485BPOS 1 d309602d485bpos.txt EQUITY ADVANTAGE VUL POST-EFFECTIVE AMENDMENT NO. 9 AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON APRIL 13, 2017 REGISTRATION NOS. 333-147508 811-06025 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-6 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ ] PRE-EFFECTIVE AMENDMENT NO. [ ] POST-EFFECTIVE AMENDMENT NO. 9 [X] REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ ] AMENDMENT NO. 81 [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) Depositor's Telephone Number, including Area Code: (212) 578-9500 RICARDO A. ANZALDUA, ESQ. EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL METROPOLITAN LIFE INSURANCE COMPANY 200 PARK AVENUE NEW YORK, NY 10166 (Name and Address of Agent for Service) COPY TO: W. THOMAS CONNER, ESQUIRE REED SMITH LLP 1301 K STREET, NW SUITE 1100 WASHINGTON, D.C. 20005 Approximate Date of Proposed Public Offering: On May 1, 2017 or as soon thereafter as practicable It is proposed that this filing will become effective (check appropriate box) [ ]immediately upon filing pursuant to paragraph (b) [X] on May 1, 2017 pursuant to paragraph (b) [ ] 60 days after filing pursuant to paragraph (a)(1) [ ] on (date) pursuant to paragraph (a)(1) of Rule 485 [ ] this post-effective amendment designates a new effective date for a previously filed post-effective amendment Title of Securities Being Registered: Flexible Premium Variable Universal Life Insurance Policies. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- EQUITY ADVANTAGE VUL Flexible Premium Variable Life Insurance Policies Issued by Metropolitan Life Separate Account UL of Metropolitan Life Insurance Company May 1, 2017 This prospectus describes individual flexible premium variable life insurance policies (the "Policies") issued by Metropolitan Life Insurance Company ("MetLife"). The Policies are no longer offered for sale. You allocate net premiums among the Investment Divisions of Metropolitan Life Separate Account UL (the "Separate Account"). Each Investment Division of the Separate Account invests in shares of one of the following "Portfolios": AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund BRIGHTHOUSE FUNDS TRUST I (FORMERLY MET INVESTORS SERIES TRUST) AB Global Dynamic Allocation Portfolio -- Class B Allianz Global Investors Dynamic Multi-Asset Plus Portfolio -- Class B American Funds(R) Balanced Allocation Portfolio -- Class B American Funds(R) Growth Allocation Portfolio -- Class B American Funds(R) Moderate Allocation Portfolio -- Class B AQR Global Risk Balanced Portfolio -- Class B BlackRock Global Tactical Strategies Portfolio -- Class B Brighthouse Asset Allocation 100 Portfolio (formerly MetLife Asset Allocation 100 Portfolio) -- Class A Brighthouse Balanced Plus Portfolio (formerly MetLife Balanced Plus Portfolio) -- Class B Brighthouse/Aberdeen Emerging Markets Equity Portfolio (formerly Met/Aberdeen Emerging Markets Equity Portfolio) -- Class A Brighthouse/Templeton International Bond Portfolio (formerly Met/Templeton International Bond Portfolio) -- Class A Brighthouse/Wellington Large Cap Research Portfolio (formerly Met/Wellington Large Cap Research Portfolio) -- Class A Clarion Global Real Estate Portfolio -- Class A ClearBridge Aggressive Growth Portfolio -- Class A Harris Oakmark International Portfolio -- Class A Invesco Balanced-Risk Allocation Portfolio -- Class B Invesco Mid Cap Value Portfolio -- Class A Invesco Small Cap Growth Portfolio -- Class A JPMorgan Global Active Allocation Portfolio -- Class B JPMorgan Small Cap Value Portfolio -- Class A Loomis Sayles Global Markets Portfolio -- Class A MetLife Multi-Index Targeted Risk Portfolio -- Class B MFS(R) Research International Portfolio -- Class A Morgan Stanley Mid Cap Growth Portfolio -- Class A Oppenheimer Global Equity Portfolio -- Class A PanAgora Global Diversified Risk Portfolio -- Class B PIMCO Inflation Protected Bond Portfolio -- Class A PIMCO Total Return Portfolio -- Class A Pyramis(R) Managed Risk Portfolio -- Class B Schroders Global Multi-Asset Portfolio -- Class B SSGA Growth and Income ETF Portfolio -- Class A SSGA Growth ETF Portfolio -- Class A T. Rowe Price Mid Cap Growth Portfolio -- Class A BRIGHTHOUSE FUNDS TRUST II (FORMERLY METROPOLITAN SERIES FUND) -- CLASS A Baillie Gifford International Stock Portfolio BlackRock Bond Income Portfolio BlackRock Capital Appreciation Portfolio BlackRock Large Cap Value Portfolio Brighthouse Asset Allocation 20 Portfolio (formerly MetLife Asset Allocation 20 Portfolio) Brighthouse Asset Allocation 40 Portfolio (formerly MetLife Asset Allocation 40 Portfolio) Brighthouse Asset Allocation 60 Portfolio (formerly MetLife Asset Allocation 60 Portfolio) Brighthouse Asset Allocation 80 Portfolio (formerly MetLife Asset Allocation 80 Portfolio) Brighthouse/Artisan Mid Cap Value Portfolio (formerly Met/ Artisan Mid Cap Value Portfolio) Brighthouse/Wellington Balanced Portfolio (formerly Met/ Wellington Balanced Portfolio) Brighthouse/Wellington Core Equity Opportunities Portfolio (formerly Met/Wellington Core Equity Opportunities Portfolio) Frontier Mid Cap Growth Portfolio Jennison Growth Portfolio Loomis Sayles Small Cap Core Portfolio Loomis Sayles Small Cap Growth Portfolio MetLife Aggregate Bond Index Portfolio (formerly Barclays Aggregate Bond Index Portfolio) MetLife Mid Cap Stock Index Portfolio MetLife MSCI EAFE(R) Index Portfolio (formerly MSCI EAFE(R) Index Portfolio) MetLife Russell 2000(R) Index Portfolio (formerly Russell 2000(R) Index Portfolio) MetLife Stock Index Portfolio MFS(R) Total Return Portfolio MFS(R) Value Portfolio Neuberger Berman Genesis Portfolio T. Rowe Price Large Cap Growth Portfolio T. Rowe Price Small Cap Growth Portfolio VanEck Global Natural Resources Portfolio Western Asset Management Strategic Bond Opportunities Portfolio Western Asset Management U.S. Government Portfolio FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund Franklin Mutual Shares VIP Fund You may also allocate net premiums to our Fixed Account. Special limits may apply to Fixed Account transfers and withdrawals. You receive Fixed Account performance until 20 days after we apply your initial premium payment to the Policy. Thereafter, we invest the Policy's cash value according to your instructions. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE POLICIES OR DETERMINED IF THIS PROSPECTUS IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. WE DO NOT GUARANTEE HOW ANY OF THE INVESTMENT DIVISIONS OR PORTFOLIOS WILL PERFORM. THE POLICIES AND THE PORTFOLIOS ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR ENDORSED BY, ANY FINANCIAL INSTITUTION AND ARE NOT FEDERALLY INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER GOVERNMENT AGENCY. TABLE OF CONTENTS
PAGE ----- SUMMARY OF BENEFITS AND RISKS............................................... A-4 Benefits of the Policy................................................... A-4 Risks of the Policy...................................................... A-5 Risks of the Portfolios.................................................. A-7 FEE TABLES.................................................................. A-7 Transaction Fees......................................................... A-7 Periodic Charges other than Portfolio Operating Expenses................. A-8 Annual Portfolio Operating Expenses...................................... A-11 THE COMPANY, THE SEPARATE ACCOUNT AND THE PORTFOLIOS........................ A-17 The Company.............................................................. A-17 The Separate Account..................................................... A-17 The Portfolios........................................................... A-17 Share Classes of the Portfolios.......................................... A-22 Certain Payments We Receive with Regard to the Portfolios................ A-22 Selection of the Portfolios.............................................. A-23 Voting Rights............................................................ A-24 Rights Reserved by MetLife............................................... A-24 THE POLICIES................................................................ A-24 Purchasing a Policy...................................................... A-24 Replacing Existing Insurance............................................. A-25 Policy Owner and Beneficiary............................................. A-25 24 Month Conversion Right................................................ A-25 Exchange Right........................................................... A-26 PREMIUMS.................................................................... A-26 Flexible Premiums........................................................ A-26 Amount Provided for Investment under the Policy.......................... A-26 Right to Examine Policy.................................................. A-27 Allocation of Net Premiums............................................... A-27 RECEIPT OF COMMUNICATIONS AND PAYMENTS AT METLIFE'S DESIGNATED OFFICE....... A-27 Cybersecurity............................................................ A-28 Payment of Proceeds...................................................... A-29 CASH VALUE.................................................................. A-30 DEATH BENEFITS.............................................................. A-30 Death Proceeds Payable................................................... A-31 Change in Death Benefit Option........................................... A-32 Increase in Face Amount.................................................. A-32 Reduction in Face Amount................................................. A-32 SURRENDERS AND PARTIAL WITHDRAWALS.......................................... A-33 Surrender................................................................ A-33 Partial Withdrawal....................................................... A-33 TRANSFERS................................................................... A-35 Transfer Option.......................................................... A-35 AUTOMATED INVESTMENT STRATEGIES............................................. A-37 LOANS....................................................................... A-38
A-3
PAGE ----- LAPSE AND REINSTATEMENT................................................................... A-39 Lapse.................................................................................. A-39 Reinstatement.......................................................................... A-40 ADDITIONAL BENEFITS BY RIDER.............................................................. A-40 THE FIXED ACCOUNT......................................................................... A-41 General Description.................................................................... A-41 Values and Benefits.................................................................... A-41 Policy Transactions.................................................................... A-42 CHARGES................................................................................... A-42 Deductions from Premiums............................................................... A-43 Surrender Charge....................................................................... A-43 Partial Withdrawal Charge.............................................................. A-44 Transfer Charge........................................................................ A-44 Illustration of Benefits Charge........................................................ A-45 Monthly Deduction from Cash Value...................................................... A-45 Loan Interest Spread................................................................... A-47 Charges Against the Portfolios and the Investment Divisions of the Separate Account.... A-47 TAX CONSIDERATIONS........................................................................ A-47 Introduction........................................................................... A-47 Tax Status of the Policy............................................................... A-48 Tax Treatment of Policy Benefits....................................................... A-48 MetLife's Income Taxes................................................................. A-52 DISTRIBUTION OF THE POLICIES.............................................................. A-52 LEGAL PROCEEDINGS......................................................................... A-53 RESTRICTIONS ON FINANCIAL TRANSACTIONS.................................................... A-54 FINANCIAL STATEMENTS...................................................................... A-54 GLOSSARY.................................................................................. A-55 APPENDIX A: GUIDELINE PREMIUM TEST AND CASH VALUE ACCUMULATION TEST....................... A-56
A-4 SUMMARY OF BENEFITS AND RISKS This summary describes the Policy's important benefits and risks. The sections in the prospectus following this summary discuss the Policy in more detail. The Glossary at the end of the prospectus defines certain words and phrases used in this prospectus. BENEFITS OF THE POLICY ---------------------- DEATH PROCEEDS. The Policy is designed to provide insurance protection. Upon receipt of satisfactory proof of the death of the insured, we pay death proceeds to the beneficiary of the Policy. Death proceeds generally equal the death benefit on the date of the insured's death plus any additional insurance provided by rider, less any outstanding loan and accrued loan interest. CHOICE OF DEATH BENEFIT OPTION. You may choose among three death benefit options: -- a level death benefit that equals the Policy's face amount, -- a variable death benefit that equals the Policy's face amount plus the Policy's cash value, and -- a combination variable and level death benefit that equals the Policy's face amount plus the Policy's cash value until the insured attains age 65 and equals the Policy's face amount thereafter. The death benefit under any option could increase to satisfy Federal tax law requirements if the cash value reaches certain levels. After the first Policy year you may change your death benefit option, subject to our underwriting rules. A change in death benefit option may have tax consequences. PREMIUM FLEXIBILITY. You can make premium payments based on a schedule you determine, subject to some limits. You may change your payment schedule at any time or make a payment that does not correspond to your schedule. We can, however, limit or prohibit payments in some situations. RIGHT TO EXAMINE THE POLICY. During the first ten days following your receipt of the Policy, you have the right to return the Policy to us. If you exercise this right, we will refund the premiums you paid. INVESTMENT OPTIONS. You can allocate your net premiums and cash value among your choice of sixty-seven Investment Divisions in the Separate Account, each of which corresponds to a mutual fund portfolio, or "Portfolio." The Portfolios available under the Policy include several common stock funds, including funds which invest primarily in foreign securities, as well as bond funds, balanced funds, asset allocation funds and funds that invest in exchange-traded funds. You may also allocate premiums and cash value to our Fixed Account which provides guarantees of interest and principal. You may change your allocation of future premiums at any time. PARTIAL WITHDRAWALS. You may withdraw cash surrender value from your Policy at any time after the first Policy anniversary. The minimum amount you may withdraw is $500. We reserve the right to limit partial withdrawals to no more than 90% of the Policy's cash surrender value. We may limit the number of partial withdrawals to 12 per Policy year or impose a processing charge of $25 for each partial withdrawal. Partial withdrawals may have tax consequences. TRANSFERS AND AUTOMATED INVESTMENT STRATEGIES. You may transfer your Policy's cash value among the Investment Divisions or between the Investment Divisions and the Fixed Account. The minimum amount you may transfer is $50, or if less, the total amount in the Investment Division or the Fixed Account. We may limit the number of transfers among the Investment Divisions and the Fixed Account to no more than four per Policy year. We may impose a processing charge of $25 for each transfer. We may also impose restrictions on frequent transfers. (See "Transfers" for additional information on such restrictions.) We offer five automated investment strategies that allow you to periodically transfer or reallocate your cash value among the Investment Divisions and the Fixed Account. (See "Automated Investment Strategies.") LOANS. You may borrow from the cash value of your Policy. The minimum amount you may borrow is $500. The maximum amount you may borrow is an amount equal to the Policy's cash value net of the Surrender Charge, reduced by Monthly Deductions and interest charges through the next Policy anniversary, increased by interest credits through the next Policy anniversary, less any existing Policy loans. We charge you a maximum annual interest rate of 4.0% for the first ten Policy years and 3.0% thereafter. We credit interest at an annual rate of at least 3.0% on amounts we hold as collateral to support your loan. Loans may have tax consequences. (See "Loans" for additional information.) A-4 SURRENDERS. You may surrender the Policy for its cash surrender value at any time. Cash surrender value equals the cash value reduced by any Policy loan and accrued loan interest and by any applicable Surrender Charge. A surrender may have tax consequences. TAX BENEFITS. We anticipate that the Policy should be deemed to be a life insurance contract under Federal tax law. Accordingly, undistributed increases in cash value should not be taxable to you. As long as your Policy is not a modified endowment contract, partial withdrawals should be non-taxable until you have withdrawn an amount equal to your total investment in the Policy. However, different rules apply in the first fifteen Policy years, when distributions accompanied by benefit reductions may be taxable prior to a complete withdrawal of your investment in the Policy. Always confirm in advance the tax consequences of a particular withdrawal with a qualified tax adviser. Death benefits paid to your beneficiary should generally be free of Federal income tax. Death benefits may be subject to estate taxes. Under current Federal income tax law, the taxable portion of distributions from variable life policies is taxed at ordinary income tax rates and does not qualify for the reduced tax rate applicable to long-term capital gains and dividends. CONVERSION RIGHT. During the first two Policy years, you may convert the Policy to fixed benefit coverage by exchanging the Policy for a fixed benefit life insurance policy that we agree to, and that is issued by us or an affiliate that we name. We will make the exchange without evidence of insurability. SUPPLEMENTAL BENEFITS AND RIDERS. We offer a variety of riders that provide supplemental benefits under the Policy. We generally deduct any monthly charges for these riders as part of the Monthly Deduction. Your registered representative can help you determine whether any of these riders are suitable for you. PERSONALIZED ILLUSTRATIONS. You will receive personalized illustrations in connection with the purchase of this Policy 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 lapse, and the charges and deductions under the Policy. They will also help you to compare this Policy to other life insurance policies. 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 POLICY ------------------- INVESTMENT RISK. If you invest your Policy's cash value in one or more of the Investment Divisions, then you will be subject to the risk that investment performance will be unfavorable and that your cash value will decrease. In addition, we deduct Policy fees and charges from your Policy's cash value, which can significantly reduce your Policy's cash value. During times of poor investment performance, this deduction will have an even greater impact on your Policy's cash value. It is possible to lose your full investment and your Policy could lapse without value, unless you pay additional premium. If you allocate cash value to the Fixed Account, then 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 3%. SURRENDER AND WITHDRAWAL RISKS. The Policies are designed to provide lifetime insurance protection. They are not offered primarily as an investment, and should not be used as a short-term savings vehicle. If you surrender the Policy within the first ten Policy years (or within the first ten Policy years following a face amount increase), you will be subject to a Surrender Charge as well as income tax on any gain that is distributed or deemed to be distributed from the Policy. You will also be subject to a Surrender Charge if you make a partial withdrawal from the Policy within the first ten Policy years (or the first ten Policy years following the face amount increase) if the partial withdrawal reduces the face amount (or the face amount increase). If you surrender the Policy in the first Policy year (or in the first year following a face amount increase) we will also deduct an amount equal to the remaining first year Coverage Expense Charges. You should purchase the Policy only if you have the financial ability to keep it in force for a substantial period of time. You should not purchase the Policy if you intend to surrender all or part of the Policy's cash value in the near future. Even if you do not ask to surrender your Policy, surrender charges may play a role in determining whether your Policy will lapse (terminate without value), because surrender charges determine the cash surrender value, which is a measure we use to determine whether your Policy will enter the grace period (and possibly lapse). RISK OF LAPSE. Your Policy may lapse if you have paid an insufficient amount of premiums or if the investment experience of the Investment Divisions is poor. If your cash surrender value is not enough to pay the Monthly Deduction, your Policy may enter a 62-day grace period. We will notify you that the Policy will lapse unless you make a sufficient payment of additional premium during the grace period. Your Policy generally will not lapse if you pay certain required premium amounts A-5 and you are therefore protected by a Guaranteed Minimum Death Benefit. If your Policy does lapse, your insurance coverage will terminate, although you will be given an opportunity to reinstate it. Lapse of a Policy on which there is an outstanding loan may have adverse tax consequences. TAX RISKS. We anticipate that the Policy should be deemed to be a life insurance contract under Federal tax law. However, the rules are not entirely clear in certain circumstances, for example, if your Policy is issued on a substandard basis. The death benefit under the Policy 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. If your Policy is not treated as a life insurance contract under Federal tax law, increases in the Policy's cash value will be taxed currently. Even if your Policy is treated as a life insurance contract for Federal tax purposes, it may become a modified endowment contract due to the payment of excess premiums or unnecessary premiums, due to a material change or due to a reduction in your death benefit. If your Policy becomes a modified endowment contract, surrenders, partial withdrawals, loans, and use of the Policy as collateral for a loan will be treated as a distribution of the earnings in the Policy and will be taxable as ordinary income to the extent thereof. In addition, if the Policy Owner is under age 59 1/2 at the time of the surrender, partial withdrawal or loan, the amount that is included in income will generally be subject to a 10% penalty tax. 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. However, different rules apply in the first fifteen Policy years, when distributions accompanied by benefit reductions may be taxable prior to a complete withdrawal of your investment in the Policy. Moreover, loans will generally not be treated as distributions prior to termination of your Policy, whether by lapse, surrender or exchange. Additionally, the tax consequences of loans outstanding after the tenth Policy year are uncertain. Finally, neither distributions nor loans from a Policy that is not a modified endowment contract are subject to the 10% penalty tax. See "Tax Considerations." You should consult a qualified tax adviser for assistance in all Policy-related tax matters. LOAN RISKS. A Policy loan, whether or not repaid, will affect the cash value of your Policy over time because we subtract the amount of the loan from the Investment Divisions and/or Fixed Account as collateral, and hold it in our Loan Account. This loan collateral does not participate in the investment experience of the Investment Divisions or receive any higher current interest rate credited to the Fixed Account. We also reduce the amount we pay on the insured's death by the amount of any outstanding loan and accrued loan interest. Your Policy may lapse if your outstanding loan and accrued loan interest reduce the cash surrender value to zero. 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 and partial withdrawals exceed the premiums paid. Since loans and partial withdrawals reduce your Policy's cash value, any remaining cash value may be insufficient to pay the income tax due. LIMITATIONS ON CASH VALUE IN THE FIXED ACCOUNT. Transfers to and from the Fixed Account must generally be in amounts of $50 or more. Partial withdrawals from the Fixed Account must be in amounts of $500 or more. The total amount of transfers and withdrawals from the Fixed Account in a Policy year may generally not exceed the greater of 25% of the Policy's cash surrender value in the Fixed Account at the beginning of the year, or the maximum transfer amount for the preceding Policy year. We may also limit the number of transfers and partial withdrawals and may impose a processing charge for transfers and partial withdrawals. We are not currently imposing the maximum limit on transfers and withdrawals from the Fixed Account, but we reserve the right to do so. It is important to note that if we impose the maximum limit on transfers and withdrawals from the Fixed Account, it could take a number of years to fully transfer or withdraw a current balance from the Fixed Account. You should keep this in mind when considering whether an allocation of cash value to the Fixed Account is consistent with your risk tolerance and time horizon. 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 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. A-6 RISKS OF THE PORTFOLIOS ----------------------- A comprehensive discussion of the risks associated with each of the Portfolios can be found in the Portfolio prospectuses, which you can obtain by calling 1-800-638-5000. THERE IS NO ASSURANCE THAT ANY OF THE PORTFOLIOS WILL ACHIEVE ITS STATED INVESTMENT OBJECTIVE. FEE TABLES The following tables describe the fees and expenses that a Policy Owner will pay when buying, owning and surrendering the Policy. The first table describes the fees and expenses that a Policy Owner will pay at the time he or she buys the Policy, surrenders the Policy or transfers cash value among accounts. TRANSACTION FEES
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE Sales Charge Imposed on On payment of premium 2.25% of premiums paid 2.25% of each premium Premiums up to the Target Premium paid per Policy year1 Premium Tax Imposed on On payment of premium 2.0% in all Policy years 2.0% in all Policy years Premiums Federal Tax Imposed on On payment of premium 1.25% in all Policy years 1.25% in all Policy years Premiums
1 The target premium varies based on individual characteristics, including the insured's issue age, risk class and (except for unisex Policies) sex.
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE Surrender Charge1 On surrender, lapse, or face amount reduction in the first ten Policy years (and, with respect to a face amount increase, in the first ten Policy years after the increase) Minimum and In Policy year 1, $3.75 to In Policy year 1, $3.75 to Maximum Charge $38.25 per $1,000 of base $38.25 per $1,000 of base Policy face amount2 Policy face amount2 Charge in the first Policy $14.00 per $1,000 of base $14.00 per $1,000 of base year for a Representative Policy face amount Policy face amount Insured 3 Transfer Charge4 On transfer of cash value Not currently charged $25 for each transfer among the Investment Divisions and to and from the Fixed Account Partial Withdrawal Charge On partial withdrawal of Not currently charged $25 for each partial cash value withdrawal5 Illustration of Benefits On provision of each Not currently charged $25 per illustration Charge illustration in excess of one per year
A-7 1 The Surrender Charge varies based on individual characteristics, including the insured's issue age, risk class, sex (except for unisex Policies), smoker status, and the Policy's face amount. The Surrender Charge may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the Surrender Charge that would apply for a particular insured by contacting your registered representative. 2 No Surrender Charge will apply on up to 10% of cash surrender value withdrawn each year. The Surrender Charge will remain level for one to three Policy years, and will then begin to decline on a monthly basis until it reaches zero in the last month of the tenth Policy year. The Surrender Charge applies to requested face amount reductions as well as to face amount reductions resulting from a change in death benefit option. 3 The Representative Insured is a male, age 35, in the preferred nonsmoker risk class, under a Policy with a base Policy face amount of $375,000. 4 The Portfolios in which the Investment Divisions invest may impose a redemption fee on shares held for a relatively short period. 5 If imposed, the partial withdrawal charge would be in addition to any Surrender Charge that is imposed. The next table describes the fees and expenses that a Policy Owner will pay periodically during the time that he or she owns the Policy, not including Portfolio fees and expenses. PERIODIC CHARGES OTHER THAN PORTFOLIO OPERATING EXPENSES
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE Cost of Insurance1 Minimum and Monthly $.01 to $83.33 per $1,000 $.02 to $83.33 per $1,000 Maximum Charge of net amount at risk2 of net amount at risk2 Charge in the first Policy Monthly $.02 per $1,000 of net $.09 per $1,000 of net year for a Representative amount at risk amount at risk Insured 3 Policy Charge4 Policy face amount less Monthly $12 $12 than $50,000 Policy face amount Monthly $15 $15 between $50,000 and $249,999 Mortality and Expense Risk Monthly .60% .80% Charge (annual rate imposed on cash value in the Separate Account)5 Coverage Expense Charge6 Minimum and Monthly $.04 to $2.30 per $1,000 $.04 to $2.30 per $1,000 Maximum Charge of base Policy face of base Policy face amount amount7 Charge for a Monthly $.16 per $1,000 of base $.16 per $1,000 of base Representative Insured 3 Policy face amount7 Policy face amount Loan Interest Spread8 Annually (or on loan 1.00% of loan collateral 1.00% of loan collateral termination, if earlier)
1 The cost of insurance charge varies based on individual characteristics, including the Policy's face amount and the insured's age, risk class, and (except for unisex Policies) sex. The cost of insurance charge may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the cost of insurance charge that would apply for a particular insured by contacting your registered representative. 2 The net amount at risk is the difference between the death benefit (generally discounted at the monthly equivalent of 3% per year) and the Policy's cash value. A-8 3 The Representative Insured is a male, age 35, in the preferred nonsmoker risk class, under a Policy with a base policy face amount of $375,000. 4 After the first Policy Year, the Policy Charge declines to $9 for a Policy with a face amount of less than $50,000, and to $8 for a Policy with a face amount between $50,000 and $249,999. No Policy Charge applies if a Policy is issued with a face amount equal to or greater than $250,000. 5 The Mortality and Expense Risk Charge declines over time in accordance with the following schedule:
CURRENT CHARGE MAXIMUM CHARGE ---------------- --------------- Policy years 1 - 10 .60% .80% Policy years 11 - 19 .35% .35% Policy years 20 - 29 .20% .20% Policy years 30+ .05% .05%
The Current Charge Percentages shown above apply if the Policy's net cash value is less than the equivalent of five Target Premiums. The percentages decrease as the Policy's net cash value, measured as a multiple of Target Premiums, increases, as shown below:
LESS THAN 5 TARGET AT LEAST 5 BUT LESS THAN AT LEAST 10 BUT LESS THAN 20 OR MORE TARGET PREMIUMS 10 TARGET PREMIUMS 20 TARGET PREMIUMS PREMIUMS -------------------- -------------------------- --------------------------- ------------------ Policy years 1- 10 .60% .55% .30% .15% Policy years 11- 19 .35% .30% .15% .10% Policy years 20- 29 .20% .15% .10% .05% Policy years 30+ .05% .05% .05% .05%
6 The Coverage Expense Charge varies based on individual characteristics, including the Policy's face amount and the Insured's age, risk class, and (except for unisex Policies) sex. The Coverage Expense Charge may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the Coverage Expense Charge that would apply to a particular insured by contacting your registered representative. 7 The Coverage Expense Charge is imposed in Policy years 1-8 and, with respect to a requested face amount increase, during the first eight years following the increase. If you surrender the Policy in the first Policy year (or in the first year following a face amount increase), we will deduct from the surrender proceeds an amount equal to the Coverage Expense Charges due for the remainder of the first Policy year (or the first year following the face amount increase). If the Policy's face amount is reduced in the first year following a face amount increase, we will deduct from the cash value an amount equal to the Coverage Expense Charges due for the remainder of the first year following the face amount increase. 8 The loan interest spread is the difference between the interest rates we charge on Policy loans and the interest earned on cash value we hold as security for the loan ("loan collateral"). We charge interest on Policy loans at an effective rate of 4.0% per year in Policy years 1-10 and 3.0% thereafter. Loan collateral earns interest at an effective rate of not less than 3.0% per year. A-9 CHARGES FOR OPTIONAL FEATURES (RIDERS):
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE Guaranteed Survivor Income Benefit Rider1 Minimum and Monthly $.01 to $1.08 per $1,000 $.01 to $83.33 per $1,000 Maximum Charge of Eligible Death Benefit of Eligible Death Benefit Charge for a Monthly $.02 per $1,000 of Eligible $.02 per $1,000 of Eligible Representative Insured2 Death Benefit Death Benefit Children's Term Insurance Monthly $.40 per $1,000 of rider $.40 per $1,000 of rider Rider face amount face amount Waiver of Monthly Deduction Rider3 Minimum and Monthly $.00 to $61.44 per $100 of $.00 to $61.44 per $100 of Maximum Charge Monthly Deduction Monthly Deduction Charge in the first Policy Monthly $6.30 per $100 of Monthly $6.30 per $100 of Monthly year for a Representative Deduction Deduction insured4 Waiver of Specified Premium Rider Minimum and Monthly $.00 to $21.75 per $100 of $.00 to $21.75 per $100 of Maximum Charge Specified Premium Specified Premium Charge in the first Policy Monthly $3.00 per $100 of $3.00 per $100 of year for a Representative Specified Premium Specified Premium Insured4
1 The charge for the Guaranteed Survivor Income Benefit Rider varies based on individual characteristics, including the rider's Eligible Death Benefit and the insured's age, risk class, and (except for unisex Policies) sex. The rider change may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the rider charge that would apply for a particular insured by contacting your registered representative. 2 The Representative Insured is a male, age 35, in the preferred nonsmoker risk class, under a Policy with an Eligible Death Benefit of $375,000. 3 The charge for this rider varies based on individual characteristics, including the insured's age, risk class, and (except for unisex Policies) sex. The rider change may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the rider charge that would apply for a particular insured by contacting your registered representative. 4 The Representative Insured is a male, age 35, in the preferred nonsmoker risk class. A-10
CHARGE WHEN CHARGE IS DEDUCTED CURRENT AMOUNT DEDUCTED MAXIMUM AMOUNT DEDUCTIBLE Options to Purchase Additional Insurance Coverage Rider1 Minimum and Monthly $.02 to $.25 per $1,000 of $.02 to $.25 per $1,000 of Maximum Charge Option amount Option amount Charge for a Monthly $.03 per $1,000 of Option $.03 per $1,000 of Option Representative Insured2 amount amount Accidental Death Benefit Rider1 Minimum and Monthly $.00 to $.34 per $1,000 $.00 to $83.33 per $1,000 Maximum Charge of rider face amount of rider face amount Charge in the first Policy Monthly $.05 per $1,000 of rider $.08 per $1,000 of rider year for a Representative face amount face amount Insured2 Guaranteed Minimum Death Benefit Rider1,3 Minimum and Monthly $.03 to $.14 per $1,000 $.03 to $83.33 per $1,000 Maximum Charge of net amount at risk of net amount at risk Charge for a Monthly $.03 per $1,000 of net $.03 per $1,000 of net Representative Insured4 amount at risk amount at risk Acceleration of Death Benefit At time of benefit payment Not currently charged One-time fee of $150 Rider Overloan Protection Rider At time of exercise One-time fee of 3.5% of One-time fee of 3.5% of Policy cash value Policy cash value
1 The charge for this rider varies based on individual characteristics, including the insured's age, risk class, and (except for unisex Policies) sex. The rider change may not be representative of the charge that a particular Policy Owner would pay. You can obtain more information about the rider charge that would apply for a particular insured by contacting your registered representative. 2 The Representative Insured is a male, age 35, in the preferred nonsmoker risk class. 3 The charge shown applicable to both the Guaranteed Minimum Death Benefit to Age 85 Rider and the Guaranteed Minimum Death Benefit to Age 121 Rider. 4 The Representative Insured is a female, age 45, in the preferred nonsmoker risk class. ANNUAL PORTFOLIO OPERATING EXPENSES The next table describes the Portfolio fees and expenses that a Policy Owner may pay periodically during the time that he or she owns the Policy. The table shows the minimum and maximum total operating expenses charged by the Portfolios for the fiscal year ended December 31, 2016. Expenses of the Portfolios may be higher or lower in the future. More detail concerning each Portfolio's fees and expenses is contained in the table that follows and in the prospectus for each Portfolio. A-11 ANNUAL OPERATING EXPENSES (AS A PERCENTAGE OF AVERAGE NET ASSETS) 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).................. 0.27% 1.34%
PORTFOLIO FEES AND EXPENSES (AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) The following table is a summary. For more complete information on Portfolio fees and expenses, please refer to the prospectus for each Portfolio.
DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER PORTFOLIO FEE (12B-1) FEES EXPENSES ------------------------------------------- ------------ -------------- ---------- AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund................... 0.36% 0.25% 0.02% American Funds Global Small Capitalization Fund....................... 0.70% 0.25% 0.04% American Funds Growth Fund................. 0.33% 0.25% 0.02% American Funds Growth-Income Fund.......... 0.27% 0.25% 0.02% BRIGHTHOUSE FUNDS TRUST I AB Global Dynamic Allocation Portfolio -- Class B...................... 0.61% 0.25% 0.03% Allianz Global Investors Dynamic Multi-Asset Plus Portfolio -- Class B..... 0.68% 0.25% 0.27% American Funds(R) Balanced Allocation Portfolio -- Class B...................... 0.06% 0.25% -- American Funds(R) Growth Allocation Portfolio -- Class B...................... 0.06% 0.25% 0.01% American Funds(R) Moderate Allocation Portfolio -- Class B...................... 0.06% 0.25% 0.01% AQR Global Risk Balanced Portfolio -- Class B................................... 0.61% 0.25% 0.03% BlackRock Global Tactical Strategies Portfolio -- Class B...................... 0.66% 0.25% 0.01% Brighthouse Asset Allocation 100 Portfolio -- Class A...................... 0.07% -- 0.01% Brighthouse Balanced Plus Portfolio -- Class B................................... 0.24% 0.25% 0.01% Brighthouse/Aberdeen Emerging Markets Equity Portfolio -- Class A....... 0.89% -- 0.11% Brighthouse/Templeton International Bond Portfolio -- Class A................. 0.60% -- 0.09% Brighthouse/Wellington Large Cap Research Portfolio -- Class A............. 0.56% -- 0.03% Clarion Global Real Estate Portfolio -- Class A................................... 0.61% -- 0.04% ACQUIRED TOTAL FEE WAIVER NET TOTAL FUND FEES ANNUAL AND/OR ANNUAL AND OPERATING EXPENSE OPERATING PORTFOLIO EXPENSES EXPENSES REIMBURSEMENT EXPENSES ------------------------------------------- ----------- ----------- --------------- ---------- AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund................... -- 0.63% -- 0.63% American Funds Global Small Capitalization Fund....................... -- 0.99% -- 0.99% American Funds Growth Fund................. -- 0.60% -- 0.60% American Funds Growth-Income Fund.......... -- 0.54% -- 0.54% BRIGHTHOUSE FUNDS TRUST I AB Global Dynamic Allocation Portfolio -- Class B...................... 0.01% 0.90% 0.02% 0.88% Allianz Global Investors Dynamic Multi-Asset Plus Portfolio -- Class B..... 0.03% 1.23% -- 1.23% American Funds(R) Balanced Allocation Portfolio -- Class B...................... 0.42% 0.73% -- 0.73% American Funds(R) Growth Allocation Portfolio -- Class B...................... 0.43% 0.75% -- 0.75% American Funds(R) Moderate Allocation Portfolio -- Class B...................... 0.40% 0.72% -- 0.72% AQR Global Risk Balanced Portfolio -- Class B................................... 0.06% 0.95% 0.01% 0.94% BlackRock Global Tactical Strategies Portfolio -- Class B...................... 0.09% 1.01% 0.03% 0.98% Brighthouse Asset Allocation 100 Portfolio -- Class A...................... 0.68% 0.76% -- 0.76% Brighthouse Balanced Plus Portfolio -- Class B................................... 0.42% 0.92% 0.01% 0.91% Brighthouse/Aberdeen Emerging Markets Equity Portfolio -- Class A....... -- 1.00% 0.06% 0.94% Brighthouse/Templeton International Bond Portfolio -- Class A................. -- 0.69% -- 0.69% Brighthouse/Wellington Large Cap Research Portfolio -- Class A............. -- 0.59% 0.04% 0.55% Clarion Global Real Estate Portfolio -- Class A................................... -- 0.65% -- 0.65%
A-12
DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER PORTFOLIO FEE (12B-1) FEES EXPENSES -------------------------------------------- ------------ -------------- ---------- ClearBridge Aggressive Growth Portfolio -- Class A....................... 0.56% -- 0.01% Harris Oakmark International Portfolio -- Class A....................... 0.77% -- 0.04% Invesco Balanced-Risk Allocation Portfolio -- Class B....................... 0.64% 0.25% 0.03% Invesco Mid Cap Value Portfolio -- Class A.................................... 0.65% -- 0.03% Invesco Small Cap Growth Portfolio -- Class A.................................... 0.85% -- 0.03% JPMorgan Global Active Allocation Portfolio -- Class B....................... 0.72% 0.25% 0.05% JPMorgan Small Cap Value Portfolio -- Class A.................................... 0.78% -- 0.05% Loomis Sayles Global Markets Portfolio -- Class A....................... 0.70% -- 0.08% MetLife Multi-Index Targeted Risk Portfolio -- Class B....................... 0.17% 0.25% 0.01% MFS(R) Research International Portfolio -- Class A....................... 0.70% -- 0.04% Morgan Stanley Mid Cap Growth Portfolio -- Class A....................... 0.65% -- 0.05% Oppenheimer Global Equity Portfolio -- Class A.................................... 0.66% -- 0.05% PanAgora Global Diversified Risk Portfolio -- Class B....................... 0.65% 0.25% 0.40% PIMCO Inflation Protected Bond Portfolio -- Class A....................... 0.47% -- 0.28% PIMCO Total Return Portfolio -- Class A..... 0.48% -- 0.05% Pyramis(R) Managed Risk Portfolio -- Class B.................................... 0.45% 0.25% 0.03% Schroders Global Multi-Asset Portfolio -- Class B....................... 0.64% 0.25% 0.07% SSGA Growth and Income ETF Portfolio -- Class A....................... 0.31% -- 0.01% SSGA Growth ETF Portfolio -- Class A........ 0.32% -- 0.02% T. Rowe Price Mid Cap Growth Portfolio -- Class A....................... 0.75% -- 0.03% BRIGHTHOUSE FUNDS TRUST II -- CLASS A Baillie Gifford International Stock Portfolio.................................. 0.80% -- 0.05% BlackRock Bond Income Portfolio............. 0.33% -- 0.04% BlackRock Capital Appreciation Portfolio.................................. 0.70% -- 0.02% BlackRock Large Cap Value Portfolio......... 0.63% -- 0.03% Brighthouse Asset Allocation 20 Portfolio.................................. 0.09% -- 0.03% ACQUIRED TOTAL FEE WAIVER NET TOTAL FUND FEES ANNUAL AND/OR ANNUAL AND OPERATING EXPENSE OPERATING PORTFOLIO EXPENSES EXPENSES REIMBURSEMENT EXPENSES -------------------------------------------- ----------- ----------- --------------- ----------- ClearBridge Aggressive Growth Portfolio -- Class A....................... -- 0.57% 0.02% 0.55% Harris Oakmark International Portfolio -- Class A....................... -- 0.81% 0.02% 0.79% Invesco Balanced-Risk Allocation Portfolio -- Class B....................... 0.03% 0.95% 0.03% 0.92% Invesco Mid Cap Value Portfolio -- Class A.................................... 0.05% 0.73% 0.02% 0.71% Invesco Small Cap Growth Portfolio -- Class A.................................... -- 0.88% 0.02% 0.86% JPMorgan Global Active Allocation Portfolio -- Class B....................... -- 1.02% 0.04% 0.98% JPMorgan Small Cap Value Portfolio -- Class A.................................... -- 0.83% 0.10% 0.73% Loomis Sayles Global Markets Portfolio -- Class A....................... -- 0.78% -- 0.78% MetLife Multi-Index Targeted Risk Portfolio -- Class B....................... 0.22% 0.65% -- 0.65% MFS(R) Research International Portfolio -- Class A....................... -- 0.74% 0.06% 0.68% Morgan Stanley Mid Cap Growth Portfolio -- Class A....................... -- 0.70% 0.01% 0.69% Oppenheimer Global Equity Portfolio -- Class A.................................... -- 0.71% 0.10% 0.61% PanAgora Global Diversified Risk Portfolio -- Class B....................... 0.04% 1.34% -- 1.34% PIMCO Inflation Protected Bond Portfolio -- Class A....................... -- 0.75% 0.01% 0.74% PIMCO Total Return Portfolio -- Class A..... -- 0.53% 0.03% 0.50% Pyramis(R) Managed Risk Portfolio -- Class B.................................... 0.47% 1.20% 0.10% 1.10% Schroders Global Multi-Asset Portfolio -- Class B....................... 0.01% 0.97% -- 0.97% SSGA Growth and Income ETF Portfolio -- Class A....................... 0.22% 0.54% -- 0.54% SSGA Growth ETF Portfolio -- Class A........ 0.24% 0.58% -- 0.58% T. Rowe Price Mid Cap Growth Portfolio -- Class A....................... -- 0.78% -- 0.78% BRIGHTHOUSE FUNDS TRUST II -- CLASS A Baillie Gifford International Stock Portfolio.................................. -- 0.85% 0.12% 0.73% BlackRock Bond Income Portfolio............. -- 0.37% -- 0.37% BlackRock Capital Appreciation Portfolio.................................. -- 0.72% 0.09% 0.63% BlackRock Large Cap Value Portfolio......... -- 0.66% 0.03% 0.63% Brighthouse Asset Allocation 20 Portfolio.................................. 0.53% 0.65% 0.02% 0.63%
A-13
DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER PORTFOLIO FEE (12B-1) FEES EXPENSES --------------------------------------------- ------------ -------------- ---------- Brighthouse Asset Allocation 40 Portfolio................................... 0.06% -- -- Brighthouse Asset Allocation 60 Portfolio................................... 0.05% -- -- Brighthouse Asset Allocation 80 Portfolio................................... 0.05% -- 0.01% Brighthouse/Artisan Mid Cap Value Portfolio................................... 0.82% -- 0.03% Brighthouse/Wellington Balanced Portfolio................................... 0.46% -- 0.09% Brighthouse/Wellington Core Equity Opportunities Portfolio..................... 0.70% -- 0.02% Frontier Mid Cap Growth Portfolio............ 0.72% -- 0.03% Jennison Growth Portfolio.................... 0.60% -- 0.02% Loomis Sayles Small Cap Core Portfolio....... 0.90% -- 0.06% Loomis Sayles Small Cap Growth Portfolio................................... 0.90% -- 0.06% MetLife Aggregate Bond Index Portfolio....... 0.25% -- 0.03% MetLife Mid Cap Stock Index Portfolio........ 0.25% -- 0.05% MetLife MSCI EAFE(R) Index Portfolio......... 0.30% -- 0.08% MetLife Russell 2000(R) Index Portfolio...... 0.25% -- 0.06% MetLife Stock Index Portfolio................ 0.25% -- 0.02% MFS(R) Total Return Portfolio................ 0.56% -- 0.05% MFS(R) Value Portfolio....................... 0.70% -- 0.02% Neuberger Berman Genesis Portfolio........... 0.81% -- 0.04% T. Rowe Price Large Cap Growth Portfolio................................... 0.60% -- 0.02% T. Rowe Price Small Cap Growth Portfolio................................... 0.47% -- 0.03% VanEck Global Natural Resources Portfolio................................... 0.78% -- 0.03% Western Asset Management Strategic Bond Opportunities Portfolio................ 0.57% -- 0.03% Western Asset Management U.S. Government Portfolio................... 0.47% -- 0.03% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund..................... 0.45% 0.25% 0.02% Franklin Mutual Shares VIP Fund.............. 0.69% 0.25% 0.03% ACQUIRED TOTAL FEE WAIVER NET TOTAL FUND FEES ANNUAL AND/OR ANNUAL AND OPERATING EXPENSE OPERATING PORTFOLIO EXPENSES EXPENSES REIMBURSEMENT EXPENSES --------------------------------------------- ----------- ----------- --------------- ----------- Brighthouse Asset Allocation 40 Portfolio................................... 0.57% 0.63% -- 0.63% Brighthouse Asset Allocation 60 Portfolio................................... 0.60% 0.65% -- 0.65% Brighthouse Asset Allocation 80 Portfolio................................... 0.64% 0.70% -- 0.70% Brighthouse/Artisan Mid Cap Value Portfolio................................... -- 0.85% -- 0.85% Brighthouse/Wellington Balanced Portfolio................................... -- 0.55% -- 0.55% Brighthouse/Wellington Core Equity Opportunities Portfolio..................... -- 0.72% 0.11% 0.61% Frontier Mid Cap Growth Portfolio............ -- 0.75% 0.02% 0.73% Jennison Growth Portfolio.................... -- 0.62% 0.08% 0.54% Loomis Sayles Small Cap Core Portfolio....... 0.04% 1.00% 0.08% 0.92% Loomis Sayles Small Cap Growth Portfolio................................... -- 0.96% 0.09% 0.87% MetLife Aggregate Bond Index Portfolio....... -- 0.28% 0.01% 0.27% MetLife Mid Cap Stock Index Portfolio........ 0.01% 0.31% -- 0.31% MetLife MSCI EAFE(R) Index Portfolio......... 0.01% 0.39% -- 0.39% MetLife Russell 2000(R) Index Portfolio...... 0.01% 0.32% -- 0.32% MetLife Stock Index Portfolio................ -- 0.27% 0.01% 0.26% MFS(R) Total Return Portfolio................ -- 0.61% -- 0.61% MFS(R) Value Portfolio....................... -- 0.72% 0.14% 0.58% Neuberger Berman Genesis Portfolio........... -- 0.85% 0.01% 0.84% T. Rowe Price Large Cap Growth Portfolio................................... -- 0.62% 0.02% 0.60% T. Rowe Price Small Cap Growth Portfolio................................... -- 0.50% -- 0.50% VanEck Global Natural Resources Portfolio................................... -- 0.81% 0.01% 0.80% Western Asset Management Strategic Bond Opportunities Portfolio................ 0.01% 0.61% 0.05% 0.56% Western Asset Management U.S. Government Portfolio................... -- 0.50% 0.01% 0.49% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund..................... 0.02% 0.74% 0.03% 0.71% Franklin Mutual Shares VIP Fund.............. -- 0.97% -- 0.97%
The information shown in the table above was provided by the Portfolios. Certain Portfolios and their investment adviser have entered into expense reimbursement and/or fee waiver arrangements that will continue from May 1, 2017 through April 30, 2018. These arrangements can be terminated with respect to these Portfolios only with the approval of the Portfolio's board of directors or trustees. Please see the Portfolios' prospectuses for additional information regarding these arrangements. A-14 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. The American Funds Insurance Series and the Franklin Templeton Variable Insurance Products Trust are not affiliated with Metropolitan Life Insurance Company. For information concerning compensation paid for the sale of the Policies, see "Distribution of the Policies." A-15 HOW THE POLICY WORKS [FLOW CHART] PREMIUM PAYMENTS - Flexible - Planned premium options - Guaranteed Minimum Death Benefit premium (5-year, 20-year, or to age 65) CHARGES FROM PREMIUM PAYMENTS - Sales Load: 2.25% up to Target Premium per Policy year (maximum 2.25% on all premiums) - Premium Tax Charge: 2.0% - Charge for Federal Taxes: 1.25% CASH VALUES - Net premium payments invested in your choice of Portfolio investments (after an initial period in the Fixed Account) or the Fixed Account - The cash value reflects investment experience, interest, premium payments, policy charges and any distributions from the Policy - We do not guarantee the cash value invested in the Portfolios - Any earnings you accumulate are generally free of any current income taxes - You may change the allocation of future net premiums at any time. You may transfer funds among Investment Divisions (and to the Fixed Account). Currently we do not limit the number of Investment Division transfers you can make in a Policy year (subject to restrictions we impose on frequent transfers). - We reserve the right to impose a $25 charge on each partial withdrawal and on each Investment Division transfer (including a transfer between an Investment Division and the Fixed Account) - We may limit the amount of transfers from (and in some cases to) the Fixed Account LOANS - You may borrow your cash value - Loan interest charge is 4.0% in Policy years 1-10 and 3.0% thereafter. - We transfer loaned funds out of the Fixed Account and the Investment Divisions into the Loan Account where we credit them with not less than 3.0% interest. RETIREMENT BENEFITS - Fixed settlement options are available for policy proceeds DEATH BENEFIT - Level, Variable and combined Level/Variable Death Benefit Options - Guaranteed not to be less than face amount (less any loan and loan interest) if the Guaranteed Minimum Death Benefit is in effect. - On or after age 121, under Options A and C, equal to the greater of (1) the face amount of the Policy as of the insured's age 121; and (2) 101% of the Policy's cash value. Under Option B, the face amount of the Policy as of the insured's age 121, plus the Policy's cash value. - Generally income tax free to named beneficiary; may be subject to estate tax. DAILY DEDUCTIONS FROM ASSETS OF THE SEPARATE ACCOUNT - Investment advisory fees and other expenses are deducted from the Portfolio values BEGINNING OF MONTH CHARGES - We deduct the cost of insurance protection (reflecting any substandard risk rating) from the cash value each month - Any Rider Charges - Policy Charge: $15.00 per month first year and $8.00 per month thereafter for Policies issued with face amounts of $50,000 and greater; but less than $250,000; $12.00 per month first year and $9.00 per month thereafter for Policies issued with face amounts of less than $50,000 - Coverage Expense Charge: Monthly charge imposed on base Policy face amount that applies during the first eight Policy years or during the first eight years following a face amount increase (in all years on a guaranteed basis). - Mortality and Expense Risk Charge applied against the cash value in the Separate Account at a maximum annual rate of .80% in Policy years 1-10; .35% in Policy years 11-19; .20% in Policy years 20-29; and .05% thereafter SURRENDER CHARGE - Applies on lapse, surrender, face amount reduction, or partial withdrawal or change in death benefit option that results in face reduction in first ten Policy years--or in the first ten Policy years following a face amount increase. Maximum charge applies in up to the first three Policy years. Thereafter, the charge decreases monthly basis over the remaining years of the surrender charge period. LIVING BENEFITS - If policyholder has elected and qualified for benefits for disability and becomes totally disabled, we will waive the monthly deduction or a specified amount of monthly premium during the period of disability up to certain limits. - You may surrender the Policy at any time for its cash surrender value - Deferred income taxes, including taxes on certain amounts borrowed, become payable upon surrender or lapse - Grace period for lapsing with no value is 62 days from the first date in which Monthly Deduction was not paid due to insufficient cash value - Subject to our rules, you may reinstate a lapsed Policy within three years of date of lapse if it has not been surrendered A-16 THE COMPANY, THE SEPARATE ACCOUNT AND THE PORTFOLIOS THE COMPANY Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. Our principal office is located at 200 Park Avenue, New York, New York 10166. MetLife is licensed to sell life insurance in all states and the District of Columbia, but we only issue the Policies in New York. We are obligated to pay all benefits under the Policies. THE SEPARATE ACCOUNT Metropolitan Life Separate Account UL is the funding vehicle for the Policies and other variable life insurance policies 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 or losses. Although we own the assets of the Separate Account, 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. This means that the assets of the Separate Account are not available to meet the claims of our general creditors, and may only be used to support the cash values of the variable life insurance policies issued by the Separate Account. We are obligated to pay the death benefit under the Policy even if that amount exceeds the Policy's cash value in the Separate Account. The amount of the death benefit that exceeds the Policy's cash value in the Separate Account is paid from our general account. Death benefits paid from the general account are subject to the financial strength and claims-paying ability of the Company. For other life insurance policies and annuity contracts that we issue, we pay all amounts owed under the policies and contracts from the general account. MetLife is regulated as an insurance company under state law, which generally imposes restrictions on the amount and type of investments in the general account. However, there is no guarantee that we will be able to meet our claims-paying obligations. There are risks to purchasing any insurance product. 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 PORTFOLIOS Each Investment Division of the Separate Account invests in a corresponding Portfolio. Each Portfolio is part of an open-end management investment company, more commonly known as a mutual fund, that serves as an investment vehicle for variable life insurance and variable annuity separate accounts of various insurance companies. The mutual funds that offer the Portfolios are the American Funds Insurance Series(R), Brighthouse Funds Trust I, Brighthouse Funds Trust II and the Franklin Templeton Variable Insurance Products Trust. Each of these mutual funds has an investment adviser responsible for overall management of the fund. Some investment advisers have contracted with sub-advisers to make the day-to-day investment decisions for the Portfolios. The adviser, sub-adviser and investment objective of each Portfolio are as follows:
PORTFOLIO 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 Management income as is consistent with the Company preservation of capital. American Funds Global Small Seeks long-term growth of capital. Capital Research and Management Capitalization Fund Company
A-17
PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------- --------------------------------------- ----------------------------------------- American Funds Growth Fund Seeks growth of capital. Capital Research and Management Company American Funds Growth-Income Seeks long-term growth of capital Capital Research and Management Fund and income. Company BRIGHTHOUSE FUNDS TRUST I AB Global Dynamic Allocation Seeks capital appreciation and Brighthouse Investment Advisers, LLC Portfolio -- Class B current income. Subadviser: AllianceBernstein L.P. Allianz Global Investors Dynamic Seeks total return. Brighthouse Investment Advisers, LLC Multi-Asset Plus Portfolio -- Subadviser: Allianz Global Investors Class B U.S. LLC American Funds(R) Balanced Seeks a balance between a high Brighthouse Investment Advisers, LLC Allocation Portfolio -- Class B level of current income and growth of capital, with a greater emphasis on growth of capital. American Funds(R) Growth Allocation Seeks growth of capital. Brighthouse Investment Advisers, LLC Portfolio -- Class B American Funds(R) Moderate Seeks a high total return in the form Brighthouse Investment Advisers, LLC Allocation Portfolio -- Class B of income and growth of capital, with a greater emphasis on income. AQR Global Risk Balanced Seeks total return. Brighthouse Investment Advisers, LLC Portfolio -- Class B Subadviser: AQR Capital Management, LLC BlackRock Global Tactical Strategies Seeks capital appreciation and Brighthouse Investment Advisers, LLC Portfolio -- Class B current income. Subadviser: BlackRock Financial Management, Inc. Brighthouse Asset Allocation 100 Seeks growth of capital. Brighthouse Investment Advisers, LLC Portfolio -- Class A Brighthouse Balanced Plus Seeks a balance between a high Brighthouse Investment Advisers, LLC Portfolio -- Class B level of current income and growth Subadviser: Overlay Portion: Pacific of capital, with a greater emphasis Investment Management Company LLC on growth of capital. Brighthouse/Aberdeen Emerging Seeks capital appreciation. Brighthouse Investment Advisers, LLC Markets Equity Portfolio -- Subadviser: Aberdeen Asset Managers Class A Limited Brighthouse/Templeton International Seeks current income with capital Brighthouse Investment Advisers, LLC Bond Portfolio -- Class A appreciation and growth of income. Subadviser: Franklin Advisers, Inc. Brighthouse/Wellington Large Cap Seeks long-term capital Brighthouse Investment Advisers, LLC Research Portfolio -- Class A appreciation. Subadviser: Wellington Management Company LLP Clarion Global Real Estate Seeks total return through Brighthouse Investment Advisers, LLC Portfolio -- Class A investment in real estate securities, Subadviser: CBRE Clarion Securities LLC emphasizing both capital appreciation and current income. ClearBridge Aggressive Growth Seeks capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: ClearBridge Investments, LLC Harris Oakmark International Seeks long-term capital Brighthouse Investment Advisers, LLC Portfolio -- Class A appreciation. Subadviser: Harris Associates L.P. Invesco Balanced-Risk Allocation Seeks total return. Brighthouse Investment Advisers, LLC Portfolio -- Class B Subadviser: Invesco Advisers, Inc.
A-18
PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------- -------------------------------------- ---------------------------------------- Invesco Mid Cap Value Portfolio -- Seeks high total return by investing Brighthouse Investment Advisers, LLC Class A in equity securities of mid-sized Subadviser: Invesco Advisers, Inc. companies. Invesco Small Cap Growth Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: Invesco Advisers, Inc. JPMorgan Global Active Allocation Seeks capital appreciation and Brighthouse Investment Advisers, LLC Portfolio -- Class B current income. Subadviser: J.P. Morgan Investment Management Inc. JPMorgan Small Cap Value Seeks long-term capital growth. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: J.P. Morgan Investment Management Inc. Loomis Sayles Global Markets Seeks high total investment return Brighthouse Investment Advisers, LLC Portfolio -- Class A through a combination of capital Subadviser: Loomis, Sayles & Company, appreciation and income. L.P. MetLife Multi-Index Targeted Risk Seeks a balance between growth of Brighthouse Investment Advisers, LLC Portfolio -- Class B capital and current income, with a Subadviser: Overlay Portion: MetLife greater emphasis on growth of Investment Advisors, LLC capital. MFS(R) Research International Seeks capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: Massachusetts Financial Services Company Morgan Stanley Mid Cap Growth Seeks capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: Morgan Stanley Investment Management Inc. Oppenheimer Global Equity Seeks capital appreciation. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: OppenheimerFunds, Inc. PanAgora Global Diversified Risk Seeks total return. Brighthouse Investment Advisers, LLC Portfolio -- Class B Subadviser: PanAgora Asset Management, Inc. PIMCO Inflation Protected Bond Seeks maximum real return, Brighthouse Investment Advisers, LLC Portfolio -- Class A consistent with preservation of Subadviser: Pacific Investment capital and prudent investment Management Company LLC management. PIMCO Total Return Portfolio -- Seeks maximum total return, Brighthouse Investment Advisers, LLC Class A consistent with the preservation of Subadviser: Pacific Investment capital and prudent investment Management Company LLC management. Pyramis(R) Managed Risk Portfolio -- Seeks total return. Brighthouse Investment Advisers, LLC Class B Subadviser: FIAM LLC Schroders Global Multi-Asset Seeks capital appreciation and Brighthouse Investment Advisers, LLC Portfolio -- Class B current income. Subadvisers: Schroder Investment Management North America Inc.; Schroder Investment Management North America Limited SSGA Growth and Income ETF Seeks growth of capital and income. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: SSGA Funds Management, Inc. SSGA Growth ETF Portfolio -- Seeks growth of capital. Brighthouse Investment Advisers, LLC Class A Subadviser: SSGA Funds Management, Inc.
A-19
PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER ------------------------------------- ---------------------------------------- ------------------------------------------- T. Rowe Price Mid Cap Growth Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio -- Class A Subadviser: T. Rowe Price Associates, Inc. BRIGHTHOUSE FUNDS TRUST II -- CLASS A Baillie Gifford International Stock Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio Subadviser: Baillie Gifford Overseas Limited BlackRock Bond Income Portfolio Seeks a competitive total return Brighthouse Investment Advisers, LLC primarily from investing in Subadviser: BlackRock Advisors, LLC fixed-income securities. BlackRock Capital Appreciation Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio Subadviser: BlackRock Advisors, LLC BlackRock Large Cap Value Portfolio Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Subadviser: BlackRock Advisors, LLC Brighthouse Asset Allocation 20 Seeks a high level of current income, Brighthouse Investment Advisers, LLC Portfolio with growth of capital as a secondary objective. Brighthouse Asset Allocation 40 Seeks high total return in the form of Brighthouse Investment Advisers, LLC Portfolio income and growth of capital, with a greater emphasis on income. Brighthouse Asset Allocation 60 Seeks a balance between a high Brighthouse Investment Advisers, LLC Portfolio level of current income and growth of capital, with a greater emphasis on growth of capital. Brighthouse Asset Allocation 80 Seeks growth of capital. Brighthouse Investment Advisers, LLC Portfolio Brighthouse/Artisan Mid Cap Value Seeks long-term capital growth. Brighthouse Investment Advisers, LLC Portfolio Subadviser: Artisan Partners Limited Partnership Brighthouse/Wellington Balanced Seeks long-term capital appreciation Brighthouse Investment Advisers, LLC Portfolio with some current income. Subadviser: Wellington Management Company LLP Brighthouse/Wellington Core Equity Seeks to provide a growing stream Brighthouse Investment Advisers, LLC Opportunities Portfolio of income over time and, Subadviser: Wellington Management secondarily, long-term capital Company LLP appreciation and current income. Frontier Mid Cap Growth Portfolio Seeks maximum capital Brighthouse Investment Advisers, LLC appreciation. Subadviser: Frontier Capital Management Company, LLC Jennison Growth Portfolio Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Subadviser: Jennison Associates LLC Loomis Sayles Small Cap Core Seeks long-term capital growth from Brighthouse Investment Advisers, LLC Portfolio investments in common stocks or Subadviser: Loomis, Sayles & Company, other equity securities. L.P. Loomis Sayles Small Cap Growth Seeks long-term capital growth. Brighthouse Investment Advisers, LLC Portfolio Subadviser: Loomis, Sayles & Company, L.P.
A-20
PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER -------------------------------------- --------------------------------------- ------------------------------------------- MetLife Aggregate Bond Index Seeks to track the performance of Brighthouse Investment Advisers, LLC Portfolio the Bloomberg Barclays Subadviser: MetLife Investment Advisors, U.S. Aggregate Bond Index. LLC MetLife Mid Cap Stock Index Seeks to track the performance of Brighthouse Investment Advisers, LLC Portfolio the Standard & Poor's MidCap 400(R) Subadviser: MetLife Investment Advisors, Composite Stock Price Index. LLC MetLife MSCI EAFE(R) Index Portfolio Seeks to track the performance of Brighthouse Investment Advisers, LLC the MSCI EAFE(R) Index. Subadviser: MetLife Investment Advisors, LLC MetLife Russell 2000(R) Index Seeks to track the performance of Brighthouse Investment Advisers, LLC Portfolio the Russell 2000(R) Index. Subadviser: MetLife Investment Advisors, LLC MetLife Stock Index Portfolio Seeks to track the performance of Brighthouse Investment Advisers, LLC the Standard & Poor's 500(R) Subadviser: MetLife Investment Advisors, Composite Stock Price Index. LLC MFS(R) Total Return Portfolio Seeks a favorable total return Brighthouse Investment Advisers, LLC through investment in a diversified Subadviser: Massachusetts Financial portfolio. Services Company MFS(R) Value Portfolio Seeks capital appreciation. Brighthouse Investment Advisers, LLC Subadviser: Massachusetts Financial Services Company Neuberger Berman Genesis Portfolio Seeks high total return, consisting Brighthouse Investment Advisers, LLC principally of capital appreciation. Subadviser: Neuberger Berman Investment Advisers LLC T. Rowe Price Large Cap Growth Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Portfolio Subadviser: T. Rowe Price Associates, Inc. T. Rowe Price Small Cap Growth Seeks long-term capital growth. Brighthouse Investment Advisers, LLC Portfolio Subadviser: T. Rowe Price Associates, Inc. VanEck Global Natural Resources Seeks long-term capital appreciation Brighthouse Investment Advisers, LLC Portfolio with income as a secondary Subadviser: Van Eck Associates consideration. Corporation Western Asset Management Seeks to maximize total return Brighthouse Investment Advisers, LLC Strategic Bond Opportunities consistent with preservation of Subadviser: Western Asset Management Portfolio capital. Company Western Asset Management Seeks to maximize total return Brighthouse Investment Advisers, LLC U.S. Government Portfolio consistent with preservation of Subadviser: Western Asset Management capital and maintenance of liquidity. Company FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST -- CLASS 2 Franklin Income VIP Fund Seeks to maximize income while Franklin Advisers, Inc. maintaining prospects for capital appreciation. Franklin Mutual Shares VIP Fund Seeks capital appreciation, with Franklin Mutual Advisers, LLC income as a secondary goal.
