0001193125-13-174841.txt : 20130426
0001193125-13-174841.hdr.sgml : 20130426
20130425204157
ACCESSION NUMBER: 0001193125-13-174841
CONFORMED SUBMISSION TYPE: 497
PUBLIC DOCUMENT COUNT: 1
FILED AS OF DATE: 20130426
DATE AS OF CHANGE: 20130425
EFFECTIVENESS DATE: 20130426
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL
CENTRAL INDEX KEY: 0000858997
IRS NUMBER: 135581829
STATE OF INCORPORATION: NY
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 497
SEC ACT: 1933 Act
SEC FILE NUMBER: 033-32813
FILM NUMBER: 13784486
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
C000023054
UL II 1990-93
497
1
d444557d497.txt
UL II 1990-93 SUPPLEMENT DATED APRIL 29, 2013
METROPOLITAN LIFE INSURANCE COMPANY
UL II -- FLEXIBLE PREMIUM MULTIFUNDED LIFE INSURANCE POLICIES
SUPPLEMENT DATED APRIL 29, 2013 TO
Prospectus Dated April 30, 1993 as previously amended
This supplement updates certain information contained in your last prospectus,
as annually and periodically supplemented. You should read and retain this
supplement with your Policy. We will send you an additional copy of your most
recent prospectus (and any previous supplements thereto), without charge, on
written request sent to MetLife, P.O. Box 543, Warwick, RI 02887-0543. New UL
II Policies are no longer available for sale.
You allocate net premiums to and may transfer cash value among the available
investment divisions of the Metropolitan Life Separate Account UL. Each
available investment division, in turn, invests in the shares of one of the
following Portfolios:
AMERICAN FUNDS INSURANCE SERIES(R) (CLASS 2 SHARES)
American Funds Bond Fund
American Funds Global Small Capitalization Fund
American Funds Growth Fund
American Funds Growth-Income Fund
MET INVESTORS SERIES TRUST (CLASS A SHARES)
BlackRock Large Cap Core Portfolio
Clarion Global Real Estate Portfolio
ClearBridge Aggressive Growth Portfolio (formerly Legg Mason ClearBridge
Aggressive Growth Portfolio)
Harris Oakmark International Portfolio
Invesco Small Cap Growth Portfolio
Janus Forty Portfolio
Lord Abbett Bond Debenture Portfolio
Lord Abbett Mid Cap Value Portfolio
MetLife Aggressive Strategy Portfolio
MFS(R) Research International Portfolio
Morgan Stanley Mid Cap Growth Portfolio
Oppenheimer Global Equity Portfolio
PIMCO Inflation Protected Bond Portfolio
PIMCO Total Return Portfolio
SSgA Growth and Income ETF Portfolio
SSgA Growth ETF Portfolio
T. Rowe Price Mid Cap Growth Portfolio
METROPOLITAN SERIES FUND (CLASS A SHARES)
Baillie Gifford International Stock Portfolio
Barclays Aggregate Bond Index Portfolio (formerly Barclays Capital Aggregate
Bond Index Portfolio)
BlackRock Bond Income Portfolio
BlackRock Capital Appreciation Portfolio (formerly BlackRock Legacy Large Cap
Growth Portfolio)
BlackRock Diversified Portfolio
BlackRock Large Cap Value Portfolio
BlackRock Money Market Portfolio
Davis Venture Value Portfolio
Frontier Mid Cap Growth Portfolio
(formerly BlackRock Aggressive Growth Portfolio)
Jennison Growth Portfolio
Loomis Sayles Small Cap Core Portfolio
Loomis Sayles Small Cap Growth Portfolio
Met/Artisan Mid Cap Value Portfolio
MetLife Conservative Allocation Portfolio
MetLife Conservative to Moderate Allocation Portfolio
MetLife Mid Cap Stock Index Portfolio
MetLife Moderate Allocation Portfolio
MetLife Moderate to Aggressive Allocation Portfolio
MetLife Stock Index Portfolio
MFS(R) Total Return Portfolio
MFS(R) Value Portfolio
MSCI EAFE(R) Index Portfolio
Neuberger Berman Genesis Portfolio
Russell 2000(R) Index Portfolio
T. Rowe Price Large Cap Growth Portfolio
T. Rowe Price Small Cap Growth Portfolio
Western Asset Management Strategic Bond
Opportunities Portfolio
Western Asset Management U.S. Government Portfolio
The prospectuses for the Portfolios describe in greater detail an investment in
the Portfolios. YOU CAN OBTAIN PROSPECTUSES FOR THE PORTFOLIOS BY CALLING
1-800-638-5000.
1
SENDING COMMUNICATIONS AND PAYMENTS TO US
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;
changing your death benefit option; taking a partial withdrawal; surrendering
your Policy; making transfer requests (including elections with respect to the
automated investment strategies) or changing your premium allocations. As of
the date of this prospectus, requests for partial withdrawals and Policy loans
must be in writing. However, you should contact us at 1-800-MET-5000 for our
current procedures. Below is a list of our Designated Offices for various
functions. 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
information on where to direct communication regarding any function not listed
below or for any other inquiry.
FUNCTION DESIGNATED OFFICE ADDRESS
---------------------------------------------------------------------------------
Premium Payments MetLife P.O. Box 371351, Pittsburgh, PA
15250-7351
---------------------------------------------------------------------------------
Payment Inquiries MetLife, P.O. Box 354, Warwick, RI
02887-0354
---------------------------------------------------------------------------------
Surrenders, Withdrawals, Loans, MetLife, P.O. Box 543, Warwick, RI
Investment Division Transfers, 02887-0543
Premium Reallocation
---------------------------------------------------------------------------------
Death Claims MetLife, P.O. Box 353, Warwick, RI
02887-0353
---------------------------------------------------------------------------------
Beneficiary & Assignment MetLife, P.O. Box 313, Warwick, RI
02887-0313
---------------------------------------------------------------------------------
Address Changes MetLife, 500 Schoolhouse Road,
Johnstown, PA 15904
Attn: Data Integrity
---------------------------------------------------------------------------------
Reinstatements MetLife, P.O. Box 30375, Tampa, FL 33630
---------------------------------------------------------------------------------
If you send your premium payments or transaction requests to an address other
than the one we have designated for receipt of such premium payments or
requests, we may return the premium payment to you, or there may be a delay in
applying the premium payment or transaction to your Policy.
