose the Advantage Equity Additions option over the Advantage Equity Enricher option or vice versa? Although other aspects of the options differ, the descriptions of their benefits on page 12 are identical. Also, the examples on page 19 only illustrate how the Advantage Equity Additions benefit works. Please include similar disclosure for the Advantage Equity Enricher and state whether there is an extra fee for this option. RESPONSE: The Advantage Equity Options differ from one another in the manner in which each is purchased. Advantage Equity Additions can only be purchased by using dividends paid on the underlying fixed benefit policy. It cannot be purchased with premiums payments. For contract owners looking for a limited investment in the securities markets, Advantage Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 7 of 9 Equity Additions would be appropriate. For a contract owner looking to invest more than the amount of the policy dividends, while still enjoying the guarantees provided by the underlying fixed benefit policy, the Advantage Equity Enricher would be appropriate. The example on page 19 applies equally to either Advantage Equity Option. To avoid any confusion, we have changed the example to refer generically to the "Advantage Equity Options" death benefit. 11. Net Single Premium (page 19) COMMENT: Please define "Net single Premium" on page 19 or provide a cross-reference to page 29 where the term in defined. RESPONSE: We have provided a cross reference. 12. Transfer Fee (Page 22) COMMENT: Please disclose the $25 transfer fee in the fee table. RESPONSE: We have added this fee to the fee table. 13. Charges (page 28) COMMENT: Please explain to the staff why an extra charge is necessary for the Advantage Equity Enricher option and not the Advantage Equity Additions option? RESPONSE: We pay compensation to sales agents for premiums paid into the Advantage Equity Enricher. We do not pay any compensation with respect to Advantage Equity Additions. 14. Payment and Deferment (Page 34) COMMENT: Please clarify that payouts or transfers may be deferred if there is an emergency as determined by the Securities and Exchange Commission. RESPONSE: We have added this disclosure. 15. Illustrations Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 8 of 9 COMMENT: Please update the average gross portfolio expenses to reflect 2005 expenses for the portfolios. RESPONSE: We have provided this information. 16. Powers of Attorney COMMENT: In accordance with Rule 483(b) under the Securities Act of 1933, as amended, exhibits for certain registration statements, please provide powers of attorney that relate to this filing, specifically. RESPONSE: We have provided powers of attorney that relate to this filing. 17. Financial statements, exhibits, and other information. COMMENT: Financial statements, exhibits, and other information not included in this registration statement should be filed by pre-effective amendment. RESPONSE: Financial statements, exhibits, and other information not included in the initial registration statements have been included in these Amendments. 18. Tandy Comment COMMENT: We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filings reviewed by the staff to be certain that they have provided all information investors require for an informed decision. Since the insurance company and its management are in possession of all facts relating to the insurance company's disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made. Notwithstanding our comments, in the event the insurance company requests acceleration of the effective date of the pending registration statement, it should furnish a letter, at the time of such request, acknowledging that . should the Commission or the staff, acting pursuant to delegated authority, declare the filing effective, it does not foreclose the Commission from taking any action with respect to the filing; . the action of the Commission or the staff, acting pursuant to delegated authority, in declaring the fling effective, does not Robert S. Lamont, Jr., Esq. December 8, 2006 ________________ Page 9 of 9 relieve the insurance company from its full responsibility for the adequacy and accuracy of the disclosure in the filing; and . the insurance company may not assert this action as defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States. In addition, please be advised that the Division of Enforcement has access to all information you provide to the staff of the Division of Investment Management in connection with our review of your filing or in response to our comments on your filing. We will consider a written request for acceleration of the effective date of the registration statement as a confirmation of the fact that those requesting acceleration are aware of their respective responsibilities. RESPONSE: The Companies have written a letter to the staff acknowledging the Tandy Comment (copies of the Companies' letters are enclosed). * * * We hope you find these responses satisfactory. If you have any questions or further comments, please call the undersigned at 202.383.0698. Sincerely, /s/ Mary E. Thornton - ------------------------- Mary E. Thornton cc: John E. Connolly, Jr., Esq. CORRESP 10 filename10.txt Metropolitan Life Insurance Company 501 Boylston Street Boston, Massachusetts 02116 December 8, 2006 Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549 Re: Form N-6 Registration Statement for Variable Additional Insurance Options to be Issued through Metropolitan Life Separate Account UL (File No. 333-131664) Commissioners: Pursuant to Rule 461 under the Securities Act of 1933, Metropolitan Life Insurance Company, on its own behalf as Depositor and principal underwriter and on behalf of Metropolitan Life Separate Account UL, respectfully requests that the effective date of the Registration Statement referred to above be accelerated and that the Registration Statement be declared effective on December 13, 2006. Very truly yours, Metropolitan Life Insurance Company /s/ John E. Connolly, Jr. ----------------------------- John E. Connolly, Jr., Esq. Assistant General Counsel CORRESP 11 filename11.txt Metropolitan Life Insurance Company 501 Boylston Street Boston, Massachusetts 02116 December 8, 2006 Robert S. Lamont, Jr., Esq. Office of Insurance Products Division of Investment Management Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549-0506 Re: Form N-6 Registration Statement for Variable Additional Insurance Options to be Issued through Metropolitan Life Separate Account UL (File No. 333-131664) Dear Mr. Lamont: Metropolitan Life Insurance Company (the "Depositor") and Metropolitan Life Separate Account UL (the "Registrant"), acknowledge with respect to the above referenced filing that: . Should the Commission or the Staff, acting pursuant to delegated authority, permit the filing to go effective pursuant to Rule 485(b)(1)(vii), it does not foreclose the Commission from taking any action with respect to the filing; and . The action of the Commission or the Staff, acting pursuant to delegated authority, in permitting the filing to go effective pursuant to Rule 485(b)(1)(vii), does not relieve the Depositor and Registrant from full responsibility for the adequacy and accuracy of the disclosure in the filing; and . Depositor and Registrant may not assert this action as a defense in any proceeding initiated by the Commission or any other person under the federal securities laws of the United States. If you have any questions or further comments, please call Mary Thornton at (202) 383-0698 or Jack Connolly at (617) 578-3031. Very truly yours, Metropolitan Life Insurance Company By: /s/ John E. Connolly, Jr. ----------------------------------- John E. Connolly, Jr., Esq. Assistant General Counsel Metropolitan Life Insurance Company Cc: Mary E. Thornton, Partner Sutherland Asbill & Brennan LLP -----END PRIVACY-ENHANCED MESSAGE-----