FOR MORE INFORMATION REGARDING THE PORTFOLIOS AND THEIR INVESTMENT ADVISERS AND SUBADVISERS, SEE THE PORTFOLIO PROSPECTUSES AND THEIR STATEMENTS OF ADDITIONAL INFORMATION, WHICH YOU CAN OBTAIN BY CALLING 1-800-638-5000. A-21 The Portfolios' investment objectives may not be met. The investment objectives and policies of certain Portfolios are similar to the investment objectives and policies of other funds that may be managed by the same investment adviser or sub-adviser. The investment results of the Portfolios may be higher or lower than the results of these funds. There is no assurance, and no representation is made, that the investment results of any of the Portfolios will be comparable to the investment results of any other fund. The Portfolios listed below are managed in a way that is intended to minimize volatility of returns (referred to as a "managed volatility strategy"): o AB Global Dynamic Allocation Portfolio o Allianz Global Investors Dynamic Multi-Asset Plus Portfolio o AQR Global Risk Balanced Portfolio o BlackRock Global Tactical Strategies Portfolio o Invesco Balanced-Risk Allocation Portfolio o JPMorgan Global Active Allocation Portfolio o Brighthouse Balanced Plus Portfolio o MetLife Multi-Index Targeted Risk Portfolio o PanAgora Global Diversified Risk Portfolio o Pyramis(R) Managed Risk Portfolio o Schroders Global Multi-Asset Portfolio Stock prices fluctuate, sometimes rapidly and dramatically, due to factors affecting individual companies, particular industries or sectors or general market conditions. Bond prices may fluctuate because they move in the opposite direction of interest rates. Foreign investing carries additional risks such as currency and market volatility. A managed volatility strategy is designed to reduce volatility of returns to the above Portfolios from investing in stocks and bonds. This strategy seeks to reduce such volatility by "smoothing" returns, which may result in an Portfolio outperforming the general securities market during periods of flat or negative market performance, and underperforming the general securities market during periods of positive market performance. This means that in periods of high market volatility, this managed volatility strategy could limit your participation in market gains; this may conflict with your investment objectives by limiting your ability to maximize potential growth of your Policy's cash value and, in turn, the value of any guaranteed benefit that is tied to investment performance. Other Portfolios may offer the potential for higher returns. SHARE CLASSES OF THE PORTFOLIOS The Portfolios offer various classes of shares, each of which has a different level of expenses. The prospectuses for the Portfolios may provide information for share classes that are not available through the Policy. When you consult the prospectus for any Portfolio, you should be careful to refer to only the information regarding the class of shares that is available through the Policy. For the American Funds Insurance Series and the Franklin Templeton Variable Insurance Products Trust, we offer Class 2 shares only; for Brighthouse Funds Trust I, we offer Class A and Class B shares; and for Brighthouse Funds Trust II, we offer Class A shares only. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS An investment adviser (other than Brighthouse Investment Advisers, LLC, formerly known as MetLife Advisers, LLC and as of the date of this prospectus, our affiliate) or subadviser of a Portfolio, or its affiliates, may make payments to us and/or certain of our affiliates. These payments may be used for a variety of purposes, including payment for expenses for certain administrative, marketing and support services with respect to the Policies and, in our role as intermediary, with respect to the Portfolios. We and our affiliates may profit from these payments. These payments may be derived, in whole or in part, from the advisory fee deducted from Portfolio assets. Policy Owners, through their indirect investment in the Portfolios, bear A-22 the costs of these advisory fees (see the Portfolio prospectuses for more information). The amount of the payments we receive is based on a percentage of assets of the Portfolio attributable to the Policies and certain other variable insurance products that we and our affiliates issue. These percentages differ and some advisers or subadvisers (or other affiliates) may pay us more than others. These percentages currently range up to 0.50%. Additionally, an investment adviser (other than Brighthouse Investment Advisers, LLC) or subadviser of a Portfolio or its affiliates may provide us with wholesaling services that assist in the distribution of the Policies and may pay us and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or subadviser (or their affiliates) with increased access to persons involved in the distribution of the Policies. As of the date of this prospectus, we and/or certain of our affiliated insurance companies have joint ownership interests in our affiliated investment adviser Brighthouse Investment Advisers, LLC, which is formed as a "limited liability company." Our ownership interests in Brighthouse Investment Advisers, LLC entitle us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from the Portfolios. We will benefit accordingly from assets allocated to the Portfolios to the extent they result in profits to the adviser. (See "Fee Tables--Annual Portfolio Operating Expenses" for information on the management fees paid by the Portfolios and the Statement of Additional Information for the Portfolios for information on the management fees paid by the adviser to the subadvisers.) In 2016, MetLife, Inc. announced plans to pursue the separation, through one or more transactions, of a substantial portion of its U.S. retail business, including Brighthouse Investment Advisers, LLC, then known as MetLife Advisers, LLC. The new separate retail business will be organized under a holding company named Brighthouse Financial, Inc. ("Brighthouse"). Following these transactions, Brighthouse Investment Advisers, LLC will be a wholly-owned subsidiary of Brighthouse and will no longer be affiliated with MetLife, and it is expected that MetLife and/or certain of its affiliates will receive payments from Brighthouse Investment Advisers, LLC and/or its affiliates of the type described in the second preceding paragraph. Additionally, it is expected that MetLife and/or certain of its affiliates will receive payments from Brighthouse Investment Advisers, LLC and/or its affiliates in an amount approximately equal to the profit distributions they would have received had these transactions not occurred. Certain Portfolios have adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. A Portfolio's 12b-1 Plan, if any, is described in more detail in the Portfolio's prospectus. (See "Fee Tables--Annual Portfolio Expenses" and "Distribution of the Policies.") Any payments we receive pursuant to those 12b-1 Plans are paid to us or our Distributor. Payments under a Portfolio's 12b-1 Plan decrease the Portfolio's investment return. For more specific information on the amounts we may receive on account of your investment in the Portfolios, you may call us toll free at 1-800-638-5000. SELECTION OF THE PORTFOLIOS We select the Portfolios offered through the Policy based on a number of criteria, including asset class coverage, the strength of the adviser's or subadviser'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 subadviser is one of our affiliates or whether the Portfolio, its adviser, its subadviser(s), or an affiliate will make payments to us or our affiliates. For additional information on these arrangements, see "Certain Payments We Receive with Regard to the Portfolios" above. In this regard, the profit distributions we receive from our affiliated investment advisers are a component of the total revenue that we consider in configuring the features and investment choices available in the variable insurance products that we and our affiliated insurance companies issue. Since we and our affiliated insurance companies may benefit more from the allocation of assets to Portfolios advised by our affiliates than those that are not, we may be more inclined to offer Portfolios advised by our affiliates in the variable insurance products we issue. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premium payments and/or transfers of 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 Policy Owners. We may include Portfolios based on recommendations from selling firms. In some cases, the selling firms may receive payments from the Portfolios they recommend and may benefit accordingly from the allocation of cash value to such Portfolios. WE DO NOT PROVIDE ANY INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY PARTICULAR PORTFOLIO. YOU BEAR THE RISK OF ANY DECLINE IN THE CASH VALUE OF YOUR POLICY RESULTING FROM THE PERFORMANCE OF THE PORTFOLIOS YOU HAVE CHOSEN. A-23 VOTING RIGHTS We own the Portfolio shares held in the Separate Account and have the right to vote those shares at meetings of the Portfolio shareholders. However, to the extent required by Federal securities law, we will give you, as Policy Owner, the right to instruct us how to vote the shares that are attributable to your Policy. We will determine, as of the record date, if you are entitled to give voting instructions and the number of shares to which you have a right of instruction. If we do not receive timely instructions from you, we will vote your shares for, against, or withhold from voting on, any proposition in the same proportion as the shares held in that Investment Division for all policies for which we have received voting instructions. The effect of this proportional voting is that a small number of Policy Owners may control the outcome of a vote. We will vote Portfolio shares held by our general account (or any unregistered separate account for which voting privileges were not extended) in the same proportion as the total of (i) shares for which voting instructions were received and (ii) shares that are voted in proportion to such voting instructions. We may disregard voting instructions for changes in the investment policy, investment adviser or principal underwriter of a Portfolio if required by state insurance law, or if we (i) reasonably disapprove of the changes and (ii) in the case of a change in investment policy or investment adviser, make a good faith determination that the proposed change is prohibited by state authorities or inconsistent with an Investment Division's investment objectives. If we do disregard voting instructions, the next semi-annual report to Policy Owners will include a summary of that action and the reasons for it. RIGHTS RESERVED BY METLIFE We and our affiliates may change the voting procedures and vote Portfolio shares without Policy Owner instructions, if the securities laws change. We also reserve the right: (1) to add Investment Divisions; (2) to combine Investment Divisions; (3) to substitute shares of another registered open-end management investment company, which may have different fees and expenses, for shares of a Portfolio; (4) to substitute or close an Investment Division to allocations of premium payments or cash value or both, and to existing investments or the investment of future premiums, or both, for any class of Policy or Policy Owner, at any time in our sole discretion; (5) to operate the Separate Account as a management investment company under the Investment Company Act of 1940 or in any other form; (6) to deregister the Separate Account under the Investment Company Act of 1940; (7) to combine it with other Separate Accounts; and (8) to transfer assets supporting the Policies from one Investment Division to another or from the Separate Account to other Separate Accounts, or to transfer assets to our general account as permitted by applicable law. We will exercise these rights in accordance with applicable law, including approval of Policy Owners if required. We will notify you if exercise of any of these rights would result in a material change in the Separate Account or its investments. We will not make any changes without receiving any necessary approval of the SEC and applicable state insurance departments. We will notify you of any changes. THE POLICIES PURCHASING A POLICY To purchase a Policy, you must submit a completed application and an initial premium to us at our Designated Office. (See "Receipt of Communications and Payments at MetLife's Designated Office.") The minimum face amount for the base Policy is $50,000 unless we consent to a lower amount. For Policies acquired through a pension or profit sharing plan qualified under Section 401 of the Internal Revenue Code of 1986, the minimum face amount is $25,000. The Policies are available for insureds age 85 or younger. We can provide you with details as to our underwriting standards when you apply for a Policy. We reserve the right to modify our minimum face amount and underwriting requirements at any time. We must receive evidence of insurability that satisfies our underwriting standards before we will issue a Policy. We reserve the right to reject an application for any reason permitted by law. A-24 We offer other variable life insurance policies that have different death benefits, policy features, and optional programs. However, these other policies also have different charges that would affect your Investment Division performance and cash values. To obtain more information about these other policies, including their eligibility requirements, contact our Designated Office or your registered representative. REPLACING EXISTING INSURANCE 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, and the Policy will impose a new surrender charge period. 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 may not issue the Policy until we have received an initial premium from your existing insurance company, the issuance of the Policy may be delayed. POLICY OWNER AND BENEFICIARY The Policy Owner is named in the application but may be changed from time to time. While the insured is living and the Policy is in force, the Policy Owner may exercise all the rights and options described in the Policy, subject to the terms of any beneficiary designation or assignment of the Policy. These rights include selecting and changing the beneficiary, changing the owner, changing the face amount of the Policy and assigning the Policy. At the death of the Policy Owner who is not the insured, his or her estate will become the Policy Owner unless a successor Policy Owner has been named. The Policy Owner's rights (except for rights to payment of benefits) terminate at the death of the insured. The beneficiary is also named in the application. You may change the beneficiary at any time before the death of the insured, unless the beneficiary designation is irrevocable. The beneficiary has no rights under the Policy until the death of the insured and must survive the insured in order to receive the death proceeds. If no named beneficiary survives the insured, we pay proceeds to the Policy Owner. A change of Policy Owner or beneficiary is subject to all payments made and actions taken by us under the Policy before we receive a signed change form. You can contact your registered representative or our Designated Office for the procedure to follow. You may assign (transfer) your rights in the Policy to someone else. An absolute assignment of the Policy is a change of Policy Owner and beneficiary to the assignee. A collateral assignment of the Policy does not change the Policy Owner or beneficiary, but their rights will be subject to the terms of the assignment. Assignments are subject to all payments made and actions taken by us under the Policy before we receive a signed copy of the assignment form. We are not responsible for determining whether or not an assignment is valid. Changing the Policy Owner or assigning the Policy may have tax consequences. (See "Tax Considerations" below.) 24 MONTH CONVERSION RIGHT GENERAL RIGHT. Generally, during the first two Policy years, or in the event of a material change in the investment policy of the Separate Account, you may convert the Policy to fixed benefit coverage by exchanging the Policy for a fixed benefit life insurance policy agreed to by us and issued by us or an affiliate that we name provided that you repay any Policy loans and loan interest, and the Policy has not lapsed. We make the exchange without evidence of insurability. The new policy will have the same base Policy face amount as that being exchanged. The new policy will have the same issue age, risk class and Policy Date as the variable life Policy had. Contact our Designated Office or your registered representative for more specific information about the 24 Month Conversion Right. The exchange may result in a cost or credit to you. On the exchange, you may need to make an immediate premium payment on the new policy in order to keep it in force. A-25 EXCHANGE RIGHT At least once each year you have the option to transfer all of your cash value to the Fixed Account and apply the cash surrender value to a new policy issued by us or an affiliate which provides paid-up insurance. Paid-up insurance is permanent insurance with no further premiums due. The face amount of the new policy of paid-up insurance may be less than the face amount of the Policy. PREMIUMS FLEXIBLE PREMIUMS Subject to the limits described below, you choose the amount and frequency of premium payments. You select a Planned Premium schedule, which consists of a first-year premium amount and an amount for subsequent premium payments. This schedule appears in your Policy. YOUR PLANNED PREMIUMS WILL NOT NECESSARILY KEEP YOUR POLICY IN FORCE. You may skip Planned Premium payments or make additional payments. Additional payments could be subject to underwriting. No payment can be less than $50, except with our consent. You can pay Planned Premiums on an annual, semi-annual or quarterly schedule, or on a monthly schedule if payments are drawn directly from your checking account under our pre-authorized checking arrangement. We will send premium notices for annual, semi-annual or quarterly Planned Premiums. You may make payments by check or through our pre-authorized checking arrangement. You can change your Planned Premium schedule by sending your request to us at our Designated Office. You may not make premium payments on or after the Policy anniversary when the insured reaches age 121, except for premiums required during the grace period. If any payments under the Policy exceed the "7-pay limit" under Federal tax law, your Policy will become a modified endowment contract and you may have more adverse tax consequences with respect to certain distributions than would otherwise be the case if premium payments did not exceed the "7-pay limit." Information about your "7-pay limit" is found in your Policy illustration. If we receive a premium payment 30 days or less before the anniversary of the 7-pay testing period that exceeds the "7-pay limit" and would cause the Policy to become a modified endowment contract, and waiting until the anniversary to apply that payment would prevent the Policy from becoming a modified endowment contract, we may retain the premium payment in a non-interest bearing account and apply the payment to the Policy on the anniversary. If we follow this procedure, we will notify you and give you the option of having the premium payment applied to the Policy before the anniversary. Otherwise, if you make a premium payment that exceeds the "7-pay limit," we will apply the payment to the Policy according to our standard procedures described below and notify you that the Policy has become a modified endowment contract. In addition, if you have selected the guideline premium test, Federal tax law limits the amount of premiums that you can pay under the Policy. You need our consent if, because of tax law requirements, a payment would increase the Policy's death benefit by more than it would increase cash value. We may require evidence of insurability before accepting the payment. We allocate net premiums to your Policy's Investment Divisions as of the date we receive the payments at our Designated Office (or at our Administrative Office in Tampa, Florida), if they are received before the close of regular trading on the New York Stock Exchange. Payments received after that time, or on a day that the New York Stock Exchange is not open, will be allocated to your Policy's Investment Divisions on the next day that the New York Stock Exchange is open. (See "Receipt of Communications and Payments at MetLife's Designated Office.") Under our current processing, we treat any payment received by us as a premium payment unless it is clearly marked as a loan repayment. AMOUNT PROVIDED FOR INVESTMENT UNDER THE POLICY INVESTMENT START DATE. Your initial net premium is credited with Fixed Account interest as of the investment start date. The investment start date is the later of the Policy Date and the date we first receive a premium payment for the Policy at our Designated Office. (See "Receipt of Communications and Payments at MetLife's Designated Office.") A-26 PREMIUM WITH APPLICATION. If you make a premium payment with the application, unless you request otherwise, the Policy Date is the date the policy application is approved. Monthly Deductions begin on the Policy Date. You may only make one premium payment with the application. The minimum amount you must pay is set forth in the application. If we decline an application, we refund the premium payment made. If you make a premium payment with the application, we will cover the insured under a temporary insurance agreement beginning on the later of the date the application is signed or on the date of any required medical examination. (See "Death Benefits.") PREMIUM ON DELIVERY. If you pay the initial premium upon delivery of the Policy, unless you request otherwise, the Policy Date and the investment start date are the date your premium payment is received at our Designated Office. Monthly Deductions begin on the Policy Date. BACKDATING. We may sometimes backdate a Policy, if you request, by assigning a Policy Date earlier than the date the Policy application is approved. You may wish to backdate so that you can obtain lower cost of insurance rates, based on a younger insurance age. For a backdated Policy, you must also pay the minimum premiums due for the period between the Policy Date and the investment start date. As of the investment start date, we allocate the net premiums to the Policy, adjusted for monthly Policy charges. For a backdated Policy, the investment start date is the later of the date the policy application is approved and the date your premium is received at our Designated Office. RIGHT TO EXAMINE POLICY You may cancel the Policy within ten days after you receive it. You may return the Policy to our Designated Office (see "Receipt of Communications and Payments at MetLife's Designated Office") or your registered representative. Insurance coverage ends as soon as you return the Policy (determined by postmark, if the Policy is mailed). If you cancel the Policy, we refund any premiums paid. ALLOCATION OF NET PREMIUMS We allocate your initial net premium to the Fixed Account as of the investment start date. We will hold your initial net premium in the Fixed Account for twenty days, and then we make the allocation among the Investment Divisions as you choose. You may allocate any whole percentage to an Investment Division. You make the initial premium allocation when you apply for a Policy. You can change the allocation of future premiums at any time thereafter. The change will be effective for premiums applied on or after the date when we receive your request. You may request the change by telephone, by written request (which may be telecopied to us) or over the Internet. (See "Receipt of Communications and Payments at MetLife's Designated Office.") When we allocate net premiums to your Policy's Investment Divisions, we convert them into accumulation units of the Investment Divisions. We determine the number of accumulation units by dividing the dollar amount of the net premium by the accumulation unit value. For your initial premium, we use the accumulation unit value on the investment start date. For subsequent premiums, we use the accumulation unit value next determined after receipt of the payment. (See "Cash Value.") RECEIPT OF COMMUNICATIONS AND PAYMENTS AT METLIFE'S DESIGNATED OFFICE We will treat your request for a Policy transaction, or your submission of a payment, as received by us if we receive a request conforming to our administrative procedures or a payment at our Designated Office before the close of regular trading on the New York Stock Exchange on that day (usually 4:00 p.m. Eastern Time). If we receive it after that time, 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 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 Designated Office for premium payments is printed on the billing statement we mail to you. If you do not have your billing statement you may call us at 1-800-638-5000 to obtain the address. The address to use depends on whether you purchased the Policy through a registered representative of our former affiliates MetLife Securities, Inc. or New England Securities Corporation, or through another registered representative. If you purchased the Policy through a registered representative of MetLife Securities, Inc. or New England Securities Corporation, premium payments should be mailed to A-27 MetLife, P.O. Box 371351, Pittsburgh, PA 15250-7351. If your representative was not registered with one of these two former affiliates, premium payments should be mailed to MetLife, P.O. Box 371862, Pittsburgh, PA 15250-7862. The Designated Office for other transactions is as follows: Payment Inquiries and MetLife Correspondence P.O. Box 354 Warwick, RI 02887-0354 Beneficiary and Ownership MetLife Changes P.O. Box 313 Warwick, RI 02887-0313 Surrenders, Loans, MetLife Withdrawals and P.O. Box 543 Investment Division Transfers Warwick, RI 02887-0543 Cancellations (Right to Examine Policy MetLife Period) Free Look Unit 500 Schoolhouse Road Johnstown, PA 15904 Death Claims MetLife P.O. Box 353 Warwick, RI 02887-0353 Investment Division Transfers and Other (800) 638-5000 Telephone Transactions and Inquiries
You may request a cash value transfer or reallocation of future premiums by written request (which may be telecopied) to us, by telephoning us or over the Internet (subject to our restrictions on frequent transfers). To request a transfer or reallocation by telephone, you should contact your registered representative or contact us at 1-800-638-5000. To request a transfer over the Internet, you may log on to our website at www.metlife.com. We use reasonable procedures to confirm that instructions communicated by telephone, facsimile or Internet are genuine. Any telephone, facsimile or Internet instructions that we reasonably believe to be genuine are your responsibility, including losses arising from any errors in the communication of instructions. However, because telephone and Internet 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 or Internet instructions, or that you have authorized any such person to act for you. Telephone, facsimile, and computer systems (including the Internet) may not always be available. Any telephone, facsimile or computer system, whether it is yours, your service provider's, your registered 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. If you send your premium payments or transaction requests to an address other than the one we have designated for receipt of such 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. CYBERSECURITY Our variable life insurance business is largely conducted through digital communications and data storage networks and systems operated by us and our service providers or other business partners (e.g., the Portfolios and the firms involved in the distribution and sale of our variable life insurance policies). For example, many routine operations, such as processing Policy Owners' requests and elections and day-to-day record keeping, are all executed through computer networks and systems. We have established administrative and technical controls and a business continuity plan to protect our operations against cybersecurity breaches. Despite these protocols, a cybersecurity breach could have a material, negative impact on A-28 MetLife and the Separate Account, as well as individual Policy Owners and their Policies. Our operations also could be negatively affected by a cybersecurity breach at a third party, such as a governmental or regulatory authority or another participant in the financial markets. Cybersecurity breaches can be intentional or unintentional events, and can occur through unauthorized access to computer systems, networks or devices; infection from computer viruses or other malicious software code; or attacks that shut down, disable, slow or otherwise disrupt operations, business processes or website access or functionality. Cybersecurity breaches can interfere with our processing of Policy transactions, including the processing of transfer orders from our website or with the Portfolios; impact our ability to calculate unit values; cause the release and possible destruction of confidential Policy Owner or business information; or impede order processing or cause other operational issues. Although we continually make efforts to identify and reduce our exposure to cybersecurity risk, there is no guarantee that we will be able to successfully manage this risk at all times. PAYMENT OF PROCEEDS We ordinarily pay any cash surrender value, loan value or death benefit proceeds from the Investment Divisions within seven days after we receive a request, or satisfactory proof of death of the insured (and any other information we need to pay the death proceeds). (See "Receipt of Communications and Payments at MetLife's Designated Office.") However, we may delay payment (except when a loan is made to pay a premium to us) or transfers from the Investment Divisions: (i) if the New York Stock Exchange is closed (other than customary weekend and holiday closing), or if trading on the New York Stock Exchange is restricted as determined by the SEC; or (ii) if an emergency exists as determined by the SEC, as a result of which disposal of securities is not reasonably practicable or it is not reasonably practicable to determine the value of the net assets of the Separate Account. We may withhold payment of surrender, withdrawal or loan proceeds if any portion of those proceeds would be derived from a Policy Owner's check that has not yet cleared (i.e., that could still be dishonored by your banking institution). We may use telephone, facsimile, Internet or other means of communications to verify that payment from the Policy Owner's check has been or will be collected. We will not delay payment longer than necessary for us to verify that payment has been or will be collected. Policy Owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. We will pay the proceeds in one sum, including either by check, by placing the amount in an account that earns interest, by any other method of payment that provides the beneficiary with immediate and full access to the proceeds, or under other settlement options that we may make available. None of these options vary with the investment performance of the Separate Account. More detailed information concerning settlement options is available in the Statement of Information and on request from our Designated Office. We will pay interest on the proceeds as required by applicable state law. Unless otherwise requested and subject to state law, the Policy's death proceeds will generally be paid to the beneficiary through a settlement option called the Total Control Account. The Total Control Account is an interest-bearing account through which the beneficiary has immediate and full access to the proceeds, with unlimited draft writing privileges. We credit interest to the account at a rate that will not be less than a guaranteed minimum annual effective rate. You may also elect to have any Policy surrender proceeds paid into a Total Control Account established for you. Assets backing the Total Control Accounts are maintained in our general account and are subject to the claims of our creditors. We will bear the investment experience of such assets; however, regardless of the investment experience of such assets, the interest credited to the Total Control Account will never fall below the applicable guaranteed minimum annual effective rate. Because we bear the investment experience of the assets backing the Total Control Accounts, we may receive a profit from these assets. The Total Control Account is not insured by the FDIC or any other governmental agency. 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 A-29 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 "Receipt of Communications and Payments at MetLife's Designated Office.") CASH VALUE Your Policy's total cash value includes its cash value in the Separate Account and in the Fixed Account. If you have a Policy loan, the cash value also includes the amount we hold in the Loan Account as a result of the loan. The cash value reflects: -- net premium payments -- the net investment experience of the Policy's Investment Divisions -- interest credited to cash value in the Fixed Account -- interest credited to amounts held in the Loan Account for a Policy loan -- the death benefit option you choose -- Policy charges -- partial withdrawals -- transfers among the Investment Divisions and the Fixed Account. The Policy's total cash value in the Separate Account equals the number of accumulation units credited in each Investment Division multiplied by that Investment Division's accumulation unit value. We convert any premium, interest earned on loan cash value, or cash value allocated to an Investment Division into accumulation units of the Investment Division. Surrenders, partial withdrawals, Policy loans, transfers and charges deducted from the cash value reduce the number of accumulation units credited in an Investment Division. We determine the number of accumulation units by dividing the dollar amount of the transaction by the Investment Division's accumulation unit value next determined following the transaction. (In the case of an initial premium, we use the accumulation unit value on the investment start date.) The accumulation unit value of an Investment Division depends on the net investment experience of its corresponding Portfolio and reflects fees and expenses of the Portfolio. We determine the accumulation unit value as of the close of regular trading on the New York Stock Exchange on each day that the Exchange is open for trading by multiplying the most recent accumulation unit value by the net investment factor ("NIF") for that day (see below). The NIF for an Investment Division reflects: -- the change in net asset value per share of the corresponding Portfolio (as of the close of regular trading on the Exchange) from its last value, -- the amount of dividends or other distributions from the Portfolio since the last determination of net asset value per share, and -- any deductions for taxes that we make from the Separate Account. The NIF can be greater or less than one. DEATH BENEFITS If the insured dies while the Policy is in force, we pay a death benefit to the beneficiary. Coverage under the Policy generally begins when you pay the initial premium. If you make a premium payment with the application, we will cover the insured under a temporary insurance agreement for a limited time that begins on the later of the date we receive the premium payment or the date of any required medical examination. Temporary coverage is not available for proposed insureds who have received medical treatment for, or been diagnosed as having, certain conditions or diseases specified in the temporary insurance agreement. The maximum temporary coverage is the lesser of the amount of insurance applied for and $1,000,000. A-30 DEATH BENEFIT OPTIONS. When you apply for a Policy, you must choose among three death benefit options. If you fail to select a death benefit option in the application, we will seek the required information from you. The Option A death benefit is equal to the face amount of the Policy. The Option A death benefit is fixed, subject to increases required by the Internal Revenue Code of 1986 (the "Code"). The Option B death benefit is equal to the face amount of the Policy, plus the Policy's cash value, if any. The Option B death benefit is also subject to increases required by the Code. The Option C death benefit (available if the insured is age 60 or younger) is equal to the face amount of the Policy plus the Policy's cash value until the insured attains age 65, at which time we will increase the Policy's face amount by the amount of the Policy's cash value and thereafter the death benefit will remain level, at the increased face amount, subject to increases required by the Code. CHOICE OF TAX TEST. The Internal Revenue Code requires the Policy's death benefit to be not less than an amount defined in the Code. As a result, if the cash value grows to certain levels, the death benefit increases to satisfy tax law requirements. When you apply for your Policy, you select which tax test will apply to the death benefit. You will choose between: (1) the guideline premium test, and (2) the cash value accumulation test. The test you choose at issue cannot be changed. Under the GUIDELINE PREMIUM TEST, the amount of premium that can be paid is subject to tax law limits. Additionally, the death benefit will not be less than the cash value times the guideline premium factor. See Appendix A. Under the CASH VALUE ACCUMULATION TEST, the death benefit will not be less than the cash value times the net single premium factor set by the Code. Net single premium factors are based on the age, smoking status, and sex (if not unisex) of the insured at the time of the calculation. Sample net single premium factors appear in Appendix A. If cash value growth in the later Policy years is your main objective, the guideline premium test may be the appropriate choice because it does not require as high a death benefit as the cash value accumulation test, and therefore cost of insurance charges may be lower, once the Policy's death benefit is subject to increases required by the Code. If you select the cash value accumulation test, you can generally make a higher amount of premium payments for any given face amount, and a higher death benefit may result in the long term. If cash value growth in the early Policy years is your main objective, the cash value accumulation test may be the appropriate choice because it allows you to invest more premiums in the Policy for each dollar of death benefit. AGE 121. The death benefit payable under Option A or Option C on or after the insured's attained age 121 will be the greater of: -- 101% of the cash value on the date of death, or -- the face amount of the base Policy on the Policy anniversary at the insured's attained age 121. The death benefit payable under Option B on or after the insured's attained age 121 will be the face amount of the base Policy on the Policy anniversary at the insured's attained age 121, plus the cash value on the date of death. The tax consequences of keeping the Policy in force beyond the insured's attained age 121 are unclear. DEATH PROCEEDS PAYABLE The death proceeds we pay are equal to the death benefit on the date of the insured's death, reduced by any outstanding loan and accrued loan interest on that date. If death occurs during the grace period, we reduce the proceeds by the amount of unpaid Monthly Deductions. (See "Lapse and Reinstatement.") We increase the death proceeds (1) by any rider benefits payable and (2) by any cost of insurance charge made for a period beyond the date of death. Riders that can have an effect on the amount of death proceeds payable are the Accelerated Death Benefit Rider, the Accidental Death Benefit Rider and the Options to Purchase Additional Insurance Coverage Rider. (See "Additional Benefits by Rider.") We may adjust the death proceeds if the insured's age or sex was misstated in the application, if death results from the insured's suicide within two years from the Policy's date of issue, or if a rider limits the death benefit. A-31 SUICIDE. If the insured commits suicide within two years from the date of issue, the death benefit will be limited to premiums paid, less any partial withdrawals, less any loan and loan interest outstanding on the date of death. If the insured commits suicide within two years after the effective date of an increase in face amount, the death benefit for such increase may be limited to the Monthly Deductions for the increase. CHANGE IN DEATH BENEFIT OPTION After the first Policy year you may change your death benefit option, subject to our underwriting rules, by written request to our Designated Office. The change will be effective on the monthly anniversary on or following the date we approve your request. We may require proof of insurability. A change in death benefit option may have tax consequences. If you change from Option A (or from Option C after the insured's attained age 65) to Option B (or to Option C on or before the insured's attained age 60), we reduce the Policy's face amount if necessary so that the death benefit is the same immediately before and after the change. A face amount reduction below $50,000 requires our consent. If we reduce the face amount, we will first reduce any prior increases in face amount that you applied for, in the reverse order in which the increases occurred, then any remaining initial face amount, and then any increase in face amount from a prior change in death benefit option, but not below the Policy minimum. A partial withdrawal of cash value may be necessary to meet Federal tax law limits on the amount of premiums that you can pay into the Policy. A Surrender Charge may apply to a Policy face amount reduction or partial withdrawal that reduces the face amount on a change from Option A (or from Option C after the insured's attained age 65) to Option B (or to Option C on or before the insured's attained age 60). (See "Surrender Charge.") In addition, if the face amount reduction occurs within 12 months after a face amount increase, we will deduct a proportionate part of the Coverage Expense Charges due with respect to the face amount increase for the remainder of the 12-month period. If you change from Option B (or from Option C on or before the insured's attained age 65) to Option A, we increase the Policy's face amount, if necessary, so that the death benefit is the same immediately before and after the change. This increase in face amount is not subject to the Coverage Expense Charge and will not be subject to any Surrender Charge. INCREASE IN FACE AMOUNT You may increase the Policy's face amount. We require satisfactory evidence of insurability, and the insured's attained age must be 85 or less. The minimum amount of increase permitted is $5,000. The increase is effective on the monthly anniversary on or next following our approval of your request. Requests for face amount increases should be submitted to our Designated Office. An increase in face amount may have tax consequences. The face amount increase will have its own Target Premium, as well as its own Surrender Charge, current cost of insurance rates, Coverage Expense Charge and Right to Examine Policy and suicide and contestability periods as if it were a new Policy. (See "Surrender Charge", "Monthly Deduction from Cash Value", "Partial Withdrawal" and "Reduction in Face Amount.") When calculating the monthly cost of insurance charge, we attribute the Policy's cash value first to any remaining initial face amount (including any increase in face amount from a prior change in death benefit option), then to any face amount increases in the order in which they were issued, for purposes of determining the net amount at risk. We reserve the right to (i) restrict certain Policy changes, such as death benefit increases, or (ii) require the issuance of a new Policy in connection with such Policy changes if we deem it administratively necessary or prudent to do so in order to comply with applicable law, including applicable Federal income tax law. REDUCTION IN FACE AMOUNT After the first Policy year, you may reduce the face amount of your Policy without receiving a distribution of any Policy cash value. If you reduce the face amount of your Policy, we deduct any Surrender Charge that applies from the Policy's cash value in proportion to the amount of the face amount reduction. If the face amount of your Policy is reduced in the first year following a face amount increase, we will also deduct a proportionate part of the Coverage Expense Charges due for the remainder of the first year following the face amount increase. A face amount reduction will decrease the Policy's death benefit unless we are increasing the death benefit to satisfy Federal income tax laws, in which case a face amount reduction will not decrease the death benefit unless we deduct a A-32 Surrender Charge from the cash value. A reduction in face amount in this situation may not be advisable. The amount of any face reduction must be at least $5,000, and the face amount remaining after a reduction must meet our minimum face amount requirements for issue, except with our consent. If you choose to reduce your Policy's face amount, unless you request otherwise, we will first decrease any prior increases in base Policy face amount that you applied for, in the reverse order in which the increases occurred, then any remaining initial base Policy face amount, and then any increase in face amount from a prior change in death benefit option. A reduction in face amount reduces the Federal tax law limits on the amount of premiums that you can pay under the Policy under the guideline premium test. In these cases, a portion of the Policy's cash value may have to be paid to you to comply with Federal tax law. A face amount reduction takes effect on the monthly anniversary on or next following the date we receive your request. You can contact your registered representative or the Designated Office for information on face amount reduction procedures. A reduction in the face amount of a Policy may create a modified endowment contract or have other adverse tax consequences. If you are contemplating a reduction in face amount, you should consult your tax adviser regarding the tax consequences of the transaction. (See "Tax Considerations.") SURRENDERS AND PARTIAL WITHDRAWALS SURRENDER You may surrender the Policy for its cash surrender value at any time while the insured is living. We determine the cash surrender value as of the date when we receive the surrender request. (See "Receipt of Communications and Payments at MetLife's Designated Office.") The cash surrender value equals the cash value reduced by any Policy loan and accrued interest and by any applicable Surrender Charge. (See "Surrender Charge.") If you surrender the Policy in the first Policy year (or in the first year following a face amount increase), we will also deduct an amount equal to the remaining first year Coverage Expense Charges. We reserve the right to also deduct an amount equal to the remaining first year Policy Charges. If you surrender the Policy, coverage will terminate on the monthly anniversary on or next following the date of surrender. If the insured dies on or after the surrender date, but before the termination date, we will reverse the surrender and will pay the Policy's death benefit to the beneficiary, but we will deduct from the death proceeds an amount equal to the cash surrender value paid to you. You may apply all or part of the surrender proceeds to a payment option. Once a Policy is surrendered, all coverage and benefits cease and cannot be reinstated. A surrender may result in adverse tax consequences. (See "Tax Considerations" below.) The Policies are designed to be long-term investments. As a result, you should be aware that if you surrender your Policy in the first Policy year, the Surrender Charge is likely to exceed the cash value of your Policy and you will receive no proceeds upon surrender. PARTIAL WITHDRAWAL After the first Policy anniversary you may withdraw a portion of the Policy's cash surrender value. A partial withdrawal reduces the Policy's death benefit and may reduce the Policy's face amount if necessary so that the amount at risk under the Policy will not increase. A partial withdrawal may also reduce rider benefits. The minimum amount of a partial withdrawal request must be $500. We have the right to limit partial withdrawals to no more than 90% of the cash surrender value. In addition, a partial withdrawal will be limited by any restriction that we currently impose on withdrawals from the Fixed Account. (See "The Fixed Account.") Currently, we permit partial withdrawals equal to the lesser of 100% of the Policy's cash surrender value in the Separate Account as of the beginning of the year, or the maximum amount that can be withdrawn without causing the Policy's face amount to fall below the minimum permitted. (However, we may allow the face amount to fall below the minimum if the Policy has been in force for at least 15 years and the insured's attained age is greater than 55.) You may not make a partial withdrawal that would reduce your cash surrender value to less than the amount of two Monthly Deductions. A-33 We have the right to limit partial withdrawals to 12 per Policy year. Currently we do not limit the number of partial withdrawals. We reserve the right to impose a charge of $25 on each partial withdrawal. If a partial withdrawal reduces your Policy's face amount, the amount of the Surrender Charge that will be deducted from your cash value is an amount that is proportional to the amount of the face reduction. The amount deducted will reduce the remaining Surrender Charge payable under the Policy. No Surrender Charge will apply on up to 10% of the cash surrender value withdrawn each year, measured as a percentage of each withdrawal. EXAMPLE. The following example assumes that a Policy Owner withdraws, in the first month of the second Policy year, 20% of the cash surrender value of a Policy. The insured under the Policy is assumed to be the representative insured shown in the fee table on page A-8 of the prospectus. As shown in the fee table, the Surrender Charge for that insured is $14.00 per $1,000 of Policy face amount. The Policy is assumed to have the other characteristics shown below: Face Amount:................. $ 375,000 Death Benefit Option:........ Option A -- Level Cash Value:.................. $ 12,000 Surrender Charge:............ $ -5,250 ($14.00 x $375,000/1,000) ------------------- Cash Surrender Value:........ $ 6,750 x 20% ------------------- Withdrawal Amount:........... $ 1,350
The first 10% of cash surrender value, or $675, can be withdrawn free of Surrender Charge. The remaining $675 withdrawn is subject to a portion of the Policy's Surrender Charge -- based on the ratio that such excess withdrawal amount bears to the Policy's face amount less the Surrender Charge, as shown in the formula below: Withdrawal Amount in Excess of Free Withdrawal ---------------------------------- Surrender Charge x = Surrender Charge On Withdrawal Face Amount less Surrender Charge $675 ---- $5,250 x = $10 $375,000 - $5,250
Because the Policy has a level death benefit, the withdrawal will cause a dollar for dollar reduction in the Policy's face amount, so that the cash value and the face amount will both be reduced by the $1,350 withdrawal and by the $10 Surrender Charge. The effect of the withdrawal on the Policy would be as follows: Face Amount before Withdrawal................ $375,000 Withdrawal.................................. - 1,350 Surrender Charge on Withdrawal.............. - 10 ---------- Face Amount after Withdrawal................. $373,640 Surrender Charge before Withdrawal........... $ 5,250 Surrender Charge on Withdrawal.............. - 10 ---------- Surrender Charge after Withdrawal............ $ 5,240 Cash Value before Withdrawal................. $ 12,000 Withdrawal.................................. - 1,350 Surrender Charge on Withdrawal.............. - 10 ---------- Cash Value after Withdrawal.................. $ 10,640 Surrender Charge after Withdrawal............ - 5,240 ---------- Cash Surrender Value after Withdrawal........ $ 5,400
A-34 Any face amount reduction resulting from a partial withdrawal will reduce the face amount in the following order: any prior increases in base Policy face amount that you applied for, in the reverse order in which the increases occurred; any remaining initial face amount; and then any face amount increases resulting from a change in death benefit option, down to the required minimum. A partial withdrawal reduces the cash value in the Investment Divisions of the Separate Account and the Fixed Account in the same proportion that the cash value in each bears to the Policy's total unloaned cash value. We determine the amount of cash surrender value paid upon a partial withdrawal as of the date when we receive a request. You can contact your registered representative or our Designated Office for information on partial withdrawal procedures. (See "Receipt of Communications and Payments at MetLife's Designated Office.") A reduction in the death benefit as a result of a partial withdrawal may create a modified endowment contract or have other adverse tax consequences. If you are contemplating a partial withdrawal, you should consult your tax adviser regarding the tax consequences. (See "Tax Considerations.") TRANSFERS TRANSFER OPTION You may transfer your Policy's cash value between and among the Investment Divisions and the Fixed Account. Your right to transfer begins 20 days after we apply your initial premium to the Policy. We reserve the right to limit transfers to four per Policy year and to impose a charge of $25 per transfer. Currently we do not limit the number of transfers per Policy year or impose a charge on transfers. We treat all transfer requests made at the same time as a single request. The transfer is effective as of the date when we receive the transfer request, if the request is received before the close of regular trading on the New York Stock Exchange. Transfer requests received after that time, or on a day that the New York Stock Exchange is not open, will be effective on the next day that the New York Stock Exchange is open. (See "Receipt of Communications and Payments at MetLife's Designated Office.") For special rules regarding transfers involving the Fixed Account, see "The Fixed Account". 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. In addition, as described below, we treat all American Funds Insurance Series portfolios ("American Funds portfolios") as Monitored Portfolios. We monitor the following portfolios: American Funds Global Small Capitalization Fund Baillie Gifford International Stock Portfolio Brighthouse/Aberdeen Emerging Markets Equity Portfolio Brighthouse/Templeton International Bond Portfolio Clarion Global Real Estate Portfolio Harris Oakmark International Portfolio Invesco Small Cap Growth Portfolio JPMorgan Small Cap Value Portfolio Loomis Sayles Global Markets Portfolio Loomis Sayles Small Cap Core Portfolio Loomis Sayles Small Cap Growth Portfolio MetLife MSCI EAFE(R) Index Portfolio MetLife Russell 2000(R) Index Portfolio MFS(R) Research International Portfolio Neuberger Berman Genesis Portfolio A-35 Oppenheimer Global Equity Portfolio T. Rowe Price Small Cap Growth Portfolio VanEck Global Natural Resources Portfolio Western Asset Management Strategic Bond Opportunities Portfolio 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 any Monitored Portfolios 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. A first occurrence will result in a warning letter; a second occurrence will result in the imposition of the restriction for a six-month period; a third occurrence will result in the permanent imposition of the restriction. Transfers made under an Automated Investment Strategy are not treated as transfers when we monitor the frequency of transfers. 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, 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 Portfolios generally are "omnibus" orders from intermediaries such as retirement plans or A-36 separate accounts funding variable insurance products. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance products 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 portfolio 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 Policy 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 a warning letter; a second occurrence will result in the imposition of the restriction for a six-month period; a third occurrence will result in the permanent imposition of the restriction. In addition to the foregoing, your right to make transfers is subject to limitations or modifications by us if we determine, in our sole opinion, that the exercise of the right by one or more owners with interests in the Investment Divisions is, or would be, to the disadvantage of other owners. Restrictions may be applied in any manner reasonably designed to prevent any use of the transfer right that we consider to be to the disadvantage of other owners. A limitation or modification could be applied to transfers to and from one or more of the Investment Divisions and could include, but is not limited to: (1) the requirement of a minimum time period between each transfer; (2) not accepting a transfer request from a third party acting under authorization on behalf of more than one owner; (3) limiting the dollar amount that may be transferred by an owner between Investment Divisions at any one time; or (4) requiring that a transfer request be provided in writing and signed by the owner. AUTOMATED INVESTMENT STRATEGIES You can choose one of five automated investment strategies. You can change or cancel your choice at any time. EQUITY GENERATORSM. The Equity Generator allows you to transfer the interest earned in the Fixed Account to any one of the Investment Divisions on each monthly anniversary. The interest earned in the month must be at least $20 in order for the transfer to take place. If less than $20 is earned, no transfer will occur, and the interest not transferred cannot be counted towards the next month's minimum. ALLOCATORSM. The Allocator allows you to systematically transfer cash value from the Fixed Account or any one Investment Division (the "source fund") to any number of Investment Divisions. The transfers will take place on each monthly anniversary. You can choose to transfer a specified dollar amount (1) for a specified number of months, or (2) until the source fund is depleted. In either case, you must select a dollar amount that would allow transfers to continue for at least three months. ENHANCED DOLLAR COST AVERAGER. With the Enhanced Dollar Cost Averager, cash value is transferred from the EDCA fixed account to the Investment Divisions monthly. You elect the EDCA at issue and select the total dollar amount of cash value to be transferred. The cash value earmarked for the strategy is held in the EDCA fixed account where it may be credited with a rate of interest that is higher than the Fixed Account's current crediting rate. The amount transferred each month to the Investment Divisions equals the total amount earmarked for the strategy divided by 12. A-37 REBALANCERSM. The Rebalancer allows your Policy's cash value to be automatically redistributed on a quarterly basis among the Investment Divisions and the Fixed Account in accordance with the allocation percentages you have selected. INDEX SELECTORSM. The Index Selector allows you to choose one of five asset allocation models which are designed to correlate to various risk tolerance levels. Based on your selection, we allocate 100% of your cash value among the five Investment Divisions that invest in the five index Portfolios available under the Policy (the MetLife Aggregate Bond Index, MetLife MSCI EAFE Index, MetLife Stock Index, MetLife Mid Cap Stock Index and MetLife Russell 2000 Index Portfolios) and the Fixed Account. On a quarterly basis, we will redistribute your cash value among these Investment Divisions and the Fixed Account in order to return your cash value to the original allocation percentages. If you change your allocation of net premiums the Index Selector strategy, including the rebalancing feature, will be terminated. We will continue to implement the Index Selector strategy using the percentage allocations of the model that was in effect when you elected the Index Selector strategy. You should consider whether it is appropriate for you to continue using this strategy over time if your risk tolerance, time horizon or financial situation changes. The asset allocation models used in Index Selector may change from time to time. If you are interested in an updated model, please contact your registered representative. You may not elect Index Selector unless you purchased the Policy prior to July 1, 2016 through a registered representative of one of our formerly affiliated broker-dealers MetLife Securities, Inc. or New England Securities Corporation. However, ask your registered representative how you might design a similar investment strategy using Rebalancer. These automated investment strategies allow you to take advantage of investment fluctuations, but none assures a profit nor protects against a loss. Because certain strategies involve continuous investment in securities regardless of fluctuating price levels of such securities, you should consider your financial ability to continue purchases through periods of fluctuating price levels. We reserve the right to modify or terminate any of the automated investment strategies for any reason, including, without limitation, a change in regulatory requirements applicable to such programs. For more information about the automated investment strategies, please contact your registered representative. LOANS You may borrow from your Policy at any time. The maximum amount you may borrow, calculated as of the date of the loan, is the greater of 75% of the Policy's cash surrender value or: -- the Policy's cash value, less -- any Policy loan balance, less -- loan interest due to the next Policy anniversary, less -- the most recent Monthly Deduction times the number of months to the next Policy anniversary, less -- any Surrender Charge, plus -- interest credited on the cash value at the guaranteed interest rate to the next Policy anniversary. The minimum loan amount is $500. We make the loan as of the date when we receive a loan request. (See "Receipt of Communications and Payments at MetLife's Designated Office.") You may increase your risk of lapse if you take a loan. You should contact our Designated Office or your registered representative for information on loan procedures. A Policy loan reduces the Policy's cash value in the Investment Divisions and the Fixed Account by the amount of the loan. A loan repayment increases the cash value in the Investment Divisions and the Fixed Account by the amount of the repayment. We attribute Policy loans to the Investment Divisions and the Fixed Account in proportion to the cash value in each. We transfer cash value equal to the amount of the loan from the Investment Divisions and the Fixed Account to the Loan Account (which is part of our general account). A-38 You may repay all or part of your loan at any time while the insured is still alive. When you make a loan repayment, we transfer an amount of cash value equal to the repayment from the Loan Account to the Divisions of the Separate Account and to the Fixed Account in proportion to the cash value in each. (See "Receipt of Communications and Payments at MetLife's Designated Office.") We guarantee that the interest rate charged on Policy loans will not be more than 4.0% per year in Policy years 1-10 and 3.0% per year thereafter. Policy loan interest is due and payable annually on each Policy anniversary. If not paid when due, we add the interest accrued to the loan amount, and we transfer an amount of cash value equal to the unpaid interest from the Investment Divisions and the Fixed Account to the Loan Account in the same manner as a new loan. Cash value in the Loan Account earns interest at not less than 3.0% per year and is transferred on each Policy anniversary to the Investment Divisions and to the Fixed Account in proportion to the cash value in each. The interest credited will also be transferred: (1) when you take a new loan; (2) when you make a full or partial loan repayment; and (3) when the Policy enters the grace period. The amount taken from the Policy's Investment Divisions as a result of a loan does not participate in the investment experience of the Investment Divisions. Therefore, loans can permanently affect the death benefit and cash value of the Policy, even if repaid. In addition, we reduce any proceeds payable under a Policy by the amount of any outstanding loan plus accrued interest. If a Policy loan is outstanding, it may be better to repay the loan than to pay a premium, because the payment is subject to sales and premium tax charges, and the loan repayment is not subject to charges. (See "Deductions from Premiums.") If you want us to treat a payment as a loan repayment, it should be clearly marked as such. A loan that is taken from, or secured by, a Policy may have tax consequences. Although the issue is not free from doubt, we believe that a loan from or secured by a Policy that is not classified as a modified endowment contract should generally not be treated as a taxable distribution. Nevertheless, the tax consequences associated with loans outstanding after the tenth Policy year are uncertain. A tax adviser should be consulted when considering a loan. LAPSE AND REINSTATEMENT LAPSE In general, in any month that your Policy's cash surrender value is not large enough to cover a Monthly Deduction, your Policy will be in default, and may lapse. However, you can prevent your Policy from lapsing, regardless of the amount of your cash surrender value, if the premiums you pay are sufficient to keep the Guaranteed Minimum Death Benefit ("GMDB") in effect. The base Policy offers, at no additional charge, a five-year GMDB, a 20-year GMDB and a GMDB that lasts until the insured's age 65. For an additional charge, you can add a Policy rider at issue that provides a GMDB to age 85 or a GMDB to age 121. All Policies are issued with a GMDB, which guarantees that the Policy will remain in force for at least five years if the required Guaranteed Minimum Death Benefit Monthly Premiums ("GMDB Monthly Premiums") are paid when due. The five-year GMDB Monthly Premium is set forth in your Policy. It is the minimum initial periodic premium you can pay into the Policy. Policies will be issued with the 20-year GMDB or the GMDB to age 65 to eligible Policy Owners who elect either of these GMDBs at issue. The GMDB Monthly Premium varies depending on the guarantee period, the insured's age, sex (except for unisex policies), smoking status and risk class, the Policy's face amount and the death benefit option chosen. The GMDB Monthly Premium may change in the event that any of the following events occur: an increase or decrease in the base Policy face amount; adding, deleting or changing a rider; a change in death benefit option or the insured's risk class; or a misstatement of the insured's age or sex in the Policy application. On each monthly anniversary we test the Policy to determine if the cumulative premiums you have paid, less any partial withdrawals or outstanding loans you have taken, equal or exceed the sum of the GMDB Monthly Premiums due to date for the GMDB you selected. If you meet this test, the GMDB you selected will be in effect. However, even if you have not elected the 20-year GMDB or the GMDB to age 65, if the amount of premiums you pay into the Policy for each Policy month since the A-39 Policy Date is sufficient to meet the requirements of the 20-year GMDB or the GMDB to age 65, in your third annual statement we will notify you that the applicable GMDB is in effect. Conversely, if you have elected the 20-year GMDB or the GMDB to age 65 and your premium payments are insufficient to satisfy the GMDB Monthly Premium requirements, we will notify you that your GMDB will be reduced to the five-year GMDB, the GMDB to age 65, or the 20-year GMDB, as applicable, unless you pay sufficient premiums within 62 days to meet the requirements of the GMDB you originally selected. If, during the first five Policy years, you fail to pay sufficient premiums to keep the five-year GMDB in effect, we will notify you that the GMDB will terminate within 62 days if you fail to pay the required Monthly Premiums. If the guarantee provided by the GMDB terminates, the Policy will continue in force for as long as there is cash surrender value sufficient to pay the Monthly Deduction. If the GMDB terminates, you may reinstate it within nine months provided the Policy remains in force. In order to reinstate the GMDB, you must pay sufficient premiums to satisfy the cumulative premium requirement for the applicable GMDB (five-year, 20-year or to age 65) at the time of reinstatement. If the GMDB is in effect and the Policy's cash surrender value is insufficient to cover the Monthly Deduction, the Policy will not lapse. We will take the Monthly Deduction from the Policy's cash value until the cash value has been reduced to zero. At that point, future Monthly Deductions will be waived for as long as the GMDB is in effect. If the GMDB is not in effect and the cash surrender value is insufficient to pay the Monthly Deduction, the Policy will enter a 62-day grace period during which you will have an opportunity to pay a premium sufficient to keep the Policy in force. The minimum amount you must pay is the lesser of three Monthly Deductions or, if applicable, the amount necessary to reinstate the GMDB. We will tell you the amount due. If you fail to pay this amount before the end of the grace period, the Policy will terminate. Your Policy may also lapse if Policy loans plus accrued interest exceed the Policy's cash value less the Surrender Charge. Your Policy may be protected against lapse in these circumstances if it has been in force for 15 years, the insured has attained age 75, and the other requirements for coverage under the Overloan Protection Rider are met. If your Policy is not so protected, we will notify you that the Policy is going to terminate. The Policy terminates without value unless you make a sufficient payment within the later of 62 days from the monthly anniversary immediately before the date when the excess loan occurs or 31 days after we mail the notice. If the Policy lapses with a loan outstanding, adverse tax consequences may result. (See "Tax Considerations" below.) REINSTATEMENT If your Policy has lapsed, you may reinstate it within three years after the date of lapse if the insured has not attained age 121. If more than three years have passed, you need our consent to reinstate. Reinstatement in all cases requires payment of certain charges described in the Policy and usually requires evidence of insurability that is satisfactory to us. If the Policy lapses and is reinstated during the first five Policy years, only the five-year GMDB will be reinstated. If the Policy lapses after the first five Policy years, the GMDB will terminate and cannot be reinstated. Under no circumstances can the GMDB provided by Policy rider be reinstated following a Policy lapse. If we deducted a Surrender Charge on lapse, we credit it back to the Policy's cash value on reinstatement. The Surrender Charge on the date of reinstatement is the same as it was on the date of lapse. When we determine the Surrender Charge and other charges except cost of insurance and the Policy loan interest rate, we do not count the amount of time that a Policy was lapsed. ADDITIONAL BENEFITS BY RIDER You can add additional benefits to the Policy by rider, subject to our underwriting and issuance standards. These additional benefits usually require an additional charge as part of the Monthly Deduction from cash value. The rider benefits available with the Policy provide fixed benefits that do not vary with the investment experience of the Separate Account. There is no limit on the number of riders you can elect to add to your Policy at issue. However, you may not elect both the Waiver of Monthly Deduction Rider and the Waiver of Specified Premium Rider. The following riders, some of which have been described previously, are available: CHILDREN'S TERM INSURANCE RIDER, which provides term insurance on the lives of children of the insured. A-40 WAIVER OF MONTHLY DEDUCTION RIDER, which provides for waiver of Monthly Deductions in the event of the disability of the insured. WAIVER OF SPECIFIED PREMIUM RIDER, which provides for waiver of a specified amount of monthly premium in the event of the disability of the insured. OPTIONS TO PURCHASE ADDITIONAL INSURANCE COVERAGE RIDER, which allows the Owner to purchase additional coverage on the insured without providing evidence of insurability. ACCELERATION OF DEATH BENEFIT RIDER, which allows a Policy Owner to accelerate payment of all or part of the Policy's death benefit if the insured is terminally ill. In calculating the Accelerated Death Benefit, we assume that death occurs one year from the date of claim and we discount the future death benefit using an interest rate not to exceed the greater of (1) the current yield on 90-day Treasury bills, and (2) the maximum policy loan interest rate under the Policy. The Policy Owner must accelerate at least $50,000 (or 25% of the death benefit, if less), but not more than the greater of $250,000 or 10% of the death benefit. As an example, if a Policy Owner accelerated the death benefit of a Policy with a face amount of $1,000,000, the maximum amount that could be accelerated would be $250,000. Assuming an interest rate of 6%, the present value of the benefit would be $235,849. If we exercised our reserved right to impose a $150 processing fee, the benefit payable would be $235,849 less $150, or $235,699. GUARANTEED SURVIVOR INCOME BENEFIT RIDER, which provides the beneficiary with the option of exchanging the Policy's death benefit for enhanced monthly income payments for life. ACCIDENTAL DEATH BENEFIT RIDER, which provides for the payment of an additional death benefit in the event of the insured's death by accident. GUARANTEED MINIMUM DEATH BENEFIT RIDER, which provides for a guaranteed death benefit until the insured's age 85 or the insured's age 121. OVERLOAN PROTECTION RIDER, which provides protection from Policy lapse due to an excess Policy loan. Riders in addition to those listed above may be made available. You should consult your registered representative regarding the availability of riders. THE FIXED ACCOUNT You may allocate net premiums and transfer cash value to the Fixed Account, which is part of MetLife's general account. Because of exemptive and exclusionary provisions in the Federal securities laws, interests in the Fixed Account are not registered under the Securities Act of 1933. Neither the Fixed Account nor the general account is registered as an investment company under the Investment Company Act of 1940. Therefore, neither the Fixed Account, the general account nor any interests therein are generally subject to the provisions of these Acts, and the SEC does not review Fixed Account disclosure. This disclosure may, however, be subject to certain provisions of the Federal securities laws on the accuracy and completeness of prospectuses. GENERAL DESCRIPTION Our general account includes all of our assets except assets in the Separate Account or in our other separate accounts. We decide how to invest our general account assets. Fixed Account allocations do not share in the actual investment experience of the general account. Instead, we guarantee that the Fixed Account will credit interest at an annual effective rate of at least 3%. We may or may not credit interest at a higher rate. We declare the current interest rate for the Fixed Account periodically. The Fixed Account earns interest daily. VALUES AND BENEFITS Cash value in the Fixed Account increases from net premiums allocated and transfers to the Fixed Account and Fixed Account interest, and decreases from loans, partial withdrawals made from the Fixed Account, charges and transfers from the Fixed Account. We deduct charges from the Fixed Account and the Policy's Investment Divisions in proportion to the amount of cash value in each. (See "Monthly Deduction from Cash Value.") A Policy's total cash value includes cash value in the Separate Account, the Fixed Account, and any cash value held in the Loan Account due to a Policy loan. A-41 Cash value in the Fixed Account is included in the calculation of the Policy's death benefit in the same manner as the cash value in the Separate Account. (See "Death Benefits.") POLICY TRANSACTIONS Except as described below, the Fixed Account has the same rights and limitations regarding premium allocations, transfers, loans, surrenders and partial withdrawals as the Separate Account. The following special rules apply to the Fixed Account. Twenty days after we apply the initial premium to the Policy you may transfer cash value from the Fixed Account to the Separate Account. The amount of any transfer must be at least $50, unless the balance remaining would be less than $50, in which case you may withdraw or transfer the entire Fixed Account cash value. After the first Policy year you may withdraw cash value from the Fixed Account. The amount of any partial withdrawal, net of applicable Surrender Charges, must be at least $500. No amount may be withdrawn from the Fixed Account that would result in there being insufficient cash value to meet any Surrender Charges that would be payable immediately following the withdrawal upon the surrender of the remaining cash value in the Policy. We reserve the right to only allow transfers and withdrawals from the Fixed Account during the 30-day period that follows the Policy anniversary. The total amount of transfers and withdrawals in a Policy year may not exceed the greater of (a) 25% of the Policy's cash surrender value in the Fixed Account at the beginning of the Policy year, (b) the previous Policy year's maximum allowable withdrawal amount, and (c) 100% of the cash surrender value in the Fixed Account if withdrawing the greater of (a) and (b) would result in a Fixed Account balance of $50 or less. We are not currently imposing the maximum limit on transfers and withdrawals from the Fixed Account, but we reserve the right to do so. There is currently no transaction charge for partial withdrawals or transfers. We reserve the right to limit partial withdrawals to 12 and transfers to four in a Policy year and to impose a charge of $25 for each partial withdrawal or transfer. We may revoke or modify the privilege of transferring amounts to the Fixed Account at any time. We may also modify the privilege of transferring amounts from the Fixed Account at any time. Partial withdrawals will result in the imposition of any applicable Surrender Charges. Unless you request otherwise, a Policy loan reduces the Policy's cash value in the Investment Divisions and the Fixed Account proportionately. We allocate all loan repayments in the same proportion that the cash value in each Investment Division and the Fixed Account bears to the Policy's total unloaned cash value. The amount transferred from the Policy's Investment Divisions and the Fixed Account as a result of a loan earns interest at an effective rate of at least 3% per year, which we credit to the Policy's cash value in the Investment Divisions and the Fixed Account in proportion to the Policy's cash value in each on the day it is credited. We take partial withdrawals from the Policy's Investment Divisions and the Fixed Account in the same proportion that the cash value in each account bears to the Policy's total unloaned cash value. We can delay transfers, surrenders, withdrawals and Policy loans from the Fixed Account for up to six months. We will not delay loans to pay premiums on policies issued by us. CHARGES We make certain charges and deductions under the Policy. These charges and deductions compensate us for: (1) services and benefits we provide; (2) costs and expenses we incur; and (3) risks we assume. Services and benefits we provide: o the death benefit, cash, and loan benefits under the Policy o investment options, including premium allocations o administration of elective options o the distribution of reports to Policy Owners Costs and expenses we incur: A-42 o costs associated with processing and underwriting applications, and with issuing and administering the Policy (including any riders) o overhead and other expenses for providing services and benefits o sales and marketing expenses o other costs of doing business, such as collecting premiums, maintaining records, processing claims, effecting transactions, and paying federal, state, and local premium and other taxes and fees Risks we assume: o that the cost of insurance charges we may deduct are insufficient to meet our actual claims because the insureds die sooner than we estimate o that the cost of providing the services and benefits under the Policies exceed the charges we deduct The amount of a charge may not necessarily correspond to the costs of the services or benefits that are implied by the name of the charge or that are associated with the particular Policy. For example, the sales charge and Surrender Charge may not fully cover all of our sales and distribution expenses, and we may use proceeds from other charges, including the Mortality and Expense Risk Charge and the cost of insurance charge, to help cover those expenses. We may profit from certain Policy charges. DEDUCTIONS FROM PREMIUMS Prior to the allocation of a premium, we deduct a percentage of your premium payment. We credit the remaining amount (the net premium) to the Investment Divisions and the Fixed Account according to your allocation instructions. The deductions we make from each premium payment are the sales charge, the premium tax charge, and the federal tax charge. SALES CHARGE. We deduct a 2.25% sales charge from each premium payment. Currently, the sales charge is only deducted from premium payments that are less than or equal to the Target Premium. PREMIUM TAX CHARGE. We deduct 2.0% from each premium for premium taxes and administrative expenses. Premium taxes vary from state to state, but we deduct a flat 2.0%, which is based on an average of such taxes. Administrative expenses covered by this charge include those related to premium tax and certain other state filings. FEDERAL TAX CHARGE. We deduct 1.25% from each premium for our Federal income tax liability related to premiums. -------------------------------------------------------------------------------- EXAMPLE: The following chart shows the net amount that we would allocate to the Policy assuming a premium payment of $4,000 (and a Target Premium of $2,000).
NET PREMIUM PREMIUM --------- --------- $4,000 $4,000 -175 (2.25% x $2,000) + (3.25% x $4,000) = total sales, premium tax and Federal tax charges ------ $3,825 Net Premium
-------------------------------------------------------------------------------- SURRENDER CHARGE If, during the first ten Policy years, or during the first ten Policy years following a face amount increase, you surrender or lapse your Policy, reduce the face amount, or make a partial withdrawal or change in death benefit option that reduces the face amount, then we will deduct a Surrender Charge from the cash value. The maximum Surrender Charge is shown in your Policy. No Surrender Charge will apply on up to 10% of the cash surrender value withdrawn each year. The Surrender Charge depends on the face amount of your Policy and the issue age, sex (except for unisex policies), risk class and smoker status of the insured. The Surrender Charge remains level for an initial period following Policy issue (or following an increase in face amount), and then declines proportionately, on a monthly basis, until the last month of the tenth A-43 Policy year (or the tenth year following the face amount increase). The initial period during which the Surrender Charge remains level before it begins to decline will be at least one year, but no more than three years, and will be specified in your Policy. The table below shows the maximum Surrender Charge that could apply under any Policy during the first Policy year (or the first year following a face amount increase) and in the last month of each Policy year thereafter. If your Policy is subject to the maximum Surrender Charge shown in the table for Policy Year 1, your Surrender Charge will begin to decline in the second Policy year (or the second year following the face amount increase), so that it will not exceed, in the last month of the second Policy year, the amount shown in the table for Policy Year 2. If your Policy is not subject to the maximum Surrender Charge in the first Policy year, then your Surrender Charge will remain level beyond the first Policy year (or the first year following a face amount increase), but in no event for more than three years.
FOR POLICIES WHICH THE MAXIMUM ARE SURRENDERED, SURRENDER CHARGE LAPSED OR PER $1,000 OF BASE REDUCED DURING POLICY FACE AMOUNT -------------------- ------------------- Entire Policy Year 1 $38.25 Last Month of Policy Year 2 35.81 3 32.56 4 31.74 5 29.84 6 27.13 7 24.42 8 18.99 9 9.50 10 0.00
In the case of a face amount reduction or a partial withdrawal or change in death benefit option that results in a face amount reduction, we deduct any Surrender Charge that applies from the Policy's remaining cash value in an amount that is proportional to the amount of the Policy's face amount surrendered. (See "Reduction in Face Amount," "Partial Withdrawal" and "Change in Death Benefit Option.") If you surrender the Policy (or a face amount increase) in the first Policy year (or in the first year following the face amount increase) we will deduct from the surrender proceeds an amount equal to the remaining first year Coverage Expense Charges. We reserve the right to also deduct an amount equal to the remaining first year Policy Charges. If you reduce the face amount of your Policy in the first year following a face amount increase, we will deduct from your cash value a proportionate amount of the remaining first year Coverage Expense Charges, based on the ratio of the face amount reduction to the Policy's original face amount. The Surrender Charge reduces the Policy's cash value in the Investment Divisions and the Fixed Account in proportion to the amount of the Policy's cash value in each. However, if you designate the accounts from which a partial withdrawal is to be taken, the charge will be deducted proportionately from the cash value of the designated accounts. PARTIAL WITHDRAWAL CHARGE We reserve the right to impose a $25 processing charge on each partial withdrawal. If imposed, this charge would compensate us for administrative costs in generating the withdrawn payment and in making all calculations that may be required because of the partial withdrawal. We are currently waiving this charge. TRANSFER CHARGE We reserve the right to impose a $25 processing charge on each transfer between Investment Divisions or between an Investment Division and the Fixed Account to compensate us for the costs of processing these transfers. If imposed, transfers under one of our Automated Investment Strategies would not count as transfers for the purpose of assessing this charge. We are currently waiving this charge. A-44 ILLUSTRATION OF BENEFITS CHARGE We reserve the right to impose a $25 charge for each illustration of Policy benefits that you request in excess of one per year. If imposed, this charge would compensate us for the cost of preparing and delivering the illustration to you. We are currently waiving this charge. MONTHLY DEDUCTION FROM CASH VALUE On the first day of each Policy month, starting with the Policy Date, we deduct the "Monthly Deduction" from your cash value. -- If your Policy is protected against lapse by a Guaranteed Minimum Death Benefit, we make the Monthly Deduction each month regardless of the amount of your cash surrender value. If your cash surrender value is insufficient to pay the Monthly Deduction in any month, your Policy will not lapse, but the shortfall will, in effect, cause your cash surrender value to have a negative balance. (See "Lapse and Reinstatement.") -- If a Guaranteed Minimum Death Benefit is not in effect, and the cash surrender value is not large enough to cover the entire Monthly Deduction, we will make the deduction to the extent cash value is available, but the Policy will be in default, and it may lapse. (See "Lapse and Reinstatement.") There is no Monthly Deduction on or after the Policy anniversary when the insured attains age 121. The Monthly Deduction reduces the cash value in each Investment Division and in the Fixed Account (and, if applicable, in the EDCA account) in proportion to the cash value in each. However, you may request that we charge the Monthly Deduction to a specific Investment Division or to the Fixed Account. If, in any month, the designated account has insufficient cash value to cover the Monthly Deduction, we will first reduce the designated account cash value to zero and then charge the remaining Monthly Deduction to all Investment Divisions and, if applicable, the Fixed Account, in proportion to the cash value in each. The Monthly Deduction includes the following charges: POLICY CHARGE. The Policy Charge is equal to $15.00 per month in the first Policy year and $8.00 per month thereafter. The Policy Charge is $12 per month in the first Policy year and $9 per month thereafter for Policies issued with face amounts of less than $50,000. No Policy Charge applies to Policies issued with face amounts equal to or greater than $250,000. The Policy Charge compensates us for administrative costs such as record keeping, processing death benefit claims and policy changes, preparing and mailing reports, and overhead costs. COVERAGE EXPENSE CHARGE. We impose a monthly charge for the costs of underwriting, issuing (including sales commissions), and administering the Policy or the face amount increase. The monthly charge is imposed on the base Policy face amount and varies by the base Policy's face amount and duration, and by the insured's issue age, smoking status, risk class (at the time the Policy or a face amount increase is issued), and, except for unisex Policies, the insured's sex. Currently, we only impose the Coverage Expense Charge during the first eight Policy years, and during the first eight years following a requested face amount increase. MONTHLY CHARGES FOR THE COST OF INSURANCE. This charge covers the cost of providing insurance protection under your Policy. The cost of insurance charge for a Policy month is equal to the "amount at risk" under the Policy, multiplied by the cost of insurance rate for that Policy month. We determine the amount at risk on the first day of the Policy month. The amount at risk is the amount by which the death benefit (generally discounted at the monthly equivalent of 3% per year) exceeds the Policy's cash value. The amount at risk is affected by investment performance, loans, premium payments, fees and charges, partial withdrawals and face amount reductions. The guaranteed cost of insurance rates for a Policy depend on the insured's -- smoking status -- risk class -- attained age -- sex (if the Policy is sex-based). A-45 The current cost of insurance rates will depend on the above factors, plus -- the insured's age at issue (and at the time of any face amount increase) -- the Policy year (and the year of any face amount increase) -- the Policy's face amount. We guarantee that the rates for underwritten Policies will not be higher than rates based on -- the 2001 Commissioners Standard Ordinary Mortality Tables (the "2001 CSO Tables") with smoker/ nonsmoker modifications, for Policies issued on non-juvenile insureds (age 18 and above at issue), adjusted for substandard ratings or flat extras, if applicable -- the 2001 CSO Aggregate Tables (Nonsmoker Tables for attained age 16 and older), for Policies issued on juvenile insureds (below age 18 at issue). The actual rates we use may be lower than the maximum rates, depending on our expectations about our future mortality and expense experience, lapse rates, taxes and investment earnings. We review the adequacy of our cost of insurance rates and other non-guaranteed charges periodically and may adjust them. Any change will apply prospectively. The risk classes we use are -- for Policies issued on non-juvenile insureds: preferred smoker, standard smoker, rated smoker, elite nonsmoker, preferred nonsmoker, standard nonsmoker, and rated nonsmoker. -- for Policies issued on juvenile insureds: standard and rated (with our consent). Rated Policies have higher cost of insurance deductions. We base the guaranteed maximum mortality charges for substandard ratings on multiples of the 2001 CSO Tables. The following standard or better smoker and non-smoker classes are available for underwritten Policies: -- elite nonsmoker for Policies with face amounts of $250,000 or more where the issue age is 18 through 80; -- preferred smoker and preferred nonsmoker for Policies with face amounts of $100,000 or more where the issue age is 18 through 80; -- standard smoker and standard nonsmoker for Policies with face amounts of $50,000 or more ($25,000 for pension plans) where the issue age is 18 through 85. The elite nonsmoker class generally offers the best current cost of insurance rates, and the preferred classes generally offer better current cost of insurance rates than the standard classes. Cost of insurance rates are generally lower for nonsmokers than for smokers and generally lower for females than for males. Within a given risk class, cost of insurance rates are generally lower for insureds with lower issue ages. For Policies sold in connection with some employee benefit plans, cost of insurance rates (and Policy values and benefits) do not vary based on the sex of the insured. We may offer Policies on a guaranteed issue basis to certain group or sponsored arrangements. We issue these Policies up to predetermined face amount limits. Because we issue these Policies based on minimal underwriting information, they may present a greater mortality cost to us than Policies issued in a standard class. Therefore, these Policies will be issued with a risk class of standard smoker or standard nonsmoker, but will be subject to an additional flat extra charge. However, the overall cost of insurance deduction for a Policy issued on a guaranteed issue basis will not exceed the maximum cost of insurance deduction imposed under fully underwritten Policies. CHARGES FOR ADDITIONAL BENEFITS. We charge monthly for the cost of any additional rider benefits (other than for the Acceleration of Death Benefit and the Overloan Protection Riders, for which we deduct a one-time fee at the time of exercise) as described in the rider form. MORTALITY AND EXPENSE RISK CHARGE. We impose a monthly charge for our mortality and expense risks. A-46 The mortality risk we assume is that insureds may live for shorter periods of time than we estimated. The expense risk is that our costs of issuing and administering the Policies may be more than we estimated. The charge is imposed on the cash value in the Separate Account, but the rate we charge is determined by the cash value in the Separate Account and the Fixed Account. The rate is determined on each monthly anniversary and varies based on the Policy year and the Policy's net cash value in relation to the Policy's Target Premium. As shown in the table below, the rate declines as the Policy's net cash value and the Policy years increase. The charge is guaranteed not to exceed 0.80% in Policy years 1-10, 0.35% in Policy years 11-19, 0.20% in Policy years 20-29 and 0.05% thereafter.
CHARGE APPLIED TO CASH VALUE IN POLICY YEAR NET CASH VALUE SEPARATE ACCOUNT ------------- ----------------------------- ----------------- < 5 target premiums 0.60% 5 but < 10 target premiums 0.55% 1 - 10 10 but < 20 target premiums 0.30% 20 target premiums or more 0.15% ---- ----------------------------- ---- < 5 target premiums 0.35% 5 but < 10 target premiums 0.30% 11 - 19 10 but < 20 target premiums 0.15% 20 target premiums or more 0.10% ---- ----------------------------- ---- < 5 target premiums 0.20% 5 but < 10 target premiums 0.15% 20 - 29 10 but < 20 target premiums 0.10% 20 target premiums or more 0.05% ---- ----------------------------- ---- 30+ 0.05%
LOAN INTEREST SPREAD We charge you interest on a loan at a maximum effective rate of 4.0% per year in Policy years 1-10 and 3.0% per year thereafter, compounded daily. We also credit interest on the amount we take from the Policy's accounts as a result of the loan at a minimum annual effective rate of 3% per year, compounded daily. As a result, the loan interest spread will never be more than 1.00%. CHARGES AGAINST THE PORTFOLIOS AND THE INVESTMENT DIVISIONS OF THE SEPARATE ACCOUNT CHARGES FOR INCOME TAXES. We currently do not charge the Separate Account for income taxes, but in the future we may make such a charge, if appropriate. We have the right to make a charge for any taxes imposed on the Policies in the future. (See "MetLife's Income Taxes".) PORTFOLIO EXPENSES. There are daily charges against the Portfolio assets for investment advisory services and fund operating expenses. These are described in the Fee Table as well as in the Portfolio prospectuses. TAX CONSIDERATIONS INTRODUCTION The following summary provides a general description of the Federal income tax considerations associated with the Policy and does not purport to be complete or to cover all tax situations. The summary does not address state, local or foreign tax issues related to the Policy. This discussion is not intended as tax advice. Counsel or other competent tax advisers should be consulted for more complete information. This discussion is based upon our understanding of the present Federal income tax laws. No representation is made as to the likelihood of continuation of the present Federal income tax laws or as to how they may be interpreted by the Internal Revenue Service. It should be further understood that the following discussion is not exhaustive and that special rules not described herein may be applicable in certain situations. A-47 TAX STATUS OF THE POLICY In order to qualify as a life insurance contract for Federal income tax purposes and to receive the tax treatment normally accorded life insurance contracts under Federal tax law, a Policy must satisfy certain requirements which are set forth in the Internal Revenue Code. Guidance as to how these requirements are to be applied is limited. Nevertheless, we anticipate that the Policy should be deemed to be a life insurance contract under Federal tax law. However, if your Policy is issued on a substandard basis, there is additional uncertainty. Moreover, if you elect the Acceleration of Death Benefit Rider, the tax qualification consequences associated with continuing the Policy after a distribution is made under the rider are unclear. We may take appropriate steps to bring the Policy into compliance with applicable requirements, and we reserve the right to restrict Policy transactions in order to do so. The insurance proceeds payable on the 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. 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. 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 the owner of the Separate Account assets. 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. In addition, the Code requires that the investments of the Separate Account be "adequately diversified" in order for the Policies to be treated as life insurance contracts for Federal income tax purposes. It is intended that the Separate Account, through the Portfolios, will satisfy these diversification requirements. If Portfolio shares are sold directly to either non-qualified plans or to tax-qualified retirement plans that later lose their tax qualified status, there could be adverse consequences under the diversification rules. The following discussion assumes that the Policy will qualify as a life insurance contract for Federal income tax purposes. TAX TREATMENT OF POLICY BENEFITS IN GENERAL. The death benefit under a Policy should generally be excludible from the gross income of the beneficiary for Federal income tax purposes. In the case of employer-owned life insurance as defined in Section 101(j), the amount of the death benefit 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, a director, 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. The death benefit will also be taxable in the case of a transfer-for-value unless certain exceptions apply. Federal, state and local estate, inheritance and other tax consequences of ownership, or receipt of Policy proceeds, depend on the circumstances of each Policy Owner or beneficiary. A tax adviser should be consulted on these circumstances. Generally, the Policy Owner will not be deemed to be in constructive receipt of the Policy cash value until there is a distribution or a deemed distribution. When distributions from a Policy occur, or when loans are taken from or secured by a Policy, the tax consequences depend on whether the Policy is classified as a modified endowment contract ("MEC"). MODIFIED ENDOWMENT CONTRACTS. Under the Internal Revenue Code, certain life insurance contracts are classified as modified endowment contracts, with less favorable income tax treatment than other life insurance contracts. Due to the Policy's flexibility with respect to premium payments and benefits, each Policy's circumstances will determine whether the Policy is a MEC. In general a Policy will be classified as a modified endowment contract if the amount of premiums paid into the Policy causes the Policy to fail the "7-pay test." A Policy will fail the 7-pay test if at any time in the first seven Policy years, A-48 or seven years after a material change, the amount paid into the Policy exceeds the sum of the level premiums that would have been paid at that point under a Policy that provided for paid-up future benefits after the payment of seven level annual payments. If there is a reduction in the benefits under the Policy during a 7-pay testing period, for example, as a result of a partial withdrawal, the 7-pay test will have to be reapplied as if the Policy had originally been issued at the reduced face amount. If there is a "material change" in the Policy's benefits or other terms, even after the first seven Policy years, the Policy may have to be retested as if it were a newly issued Policy. A material change can occur, for example, when there is an increase in the death benefit or the receipt of an unnecessary premium. Unnecessary premiums are premiums paid into the Policy which are not needed in order to provide a death benefit equal to the lowest death benefit that was payable in the most recent 7-pay testing period. To prevent your Policy from becoming a modified endowment contract, it may be necessary to limit premium payments or to limit reductions in benefits. A current or prospective Policy Owner should consult a tax adviser to determine whether a Policy transaction will cause the Policy to be classified as a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts that may provide relief in limited circumstances. DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM MODIFIED ENDOWMENT CONTRACTS. Policies classified as modified endowment contracts are subject to the following tax rules: (1) All distributions other than death benefits, including distributions upon surrender and withdrawals, from a modified endowment contract will be treated first as distributions of gain taxable as ordinary income and as tax-free recovery of the Policy Owner's investment in the Policy only after all gain has been distributed. (2) Loans taken from or secured by a Policy classified as a modified endowment contract are treated as distributions and taxed accordingly. (3) A 10 percent additional income tax is imposed on the amount subject to tax except where the distribution or loan is made when the Policy Owner has attained age 59 1/2 or is disabled, or where the distribution is part of a series of substantially equal periodic payments for the life (or life expectancy) of the Policy Owner or the joint lives (or joint life expectancies) of the Policy Owner and the Policy Owner's beneficiary. The foregoing exceptions generally do not apply to a Policy Owner which is a non-natural person, such as a corporation. If a Policy becomes a modified endowment contract, distributions 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. DISTRIBUTIONS OTHER THAN DEATH BENEFITS FROM POLICIES THAT ARE NOT MODIFIED ENDOWMENT CONTRACTS. Distributions other than death benefits from a Policy that is not classified as a modified endowment contract are generally treated first as a non-taxable recovery of the Policy Owner's investment in the Policy, and only after the recovery of all investment in the Policy as gain taxable as ordinary income. However, distributions during the first 15 Policy years accompanied by a reduction in Policy benefits, including distributions which must be made in order to enable the Policy to continue to qualify as a life insurance contract for Federal income tax purposes, are subject to different tax rules and may be treated in whole or in part as taxable income. Loans from or secured by a Policy that is not a modified endowment contract are generally not treated as distributions. However, the tax consequences associated with Policy loans that are outstanding after the first ten Policy years are less clear and a tax adviser should be consulted about such loans. Finally, neither distributions from nor loans from or secured by a Policy that is not a modified endowment contract are subject to the 10 percent additional income tax. INVESTMENT IN THE POLICY. Your investment in the Policy is generally your aggregate premiums. When a distribution is taken from the Policy, your investment in the Policy is reduced by the amount of the distribution that is tax-free. A-49 POLICY LOANS. In general, interest on a Policy loan will not be deductible. If a Policy loan is outstanding when a Policy is canceled or lapses, the amount of the outstanding indebtedness will be added to the amount distributed and will be taxed accordingly. A loan may also be taxed when a Policy is exchanged. Before taking out a Policy loan, you should consult a tax adviser as to the tax consequences. MULTIPLE POLICIES. All modified endowment contracts that are issued by MetLife (or its affiliates) to the same Policy Owner during any calendar year are treated as one modified endowment contract for purposes of determining the amount includible in the Policy Owner's income when a taxable distribution occurs. 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. Policy Owners 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, Policy Owners may be subject to state and/or municipal taxes and taxes that may be imposed by the Policy Owner's country of citizenship or residence. Prospective purchasers are advised to consult with a qualified tax adviser regarding taxation with respect to a purchase of the Policy. ACCELERATION OF DEATH BENEFIT RIDER. Payments received under the Acceleration of Death Benefit Rider should be excludable from the gross income of the Policy Owner except in certain business contexts. However, you should consult a qualified tax adviser about the consequences of adding this rider to a Policy or requesting payment under this rider. OVERLOAN PROTECTION RIDER. If you are contemplating the purchase of the Policy with the Overloan Protection Rider, you should be aware that the tax consequences of the Overloan Protection Rider have not been ruled on by the IRS or the courts. It is possible that the IRS could assert that the outstanding loan balance should be treated as a taxable distribution when the Overloan Protection Rider causes the Policy to be converted into a fixed Policy. You should consult a tax adviser as to the tax risks associated with the Overloan Protection Rider. 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, if the insured possessed incidents of ownership in the Policy at the time of death, or if the insured made a gift transfer of the Policy within three 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. Moreover, under certain circumstances, the Internal 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. OTHER POLICY OWNER TAX MATTERS. The application of certain tax rules after age 100 is not entirely clear. The tax consequences of continuing the Policy beyond the insured's attained age 121 are also unclear. You should consult a tax adviser if you intend to keep the Policy in force beyond the insured's attained age 121. A-50 If a trustee under a pension or profit-sharing plan, or similar deferred compensation arrangement, owns a Policy, the Federal, state and estate tax consequences could differ. The amounts of life insurance that may be purchased on behalf of a participant in a pension or profit-sharing plan are limited. Providing excessive life insurance coverage in a retirement plan will have adverse tax consequences. The inclusion of riders, such as waiver of premium riders, may also have adverse tax consequences. Therefore, it is important to discuss with your tax adviser the suitability of the Policy, including the suitability of coverage amounts and Policy riders, before any purchase by a retirement plan. Any proposed distribution or sale of a Policy by a retirement plan will also need to be discussed with a tax adviser. The current cost of insurance for the net amount at risk is treated as a "current fringe benefit" and must be included annually in the plan participant's gross income. If the plan participant dies while covered by the plan and the Policy proceeds are paid to the participant's beneficiary, then the excess of the death benefit over the cash value is not income taxable. However, the cash value will generally be taxable to the extent it exceeds the participant's cost basis in the Policy. Policies owned under these types of plans may be subject to restrictions under the Employee Retirement Income Security Act of 1974 ("ERISA"). You should consult a qualified adviser regarding ERISA. Department of Labor ("DOL") regulations impose requirements for participant loans under retirement plans covered by ERISA. Plan loans must also satisfy tax requirements to be treated as nontaxable. Plan loan requirements and provisions may differ from the Policy loan provisions. Failure of plan loans to comply with the requirements and provisions of the DOL regulations and of tax law may result in adverse tax consequences and/or adverse consequences under ERISA. Plan fiduciaries and participants should consult a qualified adviser before requesting a loan under a Policy held in connection with a retirement plan. 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 contemplating a change to an existing Policy or purchasing the Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a qualified tax adviser. Ownership of the Policy by a corporation, trust or other non-natural person could jeopardize some (or all) of such entity's interest deduction under Internal Revenue Code Section 264, even where such entity's indebtedness is in no way connected to the Policy. In addition, under Section 264(f)(5), if a business (other than a sole proprietorship) is directly or indirectly a beneficiary of the Policy, the Policy could be treated as held by the business for purposes of the Section 264(f) entity-holder rules. Therefore, it would be advisable to consult with a qualified tax adviser before any non-natural person is made an owner or holder of the Policy, or before a business (other than a sole proprietorship) is made a beneficiary of the Policy. GUIDANCE ON SPLIT DOLLAR 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. If your Policy is part of an equity split dollar arrangement taxed under the economic benefit regime, there is a risk that some portion of the Policy cash value may be taxed prior to any Policy distribution. If your split dollar plan provides deferred compensation, specific tax rules governing deferred compensation arrangements may apply. Failure to adhere to these rules will result in adverse tax consequences. In addition, 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 split-dollar life insurance arrangements for directors and executive officers of such companies, since 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. CORPORATE ALTERNATIVE MINIMUM TAX. There may also be an indirect tax upon the income in the Policy or the proceeds of a Policy under the Federal corporate alternative minimum tax, if the Policy Owner is subject to that tax. A-51 POSSIBLE TAX LAW CHANGES. Although the likelihood of legislative changes is uncertain, there is always the possibility that the tax treatment of the Policy could change by legislation or otherwise. Consult a tax adviser with respect to legislative developments and their effect on the Policy. METLIFE'S INCOME TAXES Under current Federal income tax law, MetLife is 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 in several states, 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. TAX CREDITS AND DEDUCTIONS. MetLife 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 MetLife is the owner of the assets from which the tax benefits are derived. DISTRIBUTION OF THE POLICIES We have entered into a distribution agreement with our affiliate, MetLife Investors Distribution Company ("Distributor"), for the distribution of the Policies. Distributor's principal executive offices are located at 200 Park Avenue, New York, New York 10166. Distributor is registered with the SEC as a broker-dealer under the Securities Exchange Act of 1934 and is a member of the Financial Industry Regulatory Authority ("FINRA"). 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. We and Distributor have entered into selling agreements with broker-dealers ("selling firms") for the sale of the Policies through their registered representatives. Prior to July 1, 2016, these broker-dealers included our affiliate, MetLife Securities, Inc. ("MSI"). On July 1, 2016, MetLife, Inc. completed the sale of MSI to Massachusetts Mutual Insurance Life Insurance Company. As a result of the transaction, MSI is no longer affiliated with MetLife. The Policies are no longer offered for sale. COMMISSIONS AND OTHER CASH COMPENSATION All selling firms receive commissions. The portion of the commission payments that selling firms pass on to their sales representatives is determined in accordance with their internal compensation programs. Those programs may also include other types of cash and non-cash compensation and other benefits. A selling firm or a sales representative of a selling firm may receive different compensation for selling one product over another and/or may be inclined to favor one product provider over another due to differing compensation rates. The maximum commissions paid for sale of the Policies are as follows: 110% of premiums paid up to the Commissionable Target Premium, and 4.5% of premiums paid in excess of Commissionable Target Premium in Policy year 1; and 13.0% of all premiums paid in Policy years 2 through 10; and 2.0% of all premiums paid thereafter. In addition, commissions are payable based on the cash value of the Policies in the following amounts: 0.10% in Policy years 2 through 10; 0.08% in Policy years 11 through 20; and 0.06% thereafter. Commissionable Target Premium is generally the Target Premium as defined in the Glossary, excluding the portions associated with flat extras and certain riders, and is generally equal to or less than the Target Premium. We and/or Distributor may also make bonus payments to selling firms. The maximum amount of these bonus payments are as follows: 9.0% of premiums paid up to the Commissionable Target Premium and 2.0% of premiums paid in excess of the Commissionable Target Premium in Policy year 1; 19.75% of premiums paid up to the Commissionable Target Premium and 0.25% of premiums paid in excess of the Commissionable Target Premium paid in Policy year 2; and 0.25% of all premiums paid thereafter. For Policies sold prior to July 1, 2016, our formerly affiliated sales representatives received cash payments for the products they sold and serviced based on a "gross dealer concession" model. The percentage of the gross dealer concession A-52 to which the representative was entitled was based on a sliding-scale formula that took into account the total amount of proprietary and non-proprietary products sold and serviced by the representative. The gross dealer concession amount in the first Policy year was 117% of premiums paid up to the Commissionable Target Premium, and 5.0% of premiums paid in excess of the Commissionable Target Premium. In Policy years 2 through 10, the gross dealer concession amount is 8.0% of all premiums paid, and in Policy years 11 and thereafter the gross dealer concession amount is 2.0% of all premiums. OTHER PAYMENTS We and Distributor may enter into preferred distribution arrangements with selected selling firms under which we 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, the amount of which depends on cumulative periodic (usually quarterly) sales of our insurance products (including the Policies) and may also depend on meeting thresholds in the sale of certain of our insurance products. They may also include payments we make to cover the cost of marketing or other support services provided for or by registered representatives who may sell our 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. These preferred distribution arrangements 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 and Distributor have entered into preferred distribution arrangements with the selling firms listed in the Statement of Additional Information. 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 Policies 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 Policies. 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. Commissions and other incentives or payments described above are not charged directly to Policy Owners or the Separate Account. We intend to recoup commissions and other sales expenses through fees and charges deducted under the Policy. The Statement of Additional Information contains additional information about the compensation paid for the sale of the Policies. 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 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 any such action or proceeding will have a material adverse effect upon the Separate Account or upon the ability of MetLife Investors Distribution Company to perform its contract with the Separate Account or of MetLife to meet its obligations under the Policies. A-53 RESTRICTIONS ON FINANCIAL TRANSACTIONS Applicable laws designed to counter terrorism and prevent money laundering might, in certain circumstances, require us to reject a premium payment and/or block or "freeze" your Policy. 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. FINANCIAL STATEMENTS You may find the financial statements of the Separate Account and the financial statements of MetLife in the Statement of Additional Information. MetLife's financial statements should be considered only as bearing on our ability to meet our obligations under the Policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account. A-54 GLOSSARY AGE. The age of an insured refers to the insured's age at his or her nearest birthday. ATTAINED AGE. The insured's issue age plus the number of completed Policy years. BASE POLICY. The Policy without riders. CASH SURRENDER VALUE. The amount you receive if you surrender the Policy. It is equal to the Policy's cash value reduced by any Surrender Charge that would apply on surrender and by any outstanding Policy loan and accrued interest. CASH VALUE. A Policy's cash value includes the amount of its cash value held in the Separate Account, the amount held in the Fixed Account, if there is an outstanding Policy loan, the amount of its cash value held in the Loan Account, and any amount held in the EDCA account. FIXED ACCOUNT. The Fixed Account is a part of our general account to which you may allocate net premiums. It provides guarantees of principal and interest. INVESTMENT DIVISION. A sub-account of the Separate Account that invests in shares of an open-ended management investment company or other pools of investment assets. INVESTMENT START DATE. This is the later of the Policy Date and the date we first receive a premium payment for the Policy. ISSUE AGE. The age of the insured as of his or her birthday nearest to the Policy Date. LOAN ACCOUNT. The account to which cash value from the Separate and/or Fixed Accounts is transferred when a Policy loan is taken. NET CASH VALUE. The Policy's cash value less any outstanding loans and accrued loan interest. NET PREMIUM. The net premium is equal to the premium payment minus the sales charge, the premium tax charge, and the federal tax charge. PLANNED PREMIUM. The Planned Premium is the premium payment schedule you choose to help meet your future goals under the Policy. The Planned Premium consists of a first-year premium amount and an amount for premium payments in subsequent Policy years. It is subject to certain limits under the Policy. POLICY DATE. The date on which coverage under the Policy and Monthly Deductions begin. If you make a premium payment with the application, unless you request otherwise, the Policy Date is generally the date the Policy application is approved. If you choose to pay the initial premium upon delivery of the Policy, unless you request otherwise, the Policy Date is generally the date on which we receive your initial payment. The Policy Date is used to measure Policy years, Policy months, and Policy anniversaries. PREMIUMS. Premiums include all payments under the Policy, whether a Planned Premium or an unscheduled payment. SEPARATE ACCOUNT. Metropolitan Life Separate Account UL, a separate account established by MetLife to receive and invest premiums paid under the Policies and certain other variable life insurance policies, and to provide variable benefits. TARGET PREMIUM. We use the Target Premium to determine the amount of Mortality and Expense Risk Charge imposed on the Separate Account and the amount of Sales Charge imposed on premium payments. The Target Premium varies by issue age, sex (except for unisex Policies), smoking status and any flat extras and substandard rating of the insured, and the Policy's base face amount, with additional amounts for most riders. YOU. "You" refers to the Policy Owner. A-55 APPENDIX A GUIDELINE PREMIUM TEST AND CASH VALUE ACCUMULATION TEST In order to meet the Internal Revenue Code's definition of life insurance, the Policies provide that the death benefit will not be less than what is required by the "guideline premium test" under Section 7702(a)(2) of the Internal Revenue Code, or the "cash value accumulation test" under Section 7702(a)(1) of the Internal Revenue Code, as selected by you when the Policy is issued. The test you choose at issue will be used for the life of the Policy. (See "Death Benefits.") For the guideline premium test, the table below shows the percentage of the Policy's cash value that is used to determine the death benefit.
AGE OF AGE OF INSURED AT START OF PERCENTAGE OF INSURED AT START OF PERCENTAGE OF THE POLICY YEAR CASH VALUE THE POLICY YEAR CASH VALUE --------------------- --------------- --------------------- -------------- 0 through 40 250 61 128 41 243 62 126 42 236 63 124 43 229 64 122 44 222 65 120 45 215 66 119 46 209 67 118 47 203 68 117 48 197 69 116 49 191 70 115 50 185 71 113 51 178 72 111 52 171 73 109 53 164 74 107 54 157 75 through 90 105 55 150 91 104 56 146 92 103 57 142 93 102 58 138 94 through 121 101 59 134 60 130
For the cash value accumulation test, sample net single premium factors for selected ages of male and female insureds, in a standard or better nonsmoker risk class, are listed below.