THE SEPARATE ACCOUNT
The following is added to this section:
The investment adviser to certain of the Portfolios offered with the Policy or
with other variable life insurance policies issued through the Separate Account
may be regulated as Commodity Pool Operators. While it does not concede that
the Separate Account is a commodity pool, MetLife has claimed an exclusion from
the definition of the term "commodity pool operator" under the Commodities
Exchange Act ("CEA"), and is not subject to registration or regulation as a
pool operator under the CEA.
THE FUNDS AND THEIR PORTFOLIOS
The following replaces the section entitled "Management of the Portfolios".
MANAGEMENT OF PORTFOLIOS
Each Fund has an investment adviser who is responsible for overall management
of the Fund. These investment advisers have contracted with sub-advisers to
make the day-to-day investment decisions for some of the Portfolios.
2
The adviser, any sub-adviser and investment objective of each Portfolio are as
follows:
INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
------------------------------------------------------------------------------------------------------------------------
AMERICAN FUNDS INSURANCE SERIES(R)--CLASS 2
------------------------------------------------------------------------------------------------------------------------
American Funds Bond Fund Seeks as high a level of current Capital Research and
income as is consistent with the Management Company
preservation of capital.
------------------------------------------------------------------------------------------------------------------------
American Funds Global Small Capitalization Fund Seeks long-term growth of capital. Capital Research and
Management Company
------------------------------------------------------------------------------------------------------------------------
American Funds Growth Fund Seeks growth of capital. Capital Research and
Management Company
------------------------------------------------------------------------------------------------------------------------
American Funds Growth-Income Fund Seeks long-term growth of capital Capital Research and
and income. Management Company
------------------------------------------------------------------------------------------------------------------------
MET INVESTORS SERIES TRUST--CLASS A
------------------------------------------------------------------------------------------------------------------------
BlackRock Large Cap Core Portfolio Seeks long-term capital growth. MetLife Advisers, LLC
Subadviser: BlackRock Advisors,
LLC
------------------------------------------------------------------------------------------------------------------------
Clarion Global Real Estate Portfolio Seeks total return through MetLife Advisers, LLC
investment in real estate securities, Subadviser: CBRE Clarion
emphasizing both capital Securities LLC
appreciation and current income.
------------------------------------------------------------------------------------------------------------------------
ClearBridge Aggressive Growth Portfolio Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: ClearBridge
Investments, LLC (formerly
ClearBridge Advisors, LLC)
------------------------------------------------------------------------------------------------------------------------
Harris Oakmark International Portfolio Seeks long-term capital MetLife Advisers, LLC
appreciation. Subadviser: Harris Associates
L.P.
------------------------------------------------------------------------------------------------------------------------
Invesco Small Cap Growth Portfolio Seeks long-term growth of capital. MetLife Advisers, LLC
Subadviser: Invesco Advisers,
Inc.
------------------------------------------------------------------------------------------------------------------------
Janus Forty Portfolio Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: Janus Capital
Management LLC
------------------------------------------------------------------------------------------------------------------------
Lord Abbett Bond Debenture Portfolio Seeks high current income and MetLife Advisers, LLC
the opportunity for capital Subadviser: Lord, Abbett & Co.
appreciation to produce a high LLC
total return.
------------------------------------------------------------------------------------------------------------------------
Lord Abbett Mid Cap Value Portfolio Seeks capital appreciation MetLife Advisers, LLC
through investments, primarily in Subadviser: Lord, Abbett & Co.
equity securities, which are LLC
believed to be undervalued in the
marketplace.
------------------------------------------------------------------------------------------------------------------------
MetLife Aggressive Strategy Portfolio Seeks growth of capital. MetLife Advisers, LLC
------------------------------------------------------------------------------------------------------------------------
MFS(R) Research International Portfolio Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: Massachusetts
Financial Services Company
------------------------------------------------------------------------------------------------------------------------
Morgan Stanley Mid Cap Growth Portfolio Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: Morgan Stanley
Investment Management Inc.
------------------------------------------------------------------------------------------------------------------------
Oppenheimer Global Equity Portfolio Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: OppenheimerFunds,
Inc.
------------------------------------------------------------------------------------------------------------------------
PIMCO Inflation Protected Bond Portfolio Seeks maximum real return, MetLife Advisers, LLC
consistent with preservation of Subadviser: Pacific Investment
capital and prudent investment Management Company LLC
management.
------------------------------------------------------------------------------------------------------------------------
PIMCO Total Return Portfolio Seeks maximum total return, MetLife Advisers, LLC
consistent with the preservation Subadviser: Pacific Investment
of capital and prudent investment Management Company LLC
management.
------------------------------------------------------------------------------------------------------------------------
3
INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
-------------------------------------------------------------------------------------------------------------------
SSgA Growth and Income ETF Portfolio Seeks growth of capital and MetLife Advisers, LLC
income. Subadviser: SSgA Funds
Management, Inc.
-------------------------------------------------------------------------------------------------------------------
SSgA Growth ETF Portfolio Seeks growth of capital. MetLife Advisers, LLC
Subadviser: SSgA Funds
Management, Inc.