NET SINGLE PREMIUM FACTOR -------------------- AGE MALE FEMALE ----------- --------- -------- 30......... 5.82979 6.59918 40......... 4.11359 4.63373 50......... 2.93292 3.28706 60......... 2.14246 2.40697 70......... 1.64028 1.82665 80......... 1.32530 1.44515 90......... 1.15724 1.22113 100........ 1.08417 1.10646 120........ 1.02597 1.02597
A-56 Additional information about the Policy and the Separate Account can be found in the Statement of Additional Information, which you can obtain, without charge, by calling our TeleService Center at 1-800-638-5000. You may also obtain, without charge, a personalized illustration of death benefits, cash surrender values and cash values by calling your registered representative. For Investment Division transfers and premium reallocations, for current information about your Policy values, to change or update Policy information such as your billing address, billing mode, beneficiary or ownership, for information about other Policy transactions, and to ask questions about your Policy, you may call us at 1-800-638-5000. 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 Policy 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 202-551-8090. The Statement of Additional Information, reports and other information about the Separate Account are available on the SEC Internet site at 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 20549-0102. File No. 811-06025 METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE SEPARATE ACCOUNT UL EQUITY ADVANTAGE VUL SUPPLEMENT DATED MAY 1, 2017 TO THE PROSPECTUS DATED MAY 1, 2017 This supplement revises certain information in the May 1, 2017 prospectus for the Equity Advantage Variable Universal Life insurance policy issued by Metropolitan Life Insurance Company. You should read and retain this supplement. We currently limit the amount of cash value you may transfer to or from any one Investment Division to a maximum of $2.5 million per day. If you own more than one Equity Advantage VUL policy on the same insured, this limit will be applied to the cumulative transfers you make to or from the Investment Division under all such Policies. EQUITY ADVANTAGE VUL FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES METROPOLITAN LIFE SEPARATE ACCOUNT UL ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION (PART B) MAY 1, 2017 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the Prospectus dated May 1, 2017 and should be read in conjunction therewith. A copy of the Prospectus may be obtained by writing to Metropolitan Life Insurance Company, P.O. Box 543, Warwick, RI 02887-0543. SAI-1 TABLE OF CONTENTS
PAGE ------ GENERAL INFORMATION AND HISTORY................................... SAI-3 The Company.................................................... SAI-3 The Separate Account........................................... SAI-3 DISTRIBUTION OF THE POLICIES...................................... SAI-3 ADDITIONAL INFORMATION ABOUT THE OPERATION OF THE POLICIES........ SAI-4 Payment of Proceeds............................................ SAI-4 Payment Options................................................ SAI-4 ADDITIONAL INFORMATION ABOUT CHARGES.............................. SAI-5 Group or Sponsored Arrangements................................ SAI-5 POTENTIAL CONFLICTS OF INTEREST................................... SAI-5 LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY................. SAI-5 MISSTATEMENT OF AGE OR SEX........................................ SAI-6 REPORTS........................................................... SAI-6 PERSONALIZED ILLUSTRATIONS........................................ SAI-6 PERFORMANCE DATA.................................................. SAI-7 REGISTRATION STATEMENT............................................ SAI-7 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................... SAI-7 FINANCIAL STATEMENTS.............................................. SAI-7
SAI-2 GENERAL INFORMATION AND HISTORY THE COMPANY Metropolitan Life Insurance Company is a leading provider of life insurance, annuities, employee benefits and asset management with operations throughout the United States. The Company offers a broad range of protection products and services aimed at serving the financial needs of its customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The Company was incorporated under the laws of New York in 1868. The Company's home office is located at 200 Park Avenue, New York, New York 10166-0188. The Company is a wholly-owned subsidiary of MetLife, Inc. MetLife, Inc., together with its subsidiaries and affiliates, is a global provider of life insurance, annuities, employee benefits and asset management serving approximately 100 million customers. MetLife, Inc., through its subsidiaries and affiliates, holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. THE SEPARATE ACCOUNT We established the Separate Account as a separate investment account on December 13, 1988. The Separate Account is the funding vehicle for the Policies, and other variable life insurance policies that we issue. These other polices impose different costs, and provide different benefits, from the Policies. The Separate Account meets the definition of a "separate account" under Federal securities laws, and is registered with the U.S. Securities and Exchange Commission (the "SEC") as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). Registration with the SEC does not involve SEC supervision of the Separate Account's management or investments. However, the New York Insurance Commissioner regulates MetLife and the Separate Account. DISTRIBUTION OF THE POLICIES Our affiliate, MetLife Investors Distribution Company, 200 Park Avenue, New York, NY 10166 ("Distributor"), serves as principal underwriter for the Policies. Distributor is a Missouri corporation organized in 2000. Distributor is registered as a broker-dealer with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934, as well as with the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority. Distributor may enter into selling agreements with other broker-dealers ("selling firms") and compensate them for their services. Distributor passes through commissions it receives to selling firms for their sales and does not retain any portion of them in return for its services as distributor for the Policies. The Policies are no longer offered for sale. Distributor received sales compensation with respect to the Policies in the following amounts in the periods indicated:
AGGREGATE AMOUNT OF AGGREGATE AMOUNT OF COMMISSIONS RETAINED BY FISCAL COMMISSIONS PAID TO DISTRIBUTOR AFTER PAYMENTS YEAR DISTRIBUTOR TO SELLING FIRMS ---------------- --------------------- --------------------------- 2016..........$5,657,520 $0 2015..........$9,274,538 $0 2014..........$9,503,654 $0
As noted in the prospectus, we and Distributor pay compensation to all selling firms in the form of commissions and certain types of non-cash compensation. We and Distributor may pay additional compensation to selected firms, including marketing allowances, introduction fees, persistency payments, preferred status fees and industry conference fees. The terms of any particular agreement governing compensation may vary among selling firms and the amounts may be significant. The amount of additional compensation (non-commission amounts) paid to selected selling firms that sold our variable life and variable annuity products in 2016 ranged from $1,469 to $13,185,332. For purposes of calculating these amounts, the amount of compensation received by a selling firm includes the additional compensation received by the firm for the sale of life insurance and annuity products issued by us and our affiliates. SAI-3 The following list sets forth the names of selling firms that received additional compensation in 2016 in connection with the sale of our and our affiliates' variable life policies, variable annuity contracts and other insurance products: Ameriprise Financial Services, Inc. AXA Network LLC BBVA Compass Investment Solutions, Inc. Cambridge Investment Research Capital Investments Group, Inc. Centaurus Financial, Inc. Cetera Advisor Networks LLC CFD Investment, Inc. Citigroup Global Markets, Inc. Citizens Securities Commonwealth Financial Network Community America Financial Solutions, LLC CUNA Brokerage Services CUSO Financial Services, L.P. Edward D. Jones & Co., L.P. Equity Services, Inc. Essex National Securities, Inc. First Heartland Capital,Inc. Founders Financial Securities, LLC FSC Securities Corporation H. D. Vest Investment Services, Inc. Infinex Investments, Inc. Invest Financial Corp. Investacorp, Inc. Investment Professionals, Inc. Janney Montgomery Scott, LLC Key Investment Services LLC Lincoln Financial Advisors Corporation Lincoln Financial Securities Corporation Lincoln Investment Planning, Inc. LPL Financial Corp. Affiliates Merrill Lynch, Inc. MetLife Securities, Inc. MML Investors Services, LLC Morgan Stanley Smith Barney, LLC National Planning Holdings NEXT Financial Group Parkland Securities, LLC PFS Investments Inc. ProEquities, Inc. Raymond James & Associates, Inc. RBC Wealth Management Sigma Financial Corporation Signator Financial Services, Inc. Signator Investors, Inc. Stifel, Nicolaus & Company, Incorporated TFS Securities, Inc. Transamerica Financial Advisors, Inc. UBS Financial Services, Inc. U.S. Bancorp Investments, Inc. ValMark Securities, Inc. Voya Financial Advisors, Inc. Wells Fargo Advisors, LLC ADDITIONAL INFORMATION ABOUT THE OPERATION OF THE POLICIES PAYMENT OF PROCEEDS We may withhold payment of surrender or loan proceeds if those proceeds are coming from a Policy Owner's check, or from a premium transaction under our pre-authorized checking arrangement, which has not yet cleared. We may also delay payment while we consider whether to contest the Policy. We pay interest on the death benefit proceeds from the date to the date we pay them. Normally we promptly make payments of cash value, or of any loan value available, from cash value in the Fixed Account. However, we may delay those payments for up to six months. We pay interest in accordance with state insurance law requirements on delayed payments. PAYMENT OPTIONS We pay the Policy's death benefit and cash surrender value in one sum unless you or the payee choose a payment option for all or part of the proceeds. You can choose a combination of payment options. You can make, change or revoke the selection of payee or payment option before the death of the insured. You can contact your registered representative or our Designated Office for the procedure to follow. (See "Receipt of Communications and Payments at MetLife's Designated Office.") The payment options available are fixed benefit options only and are not affected by the investment experience of the Separate Account. Once payments under an option begin, withdrawal rights may be restricted. Even if the death benefit under the Policy is excludible from income, payments under Payment Options may not be excludible in full. This is because earnings on the death benefit after the insured's death are taxable and payments under the Payment Options generally include such earnings. You should consult a tax adviser as to the tax treatment of payments under Payment Options. The following payment options are available: (i) SINGLE LIFE INCOME. We pay proceeds in equal monthly installments for the life of the payee. SAI-4 (ii) SINGLE LIFE INCOME--10-YEAR GUARANTEED PAYMENT PERIOD. We pay proceeds in equal monthly installments during the life of the payee, with a guaranteed payment period of 10 years. (iii) JOINT AND SURVIVOR LIFE INCOME. We pay proceeds in equal monthly installments (a) while either of two payees is living, or (b) while either of the two payees is living, but for at least 10 years. ADDITIONAL INFORMATION ABOUT CHARGES GROUP OR SPONSORED ARRANGEMENTS We may issue the Policies to group or sponsored arrangements, as well as on an individual basis. A "group arrangement" includes a situation where a trustee, employer or similar entity purchases individual Policies covering a group of individuals. Examples of such arrangements are non-qualified deferred compensation plans. A "sponsored arrangement" includes a situation where an employer or an association permits group solicitation of its employees or members for the purchase of individual Policies. We may waive, reduce or vary any Policy charges under Policies sold to a group or sponsored arrangement. We may also raise the interest rate credited to loaned amounts under these Policies. The amount of the variations and our eligibility rules may change from time to time. In general, they reflect cost savings over time that we anticipate for Policies sold to the eligible group or sponsored arrangements and relate to objective factors such as the size of the group, its stability, the purpose of the funding arrangement and characteristics of the group members. Consult your registered representative for any variations that may be available and appropriate for your case. The United States Supreme Court has ruled that insurance policies with values and benefits that vary with the sex of the insured may not be used to fund certain employee benefit programs. Therefore, we offer Policies that do not vary based on the sex of the insured to certain employee benefit programs. We recommend that employers consult an attorney before offering or purchasing the Policies in connection with an employee benefit program. POTENTIAL CONFLICTS OF INTEREST The Portfolios' Boards of Trustees monitor events to identify conflicts that may arise from the sale of Portfolio shares to variable life and variable annuity separate accounts of affiliated and, if applicable, unaffiliated insurance companies and qualified plans. Conflicts could result from changes in state insurance law or Federal income tax law, changes in investment management of a Portfolio, or differences in voting instructions given by variable life and variable annuity contract owners and qualified plans, if applicable. If there is a material conflict, the Board of Trustees will determine what action should be taken, including the removal of the affected Portfolios from the Separate Account, if necessary. If we believe any Portfolio action is insufficient, we will consider taking other action to protect Policy Owners. There could, however, be unavoidable delays or interruptions of operations of the Separate Account that we may be unable to remedy. LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY Generally, we can challenge the validity of your Policy or a rider during the insured's lifetime for two years (or less, if required by state law) from the date of issue, based on misrepresentations made in the application. We can challenge the portion of the death benefit resulting from an underwritten premium payment for two years during the insured's lifetime from receipt of the premium payment. However, if the insured dies within two years of the date of issue, we can challenge all or part of the Policy at any time based on misrepresentations in the application. We can challenge an increase in face amount, with regard to material misstatements concerning such increase, for two years during the insured's lifetime from its effective date. SAI-5 MISSTATEMENT OF AGE OR SEX If we determine, while the insured is still living, that there was a misstatement of age or (if the Policy is not unisex) sex in the application, the Policy values and charges will be recalculated from the issue date based on the correct information. If, after the death of the insured, we determine that the application misstates the insured's age or sex, the Policy's death benefit will be the amount which would be bought by the most recent Monthly Cost of Insurance, based on the insured's correct age and, if the Policy is not unisex, correct sex. REPORTS We will send you an annual statement showing your Policy's death benefit, cash value and any outstanding Policy loan principal. We will also confirm Policy loans, account transfers, lapses, surrenders and other Policy transactions when they occur. You will be sent periodic reports containing the financial statements of the Portfolios. PERSONALIZED ILLUSTRATIONS We may provide personalized illustrations showing how the Policies 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, cash surrender value, and cash value 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, risk 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, cash surrender value, and cash value for a hypothetical Policy 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 example, as a result of variations in actual returns, additional premium payments beyond those illustrated may be necessary to maintain the Policy in force for the period shown or to realize the Policy values shown in particular illustrations even if the average rate of return is realized. Illustrations may also show the internal rate of return on the cash surrender value and the death benefit. The internal rate of return on the cash surrender value is equivalent to an interest rate (after taxes) at which an amount equal to the illustrated premiums could have been invested outside the Policy to arrive at the cash surrender value of the Policy. The internal rate of return on the death benefit is equivalent to an interest rate (after taxes) at which an amount equal to the illustrated premiums could have been invested outside the Policy to arrive at the death benefit of the Policy. Illustrations may also show values based on the historical performance of the Investment Divisions. We reserve the right to impose a $25 fee for each illustration that you request in excess of one per year. SAI-6 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. Insurance, sales, premium tax, mortality and expense risk and coverage expense charges, which can significantly reduce the return to the Policy 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. REGISTRATION STATEMENT This Statement of Additional Information and the prospectus omit certain information contained in the Registration Statement which has been filed with the SEC. Copies of such additional information may be obtained from the SEC upon payment of the prescribed fee. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements and financial highlights comprising each of the Investment Divisions of Metropolitan Life Separate Account UL 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. Such financial statements and financial highlights are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The consolidated financial statements and related financial statement schedules of Metropolitan Life Insurance Company and subsidiaries 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. Such financial statements and financial statement schedules are included in reliance upon the report of such firm given upon their authority as experts in accounting and auditing. The principal business address of Deloitte & Touche LLP is 30 Rockefeller Plaza, New York, New York 10112-0015. FINANCIAL STATEMENTS MetLife's financial statements should be distinguished from the financial statements and financial highlights comprising each of the Investment Divisions of the Separate Account, and should be considered only as bearing on MetLife's ability to meet its obligations under the Policies. They should not be considered as bearing on the investment performance of the assets held in the Separate Account. SAI-7 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policy Owners of Metropolitan Life Separate Account UL and Board of Directors of Metropolitan Life Insurance Company We have audited the accompanying statements of assets and liabilities of Metropolitan Life Separate Account UL (the "Separate Account") of Metropolitan Life Insurance Company (the "Company") comprising each of the individual Investment Divisions listed in Note 2.A as of December 31, 2016, the related statements of operations and changes in net assets for the respective stated periods in the three years then ended, and the financial highlights in Note 8 for the respective stated periods in the five years then ended. These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements and financial highlights 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 and financial highlights 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. 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 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 investments owned as of December 31, 2016, by correspondence with the custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of each of the Investment Divisions constituting the Separate Account of the Company as of December 31, 2016, the results of their operations and changes in their net assets for the respective stated periods in the three years then ended, and the financial highlights for the respective stated periods in the five years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, Florida March 24, 2017 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2016
AMERICAN AB GLOBAL AB CENTURY VP CAPITAL AMERICAN FUNDS THEMATIC GROWTH INTERMEDIATE BOND APPRECIATION BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............. $ 32,386 $ 95,051 $ 3,341 $ 6,362,160 Due from Metropolitan Life Insurance Company................... -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets..................... 32,386 95,051 3,341 6,362,160 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company................... -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities................ -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS............................... $ 32,386 $ 95,051 $ 3,341 $ 6,362,160 ==================== ==================== ==================== ====================
The accompanying notes are an integral part of these financial statements. 1 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
AMERICAN FUNDS GLOBAL SMALL AMERICAN FUNDS AMERICAN FUNDS AMERICAN FUNDS CAPITALIZATION GROWTH GROWTH-INCOME INTERNATIONAL INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION --------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 63,768,756 $ 168,913,311 $ 105,740,543 $ 348,390 Due from Metropolitan Life Insurance Company........ -- -- 3 -- --------------------- -------------------- --------------------- -------------------- Total Assets.......... 63,768,756 168,913,311 105,740,546 348,390 --------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 4 -- -- --------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- 4 -- -- --------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 63,768,756 $ 168,913,307 $ 105,740,546 $ 348,390 ===================== ==================== ===================== ==================== AMERICAN FUNDS U.S. GOVERNMENT/AAA- DREYFUS VIF FIDELITY VIP ASSET FIDELITY VIP RATED SECURITIES INTERNATIONAL VALUE MANAGER: GROWTH CONTRAFUND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 54,307 $ 193,298 $ 1,799,093 $ 2,675,209 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 54,307 193,298 1,799,093 2,675,209 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 54,307 $ 193,298 $ 1,799,093 $ 2,675,209 ==================== ==================== ==================== ==================== FIDELITY VIP FIDELITY VIP EQUITY-INCOME FREEDOM 2010 INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 16,883 $ 29,390 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 16,883 29,390 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 16,883 $ 29,390 ==================== ====================
The accompanying notes are an integral part of these financial statements. 2 The accompanying notes are an integral part of these financial statements. 3 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
FIDELITY VIP FIDELITY VIP FIDELITY VIP FIDELITY VIP FREEDOM 2020 FREEDOM 2025 FREEDOM 2030 FREEDOM 2040 INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- --------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 567,520 $ 448,266 $ 181,828 $ 159,009 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- --------------------- Total Assets.......... 567,520 448,266 181,828 159,009 -------------------- --------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- --------------------- Total Liabilities..... -- -- -- -- -------------------- --------------------- -------------------- --------------------- NET ASSETS.................... $ 567,520 $ 448,266 $ 181,828 $ 159,009 ==================== ===================== ==================== ===================== FIDELITY VIP FIDELITY VIP FIDELITY VIP GOVERNMENT FIDELITY VIP INVESTMENT FREEDOM 2050 MONEY MARKET HIGH INCOME GRADE BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- --------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 107,059 $ 3,825,639 $ 368,584 $ 1,241,561 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- --------------------- Total Assets.......... 107,059 3,825,639 368,584 1,241,561 -------------------- --------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 10 -- -- -- -------------------- --------------------- -------------------- --------------------- Total Liabilities..... 10 -- -- -- -------------------- --------------------- -------------------- --------------------- NET ASSETS.................... $ 107,049 $ 3,825,639 $ 368,584 $ 1,241,561 ==================== ===================== ==================== ===================== FTVIPT FIDELITY VIP MID CAP FRANKLIN INCOME VIP INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 256,383 $ 56,031 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 256,383 56,031 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 256,383 $ 56,031 ==================== ====================
The accompanying notes are an integral part of these financial statements. 4 The accompanying notes are an integral part of these financial statements. 5 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
FTVIPT FTVIPT FTVIPT FRANKLIN MUTUAL FRANKLIN MUTUAL FTVIPT TEMPLETON TEMPLETON GLOBAL GLOBAL DISCOVERY VIP SHARES VIP FOREIGN VIP BOND VIP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 559,179 $ 96,301 $ 5,762,444 $ 624,673 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 559,179 96,301 5,762,444 624,673 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 559,179 $ 96,301 $ 5,762,444 $ 624,673 ==================== ==================== ==================== ==================== GOLDMAN SACHS GOLDMAN SACHS SMALL CAP EQUITY INVESCO V.I. INVESCO V.I. MID-CAP VALUE INSIGHTS COMSTOCK INTERNATIONAL GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 82,725 $ 39,554 $ 449,886 $ 358,802 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- --------------------- Total Assets.......... 82,725 39,554 449,886 358,802 -------------------- -------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -- -- -------------------- -------------------- -------------------- --------------------- Total Liabilities..... -- 1 -- -- -------------------- -------------------- -------------------- --------------------- NET ASSETS.................... $ 82,725 $ 39,553 $ 449,886 $ 358,802 ==================== ==================== ==================== ===================== JANUS ASPEN JANUS ASPEN BALANCED ENTERPRISE INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 1,073,389 $ 452,619 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 1,073,389 452,619 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 1,073,389 $ 452,619 ==================== ====================
The accompanying notes are an integral part of these financial statements. 6 The accompanying notes are an integral part of these financial statements. 7 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MFS VIT JANUS ASPEN FORTY JANUS ASPEN JANUS JANUS ASPEN OVERSEAS GLOBAL EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 505,032 $ 271,199 $ 43,050 $ 218,575 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 505,032 271,199 43,050 218,575 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 505,032 $ 271,199 $ 43,050 $ 218,575 ==================== ==================== ==================== ==================== MIST AB MFS VIT MFS VIT MFS VIT II GLOBAL DYNAMIC NEW DISCOVERY VALUE HIGH YIELD ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 206,405 $ 20,045 $ 151,111 $ 61,910 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 206,405 20,045 151,111 61,910 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 206,405 $ 20,045 $ 151,111 $ 61,910 ==================== ==================== ==================== ==================== MIST ALLIANZ GLOBAL MIST INVESTORS DYNAMIC AMERICAN FUNDS MULTI-ASSET PLUS BALANCED ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 4,786 $ 990,764 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 4,786 990,764 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 4,786 $ 990,764 ==================== ====================
The accompanying notes are an integral part of these financial statements. 8 The accompanying notes are an integral part of these financial statements. 9 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST MIST MIST MIST BLACKROCK AMERICAN FUNDS AMERICAN FUNDS AQR GLOBAL GLOBAL TACTICAL GROWTH ALLOCATION MODERATE ALLOCATION RISK BALANCED STRATEGIES INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 1,761,546 $ 1,158,636 $ 135,878 $ 317,436 Due from Metropolitan Life Insurance Company........ -- -- -- -- ------------------- -------------------- -------------------- -------------------- Total Assets.......... 1,761,546 1,158,636 135,878 317,436 ------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- ------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- ------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 1,761,546 $ 1,158,636 $ 135,878 $ 317,436 =================== ==================== ==================== ==================== MIST MIST INVESCO MIST CLARION MIST CLEARBRIDGE HARRIS OAKMARK BALANCED-RISK GLOBAL REAL ESTATE AGGRESSIVE GROWTH INTERNATIONAL ALLOCATION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 27,646,709 $ 40,986,926 $ 39,465,104 $ 45,859 Due from Metropolitan Life Insurance Company........ 1 16 2 -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 27,646,710 40,986,942 39,465,106 45,859 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 27,646,710 $ 40,986,942 $ 39,465,106 $ 45,859 ==================== ==================== ==================== ==================== MIST INVESCO MIST INVESCO MID CAP VALUE SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 88,992,780 $ 6,722,590 Due from Metropolitan Life Insurance Company........ -- 1 -------------------- -------------------- Total Assets.......... 88,992,780 6,722,591 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 38 -- -------------------- -------------------- Total Liabilities..... 38 -- -------------------- -------------------- NET ASSETS.................... $ 88,992,742 $ 6,722,591 ==================== ====================
The accompanying notes are an integral part of these financial statements. 10 The accompanying notes are an integral part of these financial statements. 11 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST JPMORGAN MIST MIST MET/ABERDEEN GLOBAL ACTIVE MIST JPMORGAN LOOMIS SAYLES EMERGING ALLOCATION SMALL CAP VALUE GLOBAL MARKETS MARKETS EQUITY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value.. $ 203,391 $ 409,299 $ 371,582 $ 652,237 Due from Metropolitan Life Insurance Company........ -- -- -- -- ------------------- ------------------- -------------------- ------------------- Total Assets.......... 203,391 409,299 371,582 652,237 ------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- ------------------- ------------------- -------------------- ------------------- Total Liabilities..... -- -- -- -- ------------------- ------------------- -------------------- ------------------- NET ASSETS.................... $ 203,391 $ 409,299 $ 371,582 $ 652,237 =================== =================== ==================== =================== MIST MET/TEMPLETON MIST MET/WELLINGTON MIST METLIFE MIST METLIFE INTERNATIONAL BOND LARGE CAP RESEARCH ASSET ALLOCATION 100 BALANCED PLUS INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 218,676 $ 409,625,038 $ 21,704,625 $ 316,959 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 218,676 409,625,038 21,704,625 316,959 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 5 -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 5 -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 218,676 $ 409,625,033 $ 21,704,625 $ 316,959 ==================== ==================== ==================== ==================== MIST METLIFE MULTI-INDEX MIST METLIFE TARGETED RISK SMALL CAP VALUE INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 168,352 $ 774,395 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 168,352 774,395 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 168,352 $ 774,395 ==================== ====================
The accompanying notes are an integral part of these financial statements. 12 The accompanying notes are an integral part of these financial statements. 13 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST MIST MIST MIST MFS RESEARCH MORGAN STANLEY OPPENHEIMER PANAGORA GLOBAL INTERNATIONAL MID CAP GROWTH GLOBAL EQUITY DIVERSIFIED RISK INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- -------------------- ------------------- ASSETS: Investments at fair value.. $ 17,206,099 $ 186,034,462 $ 46,257,713 $ 15 Due from Metropolitan Life Insurance Company........ 1 60 6 -- -------------------- ------------------- -------------------- ------------------- Total Assets........... 17,206,100 186,034,522 46,257,719 15 -------------------- ------------------- -------------------- ------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- ------------------- -------------------- ------------------- Total Liabilities...... -- -- -- -- -------------------- ------------------- -------------------- ------------------- NET ASSETS.................... $ 17,206,100 $ 186,034,522 $ 46,257,719 $ 15 ==================== =================== ==================== =================== MIST PIMCO INFLATION MIST PIMCO MIST PYRAMIS MIST SCHRODERS PROTECTED BOND TOTAL RETURN MANAGED RISK GLOBAL MULTI-ASSET INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value.. $ 10,359,389 $ 42,840,891 $ 8,438 $ 52,316 Due from Metropolitan Life Insurance Company........ -- 1 -- -- ------------------- -------------------- ------------------- -------------------- Total Assets........... 10,359,389 42,840,892 8,438 52,316 ------------------- -------------------- ------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- ------------------- -------------------- ------------------- -------------------- Total Liabilities...... -- -- -- -- ------------------- -------------------- ------------------- -------------------- NET ASSETS.................... $ 10,359,389 $ 42,840,892 $ 8,438 $ 52,316 =================== ==================== =================== ==================== MIST SSGA GROWTH MIST SSGA AND INCOME ETF GROWTH ETF INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 8,122,289 $ 7,142,017 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets........... 8,122,289 7,142,017 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities...... -- -- -------------------- -------------------- NET ASSETS.................... $ 8,122,289 $ 7,142,017 ==================== ====================
The accompanying notes are an integral part of these financial statements. 14 The accompanying notes are an integral part of these financial statements. 15 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MIST T. ROWE PRICE MIST T. ROWE PRICE MSF BAILLIE GIFFORD MSF BARCLAYS LARGE CAP VALUE MID CAP GROWTH INTERNATIONAL STOCK AGGREGATE BOND INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 2,327,000 $ 34,743,933 $ 38,958,128 $ 127,387,337 Due from Metropolitan Life Insurance Company........ -- -- 2 2 ------------------- ------------------- -------------------- -------------------- Total Assets.......... 2,327,000 34,743,933 38,958,130 127,387,339 ------------------- ------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- ------------------- ------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- ------------------- ------------------- -------------------- -------------------- NET ASSETS.................... $ 2,327,000 $ 34,743,933 $ 38,958,130 $ 127,387,339 =================== =================== ==================== ==================== MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK ULTRA-SHORT BOND INCOME CAPITAL APPRECIATION LARGE CAP VALUE TERM BOND INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 77,277,402 $ 9,502,695 $ 21,009,123 $ 22,657,241 Due from Metropolitan Life Insurance Company........ 1 -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 77,277,403 9,502,695 21,009,123 22,657,241 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- 1 -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- 1 -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 77,277,403 $ 9,502,695 $ 21,009,123 $ 22,657,240 ==================== ==================== ==================== ==================== MSF FRONTIER MSF JENNISON MID CAP GROWTH GROWTH INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 225,309,928 $ 22,968,241 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 225,309,928 22,968,241 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 20 1 -------------------- -------------------- Total Liabilities..... 20 1 -------------------- -------------------- NET ASSETS.................... $ 225,309,908 $ 22,968,240 ==================== ====================
The accompanying notes are an integral part of these financial statements. 16 The accompanying notes are an integral part of these financial statements. 17 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MSF LOOMIS SAYLES MSF LOOMIS SAYLES MSF MET/ARTISAN MSF MET/WELLINGTON SMALL CAP CORE SMALL CAP GROWTH MID CAP VALUE BALANCED INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- --------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 25,854,977 $ 11,122,714 $ 62,142,341 $ 299,463,080 Due from Metropolitan Life Insurance Company........ 47 6 57 1 -------------------- --------------------- -------------------- -------------------- Total Assets.......... 25,855,024 11,122,720 62,142,398 299,463,081 -------------------- --------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- --------------------- -------------------- -------------------- NET ASSETS.................... $ 25,855,024 $ 11,122,720 $ 62,142,398 $ 299,463,081 ==================== ===================== ==================== ==================== MSF MET/WELLINGTON CORE EQUITY MSF METLIFE MSF METLIFE MSF METLIFE OPPORTUNITIES ASSET ALLOCATION 20 ASSET ALLOCATION 40 ASSET ALLOCATION 60 INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 73,520,029 $ 5,067,129 $ 10,372,997 $ 52,559,819 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 73,520,029 5,067,129 10,372,997 52,559,819 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 1 -- -- 1 -------------------- -------------------- -------------------- -------------------- Total Liabilities..... 1 -- -- 1 -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 73,520,028 $ 5,067,129 $ 10,372,997 $ 52,559,818 ==================== ==================== ==================== ==================== MSF METLIFE MSF METLIFE ASSET ALLOCATION 80 MID CAP STOCK INDEX INVESTMENT DIVISION INVESTMENT DIVISION -------------------- --------------------- ASSETS: Investments at fair value.. $ 96,200,971 $ 95,179,139 Due from Metropolitan Life Insurance Company........ -- 6 -------------------- --------------------- Total Assets.......... 96,200,971 95,179,145 -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 2 -- -------------------- --------------------- Total Liabilities..... 2 -- -------------------- --------------------- NET ASSETS.................... $ 96,200,969 $ 95,179,145 ==================== =====================
The accompanying notes are an integral part of these financial statements. 18 The accompanying notes are an integral part of these financial statements. 19 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MSF METLIFE MSF MFS MSF MSCI STOCK INDEX TOTAL RETURN MSF MFS VALUE EAFE INDEX INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ------------------- -------------------- ASSETS: Investments at fair value.. $ 1,023,023,670 $ 10,408,921 $ 88,412,118 $ 76,450,326 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- ------------------- -------------------- Total Assets.......... 1,023,023,670 10,408,921 88,412,118 76,450,326 -------------------- -------------------- ------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 1 -- 1 3 -------------------- -------------------- ------------------- -------------------- Total Liabilities..... 1 -- 1 3 -------------------- -------------------- ------------------- -------------------- NET ASSETS.................... $ 1,023,023,669 $ 10,408,921 $ 88,412,117 $ 76,450,323 ==================== ==================== =================== ==================== MSF NEUBERGER MSF RUSSELL 2000 MSF T. ROWE PRICE MSF T. ROWE PRICE BERMAN GENESIS INDEX LARGE CAP GROWTH SMALL CAP GROWTH INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION ------------------- ------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 112,504,180 $ 78,678,966 $ 84,300,671 $ 112,461,755 Due from Metropolitan Life Insurance Company........ 2 -- 3 -- ------------------- ------------------- -------------------- -------------------- Total Assets.......... 112,504,182 78,678,966 84,300,674 112,461,755 ------------------- ------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 2 -- 22 ------------------- ------------------- -------------------- -------------------- Total Liabilities..... -- 2 -- 22 ------------------- ------------------- -------------------- -------------------- NET ASSETS.................... $ 112,504,182 $ 78,678,964 $ 84,300,674 $ 112,461,733 =================== =================== ==================== ==================== MSF WESTERN MSF VAN ECK ASSET MANAGEMENT GLOBAL NATURAL STRATEGIC BOND RESOURCES OPPORTUNITIES INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 259,264 $ 52,921,770 Due from Metropolitan Life Insurance Company........ -- 6 -------------------- -------------------- Total Assets.......... 259,264 52,921,776 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 259,264 $ 52,921,776 ==================== ====================
The accompanying notes are an integral part of these financial statements. 20 The accompanying notes are an integral part of these financial statements. 21 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONTINUED) DECEMBER 31, 2016
MSF WESTERN OPPENHEIMER PIMCO VIT ASSET MANAGEMENT VA MAIN STREET PIMCO VIT COMMODITYREALRETURN U.S. GOVERNMENT SMALL CAP ALL ASSET STRATEGY INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 15,656,153 $ 5,825 $ 126,203 $ 9,928 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 15,656,153 5,825 126,203 9,928 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 6 -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... 6 -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 15,656,147 $ 5,825 $ 126,203 $ 9,928 ==================== ==================== ==================== ==================== PIMCO VIT PIONEER VCT PUTNAM VT LOW DURATION MID CAP VALUE INTERNATIONAL VALUE ROYCE MICRO-CAP INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION INVESTMENT DIVISION -------------------- ------------------- ------------------- -------------------- ASSETS: Investments at fair value.. $ 873,923 $ 55,933 $ 4,261 $ 10,583 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- ------------------- ------------------- -------------------- Total Assets.......... 873,923 55,933 4,261 10,583 -------------------- ------------------- ------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 1,341 -- -- -- -------------------- ------------------- ------------------- -------------------- Total Liabilities..... 1,341 -- -- -- -------------------- ------------------- ------------------- -------------------- NET ASSETS.................... $ 872,582 $ 55,933 $ 4,261 $ 10,583 ==================== =================== =================== ==================== UIF EMERGING ROYCE SMALL-CAP MARKETS DEBT INVESTMENT DIVISION INVESTMENT DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 68,550 $ 1,256,825 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 68,550 1,256,825 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 68,550 $ 1,256,825 ==================== ====================
The accompanying notes are an integral part of these financial statements. 22 The accompanying notes are an integral part of these financial statements. 23 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES -- (CONCLUDED) DECEMBER 31, 2016
UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION -------------------- ASSETS: Investments at fair value................................................................................. $ 3,160,892 Due from Metropolitan Life Insurance Company....................................................................................... -- -------------------- Total Assets......................................................................................... 3,160,892 -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....................................................................................... -- -------------------- Total Liabilities.................................................................................... -- -------------------- NET ASSETS................................................................................................... $ 3,160,892 ====================
The accompanying notes are an integral part of these financial statements. 24 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
AB GLOBAL THEMATIC GROWTH INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... -- -- -- --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 877 4,879 1,302 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 877 4,879 1,302 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,193) (2,756) 2,635 --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (316) 2,123 3,937 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (316) $ 2,123 $ 3,937 ===================== ==================== ==================== AB INTERMEDIATE BOND INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,736 $ 2,061 $ 1,921 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 2,736 2,061 1,921 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,264 1,833 810 Realized gains (losses) on sale of investments....... (186) (171) (121) -------------------- -------------------- --------------------- Net realized gains (losses)..................... 1,078 1,662 689 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 49 (3,852) 952 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,127 (2,190) 1,641 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 3,863 $ (129) $ 3,562 ==================== ==================== ===================== AMERICAN CENTURY VP CAPITAL APPRECIATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 (a) -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... -- -- -- -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4 23 -- Realized gains (losses) on sale of investments....... (1) 33 12 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 3 56 12 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (60) (38) 42 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (57) 18 54 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (57) $ 18 $ 54 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 26 The accompanying notes are an integral part of these financial statements. 27 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
AMERICAN FUNDS BOND INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 110,564 $ 104,107 $ 115,025 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 9,571 8,549 8,401 -------------------- -------------------- --------------------- Net investment income (loss).................... 100,993 95,558 106,624 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 23,172 116,557 2,120 Realized gains (losses) on sale of investments....... 1,509 (3,532) 4,807 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 24,681 113,025 6,927 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 45,632 (201,734) 172,487 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 70,313 (88,709) 179,414 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 171,306 $ 6,849 $ 286,038 ==================== ==================== ===================== AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 159,045 $ -- $ 88,263 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 77,911 91,602 95,114 --------------------- -------------------- --------------------- Net investment income (loss).................... 81,134 (91,602) (6,851) --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 11,923,223 5,579,846 320,860 Realized gains (losses) on sale of investments....... (19,783) 1,343,378 1,028,540 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 11,903,440 6,923,224 1,349,400 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (10,777,574) (6,348,033) 96,482 --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,125,866 575,191 1,445,882 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,207,000 $ 483,589 $ 1,439,031 ===================== ==================== ===================== AMERICAN FUNDS GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,259,429 $ 1,004,590 $ 1,286,837 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 147,194 155,259 152,282 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,112,235 849,331 1,134,555 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 14,591,335 34,618,471 7,869,597 Realized gains (losses) on sale of investments....... 1,564,440 3,175,509 3,654,149 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 16,155,775 37,793,980 11,523,746 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (2,560,394) (27,669,113) 413,436 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 13,595,381 10,124,867 11,937,182 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 14,707,616 $ 10,974,198 $ 13,071,737 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 28 The accompanying notes are an integral part of these financial statements. 29 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,500,084 $ 1,369,670 $ 1,339,033 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 100,558 103,704 103,335 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,399,526 1,265,966 1,235,698 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 11,252,001 15,356,438 5,003,511 Realized gains (losses) on sale of investments....... 993,174 1,779,863 2,212,712 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 12,245,175 17,136,301 7,216,223 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (2,551,087) (16,929,014) 1,935,227 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 9,694,088 207,287 9,151,450 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 11,093,614 $ 1,473,253 $ 10,387,148 ==================== ==================== ==================== AMERICAN FUNDS INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 4,799 $ 7,125 $ 9,668 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 4,799 7,125 9,668 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 28,955 32,754 -- Realized gains (losses) on sale of investments....... (7,617) 20,582 3,059 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 21,338 53,336 3,059 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (18,823) (72,634) (30,549) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,515 (19,298) (27,490) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 7,314 $ (12,173) $ (17,822) ==================== ==================== ===================== AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 737 $ 712 $ 520 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 737 712 520 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,010 404 -- Realized gains (losses) on sale of investments....... (42) (3) (30) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 968 401 (30) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,163) (350) 1,820 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (195) 51 1,790 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 542 $ 763 $ 2,310 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 30 The accompanying notes are an integral part of these financial statements. 31 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
DREYFUS VIF INTERNATIONAL VALUE INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- ---------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 3,283 $ 4,421 $ 3,201 --------------------- ---------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- ---------------------- --------------------- Net investment income (loss).................... 3,283 4,421 3,201 --------------------- ---------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (5,322) (390) (210) --------------------- ---------------------- --------------------- Net realized gains (losses)..................... (5,322) (390) (210) --------------------- ---------------------- --------------------- Change in unrealized gains (losses) on investments... (2,271) (10,460) (26,366) --------------------- ---------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (7,593) (10,850) (26,576) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (4,310) $ (6,429) $ (23,375) ===================== ====================== ===================== FIDELITY VIP ASSET MANAGER: GROWTH INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 23,502 $ 20,958 $ 20,809 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 23,502 20,958 20,809 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 25,657 1,145 1,627 Realized gains (losses) on sale of investments....... 35,213 127,820 33,797 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 60,870 128,965 35,424 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (48,668) (145,469) 59,690 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 12,202 (16,504) 95,114 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 35,704 $ 4,454 $ 115,923 ===================== ===================== ===================== FIDELITY VIP CONTRAFUND INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 18,813 $ 25,926 $ 24,338 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 18,813 25,926 24,338 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 215,517 265,481 56,967 Realized gains (losses) on sale of investments....... 49,752 107,564 61,174 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 265,269 373,045 118,141 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (89,763) (372,526) 174,211 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 175,506 519 292,352 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 194,319 $ 26,445 $ 316,690 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 32 The accompanying notes are an integral part of these financial statements. 33 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 351 $ 426 $ 687 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 351 426 687 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 873 2,231 338 Realized gains (losses) on sale of investments....... (15) 275 718 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 858 2,506 1,056 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 1,277 (3,341) 37 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,135 (835) 1,093 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,486 $ (409) $ 1,780 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2010 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 439 $ 361 $ 775 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- 29 --------------------- --------------------- --------------------- Net investment income (loss).................... 439 361 746 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 455 65 738 Realized gains (losses) on sale of investments....... (28) 5,610 2,715 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 427 5,675 3,453 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 369 (5,470) (2,030) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 796 205 1,423 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,235 $ 566 $ 2,169 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2020 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 8,579 $ 10,060 $ 16,277 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- 108 --------------------- --------------------- --------------------- Net investment income (loss).................... 8,579 10,060 16,169 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 16,688 2,356 17,423 Realized gains (losses) on sale of investments....... 2,623 166,915 21,410 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 19,311 169,271 38,833 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 4,403 (177,998) (8,502) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 23,714 (8,727) 30,331 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 32,293 $ 1,333 $ 46,500 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 34 The accompanying notes are an integral part of these financial statements. 35 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP FREEDOM 2025 INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 6,677 $ 8,151 $ 613 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 6,677 8,151 613 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 13,619 2,389 771 Realized gains (losses) on sale of investments....... (312) 231 464 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 13,307 2,620 1,235 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 6,315 (13,249) 73 -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 19,622 (10,629) 1,308 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 26,299 $ (2,478) $ 1,921 ==================== ===================== ===================== FIDELITY VIP FREEDOM 2030 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,599 $ 2,154 $ 1,233 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- 38 --------------------- --------------------- --------------------- Net investment income (loss).................... 2,599 2,154 1,195 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,822 611 1,344 Realized gains (losses) on sale of investments....... (1,669) 1,142 11,989 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 3,153 1,753 13,333 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 4,716 (4,989) (10,096) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,869 (3,236) 3,237 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 10,468 $ (1,082) $ 4,432 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2040 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,084 $ 1,492 $ 775 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- 8 --------------------- -------------------- --------------------- Net investment income (loss).................... 2,084 1,492 767 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,682 541 487 Realized gains (losses) on sale of investments....... (877) 263 749 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 2,805 804 1,236 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 5,080 (3,345) (709) --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 7,885 (2,541) 527 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 9,969 $ (1,049) $ 1,294 ===================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 36 The accompanying notes are an integral part of these financial statements. 37 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP FREEDOM 2050 INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,500 $ 878 $ 369 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- 14 --------------------- --------------------- --------------------- Net investment income (loss).................... 1,500 878 355 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,239 308 382 Realized gains (losses) on sale of investments....... (570) 535 6,257 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 1,669 843 6,639 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 2,841 (2,416) (5,093) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 4,510 (1,573) 1,546 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 6,010 $ (695) $ 1,901 ===================== ===================== ===================== FIDELITY VIP GOVERNMENT MONEY MARKET INVESTMENT DIVISION --------------------- 2016 (b) --------------------- INVESTMENT INCOME: Dividends............................................ $ 4,167 --------------------- EXPENSES: Mortality and expense risk charges................... -- --------------------- Net investment income (loss).................... 4,167 --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- Realized gains (losses) on sale of investments....... -- --------------------- Net realized gains (losses)..................... -- --------------------- Change in unrealized gains (losses) on investments... -- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... -- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 4,167 ===================== FIDELITY VIP HIGH INCOME INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 18,971 $ 14,336 $ 10,183 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 18,971 14,336 10,183 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (443) (455) 158 --------------------- --------------------- --------------------- Net realized gains (losses)..................... (443) (455) 158 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 19,200 (20,979) (8,210) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 18,757 (21,434) (8,052) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 37,728 $ (7,098) $ 2,131 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 38 The accompanying notes are an integral part of these financial statements. 39 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 28,927 $ 31,506 $ 26,958 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- -------------------- Net investment income (loss).................... 28,927 31,506 26,958 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 587 993 644 Realized gains (losses) on sale of investments....... (2,116) (839) (16,379) --------------------- --------------------- -------------------- Net realized gains (losses)..................... (1,529) 154 (15,735) --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 27,988 (39,907) 77,902 --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 26,459 (39,753) 62,167 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 55,386 $ (8,247) $ 89,125 ===================== ===================== ==================== FIDELITY VIP MID CAP INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 766 $ 745 $ 48 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 766 745 48 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 14,495 30,638 5,961 Realized gains (losses) on sale of investments....... (682) 648 4,531 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 13,813 31,286 10,492 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... 9,442 (36,156) 4,318 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 23,255 (4,870) 14,810 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 24,021 $ (4,125) $ 14,858 ===================== ===================== ===================== FTVIPT FRANKLIN INCOME VIP INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,059 $ 1,086 $ 385 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 2,059 1,086 385 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (110) (154) (51) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (110) (154) (51) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 3,968 (2,439) (1,084) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 3,858 (2,593) (1,135) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 5,917 $ (1,507) $ (750) ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 40 The accompanying notes are an integral part of these financial statements. 41 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 8,262 $ 13,670 $ 10,690 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 8,262 13,670 10,690 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 39,176 27,512 33,082 Realized gains (losses) on sale of investments....... (2,198) 194 10,518 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 36,978 27,706 43,600 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 13,065 (58,851) (24,521) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 50,043 (31,145) 19,079 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 58,305 $ (17,475) $ 29,769 ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL SHARES VIP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,664 $ 1,895 $ 789 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,664 1,895 789 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,856 4,180 205 Realized gains (losses) on sale of investments....... (444) 33 259 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,412 4,213 464 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,437 (9,723) 1,131 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 10,849 (5,510) 1,595 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 12,513 $ (3,615) $ 2,384 ==================== ==================== ==================== FTVIPT TEMPLETON FOREIGN VIP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 114,022 $ 189,205 $ 78,379 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 114,022 189,205 78,379 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 89,391 177,426 -- Realized gains (losses) on sale of investments....... (69,876) 5,027 156,830 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 19,515 182,453 156,830 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 260,337 (703,728) (709,096) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 279,852 (521,275) (552,266) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 393,874 $ (332,070) $ (473,887) ===================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 42 The accompanying notes are an integral part of these financial statements. 43 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FTVIPT TEMPLETON GLOBAL BOND VIP INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 83,772 $ 65,826 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... -- 83,772 65,826 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 449 5,274 -- Realized gains (losses) on sale of investments....... (4,156) (97,965) (644) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (3,707) (92,691) (644) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 24,908 (36,601) (38,430) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 21,201 (129,292) (39,074) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 21,201 $ (45,520) $ 26,752 ==================== ==================== ==================== GOLDMAN SACHS MID-CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,071 $ 1,118 $ 2,932 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 1,071 1,118 2,932 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 43 20,122 48,819 Realized gains (losses) on sale of investments....... (9,872) 671 7,493 --------------------- -------------------- -------------------- Net realized gains (losses)..................... (9,829) 20,793 56,312 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 25,433 (48,920) (21,021) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 15,604 (28,127) 35,291 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 16,675 $ (27,009) $ 38,223 ===================== ==================== ==================== GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 413 $ 104 $ 277 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 413 104 277 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 986 4,391 5,208 Realized gains (losses) on sale of investments....... (839) 336 1,707 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 147 4,727 6,915 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 6,057 (5,505) (4,589) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 6,204 (778) 2,326 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 6,617 $ (674) $ 2,603 ===================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 44 The accompanying notes are an integral part of these financial statements. 45 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
INVESCO V.I. COMSTOCK INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- ---------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 4,913 $ 5,695 $ 3,587 --------------------- ---------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- ---------------------- --------------------- Net investment income (loss)................... 4,913 5,695 3,587 --------------------- ---------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 29,536 941 -- Realized gains (losses) on sale of investments....... 2,231 3,469 2,447 --------------------- ---------------------- --------------------- Net realized gains (losses).................... 31,767 4,410 2,447 --------------------- ---------------------- --------------------- Change in unrealized gains (losses) on investments... 25,839 (32,126) 22,523 --------------------- ---------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 57,606 (27,716) 24,970 --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 62,519 $ (22,021) $ 28,557 ===================== ====================== ===================== INVESCO V.I. INTERNATIONAL GROWTH INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- ---------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 4,874 $ 5,017 $ 5,421 --------------------- ---------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- ---------------------- --------------------- Net investment income (loss)................... 4,874 5,017 5,421 --------------------- ---------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 630 2,637 5,138 --------------------- ---------------------- --------------------- Net realized gains (losses).................... 630 2,637 5,138 --------------------- ---------------------- --------------------- Change in unrealized gains (losses) on investments... (8,246) (13,856) (10,871) --------------------- ---------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (7,616) (11,219) (5,733) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,742) $ (6,202) $ (312) ===================== ====================== ===================== JANUS ASPEN BALANCED INVESTMENT DIVISION ----------------------------------------------------------------------- 2016 2015 2014 --------------------- ---------------------- ---------------------- INVESTMENT INCOME: Dividends............................................ $ 20,153 $ 15,263 $ 16,228 --------------------- ---------------------- ---------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- ---------------------- ---------------------- Net investment income (loss)................... 20,153 15,263 16,228 --------------------- ---------------------- ---------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 14,217 35,506 26,985 Realized gains (losses) on sale of investments....... 8,012 5,452 10,485 --------------------- ---------------------- ---------------------- Net realized gains (losses).................... 22,229 40,958 37,470 --------------------- ---------------------- ---------------------- Change in unrealized gains (losses) on investments... (19) (51,128) 30,740 --------------------- ---------------------- ---------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 22,210 (10,170) 68,210 --------------------- ---------------------- ---------------------- Net increase (decrease) in net assets resulting from operations................................... $ 42,363 $ 5,093 $ 84,438 ===================== ====================== ======================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 46 The accompanying notes are an integral part of these financial statements. 47 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
JANUS ASPEN ENTERPRISE INVESTMENT DIVISION --------------------- 2016 (c) --------------------- INVESTMENT INCOME: Dividends............................................ $ 107 --------------------- EXPENSES: Mortality and expense risk charges................... -- --------------------- Net investment income (loss).................... 107 --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 38,700 Realized gains (losses) on sale of investments....... (534) --------------------- Net realized gains (losses)..................... 38,166 --------------------- Change in unrealized gains (losses) on investments... 289 --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 38,455 --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 38,562 ===================== JANUS ASPEN FORTY INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 252 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... -- -- 252 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 67,914 121,081 249,329 Realized gains (losses) on sale of investments....... (8,107) 1,569 62,849 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 59,807 122,650 312,178 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (58,944) (57,429) (248,123) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 863 65,221 64,055 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 863 $ 65,221 $ 64,307 ===================== ===================== ===================== JANUS ASPEN JANUS INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,500 $ 2,968 $ 1,630 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- --------------------- Net investment income (loss).................... 1,500 2,968 1,630 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 17,243 84,817 31,621 Realized gains (losses) on sale of investments....... 45,098 17,674 9,477 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 62,341 102,491 41,098 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (66,733) (79,472) 12,182 --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (4,392) 23,019 53,280 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,892) $ 25,987 $ 54,910 ===================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 48 The accompanying notes are an integral part of these financial statements. 49 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
JANUS ASPEN OVERSEAS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,672 $ 225 $ 1,960 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 1,672 225 1,960 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,129 1,449 6,620 Realized gains (losses) on sale of investments....... (7,649) (6,243) (4,308) -------------------- -------------------- --------------------- Net realized gains (losses)..................... (6,520) (4,794) 2,312 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 1,900 363 (10,605) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (4,620) (4,431) (8,293) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,948) $ (4,206) $ (6,333) ==================== ==================== ===================== MFS VIT GLOBAL EQUITY INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,326 $ 1,587 $ 974 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 1,326 1,587 974 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 9,731 6,506 1,843 Realized gains (losses) on sale of investments....... 695 2,452 2,541 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 10,426 8,958 4,384 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 736 (14,256) 1,213 --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 11,162 (5,298) 5,597 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 12,488 $ (3,711) $ 6,571 ===================== ==================== ==================== MFS VIT NEW DISCOVERY INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... -- -- -- -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 9,401 6,957 45,559 Realized gains (losses) on sale of investments....... (174) 374 1,237 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 9,227 7,331 46,796 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 7,467 (11,470) (63,957) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 16,694 (4,139) (17,161) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 16,694 $ (4,139) $ (17,161) ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 50 The accompanying notes are an integral part of these financial statements. 51 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MFS VIT VALUE INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 369 $ 439 $ 285 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- -------------------- Net investment income (loss).................... 369 439 285 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,629 1,237 670 Realized gains (losses) on sale of investments....... 619 659 571 --------------------- --------------------- -------------------- Net realized gains (losses)..................... 2,248 1,896 1,241 --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (76) (2,518) 559 --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,172 (622) 1,800 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,541 $ (183) $ 2,085 ===================== ===================== ==================== MFS VIT II HIGH YIELD INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 9,347 $ 9,868 $ 8,003 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- --------------------- Net investment income (loss).................... 9,347 9,868 8,003 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (220) (99) 25 --------------------- -------------------- --------------------- Net realized gains (losses)..................... (220) (99) 25 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 9,158 (16,013) (4,175) --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 8,938 (16,112) (4,150) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 18,285 $ (6,244) $ 3,853 ===================== ==================== ===================== MIST AB GLOBAL DYNAMIC ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 977 $ 2,180 $ 860 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- --------------------- Net investment income (loss).................... 977 2,180 860 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 630 2,323 856 Realized gains (losses) on sale of investments....... (200) (101) 135 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 430 2,222 991 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 769 (4,443) 1,384 --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,199 (2,221) 2,375 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,176 $ (41) $ 3,235 ===================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 52 The accompanying notes are an integral part of these financial statements. 53 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 (a) -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2 $ 21 $ -- -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 2 21 -- -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 19 1 Realized gains (losses) on sale of investments....... (12) (278) -- -------------------- -------------------- --------------------- Net realized gains (losses)..................... (12) (259) 1 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 80 (72) 1 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 68 (331) 2 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 70 $ (310) $ 2 ==================== ==================== ===================== MIST AMERICAN FUNDS BALANCED ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 18,208 $ 15,506 $ 13,034 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 18,208 15,506 13,034 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 77,498 46,196 78,760 Realized gains (losses) on sale of investments....... (552) 3,497 6,182 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 76,946 49,693 84,942 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (22,963) (69,036) (47,376) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 53,983 (19,343) 37,566 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 72,191 $ (3,837) $ 50,600 ==================== ===================== ===================== MIST AMERICAN FUNDS GROWTH ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 26,959 $ 24,524 $ 20,605 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 26,959 24,524 20,605 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 165,604 95,418 237,874 Realized gains (losses) on sale of investments....... (5,416) 15,416 24,970 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 160,188 110,834 262,844 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (37,021) (141,365) (180,168) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 123,167 (30,531) 82,676 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 150,126 $ (6,007) $ 103,281 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 54 The accompanying notes are an integral part of these financial statements. 55 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST AMERICAN FUNDS MODERATE ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 23,999 $ 17,019 $ 15,920 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 23,999 17,019 15,920 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 68,764 40,376 77,010 Realized gains (losses) on sale of investments....... (1,035) 12,509 5,925 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 67,729 52,885 82,935 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (16,232) (73,320) (41,113) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 51,497 (20,435) 41,822 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 75,496 $ (3,416) $ 57,742 ===================== ==================== ==================== MIST AQR GLOBAL RISK BALANCED INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 7,434 $ -- -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... -- 7,434 -- -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 13,315 786 Realized gains (losses) on sale of investments....... (7,843) (2,519) (660) -------------------- --------------------- -------------------- Net realized gains (losses)..................... (7,843) 10,796 126 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 18,548 (30,868) 5,443 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 10,705 (20,072) 5,569 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 10,705 $ (12,638) $ 5,569 ==================== ===================== ==================== MIST BLACKROCK GLOBAL TACTICAL STRATEGIES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 4,216 $ 3,577 $ 1,792 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 4,216 3,577 1,792 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 23,769 9,296 8,451 Realized gains (losses) on sale of investments....... (756) 49 363 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 23,013 9,345 8,814 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (13,208) (14,933) (1,686) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 9,805 (5,588) 7,128 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 14,021 $ (2,011) $ 8,920 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 56 The accompanying notes are an integral part of these financial statements. 57 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 679,349 $ 1,234,670 $ 513,864 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 29,090 31,928 33,399 -------------------- --------------------- -------------------- Net investment income (loss).................... 650,259 1,202,742 480,465 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 31,945 48,531 314,419 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 31,945 48,531 314,419 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (362,033) (1,654,271) 3,062,383 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (330,088) (1,605,740) 3,376,802 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 320,171 $ (402,998) $ 3,857,267 ==================== ===================== ==================== MIST CLEARBRIDGE AGGRESSIVE GROWTH INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 270,534 $ 198,717 $ 72,926 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 36,607 45,621 36,095 --------------------- -------------------- -------------------- Net investment income (loss).................... 233,927 153,096 36,831 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 970,623 1,820,551 867,002 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 970,623 1,820,551 867,002 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (103,509) (3,670,688) 5,750,935 --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 867,114 (1,850,137) 6,617,937 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,101,041 $ (1,697,041) $ 6,654,768 ===================== ==================== ==================== MIST HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 861,973 $ 1,358,813 $ 1,105,911 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 49,021 57,999 62,335 --------------------- -------------------- -------------------- Net investment income (loss).................... 812,952 1,300,814 1,043,576 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,415,203 3,880,482 4,067,270 Realized gains (losses) on sale of investments....... (640,681) 49,542 1,812,640 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,774,522 3,930,024 5,879,910 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 446,527 (6,964,997) (9,320,626) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,221,049 (3,034,973) (3,440,716) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 3,034,001 $ (1,734,159) $ (2,397,140) ===================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 58 The accompanying notes are an integral part of these financial statements. 59 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST INVESCO BALANCED-RISK ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 63 $ 1,200 $ -- -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 63 1,200 -- -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 3,078 1,200 Realized gains (losses) on sale of investments....... (528) (1,351) 65 -------------------- --------------------- -------------------- Net realized gains (losses)..................... (528) 1,727 1,265 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 4,887 (4,753) 178 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 4,359 (3,026) 1,443 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 4,422 $ (1,826) $ 1,443 ==================== ===================== ==================== MIST INVESCO MID CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 727,789 $ 652,691 $ 652,762 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 77,755 88,957 90,624 --------------------- --------------------- -------------------- Net investment income (loss).................... 650,034 563,734 562,138 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,889,123 4,446,457 16,068,302 Realized gains (losses) on sale of investments....... 11,246 732,310 1,049,905 --------------------- --------------------- -------------------- Net realized gains (losses)..................... 3,900,369 5,178,767 17,118,207 --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 7,673,646 (13,696,346) (8,899,738) --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 11,574,015 (8,517,579) 8,218,469 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 12,224,049 $ (7,953,845) $ 8,780,607 ===================== ===================== ==================== MIST INVESCO SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 9,561 $ -- -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 8,076 9,074 8,994 -------------------- --------------------- -------------------- Net investment income (loss).................... (8,076) 487 (8,994) -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,137,318 1,773,695 783,328 Realized gains (losses) on sale of investments....... (110,635) 1,804 187,042 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 1,026,683 1,775,499 970,370 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (318,719) (1,866,286) (438,103) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 707,964 (90,787) 532,267 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 699,888 $ (90,300) $ 523,273 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 60 The accompanying notes are an integral part of these financial statements. 61 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST JPMORGAN GLOBAL ACTIVE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 3,855 $ 5,107 $ 1,679 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 3,855 5,107 1,679 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,091 8,853 4,582 Realized gains (losses) on sale of investments....... (510) (120) 660 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,581 8,733 5,242 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,187) (12,813) 2,680 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,394 (4,080) 7,922 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 5,249 $ 1,027 $ 9,601 ==================== ==================== ==================== MIST JPMORGAN SMALL CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 6,286 $ 4,196 $ 2,563 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 6,286 4,196 2,563 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 22,605 26,694 28,052 Realized gains (losses) on sale of investments....... 2,029 (765) 2,277 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 24,634 25,929 30,329 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 79,671 (52,802) (18,929) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 104,305 (26,873) 11,400 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 110,591 $ (22,677) $ 13,963 ==================== ==================== ===================== MIST LOOMIS SAYLES GLOBAL MARKETS INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,758 $ 7,875 $ 9,637 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,758 7,875 9,637 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 11,125 -- -- Realized gains (losses) on sale of investments....... 1,573 18,423 4,771 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 12,698 18,423 4,771 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,350) (13,993) 1,137 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 11,348 4,430 5,908 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 18,106 $ 12,305 $ 15,545 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 62 The accompanying notes are an integral part of these financial statements. 63 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST MET/ABERDEEN EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,049 $ 10,228 $ 2,914 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,049 10,228 2,914 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (30,698) (4,559) (2,174) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (30,698) (4,559) (2,174) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 89,323 (82,085) (31,587) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 58,625 (86,644) (33,761) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 64,674 $ (76,416) $ (30,847) ==================== ==================== ==================== MIST MET/TEMPLETON INTERNATIONAL BOND INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 16,491 $ 6,729 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... -- 16,491 6,729 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 486 355 -- Realized gains (losses) on sale of investments....... (2,171) (5,538) 6 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (1,685) (5,183) 6 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,976 (19,099) (3,576) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 3,291 (24,282) (3,570) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,291 $ (7,791) $ 3,159 ==================== ==================== ==================== MIST MET/WELLINGTON LARGE CAP RESEARCH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 9,605,133 $ 3,933,627 $ 3,642,958 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 2,007,407 2,110,795 2,017,025 -------------------- -------------------- -------------------- Net investment income (loss).................... 7,597,726 1,822,832 1,625,933 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 26,127,082 29,529,907 -- Realized gains (losses) on sale of investments....... 4,953,703 6,791,139 5,779,958 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 31,080,785 36,321,046 5,779,958 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (8,253,818) (21,509,605) 41,616,595 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 22,826,967 14,811,441 47,396,553 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 30,424,693 $ 16,634,273 $ 49,022,486 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 64 The accompanying notes are an integral part of these financial statements. 65 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST METLIFE ASSET ALLOCATION 100 INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 523,833 $ 322,952 $ 181,683 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 14,780 16,490 16,174 --------------------- --------------------- --------------------- Net investment income (loss).................... 509,053 306,462 165,509 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,664,123 1,572,075 -- Realized gains (losses) on sale of investments....... 102,098 325,688 437,534 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 2,766,221 1,897,763 437,534 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (1,391,486) (2,617,113) 404,377 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,374,735 (719,350) 841,911 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,883,788 $ (412,888) $ 1,007,420 ===================== ===================== ===================== MIST METLIFE BALANCED PLUS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 7,951 $ 4,773 $ 2,715 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 7,951 4,773 2,715 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,078 13,434 12,036 Realized gains (losses) on sale of investments....... (955) (2,885) 220 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,123 10,549 12,256 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 12,397 (26,058) (517) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 14,520 (15,509) 11,739 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 22,471 $ (10,736) $ 14,454 ==================== ==================== ==================== MIST METLIFE MULTI-INDEX TARGETED RISK INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,944 $ 1,398 $ -- -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 1,944 1,398 -- -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 3,097 172 Realized gains (losses) on sale of investments....... (37) 1,073 90 -------------------- -------------------- --------------------- Net realized gains (losses)..................... (37) 4,170 262 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 4,590 (7,672) 4,343 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 4,553 (3,502) 4,605 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 6,497 $ (2,104) $ 4,605 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 66 The accompanying notes are an integral part of these financial statements. 67 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST METLIFE SMALL CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 8,421 $ 800 $ 366 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 8,421 800 366 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 21,554 310,745 38,852 Realized gains (losses) on sale of investments....... (31,090) 1,317 32,257 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (9,536) 312,062 71,109 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 191,373 (358,930) (58,142) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 181,837 (46,868) 12,967 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 190,258 $ (46,068) $ 13,333 ==================== ==================== ==================== MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 378,662 $ 565,935 $ 483,322 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 15,460 17,693 18,674 -------------------- -------------------- -------------------- Net investment income (loss).................... 363,202 548,242 464,648 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (113,918) 34,366 144,798 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (113,918) 34,366 144,798 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (396,420) (864,226) (2,026,000) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (510,338) (829,860) (1,881,202) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (147,136) $ (281,618) $ (1,416,554) ==================== ==================== ==================== MIST MORGAN STANLEY MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 132,861 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 581,093 686,901 717,140 -------------------- -------------------- -------------------- Net investment income (loss).................... (581,093) (686,901) (584,279) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 3,185,085 4,836,759 5,665,992 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,185,085 4,836,759 5,665,992 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (20,525,720) (15,427,415) (2,867,790) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (17,340,635) (10,590,656) 2,798,202 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (17,921,728) $ (11,277,557) $ 2,213,923 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 68 The accompanying notes are an integral part of these financial statements. 69 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 540,111 $ 609,199 $ 505,389 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 112,319 104,779 89,693 -------------------- -------------------- --------------------- Net investment income (loss).................... 427,792 504,420 415,696 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,248,912 1,119,227 1,468,712 Realized gains (losses) on sale of investments....... 1,062,963 1,459,506 1,473,679 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 3,311,875 2,578,733 2,942,391 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (3,785,262) (1,183,054) (2,309,701) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (473,387) 1,395,679 632,690 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (45,595) $ 1,900,099 $ 1,048,386 ==================== ==================== ===================== MIST PANAGORA GLOBAL DIVERSIFIED RISK INVESTMENT DIVISION -------------------------------------------- 2016 2015 (d) -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 50 -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -------------------- -------------------- Net investment income (loss).................... -- 50 -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 65 Realized gains (losses) on sale of investments....... 1 (360) -------------------- -------------------- Net realized gains (losses)..................... 1 (295) -------------------- -------------------- Change in unrealized gains (losses) on investments... (1) 1 -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... -- (294) -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ -- $ (244) ==================== ==================== MIST PIMCO INFLATION PROTECTED BOND INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 559,967 $ 213,452 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 17,989 19,912 21,738 -------------------- --------------------- -------------------- Net investment income (loss).................... (17,989) 540,055 191,714 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (134,822) (211,211) (162,419) -------------------- --------------------- -------------------- Net realized gains (losses)..................... (134,822) (211,211) (162,419) -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 652,775 (655,945) 319,472 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 517,953 (867,156) 157,053 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 499,964 $ (327,101) $ 348,767 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 70 The accompanying notes are an integral part of these financial statements. 71 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST PIMCO TOTAL RETURN INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,232,049 $ 2,501,824 $ 1,261,172 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 55,405 58,540 62,315 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,176,644 2,443,284 1,198,857 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 545,027 -- Realized gains (losses) on sale of investments....... (107,899) (40,218) 36,542 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (107,899) 504,809 36,542 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 134,407 (2,854,535) 873,849 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 26,508 (2,349,726) 910,391 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,203,152 $ 93,558 $ 2,109,248 ==================== ==================== ==================== MIST PYRAMIS MANAGED RISK INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 47 $ 86 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 47 86 -- -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 16 433 2 Realized gains (losses) on sale of investments....... (9) 545 8 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 7 978 10 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 239 (255) 48 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 246 723 58 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 293 $ 809 $ 58 ==================== ==================== ==================== MIST SCHRODERS GLOBAL MULTI-ASSET INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 675 $ 467 $ 398 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 675 467 398 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 658 1,401 1,089 Realized gains (losses) on sale of investments....... (11) 35 168 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 647 1,436 1,257 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,558 (2,611) 553 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 2,205 (1,175) 1,810 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 2,880 $ (708) $ 2,208 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 72 The accompanying notes are an integral part of these financial statements. 73 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 201,907 $ 200,671 $ 195,317 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 8,489 9,183 9,443 ------------------- -------------------- -------------------- Net investment income (loss).................... 193,418 191,488 185,874 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 439,798 439,240 463,729 Realized gains (losses) on sale of investments....... (17,565) 68,038 167,009 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 422,233 507,278 630,738 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (166,860) (845,948) (350,740) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 255,373 (338,670) 279,998 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 448,791 $ (147,182) $ 465,872 =================== ==================== ==================== MIST SSGA GROWTH ETF INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 159,959 $ 152,270 $ 118,289 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 7,001 7,372 7,409 -------------------- -------------------- ------------------- Net investment income (loss).................... 152,958 144,898 110,880 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 424,639 369,187 348,010 Realized gains (losses) on sale of investments....... (36,140) 30,189 110,391 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 388,499 399,376 458,401 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (116,079) (699,498) (255,403) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 272,420 (300,122) 202,998 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 425,378 $ (155,224) $ 313,878 ==================== ==================== =================== MIST T. ROWE PRICE LARGE CAP VALUE INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 63,487 $ 36,741 $ 32,258 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 63,487 36,741 32,258 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 241,959 4,421 -- Realized gains (losses) on sale of investments....... 22,893 86,882 6,947 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 264,852 91,303 6,947 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... 1,148 (197,956) 244,232 -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 266,000 (106,653) 251,179 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 329,487 $ (69,912) $ 283,437 ==================== ==================== ===================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 74 The accompanying notes are an integral part of these financial statements. 75 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST T. ROWE PRICE MID CAP GROWTH INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 45,975 45,309 39,978 --------------------- --------------------- --------------------- Net investment income (loss).................... (45,975) (45,309) (39,978) --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,929,907 5,111,107 2,710,770 Realized gains (losses) on sale of investments....... 274,363 671,843 622,719 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 5,204,270 5,782,950 3,333,489 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (3,017,999) (3,612,484) 275,430 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,186,271 2,170,466 3,608,919 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,140,296 $ 2,125,157 $ 3,568,941 ===================== ===================== ===================== MSF BAILLIE GIFFORD INTERNATIONAL STOCK INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 627,145 $ 713,415 $ 614,397 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 179,611 193,538 202,918 -------------------- -------------------- -------------------- Net investment income (loss).................... 447,534 519,877 411,479 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (310,525) (206,507) (176,452) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (310,525) (206,507) (176,452) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,728,920 (1,227,962) (1,735,615) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,418,395 (1,434,469) (1,912,067) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,865,929 $ (914,592) $ (1,500,588) ==================== ==================== ==================== MSF BARCLAYS AGGREGATE BOND INDEX INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 3,556,980 $ 3,746,041 $ 3,642,812 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 40,599 39,974 40,346 -------------------- -------------------- -------------------- Net investment income (loss).................... 3,516,381 3,706,067 3,602,466 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 157,844 111,155 62,943 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 157,844 111,155 62,943 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (713,953) (3,467,125) 3,247,015 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (556,109) (3,355,970) 3,309,958 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 2,960,272 $ 350,097 $ 6,912,424 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 76 The accompanying notes are an integral part of these financial statements. 77 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF BLACKROCK BOND INCOME INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,531,954 $ 3,137,039 $ 2,833,552 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 278,834 287,424 293,168 -------------------- -------------------- -------------------- Net investment income (loss).................... 2,253,120 2,849,615 2,540,384 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 918,699 -- Realized gains (losses) on sale of investments....... 30,488 (4,703) 70,435 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 30,488 913,996 70,435 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (97,803) (3,544,439) 2,699,020 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (67,315) (2,630,443) 2,769,455 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 2,185,805 $ 219,172 $ 5,309,839 ==================== ==================== ==================== MSF BLACKROCK CAPITAL APPRECIATION INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ 7,533 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,977 10,693 10,001 -------------------- -------------------- -------------------- Net investment income (loss).................... (9,977) (10,693) (2,468) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 852,431 1,744,269 -- Realized gains (losses) on sale of investments....... 195,339 278,466 3,803,528 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,047,770 2,022,735 3,803,528 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,066,351) (1,407,738) (2,831,679) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (18,581) 614,997 971,849 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (28,558) $ 604,304 $ 969,381 ==================== ==================== ==================== MSF BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 319,165 $ 358,828 $ 240,568 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 22,545 23,445 23,616 -------------------- -------------------- -------------------- Net investment income (loss).................... 296,620 335,383 216,952 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,458,734 1,605,704 4,383,514 Realized gains (losses) on sale of investments....... (389,249) (183,787) (65,732) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,069,485 1,421,917 4,317,782 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,883,740 (2,942,487) (2,739,427) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 2,953,225 (1,520,570) 1,578,355 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,249,845 $ (1,185,187) $ 1,795,307 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 78 The accompanying notes are an integral part of these financial statements. 79 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF BLACKROCK ULTRA-SHORT TERM BOND INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 16,356 $ 813 $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 34,740 35,827 38,422 -------------------- -------------------- -------------------- Net investment income (loss).................... (18,384) (35,014) (38,422) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 487 -- -- Realized gains (losses) on sale of investments....... 3,225 -- -- -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,712 -- -- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 60,725 -- -- -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 64,437 -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 46,053 $ (35,014) $ (38,422) ==================== ==================== ==================== MSF FRONTIER MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 1,459,027 1,605,819 1,529,952 -------------------- -------------------- -------------------- Net investment income (loss).................... (1,459,027) (1,605,819) (1,529,952) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 25,696,515 31,059,487 20,270,585 Realized gains (losses) on sale of investments....... 2,622,698 5,229,191 5,829,957 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 28,319,213 36,288,678 26,100,542 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (16,692,072) (28,947,695) (1,683,974) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 11,627,141 7,340,983 24,416,568 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 10,168,114 $ 5,735,164 $ 22,886,616 ==================== ==================== ==================== MSF JENNISON GROWTH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 66,617 $ 64,278 $ 57,642 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 14,334 14,588 13,806 -------------------- -------------------- -------------------- Net investment income (loss).................... 52,283 49,690 43,836 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,948,170 3,546,254 1,172,046 Realized gains (losses) on sale of investments....... 177,425 583,747 588,171 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,125,595 4,130,001 1,760,217 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,197,364) (1,789,865) 102,570 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (71,769) 2,340,136 1,862,787 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (19,486) $ 2,389,826 $ 1,906,623 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 80 The accompanying notes are an integral part of these financial statements. 81 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF LOOMIS SAYLES SMALL CAP CORE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 76,360 $ 38,636 $ 10,698 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 22,984 24,860 24,993 --------------------- -------------------- -------------------- Net investment income (loss).................... 53,376 13,776 (14,295) --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,113,583 3,150,294 3,179,934 Realized gains (losses) on sale of investments....... 122,418 370,891 437,509 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,236,001 3,521,185 3,617,443 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 1,915,532 (3,857,826) (2,720,783) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 4,151,533 (336,641) 896,660 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 4,204,909 $ (322,865) $ 882,365 ===================== ==================== ==================== MSF LOOMIS SAYLES SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,163 9,783 10,498 -------------------- --------------------- -------------------- Net investment income (loss).................... (9,163) (9,783) (10,498) -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,165,890 1,543,783 1,374,358 Realized gains (losses) on sale of investments....... 56,242 261,026 486,190 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 1,222,132 1,804,809 1,860,548 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (582,015) (1,598,061) (1,752,743) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 640,117 206,748 107,805 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 630,954 $ 196,965 $ 97,307 ==================== ===================== ==================== MSF MET/ARTISAN MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 623,203 $ 704,333 $ 459,965 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 49,909 52,726 58,197 -------------------- -------------------- -------------------- Net investment income (loss).................... 573,294 651,607 401,768 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,218,111 7,448,048 -- Realized gains (losses) on sale of investments....... 158,671 632,699 1,070,144 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,376,782 8,080,747 1,070,144 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 4,919,832 (14,388,947) (313,797) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 11,296,614 (6,308,200) 756,347 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 11,869,908 $ (5,656,593) $ 1,158,115 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 82 The accompanying notes are an integral part of these financial statements. 83 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF MET/WELLINGTON BALANCED INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 8,164,072 $ 6,073,749 $ 6,099,011 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 1,586,955 1,662,109 1,647,006 --------------------- -------------------- -------------------- Net investment income (loss).................... 6,577,117 4,411,640 4,452,005 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 13,751,650 51,879,369 -- Realized gains (losses) on sale of investments....... 1,873,457 4,030,610 5,320,748 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 15,625,107 55,909,979 5,320,748 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,743,348) (53,963,621) 19,346,415 --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 11,881,759 1,946,358 24,667,163 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 18,458,876 $ 6,357,998 $ 29,119,168 ===================== ==================== ==================== MSF MET/WELLINGTON CORE EQUITY OPPORTUNITIES INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,178,342 $ 1,320,806 $ 508,892 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 55,978 57,675 57,279 --------------------- -------------------- -------------------- Net investment income (loss).................... 1,122,364 1,263,131 451,613 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,218,161 25,408,009 6,081,753 Realized gains (losses) on sale of investments....... (89,698) 716,455 1,674,792 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,128,463 26,124,464 7,756,545 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 855,321 (25,717,218) (869,547) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 3,983,784 407,246 6,886,998 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 5,106,148 $ 1,670,377 $ 7,338,611 ===================== ==================== ==================== MSF METLIFE ASSET ALLOCATION 20 INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 185,658 $ 124,733 $ 209,842 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 7,760 8,287 8,381 -------------------- --------------------- --------------------- Net investment income (loss).................... 177,898 116,446 201,461 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 179,520 168,162 213,606 Realized gains (losses) on sale of investments....... (57,458) 6,832 25,638 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 122,062 174,994 239,244 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (54,551) (309,762) (203,125) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 67,511 (134,768) 36,119 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 245,409 $ (18,322) $ 237,580 ==================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 84 The accompanying notes are an integral part of these financial statements. 85 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF METLIFE ASSET ALLOCATION 40 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 380,608 $ 46,938 $ 291,635 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 15,456 17,505 18,482 --------------------- --------------------- --------------------- Net investment income (loss).................... 365,152 29,433 273,153 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 653,875 559,298 346,288 Realized gains (losses) on sale of investments....... (4,511) 140,214 121,187 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 649,364 699,512 467,475 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (402,883) (854,363) (270,968) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 246,481 (154,851) 196,507 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 611,633 $ (125,418) $ 469,660 ===================== ===================== ===================== MSF METLIFE ASSET ALLOCATION 60 INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,741,228 $ 390,972 $ 1,206,188 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 80,187 85,255 84,872 --------------------- --------------------- --------------------- Net investment income (loss).................... 1,661,041 305,717 1,121,316 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,622,045 3,409,671 2,031,851 Realized gains (losses) on sale of investments....... 180,894 662,426 808,239 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 4,802,939 4,072,097 2,840,090 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (2,834,262) (4,965,532) (1,284,610) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,968,677 (893,435) 1,555,480 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 3,629,718 $ (587,718) $ 2,676,796 ===================== ===================== ===================== MSF METLIFE ASSET ALLOCATION 80 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 3,023,030 $ 512,933 $ 1,754,790 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 80,568 85,082 84,172 --------------------- --------------------- --------------------- Net investment income (loss).................... 2,942,462 427,851 1,670,618 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 11,163,996 4,372,751 -- Realized gains (losses) on sale of investments....... 857,817 1,805,013 1,673,184 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 12,021,813 6,177,764 1,673,184 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (7,365,543) (8,037,823) 1,795,645 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 4,656,270 (1,860,059) 3,468,829 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 7,598,732 $ (1,432,208) $ 5,139,447 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 86 The accompanying notes are an integral part of these financial statements. 87 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,110,219 $ 1,033,473 $ 910,209 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 65,628 68,461 66,825 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,044,591 965,012 843,384 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,666,040 5,617,501 4,123,805 Realized gains (losses) on sale of investments....... 1,488,577 1,969,456 4,161,062 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 8,154,617 7,586,957 8,284,867 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 7,196,356 (10,506,888) (1,040,640) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 15,350,973 (2,919,931) 7,244,227 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 16,395,564 $ (1,954,919) $ 8,087,611 ==================== ==================== ==================== MSF METLIFE STOCK INDEX INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 19,282,251 $ 16,989,974 $ 15,723,375 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 2,114,804 2,188,283 2,152,159 -------------------- -------------------- -------------------- Net investment income (loss).................... 17,167,447 14,801,691 13,571,216 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 42,275,909 40,868,342 23,073,733 Realized gains (losses) on sale of investments....... 15,702,100 17,484,826 22,399,491 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 57,978,009 58,353,168 45,473,224 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 31,292,870 (63,726,527) 58,022,278 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 89,270,879 (5,373,359) 103,495,502 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 106,438,326 $ 9,428,332 $ 117,066,718 ==================== ==================== ==================== MSF MFS TOTAL RETURN INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 287,267 $ 256,077 $ 230,037 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,492 8,955 8,485 -------------------- -------------------- -------------------- Net investment income (loss).................... 277,775 247,122 221,552 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 417,334 -- -- Realized gains (losses) on sale of investments....... 162,191 196,619 193,152 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 579,525 196,619 193,152 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 3,086 (470,036) 388,544 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 582,611 (273,417) 581,696 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 860,386 $ (26,295) $ 803,248 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 88 The accompanying notes are an integral part of these financial statements. 89 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF MFS VALUE INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 1,901,086 $ 2,325,157 $ 1,410,912 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 68,482 70,555 70,434 -------------------- ------------------- ------------------- Net investment income (loss).................... 1,832,604 2,254,602 1,340,478 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,583,219 13,359,170 3,936,675 Realized gains (losses) on sale of investments....... 440,263 1,066,697 1,680,541 -------------------- ------------------- ------------------- Net realized gains (losses)..................... 8,023,482 14,425,867 5,617,216 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 1,456,878 (16,842,516) 1,679,688 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 9,480,360 (2,416,649) 7,296,904 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 11,312,964 $ (162,047) $ 8,637,382 ==================== =================== =================== MSF MSCI EAFE INDEX INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,978,825 $ 2,538,836 $ 1,985,462 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 35,536 38,784 40,521 ------------------- -------------------- -------------------- Net investment income (loss).................... 1,943,289 2,500,052 1,944,941 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 101,562 707,350 1,139,967 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 101,562 707,350 1,139,967 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (990,605) (3,862,935) (7,881,915) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (889,043) (3,155,585) (6,741,948) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,054,246 $ (655,533) $ (4,797,007) =================== ==================== ==================== MSF NEUBERGER BERMAN GENESIS INVESTMENT DIVISION ---------------------------------------------------------------- 2016 2015 2014 ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 488,023 $ 455,355 $ 420,580 ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 88,644 93,449 96,260 ------------------- -------------------- ------------------- Net investment income (loss).................... 399,379 361,906 324,320 ------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 1,826,763 1,512,189 1,496,496 ------------------- -------------------- ------------------- Net realized gains (losses)..................... 1,826,763 1,512,189 1,496,496 ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... 15,758,188 (1,230,308) (2,029,896) ------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 17,584,951 281,881 (533,400) ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 17,984,330 $ 643,787 $ (209,080) =================== ==================== ===================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 90 The accompanying notes are an integral part of these financial statements. 91 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF RUSSELL 2000 INDEX INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 959,940 $ 876,249 $ 812,259 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 46,857 47,773 48,414 --------------------- -------------------- --------------------- Net investment income (loss).................... 913,083 828,476 763,845 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,042,248 4,152,346 1,573,978 Realized gains (losses) on sale of investments....... 1,662,177 2,119,087 2,223,932 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 5,704,425 6,271,433 3,797,910 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 7,347,406 (10,053,677) (996,894) --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 13,051,831 (3,782,244) 2,801,016 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 13,964,914 $ (2,953,768) $ 3,564,861 ===================== ==================== ===================== MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 49,087 $ 117,835 $ 48,493 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 57,405 60,498 54,764 -------------------- -------------------- -------------------- Net investment income (loss).................... (8,318) 57,337 (6,271) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 10,221,524 15,073,030 5,537,905 Realized gains (losses) on sale of investments....... 1,301,214 2,495,339 2,356,884 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 11,522,738 17,568,369 7,894,789 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (10,229,673) (8,845,976) (880,615) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,293,065 8,722,393 7,014,174 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,284,747 $ 8,779,730 $ 7,007,903 ==================== ==================== ==================== MSF T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 278,411 $ 155,566 $ 19,192 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 374,021 404,512 389,795 --------------------- -------------------- --------------------- Net investment income (loss).................... (95,610) (248,946) (370,603) --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 13,259,903 9,768,650 8,559,449 Realized gains (losses) on sale of investments....... 2,246,255 3,150,255 9,322,153 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 15,506,158 12,918,905 17,881,602 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (3,850,598) (9,935,901) (10,294,099) --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 11,655,560 2,983,004 7,587,503 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 11,559,950 $ 2,734,058 $ 7,216,900 ===================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 92 The accompanying notes are an integral part of these financial statements. 93 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF VAN ECK GLOBAL NATURAL RESOURCES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,967 $ 974 $ 983 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 1,967 974 983 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 3,054 Realized gains (losses) on sale of investments....... (7,201) (9,795) (3,490) -------------------- -------------------- --------------------- Net realized gains (losses)..................... (7,201) (9,795) (436) -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... 88,581 (64,308) (44,636) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 81,380 (74,103) (45,072) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 83,347 $ (73,129) $ (44,089) ==================== ==================== ===================== MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 831,199 $ 1,322,147 $ 1,377,573 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 69,295 32,560 33,455 --------------------- -------------------- -------------------- Net investment income (loss).................... 761,904 1,289,587 1,344,118 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 119,058 73,628 163,589 --------------------- -------------------- -------------------- Net realized gains (losses)..................... 119,058 73,628 163,589 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,417,251 (1,827,670) (168,552) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 2,536,309 (1,754,042) (4,963) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 3,298,213 $ (464,455) $ 1,339,155 ===================== ==================== ==================== MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 416,577 $ 373,766 $ 319,215 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 16,155 16,226 16,566 -------------------- -------------------- --------------------- Net investment income (loss).................... 400,422 357,540 302,649 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (10,757) (6,880) (4,464) -------------------- -------------------- --------------------- Net realized gains (losses)..................... (10,757) (6,880) (4,464) -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (199,711) (270,748) 143,123 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (210,468) (277,628) 138,659 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 189,954 $ 79,912 $ 441,308 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 94 The accompanying notes are an integral part of these financial statements. 95 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
OPPENHEIMER VA MAIN STREET SMALL CAP INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 (e) -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 46 $ 40 $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 46 40 -- -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 343 665 -- Realized gains (losses) on sale of investments....... 12 (40) -- -------------------- -------------------- -------------------- Net realized gains (losses)..................... 355 625 -- -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 988 (894) 198 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,343 (269) 198 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,389 $ (229) $ 198 ==================== ==================== ==================== PIMCO VIT ALL ASSET INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 3,261 $ 17,942 $ 49,509 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- ------------------- Net investment income (loss).................... 3,261 17,942 49,509 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (833) (111,468) 28 -------------------- ------------------- ------------------- Net realized gains (losses)..................... (833) (111,468) 28 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 12,619 38,369 (44,010) -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 11,786 (73,099) (43,982) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 15,047 $ (55,157) $ 5,527 ==================== =================== =================== PIMCO VIT COMMODITYREALRETURN STRATEGY INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 111 $ 1,467 $ 86 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 111 1,467 86 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (957) (11,415) (39) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (957) (11,415) (39) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,262 3,408 (10,088) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 1,305 (8,007) (10,127) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 1,416 $ (6,540) $ (10,041) ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 96 The accompanying notes are an integral part of these financial statements. 97 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
PIMCO VIT LOW DURATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 13,010 $ 29,643 $ 17,764 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 13,010 29,643 17,764 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (325) 12,574 512 -------------------- -------------------- --------------------- Net realized gains (losses)..................... (325) 12,574 512 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (271) (33,266) (4,896) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (596) (20,692) (4,384) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ 12,414 $ 8,951 $ 13,380 ==================== ==================== ===================== PIONEER VCT MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 342 $ 412 $ 452 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 342 412 452 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,899 5,835 6,866 Realized gains (losses) on sale of investments....... 268 4,638 1,056 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,167 10,473 7,922 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 3,146 (13,938) 732 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 6,313 (3,465) 8,654 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 6,655 $ (3,053) $ 9,106 ==================== ==================== ==================== PUTNAM VT INTERNATIONAL VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 122 $ 91 $ 95 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 122 91 95 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (165) (22) 46 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (165) (22) 46 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 58 (118) (775) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (107) (140) (729) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 15 $ (49) $ (634) ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 98 The accompanying notes are an integral part of these financial statements. 99 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
ROYCE MICRO-CAP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 61 $ -- $ -- -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 61 -- -- -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 498 657 Realized gains (losses) on sale of investments....... 71 1 13 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 71 499 670 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... 1,525 (1,557) (951) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 1,596 (1,058) (281) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 1,657 $ (1,058) $ (281) ==================== ===================== ==================== ROYCE SMALL-CAP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,115 $ 443 $ 64 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,115 443 64 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 11,025 12,749 5,932 Realized gains (losses) on sale of investments....... (4,843) 64 105,416 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,182 12,813 111,348 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 2,799 (19,154) (144,191) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 8,981 (6,341) (32,843) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 10,096 $ (5,898) $ (32,779) ==================== ==================== ==================== UIF EMERGING MARKETS DEBT INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 59,307 $ 45,047 $ 66,166 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 59,307 45,047 66,166 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 9,104 Realized gains (losses) on sale of investments....... (12,131) (12,799) (26,242) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (12,131) (12,799) (17,138) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 45,652 (46,377) 6,462 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 33,521 (59,176) (10,676) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 92,828 $ (14,129) $ 55,490 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 100 The accompanying notes are an integral part of these financial statements. 101 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................... $ 12,938 $ 18,406 $ 4,726 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges...................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss)....................... 12,938 18,406 4,726 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. -- -- -- Realized gains (losses) on sale of investments.......... (37,991) (24,296) 14,990 -------------------- -------------------- -------------------- Net realized gains (losses)........................ (37,991) (24,296) 14,990 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...... 171,862 (266,747) (166,226) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments....................................... 133,871 (291,043) (151,236) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations...................................... $ 146,809 $ (272,637) $ (146,510) ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 102 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
AB GLOBAL THEMATIC GROWTH INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 877 4,879 1,302 Change in unrealized gains (losses) on investments.. (1,193) (2,756) 2,635 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (316) 2,123 3,937 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,269 1,493 1,269 Net transfers (including fixed account)............. (7,397) (6,753) 13,633 Policy charges...................................... (883) (1,929) (2,507) Transfers for policy benefits and terminations...... (90) (30,831) (6,798) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (7,101) (38,020) 5,597 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (7,417) (35,897) 9,534 NET ASSETS: Beginning of year................................... 39,803 75,700 66,166 --------------------- -------------------- -------------------- End of year......................................... $ 32,386 $ 39,803 $ 75,700 ===================== ==================== ==================== AB INTERMEDIATE BOND INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,736 $ 2,061 $ 1,921 Net realized gains (losses)......................... 1,078 1,662 689 Change in unrealized gains (losses) on investments.. 49 (3,852) 952 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 3,863 (129) 3,562 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- 644 644 Net transfers (including fixed account)............. 33,741 2,915 32 Policy charges...................................... (3,112) (2,460) (2,264) Transfers for policy benefits and terminations...... -- -- -- -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 30,629 1,099 (1,588) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 34,492 970 1,974 NET ASSETS: Beginning of year................................... 60,559 59,589 57,615 -------------------- -------------------- --------------------- End of year......................................... $ 95,051 $ 60,559 $ 59,589 ==================== ==================== ===================== AMERICAN CENTURY VP CAPITAL APPRECIATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 (a) -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 3 56 12 Change in unrealized gains (losses) on investments.. (60) (38) 42 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (57) 18 54 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,568 -- -- Net transfers (including fixed account)............. 13 1 589 Policy charges...................................... (266) (368) (211) Transfers for policy benefits and terminations...... -- -- -- -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 3,315 (367) 378 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 3,258 (349) 432 NET ASSETS: Beginning of year................................... 83 432 -- -------------------- -------------------- --------------------- End of year......................................... $ 3,341 $ 83 $ 432 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 104 The accompanying notes are an integral part of these financial statements. 105 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
AMERICAN FUNDS BOND INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 100,993 $ 95,558 $ 106,624 Net realized gains (losses)......................... 24,681 113,025 6,927 Change in unrealized gains (losses) on investments.. 45,632 (201,734) 172,487 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 171,306 6,849 286,038 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 594,195 595,751 623,827 Net transfers (including fixed account)............. 266,964 482,848 255,803 Policy charges...................................... (399,254) (353,117) (362,278) Transfers for policy benefits and terminations...... (479,171) (500,127) (416,749) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (17,266) 225,355 100,603 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 154,040 232,204 386,641 NET ASSETS: Beginning of year................................... 6,208,120 5,975,916 5,589,275 -------------------- -------------------- --------------------- End of year......................................... $ 6,362,160 $ 6,208,120 $ 5,975,916 ==================== ==================== ===================== AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 81,134 $ (91,602) $ (6,851) Net realized gains (losses)......................... 11,903,440 6,923,224 1,349,400 Change in unrealized gains (losses) on investments.. (10,777,574) (6,348,033) 96,482 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,207,000 483,589 1,439,031 --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,934,049 5,361,656 5,749,295 Net transfers (including fixed account)............. (1,739,842) (992,517) (675,673) Policy charges...................................... (3,505,140) (3,751,216) (3,816,323) Transfers for policy benefits and terminations...... (4,322,961) (4,463,980) (4,204,832) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (4,633,894) (3,846,057) (2,947,533) --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (3,426,894) (3,362,468) (1,508,502) NET ASSETS: Beginning of year................................... 67,195,650 70,558,118 72,066,620 --------------------- -------------------- --------------------- End of year......................................... $ 63,768,756 $ 67,195,650 $ 70,558,118 ===================== ==================== ===================== AMERICAN FUNDS GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,112,235 $ 849,331 $ 1,134,555 Net realized gains (losses)......................... 16,155,775 37,793,980 11,523,746 Change in unrealized gains (losses) on investments.. (2,560,394) (27,669,113) 413,436 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 14,707,616 10,974,198 13,071,737 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 10,568,668 11,128,355 12,033,016 Net transfers (including fixed account)............. (1,947,160) (2,877,301) (1,562,797) Policy charges...................................... (8,879,484) (8,922,399) (8,831,204) Transfers for policy benefits and terminations...... (10,245,919) (10,503,688) (10,353,575) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (10,503,895) (11,175,033) (8,714,560) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 4,203,721 (200,835) 4,357,177 NET ASSETS: Beginning of year................................... 164,709,586 164,910,421 160,553,244 -------------------- -------------------- -------------------- End of year......................................... $ 168,913,307 $ 164,709,586 $ 164,910,421 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 106 The accompanying notes are an integral part of these financial statements. 107 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,399,526 $ 1,265,966 $ 1,235,698 Net realized gains (losses)......................... 12,245,175 17,136,301 7,216,223 Change in unrealized gains (losses) on investments.. (2,551,087) (16,929,014) 1,935,227 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,093,614 1,473,253 10,387,148 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 6,753,905 7,132,701 7,556,304 Net transfers (including fixed account)............. (1,474,231) (706,082) (746,690) Policy charges...................................... (5,885,637) (5,898,040) (5,923,496) Transfers for policy benefits and terminations...... (6,406,059) (6,373,610) (6,455,691) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (7,012,022) (5,845,031) (5,569,573) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 4,081,592 (4,371,778) 4,817,575 NET ASSETS: Beginning of year................................... 101,658,954 106,030,732 101,213,157 -------------------- -------------------- -------------------- End of year......................................... $ 105,740,546 $ 101,658,954 $ 106,030,732 ==================== ==================== ==================== AMERICAN FUNDS INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,799 $ 7,125 $ 9,668 Net realized gains (losses)......................... 21,338 53,336 3,059 Change in unrealized gains (losses) on investments.. (18,823) (72,634) (30,549) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 7,314 (12,173) (17,822) -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 2,192 6,030 19,466 Net transfers (including fixed account)............. -- (251,186) 22,024 Policy charges...................................... (6,055) (9,566) (10,594) Transfers for policy benefits and terminations...... (70,171) -- (16,461) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (74,034) (254,722) 14,435 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (66,720) (266,895) (3,387) NET ASSETS: Beginning of year................................... 415,110 682,005 685,392 -------------------- -------------------- --------------------- End of year......................................... $ 348,390 $ 415,110 $ 682,005 ==================== ==================== ===================== AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 737 $ 712 $ 520 Net realized gains (losses)......................... 968 401 (30) Change in unrealized gains (losses) on investments.. (1,163) (350) 1,820 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 542 763 2,310 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 5,191 2,595 1,253 Net transfers (including fixed account)............. 9 1 -- Policy charges...................................... (1,778) (1,568) (1,489) Transfers for policy benefits and terminations...... -- -- (6) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 3,422 1,028 (242) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 3,964 1,791 2,068 NET ASSETS: Beginning of year................................... 50,343 48,552 46,484 -------------------- -------------------- -------------------- End of year......................................... $ 54,307 $ 50,343 $ 48,552 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 108 The accompanying notes are an integral part of these financial statements. 109 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
DREYFUS VIF INTERNATIONAL VALUE INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- ---------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,283 $ 4,421 $ 3,201 Net realized gains (losses)......................... (5,322) (390) (210) Change in unrealized gains (losses) on investments.. (2,271) (10,460) (26,366) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (4,310) (6,429) (23,375) --------------------- ---------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- -- -- Net transfers (including fixed account)............. (12,134) -- -- Policy charges...................................... (2,110) (2,287) (2,373) Transfers for policy benefits and terminations...... -- (1) -- --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (14,244) (2,288) (2,373) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets............ (18,554) (8,717) (25,748) NET ASSETS: Beginning of year................................... 211,852 220,569 246,317 --------------------- ---------------------- --------------------- End of year......................................... $ 193,298 $ 211,852 $ 220,569 ===================== ====================== ===================== FIDELITY VIP ASSET MANAGER: GROWTH INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 23,502 $ 20,958 $ 20,809 Net realized gains (losses)......................... 60,870 128,965 35,424 Change in unrealized gains (losses) on investments.. (48,668) (145,469) 59,690 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 35,704 4,454 115,923 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 69,385 154,105 105,211 Net transfers (including fixed account)............. 6,528 (120,734) 60,739 Policy charges...................................... (69,707) (80,789) (76,841) Transfers for policy benefits and terminations...... (113,789) (173,241) (47,777) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (107,583) (220,659) 41,332 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (71,879) (216,205) 157,255 NET ASSETS: Beginning of year................................... 1,870,972 2,087,177 1,929,922 --------------------- --------------------- --------------------- End of year......................................... $ 1,799,093 $ 1,870,972 $ 2,087,177 ===================== ===================== ===================== FIDELITY VIP CONTRAFUND INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 18,813 $ 25,926 $ 24,338 Net realized gains (losses)......................... 265,269 373,045 118,141 Change in unrealized gains (losses) on investments.. (89,763) (372,526) 174,211 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 194,319 26,445 316,690 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 82,242 177,261 105,425 Net transfers (including fixed account)............. (6,803) (158,700) (10,694) Policy charges...................................... (91,600) (94,010) (90,082) Transfers for policy benefits and terminations...... (278,347) (89,062) (58,177) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (294,508) (164,511) (53,528) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (100,189) (138,066) 263,162 NET ASSETS: Beginning of year................................... 2,775,398 2,913,464 2,650,302 --------------------- --------------------- --------------------- End of year......................................... $ 2,675,209 $ 2,775,398 $ 2,913,464 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 110 The accompanying notes are an integral part of these financial statements. 111 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 351 $ 426 $ 687 Net realized gains (losses)......................... 858 2,506 1,056 Change in unrealized gains (losses) on investments.. 1,277 (3,341) 37 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 2,486 (409) 1,780 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,787 2,405 1,877 Net transfers (including fixed account)............. -- -- (11,506) Policy charges...................................... (227) (278) (409) Transfers for policy benefits and terminations...... (1) (14,085) (1) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 1,559 (11,958) (10,039) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 4,045 (12,367) (8,259) NET ASSETS: Beginning of year................................... 12,838 25,205 33,464 --------------------- --------------------- --------------------- End of year......................................... $ 16,883 $ 12,838 $ 25,205 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2010 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 439 $ 361 $ 746 Net realized gains (losses)......................... 427 5,675 3,453 Change in unrealized gains (losses) on investments.. 369 (5,470) (2,030) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,235 566 2,169 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 54,823 49,696 53,609 Net transfers (including fixed account)............. -- (481) -- Policy charges...................................... -- -- -- Transfers for policy benefits and terminations...... (45,887) (78,676) (53,906) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 8,936 (29,461) (297) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 10,171 (28,895) 1,872 NET ASSETS: Beginning of year................................... 19,219 48,114 46,242 --------------------- --------------------- --------------------- End of year......................................... $ 29,390 $ 19,219 $ 48,114 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2020 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 8,579 $ 10,060 $ 16,169 Net realized gains (losses)......................... 19,311 169,271 38,833 Change in unrealized gains (losses) on investments.. 4,403 (177,998) (8,502) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 32,293 1,333 46,500 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 159,769 132,204 113,318 Net transfers (including fixed account)............. (46) (413,184) -- Policy charges...................................... (6,174) (7,305) (12,214) Transfers for policy benefits and terminations...... (146,943) (168,987) (140,759) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 6,606 (457,272) (39,655) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 38,899 (455,939) 6,845 NET ASSETS: Beginning of year................................... 528,621 984,560 977,715 --------------------- --------------------- --------------------- End of year......................................... $ 567,520 $ 528,621 $ 984,560 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 112 The accompanying notes are an integral part of these financial statements. 113 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP FREEDOM 2025 INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,677 $ 8,151 $ 613 Net realized gains (losses)......................... 13,307 2,620 1,235 Change in unrealized gains (losses) on investments.. 6,315 (13,249) 73 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 26,299 (2,478) 1,921 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- -- -- Net transfers (including fixed account)............. -- 407,484 -- Policy charges...................................... (10,760) (9,867) (4,514) Transfers for policy benefits and terminations...... -- -- -- -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (10,760) 397,617 (4,514) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 15,539 395,139 (2,593) NET ASSETS: Beginning of year................................... 432,727 37,588 40,181 -------------------- --------------------- --------------------- End of year......................................... $ 448,266 $ 432,727 $ 37,588 ==================== ===================== ===================== FIDELITY VIP FREEDOM 2030 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,599 $ 2,154 $ 1,195 Net realized gains (losses)......................... 3,153 1,753 13,333 Change in unrealized gains (losses) on investments.. 4,716 (4,989) (10,096) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 10,468 (1,082) 4,432 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 337,954 248,938 197,624 Net transfers (including fixed account)............. (74) 1,585 (1,696) Policy charges...................................... -- -- -- Transfers for policy benefits and terminations...... (286,393) (211,226) (180,726) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 51,487 39,297 15,202 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 61,955 38,215 19,634 NET ASSETS: Beginning of year................................... 119,873 81,658 62,024 --------------------- --------------------- --------------------- End of year......................................... $ 181,828 $ 119,873 $ 81,658 ===================== ===================== ===================== FIDELITY VIP FREEDOM 2040 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,084 $ 1,492 $ 767 Net realized gains (losses)......................... 2,805 804 1,236 Change in unrealized gains (losses) on investments.. 5,080 (3,345) (709) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 9,969 (1,049) 1,294 --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 263,618 178,750 138,827 Net transfers (including fixed account)............. (142) -- -- Policy charges...................................... -- -- -- Transfers for policy benefits and terminations...... (203,651) (141,983) (98,455) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 59,825 36,767 40,372 --------------------- -------------------- --------------------- Net increase (decrease) in net assets............ 69,794 35,718 41,666 NET ASSETS: Beginning of year................................... 89,215 53,497 11,831 --------------------- -------------------- --------------------- End of year......................................... $ 159,009 $ 89,215 $ 53,497 ===================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 114 The accompanying notes are an integral part of these financial statements. 115 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP FREEDOM 2050 INVESTMENT DIVISION ------------------------------------------------------------ 2016 2015 2014 ------------------- ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,500 $ 878 $ 355 Net realized gains (losses)......................... 1,669 843 6,639 Change in unrealized gains (losses) on investments.. 2,841 (2,416) (5,093) ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations................................ 6,010 (695) 1,901 ------------------- ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners........ 171,698 115,247 91,003 Net transfers (including fixed account)............. -- (1,460) -- Policy charges...................................... -- -- -- Transfers for policy benefits and terminations...... (122,043) (88,414) (88,212) ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions....................... 49,655 25,373 2,791 ------------------- ------------------- ------------------ Net increase (decrease) in net assets............. 55,665 24,678 4,692 NET ASSETS: Beginning of year................................... 51,384 26,706 22,014 ------------------- ------------------- ------------------ End of year......................................... $ 107,049 $ 51,384 $ 26,706 =================== =================== ================== FIDELITY VIP GOVERNMENT MONEY MARKET INVESTMENT DIVISION ------------------- 2016 (b) ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,167 Net realized gains (losses)......................... -- Change in unrealized gains (losses) on investments.. -- ------------------- Net increase (decrease) in net assets resulting from operations................................ 4,167 ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 256,858 Net transfers (including fixed account)............. 3,598,871 Policy charges...................................... (34,257) Transfers for policy benefits and terminations...... -- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 3,821,472 ------------------- Net increase (decrease) in net assets............. 3,825,639 NET ASSETS: Beginning of year................................... -- ------------------- End of year......................................... $ 3,825,639 =================== FIDELITY VIP HIGH INCOME INVESTMENT DIVISION ------------------------------------------------------------ 2016 2015 2014 ------------------- ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 18,971 $ 14,336 $ 10,183 Net realized gains (losses)......................... (443) (455) 158 Change in unrealized gains (losses) on investments.. 19,200 (20,979) (8,210) ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from operations................................ 37,728 (7,098) 2,131 ------------------- ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners........ 35,555 12,069 3,323 Net transfers (including fixed account)............. 96,126 35,979 3,881 Policy charges...................................... (6,565) (5,315) (5,057) Transfers for policy benefits and terminations...... -- (2,074) (91) ------------------- ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions....................... 125,116 40,659 2,056 ------------------- ------------------- ------------------ Net increase (decrease) in net assets............. 162,844 33,561 4,187 NET ASSETS: Beginning of year................................... 205,740 172,179 167,992 ------------------- ------------------- ------------------ End of year......................................... $ 368,584 $ 205,740 $ 172,179 =================== =================== ================== FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION ----------------------------------------------------------- 2016 2015 2014 ------------------ ------------------- ------------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 28,927 $ 31,506 $ 26,958 Net realized gains (losses)......................... (1,529) 154 (15,735) Change in unrealized gains (losses) on investments.. 27,988 (39,907) 77,902 ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from operations................................ 55,386 (8,247) 89,125 ------------------ ------------------- ------------------ POLICY TRANSACTIONS: Premium payments received from policy owners........ 293 829 829 Net transfers (including fixed account)............. (24,137) (11,610) (509,895) Policy charges...................................... (14,328) (14,132) (17,492) Transfers for policy benefits and terminations...... -- -- (5,265) ------------------ ------------------- ------------------ Net increase (decrease) in net assets resulting from policy transactions....................... (38,172) (24,913) (531,823) ------------------ ------------------- ------------------ Net increase (decrease) in net assets............. 17,214 (33,160) (442,698) NET ASSETS: Beginning of year................................... 1,224,347 1,257,507 1,700,205 ------------------ ------------------- ------------------ End of year......................................... $ 1,241,561 $ 1,224,347 $ 1,257,507 ================== =================== ==================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 116 The accompanying notes are an integral part of these financial statements. 117 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FIDELITY VIP MID CAP INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 766 $ 745 $ 48 Net realized gains (losses)......................... 13,813 31,286 10,492 Change in unrealized gains (losses) on investments.. 9,442 (36,156) 4,318 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 24,021 (4,125) 14,858 --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,018 1,486 7,147 Net transfers (including fixed account)............. 261 32,283 (62) Policy charges...................................... (4,768) (4,213) (3,945) Transfers for policy benefits and terminations...... (43,917) -- (12,748) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (47,406) 29,556 (9,608) --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (23,385) 25,431 5,250 NET ASSETS: Beginning of year................................... 279,768 254,337 249,087 --------------------- -------------------- --------------------- End of year......................................... $ 256,383 $ 279,768 $ 254,337 ===================== ==================== ===================== FTVIPT FRANKLIN INCOME VIP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,059 $ 1,086 $ 385 Net realized gains (losses)......................... (110) (154) (51) Change in unrealized gains (losses) on investments.. 3,968 (2,439) (1,084) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 5,917 (1,507) (750) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,179 5,340 1,936 Net transfers (including fixed account)............. 10,302 12,510 24,540 Policy charges...................................... (3,200) (2,666) (1,188) Transfers for policy benefits and terminations...... -- -- -- -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 11,281 15,184 25,288 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 17,198 13,677 24,538 NET ASSETS: Beginning of year................................... 38,833 25,156 618 -------------------- --------------------- -------------------- End of year......................................... $ 56,031 $ 38,833 $ 25,156 ==================== ===================== ==================== FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 8,262 $ 13,670 $ 10,690 Net realized gains (losses)......................... 36,978 27,706 43,600 Change in unrealized gains (losses) on investments.. 13,065 (58,851) (24,521) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 58,305 (17,475) 29,769 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 55,906 24,639 10,410 Net transfers (including fixed account)............. (15,004) 13,951 8,747 Policy charges...................................... (11,796) (15,139) (16,960) Transfers for policy benefits and terminations...... (7,814) (14,827) (38,467) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 21,292 8,624 (36,270) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 79,597 (8,851) (6,501) NET ASSETS: Beginning of year................................... 479,582 488,433 494,934 --------------------- -------------------- -------------------- End of year......................................... $ 559,179 $ 479,582 $ 488,433 ===================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 118 The accompanying notes are an integral part of these financial statements. 119 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
FTVIPT FRANKLIN MUTUAL SHARES VIP INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,664 $ 1,895 $ 789 Net realized gains (losses)......................... 6,412 4,213 464 Change in unrealized gains (losses) on investments.. 4,437 (9,723) 1,131 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 12,513 (3,615) 2,384 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 14,420 10,729 4,760 Net transfers (including fixed account)............. 9,226 27,697 14,220 Policy charges...................................... (7,976) (5,813) (3,194) Transfers for policy benefits and terminations...... (3,186) (72) -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 12,484 32,541 15,786 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 24,997 28,926 18,170 NET ASSETS: Beginning of year................................... 71,304 42,378 24,208 -------------------- -------------------- -------------------- End of year......................................... $ 96,301 $ 71,304 $ 42,378 ==================== ==================== ==================== FTVIPT TEMPLETON FOREIGN VIP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 114,022 $ 189,205 $ 78,379 Net realized gains (losses)......................... 19,515 182,453 156,830 Change in unrealized gains (losses) on investments.. 260,337 (703,728) (709,096) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 393,874 (332,070) (473,887) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 450,424 522,167 338,970 Net transfers (including fixed account)............. (43,239) 131,629 2,058,544 Policy charges...................................... (193,490) (204,300) (168,065) Transfers for policy benefits and terminations...... (189,973) (119,949) (813,885) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 23,722 329,547 1,415,564 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 417,596 (2,523) 941,677 NET ASSETS: Beginning of year................................... 5,344,848 5,347,371 4,405,694 -------------------- -------------------- -------------------- End of year......................................... $ 5,762,444 $ 5,344,848 $ 5,347,371 ==================== ==================== ==================== FTVIPT TEMPLETON GLOBAL BOND VIP INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ 83,772 $ 65,826 Net realized gains (losses)......................... (3,707) (92,691) (644) Change in unrealized gains (losses) on investments.. 24,908 (36,601) (38,430) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 21,201 (45,520) 26,752 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 66,454 35,603 15,639 Net transfers (including fixed account)............. 5,683 (632,092) (47,291) Policy charges...................................... (25,780) (35,622) (34,683) Transfers for policy benefits and terminations...... (2,149) -- (41,236) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 44,208 (632,111) (107,571) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 65,409 (677,631) (80,819) NET ASSETS: Beginning of year................................... 559,264 1,236,895 1,317,714 -------------------- -------------------- -------------------- End of year......................................... $ 624,673 $ 559,264 $ 1,236,895 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 120 The accompanying notes are an integral part of these financial statements. 121 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
GOLDMAN SACHS MID-CAP VALUE INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,071 $ 1,118 $ 2,932 Net realized gains (losses)......................... (9,829) 20,793 56,312 Change in unrealized gains (losses) on investments.. 25,433 (48,920) (21,021) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 16,675 (27,009) 38,223 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- -- -- Net transfers (including fixed account)............. (183,580) -- -- Policy charges...................................... (4,736) (7,778) (9,236) Transfers for policy benefits and terminations...... (1) (12,103) (23,589) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (188,317) (19,881) (32,825) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (171,642) (46,890) 5,398 NET ASSETS: Beginning of year................................... 254,367 301,257 295,859 --------------------- --------------------- --------------------- End of year......................................... $ 82,725 $ 254,367 $ 301,257 ===================== ===================== ===================== GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 413 $ 104 $ 277 Net realized gains (losses)......................... 147 4,727 6,915 Change in unrealized gains (losses) on investments.. 6,057 (5,505) (4,589) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 6,617 (674) 2,603 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 10,556 1,112 2,186 Net transfers (including fixed account)............. -- -- (5,501) Policy charges...................................... (3,587) (3,707) (3,679) Transfers for policy benefits and terminations...... (7,826) (1) (26) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (857) (2,596) (7,020) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 5,760 (3,270) (4,417) NET ASSETS: Beginning of year................................... 33,793 37,063 41,480 -------------------- -------------------- --------------------- End of year......................................... $ 39,553 $ 33,793 $ 37,063 ==================== ==================== ===================== INVESCO V.I. COMSTOCK INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,913 $ 5,695 $ 3,587 Net realized gains (losses)......................... 31,767 4,410 2,447 Change in unrealized gains (losses) on investments.. 25,839 (32,126) 22,523 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 62,519 (22,021) 28,557 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 59,070 21,481 1,792 Net transfers (including fixed account)............. 257 (1,856) 9,094 Policy charges...................................... (8,620) (8,488) (7,120) Transfers for policy benefits and terminations...... -- (34) (20) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 50,707 11,103 3,746 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 113,226 (10,918) 32,303 NET ASSETS: Beginning of year................................... 336,660 347,578 315,275 --------------------- --------------------- --------------------- End of year......................................... $ 449,886 $ 336,660 $ 347,578 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 122 The accompanying notes are an integral part of these financial statements. 123 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
INVESCO V.I. INTERNATIONAL GROWTH INVESTMENT DIVISION ------------------------------------------------------------ 2016 2015 2014 ------------------ ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,874 $ 5,017 $ 5,421 Net realized gains (losses)......................... 630 2,637 5,138 Change in unrealized gains (losses) on investments.. (8,246) (13,856) (10,871) ------------------ ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (2,742) (6,202) (312) ------------------ ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 16,357 -- -- Net transfers (including fixed account)............. 40,410 2,025 12,366 Policy charges...................................... (16,023) (16,496) (15,500) Transfers for policy benefits and terminations...... (9,023) (1) (45,248) ------------------ ------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 31,721 (14,472) (48,382) ------------------ ------------------- ------------------- Net increase (decrease) in net assets............ 28,979 (20,674) (48,694) NET ASSETS: Beginning of year................................... 329,823 350,497 399,191 ------------------ ------------------- ------------------- End of year......................................... $ 358,802 $ 329,823 $ 350,497 ================== =================== =================== JANUS ASPEN BALANCED INVESTMENT DIVISION ------------------------------------------------------------- 2016 2015 2014 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 20,153 $ 15,263 $ 16,228 Net realized gains (losses)......................... 22,229 40,958 37,470 Change in unrealized gains (losses) on investments.. (19) (51,128) 30,740 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 42,363 5,093 84,438 ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 55,816 36,006 43,455 Net transfers (including fixed account)............. (14,696) 28,037 39,697 Policy charges...................................... (32,106) (33,574) (34,009) Transfers for policy benefits and terminations...... (79,063) (17,338) (43,432) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (70,049) 13,131 5,711 ------------------- ------------------- ------------------- Net increase (decrease) in net assets............ (27,686) 18,224 90,149 NET ASSETS: Beginning of year................................... 1,101,075 1,082,851 992,702 ------------------- ------------------- ------------------- End of year......................................... $ 1,073,389 $ 1,101,075 $ 1,082,851 =================== =================== =================== JANUS ASPEN ENTERPRISE INVESTMENT DIVISION -------------------- 2016 (c) -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 107 Net realized gains (losses)......................... 38,166 Change in unrealized gains (losses) on investments.. 289 -------------------- Net increase (decrease) in net assets resulting from operations................................ 38,562 -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- Net transfers (including fixed account)............. 417,833 Policy charges...................................... (3,776) Transfers for policy benefits and terminations...... -- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 414,057 -------------------- Net increase (decrease) in net assets............ 452,619 NET ASSETS: Beginning of year................................... -- -------------------- End of year......................................... $ 452,619 ==================== JANUS ASPEN FORTY INVESTMENT DIVISION ------------------------------------------------------------- 2016 2015 2014 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ 252 Net realized gains (losses)......................... 59,807 122,650 312,178 Change in unrealized gains (losses) on investments.. (58,944) (57,429) (248,123) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 863 65,221 64,307 ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 21,593 8,927 17,929 Net transfers (including fixed account)............. -- 262 (352,405) Policy charges...................................... (15,394) (19,291) (23,445) Transfers for policy benefits and terminations...... (106,582) (964) (25,992) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (100,383) (11,066) (383,913) ------------------- ------------------- ------------------- Net increase (decrease) in net assets............ (99,520) 54,155 (319,606) NET ASSETS: Beginning of year................................... 604,552 550,397 870,003 ------------------- ------------------- ------------------- End of year......................................... $ 505,032 $ 604,552 $ 550,397 =================== =================== ===================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 124 The accompanying notes are an integral part of these financial statements. 125 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
JANUS ASPEN JANUS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,500 $ 2,968 $ 1,630 Net realized gains (losses)......................... 62,341 102,491 41,098 Change in unrealized gains (losses) on investments.. (66,733) (79,472) 12,182 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (2,892) 25,987 54,910 --------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,252 6,990 11,134 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (11,346) (16,553) (15,340) Transfers for policy benefits and terminations...... (187,482) (26,764) (9,982) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (195,576) (36,327) (14,188) --------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (198,468) (10,340) 40,722 NET ASSETS: Beginning of year................................... 469,667 480,007 439,285 --------------------- --------------------- -------------------- End of year......................................... $ 271,199 $ 469,667 $ 480,007 ===================== ===================== ==================== JANUS ASPEN OVERSEAS INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,672 $ 225 $ 1,960 Net realized gains (losses)......................... (6,520) (4,794) 2,312 Change in unrealized gains (losses) on investments.. 1,900 363 (10,605) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (2,948) (4,206) (6,333) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 21,555 5,534 5,199 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (6,610) (7,590) (9,034) Transfers for policy benefits and terminations...... (4,970) (5,157) (11,226) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 9,975 (7,213) (15,061) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 7,027 (11,419) (21,394) NET ASSETS: Beginning of year................................... 36,023 47,442 68,836 --------------------- --------------------- --------------------- End of year......................................... $ 43,050 $ 36,023 $ 47,442 ===================== ===================== ===================== MFS VIT GLOBAL EQUITY INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,326 $ 1,587 $ 974 Net realized gains (losses)......................... 10,426 8,958 4,384 Change in unrealized gains (losses) on investments.. 736 (14,256) 1,213 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 12,488 (3,711) 6,571 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 27,743 10,152 938 Net transfers (including fixed account)............. (176) (8,832) 329 Policy charges...................................... (4,103) (4,102) (3,867) Transfers for policy benefits and terminations...... -- (175) -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 23,464 (2,957) (2,600) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 35,952 (6,668) 3,971 NET ASSETS: Beginning of year................................... 182,623 189,291 185,320 -------------------- -------------------- -------------------- End of year......................................... $ 218,575 $ 182,623 $ 189,291 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 126 The accompanying notes are an integral part of these financial statements. 127 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MFS VIT NEW DISCOVERY INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 9,227 7,331 46,796 Change in unrealized gains (losses) on investments.. 7,467 (11,470) (63,957) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 16,694 (4,139) (17,161) --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- -- -- Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (6,581) (6,330) (6,047) Transfers for policy benefits and terminations...... (38) (52) (56) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (6,619) (6,382) (6,103) --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 10,075 (10,521) (23,264) NET ASSETS: Beginning of year................................... 196,330 206,851 230,115 --------------------- -------------------- --------------------- End of year......................................... $ 206,405 $ 196,330 $ 206,851 ===================== ==================== ===================== MFS VIT VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 369 $ 439 $ 285 Net realized gains (losses)......................... 2,248 1,896 1,241 Change in unrealized gains (losses) on investments.. (76) (2,518) 559 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,541 (183) 2,085 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- -- -- Net transfers (including fixed account)............. -- -- 166 Policy charges...................................... (2,348) (2,032) (1,886) Transfers for policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,348) (2,032) (1,720) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 193 (2,215) 365 NET ASSETS: Beginning of year................................... 19,852 22,067 21,702 -------------------- -------------------- -------------------- End of year......................................... $ 20,045 $ 19,852 $ 22,067 ==================== ==================== ==================== MFS VIT II HIGH YIELD INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 9,347 $ 9,868 $ 8,003 Net realized gains (losses)......................... (220) (99) 25 Change in unrealized gains (losses) on investments.. 9,158 (16,013) (4,175) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 18,285 (6,244) 3,853 --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- -- -- Net transfers (including fixed account)............. 1 (33) (4,330) Policy charges...................................... (2,483) (2,300) (2,228) Transfers for policy benefits and terminations...... -- -- (2,771) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,482) (2,333) (9,329) --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 15,803 (8,577) (5,476) NET ASSETS: Beginning of year................................... 135,308 143,885 149,361 --------------------- -------------------- --------------------- End of year......................................... $ 151,111 $ 135,308 $ 143,885 ===================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 128 The accompanying notes are an integral part of these financial statements. 129 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST AB GLOBAL DYNAMIC ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 977 $ 2,180 $ 860 Net realized gains (losses)......................... 430 2,222 991 Change in unrealized gains (losses) on investments.. 769 (4,443) 1,384 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,176 (41) 3,235 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 15,256 16,182 11,361 Net transfers (including fixed account)............. (2,468) 8,940 7,219 Policy charges...................................... (8,319) (9,589) (5,606) Transfers for policy benefits and terminations...... (5,916) (4,204) (552) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,447) 11,329 12,422 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 729 11,288 15,657 NET ASSETS: Beginning of year................................... 61,181 49,893 34,236 -------------------- -------------------- -------------------- End of year......................................... $ 61,910 $ 61,181 $ 49,893 ==================== ==================== ==================== MIST ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 (a) --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2 $ 21 $ -- Net realized gains (losses)......................... (12) (259) 1 Change in unrealized gains (losses) on investments.. 80 (72) 1 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 70 (310) 2 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,715 1,892 104 Net transfers (including fixed account)............. 274 1,102 19 Policy charges...................................... (1,293) (645) (48) Transfers for policy benefits and terminations...... -- (95) (1) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 2,696 2,254 74 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 2,766 1,944 76 NET ASSETS: Beginning of year................................... 2,020 76 -- --------------------- -------------------- -------------------- End of year......................................... $ 4,786 $ 2,020 $ 76 ===================== ==================== ==================== MIST AMERICAN FUNDS BALANCED ALLOCATION INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 18,208 $ 15,506 $ 13,034 Net realized gains (losses)......................... 76,946 49,693 84,942 Change in unrealized gains (losses) on investments.. (22,963) (69,036) (47,376) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 72,191 (3,837) 50,600 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 85,094 112,261 120,077 Net transfers (including fixed account)............. 21,073 (10,152) (11,952) Policy charges...................................... (69,192) (60,959) (53,306) Transfers for policy benefits and terminations...... (12,455) (19,938) (19,004) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 24,520 21,212 35,815 -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 96,711 17,375 86,415 NET ASSETS: Beginning of year................................... 894,053 876,678 790,263 -------------------- --------------------- --------------------- End of year......................................... $ 990,764 $ 894,053 $ 876,678 ==================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 130 The accompanying notes are an integral part of these financial statements. 131 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST AMERICAN FUNDS GROWTH ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 26,959 $ 24,524 $ 20,605 Net realized gains (losses)......................... 160,188 110,834 262,844 Change in unrealized gains (losses) on investments.. (37,021) (141,365) (180,168) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 150,126 (6,007) 103,281 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 271,362 284,585 260,494 Net transfers (including fixed account)............. 26,046 (51,416) (3,533) Policy charges...................................... (153,833) (138,948) (136,198) Transfers for policy benefits and terminations...... (70,269) (45,437) (219,541) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 73,306 48,784 (98,778) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 223,432 42,777 4,503 NET ASSETS: Beginning of year................................... 1,538,114 1,495,337 1,490,834 -------------------- -------------------- -------------------- End of year......................................... $ 1,761,546 $ 1,538,114 $ 1,495,337 ==================== ==================== ==================== MIST AMERICAN FUNDS MODERATE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 23,999 $ 17,019 $ 15,920 Net realized gains (losses)......................... 67,729 52,885 82,935 Change in unrealized gains (losses) on investments.. (16,232) (73,320) (41,113) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 75,496 (3,416) 57,742 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 234,792 222,467 248,387 Net transfers (including fixed account)............. 22,400 58,079 17,382 Policy charges...................................... (128,785) (117,193) (114,645) Transfers for policy benefits and terminations...... (14,859) (211,042) (63,090) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 113,548 (47,689) 88,034 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 189,044 (51,105) 145,776 NET ASSETS: Beginning of year................................... 969,592 1,020,697 874,921 -------------------- -------------------- -------------------- End of year......................................... $ 1,158,636 $ 969,592 $ 1,020,697 ==================== ==================== ==================== MIST AQR GLOBAL RISK BALANCED INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ 7,434 $ -- Net realized gains (losses)......................... (7,843) 10,796 126 Change in unrealized gains (losses) on investments.. 18,548 (30,868) 5,443 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 10,705 (12,638) 5,569 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 40,240 47,166 59,198 Net transfers (including fixed account)............. (10,383) (53,166) (15,436) Policy charges...................................... (20,166) (21,458) (22,230) Transfers for policy benefits and terminations...... (19,162) (5,275) -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (9,471) (32,733) 21,532 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,234 (45,371) 27,101 NET ASSETS: Beginning of year................................... 134,644 180,015 152,914 -------------------- -------------------- -------------------- End of year......................................... $ 135,878 $ 134,644 $ 180,015 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 132 The accompanying notes are an integral part of these financial statements. 133 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST BLACKROCK GLOBAL TACTICAL STRATEGIES INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,216 $ 3,577 $ 1,792 Net realized gains (losses)......................... 23,013 9,345 8,814 Change in unrealized gains (losses) on investments.. (13,208) (14,933) (1,686) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 14,021 (2,011) 8,920 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 84,543 68,269 71,428 Net transfers (including fixed account)............. 26,959 617 30,488 Policy charges...................................... (25,547) (22,928) (18,675) Transfers for policy benefits and terminations...... (9,699) (8,345) (3,178) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 76,256 37,613 80,063 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 90,277 35,602 88,983 NET ASSETS: Beginning of year................................... 227,159 191,557 102,574 --------------------- --------------------- --------------------- End of year......................................... $ 317,436 $ 227,159 $ 191,557 ===================== ===================== ===================== MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 650,259 $ 1,202,742 $ 480,465 Net realized gains (losses)......................... 31,945 48,531 314,419 Change in unrealized gains (losses) on investments.. (362,033) (1,654,271) 3,062,383 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 320,171 (402,998) 3,857,267 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 2,067,349 2,178,317 2,319,909 Net transfers (including fixed account)............. (931,910) (643,155) 1,111,969 Policy charges...................................... (1,519,377) (1,546,835) (1,557,429) Transfers for policy benefits and terminations...... (1,814,112) (1,529,344) (1,760,827) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,198,050) (1,541,017) 113,622 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (1,877,879) (1,944,015) 3,970,889 NET ASSETS: Beginning of year................................... 29,524,589 31,468,604 27,497,715 --------------------- --------------------- --------------------- End of year......................................... $ 27,646,710 $ 29,524,589 $ 31,468,604 ===================== ===================== ===================== MIST CLEARBRIDGE AGGRESSIVE GROWTH INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 233,927 $ 153,096 $ 36,831 Net realized gains (losses)......................... 970,623 1,820,551 867,002 Change in unrealized gains (losses) on investments.. (103,509) (3,670,688) 5,750,935 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,101,041 (1,697,041) 6,654,768 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,112,659 3,350,304 2,789,219 Net transfers (including fixed account)............. (1,658,736) (548,727) 20,585,269 Policy charges...................................... (2,334,139) (2,487,088) (2,040,428) Transfers for policy benefits and terminations...... (2,140,654) (2,989,221) (2,395,229) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (3,020,870) (2,674,732) 18,938,831 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (1,919,829) (4,371,773) 25,593,599 NET ASSETS: Beginning of year................................... 42,906,771 47,278,544 21,684,945 --------------------- --------------------- --------------------- End of year......................................... $ 40,986,942 $ 42,906,771 $ 47,278,544 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 134 The accompanying notes are an integral part of these financial statements. 135 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 812,952 $ 1,300,814 $ 1,043,576 Net realized gains (losses)......................... 1,774,522 3,930,024 5,879,910 Change in unrealized gains (losses) on investments.. 446,527 (6,964,997) (9,320,626) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 3,034,001 (1,734,159) (2,397,140) -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 2,947,689 3,189,787 3,289,660 Net transfers (including fixed account)............. (726,193) 74,671 (7,351,245) Policy charges...................................... (1,927,311) (2,084,965) (2,202,103) Transfers for policy benefits and terminations...... (2,331,900) (2,507,280) (2,639,180) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,037,715) (1,327,787) (8,902,868) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 996,286 (3,061,946) (11,300,008) NET ASSETS: Beginning of year................................... 38,468,820 41,530,766 52,830,774 -------------------- --------------------- --------------------- End of year......................................... $ 39,465,106 $ 38,468,820 $ 41,530,766 ==================== ===================== ===================== MIST INVESCO BALANCED-RISK ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 63 $ 1,200 $ -- Net realized gains (losses)......................... (528) 1,727 1,265 Change in unrealized gains (losses) on investments.. 4,887 (4,753) 178 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 4,422 (1,826) 1,443 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 15,956 16,400 11,849 Net transfers (including fixed account)............. (1,153) 2,103 (2,709) Policy charges...................................... (5,759) (5,388) (4,305) Transfers for policy benefits and terminations...... (6,082) (3,815) -- -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 2,962 9,300 4,835 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 7,384 7,474 6,278 NET ASSETS: Beginning of year................................... 38,475 31,001 24,723 -------------------- --------------------- -------------------- End of year......................................... $ 45,859 $ 38,475 $ 31,001 ==================== ===================== ==================== MIST INVESCO MID CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 650,034 $ 563,734 $ 562,138 Net realized gains (losses)......................... 3,900,369 5,178,767 17,118,207 Change in unrealized gains (losses) on investments.. 7,673,646 (13,696,346) (8,899,738) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 12,224,049 (7,953,845) 8,780,607 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 5,540,189 5,923,611 6,274,639 Net transfers (including fixed account)............. (1,504,903) 396,833 (1,527,527) Policy charges...................................... (4,725,378) (5,050,098) (5,148,577) Transfers for policy benefits and terminations...... (5,462,656) (5,269,245) (5,635,566) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (6,152,748) (3,998,899) (6,037,031) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 6,071,301 (11,952,744) 2,743,576 NET ASSETS: Beginning of year................................... 82,921,441 94,874,185 92,130,609 -------------------- --------------------- --------------------- End of year......................................... $ 88,992,742 $ 82,921,441 $ 94,874,185 ==================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 136 The accompanying notes are an integral part of these financial statements. 137 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST INVESCO SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (8,076) $ 487 $ (8,994) Net realized gains (losses)......................... 1,026,683 1,775,499 970,370 Change in unrealized gains (losses) on investments.. (318,719) (1,866,286) (438,103) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 699,888 (90,300) 523,273 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 407,148 432,154 458,397 Net transfers (including fixed account)............. (213,557) (314,953) 80,982 Policy charges...................................... (295,102) (309,254) (300,898) Transfers for policy benefits and terminations...... (427,897) (252,225) (288,293) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (529,408) (444,278) (49,812) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 170,480 (534,578) 473,461 NET ASSETS: Beginning of year................................... 6,552,111 7,086,689 6,613,228 -------------------- -------------------- -------------------- End of year......................................... $ 6,722,591 $ 6,552,111 $ 7,086,689 ==================== ==================== ==================== MIST JPMORGAN GLOBAL ACTIVE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,855 $ 5,107 $ 1,679 Net realized gains (losses)......................... 2,581 8,733 5,242 Change in unrealized gains (losses) on investments.. (1,187) (12,813) 2,680 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 5,249 1,027 9,601 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 41,651 43,757 41,753 Net transfers (including fixed account)............. 2,362 (2,180) 31,866 Policy charges...................................... (25,382) (25,286) (21,706) Transfers for policy benefits and terminations...... (6,113) (2,835) (786) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 12,518 13,456 51,127 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 17,767 14,483 60,728 NET ASSETS: Beginning of year................................... 185,624 171,141 110,413 -------------------- -------------------- -------------------- End of year......................................... $ 203,391 $ 185,624 $ 171,141 ==================== ==================== ==================== MIST JPMORGAN SMALL CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,286 $ 4,196 $ 2,563 Net realized gains (losses)......................... 24,634 25,929 30,329 Change in unrealized gains (losses) on investments.. 79,671 (52,802) (18,929) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 110,591 (22,677) 13,963 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 42,502 42,823 27,252 Net transfers (including fixed account)............. (23,758) 19,637 42,989 Policy charges...................................... (27,602) (22,975) (17,294) Transfers for policy benefits and terminations...... (2,886) (1,767) (26,298) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (11,744) 37,718 26,649 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 98,847 15,041 40,612 NET ASSETS: Beginning of year................................... 310,452 295,411 254,799 -------------------- -------------------- -------------------- End of year......................................... $ 409,299 $ 310,452 $ 295,411 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 138 The accompanying notes are an integral part of these financial statements. 139 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST LOOMIS SAYLES GLOBAL MARKETS INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,758 $ 7,875 $ 9,637 Net realized gains (losses)......................... 12,698 18,423 4,771 Change in unrealized gains (losses) on investments.. (1,350) (13,993) 1,137 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 18,106 12,305 15,545 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 52,697 43,858 52,562 Net transfers (including fixed account)............. 16,922 (6,677) 9,314 Policy charges...................................... (36,634) (35,911) (34,455) Transfers for policy benefits and terminations...... (6,534) (109,930) (37,846) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 26,451 (108,660) (10,425) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 44,557 (96,355) 5,120 NET ASSETS: Beginning of year................................... 327,025 423,380 418,260 -------------------- -------------------- -------------------- End of year......................................... $ 371,582 $ 327,025 $ 423,380 ==================== ==================== ==================== MIST MET/ABERDEEN EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,049 $ 10,228 $ 2,914 Net realized gains (losses)......................... (30,698) (4,559) (2,174) Change in unrealized gains (losses) on investments.. 89,323 (82,085) (31,587) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 64,674 (76,416) (30,847) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 132,505 116,005 130,260 Net transfers (including fixed account)............. 50,504 29,215 193,175 Policy charges...................................... (33,644) (40,363) (35,736) Transfers for policy benefits and terminations...... (100,287) (11,079) (8,565) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 49,078 93,778 279,134 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 113,752 17,362 248,287 NET ASSETS: Beginning of year................................... 538,485 521,123 272,836 -------------------- -------------------- -------------------- End of year......................................... $ 652,237 $ 538,485 $ 521,123 ==================== ==================== ==================== MIST MET/TEMPLETON INTERNATIONAL BOND INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ 16,491 $ 6,729 Net realized gains (losses)......................... (1,685) (5,183) 6 Change in unrealized gains (losses) on investments.. 4,976 (19,099) (3,576) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,291 (7,791) 3,159 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 49,471 46,145 40,184 Net transfers (including fixed account)............. 10,118 (9,888) 57,850 Policy charges...................................... (19,999) (17,243) (12,411) Transfers for policy benefits and terminations...... (7,706) (1,587) (1,693) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 31,884 17,427 83,930 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 35,175 9,636 87,089 NET ASSETS: Beginning of year................................... 183,501 173,865 86,776 --------------------- -------------------- -------------------- End of year......................................... $ 218,676 $ 183,501 $ 173,865 ===================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 140 The accompanying notes are an integral part of these financial statements. 141 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST MET/WELLINGTON LARGE CAP RESEARCH INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,597,726 $ 1,822,832 $ 1,625,933 Net realized gains (losses)......................... 31,080,785 36,321,046 5,779,958 Change in unrealized gains (losses) on investments.. (8,253,818) (21,509,605) 41,616,595 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 30,424,693 16,634,273 49,022,486 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 24,784,013 25,871,596 26,924,187 Net transfers (including fixed account)............. (2,994,332) (1,616,660) 566,938 Policy charges...................................... (26,012,789) (25,907,001) (25,639,658) Transfers for policy benefits and terminations...... (21,189,207) (22,796,743) (23,789,708) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (25,412,315) (24,448,808) (21,938,241) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 5,012,378 (7,814,535) 27,084,245 NET ASSETS: Beginning of year................................... 404,612,655 412,427,190 385,342,945 -------------------- --------------------- --------------------- End of year......................................... $ 409,625,033 $ 404,612,655 $ 412,427,190 ==================== ===================== ===================== MIST METLIFE ASSET ALLOCATION 100 INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 509,053 $ 306,462 $ 165,509 Net realized gains (losses)......................... 