-------------------------------------------------------------------------------------------------------------------
T. Rowe Price Mid Cap Growth Portfolio Seeks long-term growth of capital. MetLife Advisers, LLC
Subadviser: T. Rowe Price
Associates, Inc.
-------------------------------------------------------------------------------------------------------------------
METROPOLITAN SERIES FUND--CLASS A
-------------------------------------------------------------------------------------------------------------------
Baillie Gifford International Stock Portfolio Seeks long-term growth of capital. MetLife Advisers, LLC
Subadviser: Baillie Gifford
Overseas Limited
-------------------------------------------------------------------------------------------------------------------
Barclays Aggregate Bond Index Portfolio Seeks to track the performance of MetLife Advisers, LLC
the Barclays U.S. Aggregate Subadviser: MetLife Investment
Bond Index. Management, LLC
-------------------------------------------------------------------------------------------------------------------
BlackRock Bond Income Portfolio Seeks a competitive total return MetLife Advisers, LLC
primarily from investing in fixed- Subadviser: BlackRock Advisors,
income securities. LLC
-------------------------------------------------------------------------------------------------------------------
BlackRock Capital Appreciation Portfolio Seeks long-term growth of capital. MetLife Advisers, LLC
Subadviser: BlackRock Advisors,
LLC
-------------------------------------------------------------------------------------------------------------------
BlackRock Diversified Portfolio Seeks high total return while MetLife Advisers, LLC
attempting to limit investment Subadviser: BlackRock Advisors,
risk and preserve capital. LLC
-------------------------------------------------------------------------------------------------------------------
BlackRock Large Cap Value Portfolio Seeks long-term growth of capital. MetLife Advisers, LLC
Subadviser: BlackRock Advisors,
LLC
-------------------------------------------------------------------------------------------------------------------
BlackRock Money Market Portfolio/2/ Seeks a high level of current MetLife Advisers, LLC
income consistent with Subadviser: BlackRock Advisors,
preservation of capital. LLC
-------------------------------------------------------------------------------------------------------------------
Davis Venture Value Portfolio Seeks growth of capital. MetLife Advisers, LLC
Subadviser: Davis Selected
Advisers, L.P.
-------------------------------------------------------------------------------------------------------------------
Frontier Mid Cap Growth Portfolio Seeks maximum capital MetLife Advisers, LLC
appreciation. Subadviser: Frontier Capital
Management Company, LLC/1/
-------------------------------------------------------------------------------------------------------------------
Jennison Growth Portfolio Seeks long-term growth of capital. MetLife Advisers, LLC
Subadviser: Jennison Associates
LLC
-------------------------------------------------------------------------------------------------------------------
Loomis Sayles Small Cap Core Portfolio Seeks long-term capital growth MetLife Advisers, LLC
from investments in common Subadviser: Loomis, Sayles &
stocks or other equity securities. Company, L.P.
-------------------------------------------------------------------------------------------------------------------
Loomis Sayles Small Cap Growth Portfolio Seeks long-term capital growth. MetLife Advisers, LLC
Subadviser: Loomis, Sayles &
Company, L.P.
-------------------------------------------------------------------------------------------------------------------
Met/Artisan Mid Cap Value Portfolio Seeks long-term capital growth. MetLife Advisers, LLC
Subadviser: Artisan Partners
Limited Partnership
-------------------------------------------------------------------------------------------------------------------
MetLife Conservative Allocation Portfolio Seeks a high level of current MetLife Advisers, LLC
income, with growth of capital as
a secondary objective.
-------------------------------------------------------------------------------------------------------------------
MetLife Conservative to Moderate Allocation Seeks high total return in the MetLife Advisers, LLC
Portfolio form of income and growth of
capital, with a greater emphasis
on income.
-------------------------------------------------------------------------------------------------------------------
MetLife Mid Cap Stock Index Portfolio Seeks to track the performance of MetLife Advisers, LLC
the S&P MidCap 400(R) Composite Subadviser: MetLife Investment
Stock Price Index. Management, LLC
-------------------------------------------------------------------------------------------------------------------
4
INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------------------------------------------------------------------------------------------------------
MetLife Moderate Allocation Portfolio Seeks a balance between a high MetLife Advisers, LLC
level of current income and
growth of capital, with a greater
emphasis on growth of capital.
----------------------------------------------------------------------------------------------------------------
MetLife Moderate to Aggressive Allocation Seeks growth of capital. MetLife Advisers, LLC
Portfolio
----------------------------------------------------------------------------------------------------------------
MetLife Stock Index Portfolio Seeks to track the performance of MetLife Advisers, LLC
the S&P 500(R) Composite Stock Subadviser: MetLife Investment
Price Index. Management, LLC
----------------------------------------------------------------------------------------------------------------
MFS(R) Total Return Portfolio Seeks a favorable total return MetLife Advisers, LLC
through investment in a Subadviser: Massachusetts
diversified portfolio. Financial Services Company
----------------------------------------------------------------------------------------------------------------
MFS(R) Value Portfolio Seeks capital appreciation. MetLife Advisers, LLC
Subadviser: Massachusetts
Financial Services Company
----------------------------------------------------------------------------------------------------------------
MSCI EAFE(R) Index Portfolio Seeks to track the performance of MetLife Advisers, LLC
the MSCI EAFE(R) Index. Subadviser: MetLife Investment
Management, LLC
----------------------------------------------------------------------------------------------------------------
Neuberger Berman Genesis Portfolio Seeks high total return, consisting MetLife Advisers, LLC
principally of capital appreciation. Subadviser: Neuberger Berman
Management LLC
----------------------------------------------------------------------------------------------------------------
Russell 2000(R) Index Portfolio Seeks to track the performance of MetLife Advisers, LLC
the Russell 2000(R) Index. Subadviser: MetLife Investment
Management, LLC
----------------------------------------------------------------------------------------------------------------
T. Rowe Price Large Cap Growth Portfolio Seeks long-term growth of capital MetLife Advisers, LLC
and, secondarily, dividend income. Subadviser: T. Rowe Price
Associates, Inc.