2,766,221 1,897,763 437,534 Change in unrealized gains (losses) on investments.. (1,391,486) (2,617,113) 404,377 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,883,788 (412,888) 1,007,420 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 2,219,202 2,468,258 2,400,839 Net transfers (including fixed account)............. (470,839) (542,629) 489,496 Policy charges...................................... (1,181,948) (1,172,423) (1,133,365) Transfers for policy benefits and terminations...... (1,188,155) (791,081) (1,142,502) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (621,740) (37,875) 614,468 -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 1,262,048 (450,763) 1,621,888 NET ASSETS: Beginning of year................................... 20,442,577 20,893,340 19,271,452 -------------------- --------------------- --------------------- End of year......................................... $ 21,704,625 $ 20,442,577 $ 20,893,340 ==================== ===================== ===================== MIST METLIFE BALANCED PLUS INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,951 $ 4,773 $ 2,715 Net realized gains (losses)......................... 2,123 10,549 12,256 Change in unrealized gains (losses) on investments.. 12,397 (26,058) (517) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 22,471 (10,736) 14,454 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 69,223 60,907 41,771 Net transfers (including fixed account)............. 10,477 16,180 106,162 Policy charges...................................... (34,809) (31,093) (21,052) Transfers for policy benefits and terminations...... (11,096) (10,066) -- -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 33,795 35,928 126,881 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 56,266 25,192 141,335 NET ASSETS: Beginning of year................................... 260,693 235,501 94,166 -------------------- -------------------- --------------------- End of year......................................... $ 316,959 $ 260,693 $ 235,501 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 142 The accompanying notes are an integral part of these financial statements. 143 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST METLIFE MULTI-INDEX TARGETED RISK INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,944 $ 1,398 $ -- Net realized gains (losses)......................... (37) 4,170 262 Change in unrealized gains (losses) on investments.. 4,590 (7,672) 4,343 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 6,497 (2,104) 4,605 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 27,195 18,161 7,295 Net transfers (including fixed account)............. 14,107 13,332 111,732 Policy charges...................................... (14,951) (11,516) (4,904) Transfers for policy benefits and terminations...... (583) (3,193) -- --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 25,768 16,784 114,123 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 32,265 14,680 118,728 NET ASSETS: Beginning of year................................... 136,087 121,407 2,679 --------------------- -------------------- -------------------- End of year......................................... $ 168,352 $ 136,087 $ 121,407 ===================== ==================== ==================== MIST METLIFE SMALL CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 8,421 $ 800 $ 366 Net realized gains (losses)......................... (9,536) 312,062 71,109 Change in unrealized gains (losses) on investments.. 191,373 (358,930) (58,142) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 190,258 (46,068) 13,333 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 27,558 9,270 16,136 Net transfers (including fixed account)............. (158,661) (679) (61,174) Policy charges...................................... (18,270) (21,127) (21,735) Transfers for policy benefits and terminations...... (68,518) (3,611) (40,137) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (217,891) (16,147) (106,910) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (27,633) (62,215) (93,577) NET ASSETS: Beginning of year................................... 802,028 864,243 957,820 -------------------- --------------------- -------------------- End of year......................................... $ 774,395 $ 802,028 $ 864,243 ==================== ===================== ==================== MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 363,202 $ 548,242 $ 464,648 Net realized gains (losses)......................... (113,918) 34,366 144,798 Change in unrealized gains (losses) on investments.. (396,420) (864,226) (2,026,000) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (147,136) (281,618) (1,416,554) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,065,950 1,136,865 1,202,389 Net transfers (including fixed account)............. (137,625) (166,293) (150,627) Policy charges...................................... (829,989) (883,299) (914,533) Transfers for policy benefits and terminations...... (900,863) (790,282) (948,026) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (802,527) (703,009) (810,797) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (949,663) (984,627) (2,227,351) NET ASSETS: Beginning of year................................... 18,155,763 19,140,390 21,367,741 -------------------- --------------------- -------------------- End of year......................................... $ 17,206,100 $ 18,155,763 $ 19,140,390 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 144 The accompanying notes are an integral part of these financial statements. 145 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST MORGAN STANLEY MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (581,093) $ (686,901) $ (584,279) Net realized gains (losses)......................... 3,185,085 4,836,759 5,665,992 Change in unrealized gains (losses) on investments.. (20,525,720) (15,427,415) (2,867,790) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (17,921,728) (11,277,557) 2,213,923 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 17,390,742 17,952,987 18,859,785 Net transfers (including fixed account)............. (2,231,512) (1,160,187) (2,225,968) Policy charges...................................... (12,792,889) (13,674,535) (14,270,234) Transfers for policy benefits and terminations...... (10,991,989) (13,144,136) (15,106,139) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (8,625,648) (10,025,871) (12,742,556) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (26,547,376) (21,303,428) (10,528,633) NET ASSETS: Beginning of year................................... 212,581,898 233,885,326 244,413,959 -------------------- -------------------- -------------------- End of year......................................... $ 186,034,522 $ 212,581,898 $ 233,885,326 ==================== ==================== ==================== MIST OPPENHEIMER GLOBAL EQUITY INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 427,792 $ 504,420 $ 415,696 Net realized gains (losses)......................... 3,311,875 2,578,733 2,942,391 Change in unrealized gains (losses) on investments.. (3,785,262) (1,183,054) (2,309,701) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (45,595) 1,900,099 1,048,386 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 2,752,403 2,885,208 3,247,625 Net transfers (including fixed account)............. (1,108,515) 1,263,650 (469,967) Policy charges...................................... (2,302,561) (2,404,251) (2,381,921) Transfers for policy benefits and terminations...... (2,511,117) (2,602,123) (3,500,487) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (3,169,790) (857,516) (3,104,750) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (3,215,385) 1,042,583 (2,056,364) NET ASSETS: Beginning of year................................... 49,473,104 48,430,521 50,486,885 -------------------- -------------------- -------------------- End of year......................................... $ 46,257,719 $ 49,473,104 $ 48,430,521 ==================== ==================== ==================== MIST PANAGORA GLOBAL DIVERSIFIED RISK INVESTMENT DIVISION ------------------------------------------- 2016 2015 (d) -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ 50 Net realized gains (losses)......................... 1 (295) Change in unrealized gains (losses) on investments.. (1) 1 -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ -- (244) -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 29 41 Net transfers (including fixed account)............. -- 440 Policy charges...................................... (24) (64) Transfers for policy benefits and terminations...... -- (163) -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 5 254 -------------------- -------------------- Net increase (decrease) in net assets............. 5 10 NET ASSETS: Beginning of year................................... 10 -- -------------------- -------------------- End of year......................................... $ 15 $ 10 ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 146 The accompanying notes are an integral part of these financial statements. 147 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST PIMCO INFLATION PROTECTED BOND INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (17,989) $ 540,055 $ 191,714 Net realized gains (losses)......................... (134,822) (211,211) (162,419) Change in unrealized gains (losses) on investments.. 652,775 (655,945) 319,472 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 499,964 (327,101) 348,767 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 856,782 942,996 1,086,624 Net transfers (including fixed account)............. (25,570) (578,943) 31,773 Policy charges...................................... (670,606) (670,899) (712,219) Transfers for policy benefits and terminations...... (448,728) (496,484) (690,467) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (288,122) (803,330) (284,289) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 211,842 (1,130,431) 64,478 NET ASSETS: Beginning of year................................... 10,147,547 11,277,978 11,213,500 -------------------- -------------------- -------------------- End of year......................................... $ 10,359,389 $ 10,147,547 $ 11,277,978 ==================== ==================== ==================== MIST PIMCO TOTAL RETURN INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,176,644 $ 2,443,284 $ 1,198,857 Net realized gains (losses)......................... (107,899) 504,809 36,542 Change in unrealized gains (losses) on investments.. 134,407 (2,854,535) 873,849 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 1,203,152 93,558 2,109,248 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,607,110 3,809,014 4,163,684 Net transfers (including fixed account)............. (511,885) (1,054,727) (3,229,896) Policy charges...................................... (2,866,241) (2,872,640) (3,052,766) Transfers for policy benefits and terminations...... (2,911,492) (2,635,927) (2,972,047) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,682,508) (2,754,280) (5,091,025) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. (1,479,356) (2,660,722) (2,981,777) NET ASSETS: Beginning of year................................... 44,320,248 46,980,970 49,962,747 -------------------- -------------------- ------------------- End of year......................................... $ 42,840,892 $ 44,320,248 $ 46,980,970 ==================== ==================== =================== MIST PYRAMIS MANAGED RISK INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 47 $ 86 $ -- Net realized gains (losses)......................... 7 978 10 Change in unrealized gains (losses) on investments.. 239 (255) 48 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 293 809 58 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 6,148 3,971 1,546 Net transfers (including fixed account)............. 421 96 189 Policy charges...................................... (1,837) (2,087) (516) Transfers for policy benefits and terminations...... (196) (755) -- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 4,536 1,225 1,219 ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 4,829 2,034 1,277 NET ASSETS: Beginning of year................................... 3,609 1,575 298 ------------------- ------------------- -------------------- End of year......................................... $ 8,438 $ 3,609 $ 1,575 =================== =================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 148 The accompanying notes are an integral part of these financial statements. 149 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST SCHRODERS GLOBAL MULTI-ASSET INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 675 $ 467 $ 398 Net realized gains (losses)......................... 647 1,436 1,257 Change in unrealized gains (losses) on investments.. 1,558 (2,611) 553 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,880 (708) 2,208 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 20,016 11,927 9,093 Net transfers (including fixed account)............. 3,252 948 3,198 Policy charges...................................... (7,221) (5,687) (5,139) Transfers for policy benefits and terminations...... (4,272) (605) (239) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 11,775 6,583 6,913 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 14,655 5,875 9,121 NET ASSETS: Beginning of year................................... 37,661 31,786 22,665 ------------------- -------------------- -------------------- End of year......................................... $ 52,316 $ 37,661 $ 31,786 =================== ==================== ==================== MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 193,418 $ 191,488 $ 185,874 Net realized gains (losses)......................... 422,233 507,278 630,738 Change in unrealized gains (losses) on investments.. (166,860) (845,948) (350,740) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 448,791 (147,182) 465,872 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 817,890 902,958 906,155 Net transfers (including fixed account)............. (55,673) (56,759) (356,847) Policy charges...................................... (475,048) (487,928) (484,443) Transfers for policy benefits and terminations...... (255,414) (287,368) (640,439) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 31,755 70,903 (575,574) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 480,546 (76,279) (109,702) NET ASSETS: Beginning of year................................... 7,641,743 7,718,022 7,827,724 -------------------- -------------------- ------------------- End of year......................................... $ 8,122,289 $ 7,641,743 $ 7,718,022 ==================== ==================== =================== MIST SSGA GROWTH ETF INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 152,958 $ 144,898 $ 110,880 Net realized gains (losses)......................... 388,499 399,376 458,401 Change in unrealized gains (losses) on investments.. (116,079) (699,498) (255,403) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 425,378 (155,224) 313,878 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 957,099 1,101,174 1,072,149 Net transfers (including fixed account)............. (419,927) 27,146 369,458 Policy charges...................................... (381,379) (371,675) (333,333) Transfers for policy benefits and terminations...... (150,373) (335,865) (546,709) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 5,420 420,780 561,565 -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 430,798 265,556 875,443 NET ASSETS: Beginning of year................................... 6,711,219 6,445,663 5,570,220 -------------------- -------------------- ------------------- End of year......................................... $ 7,142,017 $ 6,711,219 $ 6,445,663 ==================== ==================== ===================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 150 The accompanying notes are an integral part of these financial statements. 151 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MIST T. ROWE PRICE LARGE CAP VALUE INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 63,487 $ 36,741 $ 32,258 Net realized gains (losses)......................... 264,852 91,303 6,947 Change in unrealized gains (losses) on investments.. 1,148 (197,956) 244,232 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 329,487 (69,912) 283,437 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,540 7,472 3,948 Net transfers (including fixed account)............. 57,340 (203,997) 113,630 Policy charges...................................... (30,407) (30,931) (30,992) Transfers for policy benefits and terminations...... (63,517) (68,966) (119) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (32,044) (296,422) 86,467 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 297,443 (366,334) 369,904 NET ASSETS: Beginning of year................................... 2,029,557 2,395,891 2,025,987 -------------------- -------------------- -------------------- End of year......................................... $ 2,327,000 $ 2,029,557 $ 2,395,891 ==================== ==================== ==================== MIST T. ROWE PRICE MID CAP GROWTH INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (45,975) $ (45,309) $ (39,978) Net realized gains (losses)......................... 5,204,270 5,782,950 3,333,489 Change in unrealized gains (losses) on investments.. (3,017,999) (3,612,484) 275,430 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 2,140,296 2,125,157 3,568,941 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 2,103,996 2,017,424 1,971,641 Net transfers (including fixed account)............. 419,067 2,394,912 1,134,159 Policy charges...................................... (1,724,543) (1,635,548) (1,470,638) Transfers for policy benefits and terminations...... (2,214,117) (2,115,852) (1,719,618) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,415,597) 660,936 (84,456) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 724,699 2,786,093 3,484,485 NET ASSETS: Beginning of year................................... 34,019,234 31,233,141 27,748,656 --------------------- --------------------- --------------------- End of year......................................... $ 34,743,933 $ 34,019,234 $ 31,233,141 ===================== ===================== ===================== MSF BAILLIE GIFFORD INTERNATIONAL STOCK INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 447,534 $ 519,877 $ 411,479 Net realized gains (losses)......................... (310,525) (206,507) (176,452) Change in unrealized gains (losses) on investments.. 1,728,920 (1,227,962) (1,735,615) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,865,929 (914,592) (1,500,588) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,389,861 3,575,231 3,833,062 Net transfers (including fixed account)............. (547,175) (179,571) (778,376) Policy charges...................................... (2,612,067) (2,610,457) (2,744,350) Transfers for policy benefits and terminations...... (2,000,028) (2,221,523) (2,453,566) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,769,409) (1,436,320) (2,143,230) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 96,520 (2,350,912) (3,643,818) NET ASSETS: Beginning of year................................... 38,861,610 41,212,522 44,856,340 --------------------- --------------------- --------------------- End of year......................................... $ 38,958,130 $ 38,861,610 $ 41,212,522 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 152 The accompanying notes are an integral part of these financial statements. 153 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF BARCLAYS AGGREGATE BOND INDEX INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,516,381 $ 3,706,067 $ 3,602,466 Net realized gains (losses)......................... 157,844 111,155 62,943 Change in unrealized gains (losses) on investments.. (713,953) (3,467,125) 3,247,015 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,960,272 350,097 6,912,424 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 10,321,297 10,650,517 10,905,300 Net transfers (including fixed account)............. 1,939,507 (390,145) 8,138,349 Policy charges...................................... (8,491,979) (8,265,344) (8,147,634) Transfers for policy benefits and terminations...... (6,293,235) (6,269,190) (8,356,763) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,524,410) (4,274,162) 2,539,252 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 435,862 (3,924,065) 9,451,676 NET ASSETS: Beginning of year................................... 126,951,477 130,875,542 121,423,866 --------------------- -------------------- -------------------- End of year......................................... $ 127,387,339 $ 126,951,477 $ 130,875,542 ===================== ==================== ==================== MSF BLACKROCK BOND INCOME INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,253,120 $ 2,849,615 $ 2,540,384 Net realized gains (losses)......................... 30,488 913,996 70,435 Change in unrealized gains (losses) on investments.. (97,803) (3,544,439) 2,699,020 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 2,185,805 219,172 5,309,839 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 6,132,147 6,361,507 6,564,554 Net transfers (including fixed account)............. 326,685 (1,236,326) (132,609) Policy charges...................................... (5,607,933) (5,484,593) (5,530,279) Transfers for policy benefits and terminations...... (4,113,027) (4,302,406) (4,664,936) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (3,262,128) (4,661,818) (3,763,270) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (1,076,323) (4,442,646) 1,546,569 NET ASSETS: Beginning of year................................... 78,353,726 82,796,372 81,249,803 -------------------- --------------------- -------------------- End of year......................................... $ 77,277,403 $ 78,353,726 $ 82,796,372 ==================== ===================== ==================== MSF BLACKROCK CAPITAL APPRECIATION INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (9,977) $ (10,693) $ (2,468) Net realized gains (losses)......................... 1,047,770 2,022,735 3,803,528 Change in unrealized gains (losses) on investments.. (1,066,351) (1,407,738) (2,831,679) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (28,558) 604,304 969,381 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 736,403 793,014 901,941 Net transfers (including fixed account)............. (3,208) 336,170 (11,673,050) Policy charges...................................... (570,923) (588,991) (632,673) Transfers for policy benefits and terminations...... (856,815) (655,032) (709,448) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (694,543) (114,839) (12,113,230) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (723,101) 489,465 (11,143,849) NET ASSETS: Beginning of year................................... 10,225,796 9,736,331 20,880,180 -------------------- --------------------- -------------------- End of year......................................... $ 9,502,695 $ 10,225,796 $ 9,736,331 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 154 The accompanying notes are an integral part of these financial statements. 155 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 296,620 $ 335,383 $ 216,952 Net realized gains (losses)......................... 1,069,485 1,421,917 4,317,782 Change in unrealized gains (losses) on investments.. 1,883,740 (2,942,487) (2,739,427) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,249,845 (1,185,187) 1,795,307 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,545,784 1,614,117 1,677,799 Net transfers (including fixed account)............. (30,878) 139,650 458,183 Policy charges...................................... (1,098,505) (1,098,817) (1,071,625) Transfers for policy benefits and terminations...... (1,075,384) (1,132,285) (1,236,456) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (658,983) (477,335) (172,099) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 2,590,862 (1,662,522) 1,623,208 NET ASSETS: Beginning of year................................... 18,418,261 20,080,783 18,457,575 -------------------- -------------------- -------------------- End of year......................................... $ 21,009,123 $ 18,418,261 $ 20,080,783 ==================== ==================== ==================== MSF BLACKROCK ULTRA-SHORT TERM BOND INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (18,384) $ (35,014) $ (38,422) Net realized gains (losses)......................... 3,712 -- -- Change in unrealized gains (losses) on investments.. 60,725 -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 46,053 (35,014) (38,422) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 567,291 476,089 2,264,640 Net transfers (including fixed account)............. (1,366,452) (4,569,788) 5,773,861 Policy charges...................................... (907,994) (886,480) (1,047,919) Transfers for policy benefits and terminations...... (365,895) (333,363) (701,246) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,073,050) (5,313,542) 6,289,336 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (2,026,997) (5,348,556) 6,250,914 NET ASSETS: Beginning of year................................... 24,684,237 30,032,793 23,781,879 -------------------- -------------------- -------------------- End of year......................................... $ 22,657,240 $ 24,684,237 $ 30,032,793 ==================== ==================== ==================== MSF FRONTIER MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (1,459,027) $ (1,605,819) $ (1,529,952) Net realized gains (losses)......................... 28,319,213 36,288,678 26,100,542 Change in unrealized gains (losses) on investments.. (16,692,072) (28,947,695) (1,683,974) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 10,168,114 5,735,164 22,886,616 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 12,817,058 13,526,076 14,123,989 Net transfers (including fixed account)............. (1,665,871) (546,174) (2,083,030) Policy charges...................................... (13,012,542) (13,281,761) (13,134,488) Transfers for policy benefits and terminations...... (10,971,677) (13,018,169) (14,207,419) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (12,833,032) (13,320,028) (15,300,948) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (2,664,918) (7,584,864) 7,585,668 NET ASSETS: Beginning of year................................... 227,974,826 235,559,690 227,974,022 -------------------- -------------------- -------------------- End of year......................................... $ 225,309,908 $ 227,974,826 $ 235,559,690 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 156 The accompanying notes are an integral part of these financial statements. 157 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF JENNISON GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 52,283 $ 49,690 $ 43,836 Net realized gains (losses)......................... 3,125,595 4,130,001 1,760,217 Change in unrealized gains (losses) on investments.. (3,197,364) (1,789,865) 102,570 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (19,486) 2,389,826 1,906,623 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,333,946 1,340,497 1,453,986 Net transfers (including fixed account)............. 2,483 509,083 255,971 Policy charges...................................... (1,218,365) (1,224,290) (1,193,061) Transfers for policy benefits and terminations...... (1,425,516) (1,580,551) (1,317,032) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,307,452) (955,261) (800,136) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,326,938) 1,434,565 1,106,487 NET ASSETS: Beginning of year................................... 24,295,178 22,860,613 21,754,126 -------------------- -------------------- -------------------- End of year......................................... $ 22,968,240 $ 24,295,178 $ 22,860,613 ==================== ==================== ==================== MSF LOOMIS SAYLES SMALL CAP CORE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 53,376 $ 13,776 $ (14,295) Net realized gains (losses)......................... 2,236,001 3,521,185 3,617,443 Change in unrealized gains (losses) on investments.. 1,915,532 (3,857,826) (2,720,783) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 4,204,909 (322,865) 882,365 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,334,562 1,455,376 1,565,136 Net transfers (including fixed account)............. (285,957) (362,429) (73,345) Policy charges...................................... (1,187,314) (1,217,974) (1,224,901) Transfers for policy benefits and terminations...... (1,306,062) (1,348,393) (1,266,842) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,444,771) (1,473,420) (999,952) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 2,760,138 (1,796,285) (117,587) NET ASSETS: Beginning of year................................... 23,094,886 24,891,171 25,008,758 -------------------- -------------------- --------------------- End of year......................................... $ 25,855,024 $ 23,094,886 $ 24,891,171 ==================== ==================== ===================== MSF LOOMIS SAYLES SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (9,163) $ (9,783) $ (10,498) Net realized gains (losses)......................... 1,222,132 1,804,809 1,860,548 Change in unrealized gains (losses) on investments.. (582,015) (1,598,061) (1,752,743) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 630,954 196,965 97,307 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 747,090 790,736 896,507 Net transfers (including fixed account)............. (235,047) 38,986 (421,247) Policy charges...................................... (586,052) (610,291) (607,725) Transfers for policy benefits and terminations...... (620,076) (603,154) (728,890) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (694,085) (383,723) (861,355) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (63,131) (186,758) (764,048) NET ASSETS: Beginning of year................................... 11,185,851 11,372,609 12,136,657 -------------------- -------------------- -------------------- End of year......................................... $ 11,122,720 $ 11,185,851 $ 11,372,609 ==================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 158 The accompanying notes are an integral part of these financial statements. 159 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF MET/ARTISAN MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 573,294 $ 651,607 $ 401,768 Net realized gains (losses)......................... 6,376,782 8,080,747 1,070,144 Change in unrealized gains (losses) on investments.. 4,919,832 (14,388,947) (313,797) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,869,908 (5,656,593) 1,158,115 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,977,996 4,248,709 4,484,293 Net transfers (including fixed account)............. (613,228) (532,025) (394,233) Policy charges...................................... (3,245,776) (3,288,323) (3,529,069) Transfers for policy benefits and terminations...... (3,402,376) (3,481,517) (4,058,223) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (3,283,384) (3,053,156) (3,497,232) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 8,586,524 (8,709,749) (2,339,117) NET ASSETS: Beginning of year................................... 53,555,874 62,265,623 64,604,740 -------------------- --------------------- -------------------- End of year......................................... $ 62,142,398 $ 53,555,874 $ 62,265,623 ==================== ===================== ==================== MSF MET/WELLINGTON BALANCED INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,577,117 $ 4,411,640 $ 4,452,005 Net realized gains (losses)......................... 15,625,107 55,909,979 5,320,748 Change in unrealized gains (losses) on investments.. (3,743,348) (53,963,621) 19,346,415 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 18,458,876 6,357,998 29,119,168 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 21,296,974 22,226,199 23,111,609 Net transfers (including fixed account)............. (1,837,317) (1,114,111) (2,156,943) Policy charges...................................... (22,205,884) (22,125,724) (22,284,172) Transfers for policy benefits and terminations...... (16,090,657) (17,838,451) (18,266,637) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (18,836,884) (18,852,087) (19,596,143) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (378,008) (12,494,089) 9,523,025 NET ASSETS: Beginning of year................................... 299,841,089 312,335,178 302,812,153 -------------------- -------------------- -------------------- End of year......................................... $ 299,463,081 $ 299,841,089 $ 312,335,178 ==================== ==================== ==================== MSF MET/WELLINGTON CORE EQUITY OPPORTUNITIES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,122,364 $ 1,263,131 $ 451,613 Net realized gains (losses)......................... 3,128,463 26,124,464 7,756,545 Change in unrealized gains (losses) on investments.. 855,321 (25,717,218) (869,547) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 5,106,148 1,670,377 7,338,611 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,745,132 5,175,987 5,479,853 Net transfers (including fixed account)............. (230,740) (1,253,819) (1,548,334) Policy charges...................................... (3,977,030) (3,976,712) (3,989,630) Transfers for policy benefits and terminations...... (4,646,198) (4,646,062) (4,457,258) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (4,108,836) (4,700,606) (4,515,369) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 997,312 (3,030,229) 2,823,242 NET ASSETS: Beginning of year................................... 72,522,716 75,552,945 72,729,703 -------------------- -------------------- --------------------- End of year......................................... $ 73,520,028 $ 72,522,716 $ 75,552,945 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 160 The accompanying notes are an integral part of these financial statements. 161 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF METLIFE ASSET ALLOCATION 20 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 177,898 $ 116,446 $ 201,461 Net realized gains (losses)......................... 122,062 174,994 239,244 Change in unrealized gains (losses) on investments.. (54,551) (309,762) (203,125) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 245,409 (18,322) 237,580 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 475,558 514,400 486,493 Net transfers (including fixed account)............. 274,364 93,614 224,914 Policy charges...................................... (539,657) (522,816) (502,703) Transfers for policy benefits and terminations...... (823,306) (165,837) (70,115) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (613,041) (80,639) 138,589 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (367,632) (98,961) 376,169 NET ASSETS: Beginning of year................................... 5,434,761 5,533,722 5,157,553 --------------------- --------------------- --------------------- End of year......................................... $ 5,067,129 $ 5,434,761 $ 5,533,722 ===================== ===================== ===================== MSF METLIFE ASSET ALLOCATION 40 INVESTMENT DIVISION --------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 365,152 $ 29,433 $ 273,153 Net realized gains (losses)......................... 649,364 699,512 467,475 Change in unrealized gains (losses) on investments.. (402,883) (854,363) (270,968) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 611,633 (125,418) 469,660 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 946,570 952,025 955,553 Net transfers (including fixed account)............. 238,465 315,680 607,149 Policy charges...................................... (796,923) (829,348) (775,283) Transfers for policy benefits and terminations...... (274,767) (637,520) (593,011) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 113,345 (199,163) 194,408 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 724,978 (324,581) 664,068 NET ASSETS: Beginning of year................................... 9,648,019 9,972,600 9,308,532 --------------------- --------------------- --------------------- End of year......................................... $ 10,372,997 $ 9,648,019 $ 9,972,600 ===================== ===================== ===================== MSF METLIFE ASSET ALLOCATION 60 INVESTMENT DIVISION ---------------------------------------------------------------------- 2016 2015 2014 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,661,041 $ 305,717 $ 1,121,316 Net realized gains (losses)......................... 4,802,939 4,072,097 2,840,090 Change in unrealized gains (losses) on investments.. (2,834,262) (4,965,532) (1,284,610) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 3,629,718 (587,718) 2,676,796 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,497,839 4,710,179 4,845,492 Net transfers (including fixed account)............. 27,071 (516,267) 1,294,516 Policy charges...................................... (3,556,897) (3,570,057) (3,579,223) Transfers for policy benefits and terminations...... (3,005,552) (2,803,258) (2,913,886) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (2,037,539) (2,179,403) (353,101) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 1,592,179 (2,767,121) 2,323,695 NET ASSETS: Beginning of year................................... 50,967,639 53,734,760 51,411,065 --------------------- --------------------- --------------------- End of year......................................... $ 52,559,818 $ 50,967,639 $ 53,734,760 ===================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 162 The accompanying notes are an integral part of these financial statements. 163 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF METLIFE ASSET ALLOCATION 80 INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,942,462 $ 427,851 $ 1,670,618 Net realized gains (losses)......................... 12,021,813 6,177,764 1,673,184 Change in unrealized gains (losses) on investments.. (7,365,543) (8,037,823) 1,795,645 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 7,598,732 (1,432,208) 5,139,447 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 8,365,149 9,064,666 9,639,429 Net transfers (including fixed account)............. (1,384,318) (479,555) 1,001,195 Policy charges...................................... (5,526,010) (5,646,022) (5,665,664) Transfers for policy benefits and terminations...... (6,463,563) (5,971,484) (5,697,181) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (5,008,742) (3,032,395) (722,221) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 2,589,990 (4,464,603) 4,417,226 NET ASSETS: Beginning of year................................... 93,610,979 98,075,582 93,658,356 -------------------- -------------------- --------------------- End of year......................................... $ 96,200,969 $ 93,610,979 $ 98,075,582 ==================== ==================== ===================== MSF METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,044,591 $ 965,012 $ 843,384 Net realized gains (losses)......................... 8,154,617 7,586,957 8,284,867 Change in unrealized gains (losses) on investments.. 7,196,356 (10,506,888) (1,040,640) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 16,395,564 (1,954,919) 8,087,611 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 5,416,314 5,638,229 5,599,962 Net transfers (including fixed account)............. (936,758) 508,090 (10,183,170) Policy charges...................................... (4,718,498) (4,665,601) (4,685,942) Transfers for policy benefits and terminations...... (4,649,606) (5,028,583) (5,756,275) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (4,888,548) (3,547,865) (15,025,425) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 11,507,016 (5,502,784) (6,937,814) NET ASSETS: Beginning of year................................... 83,672,129 89,174,913 96,112,727 -------------------- -------------------- --------------------- End of year......................................... $ 95,179,145 $ 83,672,129 $ 89,174,913 ==================== ==================== ===================== MSF METLIFE STOCK INDEX INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 17,167,447 $ 14,801,691 $ 13,571,216 Net realized gains (losses)......................... 57,978,009 58,353,168 45,473,224 Change in unrealized gains (losses) on investments.. 31,292,870 (63,726,527) 58,022,278 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 106,438,326 9,428,332 117,066,718 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 67,338,784 70,011,175 71,591,777 Net transfers (including fixed account)............. (2,630,167) 798,237 (11,181,289) Policy charges...................................... (47,351,375) (46,759,361) (46,691,201) Transfers for policy benefits and terminations...... (60,879,042) (59,435,957) (70,976,222) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (43,521,800) (35,385,906) (57,256,935) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 62,916,526 (25,957,574) 59,809,783 NET ASSETS: Beginning of year................................... 960,107,143 986,064,717 926,254,934 --------------------- -------------------- -------------------- End of year......................................... $ 1,023,023,669 $ 960,107,143 $ 986,064,717 ===================== ==================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 164 The accompanying notes are an integral part of these financial statements. 165 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF MFS TOTAL RETURN INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 277,775 $ 247,122 $ 221,552 Net realized gains (losses)......................... 579,525 196,619 193,152 Change in unrealized gains (losses) on investments.. 3,086 (470,036) 388,544 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 860,386 (26,295) 803,248 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 866,669 968,017 803,185 Net transfers (including fixed account)............. 183,218 63,944 80,744 Policy charges...................................... (622,365) (604,132) (608,835) Transfers for policy benefits and terminations...... (685,850) (558,787) (680,255) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (258,328) (130,958) (405,161) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. 602,058 (157,253) 398,087 NET ASSETS: Beginning of year................................... 9,806,863 9,964,116 9,566,029 -------------------- -------------------- ------------------- End of year......................................... $ 10,408,921 $ 9,806,863 $ 9,964,116 ==================== ==================== =================== MSF MFS VALUE INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,832,604 $ 2,254,602 $ 1,340,478 Net realized gains (losses)......................... 8,023,482 14,425,867 5,617,216 Change in unrealized gains (losses) on investments.. 1,456,878 (16,842,516) 1,679,688 -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,312,964 (162,047) 8,637,382 -------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 5,385,806 5,724,364 5,969,586 Net transfers (including fixed account)............. (616,694) (394,287) (737,889) Policy charges...................................... (4,746,152) (4,715,726) (4,711,074) Transfers for policy benefits and terminations...... (5,299,972) (5,310,681) (5,805,644) -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (5,277,012) (4,696,330) (5,285,021) -------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 6,035,952 (4,858,377) 3,352,361 NET ASSETS: Beginning of year................................... 82,376,165 87,234,542 83,882,181 -------------------- ------------------- -------------------- End of year......................................... $ 88,412,117 $ 82,376,165 $ 87,234,542 ==================== =================== ==================== MSF MSCI EAFE INDEX INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 -------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,943,289 $ 2,500,052 $ 1,944,941 Net realized gains (losses)......................... 101,562 707,350 1,139,967 Change in unrealized gains (losses) on investments.. (990,605) (3,862,935) (7,881,915) -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,054,246 (655,533) (4,797,007) -------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 6,241,891 6,286,345 6,436,883 Net transfers (including fixed account)............. 813,637 1,565,657 6,174,254 Policy charges...................................... (4,254,888) (4,329,144) (4,328,910) Transfers for policy benefits and terminations...... (3,939,562) (4,133,342) (6,727,062) -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,138,922) (610,484) 1,555,165 -------------------- ------------------- -------------------- Net increase (decrease) in net assets............. (84,676) (1,266,017) (3,241,842) NET ASSETS: Beginning of year................................... 76,534,999 77,801,016 81,042,858 -------------------- ------------------- -------------------- End of year......................................... $ 76,450,323 $ 76,534,999 $ 77,801,016 ==================== =================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 166 The accompanying notes are an integral part of these financial statements. 167 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF NEUBERGER BERMAN GENESIS INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 399,379 $ 361,906 $ 324,320 Net realized gains (losses)......................... 1,826,763 1,512,189 1,496,496 Change in unrealized gains (losses) on investments.. 15,758,188 (1,230,308) (2,029,896) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 17,984,330 643,787 (209,080) -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 6,799,075 7,267,381 7,662,015 Net transfers (including fixed account)............. (1,167,465) (927,026) (396,548) Policy charges...................................... (5,931,913) (5,942,383) (6,031,755) Transfers for policy benefits and terminations...... (6,477,508) (6,568,694) (7,231,509) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (6,777,811) (6,170,722) (5,997,797) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 11,206,519 (5,526,935) (6,206,877) NET ASSETS: Beginning of year................................... 101,297,663 106,824,598 113,031,475 -------------------- -------------------- --------------------- End of year......................................... $ 112,504,182 $ 101,297,663 $ 106,824,598 ==================== ==================== ===================== MSF RUSSELL 2000 INDEX INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 913,083 $ 828,476 $ 763,845 Net realized gains (losses)......................... 5,704,425 6,271,433 3,797,910 Change in unrealized gains (losses) on investments.. 7,347,406 (10,053,677) (996,894) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 13,964,914 (2,953,768) 3,564,861 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,810,814 4,964,713 5,061,087 Net transfers (including fixed account)............. (461,739) 432,389 570,926 Policy charges...................................... (3,605,728) (3,613,698) (3,622,004) Transfers for policy benefits and terminations...... (4,191,102) (4,335,031) (4,139,758) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (3,447,755) (2,551,627) (2,129,749) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 10,517,159 (5,505,395) 1,435,112 NET ASSETS: Beginning of year................................... 68,161,805 73,667,200 72,232,088 -------------------- -------------------- -------------------- End of year......................................... $ 78,678,964 $ 68,161,805 $ 73,667,200 ==================== ==================== ==================== MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (8,318) $ 57,337 $ (6,271) Net realized gains (losses)......................... 11,522,738 17,568,369 7,894,789 Change in unrealized gains (losses) on investments.. (10,229,673) (8,845,976) (880,615) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 1,284,747 8,779,730 7,007,903 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,913,132 5,084,380 5,142,662 Net transfers (including fixed account)............. 143,272 (3,825) 447,854 Policy charges...................................... (4,630,873) (4,639,514) (4,447,459) Transfers for policy benefits and terminations...... (5,259,756) (4,665,654) (5,183,233) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (4,834,225) (4,224,613) (4,040,176) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (3,549,478) 4,555,117 2,967,727 NET ASSETS: Beginning of year................................... 87,850,152 83,295,035 80,327,308 -------------------- -------------------- --------------------- End of year......................................... $ 84,300,674 $ 87,850,152 $ 83,295,035 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 168 The accompanying notes are an integral part of these financial statements. 169 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (95,610) $ (248,946) $ (370,603) Net realized gains (losses)......................... 15,506,158 12,918,905 17,881,602 Change in unrealized gains (losses) on investments.. (3,850,598) (9,935,901) (10,294,099) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 11,559,950 2,734,058 7,216,900 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 6,771,118 6,600,673 6,500,697 Net transfers (including fixed account)............. (896,281) 926,025 (16,314,954) Policy charges...................................... (5,218,226) (5,239,072) (5,322,474) Transfers for policy benefits and terminations...... (7,068,348) (7,416,481) (7,648,701) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (6,411,737) (5,128,855) (22,785,432) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 5,148,213 (2,394,797) (15,568,532) NET ASSETS: Beginning of year................................... 107,313,520 109,708,317 125,276,849 -------------------- -------------------- -------------------- End of year......................................... $ 112,461,733 $ 107,313,520 $ 109,708,317 ==================== ==================== ==================== MSF VAN ECK GLOBAL NATURAL RESOURCES INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,967 $ 974 $ 983 Net realized gains (losses)......................... (7,201) (9,795) (436) Change in unrealized gains (losses) on investments.. 88,581 (64,308) (44,636) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 83,347 (73,129) (44,089) --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 56,552 58,025 82,106 Net transfers (including fixed account)............. (24,534) 33,612 (14,270) Policy charges...................................... (19,533) (16,064) (17,934) Transfers for policy benefits and terminations...... (10,218) (4,972) -- --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 2,267 70,601 49,902 --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 85,614 (2,528) 5,813 NET ASSETS: Beginning of year................................... 173,650 176,178 170,365 --------------------- -------------------- --------------------- End of year......................................... $ 259,264 $ 173,650 $ 176,178 ===================== ==================== ===================== MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 761,904 $ 1,289,587 $ 1,344,118 Net realized gains (losses)......................... 119,058 73,628 163,589 Change in unrealized gains (losses) on investments.. 2,417,251 (1,827,670) (168,552) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,298,213 (464,455) 1,339,155 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,165,030 2,048,302 2,069,314 Net transfers (including fixed account)............. 26,947,040 416,380 284,768 Policy charges...................................... (2,541,922) (1,498,601) (1,508,520) Transfers for policy benefits and terminations...... (2,942,766) (1,520,683) (1,535,921) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 24,627,382 (554,602) (690,359) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 27,925,595 (1,019,057) 648,796 NET ASSETS: Beginning of year................................... 24,996,181 26,015,238 25,366,442 -------------------- --------------------- -------------------- End of year......................................... $ 52,921,776 $ 24,996,181 $ 26,015,238 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 170 The accompanying notes are an integral part of these financial statements. 171 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 400,422 $ 357,540 $ 302,649 Net realized gains (losses)......................... (10,757) (6,880) (4,464) Change in unrealized gains (losses) on investments.. (199,711) (270,748) 143,123 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 189,954 79,912 441,308 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,678,562 1,737,457 1,783,465 Net transfers (including fixed account)............. 141,399 3,538 (202,894) Policy charges...................................... (1,306,280) (1,277,275) (1,276,160) Transfers for policy benefits and terminations...... (908,115) (1,069,051) (853,922) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (394,434) (605,331) (549,511) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (204,480) (525,419) (108,203) NET ASSETS: Beginning of year................................... 15,860,627 16,386,046 16,494,249 -------------------- -------------------- -------------------- End of year......................................... $ 15,656,147 $ 15,860,627 $ 16,386,046 ==================== ==================== ==================== OPPENHEIMER VA MAIN STREET SMALL CAP INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 (e) -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 46 $ 40 $ -- Net realized gains (losses)......................... 355 625 -- Change in unrealized gains (losses) on investments.. 988 (894) 198 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,389 (229) 198 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 1,244 995 950 Net transfers (including fixed account)............. -- 4,936 4,034 Policy charges...................................... (2,077) (926) (91) Transfers for policy benefits and terminations...... (4,559) -- (39) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (5,392) 5,005 4,854 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (4,003) 4,776 5,052 NET ASSETS: Beginning of year................................... 9,828 5,052 -- -------------------- -------------------- -------------------- End of year......................................... $ 5,825 $ 9,828 $ 5,052 ==================== ==================== ==================== PIMCO VIT ALL ASSET INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,261 $ 17,942 $ 49,509 Net realized gains (losses)......................... (833) (111,468) 28 Change in unrealized gains (losses) on investments.. 12,619 38,369 (44,010) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 15,047 (55,157) 5,527 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 8,337 4,611 9,596 Net transfers (including fixed account)............. 76 (723,721) (9,803) Policy charges...................................... (7,013) (18,374) (20,445) Transfers for policy benefits and terminations...... -- -- (6,773) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 1,400 (737,484) (27,425) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 16,447 (792,641) (21,898) NET ASSETS: Beginning of year................................... 109,756 902,397 924,295 -------------------- -------------------- --------------------- End of year......................................... $ 126,203 $ 109,756 $ 902,397 ==================== ==================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 172 The accompanying notes are an integral part of these financial statements. 173 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
PIMCO VIT COMMODITYREALRETURN STRATEGY INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 111 $ 1,467 $ 86 Net realized gains (losses)......................... (957) (11,415) (39) Change in unrealized gains (losses) on investments.. 2,262 3,408 (10,088) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,416 (6,540) (10,041) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- 2,720 2,721 Net transfers (including fixed account)............. -- (19,227) 38,376 Policy charges...................................... (1,699) (1,972) (1,596) Transfers for policy benefits and terminations...... -- -- (13) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,699) (18,479) 39,488 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (283) (25,019) 29,447 NET ASSETS: Beginning of year................................... 10,211 35,230 5,783 ------------------- -------------------- -------------------- End of year......................................... $ 9,928 $ 10,211 $ 35,230 =================== ==================== ==================== PIMCO VIT LOW DURATION INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 13,010 $ 29,643 $ 17,764 Net realized gains (losses)......................... (325) 12,574 512 Change in unrealized gains (losses) on investments.. (271) (33,266) (4,896) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 12,414 8,951 13,380 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,335 1,329 3,323 Net transfers (including fixed account)............. 48,327 (723,808) -- Policy charges...................................... (16,404) (16,831) (24,792) Transfers for policy benefits and terminations...... (14) (4) (6,920) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 35,244 (739,314) (28,389) ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 47,658 (730,363) (15,009) NET ASSETS: Beginning of year................................... 824,924 1,555,287 1,570,296 ------------------- -------------------- -------------------- End of year......................................... $ 872,582 $ 824,924 $ 1,555,287 =================== ==================== ==================== PIONEER VCT MID CAP VALUE INVESTMENT DIVISION ----------------------------------------------------------------- 2016 2015 2014 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 342 $ 412 $ 452 Net realized gains (losses)......................... 3,167 10,473 7,922 Change in unrealized gains (losses) on investments.. 3,146 (13,938) 732 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 6,655 (3,053) 9,106 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 20,177 -- -- Net transfers (including fixed account)............. -- (418) 14,941 Policy charges...................................... (3,579) (4,119) (3,653) Transfers for policy benefits and terminations...... (13,760) (16,227) (72) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 2,838 (20,764) 11,216 ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 9,493 (23,817) 20,322 NET ASSETS: Beginning of year................................... 46,440 70,257 49,935 ------------------- ------------------- -------------------- End of year......................................... $ 55,933 $ 46,440 $ 70,257 =================== =================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 174 The accompanying notes are an integral part of these financial statements. 175 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
PUTNAM VT INTERNATIONAL VALUE INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 122 $ 91 $ 95 Net realized gains (losses)......................... (165) (22) 46 Change in unrealized gains (losses) on investments.. 58 (118) (775) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 15 (49) (634) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ -- 1,288 1,288 Net transfers (including fixed account)............. 1 -- 32 Policy charges...................................... (1,450) (1,363) (1,293) Transfers for policy benefits and terminations...... -- (1) (1) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... (1,449) (76) 26 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,434) (125) (608) NET ASSETS: Beginning of year................................... 5,695 5,820 6,428 --------------------- -------------------- -------------------- End of year......................................... $ 4,261 $ 5,695 $ 5,820 ===================== ==================== ==================== ROYCE MICRO-CAP INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 61 $ -- $ -- Net realized gains (losses)......................... 71 499 670 Change in unrealized gains (losses) on investments.. 1,525 (1,557) (951) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 1,657 (1,058) (281) --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 939 939 939 Net transfers (including fixed account)............. -- -- 1 Policy charges...................................... (81) (78) (80) Transfers for policy benefits and terminations...... (71) -- -- --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 787 861 860 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 2,444 (197) 579 NET ASSETS: Beginning of year................................... 8,139 8,336 7,757 --------------------- -------------------- -------------------- End of year......................................... $ 10,583 $ 8,139 $ 8,336 ===================== ==================== ==================== ROYCE SMALL-CAP INVESTMENT DIVISION -------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,115 $ 443 $ 64 Net realized gains (losses)......................... 6,182 12,813 111,348 Change in unrealized gains (losses) on investments.. 2,799 (19,154) (144,191) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 10,096 (5,898) (32,779) -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 21,194 278 -- Net transfers (including fixed account)............. -- 12,275 (595,217) Policy charges...................................... (4,548) (4,053) (9,562) Transfers for policy benefits and terminations...... (12,165) -- -- -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 4,481 8,500 (604,779) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 14,577 2,602 (637,558) NET ASSETS: Beginning of year................................... 53,973 51,371 688,929 -------------------- --------------------- --------------------- End of year......................................... $ 68,550 $ 53,973 $ 51,371 ==================== ===================== =====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 176 The accompanying notes are an integral part of these financial statements. 177 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
UIF EMERGING MARKETS DEBT INVESTMENT DIVISION ------------------------------------------------------------------ 2016 2015 2014 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 59,307 $ 45,047 $ 66,166 Net realized gains (losses)......................... (12,131) (12,799) (17,138) Change in unrealized gains (losses) on investments.. 45,652 (46,377) 6,462 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 92,828 (14,129) 55,490 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 3,052 3,052 3,052 Net transfers (including fixed account)............. 264,923 149,611 (402,394) Policy charges...................................... (19,895) (14,377) (17,192) Transfers for policy benefits and terminations...... (18) (781) (6,416) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 248,062 137,505 (422,950) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 340,890 123,376 (367,460) NET ASSETS: Beginning of year................................... 915,935 792,559 1,160,019 -------------------- -------------------- -------------------- End of year......................................... $ 1,256,825 $ 915,935 $ 792,559 ==================== ==================== ==================== UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------------------- 2016 2015 2014 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 12,938 $ 18,406 $ 4,726 Net realized gains (losses)......................... (37,991) (24,296) 14,990 Change in unrealized gains (losses) on investments.. 171,862 (266,747) (166,226) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 146,809 (272,637) (146,510) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from policy owners........ 4,305 4,305 4,305 Net transfers (including fixed account)............. 831,692 408,440 1,057,866 Policy charges...................................... (47,189) (36,287) (26,285) Transfers for policy benefits and terminations...... (296) (301) (3,783) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from policy transactions....................... 788,512 376,157 1,032,103 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. 935,321 103,520 885,593 NET ASSETS: Beginning of year................................... 2,225,571 2,122,051 1,236,458 -------------------- --------------------- -------------------- End of year......................................... $ 3,160,892 $ 2,225,571 $ 2,122,051 ==================== ===================== ====================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. The accompanying notes are an integral part of these financial statements. 178 The accompanying notes are an integral part of these financial statements. 179 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION Metropolitan Life Separate Account UL (the "Separate Account"), a separate account of Metropolitan Life Insurance Company (the "Company"), was established by the Company's Board of Directors on December 13, 1988 to support operations of the Company with respect to certain variable life insurance policies (the "Policies"). The Company is a direct wholly-owned subsidiary of MetLife, Inc., a Delaware corporation. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the New York State Department of Financial Services. On January 12, 2016, MetLife, Inc. announced its plan to pursue the separation of a portion of its retail business, (the "Separation"). Additionally, on July 21, 2016, MetLife, Inc. announced that following the Separation, the separated business will be rebranded as "Brighthouse Financial." On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. ("Brighthouse"), filed a registration statement on Form 10 (the "Form 10") with the U.S. Securities and Exchange Commission ("SEC"), which included a description of how MetLife, Inc. currently plans to effectuate the Separation. On December 6, 2016, Brighthouse filed amendments to its registration statement on Form 10 with the SEC. The information statement filed as an exhibit to the Form 10 disclosed that the Company intends to include MetLife Insurance Company USA, New England Life Insurance Company, First MetLife Investors Insurance Company and MetLife Advisers, LLC ("MetLife Advisers"), among other companies, in the proposed separated business. The ultimate form and timing of the Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. MetLife expects that the life and annuity business sold through the Company will not be a part of Brighthouse Financial. The Separation remains subject to certain conditions, including, among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the Internal Revenue Service and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, and an SEC declaration of the effectiveness of the Form 10. The Separate Account is divided into Investment Divisions, each of which is treated as an individual accounting entity for financial reporting purposes. Each Investment Division invests in shares of the corresponding fund, portfolio or series (with the same name) of registered investment management companies (the "Trusts"), which are presented below: AB Variable Products Series Fund, Inc. ("AB") Met Investors Series Trust ("MIST")* AIM Variable Insurance Funds (Invesco Variable Metropolitan Series Fund ("MSF")* Insurance Funds) ("Invesco V.I.") MFS Variable Insurance Trust ("MFS VIT") American Century Variable Portfolios, Inc. ("American MFS Variable Insurance Trust II ("MFS VIT II") Century VP") Oppenheimer Variable Account Funds American Funds Insurance Series ("American Funds") ("Oppenheimer VA") Dreyfus Variable Investment Fund ("Dreyfus VIF") PIMCO Variable Insurance Trust ("PIMCO VIT") Fidelity Variable Insurance Products ("Fidelity VIP") Pioneer Variable Contracts Trust ("Pioneer VCT") Franklin Templeton Variable Insurance Products Trust Putnam Variable Trust ("Putnam VT") ("FTVIPT") Royce Capital Fund ("Royce") Goldman Sachs Variable Insurance Trust Trust for Advised Portfolios ("TAP") ("Goldman Sachs") The Universal Institutional Funds, Inc. ("UIF") Janus Aspen Series ("Janus Aspen")
*See Note 5 for a discussion of additional information on related party transactions. The assets of each of the Investment Divisions of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Policies is not chargeable with liabilities arising out of any other business the Company may conduct. 180 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF INVESTMENT DIVISIONS A. Premium payments, less any applicable charges, applied to the Separate Account are invested in one or more Investment Divisions in accordance with the selection made by the policy owner. The following Investment Divisions had net assets as of December 31, 2016: AB Global Thematic Growth Investment Division Janus Aspen Janus Investment Division AB Intermediate Bond Investment Division Janus Aspen Overseas Investment Division American Century VP Capital Appreciation Investment MFS VIT Global Equity Investment Division Division MFS VIT New Discovery Investment Division American Funds Bond Investment Division MFS VIT Value Investment Division American Funds Global Small Capitalization MFS VIT II High Yield Investment Division Investment Division MIST AB Global Dynamic Allocation Investment American Funds Growth Investment Division Division American Funds Growth-Income Investment Division MIST Allianz Global Investors Dynamic Multi-Asset American Funds International Investment Division Plus Investment Division American Funds U.S. Government/AAA-Rated MIST American Funds Balanced Allocation Securities Investment Division Investment Division Dreyfus VIF International Value Investment Division MIST American Funds Growth Allocation Investment Fidelity VIP Asset Manager: Growth Investment Division Division MIST American Funds Moderate Allocation Fidelity VIP Contrafund Investment Division Investment Division Fidelity VIP Equity-Income Investment Division MIST AQR Global Risk Balanced Investment Division Fidelity VIP Freedom 2010 Investment Division MIST BlackRock Global Tactical Strategies Investment Fidelity VIP Freedom 2020 Investment Division Division Fidelity VIP Freedom 2025 Investment Division MIST Clarion Global Real Estate Investment Division Fidelity VIP Freedom 2030 Investment Division MIST ClearBridge Aggressive Growth Investment Fidelity VIP Freedom 2040 Investment Division Division Fidelity VIP Freedom 2050 Investment Division MIST Harris Oakmark International Investment Fidelity VIP Government Money Market Portfolio Division Investment Division (a) MIST Invesco Balanced-Risk Allocation Investment Fidelity VIP High Income Investment Division Division Fidelity VIP Investment Grade Bond Investment MIST Invesco Mid Cap Value Investment Division Division MIST Invesco Small Cap Growth Investment Fidelity VIP Mid Cap Investment Division Division (b) FTVIPT Franklin Income VIP Investment Division MIST JPMorgan Small Cap Value Investment Division FTVIPT Franklin Mutual Global Discovery VIP MIST JPMorgan Global Active Allocation Investment Investment Division Division FTVIPT Franklin Mutual Shares VIP Investment MIST Loomis Sayles Global Markets Investment Division Division FTVIPT Templeton Foreign VIP Investment Division MIST Met/Aberdeen Emerging Markets Equity FTVIPT Templeton Global Bond VIP Investment Investment Division (b) Division MIST Met/Templeton International Bond Investment Goldman Sachs Mid-Cap Value Investment Division Division Goldman Sachs Small Cap Equity Insights Investment MIST Met/Wellington Large Cap Research Investment Division Division Invesco V.I. Comstock Investment Division MIST MetLife Asset Allocation 100 Investment Invesco V.I. International Growth Investment Division Division (b) Janus Aspen Balanced Investment Division MIST MetLife Balanced Plus Investment Division Janus Aspen Enterprise Investment Division MIST MetLife Multi-Index Targeted Risk Investment Janus Aspen Forty Investment Division Division
181 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF INVESTMENT DIVISIONS -- (CONTINUED) MIST MetLife Small Cap Value Investment Division MSF Met/Wellington Balanced Investment Division MIST MFS Research International Investment MSF Met/Wellington Core Equity Opportunities Division (b) Investment Division MIST Morgan Stanley Mid Cap Growth Investment MSF MetLife Asset Allocation 20 Investment Division Division (b) MIST Oppenheimer Global Equity Investment MSF MetLife Asset Allocation 40 Investment Division Division (b) MIST PanAgora Global Diversified Risk Investment MSF MetLife Asset Allocation 60 Investment Division Division (b) MIST PIMCO Inflation Protected Bond Investment MSF MetLife Asset Allocation 80 Investment Division Division MSF MetLife Mid Cap Stock Index Investment MIST PIMCO Total Return Investment Division Division MIST Pyramis Managed Risk Investment Division MSF MetLife Stock Index Investment Division MIST Schroders Global Multi-Asset Investment MSF MFS Total Return Investment Division (b) Division MSF MFS Value Investment Division MIST SSGA Growth and Income ETF Investment MSF MSCI EAFE Index Investment Division Division MSF Neuberger Berman Genesis Investment Division MIST SSGA Growth ETF Investment Division MSF Russell 2000 Index Investment Division MIST T. Rowe Price Large Cap Value Investment MSF T. Rowe Price Large Cap Growth Investment Division Division MIST T. Rowe Price Mid Cap Growth Investment MSF T. Rowe Price Small Cap Growth Investment Division (b) Division MSF Baillie Gifford International Stock Investment MSF Van Eck Global Natural Resources Investment Division Division MSF Barclays Aggregate Bond Index Investment MSF Western Asset Management Strategic Bond Division Opportunities Investment Division MSF BlackRock Bond Income Investment Division MSF Western Asset Management U.S. Government MSF BlackRock Capital Appreciation Investment Investment Division Division Oppenheimer VA Main Street Small Cap Investment MSF BlackRock Large Cap Value Investment Division Division MSF BlackRock Ultra-Short Term Bond Investment PIMCO VIT All Asset Investment Division Division PIMCO VIT CommodityRealReturn Strategy MSF Frontier Mid Cap Growth Investment Division Investment Division MSF Jennison Growth Investment Division PIMCO VIT Low Duration Investment Division MSF Loomis Sayles Small Cap Core Investment Pioneer VCT Mid Cap Value Investment Division Division Putnam VT International Value Investment Division MSF Loomis Sayles Small Cap Growth Investment Royce Micro-Cap Investment Division Division Royce Small-Cap Investment Division MSF Met/Artisan Mid Cap Value Investment UIF Emerging Markets Debt Investment Division Division (b) UIF Emerging Markets Equity Investment Division
(a) This Investment Division began operations during the year ended December 31, 2016. (b) This Investment Division invests in two or more share classes within the underlying fund, portfolio or series of the Trusts. 182 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 2. LIST OF INVESTMENT DIVISIONS -- (CONCLUDED) B. The following Investment Divisions had no net assets as of December 31, 2016: AB International Value Investment Division PIMCO VIT Long-Term U.S. Government Investment American Funds High-Income Bond Investment Division Division TAP 1919 Variable Socially Responsive Balanced Fidelity VIP Freedom 2015 Investment Division Investment Division Invesco V.I. Government Securities Investment Division
3. PORTFOLIO CHANGES The following Investment Divisions ceased operations during the year ended December 31, 2016: MIST Lord Abbett Bond Debenture Investment Wells Fargo VT Total Return Bond Investment Division Division MIST Pioneer Fund Investment Division
The operations of the Investment Divisions were affected by the following changes that occurred during the year ended December 31, 2016: NAME CHANGES: Former Name New Name (MIST) MFS Emerging Markets Equity Portfolio (MIST) Met/Aberdeen Emerging Markets Equity Portfolio (MIST) WMC Large Cap Research Portfolio (MIST) Met/Wellington Large Cap Research Portfolio (MSF) BlackRock Money Market Portfolio (MSF) BlackRock Ultra-Short Term Bond Portfolio (MSF) WMC Balanced Portfolio (MSF) Met/Wellington Balanced Portfolio (MSF) WMC Core Equity Opportunities Portfolio (MSF) Met/Wellington Core Equity Opportunities Portfolio
MERGERS: Former Portfolio New Portfolio (MIST) Lord Abbett Bond Debenture Portfolio (MSF) Western Asset Management Strategic Bond Opportunities Portfolio (MIST) Pioneer Fund Portfolio (MSF) Met/Wellington Core Equity Opportunities Portfolio
LIQUIDATION: Wells Fargo VT Total Return Bond Fund 4. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") applicable for variable life separate accounts registered as unit investment trusts, which follow the accounting and reporting guidance in Financial Accounting Standards Board ("FASB") ACCOUNTING STANDARDS CODIFICATION TOPIC 946. 183 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED) SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. SECURITY VALUATION An Investment Division's investment in shares of a fund, portfolio or series of the Trusts is valued at fair value based on the closing net asset value ("NAV") or price per share as determined by the Trusts as of the end of the year. All changes in fair value are recorded as changes in unrealized gains (losses) on investments in the statements of operations of the applicable Investment Divisions. The Separate Account defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Each Investment Division invests in shares of open-end mutual funds which calculate a daily NAV based on the fair value of the underlying securities in their portfolios. As a result, and as required by law, shares of open-end mutual funds are purchased and redeemed at their quoted daily NAV as reported by the Trusts at the close of each business day. FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Policies. Accordingly, no charge is currently being made to the Separate Account for federal income taxes. The Company will periodically review 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 Policies. PREMIUM PAYMENTS The Company deducts a sales charge for certain policies and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain Policies, the Company also deducts a federal income tax charge before amounts are allocated to the Separate Account. This 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. Net premiums are reported as premium payments received from policy owners on the statements of changes in net assets of the applicable Investment Divisions and are credited as accumulation units. NET TRANSFERS Funds transferred by the policy owner into or out of Investment Divisions within the Separate Account or into or out of the fixed account, which is part of the Company's general account, are recorded on a net basis as net transfers in the statements of changes in net assets of the applicable Investment Divisions. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. 184 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 4. SIGNIFICANT ACCOUNTING POLICIES -- (CONCLUDED) ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT In March 2015, the FASB issued new guidance to improve fair value measurement guidance (ASU 2015-07, FAIR VALUE MEASUREMENT (TOPIC 820): DISCLOSURE FOR INVESTMENTS IN CERTAIN ENTITIES THAT CALCULATE NET ASSET VALUE PER SHARE (OR ITS EQUIVALENT)), effective for fiscal years beginning after December 15, 2015 and interim periods within those years. The objective of this update is to address the diversity in practice related to how certain investments measured at NAV with redemption dates in the future (including periodic redemption dates) are categorized within the fair value hierarchy. The amendments in the ASU remove the requirement to categorize within the fair value hierarchy all investments for which the fair value is measured using the NAV per share practical expedient. Effective January 1, 2016, the Separate Accounts adopted this guidance. The adoption resulted in removal of the related disclosures in Note 4. 5. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charge paid to the Company, is an asset-based charge and assessed through a daily reduction in unit values, which is recorded as an expense in the accompanying statements of operations of the applicable Investment Divisions: Mortality and Expense Risk -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is the risk that expenses incurred in issuing and administering the Policies will exceed the amounts realized from the administrative charges assessed against the Policies. The table below represents the range of effective annual rates for the charge for the year ended December 31, 2016: ------------------------------------------------------------------------------------------------------------------------- Mortality and Expense Risk 0.00% - 0.90% -------------------------------------------------------------------------------------------------------------------------
The above referenced charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular policy. For some Policies, a mortality and expense risk charge ranging from 0.05% to 0.90% is assessed through the redemption of units on a monthly basis and recorded as policy charges in the statements of changes in net assets of the applicable Investment Divisions. Other policy charges that are assessed through the redemption of units generally include: Cost of Insurance ("COI") charges, administrative charges, a policy fee, and charges for benefits provided by rider, if any. The COI charge is the primary charge under the policy for the death benefit provided by the Company which may vary by policy based on underwriting criteria. A transfer fee ranging from $0 to $25 may be deducted after twelve transfers made in a policy year. Policy administrative charges range from $0 to $15 based on face amounts of policies and are assessed monthly. For some Policies, a surrender charge is imposed if the policy is partially or fully surrendered within the specified surrender charge period that ranges from $3.75 to $38.25 for every $1,000 of the policy face amount. Surrender charges for other Policies are equal to the lesser of the maximum surrender charge premium or the premiums actually paid in the first two policy years. Most policies offer optional benefits that can be added to the policy by rider. The charge for riders that provide life insurance benefits can range from $0.01 to $83.33 per $1,000 of coverage and the charge for riders providing benefits in the event of disability can range from $0.00 to $61.44 per $100 of the benefit provided. The above referenced charges are paid to the Company and are recorded as policy charges in the accompanying statements of changes in net assets of the applicable Investment Divisions for the years ended December 31, 2016, 2015 and 2014. The MIST and MSF Trusts currently offer shares of their portfolios only to separate accounts established by the Company and other affiliated life insurance companies, and are managed by MetLife Advisers, an affiliate of the Company. MetLife Advisers is also the investment adviser to the portfolios of the MIST and MSF Trusts. 185 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS
AS OF DECEMBER 31 ------------------------ SHARES COST ($) ---------- ------------ 2016 2016 ---------- ------------ AB Global Thematic Growth Investment Division...... 1,505 28,905 AB Intermediate Bond Investment Division...... 9,018 102,332 American Century VP Capital Appreciation Investment Division...... 239 3,398 American Funds Bond Investment Division...... 596,266 6,470,931 American Funds Global Small Capitalization Investment Division...... 3,233,710 66,490,045 American Funds Growth Investment Division...... 2,524,108 144,467,282 American Funds Growth-Income Investment Division...... 2,403,194 91,998,406 American Funds International Investment Division................. 20,787 380,704 American Funds U.S. Government/AAA-Rated Securities Investment Division................. 4,552 56,371 Dreyfus VIF International Value Investment Division................. 19,887 248,900 Fidelity VIP Asset Manager: Growth Investment Division................. 96,311 1,402,889 Fidelity VIP Contrafund Investment Division...... 80,969 2,195,512 Fidelity VIP Equity-Income Investment Division...... 772 16,506 Fidelity VIP Freedom 2010 Investment Division...... 2,387 29,292 Fidelity VIP Freedom 2020 Investment Division...... 45,185 418,339 Fidelity VIP Freedom 2025 Investment Division...... 34,615 451,502 Fidelity VIP Freedom 2030 Investment Division...... 14,261 180,648 Fidelity VIP Freedom 2040 Investment Division...... 8,647 157,438 Fidelity VIP Freedom 2050 Investment Division...... 6,469 106,042 Fidelity VIP Government Money Market Investment Division...... 3,825,639 3,825,639 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------------------------------------------- COST OF PROCEEDS PURCHASES ($) FROM SALES ($) ------------------------------------------- ----------------------------------------- 2016 2015 2014 2016 2015 2014 -------------- ----------- -------------- ------------- ---------- ------------- AB Global Thematic Growth Investment Division...... 1,292 1,345 17,021 8,394 39,364 11,424 AB Intermediate Bond Investment Division...... 37,741 7,452 3,407 3,112 2,460 2,264 American Century VP Capital Appreciation Investment Division...... 3,530 23 589(a) 211 368 211(a) American Funds Bond Investment Division...... 1,181,124 1,545,785 879,839 1,074,225 1,108,315 670,493 American Funds Global Small Capitalization Investment Division...... 13,648,704 7,946,645 2,323,592 6,278,241 6,304,457 4,957,120 American Funds Growth Investment Division...... 18,186,698 37,422,273 11,457,537 12,987,017 13,129,504 11,167,958 American Funds Growth-Income Investment Division...... 13,903,223 18,327,316 7,783,956 8,263,717 7,549,944 7,114,338 American Funds International Investment Division................. 38,138 68,037 49,085 78,418 282,880 24,982 American Funds U.S. Government/AAA-Rated Securities Investment Division................. 8,050 3,712 1,772 2,881 1,568 1,495 Dreyfus VIF International Value Investment Division................. 3,283 4,421 3,201 14,244 2,288 2,373 Fidelity VIP Asset Manager: Growth Investment Division................. 119,159 265,538 181,483 177,581 464,095 117,715 Fidelity VIP Contrafund Investment Division...... 309,370 557,464 226,935 369,548 430,569 199,157 Fidelity VIP Equity-Income Investment Division...... 3,033 5,037 2,954 248 14,338 11,967 Fidelity VIP Freedom 2010 Investment Division...... 19,953 71,664 21,634 10,123 100,698 20,447 Fidelity VIP Freedom 2020 Investment Division...... 79,257 55,480 165,843 47,384 500,336 171,907 Fidelity VIP Freedom 2025 Investment Division...... 20,296 418,024 1,384 10,760 9,867 4,514 Fidelity VIP Freedom 2030 Investment Division...... 130,631 90,730 140,205 71,722 48,668 122,464 Fidelity VIP Freedom 2040 Investment Division...... 115,530 80,078 93,959 49,939 41,278 52,334 Fidelity VIP Freedom 2050 Investment Division...... 87,984 56,548 60,842 34,580 29,989 57,314 Fidelity VIP Government Money Market Investment Division...... 4,295,616(b) -- -- 469,978(b) -- --
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 186 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------- SHARES COST ($) ----------- ------------ 2016 2016 ----------- ------------ Fidelity VIP High Income Investment Division..... 68,510 381,591 Fidelity VIP Investment Grade Bond Investment Division................ 99,325 1,275,734 Fidelity VIP Mid Cap Investment Division..... 7,762 231,550 FTVIPT Franklin Income VIP Investment Division................ 3,643 55,578 FTVIPT Franklin Mutual Global Discovery VIP Investment Division..... 28,370 569,362 FTVIPT Franklin Mutual Shares VIP Investment Division................ 4,796 98,455 FTVIPT Templeton Foreign VIP Investment Division................ 414,863 6,063,675 FTVIPT Templeton Global Bond VIP Investment Division................ 37,073 666,163 Goldman Sachs Mid-Cap Value Investment Division................ 5,097 80,679 Goldman Sachs Small Cap Equity Insights Investment Division..... 2,868 36,185 Invesco V.I. Comstock Investment Division..... 24,161 329,102 Invesco V.I. International Growth Investment Division................ 10,909 353,554 Janus Aspen Balanced Investment Division..... 33,659 971,754 Janus Aspen Enterprise Investment Division..... 8,051 452,329 Janus Aspen Forty Investment Division..... 16,402 550,588 Janus Aspen Janus Investment Division..... 9,374 220,677 Janus Aspen Overseas Investment Division..... 1,804 61,182 MFS VIT Global Equity Investment Division..... 11,821 186,039 MFS VIT New Discovery Investment Division..... 13,751 201,066 MFS VIT Value Investment Division..... 1,078 14,894 FOR THE YEAR ENDED DECEMBER 31 --------------------------------------------------------------------------- COST OF PROCEEDS PURCHASES ($) FROM SALES ($) ------------------------------------- ------------------------------------ 2016 2015 2014 2016 2015 2014 ---------- --------- --------- ----------- ------- ------- Fidelity VIP High Income Investment Division..... 150,652 66,394 21,533 6,565 11,400 9,295 Fidelity VIP Investment Grade Bond Investment Division................ 69,382 84,404 492,396 78,041 76,817 996,618 Fidelity VIP Mid Cap Investment Division..... 16,360 67,101 20,809 48,504 6,163 24,409 FTVIPT Franklin Income VIP Investment Division................ 15,286 21,745 30,058 1,946 5,475 4,384 FTVIPT Franklin Mutual Global Discovery VIP Investment Division..... 101,655 86,232 87,301 32,925 36,427 79,798 FTVIPT Franklin Mutual Shares VIP Investment Division................ 28,542 41,137 19,716 7,538 2,521 2,934 FTVIPT Templeton Foreign VIP Investment Division................ 858,963 1,005,831 2,395,132 631,827 309,654 901,189 FTVIPT Templeton Global Bond VIP Investment Division................ 80,798 421,942 94,840 36,141 965,007 136,586 Goldman Sachs Mid-Cap Value Investment Division................ 1,114 21,240 54,571 188,316 19,881 35,646 Goldman Sachs Small Cap Equity Insights Investment Division..... 12,021 5,606 7,642 11,479 3,707 9,176 Invesco V.I. Comstock Investment Division..... 93,775 28,117 14,379 8,620 10,378 7,046 Invesco V.I. International Growth Investment Division................ 54,374 20,431 23,557 17,780 29,885 66,518 Janus Aspen Balanced Investment Division..... 88,391 115,942 131,441 124,071 52,044 82,517 Janus Aspen Enterprise Investment Division..... 520,373(c) -- -- 67,509(c) -- -- Janus Aspen Forty Investment Division..... 88,431 129,875 266,429 120,900 19,860 400,760 Janus Aspen Janus Investment Division..... 21,208 94,675 42,556 198,040 43,217 23,494 Janus Aspen Overseas Investment Division..... 24,345 6,872 14,546 11,570 12,411 21,028 MFS VIT Global Equity Investment Division..... 38,573 18,861 11,222 4,052 13,725 11,006 MFS VIT New Discovery Investment Division..... 9,401 6,957 45,561 6,619 6,382 6,105 MFS VIT Value Investment Division..... 1,998 1,676 955 2,348 2,032 1,720
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 187 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31 ----------------------- SHARES COST ($) ---------- ----------- 2016 2016 ---------- ----------- MFS VIT II High Yield Investment Division..... 26,418 159,864 MIST AB Global Dynamic Allocation Investment Division................ 5,523 62,646 MIST Allianz Global Investors Dynamic Multi-Asset Plus Investment Division..... 457 4,777 MIST American Funds Balanced Allocation Investment Division..... 101,513 1,000,782 MIST American Funds Growth Allocation Investment Division..... 190,850 1,809,180 MIST American Funds Moderate Allocation Investment Division..... 119,079 1,202,338 MIST AQR Global Risk Balanced Investment Division................ 14,899 152,793 MIST BlackRock Global Tactical Strategies Investment Division..... 32,558 341,475 MIST Clarion Global Real Estate Investment Division................ 2,375,147 28,177,731 MIST ClearBridge Aggressive Growth Investment Division..... 2,618,973 30,375,468 MIST Harris Oakmark International Investment Division................ 2,994,317 42,687,773 MIST Invesco Balanced-Risk Allocation Investment Division..... 4,478 45,426 MIST Invesco Mid Cap Value Investment Division................ 4,623,002 80,816,803 MIST Invesco Small Cap Growth Investment Division................ 491,055 7,280,839 MIST JPMorgan Global Active Allocation Investment Division..... 18,558 208,730 MIST JPMorgan Small Cap Value Investment Division................ 22,601 368,661 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------------------------------------- COST OF PROCEEDS PURCHASES ($) FROM SALES ($) --------------------------------------- --------------------------------------- 2016 2015 2014 2016 2015 2014 --------- --------- ------------- --------- --------- -------------- MFS VIT II High Yield Investment Division..... 9,347 10,209 8,053 2,483 2,674 9,380 MIST AB Global Dynamic Allocation Investment Division................ 13,677 35,828 17,377 13,517 19,998 3,240 MIST Allianz Global Investors Dynamic Multi-Asset Plus Investment Division..... 3,059 11,135 100(a) 362 8,841 24(a) MIST American Funds Balanced Allocation Investment Division..... 187,577 147,094 187,720 67,351 64,178 60,112 MIST American Funds Growth Allocation Investment Division..... 396,311 329,483 432,644 130,443 160,757 272,941 MIST American Funds Moderate Allocation Investment Division..... 240,261 262,764 261,530 33,951 253,058 80,567 MIST AQR Global Risk Balanced Investment Division................ 27,205 77,154 57,534 36,676 89,138 35,216 MIST BlackRock Global Tactical Strategies Investment Division..... 118,225 100,309 104,608 13,985 49,822 14,302 MIST Clarion Global Real Estate Investment Division................ 1,878,250 2,921,699 7,937,396 3,426,042 3,259,973 7,343,310 MIST ClearBridge Aggressive Growth Investment Division..... 1,483,635 3,901,426 22,044,282 4,270,593 6,423,106 3,068,564 MIST Harris Oakmark International Investment Division................ 5,011,447 7,532,177 7,989,660 3,821,009 3,678,669 11,781,678 MIST Invesco Balanced-Risk Allocation Investment Division..... 12,570 29,687 10,894 9,545 16,109 4,860 MIST Invesco Mid Cap Value Investment Division................ 5,175,259 7,116,167 17,257,547 6,788,812 6,104,875 6,663,774 MIST Invesco Small Cap Growth Investment Division................ 1,501,383 2,489,399 1,841,187 901,550 1,159,496 1,116,722 MIST JPMorgan Global Active Allocation Investment Division..... 39,661 61,002 72,943 20,198 33,585 15,555 MIST JPMorgan Small Cap Value Investment Division................ 177,343 86,606 107,150 160,195 18,000 49,885
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 188 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------ SHARES COST ($) ---------- ------------ 2016 2016 ---------- ------------ MIST Loomis Sayles Global Markets Investment Division..... 24,739 342,684 MIST Met/Aberdeen Emerging Markets Equity Investment Division................ 72,733 674,256 MIST Met/Templeton International Bond Investment Division..... 21,780 235,331 MIST Met/Wellington Large Cap Research Investment Division..... 29,747,643 332,446,000 MIST MetLife Asset Allocation 100 Investment Division..... 1,868,081 21,012,668 MIST MetLife Balanced Plus Investment Division................ 29,457 324,758 MIST MetLife Multi-Index Targeted Risk Investment Division................ 14,065 167,039 MIST MetLife Small Cap Value Investment Division................ 49,043 697,329 MIST MFS Research International Investment Division................ 1,699,797 18,292,796 MIST Morgan Stanley Mid Cap Growth Investment Division..... 12,901,142 133,745,596 MIST Oppenheimer Global Equity Investment Division................ 2,399,259 34,933,837 MIST PanAgora Global Diversified Risk Investment Division..... 1 16 MIST PIMCO Inflation Protected Bond Investment Division..... 1,060,326 11,454,001 MIST PIMCO Total Return Investment Division................ 3,784,531 44,569,610 MIST Pyramis Managed Risk Investment Division................ 754 8,400 MIST Schroders Global Multi-Asset Investment Division................ 4,518 51,341 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------------------------------------ COST OF PROCEEDS PURCHASES ($) FROM SALES ($) -------------------------------------- -------------------------------------- 2016 2015 2014 2016 2015 2014 ---------- ------------- ---------- ---------- -------------- ---------- MIST Loomis Sayles Global Markets Investment Division..... 64,439 28,756 47,648 20,106 129,542 48,429 MIST Met/Aberdeen Emerging Markets Equity Investment Division................ 280,017 165,039 409,348 224,891 61,034 127,301 MIST Met/Templeton International Bond Investment Division..... 47,279 88,215 99,613 14,910 53,943 8,955 MIST Met/Wellington Large Cap Research Investment Division..... 36,766,804 35,133,904 8,159,906 28,454,286 28,229,973 28,472,042 MIST MetLife Asset Allocation 100 Investment Division..... 4,730,554 3,914,059 2,705,529 2,179,118 2,073,396 1,925,555 MIST MetLife Balanced Plus Investment Division................ 68,237 137,489 157,666 23,414 83,354 16,033 MIST MetLife Multi-Index Targeted Risk Investment Division................ 34,824 128,550 116,860 7,112 107,270 2,566 MIST MetLife Small Cap Value Investment Division................ 58,002 320,730 53,036 245,917 25,332 120,727 MIST MFS Research International Investment Division................ 1,019,232 1,366,765 1,401,947 1,458,560 1,521,529 1,748,099 MIST Morgan Stanley Mid Cap Growth Investment Division..... 2,579,919 2,463,949 2,474,168 11,786,859 13,176,582 15,801,000 MIST Oppenheimer Global Equity Investment Division................ 4,429,172 5,241,230 3,170,102 4,922,398 4,474,959 4,390,657 MIST PanAgora Global Diversified Risk Investment Division..... 23 9,129(d) -- 18 8,759(d) -- MIST PIMCO Inflation Protected Bond Investment Division..... 788,450 1,409,990 1,814,740 1,094,561 1,673,265 1,907,316 MIST PIMCO Total Return Investment Division................ 2,360,550 4,418,576 2,535,003 3,866,415 4,184,544 6,427,172 MIST Pyramis Managed Risk Investment Division................ 5,396 47,328 1,698 798 45,584 476 MIST Schroders Global Multi-Asset Investment Division................ 20,539 21,659 11,548 7,433 13,208 3,147
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 189 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------ SHARES COST ($) ---------- ------------ 2016 2016 ---------- ------------ MIST SSGA Growth and Income ETF Investment Division................ 731,738 8,407,961 MIST SSGA Growth ETF Investment Division..... 643,425 7,277,484 MIST T. Rowe Price Large Cap Value Investment Division..... 68,826 1,829,964 MIST T. Rowe Price Mid Cap Growth Investment Division..... 3,352,165 32,748,124 MSF Baillie Gifford International Stock Investment Division..... 3,872,577 42,567,672 MSF Barclays Aggregate Bond Index Investment Division................ 11,719,166 128,640,793 MSF BlackRock Bond Income Investment Division................ 729,101 78,355,913 MSF BlackRock Capital Appreciation Investment Division................ 285,967 8,146,387 MSF BlackRock Large Cap Value Investment Division................ 2,326,592 22,916,872 MSF BlackRock Ultra-Short Term Bond Investment Division..... 225,940 22,596,515 MSF Frontier Mid Cap Growth Investment Division................ 7,173,191 189,544,567 MSF Jennison Growth Investment Division..... 1,733,452 21,514,327 MSF Loomis Sayles Small Cap Core Investment Division..... 95,487 21,890,065 MSF Loomis Sayles Small Cap Growth Investment Division..... 899,896 10,240,806 MSF Met/Artisan Mid Cap Value Investment Division................ 268,738 56,551,386 MSF Met/Wellington Balanced Investment Division................ 16,195,948 272,250,594 MSF Met/Wellington Core Equity Opportunities Investment Division..... 2,569,732 73,937,517 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------------------------------- COST OF PROCEEDS PURCHASES ($) FROM SALES ($) ------------------------------------ ------------------------------------ 2016 2015 2014 2016 2015 2014 ----------- ---------- ---------- ----------- ----------- ---------- MIST SSGA Growth and Income ETF Investment Division................ 1,326,767 1,604,888 1,761,161 661,795 903,258 1,687,133 MIST SSGA Growth ETF Investment Division..... 1,734,080 1,782,647 1,868,438 1,151,062 847,783 847,985 MIST T. Rowe Price Large Cap Value Investment Division..... 370,384 50,140 147,425 96,983 305,400 28,700 MIST T. Rowe Price Mid Cap Growth Investment Division..... 6,929,699 9,041,352 5,023,487 3,461,363 3,314,619 2,437,153 MSF Baillie Gifford International Stock Investment Division..... 1,543,527 2,432,046 1,702,428 2,865,403 3,348,491 3,434,170 MSF Barclays Aggregate Bond Index Investment Division................ 11,585,206 12,590,249 17,873,747 10,593,238 13,158,342 11,732,000 MSF BlackRock Bond Income Investment Division................ 4,713,262 7,717,489 5,415,462 5,722,257 8,611,007 6,638,355 MSF BlackRock Capital Appreciation Investment Division................ 1,421,521 2,583,957 690,157 1,273,610 965,221 12,805,858 MSF BlackRock Large Cap Value Investment Division................ 2,994,184 3,367,903 6,262,989 1,897,812 1,904,152 1,834,624 MSF BlackRock Ultra-Short Term Bond Investment Division..... 4,650,856 5,475,949 18,335,118 6,741,803 10,824,505 12,084,209 MSF Frontier Mid Cap Growth Investment Division................ 26,534,374 32,585,116 21,151,998 15,129,899 16,451,475 17,712,139 MSF Jennison Growth Investment Division..... 3,792,971 5,344,129 3,179,188 2,099,971 2,703,444 2,763,458 MSF Loomis Sayles Small Cap Core Investment Division..... 2,539,914 3,725,578 3,980,334 1,817,794 2,034,904 1,814,675 MSF Loomis Sayles Small Cap Growth Investment Division..... 1,580,502 2,397,390 2,282,405 1,117,866 1,247,114 1,779,900 MSF Met/Artisan Mid Cap Value Investment Division................ 7,947,921 9,241,788 1,388,923 4,439,962 4,195,279 4,484,383 MSF Met/Wellington Balanced Investment Division................ 23,782,916 60,097,474 7,536,901 22,291,040 22,658,546 22,681,028 MSF Met/Wellington Core Equity Opportunities Investment Division..... 6,093,025 28,017,024 7,579,420 5,861,337 6,046,488 5,561,430
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 190 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------- SHARES COST ($) ----------- ------------ 2016 2016 ----------- ------------ MSF MetLife Asset Allocation 20 Investment Division..... 474,354 5,316,611 MSF MetLife Asset Allocation 40 Investment Division................ 914,039 10,588,178 MSF MetLife Asset Allocation 60 Investment Division................ 4,469,678 50,391,982 MSF MetLife Asset Allocation 80 Investment Division................ 7,480,635 85,892,618 MSF MetLife Mid Cap Stock Index Investment Division................ 5,038,599 70,061,406 MSF MetLife Stock Index Investment Division..... 22,225,150 733,836,445 MSF MFS Total Return Investment Division..... 61,218 8,869,005 MSF MFS Value Investment Division..... 5,774,795 80,417,426 MSF MSCI EAFE Index Investment Division..... 6,386,828 73,166,937 MSF Neuberger Berman Genesis Investment Division................ 5,262,123 76,477,187 MSF Russell 2000 Index Investment Division..... 3,891,146 53,840,528 MSF T. Rowe Price Large Cap Growth Investment Division..... 4,177,437 69,524,816 MSF T. Rowe Price Small Cap Growth Investment Division..... 5,252,768 82,919,535 MSF Van Eck Global Natural Resources Investment Division..... 23,873 269,922 MSF Western Asset Management Strategic Bond Opportunities Investment Division..... 3,952,335 50,507,057 MSF Western Asset Management U.S. Government Investment Division................ 1,333,574 16,106,303 Oppenheimer VA Main Street Small Cap Investment Division..... 242 5,534 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------------------------------------- COST OF PROCEEDS PURCHASES ($) FROM SALES ($) --------------------------------------- --------------------------------------- 2016 2015 2014 2016 2015 2014 ---------- ---------- -------------- ----------- ---------- ------------- MSF MetLife Asset Allocation 20 Investment Division..... 1,036,496 823,597 1,528,404 1,292,119 619,628 974,749 MSF MetLife Asset Allocation 40 Investment Division................ 1,895,999 2,475,186 1,909,288 763,627 2,085,619 1,095,441 MSF MetLife Asset Allocation 60 Investment Division................ 8,110,189 6,027,977 7,170,769 3,864,641 4,491,997 4,378,369 MSF MetLife Asset Allocation 80 Investment Division................ 16,783,861 8,947,130 7,388,669 7,686,144 7,178,922 6,440,275 MSF MetLife Mid Cap Stock Index Investment Division................ 10,306,403 10,066,908 8,192,648 7,484,325 7,032,261 18,250,892 MSF MetLife Stock Index Investment Division..... 77,348,992 79,790,746 55,709,939 61,428,404 59,505,671 76,321,598 MSF MFS Total Return Investment Division..... 1,526,015 1,186,630 862,352 1,089,235 1,070,466 1,045,972 MSF MFS Value Investment Division..... 10,748,509 17,539,930 6,999,445 6,609,698 6,622,488 7,007,481 MSF MSCI EAFE Index Investment Division..... 7,036,142 7,716,691 10,695,798 6,231,772 5,827,123 7,195,699 MSF Neuberger Berman Genesis Investment Division................ 1,292,992 1,163,361 2,063,278 7,671,427 6,972,177 7,736,851 MSF Russell 2000 Index Investment Division..... 8,863,762 8,769,748 6,587,826 7,356,183 6,340,553 6,379,754 MSF T. Rowe Price Large Cap Growth Investment Division..... 12,293,158 18,463,477 7,579,276 6,914,180 7,557,701 6,082,255 MSF T. Rowe Price Small Cap Growth Investment Division..... 16,109,793 13,093,685 10,586,051 9,357,582 8,702,468 25,182,622 MSF Van Eck Global Natural Resources Investment Division..... 52,402 96,754 134,400 48,169 25,178 80,461 MSF Western Asset Management Strategic Bond Opportunities Investment Division..... 31,396,621 2,670,409 2,618,269 6,007,341 1,935,423 1,964,514 MSF Western Asset Management U.S. Government Investment Division................ 1,319,950 1,262,553 1,153,933 1,313,956 1,510,344 1,400,796 Oppenheimer VA Main Street Small Cap Investment Division..... 1,649 6,650 4,945(e) 6,651 939 91(e)
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 191 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 6. STATEMENTS OF INVESTMENTS -- (CONCLUDED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------ ------------------------------------------------------------------------- COST OF PROCEEDS SHARES COST ($) PURCHASES ($) FROM SALES ($) ---------- ------------ ----------------------------------- ----------------------------------- 2016 2016 2016 2015 2014 2016 2015 2014 ---------- ------------ --------- -------- --------- ------- ------- ------- PIMCO VIT All Asset Investment Division.... 12,608 136,206 11,673 59,535 59,597 7,013 779,077 37,514 PIMCO VIT CommodityRealReturn Strategy Investment Division............... 1,262 14,472 111 4,187 40,783 1,699 21,199 1,248 PIMCO VIT Low Duration Investment Division.... 85,344 892,270 64,676 30,973 21,087 16,404 740,639 31,701 Pioneer VCT Mid Cap Value Investment Division............... 2,730 49,736 23,486 6,247 22,259 17,407 20,763 3,724 Putnam VT International Value Investment Division............... 451 4,620 122 1,379 1,415 1,450 1,364 1,293 Royce Micro-Cap Investment Division.... 953 10,021 1,940 1,437 1,597 1,092 78 80 Royce Small-Cap Investment Division.... 8,151 82,456 33,245 25,745 399,926 16,623 4,053 998,708 UIF Emerging Markets Debt Investment Division............... 161,338 1,342,069 440,035 304,283 126,705 132,665 121,731 474,385 UIF Emerging Markets Equity Investment Division............... 240,189 3,380,662 1,196,444 758,349 1,371,355 394,994 363,786 334,525
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 192 This page is intentionally left blank. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
AB GLOBAL THEMATIC GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 5,659 11,048 10,121 Units issued and transferred from other funding options....... 220 227 2,619 Units redeemed and transferred to other funding options....... (1,234) (5,616) (1,692) ----------------- ----------------- ----------------- Units end of year........ 4,645 5,659 11,048 ================= ================= ================= AB INTERMEDIATE BOND INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 3,779 3,712 3,812 Units issued and transferred from other funding options....... 2,092 219 44 Units redeemed and transferred to other funding options....... (187) (152) (144) ----------------- ----------------- ----------------- Units end of year........ 5,684 3,779 3,712 ================= ================= ================= AMERICAN CENTURY VP CAPITAL APPRECIATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 (A) ----------------- ----------------- ----------------- Units beginning of year.. 4 21 -- Units issued and transferred from other funding options....... 162 -- 32 Units redeemed and transferred to other funding options....... (13) (17) (11) ----------------- ----------------- ----------------- Units end of year........ 153 4 21 ================= ================= ================= AMERICAN FUNDS BOND INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 437,856 422,554 417,001 Units issued and transferred from other funding options....... 111,731 130,560 99,347 Units redeemed and transferred to other funding options....... (115,207) (115,258) (93,794) ----------------- ----------------- ----------------- Units end of year........ 434,380 437,856 422,554 ================= ================= =================
AMERICAN FUNDS GLOBAL SMALL CAPITALIZATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 1,684,041 1,772,715 1,848,240 Units issued and transferred from other funding options....... 191,087 211,987 218,125 Units redeemed and transferred to other funding options....... (309,314) (300,661) (293,650) ----------------- ----------------- ----------------- Units end of year........ 1,565,814 1,684,041 1,772,715 ================= ================= ================= AMERICAN FUNDS GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 1,045,168 1,119,856 1,184,798 Units issued and transferred from other funding options....... 95,816 101,013 116,712 Units redeemed and transferred to other funding options....... (162,778) (175,701) (181,654) ----------------- ----------------- ----------------- Units end of year........ 978,206 1,045,168 1,119,856 ================= ================= ================= AMERICAN FUNDS GROWTH-INCOME INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 1,173,413 1,243,407 1,315,261 Units issued and transferred from other funding options....... 106,983 120,286 131,341 Units redeemed and transferred to other funding options....... (186,495) (190,280) (203,195) ----------------- ----------------- ----------------- Units end of year........ 1,093,901 1,173,413 1,243,407 ================= ================= ================= AMERICAN FUNDS INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 12,487 19,587 19,162 Units issued and transferred from other funding options....... 153 842 1,226 Units redeemed and transferred to other funding options....... (2,517) (7,942) (801) ----------------- ----------------- ----------------- Units end of year........ 10,123 12,487 19,587 ================= ================= =================
AMERICAN FUNDS U.S. GOVERNMENT/AAA-RATED SECURITIES INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ------------------ Units beginning of year.. 2,125 2,082 2,093 Units issued and transferred from other funding options....... 266 109 54 Units redeemed and transferred to other funding options....... (126) (66) (65) ------------------ ----------------- ------------------ Units end of year........ 2,265 2,125 2,082 ================== ================= ================== DREYFUS VIF INTERNATIONAL VALUE INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 15,363 15,519 15,672 Units issued and transferred from other funding options....... 7,615 -- -- Units redeemed and transferred to other funding options....... (8,735) (156) (153) ----------------- ------------------ ----------------- Units end of year........ 14,243 15,363 15,519 ================= ================== ================= FIDELITY VIP ASSET MANAGER: GROWTH INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 121,099 135,053 132,058 Units issued and transferred from other funding options....... 5,334 16,970 11,986 Units redeemed and transferred to other funding options....... (12,652) (30,924) (8,991) ----------------- ------------------ ----------------- Units end of year........ 113,781 121,099 135,053 ================= ================== ================= FIDELITY VIP CONTRAFUND INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ----------------- Units beginning of year.. 107,835 113,831 115,785 Units issued and transferred from other funding options....... 3,302 11,187 6,940 Units redeemed and transferred to other funding options....... (14,816) (17,183) (8,894) ------------------ ------------------ ----------------- Units end of year........ 96,321 107,835 113,831 ================== ================== =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 194 195 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
FIDELITY VIP EQUITY-INCOME INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ------------------ Units beginning of year.. 669 1,259 1,817 Units issued and transferred from other funding options....... 90 122 100 Units redeemed and transferred to other funding options....... (13) (712) (658) ----------------- ------------------ ------------------ Units end of year........ 746 669 1,259 ================= ================== ================== FIDELITY VIP FREEDOM 2010 INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ------------------ Units beginning of year.. 1,392 3,474 3,488 Units issued and transferred from other funding options....... 4,597 8,348 7,340 Units redeemed and transferred to other funding options....... (3,971) (10,430) (7,354) ------------------ ----------------- ------------------ Units end of year........ 2,018 1,392 3,474 ================== ================= ================== FIDELITY VIP FREEDOM 2020 INVESTMENT DIVISION ---------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ------------------ Units beginning of year.. 30,947 56,045 58,587 Units issued and transferred from other funding options....... 13,670 12,806 25,007 Units redeemed and transferred to other funding options....... (13,099) (37,904) (27,549) ------------------ ------------------ ------------------ Units end of year........ 31,518 30,947 56,045 ================== ================== ================== FIDELITY VIP FREEDOM 2025 INVESTMENT DIVISION ---------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ------------------ Units beginning of year.. 22,070 1,914 2,149 Units issued and transferred from other funding options....... -- 20,650 -- Units redeemed and transferred to other funding options....... (539) (494) (235) ------------------ ------------------ ------------------ Units end of year........ 21,531 22,070 1,914 ================== ================== ==================
FIDELITY VIP FREEDOM 2030 INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 8,698 5,911 4,709 Units issued and transferred from other funding options....... 29,741 20,629 23,056 Units redeemed and transferred to other funding options....... (26,063) (17,842) (21,854) ----------------- ------------------ ----------------- Units end of year........ 12,376 8,698 5,911 ================= ================== ================= FIDELITY VIP FREEDOM 2040 INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ----------------- Units beginning of year.. 5,641 3,374 782 Units issued and transferred from other funding options....... 19,827 12,698 10,224 Units redeemed and transferred to other funding options....... (16,057) (10,431) (7,632) ------------------ ------------------ ----------------- Units end of year........ 9,411 5,641 3,374 ================== ================== ================= FIDELITY VIP GOVERNMENT FIDELITY VIP FREEDOM 2050 MONEY MARKET INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------------------------------- ------------------- 2016 2015 2014 2016 (B) ------------------ ----------------- ------------------ ------------------- Units beginning of year.. 3,221 1,669 1,444 -- Units issued and transferred from other funding options....... 12,345 8,271 7,473 246,409 Units redeemed and transferred to other funding options....... (9,285) (6,719) (7,248) (28,166) ------------------ ----------------- ------------------ ------------------- Units end of year........ 6,281 3,221 1,669 218,243 ================== ================= ================== ===================
FIDELITY VIP HIGH INCOME INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ----------------- Units beginning of year.. 10,801 8,712 8,598 Units issued and transferred from other funding options....... 6,406 2,652 576 Units redeemed and transferred to other funding options....... (323) (563) (462) ------------------ ----------------- ----------------- Units end of year........ 16,884 10,801 8,712 ================== ================= ================= FIDELITY VIP INVESTMENT GRADE BOND INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ------------------ Units beginning of year.. 75,247 76,739 109,725 Units issued and transferred from other funding options....... 2,441 3,210 29,160 Units redeemed and transferred to other funding options....... (4,759) (4,702) (62,146) ----------------- ----------------- ------------------ Units end of year........ 72,929 75,247 76,739 ================= ================= ================== FIDELITY VIP MID CAP INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ------------------ Units beginning of year.. 7,000 6,260 6,501 Units issued and transferred from other funding options....... 52 889 386 Units redeemed and transferred to other funding options....... (1,320) (149) (627) ----------------- ----------------- ------------------ Units end of year........ 5,732 7,000 6,260 ================= ================= ================== FTVIPT FRANKLIN INCOME VIP INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 47 28 1 Units issued and transferred from other funding options....... 15 25 32 Units redeemed and transferred to other funding options....... (3) (6) (5) ----------------- ------------------ ----------------- Units end of year........ 59 47 28 ================= ================== =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 196 197 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 18,532 18,185 19,479 Units issued and transferred from other funding options....... 5,870 1,837 1,756 Units redeemed and transferred to other funding options....... (5,140) (1,490) (3,050) ----------------- ----------------- ----------------- Units end of year........ 19,262 18,532 18,185 ================= ================= ================= FTVIPT FRANKLIN MUTUAL SHARES VIP INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 194 109 67 Units issued and transferred from other funding options....... 51 92 50 Units redeemed and transferred to other funding options....... (20) (7) (8) ----------------- ----------------- ----------------- Units end of year........ 225 194 109 ================= ================= ================= FTVIPT TEMPLETON FOREIGN VIP INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ---------------- ----------------- ----------------- Units beginning of year.. 295,281 276,787 203,220 Units issued and transferred from other funding options....... 39,368 39,852 129,250 Units redeemed and transferred to other funding options....... (38,480) (21,358) (55,683) ---------------- ----------------- ----------------- Units end of year........ 296,169 295,281 276,787 ================ ================= ================= FTVIPT TEMPLETON GLOBAL BOND VIP INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 23,525 49,895 54,283 Units issued and transferred from other funding options....... 3,542 14,084 1,227 Units redeemed and transferred to other funding options....... (1,607) (40,454) (5,615) ----------------- ----------------- ----------------- Units end of year........ 25,460 23,525 49,895 ================= ================= =================
GOLDMAN SACHS MID-CAP VALUE INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 9,834 10,570 11,790 Units issued and transferred from other funding options....... -- -- 140 Units redeemed and transferred to other funding options....... (7,017) (736) (1,360) ----------------- ------------------ ----------------- Units end of year........ 2,817 9,834 10,570 ================= ================== ================= GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ----------------- Units beginning of year.. 1,645 1,766 2,114 Units issued and transferred from other funding options....... 477 53 111 Units redeemed and transferred to other funding options....... (559) (174) (459) ------------------ ------------------ ----------------- Units end of year........ 1,563 1,645 1,766 ================== ================== ================= INVESCO V.I. COMSTOCK INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ------------------ Units beginning of year.. 19,259 18,652 18,458 Units issued and transferred from other funding options....... 3,226 1,183 598 Units redeemed and transferred to other funding options....... (485) (576) (404) ------------------ ----------------- ------------------ Units end of year........ 22,000 19,259 18,652 ================== ================= ================== INVESCO V.I. INTERNATIONAL GROWTH INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ------------------ Units beginning of year.. 13,685 14,202 16,229 Units issued and transferred from other funding options....... 2,404 674 795 Units redeemed and transferred to other funding options....... (1,134) (1,191) (2,882) ------------------ ----------------- ------------------ Units end of year........ 14,955 13,685 14,202 ================== ================= ==================
JANUS ASPEN JANUS ASPEN BALANCED ENTERPRISE INVESTMENT DIVISION INVESTMENT DIVISION --------------------------------------------------------- ------------------- 2016 2015 2014 2016 (C) ----------------- ------------------ ------------------ ------------------- Units beginning of year.. 45,385 44,817 44,471 -- Units issued and transferred from other funding options....... 2,340 2,768 4,121 22,750 Units redeemed and transferred to other funding options....... (5,315) (2,200) (3,775) (2,995) ----------------- ------------------ ------------------ ------------------- Units end of year........ 42,410 45,385 44,817 19,755 ================= ================== ================== =================== JANUS ASPEN FORTY INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ----------------- Units beginning of year.. 19,926 20,307 34,817 Units issued and transferred from other funding options....... 704 500 912 Units redeemed and transferred to other funding options....... (4,301) (881) (15,422) ------------------ ------------------ ----------------- Units end of year........ 16,329 19,926 20,307 ================== ================== ================= JANUS ASPEN JANUS INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ------------------ ----------------- Units beginning of year.. 25,523 27,479 28,415 Units issued and transferred from other funding options....... 348 407 699 Units redeemed and transferred to other funding options....... (11,207) (2,363) (1,635) ------------------ ------------------ ----------------- Units end of year........ 14,664 25,523 27,479 ================== ================== =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 198 199 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
JANUS ASPEN OVERSEAS INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 1,568 1,884 2,403 Units issued and transferred from other funding options....... 1,016 223 240 Units redeemed and transferred to other funding options....... (575) (539) (759) ----------------- ----------------- ----------------- Units end of year........ 2,009 1,568 1,884 ================= ================= ================= MFS VIT GLOBAL EQUITY INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 7,506 7,650 7,761 Units issued and transferred from other funding options....... 1,062 430 357 Units redeemed and transferred to other funding options....... (177) (574) (468) ----------------- ----------------- ----------------- Units end of year........ 8,391 7,506 7,650 ================= ================= ================= MFS VIT NEW DISCOVERY INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 8,220 8,474 8,721 Units issued and transferred from other funding options....... 9 8 5 Units redeemed and transferred to other funding options....... (286) (262) (252) ----------------- ----------------- ----------------- Units end of year........ 7,943 8,220 8,474 ================= ================= ================= MFS VIT VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 820 903 978 Units issued and transferred from other funding options....... -- -- 1,462 Units redeemed and transferred to other funding options....... (92) (83) (1,537) ----------------- ----------------- ----------------- Units end of year........ 728 820 903 ================= ================= =================
MFS VIT II HIGH YIELD INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 7,464 7,587 8,075 Units issued and transferred from other funding options....... -- 40 3 Units redeemed and transferred to other funding options....... (129) (163) (491) ----------------- ------------------ ----------------- Units end of year........ 7,335 7,464 7,587 ================= ================== ================= MIST AB GLOBAL DYNAMIC ALLOCATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 4,712 3,865 2,847 Units issued and transferred from other funding options....... 911 2,377 1,277 Units redeemed and transferred to other funding options....... (1,020) (1,530) (259) ----------------- ----------------- ----------------- Units end of year........ 4,603 4,712 3,865 ================= ================= ================= MIST ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 (A) ----------------- ------------------ ----------------- Units beginning of year.. 1,942 72 -- Units issued and transferred from other funding options....... 2,920 10,338 96 Units redeemed and transferred to other funding options....... (351) (8,468) (24) ----------------- ------------------ ----------------- Units end of year........ 4,511 1,942 72 ================= ================== ================= MIST AMERICAN FUNDS BALANCED ALLOCATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 61,306 59,916 57,458 Units issued and transferred from other funding options....... 6,090 5,741 6,662 Units redeemed and transferred to other funding options....... (4,515) (4,351) (4,204) ----------------- ----------------- ----------------- Units end of year........ 62,881 61,306 59,916 ================= ================= =================
MIST AMERICAN FUNDS GROWTH ALLOCATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 105,040 101,601 108,102 Units issued and transferred from other funding options....... 13,432 14,045 12,222 Units redeemed and transferred to other funding options....... (8,393) (10,606) (18,723) ----------------- ----------------- ----------------- Units end of year........ 110,079 105,040 101,601 ================= ================= ================= MIST AMERICAN FUNDS MODERATE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 67,812 71,127 64,895 Units issued and transferred from other funding options....... 10,042 14,053 12,069 Units redeemed and transferred to other funding options....... (2,301) (17,368) (5,837) ----------------- ----------------- ----------------- Units end of year........ 75,553 67,812 71,127 ================= ================= ================= MIST AQR GLOBAL RISK BALANCED INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 14,099 17,046 15,059 Units issued and transferred from other funding options....... 2,702 5,403 5,307 Units redeemed and transferred to other funding options....... (3,742) (8,350) (3,320) ----------------- ----------------- ----------------- Units end of year........ 13,059 14,099 17,046 ================= ================= ================= MIST BLACKROCK GLOBAL TACTICAL STRATEGIES INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 18,463 15,552 8,821 Units issued and transferred from other funding options....... 7,371 6,931 7,919 Units redeemed and transferred to other funding options....... (1,128) (4,020) (1,188) ----------------- ----------------- ----------------- Units end of year........ 24,706 18,463 15,552 ================= ================= =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 200 201 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
MIST CLARION GLOBAL REAL ESTATE INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 1,353,491 1,424,610 1,412,669 Units issued and transferred from other funding options....... 158,424 197,300 493,788 Units redeemed and transferred to other funding options....... (258,129) (268,419) (481,847) ----------------- ------------------ ----------------- Units end of year........ 1,253,786 1,353,491 1,424,610 ================= ================== ================= MIST CLEARBRIDGE AGGRESSIVE GROWTH INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ------------------ Units beginning of year.. 2,377,629 2,519,284 1,375,745 Units issued and transferred from other funding options....... 257,617 466,292 1,550,161 Units redeemed and transferred to other funding options....... (430,581) (607,947) (406,622) ----------------- ------------------ ------------------ Units end of year........ 2,204,665 2,377,629 2,519,284 ================= ================== ================== MIST HARRIS OAKMARK INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 1,402,957 1,446,693 1,980,844 Units issued and transferred from other funding options....... 171,969 200,787 220,406 Units redeemed and transferred to other funding options....... (242,710) (244,523) (754,557) ----------------- ----------------- ----------------- Units end of year........ 1,332,216 1,402,957 1,446,693 ================= ================= ================= MIST INVESCO BALANCED-RISK ALLOCATION INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ----------------- Units beginning of year.. 35,295 27,242 22,938 Units issued and transferred from other funding options....... 10,701 22,460 8,699 Units redeemed and transferred to other funding options....... (8,340) (14,407) (4,395) ------------------ ----------------- ----------------- Units end of year........ 37,656 35,295 27,242 ================== ================= =================
MIST INVESCO MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 2,436,571 2,536,877 2,707,441 Units issued and transferred from other funding options....... 219,029 264,793 236,264 Units redeemed and transferred to other funding options....... (399,776) (365,099) (406,828) ----------------- ----------------- ----------------- Units end of year........ 2,255,824 2,436,571 2,536,877 ================= ================= ================= MIST INVESCO SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 232,966 249,054 251,143 Units issued and transferred from other funding options....... 28,154 41,305 57,371 Units redeemed and transferred to other funding options....... (47,328) (57,393) (59,460) ----------------- ----------------- ----------------- Units end of year........ 213,792 232,966 249,054 ================= ================= ================= MIST JPMORGAN GLOBAL ACTIVE ALLOCATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 146,160 135,962 93,835 Units issued and transferred from other funding options....... 25,256 36,613 54,885 Units redeemed and transferred to other funding options....... (15,784) (26,415) (12,758) ----------------- ----------------- ----------------- Units end of year........ 155,632 146,160 135,962 ================= ================= ================= MIST JPMORGAN SMALL CAP VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 14,322 12,640 11,410 Units issued and transferred from other funding options....... 7,076 2,473 3,528 Units redeemed and transferred to other funding options....... (6,968) (791) (2,298) ----------------- ----------------- ----------------- Units end of year........ 14,430 14,322 12,640 ================= ================= =================
MIST LOOMIS SAYLES GLOBAL MARKETS INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 16,216 21,302 21,834 Units issued and transferred from other funding options....... 2,308 1,018 1,956 Units redeemed and transferred to other funding options....... (981) (6,104) (2,488) ----------------- ----------------- ----------------- Units end of year........ 17,543 16,216 21,302 ================= ================= ================= MIST MET/ABERDEEN EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 44,390 36,263 21,705 Units issued and transferred from other funding options....... 24,436 14,079 25,364 Units redeemed and transferred to other funding options....... (17,498) (5,952) (10,806) ----------------- ----------------- ----------------- Units end of year........ 51,328 44,390 36,263 ================= ================= ================= MIST MET/TEMPLETON INTERNATIONAL BOND INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ---------------- ----------------- ----------------- Units beginning of year.. 12,955 11,790 5,967 Units issued and transferred from other funding options....... 3,409 4,916 6,422 Units redeemed and transferred to other funding options....... (1,089) (3,751) (599) ---------------- ----------------- ----------------- Units end of year........ 15,275 12,955 11,790 ================ ================= ================= MIST MET/WELLINGTON LARGE CAP RESEARCH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 9,969,725 10,583,026 11,184,832 Units issued and transferred from other funding options....... 777,218 847,471 1,115,535 Units redeemed and transferred to other funding options....... (1,394,494) (1,460,772) (1,717,341) ----------------- ----------------- ----------------- Units end of year........ 9,352,449 9,969,725 10,583,026 ================= ================= =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 202 203 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
MIST METLIFE ASSET ALLOCATION 100 INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 1,092,776 1,096,717 1,065,070 Units issued and transferred from other funding options....... 154,677 187,265 228,160 Units redeemed and transferred to other funding options....... (186,653) (191,206) (196,513) ----------------- ------------------ ----------------- Units end of year........ 1,060,800 1,092,776 1,096,717 ================= ================== ================= MIST METLIFE BALANCED PLUS INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 20,231 17,529 7,685 Units issued and transferred from other funding options....... 4,208 9,022 11,072 Units redeemed and transferred to other funding options....... (1,740) (6,320) (1,228) ----------------- ------------------ ----------------- Units end of year........ 22,699 20,231 17,529 ================= ================== ================= MIST METLIFE MULTI-INDEX TARGETED RISK INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ------------------ Units beginning of year.. 1,099 968 23 Units issued and transferred from other funding options....... 260 982 966 Units redeemed and transferred to other funding options....... (57) (851) (21) ----------------- ----------------- ------------------ Units end of year........ 1,302 1,099 968 ================= ================= ================== MIST METLIFE SMALL CAP VALUE INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ------------------ Units beginning of year.. 36,056 36,751 41,430 Units issued and transferred from other funding options....... 3,175 595 892 Units redeemed and transferred to other funding options....... (12,707) (1,290) (5,571) ----------------- ----------------- ------------------ Units end of year........ 26,524 36,056 36,751 ================= ================= ==================
MIST MFS RESEARCH INTERNATIONAL INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 988,508 1,025,165 1,065,499 Units issued and transferred from other funding options....... 89,574 97,048 100,778 Units redeemed and transferred to other funding options....... (132,857) (133,705) (141,112) ----------------- ----------------- ----------------- Units end of year........ 945,225 988,508 1,025,165 ================= ================= ================= MIST MORGAN STANLEY MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 10,144,421 10,592,901 11,170,989 Units issued and transferred from other funding options....... 1,160,138 1,090,120 1,232,830 Units redeemed and transferred to other funding options....... (1,593,290) (1,538,600) (1,810,918) ----------------- ----------------- ----------------- Units end of year........ 9,711,269 10,144,421 10,592,901 ================= ================= ================= MIST PANAGORA MIST OPPENHEIMER GLOBAL EQUITY GLOBAL DIVERSIFIED RISK INVESTMENT DIVISION INVESTMENT DIVISION ------------------------------------------------------- ------------------------------------ 2016 2015 2014 2016 2015 (D) ----------------- ----------------- ----------------- ----------------- ----------------- Units beginning of year.. 1,549,994 1,580,006 1,679,985 10 -- Units issued and transferred from other funding options....... 167,983 214,184 175,615 21 8,768 Units redeemed and transferred to other funding options....... (271,444) (244,196) (275,594) (17) (8,758) ----------------- ----------------- ----------------- ----------------- ----------------- Units end of year........ 1,446,533 1,549,994 1,580,006 14 10 ================= ================= ================= ================= =================
MIST PIMCO INFLATION PROTECTED BOND INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.... 691,385 747,392 755,274 Units issued and transferred from other funding options......... 105,509 113,438 177,981 Units redeemed and transferred to other funding options......... (125,255) (169,445) (185,863) ----------------- ----------------- ----------------- Units end of year.......... 671,639 691,385 747,392 ================= ================= ================= MIST PIMCO TOTAL RETURN INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ---------------- ----------------- Units beginning of year.... 2,027,593 2,149,016 2,464,593 Units issued and transferred from other funding options......... 217,839 253,114 274,736 Units redeemed and transferred to other funding options......... (335,352) (374,537) (590,313) ----------------- ---------------- ----------------- Units end of year.......... 1,910,080 2,027,593 2,149,016 ================= ================ ================= MIST PYRAMIS MANAGED RISK INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ----------------- ---------------- Units beginning of year.... 31 13 3 Units issued and transferred from other funding options......... 45 393 15 Units redeemed and transferred to other funding options......... (7) (375) (5) ----------------- ----------------- ---------------- Units end of year.......... 69 31 13 ================= ================= ================ MIST SCHRODERS GLOBAL MULTI-ASSET INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.... 29,697 24,844 19,086 Units issued and transferred from other funding options......... 15,134 15,177 8,293 Units redeemed and transferred to other funding options......... (5,785) (10,324) (2,535) ----------------- ----------------- ----------------- Units end of year.......... 39,046 29,697 24,844 ================= ================= =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 204 205 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
MIST SSGA GROWTH AND INCOME ETF INVESTMENT DIVISION ----------------------------------------------------- 2016 2015 2014 ---------------- ----------------- ---------------- Units beginning of year.... 470,354 467,656 503,743 Units issued and transferred from other funding options......... 60,309 77,796 91,210 Units redeemed and transferred to other funding options......... (59,834) (75,098) (127,297) ---------------- ----------------- ---------------- Units end of year.......... 470,829 470,354 467,656 ================ ================= ================ MIST SSGA GROWTH ETF INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ----------------- ---------------- Units beginning of year.... 421,872 398,249 366,821 Units issued and transferred from other funding options......... 103,782 95,075 110,844 Units redeemed and transferred to other funding options......... (109,256) (71,452) (79,416) ----------------- ----------------- ---------------- Units end of year.......... 416,398 421,872 398,249 ================= ================= ================ MIST T. ROWE PRICE LARGE CAP VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.... 117,032 133,581 128,280 Units issued and transferred from other funding options......... 3,880 514 7,180 Units redeemed and transferred to other funding options......... (5,438) (17,063) (1,879) ----------------- ----------------- ----------------- Units end of year.......... 115,474 117,032 133,581 ================= ================= ================= MIST T. ROWE PRICE MID CAP GROWTH INVESTMENT DIVISION ----------------------------------------------------- 2016 2015 2014 ----------------- ---------------- ---------------- Units beginning of year.... 1,508,551 1,478,700 1,482,938 Units issued and transferred from other funding options......... 224,782 325,674 265,792 Units redeemed and transferred to other funding options......... (283,682) (295,823) (270,030) ----------------- ---------------- ---------------- Units end of year.......... 1,449,651 1,508,551 1,478,700 ================= ================ ================
MSF BAILLIE GIFFORD INTERNATIONAL STOCK INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ------------------ Units beginning of year.. 2,482,793 2,569,893 2,695,199 Units issued and transferred from other funding options....... 291,612 347,116 341,419 Units redeemed and transferred to other funding options....... (403,358) (434,216) (466,725) ----------------- ----------------- ------------------ Units end of year........ 2,371,047 2,482,793 2,569,893 ================= ================= ================== MSF BARCLAYS AGGREGATE BOND INDEX INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 5,819,142 6,012,506 5,904,440 Units issued and transferred from other funding options....... 806,050 869,690 1,175,001 Units redeemed and transferred to other funding options....... (917,337) (1,063,054) (1,066,935) ----------------- ----------------- ----------------- Units end of year........ 5,707,855 5,819,142 6,012,506 ================= ================= ================= MSF BLACKROCK BOND INCOME INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ----------------- Units beginning of year.. 2,840,523 3,018,880 3,164,737 Units issued and transferred from other funding options....... 320,525 413,695 388,693 Units redeemed and transferred to other funding options....... (432,509) (592,052) (534,550) ------------------ ----------------- ----------------- Units end of year........ 2,728,539 2,840,523 3,018,880 ================== ================= ================= MSF BLACKROCK CAPITAL APPRECIATION INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 409,612 414,973 1,238,069 Units issued and transferred from other funding options....... 51,339 70,459 69,171 Units redeemed and transferred to other funding options....... (85,190) (75,820) (892,267) ----------------- ----------------- ----------------- Units end of year........ 375,761 409,612 414,973 ================= ================= =================
MSF BLACKROCK LARGE CAP VALUE INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ----------------- ---------------- Units beginning of year.... 921,609 943,466 952,777 Units issued and transferred from other funding options......... 136,391 144,666 168,601 Units redeemed and transferred to other funding options......... (169,054) (166,523) (177,912) ----------------- ----------------- ---------------- Units end of year.......... 888,946 921,609 943,466 ================= ================= ================ MSF BLACKROCK ULTRA-SHORT TERM BOND INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.... 1,386,934 1,682,938 1,334,062 Units issued and transferred from other funding options......... 289,814 357,312 1,140,932 Units redeemed and transferred to other funding options......... (405,537) (653,316) (792,056) ----------------- ----------------- ----------------- Units end of year.......... 1,271,211 1,386,934 1,682,938 ================= ================= ================= MSF FRONTIER MID CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ---------------- ----------------- ----------------- Units beginning of year.... 6,492,334 6,861,561 7,328,205 Units issued and transferred from other funding options......... 474,779 503,551 603,587 Units redeemed and transferred to other funding options......... (838,225) (872,778) (1,070,231) ---------------- ----------------- ----------------- Units end of year.......... 6,128,888 6,492,334 6,861,561 ================ ================= ================= MSF JENNISON GROWTH INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ---------------- ----------------- ----------------- Units beginning of year.... 935,827 975,379 1,014,111 Units issued and transferred from other funding options......... 97,288 152,823 170,080 Units redeemed and transferred to other funding options......... (156,670) (192,375) (208,812) ---------------- ----------------- ----------------- Units end of year.......... 876,445 935,827 975,379 ================ ================= =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 206 207 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
MSF LOOMIS SAYLES SMALL CAP CORE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ---------------- ----------------- ----------------- Units beginning of year.. 72,870 78,544 81,272 Units issued and transferred from other funding options....... 4,468 5,343 7,450 Units redeemed and transferred to other funding options....... (7,636) (11,017) (10,178) ---------------- ----------------- ----------------- Units end of year........ 69,702 72,870 78,544 ================ ================= ================= MSF LOOMIS SAYLES SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 515,373 532,728 575,475 Units issued and transferred from other funding options....... 56,414 77,825 93,547 Units redeemed and transferred to other funding options....... (89,108) (95,180) (136,294) ----------------- ----------------- ----------------- Units end of year........ 482,679 515,373 532,728 ================= ================= ================= MSF MET/ARTISAN MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 159,896 171,419 179,229 Units issued and transferred from other funding options....... 17,563 17,894 19,314 Units redeemed and transferred to other funding options....... (27,383) (29,417) (27,124) ----------------- ----------------- ----------------- Units end of year........ 150,076 159,896 171,419 ================= ================= ================= MSF MET/WELLINGTON BALANCED INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ----------------- ---------------- Units beginning of year.. 8,029,813 8,541,626 9,093,665 Units issued and transferred from other funding options....... 707,735 766,101 836,836 Units redeemed and transferred to other funding options....... (1,191,007) (1,277,914) (1,388,875) ----------------- ----------------- ---------------- Units end of year........ 7,546,541 8,029,813 8,541,626 ================= ================= ================
MSF MET/WELLINGTON CORE EQUITY OPPORTUNITIES INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 1,224,975 1,304,591 1,389,950 Units issued and transferred from other funding options....... 137,916 121,985 130,153 Units redeemed and transferred to other funding options....... (195,441) (201,601) (215,512) ----------------- ------------------ ----------------- Units end of year........ 1,167,450 1,224,975 1,304,591 ================= ================== ================= MSF METLIFE ASSET ALLOCATION 20 INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ------------------ ----------------- ------------------ Units beginning of year.. 307,157 311,182 302,268 Units issued and transferred from other funding options....... 65,946 56,467 96,285 Units redeemed and transferred to other funding options....... (101,190) (60,492) (87,371) ------------------ ----------------- ------------------ Units end of year........ 271,913 307,157 311,182 ================== ================= ================== MSF METLIFE ASSET ALLOCATION 40 INVESTMENT DIVISION --------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ------------------ Units beginning of year.. 510,437 537,152 528,645 Units issued and transferred from other funding options....... 86,527 145,986 114,747 Units redeemed and transferred to other funding options....... (82,384) (172,701) (106,240) ----------------- ------------------ ------------------ Units end of year........ 514,580 510,437 537,152 ================= ================== ================== MSF METLIFE ASSET ALLOCATION 60 INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 2,828,639 2,946,636 2,959,238 Units issued and transferred from other funding options....... 301,733 339,199 485,403 Units redeemed and transferred to other funding options....... (414,834) (457,196) (498,005) ----------------- ------------------ ----------------- Units end of year........ 2,715,538 2,828,639 2,946,636 ================= ================== =================
MSF METLIFE ASSET ALLOCATION 80 INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 5,108,404 5,267,738 5,304,870 Units issued and transferred from other funding options....... 499,092 601,128 762,440 Units redeemed and transferred to other funding options....... (760,969) (760,462) (799,572) ----------------- ----------------- ----------------- Units end of year........ 4,846,527 5,108,404 5,267,738 ================= ================= ================= MSF METLIFE MID CAP STOCK INDEX INVESTMENT DIVISION -------------------------------------------------------- 2016 2015 2014 ----------------- ------------------ ----------------- Units beginning of year.. 2,505,060 2,603,842 3,096,714 Units issued and transferred from other funding options....... 265,728 303,111 344,308 Units redeemed and transferred to other funding options....... (401,944) (401,893) (837,180) ----------------- ------------------ ----------------- Units end of year........ 2,368,844 2,505,060 2,603,842 ================= ================== ================= MSF METLIFE STOCK INDEX INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 30,734,692 31,845,594 33,504,283 Units issued and transferred from other funding options....... 2,659,842 3,048,757 3,230,743 Units redeemed and transferred to other funding options....... (3,955,694) (4,159,659) (4,889,432) ----------------- ----------------- ----------------- Units end of year........ 29,438,840 30,734,692 31,845,594 ================= ================= ================= MSF MFS TOTAL RETURN INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 489,178 495,079 516,460 Units issued and transferred from other funding options....... 67,702 76,608 64,664 Units redeemed and transferred to other funding options....... (82,012) (82,509) (86,045) ----------------- ----------------- ----------------- Units end of year........ 474,868 489,178 495,079 ================= ================= =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 208 209 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
MSF MFS VALUE INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ---------------- ----------------- Units beginning of year.... 3,455,842 3,651,820 3,880,440 Units issued and transferred from other funding options......... 310,841 362,018 410,647 Units redeemed and transferred to other funding options......... (520,741) (557,996) (639,267) ----------------- ---------------- ----------------- Units end of year.......... 3,245,942 3,455,842 3,651,820 ================= ================ ================= MSF MSCI EAFE INDEX INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ---------------- ----------------- Units beginning of year.... 4,684,375 4,721,774 4,619,766 Units issued and transferred from other funding options......... 709,296 694,105 958,783 Units redeemed and transferred to other funding options......... (777,095) (731,504) (856,775) ----------------- ---------------- ----------------- Units end of year.......... 4,616,576 4,684,375 4,721,774 ================= ================ ================= MSF NEUBERGER BERMAN GENESIS INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ---------------- ----------------- ----------------- Units beginning of year.... 3,271,086 3,467,583 3,669,017 Units issued and transferred from other funding options......... 280,164 312,240 372,237 Units redeemed and transferred to other funding options......... (488,347) (508,737) (573,671) ---------------- ----------------- ----------------- Units end of year.......... 3,062,903 3,271,086 3,467,583 ================ ================= ================= MSF RUSSELL 2000 INDEX INVESTMENT DIVISION ----------------------------------------------------- 2016 2015 2014 ---------------- ----------------- ---------------- Units beginning of year.... 2,183,522 2,260,930 2,328,388 Units issued and transferred from other funding options......... 303,251 287,495 345,889 Units redeemed and transferred to other funding options......... (402,426) (364,903) (413,347) ---------------- ----------------- ---------------- Units end of year.......... 2,084,347 2,183,522 2,260,930 ================ ================= ================
MSF T. ROWE PRICE LARGE CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 3,109,875 3,259,625 3,427,787 Units issued and transferred from other funding options....... 335,004 404,951 389,494 Units redeemed and transferred to other funding options....... (515,179) (554,701) (557,656) ----------------- ----------------- ----------------- Units end of year........ 2,929,700 3,109,875 3,259,625 ================= ================= ================= MSF T. ROWE PRICE SMALL CAP GROWTH INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 2,691,919 2,818,717 3,406,451 Units issued and transferred from other funding options....... 255,887 266,479 292,004 Units redeemed and transferred to other funding options....... (414,065) (393,277) (879,738) ----------------- ----------------- ----------------- Units end of year........ 2,533,741 2,691,919 2,818,717 ================= ================= ================= MSF VAN ECK GLOBAL NATURAL RESOURCES INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 1,703 1,164 916 Units issued and transferred from other funding options....... 419 743 698 Units redeemed and transferred to other funding options....... (359) (204) (450) ----------------- ----------------- ----------------- Units end of year........ 1,763 1,703 1,164 ================= ================= ================= MSF WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 964,462 989,244 1,022,252 Units issued and transferred from other funding options....... 1,206,539 135,162 135,497 Units redeemed and transferred to other funding options....... (318,317) (159,944) (168,505) ----------------- ----------------- ----------------- Units end of year........ 1,852,684 964,462 989,244 ================= ================= =================
MSF WESTERN ASSET MANAGEMENT U.S. GOVERNMENT INVESTMENT DIVISION ----------------------------------------------------- 2016 2015 2014 ----------------- ---------------- ---------------- Units beginning of year.... 870,402 904,420 935,377 Units issued and transferred from other funding options......... 136,832 138,201 141,439 Units redeemed and transferred to other funding options......... (158,366) (172,219) (172,396) ----------------- ---------------- ---------------- Units end of year.......... 848,868 870,402 904,420 ================= ================ ================ OPPENHEIMER VA MAIN STREET SMALL CAP INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 (E) ----------------- ----------------- ---------------- Units beginning of year.... 290 140 -- Units issued and transferred from other funding options......... 33 176 143 Units redeemed and transferred to other funding options......... (177) (26) (3) ----------------- ----------------- ---------------- Units end of year.......... 146 290 140 ================= ================= ================ PIMCO VIT ALL ASSET INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ----------------- ---------------- Units beginning of year.... 9,368 70,102 72,143 Units issued and transferred from other funding options......... 730 3,231 784 Units redeemed and transferred to other funding options......... (559) (63,965) (2,825) ----------------- ----------------- ---------------- Units end of year.......... 9,539 9,368 70,102 ================= ================= ================ PIMCO VIT COMMODITYREALRETURN STRATEGY INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ----------------- ---------------- Units beginning of year.... 1,395 3,576 479 Units issued and transferred from other funding options......... -- 331 3,227 Units redeemed and transferred to other funding options......... (217) (2,512) (130) ----------------- ----------------- ---------------- Units end of year.......... 1,178 1,395 3,576 ================= ================= ================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 210 211 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 7. SCHEDULES OF UNITS -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014:
PIMCO VIT LOW DURATION INVESTMENT DIVISION ------------------------------------------------------ 2016 2015 2014 ----------------- ---------------- ----------------- Units beginning of year.. 65,525 123,927 126,188 Units issued and transferred from other funding options....... 4,119 105 265 Units redeemed and transferred to other funding options....... (1,294) (58,507) (2,526) ----------------- ---------------- ----------------- Units end of year........ 68,350 65,525 123,927 ================= ================ ================= PIONEER VCT MID CAP VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 713 1,012 828 Units issued and transferred from other funding options....... 289 -- 242 Units redeemed and transferred to other funding options....... (265) (299) (58) ----------------- ----------------- ----------------- Units end of year........ 737 713 1,012 ================= ================= ================= PUTNAM VT INTERNATIONAL VALUE INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 239 239 239 Units issued and transferred from other funding options....... -- 54 49 Units redeemed and transferred to other funding options....... (62) (54) (49) ----------------- ----------------- ----------------- Units end of year........ 177 239 239 ================= ================= ================= ROYCE MICRO-CAP INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 465 417 374 Units issued and transferred from other funding options....... 92 52 47 Units redeemed and transferred to other funding options....... (52) (4) (4) ----------------- ----------------- ----------------- Units end of year........ 505 465 417 ================= ================= =================
ROYCE SMALL-CAP INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 2,698 2,265 31,356 Units issued and transferred from other funding options....... 975 619 18,250 Units redeemed and transferred to other funding options....... (840) (186) (47,341) ----------------- ----------------- ----------------- Units end of year........ 2,833 2,698 2,265 ================= ================= ================= UIF EMERGING MARKETS DEBT INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 27,569 23,590 35,538 Units issued and transferred from other funding options....... 10,394 7,582 1,488 Units redeemed and transferred to other funding options....... (3,745) (3,603) (13,436) ----------------- ----------------- ----------------- Units end of year........ 34,218 27,569 23,590 ================= ================= ================= UIF EMERGING MARKETS EQUITY INVESTMENT DIVISION ------------------------------------------------------- 2016 2015 2014 ----------------- ----------------- ----------------- Units beginning of year.. 176,970 150,699 83,866 Units issued and transferred from other funding options....... 88,482 52,324 88,221 Units redeemed and transferred to other funding options....... (29,975) (26,053) (21,388) ----------------- ----------------- ----------------- Units end of year........ 235,477 176,970 150,699 ================= ================= =================
(a) For the period April 28, 2014 to December 31, 2014. (b) For the period April 29, 2016 to December 31, 2016. (c) Commenced May 3, 2010 and began transactions in 2016. (d) Commenced April 28, 2014 and began transactions in 2015. (e) Commenced April 28, 2008 and began transactions in 2014. 212 213 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS The Company sells a number of variable life products which have unique combinations of features and fees, some of which directly affect the unit values of the Investment Divisions. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. The following table is a summary of unit values and units outstanding for the Policies, net investment income ratios, and expense ratios, excluding expenses for the underlying fund, portfolio or series, for the respective stated periods in the five years ended December 31, 2016:
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- -------------- -------------- ------------- ---------------- ---------------- AB Global Thematic Growth 2016 4,645 6.97 32,386 -- 0.00 (0.88) Investment Division 2015 5,659 7.03 39,803 -- 0.00 2.65 2014 11,048 6.85 75,700 -- 0.00 4.81 2013 10,121 6.54 66,166 0.02 0.00 22.93 2012 11,630 5.32 61,856 -- 0.00 13.24 AB Intermediate Bond 2016 5,684 16.72 95,051 2.98 0.00 4.36 Investment Division 2015 3,779 16.02 60,559 3.34 0.00 (0.18) 2014 3,712 16.05 59,589 3.24 0.00 6.22 2013 3,812 15.11 57,615 3.09 0.00 (2.34) 2012 6,675 15.48 103,300 3.42 0.00 5.79 American Century VP 2016 153 21.80 3,341 -- 0.00 3.23 Capital Appreciation 2015 4 21.12 83 -- 0.00 1.93 Investment Division 2014 21 20.72 432 -- 0.00 11.65 (Commenced 4/28/2014) American Funds Bond 2016 434,380 12.85 - 23.78 6,362,160 1.69 0.00 - 0.90 2.02 - 2.94 Investment Division 2015 437,856 12.59 - 23.10 6,208,120 1.73 0.00 - 0.90 (0.62) - 0.27 2014 422,554 12.67 - 23.04 5,975,916 1.99 0.00 - 0.90 4.33 - 5.28 2013 417,001 12.15 - 21.88 5,589,275 1.83 0.00 - 0.90 (3.03) - (2.16) 2012 397,946 12.53 - 22.37 5,420,310 2.55 0.00 - 0.90 4.42 - 5.37 American Funds Global 2016 1,565,814 35.96 - 47.59 63,768,756 0.25 0.00 - 0.90 1.18 - 2.10 Small Capitalization 2015 1,684,041 35.54 - 46.61 67,195,650 -- 0.00 - 0.90 (0.63) - 0.27 Investment Division 2014 1,772,715 35.77 - 46.48 70,558,118 0.12 0.00 - 0.90 1.21 - 2.12 2013 1,848,240 35.34 - 45.52 72,066,620 0.87 0.00 - 0.90 27.13 - 28.28 2012 1,947,587 27.80 - 35.48 59,237,806 1.34 0.00 - 0.90 17.11 - 18.18 American Funds Growth 2016 978,206 38.99 - 426.47 168,913,307 0.78 0.00 - 0.90 8.51 - 9.49 Investment Division 2015 1,045,168 35.61 - 389.52 164,709,586 0.60 0.00 - 0.90 5.90 - 6.86 2014 1,119,856 33.32 - 364.52 164,910,421 0.80 0.00 - 0.90 7.54 - 8.51 2013 1,184,798 30.71 - 335.94 160,553,244 0.94 0.00 - 0.90 28.94 - 30.10 2012 1,269,410 23.60 - 258.21 130,921,222 0.80 0.00 - 0.90 16.83 - 17.89 American Funds 2016 1,093,901 83.80 - 293.83 105,740,546 1.48 0.00 - 0.90 10.52 - 11.52 Growth-Income 2015 1,173,413 75.82 - 263.48 101,658,954 1.30 0.00 - 0.90 0.55 - 1.45 Investment Division 2014 1,243,407 75.41 - 259.70 106,030,732 1.29 0.00 - 0.90 9.64 - 10.63 2013 1,315,261 68.78 - 234.74 101,213,157 1.37 0.00 - 0.90 32.30 - 33.50 2012 1,382,116 51.99 - 175.83 79,614,717 1.64 0.00 - 0.90 16.42 - 17.48 American Funds International 2016 10,123 34.42 348,390 1.41 0.00 3.53 Investment Division 2015 12,487 33.24 415,110 1.24 0.00 (4.53) 2014 19,587 34.82 682,005 1.40 0.00 (2.65) 2013 19,162 35.77 685,392 1.65 0.00 21.63 2012 18,773 29.41 552,053 1.43 0.00 17.91
214 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------ UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- -------------- ------------- American Funds U.S. 2016 2,265 23.98 54,307 Government/AAA-Rated 2015 2,125 23.70 50,343 Securities 2014 2,082 23.33 48,552 Investment Division 2013 2,093 22.21 46,484 2012 1,972 22.92 45,192 Dreyfus VIF International 2016 14,243 13.57 193,298 Value Investment Division 2015 15,363 13.79 211,852 2014 15,519 14.21 220,569 2013 15,672 15.72 246,317 2012 16,013 12.81 205,133 Fidelity VIP Asset Manager: 2016 113,781 15.81 1,799,093 Growth Investment Division 2015 121,099 15.45 1,870,972 2014 135,053 15.45 2,087,177 2013 132,058 14.61 1,929,922 2012 164,596 11.95 1,966,232 Fidelity VIP Contrafund 2016 96,321 27.77 2,675,209 Investment Division 2015 107,835 25.74 2,775,398 2014 113,831 25.59 2,913,464 2013 115,785 22.89 2,650,302 2012 147,414 15.89 2,343,022 Fidelity VIP Equity-Income 2016 746 22.63 16,883 Investment Division 2015 669 19.20 12,838 2014 1,259 20.01 25,205 2013 1,817 18.42 33,464 2012 4,431 14.06 62,291 Fidelity VIP Freedom 2010 2016 2,018 14.56 29,390 Investment Division 2015 1,392 13.81 19,219 2014 3,474 13.85 48,114 2013 3,488 13.26 46,242 2012 3,378 11.73 39,638 Fidelity VIP Freedom 2020 2016 31,518 14.46 - 19.75 567,520 Investment Division 2015 30,947 13.63 - 18.61 528,621 2014 56,045 13.66 - 18.66 984,560 2013 58,587 13.04 - 17.80 977,715 2012 51,279 11.29 - 15.34 764,724 Fidelity VIP Freedom 2025 2016 21,531 20.82 448,266 Investment Division 2015 22,070 19.61 432,727 (Commenced 4/28/2008 and 2014 1,914 19.64 37,588 began transactions in 2013) 2013 2,149 18.70 40,181 Fidelity VIP Freedom 2030 2016 12,376 14.69 181,828 Investment Division 2015 8,698 13.78 119,873 2014 5,911 13.81 81,658 2013 4,709 13.17 62,024 2012 3,939 10.87 42,834 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- American Funds U.S. 2016 1.41 0.00 1.19 Government/AAA-Rated 2015 1.47 0.00 1.59 Securities 2014 1.10 0.00 5.02 Investment Division 2013 0.68 0.00 (3.08) 2012 1.00 0.00 1.90 Dreyfus VIF International 2016 1.68 0.00 (1.58) Value Investment Division 2015 1.94 0.00 (2.98) 2014 1.32 0.00 (9.57) 2013 1.78 0.00 22.69 2012 2.56 0.00 12.42 Fidelity VIP Asset Manager: 2016 1.35 0.00 2.34 Growth Investment Division 2015 1.03 0.00 (0.03) 2014 1.01 0.00 5.75 2013 0.83 0.00 22.34 2012 1.40 0.00 15.34 Fidelity VIP Contrafund 2016 0.73 0.00 7.91 Investment Division 2015 0.90 0.00 0.56 2014 0.86 0.00 11.82 2013 0.95 0.00 44.02 2012 1.22 0.00 16.31 Fidelity VIP Equity-Income 2016 2.43 0.00 17.90 Investment Division 2015 2.69 0.00 (4.09) 2014 2.88 0.00 8.65 2013 2.56 0.00 31.02 2012 5.62 0.00 17.19 Fidelity VIP Freedom 2010 2016 1.87 0.00 5.45 Investment Division 2015 0.92 0.00 (0.29) 2014 1.62 0.00 4.46 2013 1.76 0.00 12.98 2012 1.97 0.00 11.28 Fidelity VIP Freedom 2020 2016 1.59 0.00 6.12 Investment Division 2015 1.71 0.00 (0.27) 2014 1.65 0.00 4.76 - 4.82 2013 1.87 0.00 15.49 - 16.01 2012 2.06 0.00 12.87 - 13.38 Fidelity VIP Freedom 2025 2016 1.54 0.00 6.18 Investment Division 2015 1.92 0.00 (0.18) (Commenced 4/28/2008 and 2014 1.58 0.00 5.06 began transactions in 2013) 2013 1.79 0.00 19.95 Fidelity VIP Freedom 2030 2016 1.75 0.00 6.61 Investment Division 2015 2.05 0.00 (0.24) 2014 1.76 0.00 4.89 2013 1.93 0.00 21.12 2012 1.84 0.00 15.06
215 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ----------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- ------------- ------------- ------------- ---------------- ---------------- Fidelity VIP Freedom 2040 2016 9,411 16.90 159,009 1.68 0.00 6.83 Investment Division 2015 5,641 15.81 89,215 2.00 0.00 (0.26) (Commenced 5/3/2010 and 2014 3,374 15.86 53,497 2.38 0.00 4.85 began transactions in 2013) 2013 782 15.12 11,831 3.69 0.00 24.73 Fidelity VIP Freedom 2050 2016 6,281 17.04 107,049 2.03 0.00 6.84 Investment Division 2015 3,221 15.95 51,384 2.16 0.00 (0.29) 2014 1,669 16.00 26,706 1.38 0.00 4.94 2013 1,444 15.25 22,014 1.43 0.00 25.78 2012 1,468 12.12 17,799 2.12 0.00 17.20 Fidelity VIP Government 2016 218,243 17.53 3,825,639 0.16 0.00 0.13 Money Market Investment Division (Commenced 4/29/2016) Fidelity VIP High Income 2016 16,884 21.83 368,584 6.80 0.00 14.61 Investment Division 2015 10,801 19.05 205,740 7.86 0.00 (3.63) 2014 8,712 19.76 172,179 5.69 0.00 1.16 2013 8,598 19.54 167,992 5.84 0.00 5.95 2012 8,955 18.44 165,146 14.49 0.00 14.23 Fidelity VIP Investment 2016 72,929 17.02 1,241,561 2.33 0.00 4.63 Grade Bond 2015 75,247 16.27 1,224,347 2.51 0.00 (0.71) Investment Division 2014 76,739 16.39 1,257,507 1.79 0.00 5.75 2013 109,725 15.50 1,700,205 2.44 0.00 (1.89) 2012 144,729 15.79 2,285,792 1.95 0.00 5.77 Fidelity VIP Mid Cap 2016 5,732 44.73 256,383 0.32 0.00 11.92 Investment Division 2015 7,000 39.97 279,768 0.28 0.00 (1.63) 2014 6,260 40.63 254,337 0.02 0.00 6.03 2013 6,501 38.32 249,087 0.09 0.00 35.87 2012 26,557 28.20 748,919 0.42 0.00 14.56 FTVIPT Franklin Income VIP 2016 59 943.96 56,031 4.69 0.00 14.02 Investment Division 2015 47 827.87 38,833 3.59 0.00 (7.05) (Commenced 4/29/2013) 2014 28 890.70 25,156 3.07 0.00 4.62 2013 1 851.40 618 -- 0.00 7.52 FTVIPT Franklin Mutual 2016 19,262 29.03 559,179 1.70 0.00 12.18 Global Discovery VIP 2015 18,532 25.88 479,582 2.78 0.00 (3.65) Investment Division 2014 18,185 26.86 488,433 2.10 0.00 5.71 2013 19,479 25.41 494,934 2.33 0.00 27.61 2012 40,339 19.91 803,176 2.67 0.00 13.36 FTVIPT Franklin Mutual 2016 225 427.53 96,301 2.09 0.00 16.06 Shares VIP Investment 2015 194 368.38 71,304 3.29 0.00 (4.94) Division 2014 109 387.51 42,378 2.19 0.00 7.12 (Commenced 4/29/2013) 2013 67 361.74 24,208 2.28 0.00 16.31 FTVIPT Templeton 2016 296,169 19.46 5,762,444 2.14 0.00 7.49 Foreign VIP 2015 295,281 18.10 5,344,848 3.37 0.00 (6.31) Investment Division 2014 276,787 19.32 5,347,371 1.86 0.00 (10.89) 2013 203,220 21.68 4,405,694 2.41 0.00 23.27 2012 225,312 17.59 3,962,470 3.26 0.00 18.60
216 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- -------------- -------------- ------------- ---------------- ---------------- FTVIPT Templeton Global 2016 25,460 24.54 624,673 -- 0.00 3.21 Bond VIP Investment 2015 23,525 23.77 559,264 7.41 0.00 (4.10) Division 2014 49,895 24.79 1,236,895 5.18 0.00 2.12 2013 54,283 24.27 1,317,714 3.58 0.00 1.89 2012 18,556 23.82 442,101 6.56 0.00 15.31 Goldman Sachs Mid-Cap 2016 2,817 29.37 82,725 0.65 0.00 13.53 Value Investment 2015 9,834 25.87 254,367 0.39 0.00 (9.24) Division 2014 10,570 28.50 301,257 0.99 0.00 13.57 2013 11,790 25.09 295,859 0.85 0.00 51.88 2012 15,625 16.52 258,154 1.06 0.00 18.47 Goldman Sachs Small Cap 2016 1,563 25.30 39,553 1.25 0.00 23.20 Equity Insights 2015 1,645 20.54 33,793 0.28 0.00 (2.13) Investment Division 2014 1,766 20.99 37,063 0.68 0.00 6.93 2013 2,114 19.63 41,480 1.13 0.00 43.55 2012 1,925 13.67 26,317 1.02 0.00 12.83 Invesco V.I. Comstock 2016 22,000 20.45 449,886 1.37 0.00 16.99 Investment Division 2015 19,259 17.48 336,660 1.68 0.00 (6.19) 2014 18,652 18.63 347,578 1.10 0.00 9.10 2013 18,458 17.08 315,275 1.46 0.00 35.65 2012 18,847 12.59 237,306 1.58 0.00 18.92 Invesco V.I. International 2016 14,955 23.99 358,802 1.46 0.00 (0.45) Growth Investment 2015 13,685 24.10 329,823 1.45 0.00 (2.34) Division 2014 14,202 24.68 350,497 1.54 0.00 0.33 2013 16,229 24.60 399,191 0.34 0.00 19.01 2012 314,797 20.67 6,506,152 1.58 0.00 15.53 Janus Aspen Balanced 2016 42,410 25.31 1,073,389 1.94 0.00 4.32 Investment Division 2015 45,385 24.26 1,101,075 1.38 0.00 0.41 2014 44,817 24.16 1,082,851 1.54 0.00 8.24 2013 44,471 22.32 992,702 1.28 0.00 19.80 2012 59,065 18.63 1,100,549 2.26 0.00 13.37 Janus Aspen Enterprise 2016 19,755 22.91 452,619 0.02 0.00 12.10 Investment Division (Commenced 5/3/2010 and began transactions in 2016) Janus Aspen Forty 2016 16,329 30.93 505,032 -- 0.00 1.94 Investment Division 2015 19,926 30.34 604,552 -- 0.00 11.94 2014 20,307 27.10 550,397 0.03 0.00 8.47 2013 34,817 24.99 870,003 0.58 0.00 30.89 2012 46,505 19.09 887,847 0.56 0.00 23.86 Janus Aspen Janus 2016 14,664 18.49 271,199 0.46 0.00 0.50 Investment Division 2015 25,523 18.40 469,667 0.62 0.00 5.35 2014 27,479 17.47 480,007 0.37 0.00 12.99 2013 28,415 15.46 439,285 0.89 0.00 30.34 2012 81,921 11.86 971,677 0.56 0.00 18.59
217 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ----------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- -------------- ------------- ------------- ---------------- ---------------- Janus Aspen Overseas 2016 2,009 21.43 43,050 4.42 0.00 (6.71) Investment Division 2015 1,568 22.97 36,023 0.48 0.00 (8.80) 2014 1,884 25.18 47,442 3.16 0.00 (12.10) 2013 2,403 28.65 68,836 3.03 0.00 14.28 2012 17,627 25.07 441,942 0.63 0.00 13.18 MFS VIT Global Equity 2016 8,391 26.05 218,575 0.68 0.00 7.06 Investment Division 2015 7,506 24.33 182,623 0.84 0.00 (1.67) 2014 7,650 24.74 189,291 0.53 0.00 3.63 2013 7,761 23.88 185,320 0.76 0.00 27.52 2012 7,233 18.72 135,428 0.22 0.00 22.98 MFS VIT New Discovery 2016 7,943 25.99 206,405 -- 0.00 8.80 Investment Division 2015 8,220 23.89 196,330 -- 0.00 (2.15) 2014 8,474 24.41 206,851 -- 0.00 (7.49) 2013 8,721 26.39 230,115 -- 0.00 41.22 2012 9,204 18.68 171,983 -- 0.00 20.90 MFS VIT Value Investment 2016 728 27.55 20,045 1.88 0.00 13.78 Division 2015 820 24.22 19,852 2.08 0.00 (0.93) 2014 903 24.45 22,067 1.33 0.00 10.20 2013 978 22.18 21,702 1.01 0.00 35.59 2012 1,049 16.36 17,162 1.77 0.00 15.88 MFS VIT II High Yield 2016 7,335 20.60 151,111 6.53 0.00 13.64 Investment Division 2015 7,464 18.13 135,308 6.86 0.00 (4.42) (Commenced 8/19/2013) 2014 7,587 18.97 143,885 5.29 0.00 2.53 2013 8,075 18.50 149,361 2.22 0.00 3.84 MIST AB Global Dynamic 2016 4,603 13.45 61,910 1.58 0.00 3.60 Allocation Investment 2015 4,712 12.98 61,181 3.66 0.00 0.58 Division 2014 3,865 12.91 49,893 1.91 0.00 7.35 (Commenced 4/30/2012) 2013 2,847 12.03 34,236 0.59 0.00 11.15 2012 656 10.82 7,098 -- 0.00 4.39 MIST Allianz Global Investors 2016 4,511 1.06 4,786 0.05 0.00 1.99 Dynamic Multi-Asset Plus 2015 1,942 1.04 2,020 0.73 0.00 (0.98) Investment Division 2014 72 1.05 76 0.70 0.00 5.36 (Commenced 4/28/2014) MIST American Funds 2016 62,881 15.76 990,764 1.95 0.00 8.04 Balanced Allocation 2015 61,306 14.58 894,053 1.74 0.00 (0.33) Investment Division 2014 59,916 14.63 876,678 1.58 0.00 6.38 2013 57,458 13.75 790,263 1.64 0.00 18.91 2012 54,591 11.57 631,423 1.94 0.00 13.80 MIST American Funds 2016 110,079 16.00 1,761,546 1.65 0.00 9.28 Growth Allocation 2015 105,040 14.64 1,538,114 1.62 0.00 (0.51) Investment Division 2014 101,601 14.72 1,495,337 1.36 0.00 6.72 2013 108,102 13.79 1,490,834 1.27 0.00 25.44 2012 84,318 10.99 926,978 1.55 0.00 16.54
218 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 -------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- --------------- -------------- MIST American Funds 2016 75,553 15.34 1,158,636 Moderate Allocation 2015 67,812 14.30 969,592 Investment Division 2014 71,127 14.35 1,020,697 2013 64,895 13.48 874,921 2012 49,584 11.85 587,686 MIST AQR Global Risk 2016 13,059 10.41 135,878 Balanced Investment 2015 14,099 9.55 134,644 Division 2014 17,046 10.56 180,015 (Commenced 4/30/2012) 2013 15,059 10.15 152,914 2012 2,358 10.51 24,784 MIST BlackRock Global 2016 24,706 12.85 317,436 Tactical Strategies 2015 18,463 12.30 227,159 Investment Division 2014 15,552 12.32 191,557 (Commenced 4/30/2012) 2013 8,821 11.63 102,574 2012 3,707 10.54 39,078 MIST Clarion Global Real 2016 1,253,786 20.01 - 22.42 27,646,710 Estate Investment Division 2015 1,353,491 19.96 - 22.17 29,524,589 2014 1,424,610 20.39 - 22.44 31,468,604 2013 1,412,669 18.10 - 19.74 27,497,715 2012 1,388,419 17.60 - 19.03 26,083,318 MIST ClearBridge Aggressive 2016 2,204,665 16.32 - 19.18 40,986,942 Growth Investment 2015 2,377,629 15.85 - 18.62 42,906,771 Division 2014 2,519,284 16.47 - 19.36 47,278,544 2013 1,375,745 13.83 - 16.25 21,684,945 2012 1,313,742 9.48 - 11.14 14,226,385 MIST Harris Oakmark 2016 1,332,216 15.82 - 31.01 39,465,106 International Investment 2015 1,402,957 14.59 - 28.60 38,468,820 Division 2014 1,446,693 15.25 - 29.89 41,530,766 2013 1,980,844 16.14 - 31.64 52,830,774 2012 1,421,965 12.34 - 24.19 33,602,695 MIST Invesco Balanced-Risk 2016 37,656 1.22 45,859 Allocation Investment 2015 35,295 1.09 38,475 Division 2014 27,242 1.14 31,001 (Commenced 4/30/2012) 2013 22,938 1.08 24,723 2012 7,100 1.06 7,513 MIST Invesco Mid Cap Value 2016 2,255,824 23.41 - 49.88 88,992,742 Investment Division 2015 2,436,571 20.22 - 43.08 82,921,441 2014 2,536,877 22.16 - 47.22 94,874,185 2013 2,707,441 20.16 - 42.94 92,130,609 2012 2,873,152 15.40 - 32.87 74,892,920 MIST Invesco Small Cap 2016 213,792 28.07 - 36.28 6,722,591 Growth Investment 2015 232,966 25.35 - 32.47 6,552,111 Division 2014 249,054 25.95 - 32.94 7,086,689 2013 251,143 24.20 - 30.45 6,613,228 2012 245,733 17.38 - 21.67 4,616,668 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ----------------- ---------------- MIST American Funds 2016 2.23 0.00 7.25 Moderate Allocation 2015 1.77 0.00 (0.36) Investment Division 2014 1.69 0.00 6.44 2013 1.90 0.00 13.75 2012 2.15 0.00 11.28 MIST AQR Global Risk 2016 -- 0.00 8.96 Balanced Investment 2015 5.02 0.00 (9.57) Division 2014 -- 0.00 4.00 (Commenced 4/30/2012) 2013 1.78 0.00 (3.39) 2012 -- 0.00 4.63 MIST BlackRock Global 2016 1.46 0.00 4.43 Tactical Strategies 2015 1.59 0.00 (0.11) Investment Division 2014 1.11 0.00 5.92 (Commenced 4/30/2012) 2013 1.20 0.00 10.31 2012 -- 0.00 4.21 MIST Clarion Global Real 2016 2.35 0.00 - 0.90 0.25 - 1.15 Estate Investment Division 2015 3.99 0.00 - 0.90 (2.11) - (1.23) 2014 1.67 0.00 - 0.90 7.53 - 13.67 2013 6.88 0.00 - 0.90 2.83 - 3.76 2012 2.22 0.00 - 0.90 25.16 - 26.30 MIST ClearBridge Aggressive 2016 0.67 0.00 - 0.90 2.06 - 2.98 Growth Investment 2015 0.42 0.00 - 0.90 (4.67) - (3.81) Division 2014 0.19 0.00 - 0.90 18.05 - 19.12 2013 0.40 0.00 - 0.90 44.60 - 45.90 2012 0.21 0.00 - 0.90 8.91 - 18.81 MIST Harris Oakmark 2016 2.35 0.00 - 0.90 7.46 - 8.43 International Investment 2015 3.22 0.00 - 0.90 (5.17) - (4.31) Division 2014 2.49 0.00 - 0.90 (6.37) - (5.52) 2013 2.71 0.00 - 0.90 29.63 - 30.80 2012 1.82 0.00 - 0.90 28.31 - 29.47 MIST Invesco Balanced-Risk 2016 0.15 0.00 11.72 Allocation Investment 2015 3.22 0.00 (4.20) Division 2014 -- 0.00 5.58 (Commenced 4/30/2012) 2013 -- 0.00 1.86 2012 0.66 0.00 4.67 MIST Invesco Mid Cap Value 2016 0.89 0.00 - 0.90 14.74 - 15.78 Investment Division 2015 0.71 0.00 - 0.90 (9.57) - (8.76) 2014 0.70 0.00 - 0.90 8.97 - 9.96 2013 0.90 0.00 - 0.90 29.46 - 30.87 2012 -- 0.00 2.78 - 3.71 MIST Invesco Small Cap 2016 -- 0.00 - 0.90 10.72 - 11.72 Growth Investment 2015 0.13 0.00 - 0.90 (2.30) - (1.42) Division 2014 -- 0.00 - 0.90 7.21 - 8.18 2013 0.40 0.00 - 0.90 39.28 - 40.54 2012 -- 0.00 - 0.90 17.44 - 18.51
219 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- -------------- -------------- MIST JPMorgan Global Active 2016 155,632 1.31 203,391 Allocation Investment 2015 146,160 1.27 185,624 Division 2014 135,962 1.26 171,141 (Commenced 4/30/2012) 2013 93,835 1.18 110,413 2012 17,811 1.06 18,883 MIST JPMorgan Small Cap 2016 14,430 28.37 409,299 Value Investment Division 2015 14,322 21.68 310,452 2014 12,640 23.37 295,411 2013 11,410 22.33 254,799 2012 2,300 16.76 38,553 MIST Loomis Sayles Global 2016 17,543 21.18 371,582 Markets Investment Division 2015 16,216 20.17 327,025 (Commenced 4/29/2013) 2014 21,302 19.88 423,380 2013 21,834 19.16 418,260 MIST Met/Aberdeen Emerging 2016 51,328 11.38 - 18.18 652,237 Markets Equity Investment 2015 44,390 10.18 - 16.30 538,485 Division 2014 36,263 11.79 - 18.91 521,123 2013 21,705 12.57 272,836 2012 6,737 13.20 88,957 MIST Met/Templeton 2016 15,275 14.32 218,676 International Bond 2015 12,955 14.16 183,501 Investment Division 2014 11,790 14.75 173,865 (Commenced 4/30/2012) 2013 5,967 14.54 86,776 2012 181 14.36 2,605 MIST Met/Wellington Large 2016 9,352,449 16.49 - 69.42 409,625,033 Cap Research Investment 2015 9,969,725 15.20 - 64.50 404,612,655 Division 2014 10,583,026 14.53 - 62.18 412,427,190 2013 11,184,832 12.78 - 55.10 385,342,945 2012 11,913,338 9.54 - 41.30 307,558,825 MIST MetLife Asset 2016 1,060,800 17.99 - 194.02 21,704,625 Allocation 100 Investment 2015 1,092,776 16.63 - 178.03 20,442,577 Division 2014 1,096,717 17.06 - 181.68 20,893,340 2013 1,065,070 16.36 - 172.88 19,271,452 2012 1,085,674 12.72 - 133.49 15,142,596 MIST MetLife Balanced Plus 2016 22,699 13.96 316,959 Investment Division 2015 20,231 12.89 260,693 (Commenced 4/30/2012) 2014 17,529 13.43 235,501 2013 7,685 12.25 94,166 2012 4,287 10.71 45,933 MIST MetLife Multi-Index 2016 1,302 129.26 168,352 Targeted Risk Investment 2015 1,099 123.86 136,087 Division 2014 968 125.38 121,407 (Commenced 4/29/2013) 2013 23 114.75 2,679 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ----------------- MIST JPMorgan Global Active 2016 1.98 0.00 2.90 Allocation Investment 2015 2.72 0.00 0.89 Division 2014 1.11 0.00 6.98 (Commenced 4/30/2012) 2013 0.06 0.00 10.99 2012 1.08 0.00 4.66 MIST JPMorgan Small Cap 2016 1.75 0.00 30.86 Value Investment Division 2015 1.36 0.00 (7.25) 2014 0.96 0.00 4.66 2013 0.27 0.00 33.25 2012 0.95 0.00 15.66 MIST Loomis Sayles Global 2016 1.93 0.00 5.03 Markets Investment Division 2015 2.02 0.00 1.47 (Commenced 4/29/2013) 2014 2.29 0.00 3.76 2013 -- 0.00 17.34 MIST Met/Aberdeen Emerging 2016 1.10 0.00 11.50 - 11.83 Markets Equity Investment 2015 1.94 0.00 (13.81) - (13.66) Division 2014 0.62 0.00 (6.23) - (3.93) 2013 0.98 0.00 (4.80) 2012 1.57 0.00 19.10 MIST Met/Templeton 2016 -- 0.00 1.07 International Bond 2015 8.56 0.00 (3.95) Investment Division 2014 4.66 0.00 1.41 (Commenced 4/30/2012) 2013 0.68 0.00 1.27 2012 -- 0.00 8.00 MIST Met/Wellington Large 2016 2.42 0.00 - 0.90 7.62 - 8.59 Cap Research Investment 2015 0.95 0.00 - 0.90 3.74 - 4.67 Division 2014 0.93 0.00 - 0.90 12.85 - 13.87 2013 1.41 0.00 - 0.90 33.40 - 34.60 2012 1.21 0.00 - 0.90 12.66 - 13.68 MIST MetLife Asset 2016 2.51 0.00 - 0.90 8.21 - 9.19 Allocation 100 Investment 2015 1.53 0.00 - 0.90 (2.55) - (1.67) Division 2014 0.90 0.00 - 0.90 4.29 - 5.24 2013 0.93 0.00 - 0.90 28.61 - 29.77 2012 0.85 0.00 - 0.90 (0.17) - 3.96 MIST MetLife Balanced Plus 2016 2.75 0.00 8.36 Investment Division 2015 1.99 0.00 (4.09) (Commenced 4/30/2012) 2014 1.67 0.00 9.65 2013 1.11 0.00 14.36 2012 -- 0.00 5.63 MIST MetLife Multi-Index 2016 1.28 0.00 4.36 Targeted Risk Investment 2015 1.12 0.00 (1.21) Division 2014 -- 0.00 9.26 (Commenced 4/29/2013) 2013 0.24 0.00 6.63
220 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------- UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- -------------- -------------- MIST MetLife Small Cap 2016 26,524 29.20 774,395 Value Investment Division 2015 36,056 22.24 802,028 2014 36,751 23.52 864,243 2013 41,430 23.12 957,820 2012 50,513 17.46 881,737 MIST MFS Research 2016 945,225 16.48 - 19.48 17,206,100 International Investment 2015 988,508 16.63 - 19.61 18,155,763 Division 2014 1,025,165 16.93 - 19.91 19,140,390 2013 1,065,499 18.19 - 21.34 21,367,741 2012 920,691 15.26 - 17.85 15,720,813 MIST Morgan Stanley 2016 9,711,269 8.40 - 23.58 186,034,522 Mid Cap Growth 2015 10,144,421 9.16 - 25.71 212,581,898 Investment Division 2014 10,592,901 9.62 - 27.00 233,885,326 2013 11,170,989 9.50 - 26.66 244,413,959 2012 11,831,703 6.82 - 19.14 186,491,111 MIST Oppenheimer Global 2016 1,446,533 29.97 - 35.82 46,257,719 Equity Investment Division 2015 1,549,994 30.10 - 35.65 49,473,104 2014 1,580,006 29.15 - 34.22 48,430,521 2013 1,679,985 28.72 - 33.41 50,486,885 2012 1,769,256 22.75 - 26.22 41,848,339 MIST PanAgora Global 2016 14 1.10 15 Diversified Risk 2015 10 0.99 10 Investment Division (Commenced 4/28/2014 and began transactions in 2015) MIST PIMCO Inflation 2016 671,639 12.12 - 18.27 10,359,389 Protected Bond Investment 2015 691,385 11.53 - 17.37 10,147,547 Division 2014 747,392 11.87 - 17.89 11,277,978 2013 755,274 11.51 - 17.34 11,213,500 2012 837,709 12.64 - 19.05 13,671,560 MIST PIMCO Total Return 2016 1,910,080 12.52 - 23.15 42,840,892 Investment Division 2015 2,027,593 12.18 - 22.51 44,320,248 2014 2,149,016 12.14 - 22.45 46,980,970 2013 2,464,593 11.62 - 21.48 49,962,747 2012 2,365,572 11.82 - 21.86 50,485,893 MIST Pyramis Managed Risk 2016 69 121.82 8,438 Investment Division 2015 31 116.50 3,609 (Commenced 4/29/2013) 2014 13 117.98 1,575 2013 3 108.59 298 MIST Schroders Global 2016 39,046 1.34 52,316 Multi-Asset Investment 2015 29,697 1.27 37,661 Division 2014 24,844 1.28 31,786 (Commenced 4/30/2012) 2013 19,086 1.19 22,665 2012 5,334 1.08 5,752 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ---------------- ---------------- MIST MetLife Small Cap 2016 1.16 0.00 31.25 Value Investment Division 2015 0.09 0.00 (5.41) 2014 0.04 0.00 1.72 2013 1.08 0.00 32.45 2012 -- 0.00 17.99 MIST MFS Research 2016 2.18 0.00 - 0.90 (1.56) - (0.67) International Investment 2015 2.89 0.00 - 0.90 (2.38) - (1.50) Division 2014 2.35 0.00 - 0.90 (7.57) - (6.74) 2013 2.53 0.00 - 0.90 18.51 - 19.58 2012 2.10 0.00 - 0.90 15.92 - 16.97 MIST Morgan Stanley 2016 -- 0.00 - 0.90 (9.09) - (8.27) Mid Cap Growth 2015 -- 0.00 - 0.90 (5.64) - (4.78) Investment Division 2014 0.06 0.00 - 0.90 0.38 - 1.29 2013 0.79 0.00 - 0.90 38.06 - 39.30 2012 -- 0.00 - 0.90 8.57 - 9.55 MIST Oppenheimer Global 2016 1.18 0.00 - 0.90 (0.41) - 0.49 Equity Investment Division 2015 1.19 0.00 - 0.90 3.24 - 4.18 2014 1.02 0.00 - 0.90 1.49 - 2.41 2013 2.05 0.00 - 0.90 26.28 - 27.42 2012 1.64 0.00 - 0.90 20.42 - 21.52 MIST PanAgora Global 2016 2.47 0.00 11.12 Diversified Risk 2015 1.18 0.00 (5.48) Investment Division (Commenced 4/28/2014 and began transactions in 2015) MIST PIMCO Inflation 2016 -- 0.00 - 0.90 4.22 - 5.17 Protected Bond Investment 2015 5.15 0.00 - 0.90 (3.78) - (2.91) Division 2014 1.83 0.00 - 0.90 2.25 - 3.18 2013 2.44 0.00 - 0.90 (9.80) - (8.98) 2012 3.14 0.00 - 0.90 8.34 - 20.51 MIST PIMCO Total Return 2016 2.79 0.00 - 0.90 1.93 - 2.85 Investment Division 2015 5.43 0.00 - 0.90 (0.61) - 0.28 2014 2.56 0.00 - 0.90 3.55 - 4.49 2013 4.38 0.00 - 0.90 (2.60) - (1.72) 2012 3.30 0.00 - 0.90 8.57 - 9.56 MIST Pyramis Managed Risk 2016 0.73 0.00 4.57 Investment Division 2015 0.73 0.00 (1.25) (Commenced 4/29/2013) 2014 -- 0.00 8.64 2013 1.24 0.00 7.52 MIST Schroders Global 2016 1.41 0.00 5.65 Multi-Asset Investment 2015 1.19 0.00 (0.88) Division 2014 1.35 0.00 7.74 (Commenced 4/30/2012) 2013 0.01 0.00 10.11 2012 1.48 0.00 6.68
221 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- -------------- -------------- ------------- ---------------- ---------------- MIST SSGA Growth and 2016 470,829 15.63 - 18.26 8,122,289 2.57 0.00 - 0.90 5.08 - 6.03 Income ETF 2015 470,354 14.87 - 17.22 7,641,743 2.54 0.00 - 0.90 (2.65) - (1.77) Investment Division 2014 467,656 15.28 - 17.53 7,718,022 2.44 0.00 - 0.90 5.19 - 6.14 2013 503,743 14.53 - 16.52 7,827,724 2.65 0.00 - 0.90 12.21 - 13.22 2012 450,776 12.95 - 14.59 6,167,640 2.40 0.00 - 0.90 12.09 - 13.11 MIST SSGA Growth ETF 2016 416,398 15.31 - 18.23 7,142,017 2.39 0.00 - 0.90 6.09 - 7.04 Investment Division 2015 421,872 14.43 - 17.03 6,711,219 2.26 0.00 - 0.90 (2.92) - (2.04) 2014 398,249 14.87 - 17.38 6,445,663 1.97 0.00 - 0.90 4.74 - 5.69 2013 366,821 14.19 - 16.45 5,570,220 2.22 0.00 - 0.90 17.28 - 18.34 2012 332,667 12.10 - 13.90 4,244,488 2.07 0.00 - 0.90 14.28 - 15.32 MIST T. Rowe Price 2016 115,474 20.15 2,327,000 2.99 0.00 16.20 Large Cap Value 2015 117,032 17.34 2,029,557 1.72 0.00 (3.31) Investment Division 2014 133,581 17.94 2,395,891 1.47 0.00 13.57 2013 128,280 15.79 2,025,987 1.68 0.00 34.09 2012 112,114 11.78 1,320,515 1.62 0.00 18.27 MIST T. Rowe Price 2016 1,449,651 21.25 - 35.76 34,743,933 -- 0.00 - 0.90 5.56 - 6.52 Mid Cap Growth 2015 1,508,551 20.13 - 33.67 34,019,234 -- 0.00 - 0.90 5.92 - 6.88 Investment Division 2014 1,478,700 19.01 - 31.56 31,233,141 -- 0.00 - 0.90 12.03 - 13.04 2013 1,482,938 16.97 - 27.99 27,748,656 0.40 0.00 - 0.90 35.73 - 36.96 2012 1,544,904 12.50 - 20.49 21,145,655 -- 0.00 - 0.90 12.90 - 13.93 MSF Baillie Gifford 2016 2,371,047 13.72 - 20.75 38,958,130 1.62 0.00 - 0.90 4.43 - 5.38 International Stock 2015 2,482,793 13.02 - 19.69 38,861,610 1.72 0.00 - 0.90 (2.85) - (1.97) Investment Division 2014 2,569,893 13.28 - 20.09 41,212,522 1.42 0.00 - 0.90 (3.97) - (3.10) 2013 2,695,199 13.71 - 20.73 44,856,340 1.61 0.00 - 0.90 14.51 - 15.54 2012 2,785,901 11.92 - 17.95 40,399,665 1.37 0.00 - 0.90 18.44 - 19.52 MSF Barclays Aggregate 2016 5,707,855 18.80 - 22.63 127,387,339 2.75 0.00 - 0.90 1.43 - 2.35 Bond Index Investment 2015 5,819,142 18.54 - 22.11 126,951,477 2.91 0.00 - 0.90 (0.64) - 0.25 Division 2014 6,012,506 18.66 - 22.06 130,875,542 2.97 0.00 - 0.90 4.86 - 5.81 2013 5,904,440 17.79 - 20.85 121,423,866 3.51 0.00 - 0.90 (3.20) - (2.33) 2012 5,528,875 18.38 - 21.34 116,415,557 3.71 0.00 - 0.90 2.97 - 3.90 MSF BlackRock Bond 2016 2,728,539 22.13 - 104.82 77,277,403 3.19 0.00 - 0.90 2.20 - 3.12 Income Investment 2015 2,840,523 21.46 - 101.64 78,353,726 3.81 0.00 - 0.90 (0.31) - 0.59 Division 2014 3,018,880 21.34 - 101.04 82,796,372 3.45 0.00 - 0.90 6.13 - 7.08 2013 3,164,737 19.93 - 94.36 81,249,803 3.96 0.00 - 0.90 (1.66) - (0.77) 2012 3,286,524 20.08 - 95.09 85,513,325 2.69 0.00 - 0.90 6.58 - 7.55 MSF BlackRock Capital 2016 375,761 16.59 - 66.78 9,502,695 -- 0.00 - 0.90 (0.81) - 0.09 Appreciation Investment 2015 409,612 16.58 - 66.72 10,225,796 -- 0.00 - 0.90 5.33 - 6.28 Division 2014 414,973 15.60 - 62.78 9,736,331 0.06 0.00 - 0.90 7.92 - 8.90 2013 1,238,069 14.32 - 57.65 20,880,180 0.83 0.00 - 0.90 33.02 - 34.22 2012 1,083,757 10.67 - 42.95 14,012,099 0.31 0.00 - 0.90 13.34 - 14.37 MSF BlackRock 2016 888,946 21.11 - 24.09 21,009,123 1.69 0.00 - 0.90 17.45 - 18.51 Large Cap Value 2015 921,609 17.97 - 20.32 18,418,261 1.81 0.00 - 0.90 (6.83) - (5.99) Investment Division 2014 943,466 19.29 - 21.62 20,080,783 1.25 0.00 - 0.90 8.94 - 9.92 2013 952,777 17.71 - 19.67 18,457,575 1.36 0.00 - 0.90 30.87 - 32.05 2012 972,398 13.53 - 14.89 14,290,950 1.63 0.00 - 0.90 13.25 - 14.28
222 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------ ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- -------------- ------------- ------------- ---------------- ---------------- MSF BlackRock Ultra-Short 2016 1,271,211 16.79 - 18.04 22,657,240 0.07 0.00 - 0.90 (0.55) - 0.35 Term Bond Investment 2015 1,386,934 16.89 - 17.98 24,684,237 -- 0.00 - 0.90 (0.89) - 0.00 Division 2014 1,682,938 17.04 - 17.98 30,032,793 -- 0.00 - 0.90 (0.90) - 0.00 2013 1,334,062 17.19 - 17.98 23,781,879 -- 0.00 - 0.90 (0.90) - 0.00 2012 1,306,002 17.35 - 17.98 23,274,454 -- 0.00 - 0.90 (0.90) - 0.00 MSF Frontier Mid Cap 2016 6,128,888 29.54 - 112.57 225,309,908 -- 0.00 - 0.90 4.46 - 5.40 Growth Investment 2015 6,492,334 28.02 - 106.80 227,974,826 -- 0.00 - 0.90 1.96 - 2.88 Division 2014 6,861,561 27.24 - 103.81 235,559,690 -- 0.00 - 0.90 10.14 - 11.14 2013 7,328,205 24.52 - 93.40 227,974,022 1.25 0.00 - 0.90 31.58 - 32.77 2012 8,053,406 18.55 - 70.35 190,699,476 -- 0.00 - 0.90 9.98 - 10.97 MSF Jennison Growth 2016 876,445 12.43 - 27.43 22,968,240 0.29 0.00 - 0.90 (0.73) - 0.17 Investment Division 2015 935,827 12.41 - 27.39 24,295,178 0.27 0.00 - 0.90 9.79 - 10.78 2014 975,379 11.20 - 24.72 22,860,613 0.26 0.00 - 0.90 8.08 - 9.06 2013 1,014,111 10.27 - 22.67 21,754,126 0.41 0.00 - 0.90 35.77 - 37.00 2012 1,151,518 7.50 - 16.55 17,774,611 0.22 0.00 - 0.90 14.74 - 15.78 MSF Loomis Sayles 2016 69,702 31.79 - 704.03 25,855,024 0.33 0.00 - 0.90 18.20 - 19.27 Small Cap Core 2015 72,870 26.65 - 590.28 23,094,886 0.16 0.00 - 0.90 (2.38) - (1.50) Investment Division 2014 78,544 27.05 - 599.24 24,891,171 0.04 0.00 - 0.90 2.83 - 3.76 2013 81,272 26.07 - 577.53 25,008,758 0.43 0.00 - 0.90 39.78 - 41.04 2012 88,479 18.49 - 409.49 18,836,597 -- 0.00 - 0.90 13.52 - 14.55 MSF Loomis Sayles 2016 482,679 20.29 - 23.36 11,122,720 -- 0.00 - 0.90 5.26 - 6.21 Small Cap Growth 2015 515,373 19.27 - 21.99 11,185,851 -- 0.00 - 0.90 0.82 - 1.73 Investment Division 2014 532,728 19.12 - 21.62 11,372,609 -- 0.00 - 0.90 0.32 - 1.22 2013 575,475 19.06 - 21.35 12,136,657 -- 0.00 - 0.90 47.37 - 48.70 2012 569,420 12.93 - 14.36 8,095,037 -- 0.00 - 0.90 10.19 - 11.19 MSF Met/Artisan 2016 150,076 32.16 - 464.99 62,142,398 1.09 0.00 - 0.90 21.86 - 22.96 Mid Cap Value 2015 159,896 26.22 - 378.15 53,555,874 1.18 0.00 - 0.90 (10.25) - (9.44) Investment Division 2014 171,419 29.03 - 417.58 62,265,623 0.72 0.00 - 0.90 1.01 - 1.93 2013 179,229 28.55 - 409.68 64,604,740 0.96 0.00 - 0.90 35.63 - 36.85 2012 188,777 20.91 - 299.35 50,145,783 0.99 0.00 - 0.90 10.86 - 11.86 MSF Met/Wellington 2016 7,546,541 25.48 - 103.10 299,463,081 2.75 0.00 - 0.90 6.04 - 6.99 Balanced 2015 8,029,813 23.81 - 96.36 299,841,089 1.96 0.00 - 0.90 1.66 - 2.58 Investment Division 2014 8,541,626 23.21 - 93.94 312,335,178 1.99 0.00 - 0.90 9.56 - 10.55 2013 9,093,665 21.00 - 84.97 302,812,153 2.46 0.00 - 0.90 19.51 - 20.59 2012 9,597,280 17.41 - 70.46 266,981,783 2.28 0.00 - 0.90 11.36 - 12.38 MSF Met/Wellington Core 2016 1,167,450 22.94 - 75.79 73,520,028 1.62 0.00 - 0.90 6.38 - 7.34 Equity Opportunities 2015 1,224,975 21.37 - 70.61 72,522,716 1.78 0.00 - 0.90 1.48 - 2.40 Investment Division 2014 1,304,591 20.87 - 68.96 75,552,945 0.70 0.00 - 0.90 9.64 - 10.63 2013 1,389,950 18.87 - 62.33 72,729,703 1.37 0.00 - 0.90 32.50 - 33.70 2012 1,511,861 14.11 - 46.62 58,219,352 0.83 0.00 - 0.90 11.85 - 12.86 MSF MetLife Asset 2016 271,913 15.77 - 170.04 5,067,129 3.50 0.00 - 0.90 3.83 - 4.76 Allocation 20 Investment 2015 307,157 15.19 - 162.67 5,434,761 2.26 0.00 - 0.90 (1.12) - (0.23) Division 2014 311,182 15.36 - 163.63 5,533,722 3.93 0.00 - 0.90 3.79 - 4.73 2013 302,268 14.80 - 156.63 5,157,553 3.17 0.00 - 0.90 3.57 - 4.50 2012 330,868 14.29 - 150.19 5,385,935 2.97 0.00 - 0.90 8.50 - 9.49
223 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------- ------------------------------------------------- UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ---------- -------------- -------------- ------------- ---------------- ---------------- MSF MetLife Asset 2016 514,580 16.80 - 181.12 10,372,997 3.77 0.00 - 0.90 5.38 - 6.33 Allocation 40 Investment 2015 510,437 15.95 - 170.73 9,648,019 0.47 0.00 - 0.90 (1.67) - (0.78) Division 2014 537,152 16.22 - 172.58 9,972,600 3.00 0.00 - 0.90 4.22 - 5.16 2013 528,645 15.56 - 164.48 9,308,532 2.71 0.00 - 0.90 10.20 - 11.20 2012 548,694 14.12 - 148.28 8,676,630 2.88 0.00 - 0.90 10.73 - 11.74 MSF MetLife Asset 2016 2,715,538 17.57 - 189.41 52,559,818 3.39 0.00 - 0.90 6.50 - 7.47 Allocation 60 Investment 2015 2,828,639 16.50 - 176.84 50,967,639 0.73 0.00 - 0.90 (1.87) - (0.99) Division 2014 2,946,636 16.81 - 179.11 53,734,760 2.27 0.00 - 0.90 4.35 - 5.29 2013 2,959,238 16.11 - 170.50 51,411,065 2.13 0.00 - 0.90 17.23 - 18.29 2012 3,085,848 13.74 - 144.51 45,401,738 2.48 0.00 - 0.90 12.45 - 13.47 MSF MetLife Asset 2016 4,846,527 18.06 - 194.92 96,200,969 3.23 0.00 - 0.90 7.46 - 8.43 Allocation 80 Investment 2015 5,108,404 16.81 - 180.25 93,610,979 0.53 0.00 - 0.90 (2.38) - (1.50) Division 2014 5,267,738 17.22 - 18.78 98,075,582 1.82 0.00 - 0.90 4.59 - 5.53 2013 5,304,870 16.46 - 17.80 93,658,356 1.65 0.00 - 0.90 23.40 - 24.51 2012 5,433,641 13.34 - 14.29 77,039,719 2.10 0.00 - 0.90 14.77 - 15.82 MSF MetLife Mid Cap 2016 2,368,844 35.31 - 40.94 95,179,145 1.28 0.00 - 0.90 19.36 - 20.43 Stock Index 2015 2,505,060 29.58 - 34.00 83,672,129 1.16 0.00 - 0.90 (3.23) - (2.35) Investment Division 2014 2,603,842 30.57 - 34.82 89,174,913 1.02 0.00 - 0.90 8.51 - 9.49 2013 3,096,714 28.17 - 31.80 96,112,727 1.15 0.00 - 0.90 31.96 - 33.15 2012 2,971,386 21.35 - 23.88 69,807,817 0.99 0.00 - 0.90 16.54 - 17.60 MSF MetLife Stock Index 2016 29,438,840 24.47 - 109.62 1,023,023,669 1.99 0.00 - 0.90 10.67 - 11.67 Investment Division 2015 30,734,692 21.92 - 98.16 960,107,143 1.74 0.00 - 0.90 0.26 - 1.17 2014 31,845,594 21.66 - 97.03 986,064,717 1.66 0.00 - 0.90 12.35 - 13.36 2013 33,504,283 19.11 - 85.59 926,254,934 1.82 0.00 - 0.90 30.84 - 32.02 2012 35,058,600 14.48 - 64.83 739,806,231 1.76 0.00 - 0.90 14.72 - 15.76 MSF MFS Total Return 2016 474,868 19.48 - 106.74 10,408,921 2.88 0.00 - 0.90 8.22 - 9.20 Investment Division 2015 489,178 18.00 - 97.75 9,806,863 2.59 0.00 - 0.90 (1.05) - (0.16) 2014 495,079 18.19 - 97.90 9,964,116 2.33 0.00 - 0.90 7.67 - 8.64 2013 516,460 16.89 - 90.12 9,566,029 2.52 0.00 - 0.90 17.93 - 18.99 2012 523,594 14.32 - 75.73 8,143,436 2.81 0.00 - 0.90 10.58 - 11.58 MSF MFS Value Investment 2016 3,245,942 24.80 - 36.46 88,412,117 2.26 0.00 - 0.90 13.37 - 14.39 Division 2015 3,455,842 21.68 - 31.88 82,376,165 2.71 0.00 - 0.90 (1.05) - (0.15) 2014 3,651,820 21.71 - 31.93 87,234,542 1.68 0.00 - 0.90 9.82 - 10.81 2013 3,880,440 19.62 - 28.81 83,882,181 1.69 0.00 - 0.90 (11.63) - 35.73 2012 3,634,888 14.55 - 21.23 57,891,425 1.92 0.00 - 0.90 15.60 - 16.65 MSF MSCI EAFE Index 2016 4,616,576 12.64 - 18.76 76,450,323 2.63 0.00 - 0.90 0.43 - 1.34 Investment Division 2015 4,684,375 12.59 - 18.52 76,534,999 3.19 0.00 - 0.90 (1.98) - (1.09) 2014 4,721,774 12.84 - 18.72 77,801,016 2.52 0.00 - 0.90 (6.85) - (6.00) 2013 4,619,766 13.79 - 19.92 81,042,858 3.03 0.00 - 0.90 20.77 - 21.86 2012 4,738,737 11.42 - 16.34 68,221,885 3.07 0.00 - 0.90 17.26 - 18.33 MSF Neuberger Berman 2016 3,062,903 32.16 - 37.29 112,504,182 0.47 0.00 - 0.90 17.62 - 18.68 Genesis Investment 2015 3,271,086 27.34 - 31.42 101,297,663 0.43 0.00 - 0.90 (0.32) - 0.58 Division 2014 3,467,583 27.43 - 31.24 106,824,598 0.39 0.00 - 0.90 (0.89) - 0.01 2013 3,669,017 27.67 - 31.24 113,031,475 0.76 0.00 - 0.90 37.28 - 38.52 2012 3,701,342 20.16 - 22.55 82,409,606 0.37 0.00 - 0.90 9.04 - 10.03
224 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONTINUED)
AS OF DECEMBER 31 ------------------------------------------ UNIT VALUE LOWEST TO NET UNITS HIGHEST ($) ASSETS ($) ----------- -------------- ------------- MSF Russell 2000 Index 2016 2,084,347 27.43 - 41.84 78,678,964 Investment Division 2015 2,183,522 22.82 - 34.50 68,161,805 2014 2,260,930 24.05 - 36.04 73,667,200 2013 2,328,388 23.11 - 34.31 72,232,088 2012 2,492,581 16.83 - 24.76 55,930,600 MSF T. Rowe Price 2016 2,929,700 20.88 - 34.59 84,300,674 Large Cap Growth 2015 3,109,875 20.70 - 33.99 87,850,152 Investment Division 2014 3,259,625 18.86 - 30.68 83,295,035 2013 3,427,787 17.44 - 28.13 80,327,308 2012 2,902,055 12.65 - 20.21 49,402,465 MSF T. Rowe Price 2016 2,533,741 39.69 - 48.20 112,461,733 Small Cap Growth 2015 2,691,919 35.84 - 43.14 107,313,520 Investment Division 2014 2,818,717 35.21 - 42.00 109,708,317 2013 3,406,451 33.24 - 39.29 125,276,849 2012 3,660,384 23.20 - 27.18 93,411,008 MSF Van Eck Global 2016 1,763 147.06 259,264 Natural Resources 2015 1,703 101.94 173,650 Investment Division 2014 1,164 151.34 176,178 2013 916 185.99 170,365 2012 319 167.46 53,423 MSF Western Asset 2016 1,852,684 10.47 - 44.71 52,921,776 Management Strategic 2015 964,462 22.85 - 41.19 24,996,181 Bond Opportunities 2014 989,244 23.46 - 41.91 26,015,238 Investment Division 2013 1,022,252 22.45 - 39.73 25,366,442 2012 1,037,022 22.40 - 39.30 25,456,035 MSF Western Asset 2016 848,868 16.20 - 25.69 15,656,147 Management 2015 870,402 16.14 - 25.36 15,860,627 U.S. Government 2014 904,420 16.19 - 25.22 16,386,046 Investment Division 2013 935,377 15.89 - 24.53 16,494,249 2012 936,357 16.15 - 24.71 16,622,548 Oppenheimer VA Main 2016 146 40.00 5,825 Street Small Cap 2015 290 33.88 9,828 Investment Division 2014 140 36.01 5,052 (Commenced 4/28/2008 and began transactions in 2014) PIMCO VIT All Asset 2016 9,539 13.23 126,203 Investment Division 2015 9,368 11.72 109,756 2014 70,102 12.87 902,397 2013 72,143 12.81 924,295 2012 10,325 12.78 131,919 PIMCO VIT 2016 1,178 8.43 9,928 CommodityRealReturn 2015 1,395 7.32 10,211 Strategy Investment Division 2014 3,576 9.85 35,230 (Commenced 4/29/2013) 2013 479 12.08 5,783 FOR THE YEAR ENDED DECEMBER 31 -------------------------------------------------- INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) INCOME LOWEST TO LOWEST TO RATIO (%) HIGHEST (%) HIGHEST (%) ------------- ----------------- ---------------- MSF Russell 2000 Index 2016 1.38 0.00 - 0.90 20.20 - 21.28 Investment Division 2015 1.21 0.00 - 0.90 (5.13) - (4.27) 2014 1.14 0.00 - 0.90 4.10 - 5.04 2013 1.53 0.00 - 0.90 37.31 - 38.55 2012 1.15 0.00 - 0.90 15.30 - 16.35 MSF T. Rowe Price 2016 0.06 0.00 - 0.90 0.85 - 1.76 Large Cap Growth 2015 0.14 0.00 - 0.90 9.79 - 10.78 Investment Division 2014 0.06 0.00 - 0.90 8.11 - 9.09 2013 0.25 0.00 - 0.90 37.91 - 39.19 2012 0.12 0.00 - 0.90 17.90 - 18.97 MSF T. Rowe Price 2016 0.26 0.00 - 0.90 10.74 - 11.74 Small Cap Growth 2015 0.14 0.00 - 0.90 1.79 - 2.71 Investment Division 2014 0.02 0.00 - 0.90 5.95 - 6.91 2013 0.34 0.00 - 0.90 43.26 - 44.55 2012 -- 0.00 - 0.90 15.13 - 16.18 MSF Van Eck Global 2016 0.86 0.00 44.26 Natural Resources 2015 0.52 0.00 (32.64) Investment Division 2014 0.49 0.00 (18.63) 2013 0.61 0.00 14.17 2012 -- 0.00 2.80 MSF Western Asset 2016 1.88 0.00 - 0.90 4.71 - 8.55 Management Strategic 2015 5.11 0.00 - 0.90 (2.60) - (1.72) Bond Opportunities 2014 5.30 0.00 - 0.90 4.53 - 5.47 Investment Division 2013 4.98 0.00 - 0.90 0.19 - 1.09 2012 3.61 0.00 - 0.90 10.49 - 11.50 MSF Western Asset 2016 2.60 0.00 - 0.90 0.38 - 1.28 Management 2015 2.30 0.00 - 0.90 (0.33) - 0.57 U.S. Government 2014 1.93 0.00 - 0.90 1.89 - 2.81 Investment Division 2013 2.13 0.00 - 0.90 (1.63) - (0.74) 2012 2.09 0.00 - 0.90 2.44 - 3.37 Oppenheimer VA Main 2016 0.54 0.00 18.05 Street Small Cap 2015 0.84 0.00 (5.90) Investment Division 2014 -- 0.00 11.93 (Commenced 4/28/2008 and began transactions in 2014) PIMCO VIT All Asset 2016 2.67 0.00 12.93 Investment Division 2015 2.33 0.00 (8.99) 2014 5.22 0.00 0.47 2013 9.56 0.00 0.27 2012 5.69 0.00 10.96 PIMCO VIT 2016 1.10 0.00 15.16 CommodityRealReturn 2015 5.76 0.00 (25.70) Strategy Investment Division 2014 0.40 0.00 (18.42) (Commenced 4/29/2013) 2013 -- 0.00 (7.98)
225 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONTINUED) 8. FINANCIAL HIGHLIGHTS -- (CONCLUDED)
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 ------------------------------------------ ------------------------------------------------ UNIT VALUE INVESTMENT(1) EXPENSE RATIO(2) TOTAL RETURN(3) LOWEST TO NET INCOME LOWEST TO LOWEST TO UNITS HIGHEST ($) ASSETS ($) RATIO (%) HIGHEST (%) HIGHEST (%) ----------- -------------- ------------- ------------- ---------------- --------------- PIMCO VIT Low Duration 2016 68,350 12.77 872,582 1.50 0.00 1.41 Investment Division 2015 65,525 12.59 824,924 3.11 0.00 0.31 2014 123,927 12.55 1,555,287 1.13 0.00 0.85 2013 126,188 12.44 1,570,296 1.45 0.00 0.21 2012 79,088 12.46 985,514 1.91 0.00 5.86 Pioneer VCT Mid Cap Value 2016 737 75.92 55,933 0.74 0.00 16.56 Investment Division 2015 713 65.14 46,440 0.78 0.00 (6.14) 2014 1,012 69.40 70,257 0.82 0.00 15.09 2013 828 60.30 49,935 0.48 0.00 33.10 2012 3,389 45.30 153,545 1.05 0.00 11.11 Putnam VT International 2016 177 24.13 4,261 2.57 0.00 1.11 Value Investment Division 2015 239 23.87 5,695 1.37 0.00 (2.00) (Commenced 4/28/2008 and 2014 239 24.36 5,820 1.40 0.00 (9.49) began transactions in 2013) 2013 239 26.91 6,428 -- 0.00 22.21 Royce Micro-Cap Investment 2016 505 20.97 10,583 0.73 0.00 19.71 Division 2015 465 17.52 8,139 -- 0.00 (12.46) 2014 417 20.01 8,336 -- 0.00 (3.58) 2013 374 20.76 7,757 0.01 0.00 20.99 2012 21,685 17.16 372,006 -- 0.00 7.60 Royce Small-Cap Investment 2016 2,833 24.20 68,550 1.99 0.00 20.96 Division 2015 2,698 20.01 53,973 0.87 0.00 (11.80) 2014 2,265 22.68 51,371 0.01 0.00 3.24 2013 31,356 21.97 688,929 1.08 0.00 34.75 2012 33,234 16.30 541,872 0.09 0.00 12.50 UIF Emerging Markets Debt 2016 34,218 36.73 1,256,825 5.31 0.00 10.55 Investment Division 2015 27,569 33.22 915,935 5.42 0.00 (1.12) 2014 23,590 33.60 792,559 6.39 0.00 2.93 2013 35,538 32.64 1,160,019 4.27 0.00 (8.75) 2012 33,059 35.77 1,182,598 2.41 0.00 17.96 UIF Emerging Markets Equity 2016 235,477 13.42 3,160,892 0.47 0.00 6.74 Investment Division 2015 176,970 12.58 2,225,571 0.83 0.00 (10.69) 2014 150,699 14.08 2,122,051 0.29 0.00 (4.49) 2013 83,866 14.74 1,236,458 1.23 0.00 (1.02) 2012 69,412 14.90 1,033,944 -- 0.00 19.95
1 These amounts represent the dividends, excluding distributions of capital gains, received by the Investment Division from the underlying fund, portfolio, or series, net of management fees assessed by the fund manager, divided by the average net assets, regardless of share class, if any. These ratios exclude those expenses, such as mortality and expense risk charges, that are assessed against policy owner accounts either through reductions in the unit values or the redemption of units. The investment income ratio is calculated for each period indicated or from the effective date through the end of the reporting period. The recognition of investment income by the Investment Division is affected by the timing of the declaration of dividends by the underlying fund, portfolio, or series, in which the Investment Division invests. The investment income ratio is calculated as a weighted average ratio since the Investment Division may invest in two or more share classes, if any, within the underlying fund, portfolio, or series of the Trusts which may have unique investment income ratios. 2 These amounts represent annualized policy expenses of each of the applicable Investment Divisions, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to policy owner accounts through the redemption of units and expenses of the underlying fund, portfolio, or series have been excluded. 3 These amounts represent the total return for the period indicated, including changes in the value of the underlying fund, portfolio, or series, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. The total return is presented as a range of minimum to maximum returns, based on the minimum and maximum returns within each product grouping of the applicable Investment Division. 226 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY NOTES TO THE FINANCIAL STATEMENTS -- (CONCLUDED) 9. SUBSEQUENT EVENTS The operations of the Investment Divisions were affected by the following changes that occurred on March 6, 2017: PORTFOLIO NAME CHANGES: Former Name New Name (MIST) Met/Aberdeen Emerging Markets Equity (BHFTI) Brighthouse/Aberdeen Emerging Markets Portfolio Equity Portfolio (MIST) Met/Templeton International Bond Portfolio (BHFTI) Brighthouse/Templeton International Bond Portfolio (MIST) Met/Wellington Large Cap Research Portfolio (BHFTI) Brighthouse/Wellington Large Cap Research Portfolio (MIST) MetLife Asset Allocation 100 Portfolio (BHFTI) Brighthouse Asset Allocation 100 Portfolio (MIST) MetLife Balanced Plus Portfolio (BHFTI) Brighthouse Balanced Plus Portfolio (MIST) MetLife Small Cap Value Portfolio (BHFTI) Brighthouse Small Cap Value Portfolio (MSF) Barclays Aggregate Bond Index Portfolio (BHFTII) MetLife Aggregate Bond Index Portfolio (MSF) Met/Artisan Mid Cap Value Portfolio (BHFTII) Brighthouse/Artisan Mid Cap Value Portfolio (MSF) Met/Wellington Balanced Portfolio (BHFTII) Brighthouse/Wellington Balanced Portfolio (MSF) Met/Wellington Core Equity Opportunities (BHFTII) Brighthouse/Wellington Core Equity Portfolio Opportunities Portfolio (MSF) MetLife Asset Allocation 20 Portfolio (BHFTII) Brighthouse Asset Allocation 20 Portfolio (MSF) MetLife Asset Allocation 40 Portfolio (BHFTII) Brighthouse Asset Allocation 40 Portfolio (MSF) MetLife Asset Allocation 60 Portfolio (BHFTII) Brighthouse Asset Allocation 60 Portfolio (MSF) MetLife Asset Allocation 80 Portfolio (BHFTII) Brighthouse Asset Allocation 80 Portfolio (MSF) MSCI EAFE Index Portfolio (BHFTII) MetLife MSCI EAFE Index Portfolio (MSF) Russell 2000 Index Portfolio (BHFTII) MetLife Russell 2000 Index Portfolio