----------------------------------------------------------------------------------------------------------------
T. Rowe Price Small Cap Growth Portfolio Seeks long-term capital growth. MetLife Advisers, LLC
Subadviser: T. Rowe Price
Associates, Inc.
----------------------------------------------------------------------------------------------------------------
Western Asset Management Strategic Bond Seeks to maximize total return MetLife Advisers, LLC
Opportunities Portfolio consistent with preservation of Subadviser: Western Asset
capital. Management Company
----------------------------------------------------------------------------------------------------------------
Western Asset Management U.S. Government Seeks to maximize total return MetLife Advisers, LLC
Portfolio consistent with preservation of Subadviser: Western Asset
capital and maintenance of Management Company
liquidity.
--------
/1/ Prior to January 7, 2013, BlackRock Advisors, LLC was the subadviser to the
Portfolio.
/2/ An investment in the BlackRock Money Market Portfolio is not insured or
guaranteed by the Federal Deposit Insurance Corporation or any other
government agency. Although the Portfolio seeks to preserve the value of
your investment at $100 per share, it is possible to lose money by
investing in the Portfolio. During extended periods of low interest rates,
the yields of the investment division in the BlackRock Money Market
Portfolio may become extremely low and possibly negative.
A Portfolio may have a name and/or objective that is very similar to that of a
publicly available mutual fund that is managed by the same sub-investment
manager or adviser. 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.
5
FEE TABLES
The following replaces the section entitled "Annual Portfolio Operating
Expenses".
ANNUAL PORTFOLIO OPERATING EXPENSES
The following tables describe 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 a Policy. The first table shows the minimum and
maximum fees and expenses charged by the Portfolios for the fiscal year ended
December 31, 2012. More detail concerning each Portfolio's fees and expenses is
contained in the table that follows this table and in the prospectuses for the
Portfolios. Certain Portfolios may impose a redemption fee in the future.
The next table describes the annual operating expenses for each Portfolio for
the year ended December 31, 2012, as a percentage of the Portfolio's average
daily net assets for the year (before and after fee waivers and expense
reimbursements).
MINIMUM AND MAXIMUM TOTAL ANNUAL PORTFOLIO OPERATING EXPENSES
-----------------------------------------------------------------------------------------------
MINIMUM MAXIMUM
-----------------------------------------------------------------------------------------------
Total Annual Portfolio Operating Expenses
(expenses that are deducted from Portfolio assets, including management fees,
distribution and/or service (12b-1) fees, and other expenses) 0.28% 1.07%
-----------------------------------------------------------------------------------------------
PORTFOLIO FEES AND EXPENSES
(as a percentage of average daily net assets)
-------------------------------------------------------------------------------------------------
DISTRIBUTION
AND/OR ACQUIRED TOTAL NET TOTAL
SERVICE FUND ANNUAL FEE WAIVER ANNUAL
MANAGEMENT (12B-1) OTHER FEES AND OPERATING AND/OR EXPENSE OPERATING
FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
-------------------------------------------------------------------------------------------------
AMERICAN FUNDS
INSURANCE
SERIES(R) --
CLASS 2
-------------------------------------------------------------------------------------------------
American Funds
Bond Fund 0.37% 0.25% 0.02% -- 0.64% -- 0.64%
-------------------------------------------------------------------------------------------------
American Funds
Global Small
Capitalization
Fund 0.71% 0.25% 0.04% -- 1.00% -- 1.00%
-------------------------------------------------------------------------------------------------
American Funds
Growth Fund 0.33% 0.25% 0.02% -- 0.60% -- 0.60%
-------------------------------------------------------------------------------------------------
American Funds
Growth-Income
Fund 0.27% 0.25% 0.02% -- 0.54% -- 0.54%
-------------------------------------------------------------------------------------------------
MET INVESTORS
SERIES TRUST --
CLASS A
-------------------------------------------------------------------------------------------------
BlackRock Large
Cap Core
Portfolio 0.59% -- 0.05% -- 0.64% 0.01% 0.63%
-------------------------------------------------------------------------------------------------
Clarion Global Real
Estate Portfolio 0.60% -- 0.06% -- 0.66% -- 0.66%
-------------------------------------------------------------------------------------------------
ClearBridge
Aggressive
Growth Portfolio 0.61% -- 0.03% -- 0.64% -- 0.64%
-------------------------------------------------------------------------------------------------
Harris Oakmark
International
Portfolio 0.77% -- 0.06% -- 0.83% 0.02% 0.81%
-------------------------------------------------------------------------------------------------
6
-------------------------------------------------------------------------------------------------
DISTRIBUTION
AND/OR ACQUIRED TOTAL NET TOTAL
SERVICE FUND ANNUAL FEE WAIVER ANNUAL
MANAGEMENT (12B-1) OTHER FEES AND OPERATING AND/OR EXPENSE OPERATING
FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
-------------------------------------------------------------------------------------------------
Invesco Small Cap
Growth Portfolio 0.85% -- 0.02% -- 0.87% 0.01% 0.86%
-------------------------------------------------------------------------------------------------
Janus Forty
Portfolio 0.63% -- 0.03% -- 0.66% 0.01% 0.65%
-------------------------------------------------------------------------------------------------
Lord Abbett Bond
Debenture
Portfolio 0.51% -- 0.03% -- 0.54% -- 0.54%
-------------------------------------------------------------------------------------------------
Lord Abbett Mid
Cap Value
Portfolio 0.65% -- 0.04% 0.06% 0.75% 0.00% 0.75%
-------------------------------------------------------------------------------------------------
MetLife Aggressive
Strategy Portfolio 0.09% -- 0.01% 0.72% 0.82% -- 0.82%
-------------------------------------------------------------------------------------------------
MFS(R) Research
International
Portfolio 0.68% -- 0.07% -- 0.75% 0.05% 0.70%
-------------------------------------------------------------------------------------------------
Morgan Stanley Mid
Cap Growth
Portfolio 0.65% -- 0.07% -- 0.72% 0.01% 0.71%