TRUST NAME CHANGES: Former Trust New Trust Met Investors Series Trust (MIST) Brighthouse Funds Trust I (BHFTI) Metropolitan Series Fund (MSF) Brighthouse Funds Trust II (BHFTII)
ADVISER NAME CHANGE: Former Adviser New Adviser MetLife Advisers, LLC Brighthouse Investment Advisers, LLC
227 This page is intentionally left blank. Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements, Notes and Schedules
Page ---------- Report of Independent Registered Public Accounting Firm.......................................... 2 Financial Statements at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015 and 2014: Consolidated Balance Sheets..................................................................... 3 Consolidated Statements of Operations........................................................... 4 Consolidated Statements of Comprehensive Income (Loss).......................................... 5 Consolidated Statements of Equity............................................................... 6 Consolidated Statements of Cash Flows........................................................... 7 Notes to the Consolidated Financial Statements.................................................. 9 Note 1 -- Business, Basis of Presentation and Summary of Significant Accounting Policies.... 9 Note 2 -- Segment Information............................................................... 26 Note 3 -- Dispositions...................................................................... 32 Note 4 -- Insurance......................................................................... 32 Note 5 -- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles............................................................................... 43 Note 6 -- Reinsurance....................................................................... 46 Note 7 -- Closed Block...................................................................... 51 Note 8 -- Investments....................................................................... 54 Note 9 -- Derivatives....................................................................... 75 Note 10 -- Fair Value....................................................................... 88 Note 11 -- Long-term and Short-term Debt.................................................... 107 Note 12 -- Equity........................................................................... 110 Note 13 -- Other Expenses................................................................... 115 Note 14 -- Employee Benefit Plans........................................................... 116 Note 15 -- Income Tax....................................................................... 125 Note 16 -- Contingencies, Commitments and Guarantees........................................ 130 Note 17 -- Quarterly Results of Operations (Unaudited)...................................... 139 Note 18 -- Related Party Transactions....................................................... 139 Note 19 -- Subsequent Events................................................................ 140 Financial Statement Schedules at December 31, 2016 and 2015 and for the Years Ended December 31, 2016, 2015 and 2014: Schedule I -- Consolidated Summary of Investments -- Other Than Investments in Related Parties....................................................................................... 141 Schedule III -- Consolidated Supplementary Insurance Information................................ 142 Schedule IV -- Consolidated Reinsurance......................................................... 144
1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholder of Metropolitan Life Insurance Company: We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2016 and 2015, and the related consolidated statements of operations, comprehensive income (loss), equity, and cash flows for each of the three years in the period ended December 31, 2016. Our audits also included the financial statement schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules. These consolidated financial statements and financial statement schedules are the responsibility of the Company's management. Our responsibility is to express an opinion on the consolidated financial statements and financial statement schedules 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 consolidated 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 as of December 31, 2016 and 2015, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2016, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedules, when considered in relation to the basic consolidated financial statements taken as a whole, present fairly, in all material respects, the information set forth therein. /s/ DELOITTE & TOUCHE LLP New York, New York March 23, 2017 2 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Balance Sheets December 31, 2016 and 2015 (In millions, except share and per share data)
2016 2015 ------------- ------------- Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $155,141 and $168,361, respectively; includes $0 and $103, respectively, relating to variable interest entities)............................. $ 163,120 $ 175,686 Equity securities available-for-sale, at estimated fair value (cost: $1,785 and $1,985, respectively).............. 1,839 1,949 Fair value option and trading securities, at estimated fair value (includes $0 and $404, respectively, of actively traded securities; and $8 and $13, respectively, relating to variable interest entities)............................. 23 431 Mortgage loans (net of valuation allowances of $267 and $257, respectively; includes $566 and $314, respectively, under the fair value option)............................... 56,560 53,722 Policy loans................................................ 5,945 8,134 Real estate and real estate joint ventures (includes $1,124 and $0, respectively, relating to variable interest entities; includes $56 and $42, respectively, of real estate held-for-sale)...................................... 6,386 6,008 Other limited partnership interests (includes $14 and $27, respectively, relating to variable interest entities)...... 3,725 4,088 Short-term investments, principally at estimated fair value. 4,690 5,595 Other invested assets (includes $31 and $43, respectively, relating to variable interest entities).................... 17,232 16,869 ------------- ------------- Total investments......................................... 259,520 272,482 Cash and cash equivalents, principally at estimated fair value (includes $0 and $1, respectively, relating to variable interest entities)................................ 5,714 4,651 Accrued investment income (includes $0 and $1, respectively, relating to variable interest entities)...... 2,019 2,250 Premiums, reinsurance and other receivables (includes $6 and $2, respectively, relating to variable interest entities).................................................. 22,383 23,722 Deferred policy acquisition costs and value of business acquired................................................... 4,743 6,043 Current income tax recoverable.............................. -- 36 Other assets (includes $3 and $3, respectively, relating to variable interest entities)................................ 4,346 4,397 Separate account assets..................................... 133,836 135,939 ------------- ------------- Total assets.............................................. $ 432,561 $ 449,520 ============= ============= Liabilities and Equity Liabilities Future policy benefits...................................... $ 115,556 $ 118,914 Policyholder account balances............................... 92,466 94,420 Other policy-related balances............................... 6,731 7,201 Policyholder dividends payable.............................. 510 624 Policyholder dividend obligation............................ 1,931 1,783 Payables for collateral under securities loaned and other transactions............................................... 20,815 21,937 Short-term debt............................................. 100 100 Long-term debt (includes $12 and $61, respectively, at estimated fair value, relating to variable interest entities).................................................. 1,589 1,715 Current income tax payable.................................. 50 -- Deferred income tax liability............................... 2,503 2,888 Other liabilities (includes $0 and $2, respectively, relating to variable interest entities).................... 29,497 32,755 Separate account liabilities................................ 133,836 135,939 ------------- ------------- Total liabilities......................................... 405,584 418,276 ------------- ------------- Contingencies, Commitments and Guarantees (Note 16) Equity Metropolitan Life Insurance Company stockholder's equity: Common stock, par value $0.01 per share; 1,000,000,000 shares authorized; 494,466,664 shares issued and outstanding................................................ 5 5 Additional paid-in capital.................................. 14,413 14,444 Retained earnings........................................... 9,250 13,738 Accumulated other comprehensive income (loss)............... 3,119 2,685 ------------- ------------- Total Metropolitan Life Insurance Company stockholder's equity................................................... 26,787 30,872 Noncontrolling interests.................................... 190 372 ------------- ------------- Total equity.............................................. 26,977 31,244 ------------- ------------- Total liabilities and equity.............................. $ 432,561 $ 449,520 ============= =============
See accompanying notes to the consolidated financial statements. 3 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Operations For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 ------------ ------------ ------------ Revenues Premiums........................................................................... $ 22,393 $ 21,934 $ 21,384 Universal life and investment-type product policy fees............................. 2,542 2,584 2,466 Net investment income.............................................................. 11,083 11,577 11,893 Other revenues..................................................................... 1,478 1,536 1,808 Net investment gains (losses): Other-than-temporary impairments on fixed maturity securities...................... (87) (49) (16) Other-than-temporary impairments on fixed maturity securities transferred to other comprehensive income (loss)....................................................... (10) (5) (10) Other net investment gains (losses)................................................ 229 313 169 ------------ ------------ ------------ Total net investment gains (losses).............................................. 132 259 143 Net derivative gains (losses)...................................................... (1,138) 881 1,037 ------------ ------------ ------------ Total revenues................................................................... 36,490 38,771 38,731 ------------ ------------ ------------ Expenses Policyholder benefits and claims................................................... 25,291 24,527 23,855 Interest credited to policyholder account balances................................. 2,233 2,183 2,174 Policyholder dividends............................................................. 1,200 1,264 1,240 Other expenses..................................................................... 5,803 6,258 6,071 ------------ ------------ ------------ Total expenses................................................................... 34,527 34,232 33,340 ------------ ------------ ------------ Income (loss) from continuing operations before provision for income tax......... 1,963 4,539 5,391 Provision for income tax expense (benefit)......................................... 207 1,782 1,532 ------------ ------------ ------------ Income (loss) from continuing operations, net of income tax...................... 1,756 2,757 3,859 Income (loss) from discontinued operations, net of income tax...................... -- -- (3) ------------ ------------ ------------ Net income (loss)................................................................ 1,756 2,757 3,856 Less: Net income (loss) attributable to noncontrolling interests................... (8) -- (5) ------------ ------------ ------------ Net income (loss) attributable to Metropolitan Life Insurance Company............ $ 1,764 $ 2,757 $ 3,861 ============ ============ ============
See accompanying notes to the consolidated financial statements. 4 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Comprehensive Income (Loss) For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 ------------ ------------ ------------ Net income (loss).................................................................. $ 1,756 $ 2,757 $ 3,856 Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsets....................... 406 (4,434) 4,165 Unrealized gains (losses) on derivatives........................................... 36 559 1,288 Foreign currency translation adjustments........................................... 13 (101) (44) Defined benefit plans adjustment................................................... 217 342 (1,001) ------------ ------------ ------------ Other comprehensive income (loss), before income tax............................. 672 (3,634) 4,408 Income tax (expense) benefit related to items of other comprehensive income (loss). (238) 1,285 (1,532) ------------ ------------ ------------ Other comprehensive income (loss), net of income tax............................. 434 (2,349) 2,876 ------------ ------------ ------------ Comprehensive income (loss)........................................................ 2,190 408 6,732 Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income tax........................................................................ (8) -- (5) ------------ ------------ ------------ Comprehensive income (loss) attributable to Metropolitan Life Insurance Company......................................................................... $ 2,198 $ 408 $ 6,737 ============ ============ ============
See accompanying notes to the consolidated financial statements. 5 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Equity For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
Accumulated Total Additional Other Metropolitan Life Common Paid-in Retained Comprehensive Insurance Company Noncontrolling Total Stock Capital Earnings Income (Loss) Stockholder's Equity Interests Equity -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2013................... $ 5 $ 14,515 $ 9,352 $ 2,158 $ 26,030 $ 250 $ 26,280 Capital contributions from MetLife, Inc...... 4 4 4 Returns of capital...... (76) (76) (76) Excess tax benefits related to stock-based compensation........... 5 5 5 Dividends paid to MetLife, Inc........... (708) (708) (708) Dividend of subsidiary (Note 3)............... (35) (35) (35) Change in equity of noncontrolling interests.............. -- 147 147 Net income (loss)....... 3,861 3,861 (5) 3,856 Other comprehensive income (loss), net of income tax............. 2,876 2,876 2,876 -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2014................... 5 14,448 12,470 5,034 31,957 392 32,349 Capital contributions from MetLife, Inc...... 4 4 4 Returns of capital...... (11) (11) (11) Excess tax benefits related to stock-based compensation........... 3 3 3 Dividends paid to MetLife, Inc........... (1,489) (1,489) (1,489) Change in equity of noncontrolling interests.............. -- (20) (20) Net income (loss)....... 2,757 2,757 2,757 Other comprehensive income (loss), net of income tax............. (2,349) (2,349) (2,349) -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2015................... 5 14,444 13,738 2,685 30,872 372 31,244 Capital contributions from MetLife, Inc...... 10 10 10 Returns of capital...... (68) (68) (68) Excess tax benefits related to stock-based compensation........... 27 27 27 Dividends paid to MetLife, Inc........... (3,600) (3,600) (3,600) Dividend of subsidiaries (Note 3).. (2,652) (2,652) 2 (2,650) Change in equity of noncontrolling interests.............. -- (176) (176) Net income (loss)....... 1,764 1,764 (8) 1,756 Other comprehensive income (loss), net of income tax............. 434 434 434 -------- ----------- ---------- -------------- --------------------- --------------- --------- Balance at December 31, 2016................... $ 5 $ 14,413 $ 9,250 $ 3,119 $ 26,787 $ 190 $ 26,977 ======== =========== ========== ============== ===================== =============== =========
See accompanying notes to the consolidated financial statements. 6 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 --------------- --------------- --------------- Cash flows from operating activities Net income (loss)..................................................... $ 1,756 $ 2,757 $ 3,856 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization expenses............................... 367 474 460 Amortization of premiums and accretion of discounts associated with investments, net.................................................... (975) (848) (664) (Gains) losses on investments and from sales of businesses, net...... (132) (259) (138) (Gains) losses on derivatives, net................................... 1,865 (426) (902) (Income) loss from equity method investments, net of dividends or distributions....................................................... 483 320 374 Interest credited to policyholder account balances................... 2,233 2,183 2,174 Universal life and investment-type product policy fees............... (2,542) (2,584) (2,466) Change in fair value option and trading securities................... 406 278 2 Change in accrued investment income.................................. 81 113 242 Change in premiums, reinsurance and other receivables................ (2,606) (135) 711 Change in deferred policy acquisition costs and value of business acquired, net....................................................... 108 260 271 Change in income tax................................................. (430) 257 229 Change in other assets............................................... 701 763 465 Change in insurance-related liabilities and policy-related balances.. 2,719 2,628 2,672 Change in other liabilities.......................................... 1,731 (499) (1,086) Other, net........................................................... 39 (16) 1 --------------- --------------- --------------- Net cash provided by (used in) operating activities................. 5,804 5,266 6,201 --------------- --------------- --------------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities............................................ 74,985 82,744 63,068 Equity securities.................................................... 859 651 186 Mortgage loans....................................................... 11,286 11,189 11,605 Real estate and real estate joint ventures........................... 762 2,734 976 Other limited partnership interests.................................. 830 1,185 375 Purchases of: Fixed maturity securities............................................ (72,414) (76,594) (69,256) Equity securities.................................................... (771) (694) (173) Mortgage loans....................................................... (16,039) (16,268) (14,769) Real estate and real estate joint ventures........................... (1,390) (823) (1,876) Other limited partnership interests.................................. (809) (668) (773) Cash received in connection with freestanding derivatives............. 1,372 1,039 740 Cash paid in connection with freestanding derivatives................. (2,451) (1,012) (1,050) Receipts on loans to affiliates....................................... -- -- 75 Issuances of loans to affiliates...................................... -- -- (100) Purchases of loans to affiliates...................................... -- -- (437) Net change in policy loans............................................ 85 357 (70) Net change in short-term investments.................................. 694 (1,117) 1,472 Net change in other invested assets................................... (434) (603) (254) Net change in property, equipment and leasehold improvements.......... (227) 23 (140) Other, net............................................................ -- -- (32) --------------- --------------- --------------- Net cash provided by (used in) investing activities................. $ (3,662) $ 2,143 $ (10,433) --------------- --------------- ---------------
See accompanying notes to the consolidated financial statements. 7 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) -- (continued) Consolidated Statements of Cash Flows For the Years Ended December 31, 2016, 2015 and 2014 (In millions)
2016 2015 2014 --------- --------- --------- Cash flows from financing activities Policyholder account balances: Deposits...................................................................... $ 64,962 $ 60,216 $ 54,902 Withdrawals................................................................... (61,252) (61,248) (51,210) Net change in payables for collateral under securities loaned and other transactions................................................................... (696) (2,230) 3,071 Net change in short-term debt................................................... -- -- (320) Long-term debt issued........................................................... 45 907 4 Long-term debt repaid........................................................... (58) (673) (390) Financing element on certain derivative instruments, net........................ (321) (66) (224) Cash paid in connection with noncontrolling interests........................... -- (159) -- Dividend of subsidiaries........................................................ (115) -- -- Dividends paid to MetLife, Inc.................................................. (3,600) (1,489) (708) Returns of capital.............................................................. (68) (11) -- Other, net...................................................................... 24 2 2 --------- --------- --------- Net cash provided by (used in) financing activities........................... (1,079) (4,751) 5,127 --------- --------- --------- Change in cash and cash equivalents........................................... 1,063 2,658 895 Cash and cash equivalents, beginning of year.................................... 4,651 1,993 1,098 --------- --------- --------- Cash and cash equivalents, end of year........................................ $ 5,714 $ 4,651 $ 1,993 ========= ========= ========= Supplemental disclosures of cash flow information............................... Net cash paid (received) for: Interest........................................................................ $ 114 $ 123 $ 150 ========= ========= ========= Income tax...................................................................... $ 819 $ 1,217 $ 1,304 ========= ========= ========= Non-cash transactions Capital contributions from MetLife, Inc......................................... $ 10 $ 4 $ 4 ========= ========= ========= Fixed maturity securities received in connection with pension risk transfer transactions................................................................... $ 985 $ 903 $ -- ========= ========= ========= Transfer of fixed maturity securities from affiliates........................... $ 367 $ -- $ -- ========= ========= ========= Transfer of fixed maturity securities to affiliates............................. $ 3,940 $ -- $ -- ========= ========= ========= Transfer of mortgage loans to affiliates........................................ $ 626 $ -- $ -- ========= ========= ========= Deconsolidation of real estate investment vehicles (1): Reduction of redeemable noncontrolling interests.............................. $ -- $ -- $ 774 ========= ========= ========= Reduction of long-term debt................................................... $ -- $ 543 $ 413 ========= ========= ========= Reduction of real estate and real estate joint ventures....................... $ 354 $ 389 $ 1,132 ========= ========= ========= Increase in noncontrolling interests.......................................... $ -- $ 153 $ -- ========= ========= ========= Reduction of noncontrolling interests......................................... $ 354 $ -- $ -- ========= ========= ========= Issuance of short-term debt..................................................... $ -- $ -- $ 245 ========= ========= ========= Returns of capital.............................................................. $ -- $ -- $ 76 ========= ========= ========= Disposal of subsidiaries: Assets disposed................................................................. $ 27,476 $ -- $ 69 Liabilities disposed............................................................ (24,572) -- (34) --------- --------- --------- Net assets disposed........................................................... 2,904 -- 35 Cash disposed................................................................... (115) -- (49) Dividend of interests in subsidiaries........................................... (2,789) -- 14 --------- --------- --------- Loss on dividend of interests in subsidiaries................................. $ -- $ -- $ -- ========= ========= =========
--------- (1) For the year ended December 31, 2015, amounts represent the impact of the consolidation of a real estate investment vehicle, offset by the subsequent deconsolidation of such real estate investment vehicle. See accompanying notes to the consolidated financial statements. 8 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements 1. Business, Basis of Presentation and Summary of Significant Accounting Policies Business Metropolitan Life Insurance Company and its subsidiaries (collectively, "MLIC" or the "Company") is a provider of life insurance, annuities, employee benefits and asset management and is organized into two segments: U.S. and MetLife Holdings. Metropolitan Life Insurance Company is a wholly-owned subsidiary of MetLife, Inc. (MetLife, Inc., together with its subsidiaries and affiliates, "MetLife"). Basis of Presentation The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to adopt accounting policies and make estimates and assumptions that affect amounts reported on the consolidated financial statements. In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others are specific to the Company's business and operations. Actual results could differ from these estimates. Consolidation The accompanying consolidated financial statements include the accounts of Metropolitan Life Insurance Company and its subsidiaries, as well as partnerships and joint ventures in which the Company has control, and variable interest entities ("VIEs") for which the Company is the primary beneficiary. Intercompany accounts and transactions have been eliminated. Since the Company is a member of a controlled group of affiliated companies, its results may not be indicative of those of a stand-alone entity. Discontinued Operations The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale are reported in discontinued operations if certain criteria are met. Effective January 1, 2014, the Company adopted new guidance regarding reporting of discontinued operations for disposals or classifications as held-for-sale that have not been previously reported on the consolidated financial statements. A disposal of a component is reported in discontinued operations if the disposal represents a strategic shift that has or will have a major effect on the Company's operations and financial results. Separate Accounts Separate accounts are established in conformity with insurance laws. Generally, the assets of the separate accounts cannot be used to settle the 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. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the separate accounts if: . such separate accounts are legally recognized; . assets supporting the contract liabilities are legally insulated from the Company's general account liabilities; . investments are directed by the contractholder; and . all investment performance, net of contract fees and assessments, is passed through to the contractholder. The Company reports separate account assets at their fair value, which is based on the estimated fair values of the underlying assets comprising the individual separate account portfolios. 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 on the statements of operations. Separate accounts credited with a contractual investment return are combined on a line-by-line basis with the Company's general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described herein for similar financial instruments held within the general account. 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. Such fees are included in universal life and investment-type product policy fees on the statements of operations. 9 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Reclassifications Certain amounts in the prior years' consolidated financial statements and related footnotes thereto have been reclassified to conform with the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements. Summary of Significant Accounting Policies The following are the Company's significant accounting policies with references to notes providing additional information on such policies and critical accounting estimates relating to such policies. -------------------------------------------------------------------------------------------- Accounting Policy Note -------------------------------------------------------------------------------------------- Insurance 4 -------------------------------------------------------------------------------------------- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles 5 -------------------------------------------------------------------------------------------- Reinsurance 6 -------------------------------------------------------------------------------------------- Investments 8 -------------------------------------------------------------------------------------------- Derivatives 9 -------------------------------------------------------------------------------------------- Fair Value 10 -------------------------------------------------------------------------------------------- Employee Benefit Plans 14 -------------------------------------------------------------------------------------------- Income Tax 15 -------------------------------------------------------------------------------------------- Litigation Contingencies 16 --------------------------------------------------------------------------------------------
Insurance Future Policy Benefit Liabilities and Policyholder Account Balances The Company establishes liabilities for amounts payable under insurance policies. Generally, amounts are payable over an extended period of time and related liabilities are calculated as the present value of future expected benefits to be paid, reduced by the present value of future expected premiums. Such 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, policy lapse, renewal, retirement, disability incidence, disability terminations, investment returns, inflation, expenses and other contingent events as appropriate to the respective product type. These assumptions are established at the time the policy is issued and are intended to estimate the experience for the period the policy benefits are payable. Utilizing these assumptions, liabilities are established on a block of business basis. For long-duration insurance contracts, assumptions such as mortality, morbidity and interest rates are "locked in" upon the issuance of new business. However, significant adverse changes in experience on such contracts may require the establishment of premium deficiency reserves. Such reserves are determined based on the then current assumptions and do not include a provision for adverse deviation. Premium deficiency reserves may also be established for short-duration contracts to provide for expected future losses. These reserves are based on actuarial estimates of the amount of loss inherent in that period, including losses incurred for which claims have not been reported. The provisions for unreported claims are calculated using studies that measure the historical length of time between the incurred date of a claim and its eventual reporting to the Company. Anticipated investment income is considered in the calculation of premium deficiency losses for short-duration contracts. Liabilities for universal and variable life policies with 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 assumptions used in estimating the secondary and paid-up guarantee liabilities are consistent with those used for amortizing deferred policy acquisition costs ("DAC"), and are thus subject to the same variability and risk as further discussed herein. The assumptions of investment performance and volatility for variable products are consistent with historical experience of appropriate underlying equity indices, such as the Standard & Poor's Global Ratings ("S&P") 500 Index. The benefits used in calculating the liabilities are based on the average benefits payable over a range of scenarios. 10 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company regularly reviews its estimates of liabilities for future policy benefits and compares them with its actual experience. Differences result in changes to the liability balances with related charges or credits to benefit expenses in the period in which the changes occur. Policyholder account balances relate to contracts or contract features where the Company has no significant insurance risk. The Company issues directly and assumes through reinsurance certain variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit (i.e., the benefit base) less withdrawals. These guarantees are accounted for as insurance liabilities or as embedded derivatives depending on how and when the benefit is paid. Specifically, a guarantee is accounted for as an embedded derivative if a guarantee is paid without requiring (i) the occurrence of specific insurable event, or (ii) the policyholder to annuitize. Alternatively, a guarantee is accounted for as an insurance liability if the guarantee is paid only upon either (i) the occurrence of a specific insurable event, or (ii) annuitization. In certain cases, a guarantee may have elements of both an insurance liability and an embedded derivative and in such cases the guarantee is split and accounted for under both models. Guarantees accounted for as insurance liabilities in future policy benefits include guaranteed minimum death benefits ("GMDBs"), the portion of guaranteed minimum income benefits ("GMIBs") that require annuitization, and the life-contingent portion of guaranteed minimum withdrawal benefits ("GMWBs"). Guarantees accounted for as embedded derivatives in policyholder account balances include the non life-contingent portion of GMWBs, guaranteed minimum accumulation benefits ("GMABs") and the portion of GMIBs that do not require annuitization. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. Other Policy-Related Balances Other policy-related balances include policy and contract claims, unearned revenue liabilities, premiums received in advance, policyholder dividends due and unpaid, policyholder dividends left on deposit and obligations assumed under structured settlement assignments. The liability for policy and contract claims generally relates to incurred but not reported ("IBNR") death, disability, long-term care and dental claims, as well as claims which have been reported but not yet settled. The liability for these claims is based on the Company's estimated ultimate cost of settling all claims. The Company derives estimates for the development of IBNR claims principally from analyses of historical patterns of claims by business line. The methods used to determine these estimates are continually reviewed. Adjustments resulting from this continuous review process and differences between estimates and payments for claims are recognized in policyholder benefits and claims expense in the period in which the estimates are changed or payments are made. The unearned revenue liability relates to universal life-type and investment-type products and represents policy charges for services to be provided in future periods. The charges are deferred as unearned revenue and amortized using the product's estimated gross profits and margins, similar to DAC as discussed further herein. Such amortization is recorded in universal life and investment-type product policy fees. The Company accounts for the prepayment of premiums on its individual life, group life and health contracts as premiums received in advance and applies the cash received to premiums when due. See Note 4 for additional information on obligations assumed under structured settlement assignments. Recognition of Insurance Revenues and Deposits Premiums related to traditional life and annuity contracts with life contingencies are recognized as revenues when due from policyholders. Policyholder benefits and expenses are provided to recognize profits over the estimated lives of the insurance 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 earnings in a constant relationship to insurance in-force or, for annuities, the amount of expected future policy benefit payments. 11 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Premiums related to short-duration 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 fees 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 earnings include interest credited and benefit claims incurred in excess of related policyholder account balances. All revenues and expenses are presented net of reinsurance, as applicable. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles The Company incurs significant costs in connection with acquiring new and renewal insurance business. Costs that are related directly to the successful acquisition or renewal of insurance contracts are capitalized as DAC. Such costs include: . incremental direct costs of contract acquisition, such as commissions; . the portion of an employee's total compensation and benefits related to time spent selling, underwriting or processing the issuance of new and renewal insurance business only with respect to actual policies acquired or renewed; and . other essential direct costs that would not have been incurred had a policy not been acquired or renewed. All other acquisition-related costs, including those related to general advertising and solicitation, market research, agent training, product development, unsuccessful sales and underwriting efforts, as well as all indirect costs, are expensed as incurred. Value of business acquired ("VOBA") is an intangible asset resulting from a business combination that represents the excess of book value over the estimated fair value of acquired insurance, annuity, and investment-type contracts in-force at the acquisition date. The estimated fair value of the acquired liabilities is based on projections, by each block of business, of future policy and contract charges, premiums, mortality and morbidity, separate account performance, surrenders, operating expenses, investment returns, nonperformance risk adjustment and other factors. Actual experience on the purchased business may vary from these projections. DAC and VOBA are amortized as follows: Products: In proportion to the following over estimated lives of the contracts: ------------------------------------------------------------------------------ . Nonparticipating and Actual and expected future gross non-dividend-paying traditional premiums. contracts: . Term insurance . Nonparticipating whole life insurance . Traditional group life insurance . Non-medical health insurance ------------------------------------------------------------------------------ . Participating, dividend-paying Actual and expected future gross traditional contracts margins. ------------------------------------------------------------------------------ . Fixed and variable universal life Actual and expected future gross contracts profits. . Fixed and variable deferred annuity contracts See Note 5 for additional information on DAC and VOBA amortization. Amortization of DAC and VOBA is included in other expenses. The recovery of DAC and VOBA is dependent upon the future profitability of the related business. DAC and VOBA are aggregated on the financial statements for reporting purposes. 12 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company generally 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. The amortization of sales inducements is included in policyholder benefits and claims. Each year, or more frequently if circumstances indicate a potential recoverability issue exists, the Company reviews deferred sales inducements ("DSI") to determine the recoverability of the asset. Value of distribution agreements acquired ("VODA") is reported in other assets and represents the present value of expected future profits associated with the expected future business derived from the distribution agreements acquired as part of a business combination. Value of customer relationships acquired ("VOCRA") is also reported in other assets and represents the present value of the expected future profits associated with the expected future business acquired through existing customers of the acquired company or business. The VODA and VOCRA associated with past business combinations are amortized over useful lives ranging from 10 to 30 years and such amortization is included in other expenses. Each year, or more frequently if circumstances indicate a possible impairment exists, the Company reviews VODA and VOCRA to determine whether the asset is impaired. Reinsurance For each of its reinsurance agreements, the Company determines whether the agreement provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. Cessions under reinsurance agreements do not discharge the Company's obligations as the primary insurer. The Company reviews all contractual features, including those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. For reinsurance of existing in-force blocks of long-duration contracts that transfer significant insurance risk, the difference, if any, between the amounts paid (received), and the liabilities ceded (assumed) related to the underlying contracts is considered the net cost of reinsurance at the inception of the reinsurance agreement. The net cost of reinsurance is recorded as an adjustment to DAC when there is a gain at inception on the ceding entity and to other liabilities when there is a loss at inception. The net cost of reinsurance is recognized as a component of other expenses when there is a gain at inception and as policyholder benefits and claims when there is a loss and is subsequently amortized on a basis consistent with the methodology used for amortizing DAC related to the underlying reinsured contracts. Subsequent amounts paid (received) on the reinsurance of in-force blocks, as well as amounts paid (received) related to new business, are recorded as ceded (assumed) premiums; and ceded (assumed) premiums, reinsurance and other receivables (future policy benefits) are established. For prospective reinsurance of short-duration contracts that meet the criteria for reinsurance accounting, amounts paid (received) are recorded as ceded (assumed) premiums and ceded (assumed) unearned premiums. Unearned premiums are reflected as a component of premiums, reinsurance and other receivables (future policy benefits). Such amounts are amortized through earned premiums over the remaining contract period in proportion to the amount of insurance protection provided. For retroactive reinsurance of short-duration contracts that meet the criteria of reinsurance accounting, amounts paid (received) in excess of the related insurance liabilities ceded (assumed) are recognized immediately as a loss and are reported in the appropriate line item within the statement of operations. Any gain on such retroactive agreement is deferred and is amortized as part of DAC, primarily using the recovery method. Amounts currently recoverable under reinsurance agreements are included in premiums, reinsurance and other receivables and amounts currently payable are included in other liabilities. Assets and liabilities relating to reinsurance agreements with the same reinsurer may be recorded net on the balance sheet, if a right of offset exists within the reinsurance agreement. In the event that reinsurers do not meet their obligations to the Company under the terms of the reinsurance agreements, reinsurance recoverable balances could become uncollectible. In such instances, reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance. 13 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The funds withheld liability represents amounts withheld by the Company in accordance with the terms of the reinsurance agreements. The Company withholds the funds rather than transferring the underlying investments and, as a result, records funds withheld liability within other liabilities. The Company recognizes interest on funds withheld, included in other expenses, at rates defined by the terms of the agreement which may be contractually specified or directly related to the investment portfolio. Premiums, fees and policyholder benefits and claims include amounts assumed under reinsurance agreements and are net of reinsurance ceded. Amounts received from reinsurers for policy administration are reported in other revenues. With respect to GMIBs, a portion of the directly written GMIBs are accounted for as insurance liabilities, but the associated reinsurance agreements contain embedded derivatives. These embedded derivatives are included in premiums, reinsurance and other receivables with changes in estimated fair value reported in net derivative gains (losses). Certain assumed GMWB, GMAB and GMIB are also accounted for as embedded derivatives with changes in estimated fair value reported in net derivative gains (losses). If the Company determines that a reinsurance agreement does not expose the reinsurer to a reasonable possibility of a significant loss from insurance risk, the Company records the agreement using the deposit method of accounting. Deposits received are included in other liabilities and deposits made are included within premiums, reinsurance and other receivables. As amounts are paid or received, consistent with the underlying contracts, the deposit assets or liabilities are adjusted. Interest on such deposits is recorded as other revenues or other expenses, as appropriate. Periodically, the Company evaluates the adequacy of the expected payments or recoveries and adjusts the deposit asset or liability through other revenues or other expenses, as appropriate. Investments Net Investment Income and Net Investment Gains (Losses) Income from investments is reported within net investment income, unless otherwise stated herein. Gains and losses on sales of investments, impairment losses and changes in valuation allowances are reported within net investment gains (losses), unless otherwise stated herein. Fixed Maturity and Equity Securities The majority of the Company's fixed maturity and equity securities are classified as available-for-sale ("AFS") and are reported at their estimated fair value. Unrealized investment gains and losses on these securities are recorded as a separate component of other comprehensive income (loss) ("OCI"), net of policy-related amounts and deferred income taxes. All security transactions are recorded on a trade date basis. Investment gains and losses on sales are determined on a specific identification basis. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts, and is based on the estimated economic life of the securities, which for mortgage-backed and asset-backed securities considers the estimated timing and amount of prepayments of the underlying loans. See Note 8 "-- Investments -- Fixed Maturity and Equity Securities AFS -- Methodology for Amortization of Premium and Accretion of Discount on Structured Securities." The amortization of premium and accretion of discount of fixed maturity securities also takes into consideration call and maturity dates. Dividends on equity securities are recognized when declared. The Company periodically evaluates fixed maturity and equity securities for impairment. The assessment of whether impairments have occurred is based on management's case-by-case evaluation of the underlying reasons for the decline in estimated fair value, as well as an analysis of the gross unrealized losses by severity and/or age as described in Note 8 "-- Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities." 14 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) For fixed maturity securities in an unrealized loss position, an other-than-temporary impairment ("OTTI") is recognized in earnings when it is anticipated that the amortized cost will not be recovered. When either: (i) the Company has the intent to sell the security; or (ii) it is more likely than not that the Company will be required to sell the security before recovery, the OTTI recognized in earnings is the entire difference between the security's amortized cost and estimated fair value. If neither of these conditions exists, the difference between the amortized cost of the security and the present value of projected future cash flows expected to be collected is recognized as an OTTI in earnings ("credit loss"). If the estimated fair value is less than the present value of projected future cash flows expected to be collected, this portion of OTTI related to other-than-credit factors ("noncredit loss") is recorded in OCI. With respect to equity securities, the Company considers in its OTTI analysis its intent and ability to hold a particular equity security for a period of time sufficient to allow for the recovery of its estimated fair value to an amount equal to or greater than cost. If a sale decision is made for an equity security and recovery to an amount at least equal to cost prior to the sale is not expected, the security will be deemed to be other-than-temporarily impaired in the period that the sale decision was made and an OTTI loss will be recorded in earnings. The OTTI loss recognized is the entire difference between the security's cost and its estimated fair value. Fair Value Option and Trading Securities Fair value option ("FVO") and trading securities are stated at estimated fair value and include investments for which the FVO has been elected ("FVO Securities") and investments that are actively purchased and sold ("Actively traded securities"). Changes in estimated fair value of these securities are included in net investment income, except for certain securities included in FVO Securities, where changes are included in net investment gains (losses). Mortgage Loans The Company disaggregates its mortgage loan investments into three portfolio segments: commercial, agricultural and residential. The accounting policies that are applicable to all portfolio segments are presented below and the accounting policies related to each of the portfolio segments are included in Note 8. Mortgage loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount, deferred fees or expenses, and are net of valuation allowances. Interest income and prepayment fees are recognized when earned. Interest income is recognized using an effective yield method giving effect to amortization of premiums and accretion of discounts. Also included in mortgage loans are residential mortgage loans for which the FVO was elected. These mortgage loans are stated at estimated fair value. Changes in estimated fair value are recognized in net investment income. Policy Loans Policy loans are stated at unpaid principal balances. Interest income is recorded as earned using the contractual interest rate. Generally, accrued interest is capitalized on the policy's anniversary date. Valuation allowances are not established for policy loans, as they are fully collateralized by the cash surrender value of the underlying insurance policies. Any unpaid principal and accrued interest is deducted from the cash surrender value or the death benefit prior to settlement of the insurance policy. Real Estate Real estate held-for-investment is stated at cost less accumulated depreciation. Depreciation is recorded on a straight-line basis over the estimated useful life of the asset (typically 20 to 55 years). Rental income is recognized on a straight-line basis over the term of the respective leases. The Company periodically reviews its real estate held-for-investment for impairment and tests for recoverability whenever events or changes in circumstances indicate the carrying value may not be recoverable and exceeds its estimated fair value. Properties whose carrying values are greater than their undiscounted cash flows are written down to their estimated fair value, which is generally computed using the present value of expected future cash flows discounted at a rate commensurate with the underlying risks. Real estate for which the Company commits to a plan to sell within one year and actively markets in its current condition for a reasonable price in comparison to its estimated fair value is classified as held-for-sale. Real estate held-for-sale is stated at the lower of depreciated cost or estimated fair value less expected disposition costs and is not depreciated. 15 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Real Estate Joint Ventures and Other Limited Partnership Interests The Company uses the equity method of accounting for equity securities when it has significant influence or at least 20% interest and for real estate joint ventures and other limited partnership interests ("investees") when it has more than a minor ownership interest or more than a minor influence over the investee's operations. The Company generally recognizes its share of the investee's earnings on a three-month lag in instances where the investee's financial information is not sufficiently timely or when the investee's reporting period differs from the Company's reporting period. The Company uses the cost method of accounting for investments in which it has virtually no influence over the investee's operations. The Company recognizes distributions on cost method investments when such distributions become payable or received. Because of the nature and structure of these cost method investments, they do not meet the characteristics of an equity security in accordance with applicable accounting standards. The Company routinely evaluates its equity method and cost method investments for impairment. For equity method investees, the Company considers financial and other information provided by the investee, other known information and inherent risks in the underlying investments, as well as future capital commitments, in determining whether an impairment has occurred. The Company considers its cost method investments for impairment when the carrying value of such investments exceeds the net asset value ("NAV"). The Company takes into consideration the severity and duration of this excess when determining whether the cost method investment is impaired. Short-term Investments Short-term investments include securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase and are stated at estimated fair value or amortized cost, which approximates estimated fair value. Short-term investments also include investments in affiliated money market pools. Other Invested Assets Other invested assets consist principally of the following: . Freestanding derivatives with positive estimated fair values which are described in "-- Derivatives" below. . Tax credit and renewable energy partnerships which derive a significant source of investment return in the form of income tax credits or other tax incentives. Where tax credits are guaranteed by a creditworthy third party, the investment is accounted for under the effective yield method. Otherwise, the investment is accounted for under the equity method. . Loans to affiliates which are stated at unpaid principal balance and adjusted for any unamortized premium or discount. . Leveraged leases which are recorded net of non-recourse debt. Income is recognized by applying the leveraged lease's estimated rate of return to the net investment in the lease. The Company regularly reviews residual values for impairment. . Annuities funding structured settlement claims represent annuities funding claims assumed by the Company in its capacity as a structured settlements assignment company. The annuities are stated at their contract value, which represents the present value of the future periodic claim payments to be provided. The net investment income recognized reflects the amortization of discount of the annuity at its implied effective interest rate. See Note 4. . Direct financing leases gross investment is equal to the minimum lease payments plus the unguaranteed residual value. Income is recorded by applying the pre-tax internal rate of return to the investment balance. The Company regularly reviews lease receivables for impairment. . Funds withheld represent a receivable for amounts contractually withheld by ceding companies in accordance with reinsurance agreements. The Company recognizes interest on funds withheld at rates defined by the terms of the agreement which may be contractually specified or directly related to the underlying investments. . Investment in an operating joint venture that engages in insurance underwriting activities accounted for under the equity method. 16 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Securities Lending Program Securities lending transactions, whereby blocks of securities are loaned to third parties, primarily brokerage firms and commercial banks, are treated as financing arrangements and the associated liability is recorded at the amount of cash received. The Company obtains collateral at the inception of the loan, usually cash, in an amount generally equal to 102% of the estimated fair value of the securities loaned, and maintains it at a level greater than or equal to 100% for the duration of the loan. Securities loaned under such transactions may be sold or re-pledged by the transferee. The Company is liable to return to the counterparties the cash collateral received. Security collateral on deposit from counterparties in connection with securities lending transactions may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the Company's financial statements. The Company monitors the estimated fair value of the securities loaned on a daily basis and additional collateral is obtained as necessary throughout the duration of the loan. Income and expenses associated with securities lending transactions are reported as investment income and investment expense, respectively, within net investment income. Derivatives Freestanding Derivatives Freestanding derivatives are carried on the Company's balance sheet either as assets within other invested assets or as liabilities within other liabilities at estimated fair value. The Company does not offset the estimated fair value amounts recognized for derivatives executed with the same counterparty under the same master netting agreement. Accruals on derivatives are generally recorded in accrued investment income or within other liabilities. However, accruals that are not scheduled to settle within one year are included with the derivatives' carrying value in other invested assets or other liabilities. If a derivative is not designated as an accounting hedge or its use in managing risk does not qualify for hedge accounting, changes in the estimated fair value of the derivative are reported in net derivative gains (losses) except as follows: Statement of Operations Presentation: Derivative: ----------------------------------------------------------------------------- Policyholder benefits and claims . Economic hedges of variable annuity guarantees included in future policy benefits ----------------------------------------------------------------------------- Net investment income . Economic hedges of equity method investments in joint ventures . All derivatives held in relation to trading portfolios
Hedge Accounting 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. Hedge designation and financial statement presentation of changes in estimated fair value of the hedging derivatives are as follows: . Fair value hedge (a hedge of the estimated fair value of a recognized asset or liability) - in net derivative gains (losses), consistent with the change in estimated fair value of the hedged item attributable to the designated risk being hedged. . Cash flow hedge (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) - effectiveness in OCI (deferred gains or losses on the derivative are reclassified into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item); ineffectiveness in net derivative gains (losses). The changes in estimated fair values of the hedging derivatives are exclusive of any accruals that are separately reported on the statement of operations within interest income or interest expense to match the location of the hedged item. 17 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In its hedge 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 that 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 at least quarterly throughout the life of the designated hedging relationship. Assessments of hedge effectiveness and measurements of ineffectiveness are also subject to interpretation and estimation and different interpretations or estimates may have a material effect on the amount reported in net income. The Company discontinues hedge accounting prospectively when: (i) it is determined that the derivative is no longer highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item; (ii) the derivative expires, is sold, terminated, or exercised; (iii) it is no longer probable that the hedged forecasted transaction will occur; or (iv) the derivative is de-designated as a hedging instrument. When hedge accounting is discontinued because it is determined that the derivative is not highly effective in offsetting changes in the estimated fair value or cash flows of a hedged item, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized in net derivative gains (losses). The carrying value of the hedged recognized asset or liability under a fair value hedge is no longer adjusted for changes in its estimated fair value due to the hedged risk, and the cumulative adjustment to its carrying value is amortized into income over the remaining life of the hedged item. Provided the hedged forecasted transaction is still probable of occurrence, the changes in estimated fair value of derivatives recorded in OCI related to discontinued cash flow hedges are released into the statement of operations when the Company's earnings are affected by the variability in cash flows of the hedged item. When hedge accounting is discontinued because it is no longer probable that the forecasted transactions will occur on the anticipated date or within two months of that date, the derivative continues to be carried on the balance sheet at its estimated fair value, with changes in estimated fair value recognized currently in net derivative gains (losses). Deferred gains and losses of a derivative recorded in OCI pursuant to the discontinued cash flow hedge of a forecasted transaction that is no longer probable are recognized immediately in net derivative gains (losses). In all other situations in which hedge accounting is discontinued, the derivative is carried at its estimated fair value on the balance sheet, with changes in its estimated fair value recognized in the current period as net derivative gains (losses). Embedded Derivatives The Company sells variable annuities and issues certain insurance products and investment contracts and is a party to certain reinsurance agreements that have embedded derivatives. The Company assesses each identified embedded derivative to determine whether it is required to be bifurcated. The embedded derivative is bifurcated from the host contract and accounted for as a freestanding derivative if: . the combined instrument is not accounted for in its entirety at estimated fair value with changes in estimated fair value recorded in earnings; . the terms of the embedded derivative are not clearly and closely related to the economic characteristics of the host contract; and . a separate instrument with the same terms as the embedded derivative would qualify as a derivative instrument. Such embedded derivatives are carried on the balance sheet at estimated fair value with the host contract and changes in their estimated fair value are generally reported in net derivative gains (losses). If the Company is unable to properly identify and measure an embedded derivative for separation from its host contract, the entire contract is carried on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income. Additionally, the Company may elect to carry an entire contract on the balance sheet at estimated fair value, with changes in estimated fair value recognized in the current period in net investment gains (losses) or net investment income if that contract contains an embedded derivative that requires bifurcation. At inception, the Company attributes to the embedded derivative a portion of the projected future guarantee fees to be collected from the policyholder equal to the present value of projected future guaranteed benefits. Any additional fees represent "excess" fees and are reported in universal life and investment-type product policy fees. 18 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Fair Value Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. In most cases, the exit price and the transaction (or entry) price will be the same at initial recognition. Subsequent to initial recognition, fair values are based on unadjusted quoted prices for identical assets or liabilities in active markets that are readily and regularly obtainable. When such quoted prices are not available, fair values are based on quoted prices in markets that are not active, quoted prices for similar but not identical assets or liabilities, or other observable inputs. If these inputs are not available, or observable inputs are not determinable, unobservable inputs and/or adjustments to observable inputs requiring management judgment are used to determine the estimated fair value of assets and liabilities. Employee Benefit Plans The Company sponsors and administers various qualified and nonqualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees and sales representatives who meet specified eligibility requirements of the sponsor and its participating affiliates. A December 31 measurement date is used for all of the Company's defined benefit pension and other postretirement benefit plans. The Company recognizes the funded status of each of its defined pension and postretirement benefit plans, measured as the difference between the fair value of plan assets and the benefit obligation, which is the projected benefit obligation ("PBO") for pension benefits and the accumulated postretirement benefit obligation ("APBO") for other postretirement benefits in other assets or other liabilities. Actuarial gains and losses result from differences between the actual experience and the assumed experience on plan assets or PBO during a particular period and are recorded in accumulated OCI ("AOCI"). To the extent such gains and losses exceed 10% of the greater of the PBO or the estimated fair value of plan assets, the excess is amortized into net periodic benefit costs, generally over the average projected future service years of the active employees. In addition, prior service costs (credit) are recognized in AOCI at the time of the amendment and then amortized to net periodic benefit costs over the average projected future service years of the active employees. Net periodic benefit costs are determined using management estimates and actuarial assumptions and are comprised of service cost, interest cost, settlement and curtailment costs, expected return on plan assets, amortization of net actuarial (gains) losses, and amortization of prior service costs (credit). Fair value is used to determine the expected return on plan assets. The Company also sponsors defined contribution plans for substantially all employees under which a portion of employee contributions is matched. Applicable matching contributions are made each payroll period. Accordingly, the Company recognizes compensation cost for current matching contributions. As all contributions are transferred currently as earned to the defined contribution plans, no liability for matching contributions is recognized on the balance sheets. Income Tax Metropolitan Life Insurance Company and its includable subsidiaries join with MetLife, Inc. and its includable subsidiaries in filing a consolidated U.S. life and non-life federal income tax return in accordance with the provisions of the Internal Revenue Code of 1986, as amended. Current taxes (and the benefits of tax attributes such as losses) are allocated to Metropolitan Life Insurance Company and its subsidiaries under the consolidated tax return regulations and a tax sharing agreement. Under the consolidated tax return regulations, MetLife, Inc. has elected the "percentage method" (and 100% under such method) of reimbursing companies for tax attributes, e.g., net operating losses. As a result, 100% of tax attributes are reimbursed by MetLife, Inc. to the extent that consolidated federal income tax of the consolidated federal tax return group is reduced in a year by tax attributes. On an annual basis, each of the profitable subsidiaries pays to MetLife, Inc. the federal income tax which it would have paid based upon that year's taxable income. If Metropolitan Life Insurance Company or its includable subsidiaries has current or prior deductions and credits (including but not limited to losses) which reduce the consolidated tax liability of the consolidated federal tax return group, the deductions and credits are characterized as realized (or realizable) by Metropolitan Life Insurance Company and its includable subsidiaries when those tax attributes are realized (or realizable) by the consolidated federal tax return group, even if Metropolitan Life Insurance Company or its includable subsidiaries would not have realized the attributes on a stand-alone basis under a "wait and see" method. 19 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) The Company's accounting for income taxes represents management's best estimate of various events and transactions. Deferred tax assets and liabilities resulting from temporary differences between the financial reporting and tax bases of assets and liabilities are measured at the balance sheet date using enacted tax rates expected to apply to taxable income in the years the temporary differences are expected to reverse. The realization of deferred tax assets depends upon the existence of sufficient taxable income within the carryback or carryforward periods under the tax law in the applicable tax jurisdiction. Valuation allowances are established against deferred tax assets when management determines, based on available information, that it is more likely than not that deferred income tax assets will not be realized. Significant judgment is required in determining whether valuation allowances should be established, as well as the amount of such allowances. When making such determination the Company considers many factors, including: . the nature, frequency, and amount of cumulative financial reporting income and losses in recent years; . the jurisdiction in which the deferred tax asset was generated; . the length of time that carryforward can be utilized in the various taxing jurisdiction; . future taxable income exclusive of reversing temporary differences and carryforwards; . future reversals of existing taxable temporary differences; . taxable income in prior carryback years; and . tax planning strategies. The Company may be required to change its provision for income taxes when estimates used in determining valuation allowances on deferred tax assets significantly change or when receipt of new information indicates the need for adjustment in valuation allowances. Additionally, the effect of changes in tax laws, tax regulations, or interpretations of such laws or regulations, is recognized in net income tax expense (benefit) in the period of change. The Company determines whether it is more likely than not that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded on the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50% likely of being realized upon settlement. Unrecognized tax benefits due to tax uncertainties that do not meet the threshold are included within other liabilities and are charged to earnings in the period that such determination is made. The Company classifies interest recognized as interest expense and penalties recognized as a component of income tax expense. Litigation Contingencies The Company is a party to a number of legal actions and is involved in a number of regulatory investigations. Given the inherent unpredictability of these matters, it is difficult to estimate the impact on the Company's 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. Except as otherwise disclosed in Note 16, legal costs are recognized as incurred. 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 on the Company's financial statements. Other Accounting Policies Stock-Based Compensation Stock-based compensation recognized on the Company's consolidated results of operations is allocated from MetLife, Inc. The accounting policies described below represent those that MetLife, Inc. applies in determining such allocated expenses. 20 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) MetLife, Inc. grants certain employees stock-based compensation awards under various plans that are subject to specific vesting conditions. With the exception of performance shares granted in 2013 and after which are re-measured quarterly, the cost of all stock-based transactions is measured at fair value at the grant date and recognized over the period during which a grantee is required to provide services in exchange for the award. Although the terms of MetLife, Inc.'s stock-based plans do not accelerate vesting upon the attainment of the applicable criteria for post-employment award continuation, the requisite service period subsequent to attaining such criteria is considered non-substantive. Accordingly, MetLife, Inc. recognizes compensation expense related to stock-based awards over the shorter of the requisite service period or the period to attainment of such criteria. An estimation of future forfeitures of stock-based awards is incorporated into the determination of compensation expense when recognizing expense over the requisite service period. Cash and Cash Equivalents The Company considers all highly liquid securities and other investments purchased with an original or remaining maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at amortized cost, which approximates estimated fair value. 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 the straight-line method over the estimated useful lives of the assets, as appropriate. The estimated life is generally 40 years for company occupied real estate property, from one to 25 years for leasehold improvements, and from three to seven years for all other property and equipment. The cost basis of the property, equipment and leasehold improvements was $1.3 billion and $1.2 billion at December 31, 2016 and 2015, respectively. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $673 million and $720 million at December 31, 2016 and 2015, respectively. Related depreciation and amortization expense was $139 million, $159 million and $123 million for the years ended December 31, 2016, 2015 and 2014, respectively. Computer software, which is included in other assets, is stated at cost, less accumulated amortization. Purchased software costs, as well as certain 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 $1.5 billion and $1.4 billion at December 31, 2016 and 2015, respectively. Accumulated amortization of capitalized software was $1.1 billion and $1.0 billion at December 31, 2016 and 2015, respectively. Related amortization expense was $132 million, $150 million and $145 million for the years ended December 31, 2016, 2015 and 2014, respectively. Other Revenues Other revenues include, in addition to items described elsewhere herein, advisory fees, broker-dealer commissions and fees, administrative service fees, and changes in account value relating to corporate-owned life insurance ("COLI"). Such fees and commissions are recognized in the period in which services are performed. Under certain COLI contracts, if the Company reports certain unlikely adverse results in its 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 Insurance Company's board 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 Insurance Company. 21 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Foreign Currency Assets, liabilities and operations of foreign affiliates and subsidiaries are recorded based on the functional currency of each entity. The determination of the functional currency is made based on the appropriate economic and management indicators. The local currencies of foreign operations are the functional currencies. Assets and liabilities of foreign affiliates and subsidiaries are translated from the functional currency to U.S. dollars at the exchange rates in effect at each year-end and revenues and expenses are translated at the average exchange rates during the year. The resulting translation adjustments are charged or credited directly to OCI, net of applicable taxes. Gains and losses from foreign currency transactions, including the effect of re-measurement of monetary assets and liabilities to the appropriate functional currency, are reported as part of net investment gains (losses) in the period in which they occur. Goodwill Goodwill, which is included in other assets, represents the future economic benefits arising from net assets acquired in a business combination that are not individually identified and recognized. Goodwill is calculated as the excess of cost over the estimated fair value of such net assets acquired, is not amortized, and is tested for impairment based on a fair value approach at least annually or more frequently if events or circumstances indicate that there may be justification for conducting an interim test. The Company performs its annual goodwill impairment testing during the third quarter of each year based upon data as of the close of the second quarter. Goodwill associated with a business acquisition is not tested for impairment during the year the business is acquired unless there is a significant identified impairment event. The impairment test is performed at the reporting unit level, which is the operating segment or a business 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, if the carrying value of a reporting unit exceeds its estimated fair value, there may be an indication of impairment. In such instances, the implied fair value of the goodwill is determined in the same manner as the amount of goodwill that would be determined in a business combination. The excess of the carrying value of goodwill over the implied fair value of goodwill would be recognized as an impairment and recorded as a charge against net income. The Company tests goodwill for impairment by either performing a qualitative assessment or a two-step quantitative test. The qualitative assessment is an assessment of historical information and relevant events and circumstances to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. The Company may elect not to perform the qualitative assessment for some or all of its reporting units and perform a two-step quantitative impairment test. In performing the two-step quantitative impairment test, the Company may determine the fair values of its reporting units by applying a market multiple, discounted cash flow, and/or an actuarial based valuation approach. For the 2016 annual goodwill impairment tests, the Company utilized qualitative assessments for its reporting units and determined it was not more likely than not that the fair value of any of the reporting units was less than its carrying amount. Therefore, no further testing was needed for these reporting units. The goodwill balance was $70 million in the U.S segment and $31 million in the MetLife Holdings segment, at both December 31, 2016 and 2015. Adoption of New Accounting Pronouncements Effective January 1, 2016, the Company retrospectively adopted guidance relating to short-duration contracts. The new guidance requires insurance entities to provide users of financial statements with more transparent information about initial claim estimates and subsequent adjustments to these estimates, including information on: (i) reconciling from the claim development table to the balance sheet liability, (ii) methodologies and judgments in estimating claims, and (iii) the timing, and frequency of claims. The adoption did not have an impact on the Company's consolidated financial statements other than expanded disclosures in Note 4. 22 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) Effective January 1, 2016, the Company retrospectively adopted new guidance relating to the consolidation of certain entities. The objective of the new standard is to improve targeted areas of the consolidation guidance and to reduce the number of consolidation models. The new consolidation standard provides guidance on how a reporting entity (i) evaluates whether the entity should consolidate limited partnerships and similar entities, (ii) assesses whether the fees paid to a decisionmaker or service provider are variable interests in a VIE, and (iii) assesses the variable interests in a VIE held by related parties of the reporting entity. The new guidance also eliminates the VIE consolidation model based on majority exposure to variability that applied to certain investment companies and similar entities. The adoption of the new guidance did not impact which entities are consolidated by the Company. The consolidated VIE assets and liabilities and unconsolidated VIE carrying amounts and maximum exposure to loss as of December 31, 2016, disclosed in Note 8, reflect the application of the new guidance. Effective November 18, 2014, the Company adopted new guidance on when, if ever, the cost of acquiring an entity should be used to establish a new accounting basis ("pushdown") in the acquired entity's separate financial statements. The guidance provides an acquired entity and its subsidiaries with an irrevocable option to apply pushdown accounting in its separate financial statements upon occurrence of an event in which an acquirer obtains control of the acquired entity. If a reporting entity elects to apply pushdown accounting, its stand-alone financial statements would reflect the acquirer's new basis in the acquired entity's assets and liabilities. The election to apply pushdown accounting should be determined by an acquired entity for each individual change-in-control event in which an acquirer obtains control of the acquired entity; however, an entity that does not elect to apply pushdown accounting in the period of a change-in-control can later elect to retrospectively apply pushdown accounting to the most recent change-in-control transaction as a change in accounting principle. The new guidance did not have a material impact on the consolidated financial statements upon adoption. Effective January 1, 2014, the Company adopted new guidance regarding the presentation of an unrecognized tax benefit. The new guidance requires that an unrecognized tax benefit, or a portion of an unrecognized tax benefit, be presented on the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward. However, when the carryforwards are not available at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position or the applicable tax law does not require, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit will be presented on the financial statements as a liability and will not be combined with the related deferred tax asset. The adoption was prospectively applied and resulted in a reduction to other liabilities and a corresponding increase to deferred income tax liability in the amount of $190 million. Effective January 1, 2014, the Company adopted new guidance on other expenses. The objective of this standard is to address how health insurers should recognize and classify in their income statements fees mandated by the Patient Protection and Health Care and Education Reconciliation Act of 2010, signed into law on March 30, 2010, as amended by the Health Care and Education Reconciliation Act. The amendments in this standard specify that the liability for the fee should be estimated and recorded in full once the entity provides qualifying health insurance in the applicable calendar year in which the fee is payable with a corresponding deferred cost that is amortized to expense using the straight-line method of allocation unless another method better allocates the fee over the calendar year that it is payable. In accordance with the adoption of the new accounting pronouncement, on January 1, 2014, the Company recorded $55 million in other liabilities, and a corresponding deferred cost, in other assets. Future Adoption of New Accounting Pronouncements In March 2017, the Financial Accounting Standards Board ("FASB") issued new guidance on the presentation of net periodic pension cost and net periodic postretirement benefit cost (Accounting Standards Update ("ASU") 2017-07, Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost). The new guidance is effective for annual periods beginning after December 15, 2017 and interim periods within those annual periods. Early adoption is permitted as of the beginning of an annual period for which financial statements (interim or annual) have not been issued or made available for issuance. The guidance requires that an employer that offers to their employees defined benefit pension or other postretirement benefit plans report the service cost component in the same line item or items as other compensation costs arising from services rendered by the pertinent employees during the period. The other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations, if one is presented. The guidance should be applied retrospectively for the presentation of the service cost component in the income statement and allows a practical expedient for the estimation basis for applying the retrospective presentation requirements. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. 23 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In February 2017, the FASB issued new guidance on derecognition of nonfinancial assets (ASU 2017-05, Other Income-Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those years. Early adoption is permitted for interim or annual reporting periods beginning after December 15, 2016. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance clarifies the scope and accounting of a financial asset that meets the definition of an "in-substance nonfinancial asset" and defines the term, "in-substance nonfinancial asset." The ASU also adds guidance for partial sales of nonfinancial assets. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued new guidance on goodwill impairment (ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment). The new guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The new guidance simplifies the current two-step goodwill impairment test by eliminating Step 2 of the test. The new guidance requires a one-step impairment test in which an entity compares the fair value of a reporting unit with its carrying amount and recognizes an impairment charge for the amount by which the carrying amount exceeds the reporting unit's fair value, if any. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2017, the FASB issued new guidance on business combinations (ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a prospective basis. Early adoption is permitted as specified in the guidance. The new guidance clarifies the definition of a business and requires that an entity apply certain criteria in order to determine when a set of assets and activities qualifies as a business. The adoption of this standard will result in fewer acquisitions qualifying as businesses and, accordingly, acquisition costs for those acquisitions that do not qualify as businesses will be capitalized rather than expensed. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In November 2016, the FASB issued new guidance on restricted cash (ASU 2016-18, Statement of Cash Flows (Topic 230): a consensus of the FASB Emerging Issues Task Force). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. As a result, the new guidance requires that amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The new guidance does not provide a definition of restricted cash or restricted cash equivalents. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In October 2016, the FASB issued new guidance on consolidation evaluation for entities under common control (ASU 2016-17, Consolidation (Topic 810): Interests Held through Related Parties That Are under Common Control). The new guidance is effective for fiscal years beginning after December 15, 2016 and interim periods within those fiscal years, and should be applied on a retrospective basis. Early adoption is permitted. The new guidance does not change the characteristics of a primary beneficiary under current GAAP. It changes how a reporting entity evaluates whether it is the primary beneficiary of a VIE by changing how a reporting entity that is a single decisionmaker of a VIE handles indirect interests in the entity held through related parties that are under common control with the reporting entity. The adoption of this new guidance will not have a material impact on the Company's consolidated financial statements. In October 2016, the FASB issued new guidance on tax accounting for intra-entity transfers of assets (ASU 2016-16, Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied on a modified retrospective basis. Early adoption is permitted in the first interim or annual reporting period. Current guidance prohibits the recognition of current and deferred income taxes for an intra-entity asset transfer until the asset has been sold to an outside party. The new guidance requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. Also, the guidance eliminates the exception for an intra-entity transfer of an asset other than inventory. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. 24 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In August 2016, the FASB issued new guidance on cash flow statement presentation (ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments). The new guidance is effective for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years, and should be applied retrospectively to all periods presented. Early adoption is permitted in any interim or annual period. This ASU addresses diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In June 2016, the FASB issued new guidance on measurement of credit losses on financial instruments (ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments). The new guidance is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. This ASU replaces the incurred loss impairment methodology with one that reflects expected credit losses. The measurement of expected credit losses should be based on historical loss information, current conditions, and reasonable and supportable forecasts. The new guidance requires that an OTTI on a debt security will be recognized as an allowance going forward, such that improvements in expected future cash flows after an impairment will no longer be reflected as a prospective yield adjustment through net investment income, but rather a reversal of the previous impairment and recognized through realized investment gains and losses. The guidance also requires enhanced disclosures. The Company has assessed the asset classes impacted by the new guidance and is currently assessing the accounting and reporting system changes that will be required to comply with the new guidance. The Company believes that the most significant impact upon adoption will be to its mortgage loan investments. The Company is continuing to evaluate the overall impact of the new guidance on its consolidated financial statements. In February 2016, the FASB issued new guidance on leasing transactions (ASU 2016-02, Leases - Topic 842). The new guidance is effective for the fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and requires a modified retrospective transition approach. Early adoption is permitted. The new guidance requires a lessee to recognize assets and liabilities for leases with lease terms of more than 12 months. Leases would be classified as finance or operating leases and both types of leases will be recognized on the balance sheet. Lessor accounting will remain largely unchanged from current guidance except for certain targeted changes. The new guidance will also require new qualitative and quantitative disclosures. The Company's implementation efforts are primarily focused on the review of its existing lease contracts, as well as identification of other contracts that may fall under the scope of the new guidance. The Company is currently evaluating the impact of this guidance on its consolidated financial statements. In January 2016, the FASB issued new guidance (ASU 2016-01, Financial Instruments-Overall: Recognition and Measurement of Financial Assets and Financial Liabilities) on the recognition and measurement of financial instruments. The new guidance is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted for the instrument-specific credit risk provision. The new guidance changes the current accounting guidance related to (i) the classification and measurement of certain equity investments, (ii) the presentation of changes in the fair value of financial liabilities measured under the FVO that are due to instrument-specific credit risk, and (iii) certain disclosures associated with the fair value of financial instruments. Additionally, there will no longer be a requirement to assess equity securities for impairment since such securities will be measured at fair value through net income. The Company has assessed the population of financial instruments that are subject to the new guidance and has determined that the most significant impact will be the requirement to report changes in fair value in net income each reporting period for all equity securities currently classified as available-for-sale and, to a lesser extent, other limited partnership interests and real estate joint ventures that are currently accounted for under the cost method. The population of these investments accounted for under the cost method is not material. The Company is continuing to evaluate the overall impact of this guidance on its consolidated financial statements. 25 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 1. Business, Basis of Presentation and Summary of Significant Accounting Policies (continued) In May 2014, the FASB issued a comprehensive new revenue recognition standard (ASU 2014-09, Revenue from Contracts with Customers (Topic 606)), effective for fiscal years beginning after December 15, 2017 and interim periods within those years. The guidance may be applied retrospectively for all periods presented or retrospectively with a cumulative-effect adjustment at the date of adoption. The new guidance will supersede nearly all existing revenue recognition guidance under U.S. GAAP; however, it will not impact the accounting for insurance and investment contracts within the scope of Financial Services insurance (Topic 944), leases, financial instruments and guarantees. For those contracts that are impacted, the guidance will require an entity to recognize revenue upon the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled, in exchange for those goods or services. Given the scope of the new revenue recognition guidance, the Company does not expect the adoption to have a material impact on its consolidated revenues or statements of operations, with the Company's implementation efforts primarily focused on other revenues on the consolidated statements of operations. Other Effective January 3, 2017, the Chicago Mercantile Exchange ("CME") amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments will impact the accounting treatment of the Company's centrally cleared derivatives, for which the CME serves as the central clearing party. The application of the amended rulebook is expected to reduce the gross derivative assets and liabilities, as well as the related collateral, recorded on the consolidated balance sheet for trades cleared through the CME. The Company is currently evaluating the impact of these amendments on its consolidated financial statements. This change is not expected to impact the tax treatment of such derivatives, although the Internal Revenue Service ("IRS") is being asked to issue definitive guidance. 2. Segment Information The Company is organized into two segments: U.S. and MetLife Holdings. In addition, the Company reports certain of its results of operations in Corporate & Other. On January 12, 2016, MetLife, Inc. announced its plan to separate a substantial portion of its former Retail segment, as well as certain portions of its former Corporate Benefit Funding segment and Corporate & Other (the "Separation"). MetLife, Inc. subsequently re-segmented the business to be separated and rebranded it "Brighthouse Financial." On October 5, 2016, Brighthouse Financial, Inc., a subsidiary of MetLife, Inc. ("Brighthouse"), filed a registration statement on Form 10 (the "Form 10") with the U.S. Securities and Exchange Commission ("SEC"). On December 6, 2016, Brighthouse filed an amendment to its registration statement on Form 10 with the SEC. The information statement filed as an exhibit to the Form 10 disclosed that MetLife, Inc. intends to include Brighthouse Life Insurance Company (formerly, MetLife Insurance Company USA) ("Brighthouse Insurance"), New England Life Insurance Company ("NELICO"), a former wholly-owned subsidiary of Metropolitan Life Insurance Company, Brighthouse Life Insurance Company of NY (formerly, First MetLife Investors Insurance Company) ("Brighthouse NY"), Brighthouse Investment Advisers, LLC (formerly, MetLife Advisers, LLC) and certain captive reinsurance companies in the proposed separated business and distribute at least 80.1% of the shares of Brighthouse's common stock on a pro rata basis to the holders of MetLife, Inc. common stock. The ultimate form and timing of the Separation will be influenced by a number of factors, including regulatory considerations and economic conditions. MetLife continues to evaluate and pursue structural alternatives for the proposed Separation. The Separation remains subject to certain conditions, including among others, obtaining final approval from the MetLife, Inc. Board of Directors, receipt of a favorable ruling from the IRS and an opinion from MetLife's tax advisor regarding certain U.S. federal income tax matters, insurance and other regulatory approvals, and an SEC declaration of the effectiveness of the Form 10. U.S. The U.S. segment offers a broad range of protection products and services aimed at serving the financial needs of customers throughout their lives. These products are sold to corporations and their respective employees, other institutions and their respective members, as well as individuals. The U.S. segment is organized into two businesses: Group Benefits and Retirement and Income Solutions. 26 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) . The Group Benefits business offers insurance products and services which include life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, critical illness, vision and accident & health coverages, as well as prepaid legal plans. This business also sells administrative services-only arrangements to some employers. . The Retirement and Income Solutions business offers a broad range of annuity and investment products, including guaranteed interest contracts and other stable value products, institutional income annuities and separate account contracts for the investment management of defined benefit and defined contribution plan assets. This business also includes structured settlements and certain products to fund postretirement benefits and company-, bank- or trust-owned life insurance used to finance nonqualified benefit programs for executives. MetLife Holdings The MetLife Holdings segment consists of operations relating to products and businesses no longer actively marketed by the Company in the United States. These products and businesses include variable, universal, term and whole life, as well as variable, fixed and index-linked annuities. The MetLife Holdings segment also includes the Company's discontinued long-term care business. Corporate & Other Corporate & Other contains the excess capital, as well as certain charges and activities, not allocated to the segments, including enterprise-wide strategic initiative restructuring charges and various start-up businesses (including the investment management business through which the Company offers fee-based investment management services to institutional clients, as well as the direct to consumer portion of the U.S. Direct business). Corporate & Other also includes the Company's ancillary international operations, the businesses of the Company that MetLife, Inc. plans to separate and include in Brighthouse Financial and interest expense related to the majority of the Company's outstanding debt, as well as expenses associated with certain legal proceedings and income tax audit issues. In addition, Corporate & Other includes the elimination of intersegment amounts, which generally relate to intersegment loans, which bear interest rates commensurate with related borrowings. Financial Measures and Segment Accounting Policies Operating earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, operating earnings is also the Company's GAAP measure of segment performance and is reported below. Operating earnings should not be viewed as a substitute for income (loss) from continuing operations, net of income tax. The Company believes the presentation of operating earnings as the Company measures it for management purposes enhances the understanding of its performance by highlighting the results of operations and the underlying profitability drivers of the business. Operating earnings allows analysis of the Company's performance and facilitates comparisons to industry results. Operating earnings is defined as operating revenues less operating expenses, both net of income tax. The financial measures of operating revenues and operating expenses focus on the Company's primary businesses principally by excluding the impact of market volatility, which could distort trends, and revenues and costs related to non-core products and divested businesses and certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations and other businesses that have been or will be sold or exited by MetLife and are referred to as divested businesses. Operating revenues also excludes net investment gains (losses) and net derivative gains (losses). The following additional adjustments are made to revenues, in the line items indicated, in calculating operating revenues: . Universal life and investment-type product policy fees excludes the amortization of unearned revenue related to net investment gains (losses) and net derivative gains (losses) and certain variable annuity GMIB fees ("GMIB Fees"); and . Net investment income: (i) includes earned income on derivatives and amortization of premium on derivatives that are hedges of investments or that are used to replicate certain investments, but do not qualify for hedge accounting treatment, (ii) includes income from discontinued real estate operations, (iii) excludes post-tax operating earnings adjustments relating to insurance joint ventures accounted for under the equity method and (iv) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP. 27 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) The following additional adjustments are made to expenses, in the line items indicated, in calculating operating expenses: . Policyholder benefits and claims and policyholder dividends excludes: (i) changes in the policyholder dividend obligation related to net investment gains (losses) and net derivative gains (losses), (ii) amounts associated with periodic crediting rate adjustments based on the total return of a contractually referenced pool of assets, (iii) benefits and hedging costs related to GMIBs ("GMIB Costs") and (iv) market value adjustments associated with surrenders or terminations of contracts ("Market Value Adjustments"); . Interest credited to policyholder account balances includes adjustments for earned income on derivatives and amortization of premium on derivatives that are hedges of policyholder account balances but do not qualify for hedge accounting treatment; . Amortization of DAC and VOBA excludes amounts related to: (i) net investment gains (losses) and net derivative gains (losses), (ii) GMIB Fees and GMIB Costs and (iii) Market Value Adjustments; . Interest expense on debt excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP; and . Other expenses excludes costs related to noncontrolling interests and goodwill impairments. The tax impact of the adjustments mentioned above are calculated net of the U.S. or foreign statutory tax rate, which could differ from the Company's effective tax rate. 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, 2016, 2015 and 2014 and at December 31, 2016 and 2015. The segment accounting policies are the same as those used to prepare the Company's consolidated financial statements, except for operating earnings adjustments as defined above. In addition, segment accounting policies include the method of capital allocation described below. Economic capital is an internally developed risk capital model, the purpose of which is to measure the risk in the business and to provide a basis upon which capital is deployed. The economic capital model accounts for the unique and specific nature of the risks inherent in MetLife's and the Company's business. MetLife's economic capital model, coupled with considerations of local capital requirements, aligns segment allocated equity with emerging standards and consistent risk principles. The model applies statistics-based risk evaluation principles to the material risks to which the Company is exposed. These consistent risk principles include calibrating required economic capital shock factors to a specific confidence level and time horizon while applying an industry standard method for the inclusion of diversification benefits among risk types. MetLife's management is responsible for the ongoing production and enhancement of the economic capital model and reviews its approach periodically to ensure that it remains consistent with emerging industry practice standards. Segment net investment income is credited or charged based on the level of allocated equity; however, changes in allocated equity do not impact the Company's consolidated net investment income, income (loss) from continuing operations, net of income tax, or operating earnings. Net investment income is based upon the actual results of each segment's specifically identifiable investment portfolios adjusted for allocated equity. Other costs are allocated to each of the segments based upon: (i) a review of the nature of such costs; (ii) time studies analyzing the amount of employee compensation costs incurred by each segment; and (iii) cost estimates included in the Company's product pricing. 28 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