-------------------------------------------------------------------------------------------------
Oppenheimer Global
Equity Portfolio 0.67% -- 0.09% -- 0.76% 0.02% 0.74%
-------------------------------------------------------------------------------------------------
PIMCO Inflation
Protected Bond
Portfolio 0.47% -- 0.11% -- 0.58% -- 0.58%
-------------------------------------------------------------------------------------------------
PIMCO Total
Return Portfolio 0.48% -- 0.03% -- 0.51% -- 0.51%
-------------------------------------------------------------------------------------------------
SSgA Growth and
Income ETF
Portfolio 0.31% -- 0.01% 0.24% 0.56% -- 0.56%
-------------------------------------------------------------------------------------------------
SSgA Growth ETF
Portfolio 0.32% -- 0.03% 0.25% 0.60% -- 0.60%
-------------------------------------------------------------------------------------------------
T. Rowe Price Mid
Cap Growth
Portfolio 0.75% -- 0.03% -- 0.78% -- 0.78%
-------------------------------------------------------------------------------------------------
METROPOLITAN
SERIES FUND --
CLASS A
-------------------------------------------------------------------------------------------------
Baillie Gifford
International
Stock Portfolio 0.81% -- 0.10% -- 0.91% 0.10% 0.81%
-------------------------------------------------------------------------------------------------
Barclays Aggregate
Bond Index
Portfolio 0.25% -- 0.04% -- 0.29% 0.01% 0.28%
-------------------------------------------------------------------------------------------------
BlackRock Bond
Income Portfolio 0.32% -- 0.04% -- 0.36% 0.00% 0.36%
-------------------------------------------------------------------------------------------------
BlackRock Capital
Appreciation
Portfolio 0.70% -- 0.03% -- 0.73% 0.01% 0.72%
-------------------------------------------------------------------------------------------------
BlackRock
Diversified
Portfolio 0.46% -- 0.07% -- 0.53% -- 0.53%
-------------------------------------------------------------------------------------------------
BlackRock Large
Cap Value
Portfolio 0.63% -- 0.03% -- 0.66% 0.03% 0.63%
-------------------------------------------------------------------------------------------------
BlackRock Money
Market Portfolio 0.33% -- 0.02% -- 0.35% 0.01% 0.34%
-------------------------------------------------------------------------------------------------
7
---------------------------------------------------------------------------------------------------
DISTRIBUTION
AND/OR ACQUIRED TOTAL NET TOTAL
SERVICE FUND ANNUAL FEE WAIVER ANNUAL
MANAGEMENT (12B-1) OTHER FEES AND OPERATING AND/OR EXPENSE OPERATING
FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
---------------------------------------------------------------------------------------------------
Davis Venture
Value Portfolio 0.70% -- 0.03% -- 0.73% 0.05% 0.68%
---------------------------------------------------------------------------------------------------
Frontier Mid Cap
Growth Portfolio 0.73% -- 0.05% -- 0.78% 0.02% 0.76%
---------------------------------------------------------------------------------------------------
Jennison Growth
Portfolio 0.61% -- 0.03% -- 0.64% 0.07% 0.57%
---------------------------------------------------------------------------------------------------
Loomis Sayles Small
Cap Core
Portfolio 0.90% -- 0.07% 0.10% 1.07% 0.08% 0.99%
---------------------------------------------------------------------------------------------------
Loomis Sayles Small
Cap Growth
Portfolio 0.90% -- 0.06% -- 0.96% 0.09% 0.87%
---------------------------------------------------------------------------------------------------
Met/Artisan Mid
Cap Value
Portfolio 0.81% -- 0.04% -- 0.85% -- 0.85%
---------------------------------------------------------------------------------------------------
MetLife
Conservative
Allocation
Portfolio 0.09% -- 0.02% 0.54% 0.65% 0.01% 0.64%
---------------------------------------------------------------------------------------------------
MetLife
Conservative to
Moderate
Allocation
Portfolio 0.07% -- 0.01% 0.58% 0.66% 0.00% 0.66%
---------------------------------------------------------------------------------------------------
MetLife Mid Cap
Stock Index
Portfolio 0.25% -- 0.07% 0.02% 0.34% 0.00% 0.34%
---------------------------------------------------------------------------------------------------
MetLife Moderate
Allocation
Portfolio 0.06% -- -- 0.63% 0.69% 0.00% 0.69%
---------------------------------------------------------------------------------------------------
MetLife Moderate to
Aggressive
Allocation
Portfolio 0.06% -- 0.01% 0.67% 0.74% 0.00% 0.74%
---------------------------------------------------------------------------------------------------
MetLife Stock Index
Portfolio 0.25% -- 0.03% -- 0.28% 0.01% 0.27%
---------------------------------------------------------------------------------------------------
MFS(R) Total Return
Portfolio 0.55% -- 0.05% -- 0.60% -- 0.60%
---------------------------------------------------------------------------------------------------
MFS(R) Value
Portfolio 0.70% -- 0.03% -- 0.73% 0.13% 0.60%
---------------------------------------------------------------------------------------------------
MSCI EAFE(R)
Index Portfolio 0.30% -- 0.11% 0.01% 0.42% 0.00% 0.42%
---------------------------------------------------------------------------------------------------
Neuberger Berman
Genesis Portfolio 0.82% -- 0.04% -- 0.86% 0.01% 0.85%
---------------------------------------------------------------------------------------------------
Russell 2000(R) Index
Portfolio 0.25% -- 0.08% 0.09% 0.42% 0.00% 0.42%
---------------------------------------------------------------------------------------------------
T. Rowe Price Large
Cap Growth
Portfolio 0.60% -- 0.04% -- 0.64% 0.01% 0.63%
---------------------------------------------------------------------------------------------------
T. Rowe Price Small
Cap Growth
Portfolio 0.49% -- 0.06% -- 0.55% -- 0.55%
---------------------------------------------------------------------------------------------------
8
----------------------------------------------------------------------------------------------
DISTRIBUTION
AND/OR ACQUIRED TOTAL NET TOTAL
SERVICE FUND ANNUAL FEE WAIVER ANNUAL
MANAGEMENT (12B-1) OTHER FEES AND OPERATING AND/OR EXPENSE OPERATING
FEE FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
----------------------------------------------------------------------------------------------
Western Asset
Management
Strategic Bond
Opportunities
Portfolio 0.60% -- 0.05% -- 0.65% 0.04% 0.61%
----------------------------------------------------------------------------------------------
Western Asset
Management U.S.
Government
Portfolio 0.47% -- 0.03% -- 0.50% 0.02% 0.48%
----------------------------------------------------------------------------------------------
The information shown in the table above was provided by the Portfolios and we
have not independently verified that information. Net Total Annual Operating
Expenses shown in the table reflect any current fee waiver or expense
reimbursement arrangement that will remain in effect for a period of at least
one year from the date of the Portfolio's 2013 prospectus. "0.00%" in the Fee
Waiver and/or Expense Reimbursement column indicates that there is such an
arrangement in effect for the Portfolio, but that the expenses of the Portfolio
are below the level that would trigger the waiver or reimbursement. Fee waiver
and expense reimbursement arrangements with a duration of less than one year,
or arrangements that may be terminated without the consent of the Portfolio's
board of directors or trustees, are not shown.
Certain Portfolios that have "Acquired Fund Fees and Expenses" are "funds of
funds." A fund of funds invests substantially all of its assets in other
underlying funds. Because the Portfolio invests in other funds, it will bear
its pro rata portion of the operating expenses of those underlying funds,
including the management fee.
We are waiving the following amount of the Mortality and Expense Risk Charge:
an amount equal to the underlying portfolio expenses that are in excess of
0.62% for the investment division investing in the Oppenheimer Global Equity
Portfolio (Class A).
THE AMERICAN FUNDS INSURANCE SERIES IS NOT AFFILIATED WITH METLIFE.
INSURANCE PROCEEDS PAYABLE IF THE INSURED DIES
The following is added to this section:
Every state has unclaimed property laws which generally declare life insurance
policies to be abandoned after a period of inactivity of three to five years
from the date any death benefit is due and payable. For example, if the payment
of a death benefit has been triggered, and after a thorough search, we are
still unable to locate the beneficiary of the death benefit, the death benefit
will be paid to the abandoned property division or unclaimed property office of
the state in which the beneficiary or the policy owner last resided, as shown
on our books and records. ("Escheatment" is the formal, legal name for this
process.) However, the state is obligated to pay the death benefit (without
interest) if your beneficiary steps forward to claim it with the proper
documentation. To prevent your Policy's death benefit from being paid to the
state's abandoned or unclaimed property office, it is important that you update
your beneficiary designation--including complete names and complete address--if
and as they change. You should contact our Designated Office in order to make a
change to your beneficiary designation. (See "Sending Communications and
Payments to Us.")
TRANSFERRING CASH VALUE AMONG YOUR POLICY'S INVESTMENT OPTIONS
The minimum amount you may transfer is $50 or, if less, the total amount in an
investment option. We do not currently charge for transfers, but we do reserve
the right to charge up to $25 per transfer, except for transfers under the
Automated Investment Strategies. Currently, transfers are not taxable
transactions.
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RESTRICTIONS ON FREQUENT TRANSFERS. Frequent requests from Policy owners to
transfer 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"). Frequent transfers involving arbitrage
trading may adversely affect the long-term performance of the Portfolios, which
may in turn adversely affect Policy 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 (i.e. American Funds Global
Small Capitalization Fund, Baillie Gifford International Stock Portfolio,
Clarion Global Real Estate Portfolio, Harris Oakmark International Portfolio,
Invesco Small Cap Growth Portfolio, Loomis Sayles Small Cap Core Portfolio,
Loomis Sayles Small Cap Growth Portfolio, Lord Abbett Bond Debenture Portfolio,
MFS(R) Research International Portfolio, MSCI EAFE(R) Index Portfolio,
Neuberger Berman Genesis Portfolio, Oppenheimer Global Equity Portfolio,
Russell 2000(R) Index Portfolio, T. Rowe Price Small Cap Growth Portfolio and
Western Asset Management Strategic Bond Opportunities Portfolio) and we monitor
transfer activity in those Portfolios (the "Monitored Portfolios"). In
addition, as described below, we intend to treat all American Funds Insurance
Series portfolios ("American Funds Portfolios") as 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. We may change the Monitored Portfolios at any time without
notice in our sole discretion.
As a condition to making their portfolios available in our products, American
Funds requires us to treat all American Funds portfolios as Monitored
Portfolios under our current frequent transfer policies and procedures.
Further, American Funds requires us to impose additional specified monitoring
criteria for all American Funds portfolios available under the Policy,
regardless of the potential for arbitrage trading. We are required to monitor
transfer activity in American Funds portfolios to determine if there were two
or more transfers in followed by transfers out, in each case of a certain
dollar amount or greater, in any 30-day period. A first violation of the
American Funds monitoring policy will result in a written notice of violation;
each additional violation will result in the imposition of a six-month
restriction, during which period we will require all transfer requests to or
from an American Funds portfolio to be submitted with an original signature.
Further, as Monitored Portfolios, all American Funds portfolios also will be
subject to our current frequent transfer policies, procedures and restrictions
(described below), and transfer restrictions may be imposed upon a violation of
either monitoring policy.
Our policies and procedures may result in transfer restrictions being applied
to deter frequent transfers. Currently, when we detect transfer activity in the
Monitored Portfolios that exceeds our current transfer limits, we require
future transfer requests to or from a Monitored Portfolio under that Policy to
be submitted either (i) in writing with an original signature or (ii) by
telephone prior to 10:00 a.m. A first occurrence will result in the imposition
of this restriction for a six-month period; a second occurrence will result in
the permanent imposition of the restriction. Transfers made under an Automated
Investment Strategy described in this prospectus are not treated as transfers
when we monitor the frequency of transfers.
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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 also may be
limited by provisions of the Policy. Accordingly, there is no assurance that we
will prevent all transfer activity that may adversely affect Policy owners and
other persons with interests in the Policies. We do not accommodate frequent
transfers in any Portfolio and there are no arrangements in place to permit any
Policy owner to engage in frequent transfers; 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 transfers in their respective shares, and we reserve the right to
enforce these policies and procedures. For example, the 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. Although we may not have the
contractual authority or the operational capacity to apply the frequent
transfer policies and procedures of the Portfolios, we have entered into a
written agreement, as required by SEC regulation, with each Portfolio or its
principal underwriter that obligates us to provide to the Portfolio promptly
upon request certain information about the trading activity of individual
Policy owners, and to execute instructions from the Portfolio to restrict or
prohibit further purchases or transfers by specific Policy owners who violate
the frequent transfer policies established by the Portfolio.
In addition, Policy owners and other persons with interests in the Policies
should be aware that the purchase and redemption orders received by the
Portfolio generally are "omnibus" orders from intermediaries such as retirement
plans or separate accounts funding variable insurance contracts. The omnibus
orders reflect the aggregation and netting of multiple orders from individual
owners of variable insurance contracts and/or individual retirement plan
participants. The omnibus nature of these orders may limit the Portfolios in
their ability to apply their frequent transfer 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 Policy owners) will not be harmed by
transfer activity relating to other insurance companies and/or retirement plans
that may invest in the Portfolios. If a Portfolio believes that an omnibus
order reflects one or more transfer requests from Policy owners engaged in
frequent trading, the Portfolio may reject the entire omnibus order.
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 frequent transfers (even if an entire omnibus order is rejected
due to the frequent transfers of a single Policy owner). You should read the
Portfolio prospectuses for more details.
RESTRICTIONS ON LARGE TRANSFERS. Large transfers may 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. We
do not monitor for large transfers to or from Portfolios except where the
manager of a particular underlying Portfolio has brought large transfer
activity to our attention for investigation on a case-by-case basis. For
example, some portfolio managers have asked us to monitor for "block transfers"
where transfer requests have been submitted on behalf of multiple owners by a
third party such as an investment adviser. When we detect such large trades, we
may impose restrictions similar to those described above where future transfer
requests from that third party must be submitted either (i) in writing with an
original signature or (ii) by telephone prior to 10:00 a.m. A first occurrence
will result in the imposition of this restriction for a six-month period; a
second occurrence will result in the permanent imposition of the restriction.
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OTHER INFORMATION
The Financial Industry Regulatory Authority (FINRA) provides background
information about broker-dealers and their registered representatives through
FINRA BrokerCheck. You may contact the FINRA BrokerCheck Hotline at
1-800-289-9999, or log on to www.finra.org. An investor brochure that includes
information describing FINRA BrokerCheck is available through the Hotline or
on-line.
FEDERAL TAX MATTERS
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. The
summary does not address state, local or foreign tax issues related to your
Policy. Because individual circumstances vary, you should consult with your own
tax advisor to find out how taxes can affect your benefits and rights under
your Policy, especially before you make unscheduled premium payments, change
your specified face amount, change your death benefit option, change coverage
provided by riders, take a loan or withdrawal, or assign or surrender the
Policy. Under current federal income tax law, the taxable portion of
distributions from variable life contracts is taxed at ordinary income tax
rates and does not qualify for the reduced tax rate applicable to long-term
capital gains and dividends.
IRS CIRCULAR 230 NOTICE: The tax information contained in this Prospectus is
not intended to (and cannot) be used by anyone to avoid IRS penalties. It is
intended to support the sale of the Policy. The Policyholder should seek tax
advice based on its particular circumstances from an independent tax advisor.
INSURANCE PROCEEDS
.. Generally excludable from your beneficiary's gross income to the extent
provided in Section 101 of the Internal Revenue Code ("Code").
In the case of employer-owned life insurance as defined in Section 101(j) of
the Code, the amount excludable from gross income is limited to premiums paid
unless the policy falls within certain specified exceptions and a notice and
consent requirement is satisfied before the policy is issued. Certain
specified exceptions are based on the status of an employee as highly
compensated or recently employed. There are also exceptions for policy
proceeds paid to an employee's heirs. These exceptions only apply if proper
notice is given to the insured employee and consent is received from the
insured employee before the issuance of the policy. These rules apply to
policies issued August 18, 2006 and later and also apply to policies issued
before August 18, 2006 after a material increase in the death benefit or
other material change. An IRS reporting requirement applies to employer-owned
life insurance subject to these rules. Because these rules are complex and
will affect the tax treatment of Death Benefits, it is advisable to consult
tax counsel.
Insurance death proceeds will also be taxable in the case of a
transfer-for-value unless certain exceptions apply.
.. 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 will never be less
than the minimum 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. The rules under section 7702 of the Internal
Revenue Code with respect to Policies issued on a substandard risk basis are
not entirely clear.
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CASH VALUE (IF YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT)
You are generally not taxed on your cash value until you withdraw it, surrender
your Policy or receive a distribution such as on the Final Date. 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.
SPLIT-DOLLAR INSURANCE PLANS
The IRS has issued guidance on split dollar insurance plans. A tax advisor
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. If your
split dollar plan provides deferred compensation, recently enacted rules
governing deferred compensation arrangement may apply. Failure to adhere to
these rules will result in adverse tax consequences. Consult a tax adviser.
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.
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.
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, the Final Date
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. In the case of an outstanding
loan at the time of an exchange, the cancelled loan will generally be taxed
to the extent of any policy gain. Since amounts borrowed reduce the cash
value that will be distributed to you if the Policy is surrendered, cancelled
or lapses, any cash value distributed to you in these circumstances may be
insufficient to pay the income tax on any gain.
.. The tax consequences of loans outstanding after the 15th Policy year are
uncertain.
MODIFIED ENDOWMENT CONTRACTS
These contracts are life insurance policies where the premiums paid during the
first 7 years after the Policy is issued, or after a material change in the
Policy exceeds 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
13
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 MEC.
If your Policy is considered a modified endowment contract:
.. The death benefit will still 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 (to the extent of
any gains on your policy) treated as income first and subject to income tax.
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.
.. You will generally owe an additional 10% tax penalty on the taxable portion
of the amounts you received before age 59 1/2, except generally if you are
disabled or 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 Policy 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.
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 Policy. 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. In addition, if
Portfolio shares are sold directly to tax-qualified retirement plans that later
lose their tax-qualified status or to non-qualified plans, there could be
adverse consequences under the diversification rules.
INVESTOR CONTROL
In some circumstances, owners of variable contracts who retain excessive
control over the investment of the underlying Separate Account assets may be
treated as the owners of those assets and may be subject to tax on income
produced by those assets. Although published guidance in this area does not
address certain aspects of the Policies, we believe that the owner of a Policy
should not be treated as an owner of the assets in our Separate Account. We
reserve the right to modify the policies 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 the underlying Separate
Account assets.
ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAXES
The transfer of the Policy or the designation of a beneficiary may have
Federal, state, and/or local transfer and inheritance tax consequences,
including the imposition of gift, estate, and generation-skipping transfer
taxes. When the insured dies, the death proceeds will generally be includable
in the Policy Owner's estate for purposes of the Federal estate tax if the
Policy Owner was the insured, retained incidents of ownership at death, or made
a gift transfer of the Policy within 3 years of death. If the Policy Owner was
not the insured, the fair market value of the Policy would be included in the
Policy Owner's estate upon the Policy Owner's death. The Policy would not be
includable in the insured's estate if the insured neither retained incidents of
ownership at death nor had given up ownership within three years before death.
Moreover, under certain circumstances, the Internal
14
Revenue Code may impose a "generation-skipping transfer tax" when all or part
of a life insurance policy is transferred to, or a death benefit is paid to, an
individual two or more generations younger than the Policy Owner. Regulations
issued under the Internal Revenue Code may require us to deduct the tax from
your Policy, or from any applicable payment, and pay it directly to the IRS.
Qualified tax advisers should be consulted concerning the estate and gift tax
consequences of Policy ownership and distributions under Federal, state and
local law. The individual situation of each Policy Owner or beneficiary will
determine the extent, if any, to which Federal, state, and local transfer and
inheritance taxes may be imposed and how ownership or receipt of Policy
proceeds will be treated for purposes of Federal, state and local estate,
inheritance, generation-skipping and other taxes.
In general, current rules provide for a $5 million estate, gift and
generation-skipping transfer tax exemption (as indexed for inflation) and a top
tax rate of 40 percent.
The complexity of the tax law, along with uncertainty as to how it might be
modified in coming years, underscores the importance of seeking guidance from a
qualified adviser to help ensure that your estate plan adequately addresses
your needs and those 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 RESIDENTS OF PUERTO RICO
In Rev. Rul. 2004-75, 2004-31 I.R.B. 109, the Internal Revenue Service recently
announced that income received by residents of Puerto Rico under life insurance
contracts issued by a Puerto Rico branch of a United States life insurance
company is U.S.-source income that is generally subject to United States
Federal income tax.
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
purchasers are advised to consult with a qualified tax adviser regarding
taxation with respect to a life insurance 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. As noted, in the
case of a business owned Policy, the provisions of Section 101(j) of the Code
may limit the amount of the Death Benefit excludable from gross income unless a
specified exception applies and a notice and consent requirement is satisfied,
as discussed above. 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 laws, 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.
15
. Possible taxation as if you were the owner of your allocable portion of
the Separate Account's assets.
. Possible limits on the number of investment funds available or the
frequency of transfers among them.
. Possible changes in the tax treatment of Policy benefits and rights.
TAX CREDITS AND DEDUCTIONS
The Company may be entitled to certain tax benefits related to the assets of
the Separate Account. These tax benefits, which may include foreign tax credits
and corporate dividend received deductions, are not passed back to the Separate
Account or to Policy owners since the Company is the owner of the assets from
which the tax benefits are derived.
THE COMPANY'S INCOME TAXES
Under current Federal income tax law we are not taxed on the Separate Account's
operations. Thus, currently we do not deduct a charge from the Separate Account
for company Federal income taxes. (We do deduct a charge for Federal taxes from
premiums.) We reserve the right to charge the Separate Account for any future
Federal income taxes we may incur. Under current laws we may incur state and
local taxes (in addition to premium taxes). These taxes are not now significant
and we are not currently charging for them. If they increase, we may deduct
charges for such taxes.
FINANCIAL STATEMENTS
The financial statements of the Separate Account and of MetLife are attached to
this Supplement. Our financial statements should be considered only as bearing
upon our ability to meet our obligations under the Policy.
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