Operating Results ----------------------------------------------- MetLife Corporate Total Year Ended December 31, 2016 U.S. Holdings & Other Total Adjustments Consolidated -------------------------------------------------- ---------- ----------- --------- ----------- ------------ ------------- (In millions) Revenues Premiums.......................................... $ 17,921 $ 4,411 $ 61 $ 22,393 $ -- $ 22,393 Universal life and investment-type product policy fees............................................. 988 1,236 216 2,440 102 2,542 Net investment income............................. 6,075 5,606 (67) 11,614 (531) 11,083 Other revenues.................................... 750 110 618 1,478 -- 1,478 Net investment gains (losses)..................... -- -- -- -- 132 132 Net derivative gains (losses)..................... -- -- -- -- (1,138) (1,138) ---------- ----------- --------- ----------- ------------ ------------- Total revenues.................................. 25,734 11,363 828 37,925 (1,435) 36,490 ---------- ----------- --------- ----------- ------------ ------------- Expenses Policyholder benefits and claims and policyholder dividends........................................ 18,935 7,255 130 26,320 171 26,491 Interest credited to policyholder account balances......................................... 1,297 907 32 2,236 (3) 2,233 Capitalization of DAC............................. (60) (267) (5) (332) -- (332) Amortization of DAC and VOBA...................... 56 675 56 787 (346) 441 Interest expense on debt.......................... 10 7 95 112 -- 112 Other expenses.................................... 2,770 1,850 825 5,445 137 5,582 ---------- ----------- --------- ----------- ------------ ------------- Total expenses.................................. 23,008 10,427 1,133 34,568 (41) 34,527 ---------- ----------- --------- ----------- ------------ ------------- Provision for income tax expense (benefit)........ 975 270 (551) 694 (487) 207 ---------- ----------- --------- ----------- ------------- Operating earnings.............................. $ 1,751 $ 666 $ 246 2,663 ========== =========== ========= Adjustments to: Total revenues.................................... (1,435) Total expenses.................................... 41 Provision for income tax (expense) benefit........ 487 ----------- Income (loss) from continuing operations, net of income tax $ 1,756 $ 1,756 =========== =============
MetLife Corporate At December 31, 2016 U.S. Holdings & Other Total --------------------------------------- ---------- ---------- --------- ---------- (In millions) Total assets........................... $ 247,314 $ 163,048 $ 22,199 $ 432,561 Separate account assets................ $ 85,854 $ 47,982 $ -- $ 133,836 Separate account liabilities........... $ 85,854 $ 47,982 $ -- $ 133,836
29 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
Operating Results -------------------------------------------- MetLife Corporate Total Year Ended December 31, 2015 U.S. Holdings & Other Total Adjustments Consolidated ------------------------------------------- --------- --------- --------- --------- ----------- ------------ (In millions) Revenues Premiums...................................... $ 17,340 $ 4,527 $ 67 $ 21,934 $ -- $ 21,934 Universal life and investment-type product policy fees.................................. 941 1,294 249 2,484 100 2,584 Net investment income......................... 6,037 5,902 94 12,033 (456) 11,577 Other revenues................................ 729 135 672 1,536 -- 1,536 Net investment gains (losses)................. -- -- -- -- 259 259 Net derivative gains (losses)................. -- -- -- -- 881 881 --------- --------- --------- --------- ----------- ------------ Total revenues.............................. 25,047 11,858 1,082 37,987 784 38,771 --------- --------- --------- --------- ----------- ------------ Expenses Policyholder benefits and claims and policyholder dividends....................... 18,384 7,218 125 25,727 64 25,791 Interest credited to policyholder account balances..................................... 1,212 933 34 2,179 4 2,183 Capitalization of DAC......................... (71) (409) (2) (482) -- (482) Amortization of DAC and VOBA.................. 59 527 44 630 112 742 Interest expense on debt...................... 5 4 113 122 -- 122 Other expenses................................ 2,724 1,825 1,324 5,873 3 5,876 --------- --------- --------- --------- ----------- ------------ Total expenses.............................. 22,313 10,098 1,638 34,049 183 34,232 --------- --------- --------- --------- ----------- ------------ Provision for income tax expense (benefit).... 981 555 37 1,573 209 1,782 --------- --------- --------- --------- ---------- Operating earnings.......................... $ 1,753 $ 1,205 $ (593) 2,365 ========= ========= ========= Adjustments to: Total revenues................................ 784 Total expenses................................ (183) Provision for income tax (expense) benefit.... (209) --------- Income (loss) from continuing operations, net of income tax................................................... $ 2,757 $ 2,757 ========= ============
MetLife Corporate At December 31, 2015 U.S. Holdings & Other Total --------------------------------------- ---------- ---------- --------- ---------- (In millions) Total assets........................... $ 231,653 $ 178,734 $ 39,133 $ 449,520 Separate account assets................ $ 79,540 $ 48,478 $ 7,921 $ 135,939 Separate account liabilities........... $ 79,540 $ 48,478 $ 7,921 $ 135,939
30 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
Operating Results --------------------------------------------- MetLife Corporate Total Year Ended December 31, 2014 U.S. Holdings & Other Total Adjustments Consolidated -------------------------------------------------- ---------- ---------- --------- ---------- ----------- ------------ (In millions) Revenues Premiums.......................................... $ 16,771 $ 4,523 $ 90 $ 21,384 $ -- $ 21,384 Universal life and investment-type product policy fees............................................. 907 1,257 248 2,412 54 2,466 Net investment income............................. 5,927 6,105 333 12,365 (472) 11,893 Other revenues.................................... 702 407 699 1,808 -- 1,808 Net investment gains (losses)..................... -- -- -- -- 143 143 Net derivative gains (losses)..................... -- -- -- -- 1,037 1,037 ---------- ---------- --------- ---------- ----------- ------------ Total revenues.................................. 24,307 12,292 1,370 37,969 762 38,731 ---------- ---------- --------- ---------- ----------- ------------ Expenses Policyholder benefits and claims and policyholder dividends........................................ 17,825 7,102 123 25,050 45 25,095 Interest credited to policyholder account balances......................................... 1,164 966 33 2,163 11 2,174 Capitalization of DAC............................. (78) (325) (21) (424) -- (424) Amortization of DAC and VOBA...................... 54 467 58 579 116 695 Interest expense on debt.......................... 12 8 130 150 1 151 Other expenses.................................... 2,639 1,709 1,307 5,655 (6) 5,649 ---------- ---------- --------- ---------- ----------- ------------ Total expenses.................................. 21,616 9,927 1,630 33,173 167 33,340 ---------- ---------- --------- ---------- ----------- ------------ Provision for income tax expense (benefit)........ 954 762 (394) 1,322 210 1,532 ---------- ---------- --------- ---------- ------------ Operating earnings.............................. $ 1,737 $ 1,603 $ 134 3,474 ========== ========== ========= Adjustments to: Total revenues.................................... 762 Total expenses.................................... (167) Provision for income tax (expense) benefit........ (210) ---------- Income (loss) from continuing operations, net of income tax...................................................... $ 3,859 $ 3,859 ========== ============
The following table presents total premiums, universal life and investment-type product policy fees and other revenues by major product groups of the Company's segments, as well as Corporate & Other:
Years Ended December 31, ----------------------- 2016 2015 2014 ------- ------- ------- (In millions) Life insurance............................... $13,907 $13,811 $13,865 Accident & health insurance.................. 7,889 7,475 7,247 Annuities.................................... 4,379 4,548 4,352 Non-insurance................................ 238 220 194 ------- ------- ------- Total....................................... $26,413 $26,054 $25,658 ======= ======= =======
Substantially all of the Company's consolidated premiums, universal life and investment-type product policy fees and other revenues originated in the U.S. Revenues derived from one U.S. customer were $2.8 billion, $2.7 billion and $2.8 billion for the years ended December 31, 2016, 2015 and 2014, respectively, which represented 10%, 10% and 11%, respectively, of consolidated premiums, universal life and investment-type product policy fees and other revenues. Revenues derived from any other customer did not exceed 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues for the years ended December 31, 2016, 2015 and 2014. 31 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 3. Dispositions 2016 Dispositions In December 2016, the Company distributed to MetLife, Inc. as a non-cash extraordinary dividend all of the issued and outstanding shares of common stock of its wholly-owned subsidiaries, NELICO and General American Life Insurance Company ("GALIC"). The net book value of NELICO and GALIC at the time of the dividend was $2.9 billion, which was recorded as a dividend of retained earnings of $2.7 billion and a decrease to other comprehensive income of $254 million, net of income tax. As of the date of the dividend payment, the Company no longer consolidates the assets, liabilities and operations of NELICO and GALIC. 2014 Disposition In December 2014, Metropolitan Life Insurance Company distributed to MetLife, Inc., as a dividend, all of the issued and outstanding shares of common stock of its wholly-owned, broker-dealer subsidiary, New England Securities Corporation ("NES"). The net book value of NES at the time of the dividend was $35 million, which was recorded as a dividend of retained earnings of $35 million. As of the date of the dividend payment, the Company no longer consolidates the assets, liabilities and operations of NES. 4. Insurance Insurance Liabilities Insurance liabilities, including affiliated insurance liabilities on reinsurance assumed and ceded, are comprised of future policy benefits, policyholder account balances and other policy-related balances. Information regarding insurance liabilities by segment, as well as Corporate & Other, was as follows at:
December 31, ------------------- 2016 2015 --------- --------- (In millions) U.S............... $ 124,505 $ 119,806 MetLife Holdings.. 89,911 98,346 Corporate & Other. 337 2,383 --------- --------- Total............ $ 214,753 $ 220,535 ========= =========
See Note 6 for discussion of affiliated reinsurance liabilities included in the table above. Future policy benefits are measured as follows: ------------------------------------------------------------------- Product Type: Measurement Assumptions: ------------------------------------------------------------------- Participating life 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. ------------------------------------------------------------------- Nonparticipating life Aggregate of the present value of expected future benefit payments and related expenses less the present value of expected future net premiums. Assumptions as to mortality and persistency are based upon the Company's experience when the basis of the liability is established. Interest rate assumptions for the aggregate future policy benefit liabilities range from 2% to 11%. ------------------------------------------------------------------- Individual and group Present value of expected future traditional fixed annuities payments. Interest rate assumptions after annuitization used in establishing such liabilities range from 2% to 11%. ------------------------------------------------------------------- Non-medical health The net level premium method and insurance assumptions as to future morbidity, withdrawals and interest, which provide a margin for adverse deviation. Interest rate assumptions used in establishing such liabilities range from 4% to 7%. ------------------------------------------------------------------- Disabled lives Present value of benefits method and experience assumptions as to claim terminations, expenses and interest. Interest rate assumptions used in establishing such liabilities range from 2% to 8%. ------------------------------------------------------------------- 32 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Participating business represented 4% and 5% of the Company's life insurance in-force at December 31, 2016 and 2015, respectively. Participating policies represented 26%, 27% and 27% of gross traditional life insurance premiums for the years ended December 31, 2016, 2015 and 2014, respectively. 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 less than 1% to 13%, less expenses, mortality charges and withdrawals. Guarantees The Company issues variable annuity products with guaranteed minimum benefits. GMABs, the non-life-contingent portion of GMWBs and the portion of certain GMIBs that do not require annuitization are accounted for as embedded derivatives in policyholder account balances and are further discussed in Note 9. Guarantees accounted for as insurance liabilities include: ------------------------------------------------------------------------------ Guarantee: Measurement Assumptions: ------------------------------------------------------------------------------ GMDBs . A return of purchase payment . Present value of expected death upon death even if the account benefits in excess of the value is reduced to zero. projected account balance recognizing the excess ratably over the accumulation period based on the present value of total expected assessments. . An enhanced death benefit may be . Assumptions are consistent with available for an additional fee. those used for amortizing DAC, and are thus subject to the same variability and risk. . Investment performance and volatility assumptions are consistent with the historical experience of the appropriate underlying equity index, such as the S&P 500 Index. . Benefit assumptions are based on the average benefits payable over a range of scenarios. ------------------------------------------------------------------------------ GMIBs . After a specified period of time . Present value of expected income determined at the time of benefits in excess of the issuance of the variable projected account balance at annuity contract, a minimum any future date of accumulation of purchase annuitization and recognizing payments, even if the account the excess ratably over the value is reduced to zero, that accumulation period based on can be annuitized to receive a present value of total expected monthly income stream that is assessments. not less than a specified amount. . Certain contracts also provide . Assumptions are consistent with for a guaranteed lump sum those used for estimating GMDB return of purchase premium in liabilities. lieu of the annuitization benefit. . Calculation incorporates an assumption for the percentage of the potential annuitizations that may be elected by the contractholder. ------------------------------------------------------------------------------ GMWBs. . A return of purchase payment via . Expected value of the life partial withdrawals, even if contingent payments and the account value is reduced to expected assessments using zero, provided that cumulative assumptions consistent with withdrawals in a contract year those used for estimating the do not exceed a certain limit. GMDB liabilities. . Certain contracts include guaranteed withdrawals that are life contingent. ------------------------------------------------------------------------------ The Company also issues other annuity contracts that apply a lower rate on funds deposited if the contractholder elects to surrender the contract for cash and a higher rate if the contractholder elects to annuitize. These guarantees include benefits that are payable in the event of death, maturity or at annuitization. Certain other annuity contracts contain guaranteed annuitization benefits that may be above what would be provided by the current account value of the contract. Additionally, the Company issues universal and variable life contracts where the Company contractually guarantees to the contractholder a secondary guarantee or a guaranteed paid-up benefit. 33 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Information regarding the liabilities for guarantees (excluding base policy liabilities and embedded derivatives) relating to annuity and universal and variable life contracts was as follows:
Universal and Variable Annuity Contracts Life Contracts ------------------ ---------------------- Secondary Paid-Up GMDBs GMIBs Guarantees Guarantees Total -------- -------- ---------- ---------- --------- (In millions) Direct: Balance at January 1, 2014... $ 148 $ 390 $ 417 $ 74 $ 1,029 Incurred guaranteed benefits. 51 68 124 8 251 Paid guaranteed benefits..... (3) -- -- -- (3) -------- -------- ---------- ---------- --------- Balance at December 31, 2014. 196 458 541 82 1,277 Incurred guaranteed benefits. 37 80 86 9 212 Paid guaranteed benefits..... (1) -- -- -- (1) -------- -------- ---------- ---------- --------- Balance at December 31, 2015. 232 538 627 91 1,488 Incurred guaranteed benefits. 55 63 92 11 221 Paid guaranteed benefits..... (1) -- -- -- (1) Dispositions (1)............. (18) (134) (99) -- (251) -------- -------- ---------- ---------- --------- Balance at December 31, 2016. $ 268 $ 467 $ 620 $ 102 $ 1,457 ======== ======== ========== ========== ========= Ceded: Balance at January 1, 2014... $ 120 $ 124 $ 314 $ 51 $ 609 Incurred guaranteed benefits. (80) (100) (9) 6 (183) Paid guaranteed benefits..... (3) -- -- -- (3) -------- -------- ---------- ---------- --------- Balance at December 31, 2014. 37 24 305 57 423 Incurred guaranteed benefits. 14 2 49 6 71 Paid guaranteed benefits..... (1) -- -- -- (1) -------- -------- ---------- ---------- --------- Balance at December 31, 2015. 50 26 354 63 493 Incurred guaranteed benefits. 13 (8) (8) 8 5 Paid guaranteed benefits..... (1) -- -- -- (1) Dispositions (1)............. (18) (39) (97) -- (154) -------- -------- ---------- ---------- --------- Balance at December 31, 2016. $ 44 $ (21) $ 249 $ 71 $ 343 ======== ======== ========== ========== ========= Net: Balance at January 1, 2014... $ 28 $ 266 $ 103 $ 23 $ 420 Incurred guaranteed benefits. 131 168 133 2 434 Paid guaranteed benefits..... -- -- -- -- -- -------- -------- ---------- ---------- --------- Balance at December 31, 2014. 159 434 236 25 854 Incurred guaranteed benefits. 23 78 37 3 141 Paid guaranteed benefits..... -- -- -- -- -- -------- -------- ---------- ---------- --------- Balance at December 31, 2015. 182 512 273 28 995 Incurred guaranteed benefits. 42 71 100 3 216 Paid guaranteed benefits..... -- -- -- -- -- Dispositions (1)............. -- (95) (2) -- (97) -------- -------- ---------- ---------- --------- Balance at December 31, 2016. $ 224 $ 488 $ 371 $ 31 $ 1,114 ======== ======== ========== ========== =========
-------- (1) See Note 3. 34 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Information regarding the Company's guarantee exposure, which includes direct business, but excludes offsets from hedging or reinsurance, if any, was as follows at:
December 31, ------------------------------------------------------------------ 2016 2015 ------------------------------- ------------------------------ In the At In the At Event of Death Annuitization Event of Death Annuitization ---------------- --------------- ---------------- ------------- (Dollars in millions) Annuity Contracts (1): Variable Annuity Guarantees: Total account value (2).................. $ 54,629 $ 24,310 $ 59,858 $ 27,648 Separate account value................... $ 43,359 $ 23,330 $ 48,216 $ 26,530 Net amount at risk....................... $ 1,386 (3) $ 328 (4) $ 1,698 (3) $ 379 (4) Average attained age of contractholders.... 65 years 64 years 65 years 63 years Other Annuity Guarantees: Total account value (2).................. N/A $ 141 N/A $ 406 Net amount at risk....................... N/A $ 92 (5) N/A $ 144 (5) Average attained age of contractholders.... N/A 52 years N/A 56 years December 31, ------------------------------------------------------------------ 2016 2015 ------------------------------- ------------------------------ Secondary Paid-Up Secondary Paid-Up Guarantees Guarantees Guarantees Guarantees ---------------- --------------- ---------------- ------------- (Dollars in millions) Universal and Variable Life Contracts (1): Total account value (2).................. $ 4,306 $ 1,014 $ 8,166 $ 1,052 Net amount at risk (6)................... $ 49,161 $ 7,164 $ 75,994 $ 7,658 Average attained age of policyholders...... 53 years 62 years 55 years 61 years
-------- (1) 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. (2) Includes the contractholder's investments in the general account and separate account, if applicable. (3) Defined as the death benefit less the total account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date and includes any additional contractual claims associated with riders purchased to assist with covering income taxes payable upon death. (4) Defined as the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. This amount represents the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date, even though the contracts contain terms that allow annuitization of the guaranteed amount only after the 10th anniversary of the contract, which not all contractholders have achieved. (5) Defined as either the excess of the upper tier, adjusted for a profit margin, less the lower tier, as of the balance sheet date or the amount (if any) that would be required to be added to the total account value to purchase a lifetime income stream, based on current annuity rates, equal to the minimum amount provided under the guaranteed benefit. These amounts represent the Company's potential economic exposure to such guarantees in the event all contractholders were to annuitize on the balance sheet date. (6) Defined as the guarantee amount less the account value, as of the balance sheet date. It represents the amount of the claim that the Company would incur if death claims were filed on all contracts on the balance sheet date. 35 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Account balances of contracts with guarantees were invested in separate account asset classes as follows at:
December 31, ------------------- 2016 2015 --------- --------- (In millions) Fund Groupings: Equity.......... $ 19,929 $ 23,701 Balanced........ 18,833 21,082 Bond............ 3,882 4,454 Money Market.... 64 132 --------- --------- Total.......... $ 42,708 $ 49,369 ========= =========
Obligations Assumed Under Structured Settlement Assignments The Company assumes structured settlement claim obligations as an assignment company. These liabilities are measured at the present value of the periodic claims to be provided and reported as other policy-related balances. The Company receives a fee for assuming these claim obligations and, as the assignee of the claim, is legally obligated to ensure periodic payments are made to the claimant. The Company purchases annuities from affiliates to fund these periodic payment claim obligations and designates payments to be made directly to the claimant by the affiliated annuity writer. These annuities funding structured settlement claims are recorded as an investment. See Note 1. See Note 8 for additional information on obligations assumed under structured settlement assignments. Obligations Under Funding Agreements The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to certain unconsolidated special purpose entities ("SPEs") that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such funding agreements. During the years ended December 31, 2016, 2015 and 2014, the Company issued $39.7 billion, $35.1 billion and $36.7 billion, respectively, and repaid $38.5 billion, $35.5 billion and $31.7 billion, respectively, of such funding agreements. At December 31, 2016 and 2015, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $30.8 billion and $29.5 billion, respectively. Metropolitan Life Insurance Company and GALIC, a former subsidiary, are members of regional banks in the Federal Home Loan Bank ("FHLB") system ("FHLBanks"). Holdings of common stock of FHLBanks, included in equity securities, were as follows at:
December 31, --------------------------- 2016 2015 ----------- ----------- (In millions) FHLB of New York... $ 748 $ 666 FHLB of Des Moines. $ -- (1) $ 40
--------- (1) See Note 3 for information on the disposition of GALIC. 36 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) The Company has also entered into funding agreements with FHLBanks and the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the U.S. ("Farmer Mac"). The liability for such funding agreements is included in policyholder account balances. Information related to such funding agreements was as follows at:
Liability Collateral ------------------------- ----------------------------- December 31, ------------------------------------------------------- 2016 2015 2016 2015 ------------ ------------ ------------ ------------ (In millions) FHLB of New York (1)... $ 14,445 $ 12,570 $ 16,828 (2) $ 14,085 (2) Farmer Mac (3)......... $ 2,550 $ 2,550 $ 2,645 $ 2,643 FHLB of Des Moines (1). $ -- $ 750 $ -- (2) $ 851 (2)
------------ (1) Represents funding agreements issued to the applicable FHLBank in exchange for cash and for which such FHLBank has been granted a lien on certain assets, some of which are in the custody of such FHLBank, including residential mortgage-backed securities ("RMBS"), to collateralize obligations under advances evidenced by funding agreements. The Company is permitted to withdraw any portion of the collateral in the custody of such FHLBank as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the collateral maintenance level. Upon any event of default by the Company, such FHLBank's recovery on the collateral is limited to the amount of the Company's liability to such FHLBank. (2) Advances are collateralized by mortgage-backed securities. The amount of collateral presented is at estimated fair value. (3) Represents funding agreements issued to a subsidiary of Farmer Mac, as well as certain SPEs that have issued debt securities for which payment of interest and principal is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and principal by Farmer Mac. The obligations under these funding agreements are secured by a pledge of certain eligible agricultural mortgage loans and may, under certain circumstances, be secured by other qualified collateral. The amount of collateral presented is at carrying value. Liabilities for Unpaid Claims and Claim Expenses The following is information about incurred and paid claims development by segment as of December 31, 2016. Such amounts are presented net of reinsurance, and are not discounted. The tables present claims development and cumulative claim payments by incurral year. The development tables are only presented for significant short-duration product liabilities within each segment. Where practical, up to 10 years of history has been provided. The information about incurred and paid claims development prior to 2016 is presented as supplementary information, as described in Note 1. 37 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) U.S. Group Life - Term
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance At December 31, 2016 ------------------------------------------------------------------------- ---------------------------- For the Years Ended December 31, Total IBNR ------------------------------------------------------------------------- Liabilities Plus Cumulative (Unaudited) Expected Number of ----------------------------------------------------------- Development on Reported Incurral Year 2011 2012 2013 2014 2015 2016 Reported Claims Claims ------------------- -------- -------- -------- -------- -------- ---------- ---------------- ----------- (Dollars in millions) 2011............... $ 6,318 $ 6,290 $ 6,293 $ 6,269 $ 6,287 $ 6,295 $ 3 207,139 2012............... 6,503 6,579 6,569 6,546 6,568 3 208,441 2013............... 6,637 6,713 6,719 6,720 8 210,597 2014............... 6,986 6,919 6,913 13 210,347 2015............... 7,040 7,015 27 210,838 2016............... 7,125 825 184,085 ---------- Total......................................................................... 40,636 Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance................................................... (38,879) All outstanding liabilities for incurral years prior to 2011, net of reinsurance............................................................. 12 ---------- Total unpaid claims and claim adjustment expenses, net of reinsurance.................................................................. $ 1,769 ==========
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance --------------------------------------------------------------------------------------- For the Years Ended December 31, --------------------------------------------------------------------------------------- (Unaudited) ----------------------------------------------------------------------- Incurral Year 2011 2012 2013 2014 2015 2016 --------- ---------- ---------- ---------- ---------- ---------- ------------ (In millions) 2011..... $ 4,982 $ 6,194 $ 6,239 $ 6,256 $ 6,281 $ 6,290 2012..... 5,132 6,472 6,518 6,532 6,558 2013..... 5,216 6,614 6,664 6,678 2014..... 5,428 6,809 6,858 2015..... 5,524 6,913 2016..... 5,582 ------------ Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance........................................ $ 38,879 ============
Average Annual Percentage Payout The following is supplementary information about average historical claims duration as of December 31, 2016:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ------------------------------------------------------------------------------- Years................... 1 2 3 4 5 6 Group Life -- Term...... 78.4% 20.0% 0.7% 0.2% 0.4% 0.2%
38 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Group Long-Term Disability
Incurred Claims and Allocated Claim Adjustment Expense, Net of Reinsurance At December 31, 2016 ------------------------------------------------------------------------- ---------------------------- For the Years Ended December 31, Total IBNR ------------------------------------------------------------------------- Liabilities Plus Cumulative (Unaudited) Expected Number of ------------------------------------------------------------ Development on Reported Incurral Year 2011 2012 2013 2014 2015 2016 Reported Claims Claims ------------------- --------- --------- --------- --------- --------- ---------- ---------------- ----------- (Dollars in millions) 2011............... $ 955 $ 916 $ 894 $ 914 $ 924 $ 923 $ -- 21,187 2012............... 966 979 980 1,014 1,034 -- 19,502 2013............... 1,008 1,027 1,032 1,049 -- 20,547 2014............... 1,076 1,077 1,079 6 22,233 2015............... 1,082 1,105 29 18,172 2016............... 1,131 534 8,960 ---------- Total.......................................................................... 6,321 Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance.............................................................. (2,277) All outstanding liabilities for incurral years prior to 2011, net of reinsurance..................................................................... 2,933 ---------- Total unpaid claims and claim adjustment expenses, net of reinsurance.......... $ 6,977 ==========
Cumulative Paid Claims and Paid Allocated Claim Adjustment Expenses, Net of Reinsurance --------------------------------------------------------------------------------------- For the Years Ended December 31, --------------------------------------------------------------------------------------- (Unaudited) ------------------------------------------------------------------------ Incurral Year 2011 2012 2013 2014 2015 2016 ------------------- ----------- ------------ ------------ ------------ ------------ ------------- (In millions) 2011............... $ 44 $ 217 $ 337 $ 411 $ 478 $ 537 2012............... 43 229 365 453 524 2013............... 43 234 382 475 2014............... 51 266 428 2015............... 50 264 2016............... 49 ------------- Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance............................................................................... $ 2,277 =============
Average Annual Percentage Payout The following is supplementary information about average historical claims duration as of December 31, 2016:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ------------------------------------------------------------------------------- Years.................... 1 2 3 4 5 6 Group Long-Term Disability.............. 4.4% 18.9% 13.8% 8.4% 7.1% 6.3%
Significant Methodologies and Assumptions Group Life - Term and Group Long-Term Disability incurred but not paid ("IBNP") liabilities are developed using a combination of loss ratio and development methods. Claims in the course of settlement are then subtracted from the IBNP liabilities resulting in the IBNR liabilities. The loss ratio method is used in the period in which the claims are neither sufficient nor credible. In developing the loss ratios, any material rate increases that could change the underlying premium without affecting the estimated incurred losses are taken into account. For periods where sufficient and credible claim data exists, the development method is used based on the claim triangles which categorize claims according to both the period in which they were incurred and the period in which they were paid, adjudicated or reported. The end result is a triangle of known data that is used to develop known completion ratios and factors. Claims paid are then subtracted from the estimated ultimate incurred claims to calculate the IBNP liability. 39 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) An expense liability is held for the future expenses associated with the payment of incurred but not yet paid claims (IBNR and pending). This is expressed as a percentage of the underlying claims liability and is based on past experience and the anticipated future expense structure. For Group Life - Term and Group Long-Term Disability, first year incurred claims and allocated loss adjustment expenses increased in 2016 compared to the 2015 incurral year due to the growth in the size of the business. There were no significant changes in methodologies during 2016. The assumptions used in calculating the unpaid claims and claim adjustment expenses for Group Life - Term and Group Long-Term Disability are updated annually to reflect emerging trends in claim experience. No additional premiums or return premiums have been accrued as a result of the prior year development. Liabilities for Group Life - Term unpaid claims and claim adjustment expenses are not discounted. The liabilities for Group Long-Term Disability unpaid claims and claim adjustment expenses were $5.8 billion and $5.5 billion at December 31, 2016 and 2015, respectively. These amounts were discounted using interest rates ranging from 3% to 8%, based on the incurral year. The total discount applied to these liabilities was $1.3 billion at both December 31, 2016 and 2015. The amount of interest accretion recognized was $565 million, $517 million and $481 million for the years ended December 31, 2016, 2015 and 2014, respectively. These amounts were reflected in policyholder benefits and claims. For Group Life - Term, claims were based upon individual death claims. For Group Long-Term Disability, claim frequency was determined by the number of reported claims as identified by a unique claim number assigned to individual claimants. Claim counts initially include claims that do not ultimately result in a liability. These claims are omitted from the claim counts once it is determined that there is no liability. The Group Long-Term Disability IBNR, included in the development tables above, was developed using discounted cash flows, and is presented on a discounted basis. 40 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Reconciliation of the Disclosure of Incurred and Paid Claims Development to the Liability for Unpaid Claims and Claim Adjustment Expenses The reconciliation of the net incurred and paid claims development tables to the liability for unpaid claims and claims adjustment expenses on the consolidated balance sheet was as follows at:
December 31, 2016 -------------------------------- (In millions) Short-Duration: Unpaid claims and allocated claims adjustment expenses, net of reinsurance: U.S.: Group Life - Term.............................................................................. $ 1,769 Group Long-Term Disability..................................................................... 6,977 --------------- Total........................................................................................ 8,746 ---------------- Other insurance lines - all segments combined.................................................. 548 ---------------- Total unpaid claims and allocated claims adjustment expenses, net of reinsurance............. 9,294 ---------------- Reinsurance recoverables on unpaid claims: U.S.: Group Life - Term.............................................................................. 21 Group Long-Term Disability..................................................................... 74 --------------- ---------------- Total........................................................................................ 95 ---------------- Other insurance lines - all segments combined.................................................. 5 ---------------- Total reinsurance recoverable on unpaid claims............................................... 100 ---------------- Total unpaid claims and allocated claims adjustment expense.................................. 9,394 Discounting.................................................................................... (1,277) ---------------- Liability for unpaid claims and claim adjustment liabilities - short-duration................ 8,117 Liability for unpaid claims and claim adjustment liabilities - all long-duration lines......... 3,504 ---------------- Total liability for unpaid claims and claim adjustment expense (included in future policy benefits and other policy-related balances)................................................ $ 11,621 ================
41 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Rollforward of Claims and Claim Adjustment Expenses Information regarding the liabilities for unpaid claims and claim adjustment expenses was as follows:
Years Ended December 31, ------------------------------------------------ 2016 2015 (1) 2014 (1) ---------------- --------------- --------------- (In millions) Balance at December 31 of prior period..... $ 7,527 $ 7,310 $ 7,022 Less: Reinsurance recoverables........... 273 286 290 ---------------- --------------- --------------- Net balance at December 31 of prior period. 7,254 7,024 6,732 Cumulative adjustment (2).................. 3,397 -- -- ---------------- --------------- --------------- Net balance at January 1,.................. 10,651 7,024 6,732 Incurred related to: Current year............................. 16,321 5,316 5,099 Prior years (3).......................... 325 13 -- ---------------- --------------- --------------- Total incurred......................... 16,646 5,329 5,099 Paid related to: Current year............................. (10,461) (3,415) (3,228) Prior years.............................. (5,638) (1,684) (1,579) ---------------- --------------- --------------- Total paid............................. (16,099) (5,099) (4,807) Dispositions (4)........................... (116) -- -- ---------------- --------------- --------------- Net balance at December 31,................ 11,082 7,254 7,024 Add: Reinsurance recoverables............ 539 273 286 ---------------- --------------- --------------- Balance at December 31,.................... $ 11,621 $ 7,527 $ 7,310 ================ =============== ===============
--------- (1) Limited to group accident and non-medical health policies and contracts. (2) Reflects the accumulated adjustment, net of reinsurance, upon implementation of the new short-duration contracts guidance which clarified the requirement to include claim information for long-duration contracts. The accumulated adjustment primarily reflects unpaid claim liabilities, net of reinsurance, for long-duration contracts as of the beginning of the period presented. Prior periods have not been restated. See Note 1. (3) During 2016, as a result of changes in estimates of insured events in the respective prior year, claims and claim adjustment expenses associated with prior years increased due to the implementation of new guidance related to short-duration contracts. (4) See Note 3. Separate Accounts Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $73.6 billion and $79.7 billion at December 31, 2016 and 2015, respectively, for which the policyholder assumes all investment risk, and separate accounts for which the Company contractually guarantees either a minimum return or account value to the policyholder which totaled $60.2 billion and $56.2 billion at December 31, 2016 and 2015, respectively. The latter category consisted primarily of guaranteed interest contracts. The average interest rate credited on these contracts was 2.39% and 2.40% at December 31, 2016 and 2015, respectively. For the years ended December 31, 2016, 2015 and 2014, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 42 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles See Note 1 for a description of capitalized acquisition costs. Nonparticipating and Non-Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts (term insurance, nonparticipating whole life insurance, traditional group life insurance, and non-medical health insurance) over the appropriate premium paying period in proportion to the actual and expected future gross premiums that were set at contract issue. The expected premiums are based upon the premium requirement of each policy and assumptions for mortality, morbidity, persistency and investment returns at policy issuance, or policy acquisition (as it relates to VOBA), include provisions for adverse deviation, and are consistent with the assumptions used to calculate future policyholder benefit liabilities. These assumptions are not revised after policy issuance or acquisition unless the DAC or VOBA balance is deemed to be unrecoverable from future expected profits. Absent a premium deficiency, variability in amortization after policy issuance or acquisition is caused only by variability in premium volumes. Participating, Dividend-Paying Traditional Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross margins. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The future gross margins are dependent principally on investment returns, policyholder dividend scales, mortality, persistency, expenses to administer the business, creditworthiness of reinsurance counterparties and certain economic variables, such as inflation. For participating contracts within the closed block (dividend-paying traditional contracts) future gross margins are also dependent upon changes in the policyholder dividend obligation. See Note 7. Of these factors, the Company anticipates that investment returns, expenses, persistency and other factor changes, as well as policyholder dividend scales, are reasonably likely to impact significantly the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross margins with the actual gross margins for that period. When the actual gross margins change from previously estimated gross margins, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross margins exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross margins are below the previously estimated gross margins. Each reporting period, the Company also updates the actual amount of business in-force, which impacts expected future gross margins. When expected future gross margins are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross margins are above the previously estimated expected future gross margins. Each period, the Company also reviews the estimated gross margins for each block of business to determine the recoverability of DAC and VOBA balances. Fixed and Variable Universal Life Contracts and Fixed and Variable Deferred Annuity Contracts The Company amortizes DAC and VOBA related to these contracts over the estimated lives of the contracts in proportion to actual and expected future gross profits. The amortization includes interest based on rates in effect at inception or acquisition of the contracts. The amount of future gross profits is dependent principally upon returns in excess of the amounts credited to policyholders, mortality, persistency, interest crediting rates, expenses to administer the business, creditworthiness of reinsurance counterparties, the effect of any hedges used and certain economic variables, such as inflation. Of these factors, the Company anticipates that investment returns, expenses and persistency are reasonably likely to significantly impact the rate of DAC and VOBA amortization. Each reporting period, the Company updates the estimated gross profits with the actual gross profits for that period. When the actual gross profits change from previously estimated gross profits, the cumulative DAC and VOBA amortization is re-estimated and adjusted by a cumulative charge or credit to current operations. When actual gross profits exceed those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the actual gross profits are below the previously estimated gross profits. Each reporting period, the Company also updates the actual amount of business remaining in-force, which impacts expected future gross profits. When expected future gross profits are below those previously estimated, the DAC and VOBA amortization will increase, resulting in a current period charge to earnings. The opposite result occurs when the expected future gross profits are above the previously estimated expected future gross profits. Each period, the Company also reviews the estimated gross profits for each block of business to determine the recoverability of DAC and VOBA balances. 43 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Factors Impacting Amortization Separate account rates of return on variable universal life contracts and variable deferred annuity contracts affect in-force account balances on such contracts each reporting period, which can result in significant fluctuations in amortization of DAC and VOBA. Returns that are higher than the Company's long-term expectation produce higher account balances, which increases the Company's future fee expectations and decreases future benefit payment expectations on minimum death and living benefit guarantees, resulting in higher expected future gross profits. The opposite result occurs when returns are lower than the Company's long-term expectation. The Company's practice to determine the impact of gross profits resulting from returns on separate accounts assumes that long-term appreciation in equity markets is not changed by short-term market fluctuations, but is only changed when sustained interim deviations are expected. The Company monitors these events and only changes the assumption when its long-term expectation changes. The Company also periodically reviews other long-term assumptions underlying the projections of estimated gross margins and profits. These assumptions primarily relate to investment returns, policyholder dividend scales, interest crediting rates, mortality, persistency, policyholder behavior and expenses to administer business. Management annually updates assumptions used in the calculation of estimated gross margins and profits which may have significantly changed. If the update of assumptions causes expected future gross margins and profits to increase, DAC and VOBA amortization will decrease, resulting in a current period increase to earnings. The opposite result occurs when the assumption update causes expected future gross margins and profits to decrease. Periodically, the Company modifies product benefits, features, rights or coverages that occur by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by election or coverage within a contract. If such modification, referred to as an internal replacement, substantially changes the contract, the associated DAC or VOBA is written off immediately through income and any new deferrable costs associated with the replacement contract are deferred. If the modification does not substantially change the contract, the DAC or VOBA amortization on the original contract will continue and any acquisition costs associated with the related modification are expensed. Amortization of DAC and VOBA is attributed to net investment gains (losses) and net derivative gains (losses), and to other expenses for the amount of gross margins or profits originating from transactions other than investment gains and losses. Unrealized investment gains and losses represent the amount of DAC and VOBA that would have been amortized if such gains and losses had been recognized. 44 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding DAC and VOBA was as follows:
Years Ended December 31, ------------------------------------------------- 2016 2015 2014 --------------- --------------- --------------- (In millions) DAC: Balance at January 1,........................................... $ 5,977 $ 5,905 $ 6,338 Capitalizations................................................. 332 482 424 Amortization related to: Net investment gains (losses) and net derivative gains (losses). 353 (111) (104) Other expenses.................................................. (791) (624) (583) --------------- --------------- --------------- Total amortization............................................ (438) (735) (687) --------------- --------------- --------------- Unrealized investment gains (losses)............................ (12) 325 (170) Dispositions (1)................................................ (1,145) -- -- --------------- --------------- --------------- Balance at December 31,......................................... 4,714 5,977 5,905 --------------- --------------- --------------- VOBA: Balance at January 1,........................................... 66 70 78 Amortization related to: Other expenses.................................................. (3) (7) (8) --------------- --------------- --------------- Total amortization............................................ (3) (7) (8) --------------- --------------- --------------- Unrealized investment gains (losses)............................ 13 3 -- Dispositions (1)................................................ (47) -- -- --------------- --------------- --------------- Balance at December 31,......................................... 29 66 70 --------------- --------------- --------------- Total DAC and VOBA: Balance at December 31,......................................... $ 4,743 $ 6,043 $ 5,975 =============== =============== ===============
----------- (1) See Note 3. Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:
December 31, ----------------------------- 2016 2015 -------------- -------------- (In millions) U.S............... $ 421 $ 418 MetLife Holdings.. 4,317 5,000 Corporate & Other. 5 625 -------------- -------------- Total........... $ 4,743 $ 6,043 ============== ==============
45 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 5. Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles (continued) Information regarding other intangibles was as follows:
Years Ended December 31, ---------------------------------------- 2016 2015 2014 ------------ ------------ ------------ (In millions) DSI: Balance at January 1,................ $ 130 $ 122 $ 175 Capitalization....................... 4 8 10 Amortization......................... (16) (21) (28) Unrealized investment gains (losses). 1 21 (35) Dispositions (1)..................... $ (14) $ -- $ -- ------------ ------------ ------------ Balance at December 31,.............. $ 105 $ 130 $ 122 ============ ============ ============ VODA and VOCRA: Balance at January 1,................ $ 265 $ 295 $ 325 Amortization......................... (30) (30) (30) ------------ ------------ ------------ Balance at December 31,.............. $ 235 $ 265 $ 295 ============ ============ ============ Accumulated amortization............. $ 222 $ 192 $ 162 ============ ============ ============
--------- (1)See Note 3. The estimated future amortization expense to be reported in other expenses for the next five years is as follows:
VOBA VODA and VOCRA -------------- --------------- (In millions) 2017.......................... $ 2 $ 28 2018.......................... $ 2 $ 26 2019.......................... $ 2 $ 24 2020.......................... $ 2 $ 22 2021.......................... $ 2 $ 19
6. Reinsurance The Company enters into reinsurance agreements primarily as a purchaser of reinsurance for its various insurance products and also as a provider of reinsurance for some insurance products issued by affiliated and unaffiliated companies. The Company participates in reinsurance activities in order to limit losses, minimize exposure to significant risks and provide additional capacity for future growth. 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 in Note 8. U.S. For certain policies within the Group Benefits business, the Company generally retains most of the risk and only cedes particular risks on certain client arrangements. The majority of the Company's reinsurance activity within this business relates to client agreements for employer sponsored captive programs, risk-sharing agreements and multinational pooling. 46 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The Company's Retirement and Income Solutions business has periodically engaged in reinsurance activities, on an opportunistic basis. The impact of these activities on the financial results of this business has not been significant and there were no significant transactions during the periods presented. MetLife Holdings For its life products, the Company has historically reinsured the mortality risk primarily on an excess of retention basis or on a quota share basis. The Company currently reinsures 90% of the mortality risk in excess of $2 million for most products. In addition to reinsuring mortality risk as described above, the Company reinsures other risks, as well as specific coverages. Placement of reinsurance is done primarily on an automatic basis and also on a facultative basis for risks with specified characteristics. On a case by case basis, the Company may retain up to $20 million per life and reinsure 100% of amounts in excess of the amount the Company retains. The Company evaluates its reinsurance programs routinely and may increase or decrease its retention at any time. For annuities, the Company reinsures 100% of the living and death benefit guarantees issued in connection with certain variable annuities issued since 2004 to an affiliate and portions of the living and death benefit guarantees issued in connection with its variable annuities issued prior to 2004 to affiliated and unaffiliated reinsurers. Under these reinsurance agreements, the Company pays a reinsurance premium generally based on fees associated with the guarantees collected from policyholders, and receives reimbursement for benefits paid or accrued in excess of account values, subject to certain limitations. The value of embedded derivatives on the ceded risk is determined using a methodology consistent with the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. The Company also assumes 100% of certain variable annuity risks issued by an affiliate. Catastrophe Coverage The Company has exposure to catastrophes which could contribute to significant fluctuations in the Company's results of operations. The Company uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks. Reinsurance Recoverables The Company reinsures its business through a diversified group of well-capitalized reinsurers. The Company analyzes recent trends in arbitration and litigation outcomes in disputes, if any, with its reinsurers. The Company monitors ratings and evaluates the financial strength of its reinsurers by analyzing their financial statements. In addition, the reinsurance recoverable balance due from each reinsurer is evaluated as part of the overall monitoring process. Recoverability of reinsurance recoverable balances is evaluated based on these analyses. The Company generally secures large reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts, and irrevocable letters of credit. These reinsurance recoverable balances are stated net of allowances for uncollectible reinsurance, which at December 31, 2016 and 2015, were not significant. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $1.9 billion and $2.4 billion of unsecured unaffiliated reinsurance recoverable balances at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company had $3.0 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $2.1 billion, or 70%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.4 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. At December 31, 2015, the Company had $5.4 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $4.2 billion, or 78%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.6 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. The Company has reinsured with an unaffiliated third-party reinsurer, 59% of the closed block through a modified coinsurance agreement. The Company accounts for this agreement under the deposit method of accounting. The Company, having the right of offset, has offset the modified coinsurance deposit with the deposit recoverable. 47 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The amounts on the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:
Years Ended December 31, ---------------------------------------------- 2016 2015 2014 -------------- -------------- -------------- (In millions) Premiums Direct premiums............................................... $ 21,931 $ 21,497 $ 20,963 Reinsurance assumed........................................... 1,687 1,679 1,673 Reinsurance ceded............................................. (1,225) (1,242) (1,252) -------------- -------------- -------------- Net premiums................................................ $ 22,393 $ 21,934 $ 21,384 ============== ============== ============== Universal life and investment-type product policy fees Direct universal life and investment-type product policy fees. $ 3,006 $ 3,050 $ 3,029 Reinsurance assumed........................................... 60 58 48 Reinsurance ceded............................................. (524) (524) (611) -------------- -------------- -------------- Net universal life and investment-type product policy fees.. $ 2,542 $ 2,584 $ 2,466 ============== ============== ============== Other revenues Direct other revenues......................................... $ 851 $ 875 $ 1,040 Reinsurance assumed........................................... (2) 5 2 Reinsurance ceded............................................. 629 656 766 -------------- -------------- -------------- Net other revenues.......................................... $ 1,478 $ 1,536 $ 1,808 ============== ============== ============== Policyholder benefits and claims Direct policyholder benefits and claims....................... $ 25,226 $ 24,541 $ 23,978 Reinsurance assumed........................................... 1,496 1,454 1,416 Reinsurance ceded............................................. (1,431) (1,468) (1,539) -------------- -------------- -------------- Net policyholder benefits and claims........................ $ 25,291 $ 24,527 $ 23,855 ============== ============== ============== Interest credited to policyholder account balances Direct interest credited to policyholder account balances..... $ 2,279 $ 2,240 $ 2,227 Reinsurance assumed........................................... 35 33 35 Reinsurance ceded............................................. (81) (90) (88) -------------- -------------- -------------- Net interest credited to policyholder account balances...... $ 2,233 $ 2,183 $ 2,174 ============== ============== ============== Other expenses Direct other expenses......................................... $ 4,830 $ 5,448 $ 5,132 Reinsurance assumed........................................... 583 340 399 Reinsurance ceded............................................. 390 470 540 -------------- -------------- -------------- Net other expenses.......................................... $ 5,803 $ 6,258 $ 6,071 ============== ============== ==============
48 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The amounts on the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows at:
December 31, ------------------------------------------------------------------------------------ 2016 2015 ----------------------------------------- ------------------------------------------ Total Total Balance Balance Direct Assumed Ceded Sheet Direct Assumed Ceded Sheet --------- --------- ---------- --------- --------- ---------- ---------- --------- (In millions) Assets Premiums, reinsurance and other receivables...................... $ 2,212 $ 620 $ 19,551 $ 22,383 $ 1,957 $ 667 $ 21,098 $ 23,722 Deferred policy acquisition costs and value of business acquired......................... 4,977 55 (289) 4,743 5,973 458 (388) 6,043 --------- --------- ---------- --------- --------- ---------- ---------- --------- Total assets.................... $ 7,189 $ 675 $ 19,262 $ 27,126 $ 7,930 $ 1,125 $ 20,710 $ 29,765 ========= ========= ========== ========= ========= ========== ========== ========= Liabilities Future policy benefits............ $113,920 $ 1,640 $ (4) $115,556 $116,389 $ 2,530 $ (5) $118,914 Policyholder account balances..... 91,889 577 -- 92,466 94,080 340 -- 94,420 Other policy-related balances..... 6,355 358 18 6,731 6,766 392 43 7,201 Other liabilities................. 10,735 2,229 16,533 29,497 10,384 6,843 15,528 32,755 --------- --------- ---------- --------- --------- ---------- ---------- --------- Total liabilities............... $222,899 $ 4,804 $ 16,547 $244,250 $227,619 $ 10,105 $ 15,566 $253,290 ========= ========= ========== ========= ========= ========== ========== =========
Effective December 1, 2016, the Company recaptured two reinsurance agreements which covered 90% of the liabilities on certain participating whole life insurance policies issued between April 1, 2000 and December 31, 2001 which were reinsured by an unaffiliated company. This recapture resulted in an increase in DAC and VOBA of $95 million, a decrease in premiums, reinsurance and other receivables of $697 million, and a decrease in other liabilities of $713 million. The Company recognized a gain of $72 million, net of income tax, as a result of this transaction. Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on reinsurance were $14.5 billion and $13.6 billion at December 31, 2016 and 2015, respectively. The deposit liabilities on reinsurance were $2.2 billion and $6.5 billion at December 31, 2016 and 2015, respectively. Related Party Reinsurance Transactions The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including Brighthouse Insurance, Brighthouse NY, MetLife Reinsurance Company of Charleston ("MRC"), MetLife Reinsurance Company of Vermont, Metropolitan Tower Life Insurance Company, NELICO and GALIC, all of which are related parties. 49 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) Information regarding the significant effects of affiliated reinsurance included on the consolidated statements of operations was as follows:
Years Ended December 31, ------------------------------------- 2016 2015 2014 ------------- ----------- ----------- (In millions) Premiums Reinsurance assumed.......................................... $ 727 $ 701 $ 681 Reinsurance ceded............................................ (45) (40) (36) ------------- ----------- ----------- Net premiums............................................... $ 682 $ 661 $ 645 ============= =========== =========== Universal life and investment-type product policy fees Reinsurance assumed.......................................... $ 60 $ 58 $ 48 Reinsurance ceded............................................ (138) (141) (240) ------------- ----------- ----------- Net universal life and investment-type product policy fees. $ (78) $ (83) $ (192) ============= =========== =========== Other revenues Reinsurance assumed.......................................... $ (1) $ 5 $ 2 Reinsurance ceded............................................ 575 607 713 ------------- ----------- ----------- Net other revenues......................................... $ 574 $ 612 $ 715 ============= =========== =========== Policyholder benefits and claims Reinsurance assumed.......................................... $ 697 $ 652 $ 623 Reinsurance ceded............................................ (110) (106) (197) ------------- ----------- ----------- Net policyholder benefits and claims....................... $ 587 $ 546 $ 426 ============= =========== =========== Interest credited to policyholder account balances Reinsurance assumed.......................................... $ 34 $ 32 $ 33 Reinsurance ceded............................................ (81) (90) (88) ------------- ----------- ----------- Net interest credited to policyholder account balances..... $ (47) $ (58) $ (55) ============= =========== =========== Other expenses Reinsurance assumed.......................................... $ 490 $ 245 $ 298 Reinsurance ceded............................................ 570 578 680 ------------- ----------- ----------- Net other expenses......................................... $ 1,060 $ 823 $ 978 ============= =========== ===========
Information regarding the significant effects of affiliated reinsurance included on the consolidated balance sheets was as follows at:
December 31, ------------------------------------------------- 2016 2015 ------------------------ ------------------------ Assumed Ceded Assumed Ceded ----------- ------------ ----------- ------------ (In millions) Assets Premiums, reinsurance and other receivables...................... $ 229 $ 13,334 $ 280 $ 15,466 Deferred policy acquisition costs and value of business acquired. 38 (198) 439 (193) ----------- ------------ ----------- ------------ Total assets................................................... $ 267 $ 13,136 $ 719 $ 15,273 =========== ============ =========== ============ Liabilities Future policy benefits........................................... $ 663 $ (4) $ 1,436 $ (5) Policyholder account balances.................................... 563 -- 326 -- Other policy-related balances.................................... 212 18 187 43 Other liabilities................................................ 1,853 13,065 6,463 13,000 ----------- ------------ ----------- ------------ Total liabilities.............................................. $ 3,291 $ 13,079 $ 8,412 $ 13,038 =========== ============ =========== ============
50 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The Company ceded two blocks of business to an affiliate on a 75% coinsurance with funds withheld basis. Certain contractual features of these agreements qualify as embedded derivatives, which are separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivatives related to the funds withheld associated with these reinsurance agreements are included within other liabilities and increased the funds withheld balance by $10 million and $8 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with these embedded derivatives were ($2) million, $12 million and ($39) million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company ceded risks to an affiliate related to guaranteed minimum benefit guarantees written directly by the Company. These ceded reinsurance agreements contain embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with the cessions are included within premiums, reinsurance and other receivables and were $460 million and $712 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivatives were $33 million, $47 million and $497 million for the years ended December 31, 2016, 2015 and 2014, respectively. Certain contractual features of the closed block agreement with MRC create an embedded derivative, which is separately accounted for at estimated fair value on the Company's consolidated balance sheets. The embedded derivative related to the funds withheld associated with this reinsurance agreement was included within other liabilities and increased the funds withheld balance by $767 million and $694 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivative were ($73) million, $404 million and ($389) million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company assumes risks from affiliates related to guaranteed minimum benefit guarantees written directly by the affiliates. These assumed reinsurance agreements contain embedded derivatives and changes in their estimated fair value are also included within net derivative gains (losses). The embedded derivatives associated with these agreements are included within policyholder account balances and were $390 million and $126 million at December 31, 2016 and 2015, respectively. Net derivative gains (losses) associated with the embedded derivatives were ($32) million, ($55) million and ($42) million for the years ended December 31, 2016, 2015 and 2014, respectively. In April 2016, Brighthouse Insurance recaptured risks related to certain single premium deferred annuity contracts from the Company. As a result of this recapture, the significant effects to the Company were a decrease in investments and cash and cash equivalents of $4.3 billion and a decrease in DAC of $87 million, offset by a decrease in other liabilities of $4.0 billion. The Company recognized a loss of $95 million, net of income tax, as a result of this recapture. The Company has secured certain reinsurance recoverable balances with various forms of collateral, including secured trusts, funds withheld accounts and irrevocable letters of credit. The Company had $293 million and $2.2 billion of unsecured affiliated reinsurance recoverable balances at December 31, 2016 and 2015, respectively. Affiliated reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the deposit method of accounting. The deposit assets on affiliated reinsurance were $11.7 billion at both December 31, 2016 and 2015. The deposit liabilities on affiliated reinsurance were $2.2 billion and $6.5 billion at December 31, 2016 and 2015, respectively. 7. Closed Block On April 7, 2000 (the "Demutualization Date"), Metropolitan Life Insurance Company converted from a mutual life insurance company to a stock life insurance company and became a wholly-owned subsidiary of MetLife, Inc. The conversion was pursuant to an order by the New York Superintendent of Insurance approving Metropolitan Life Insurance Company's plan of reorganization, as amended (the "Plan of Reorganization"). On the Demutualization Date, Metropolitan Life Insurance Company established a closed block for the benefit of holders of certain individual life insurance policies of Metropolitan Life Insurance Company. 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. 51 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block (continued) 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 Demutualization Date. 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 Demutualization Date (adjusted to eliminate the impact of related amounts in AOCI) 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 are 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 are less than the expected cumulative earnings of the closed block, the Company will recognize only the actual earnings in income. However, the Company may 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. Experience within the closed block, in particular mortality and investment yields, as well as realized and unrealized gains and losses, directly impact the policyholder dividend obligation. Amortization of the closed block DAC, which resides outside of the closed block, is based upon cumulative actual and expected earnings within the closed block. Accordingly, the Company's net income continues to be sensitive to the actual performance of the closed block. 52 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block (continued) 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. Information regarding the closed block liabilities and assets designated to the closed block was as follows at:
December 31, --------------------------- 2016 2015 ------------- ------------- (In millions) Closed Block Liabilities Future policy benefits.............................................................. $ 40,834 $ 41,278 Other policy-related balances....................................................... 257 249 Policyholder dividends payable...................................................... 443 468 Policyholder dividend obligation.................................................... 1,931 1,783 Current income tax payable.......................................................... 4 -- Other liabilities................................................................... 196 380 ------------- ------------- Total closed block liabilities.................................................... 43,665 44,158 ------------- ------------- Assets Designated to the Closed Block Investments: Fixed maturity securities available-for-sale, at estimated fair value............... 27,220 27,556 Equity securities available-for-sale, at estimated fair value....................... 100 111 Mortgage loans...................................................................... 5,935 6,022 Policy loans........................................................................ 4,553 4,642 Real estate and real estate joint ventures.......................................... 655 462 Other invested assets............................................................... 1,246 1,066 ------------- ------------- Total investments................................................................. 39,709 39,859 Cash and cash equivalents........................................................... 18 236 Accrued investment income........................................................... 467 474 Premiums, reinsurance and other receivables......................................... 68 56 Current income tax recoverable...................................................... -- 11 Deferred income tax assets.......................................................... 177 234 ------------- ------------- Total assets designated to the closed block....................................... 40,439 40,870 ------------- ------------- Excess of closed block liabilities over assets designated to the closed block..... 3,226 3,288 ------------- ------------- Amounts included in AOCI: Unrealized investment gains (losses), net of income tax............................. 1,517 1,382 Unrealized gains (losses) on derivatives, net of income tax......................... 95 76 Allocated to policyholder dividend obligation, net of income tax.................... (1,255) (1,159) ------------- ------------- Total amounts included in AOCI.................................................... 357 299 ------------- ------------- Maximum future earnings to be recognized from closed block assets and liabilities. $ 3,583 $ 3,587 ============= =============
Information regarding the closed block policyholder dividend obligation was as follows:
Years Ended December 31, ----------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Balance at January 1,......................................... $ 1,783 $ 3,155 $ 1,771 Change in unrealized investment and derivative gains (losses). 148 (1,372) 1,384 ------------- ------------- ------------- Balance at December 31,....................................... $ 1,931 $ 1,783 $ 3,155 ============= ============= =============
53 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block (continued) Information regarding the closed block revenues and expenses was as follows:
Years Ended December 31, ------------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Revenues Premiums............................................................. $ 1,804 $ 1,850 $ 1,918 Net investment income................................................ 1,902 1,982 2,093 Net investment gains (losses)........................................ (10) (23) 7 Net derivative gains (losses)........................................ 25 27 20 ------------- ------------- ------------- Total revenues..................................................... 3,721 3,836 4,038 ------------- ------------- ------------- Expenses Policyholder benefits and claims..................................... 2,563 2,564 2,598 Policyholder dividends............................................... 953 1,015 988 Other expenses....................................................... 133 143 155 ------------- ------------- ------------- Total expenses..................................................... 3,649 3,722 3,741 ------------- ------------- ------------- Revenues, net of expenses before provision for income tax expense (benefit)......................................................... 72 114 297 Provision for income tax expense (benefit)........................... 24 41 104 ------------- ------------- ------------- Revenues, net of expenses and provision for income tax expense (benefit)......................................................... $ 48 $ 73 $ 193 ============= ============= =============
Metropolitan Life Insurance Company charges the closed block with federal income taxes, state and local premium taxes and other state or local taxes, as well as investment management expenses relating to the closed block as provided in the Plan of Reorganization. Metropolitan Life Insurance Company also charges the closed block for expenses of maintaining the policies included in the closed block. 8. Investments See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies. Investment Risks and Uncertainties Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements. The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available. The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities ("ABS"), certain structured investment transactions and FVO and trading securities) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned. 54 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Fixed Maturity and Equity Securities AFS Fixed Maturity and Equity Securities AFS by Sector The following table presents the fixed maturity and equity securities AFS by sector. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including RMBS, ABS and commercial mortgage-backed securities ("CMBS") (collectively, "Structured Securities").
December 31, 2016 December 31, 2015 -------------------------------------------------- ------------------------------------------------ Gross Unrealized Gross Unrealized Cost or --------------------------- Estimated Cost or -------------------------- Estimated Amortized Temporary OTTI Fair Amortized Temporary OTTI Fair Cost Gains Losses Losses Value Cost Gains Losses Losses Value ---------- --------- --------- ------- ---------- ---------- --------- --------- ------ ---------- (In millions) Fixed maturity securities: U.S. corporate............. $ 52,665 $ 4,079 $ 586 $ -- $ 56,158 $ 59,305 $ 3,763 $ 1,511 $ -- $ 61,557 U.S. government and agency. 32,834 3,238 457 -- 35,615 36,183 3,638 128 -- 39,693 Foreign corporate.......... 24,596 957 1,196 -- 24,357 27,218 1,005 1,427 1 26,795 RMBS (1)................... 22,786 911 290 (10) 23,417 23,195 1,008 252 36 23,915 ABS........................ 7,567 32 95 -- 7,504 6,665 40 138 -- 6,567 State and political subdivision............... 6,252 928 44 -- 7,136 6,070 935 29 2 6,974 CMBS....................... 4,876 118 59 -- 4,935 6,547 114 82 -- 6,579 Foreign government......... 3,565 507 74 -- 3,998 3,178 536 108 -- 3,606 ---------- --------- -------- ------- ---------- ---------- --------- -------- ------ ---------- Total fixed maturity securities.............. $ 155,141 $ 10,770 $ 2,801 $ (10) $ 163,120 $ 168,361 $ 11,039 $ 3,675 $ 39 $ 175,686 ========== ========= ======== ======= ========== ========== ========= ======== ====== ========== Equity securities: Common stock............... $ 1,220 $ 91 $ 12 $ -- $ 1,299 $ 1,298 $ 46 $ 101 $ -- $ 1,243 Non-redeemable preferred stock..................... 565 14 39 -- 540 687 59 40 -- 706 ---------- --------- -------- ------- ---------- ---------- --------- -------- ------ ---------- Total equity securities.. $ 1,785 $ 105 $ 51 $ -- $ 1,839 $ 1,985 $ 105 $ 141 $ -- $ 1,949 ========== ========= ======== ======= ========== ========== ========= ======== ====== ==========
--------- (1) The noncredit loss component of OTTI losses for RMBS was in an unrealized gain position of $10 million at December 31, 2016 due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also "-- Net Unrealized Investment Gains (Losses)." The Company held non-income producing fixed maturity securities with an estimated fair value of less than $1 million and $3 million with unrealized gains (losses) of less than $1 million and less than $1 million at December 31, 2016 and 2015, respectively. Methodology for Amortization of Premium and Accretion of Discount on Structured Securities Amortization of premium and accretion of discount on Structured Securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for Structured Securities are estimated using inputs obtained from third-party specialists and based on management's knowledge of the current market. For credit-sensitive Structured Securities and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective yield is recalculated on a retrospective basis. 55 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Maturities of Fixed Maturity Securities The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at December 31, 2016:
Due After Five Due After One Years Total Fixed Due in One Year Through Through Ten Due After Ten Structured Maturity Year or Less Five Years Years Years Securities Securities ------------ ------------- -------------- ------------- ---------- ----------- (In millions) Amortized cost....... $ 6,680 $ 32,992 $ 28,612 $ 51,628 $ 35,229 $ 155,141 Estimated fair value. $ 6,664 $ 34,150 $ 29,298 $ 57,152 $ 35,856 $ 163,120
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. Structured Securities are shown separately, as they are not due at a single maturity. Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position at:
December 31, 2016 December 31, 2015 ------------------------------------------- ------------------------------------------- Equal to or Greater Equal to or Greater Less than 12 Months than 12 Months Less than 12 Months than 12 Months --------------------- --------------------- --------------------- --------------------- Estimated Gross Estimated Gross Estimated Gross Estimated Gross Fair Unrealized Fair Unrealized Fair Unrealized Fair Unrealized Value Losses Value Losses Value Losses Value Losses ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (Dollars in millions) Fixed maturity securities: U.S. corporate.................... $ 8,406 $ 337 $ 2,260 $ 249 $ 17,480 $ 1,078 $ 2,469 $ 433 U.S. government and agency........ 6,032 457 -- -- 11,683 125 248 3 Foreign corporate................. 5,343 336 4,523 860 8,823 669 4,049 759 RMBS.............................. 6,662 187 1,707 93 6,065 158 1,769 130 ABS............................... 1,482 12 1,714 83 3,211 54 1,817 84 State and political subdivision... 943 43 17 1 767 26 15 5 CMBS.............................. 922 15 432 44 2,266 42 509 40 Foreign government................ 581 26 309 48 961 91 87 17 ---------- --------- ---------- --------- ---------- --------- ---------- --------- Total fixed maturity securities. $ 30,371 $ 1,413 $ 10,962 $ 1,378 $ 51,256 $ 2,243 $ 10,963 $ 1,471 ========== ========= ========== ========= ========== ========= ========== ========= Equity securities: Common stock...................... $ 58 $ 12 $ 10 $ -- $ 182 $ 99 $ 19 $ 2 Non-redeemable preferred stock.... 139 6 120 33 56 2 132 38 ---------- --------- ---------- --------- ---------- --------- ---------- --------- Total equity securities......... $ 197 $ 18 $ 130 $ 33 $ 238 $ 101 $ 151 $ 40 ========== ========= ========== ========= ========== ========= ========== ========= Total number of securities in an unrealized loss position......... 3,076 940 4,167 807 ========== ========== ========== ==========
56 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities Evaluation and Measurement Methodologies 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 in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments 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 where the issuer, series of issuers or industry has suffered a catastrophic loss or has exhausted natural resources; (vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to Structured Securities, changes in forecasted cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; (viii) the potential for impairments due to weakening of foreign currencies on non-functional currency denominated fixed maturity securities that are near maturity; and (ix) other subjective factors, including concentrations and information obtained from regulators and rating agencies. The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as follows: . The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment. . When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management's best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security's position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies. . Additional considerations are made when assessing the unique features that apply to certain Structured Securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security. . When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described above, as well as any private and public sector programs to restructure such securities. With respect to securities that have attributes of debt and equity ("perpetual hybrid securities"), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security's cost and its estimated fair value with a corresponding charge to earnings. 57 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value. In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective manner based on the amount and timing of estimated future cash flows. Current Period Evaluation Based on the Company's current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company's current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company concluded that these securities were not other-than-temporarily impaired at December 31, 2016. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods. Gross unrealized losses on fixed maturity securities decreased $923 million during the year ended December 31, 2016 to $2.8 billion. The decrease in gross unrealized losses for the year ended December 31, 2016 was primarily attributable to narrowing credit spreads, partially offset by an increase in interest rates and, to a lesser extent, the impact of weakening foreign currencies on non-functional currency denominated fixed maturity securities. At December 31, 2016, $178 million of the total $2.8 billion of gross unrealized losses were from 41 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater. Investment Grade Fixed Maturity Securities Of the $178 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $136 million, or 76%, were related to gross unrealized losses on 20 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities Of the $178 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $42 million, or 24%, were related to gross unrealized losses on 21 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to U.S. and foreign corporate securities (primarily industrial and utility securities) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over lower oil prices in the energy sector. Management evaluates U.S. and foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuers. Equity Securities Gross unrealized losses on equity securities decreased $90 million during the year ended December 31, 2016 to $50 million. Of the $50 million, $29 million were from six securities with gross unrealized losses of 20% or more of cost for 12 months or greater. Of the $29 million, 64% were rated A or better, and all were from financial services industry investment grade non-redeemable preferred stock. 58 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at:
December 31, ----------------------------------------------- 2016 2015 ----------------------- ----------------------- Carrying % of Carrying % of Value Total Value Total ------------ ---------- ------------ ---------- (Dollars in millions) Mortgage loans Commercial..................... $ 34,008 60.1% $ 33,440 62.3% Agricultural................... 12,358 21.9 11,663 21.7 Residential.................... 9,895 17.5 8,562 15.9 ------------ ---------- ------------ ---------- Subtotal..................... 56,261 99.5 53,665 99.9 Valuation allowances........... (267) (0.5) (257) (0.5) ------------ ---------- ------------ ---------- Subtotal mortgage loans, net. 55,994 99.0 53,408 99.4 Residential -- FVO............. 566 1.0 314 0.6 ------------ ---------- ------------ ---------- Total mortgage loans, net.... $ 56,560 100.0% $ 53,722 100.0% ============ ========== ============ ==========
The Company originates and acquires unaffiliated mortgage loans and simultaneously sells a portion to affiliates under master participation agreements. The aggregate amount of unaffiliated mortgage loan participation interests sold by the Company to affiliates during the years ended December 31, 2016, 2015 and 2014 were $3.6 billion, $3.0 billion and $1.9 billion, respectively. In connection with the mortgage loan participations, the Company collected mortgage loan principal and interest payments from unaffiliated borrowers on behalf of affiliates and remitted such receipts to the affiliates in the amount of $2.1 billion, $1.8 billion and $1.3 billion during the years ended December 31, 2016, 2015 and 2014, respectively. Purchases of mortgage loans were $2.9 billion and $3.9 billion for the years ended December 31, 2016 and 2015, respectively, and were primarily comprised of residential mortgage loans. Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential -- FVO is presented in Note 10. The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. 59 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans, Valuation Allowance and Impaired Loans by Portfolio Segment Mortgage loans by portfolio segment, by method of evaluation of credit loss, impaired mortgage loans including those modified in a troubled debt restructuring, and the related valuation allowances, were as follows at and for the years ended:
Evaluated Collectively for Impaired Evaluated Individually for Credit Losses Credit Losses Loans -------------------------------------------------------- -------------------------- --------------------- Impaired Loans with a Impaired Loans without a Valuation Allowance Valuation Allowance -------------------------------- ----------------------- Unpaid Unpaid Average Principal Recorded Valuation Principal Recorded Recorded Valuation Carrying Recorded Balance Investment Allowances Balance Investment Investment Allowances Value Investment ---------- ---------- ---------- ----------- ----------- -------------- ----------- ---------- ---------- (In millions) December 31, 2016 Commercial........ $ -- $ -- $ -- $ 12 $ 12 $ 33,996 $ 167 $ 12 $ 30 Agricultural...... 11 9 1 27 27 12,322 37 35 49 Residential....... -- -- -- 265 241 9,654 62 241 188 ---------- ---------- --------- ----------- ----------- -------------- ----------- ---------- ---------- Total........... $ 11 $ 9 $ 1 $ 304 $ 280 $ 55,972 $ 266 $ 288 $ 267 ========== ========== ========= =========== =========== ============== =========== ========== ========== December 31, 2015 Commercial........ $ -- $ -- $ -- $ 57 $ 57 $ 33,383 $ 165 $ 57 $ 120 Agricultural...... 45 43 3 22 21 11,599 34 61 60 Residential....... -- -- -- 141 131 8,431 55 131 84 ---------- ---------- --------- ----------- ----------- -------------- ----------- ---------- ---------- Total........... $ 45 $ 43 $ 3 $ 220 $ 209 $ 53,413 $ 254 $ 249 $ 264 ========== ========== ========= =========== =========== ============== =========== ========== ==========
The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $298 million, $76 million and $17 million, respectively, for the year ended December 31, 2014. Valuation Allowance Rollforward by Portfolio Segment The changes in the valuation allowance, by portfolio segment, were as follows:
Commercial Agricultural Residential Total -------------- ------------- ------------- -------------- (In millions) Balance at January 1, 2014..... $ 213 $ 40 $ 19 $ 272 Provision (release)............ (8) (4) 27 15 Charge-offs, net of recoveries. (23) (1) (5) (29) -------------- ------------- ------------- -------------- Balance at December 31, 2014... 182 35 41 258 Provision (release)............ 2 2 30 34 Charge-offs, net of recoveries. (19) -- (16) (35) -------------- ------------- ------------- -------------- Balance at December 31, 2015... 165 37 55 257 Provision (release)............ 6 1 23 30 Charge-offs, net of recoveries. -- -- (16) (16) Dispositions (1)............... $ (4) $ -- $ -- $ (4) ============== ============= ============= ============== Balance at December 31, 2016... $ 167 $ 38 $ 62 $ 267 ============== ============= ============= ==============
-------- (1) See Note 3. 60 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Valuation Allowance Methodology Mortgage 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 loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan's original effective interest rate, (ii) the estimated fair value of the loan's underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan's observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company's experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available. Commercial and Agricultural Mortgage Loan Portfolio Segments The Company typically uses several years of historical experience in establishing non-specific valuation allowances which captures multiple economic cycles. For evaluations of commercial mortgage loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural mortgage loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for commercial and agricultural mortgage loans. All commercial mortgage loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. All agricultural mortgage loans are monitored on an ongoing basis. The monitoring process for agricultural mortgage loans is generally similar to the commercial mortgage loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio. For commercial mortgage loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property's net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial mortgage loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and the values utilized in calculating the ratio are updated annually on a rolling basis, with a portion of the portfolio updated each quarter. In addition, the loan-to-value ratio is routinely updated for all but the lowest risk loans as part of the Company's ongoing review of its commercial mortgage loan portfolio. For agricultural mortgage loans, the Company's primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural mortgage loan portfolio and are routinely updated. 61 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Residential Mortgage Loan Portfolio Segment The Company's residential mortgage loan portfolio is comprised primarily of closed end, amortizing residential mortgage loans. For evaluations of residential mortgage loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and the Company's historical experience. In contrast to the commercial and agricultural mortgage loan portfolios, residential mortgage loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential mortgage loans when they have been restructured and are established using the methodology described above for all loan portfolio segments. For residential mortgage loans, the Company's primary credit quality indicator is whether the loan is performing or nonperforming. The Company generally defines nonperforming residential mortgage loans as those that are 60 or more days past due and/or in nonaccrual status which is assessed monthly. Generally, nonperforming residential mortgage loans have a higher risk of experiencing a credit loss. Credit Quality of Commercial Mortgage Loans The credit quality of commercial mortgage loans was as follows at:
Recorded Investment ------------------------------------------------------- Debt Service Coverage Ratios Estimated ---------------------------------- % of Fair % of > 1.20x 1.00x - 1.20x < 1.00x Total Total Value Total ----------- ------------- -------- ----------- -------- ----------- --------- (Dollars in millions) December 31, 2016 Loan-to-value ratios: Less than 65%......... $ 29,352 $ 1,036 $ 564 $ 30,952 91.0% $ 31,320 91.2% 65% to 75%............ 2,522 -- 198 2,720 8.0 2,694 7.9 76% to 80%............ 116 -- -- 116 0.3 115 0.3 Greater than 80%...... 118 27 75 220 0.7 214 0.6 ----------- ---------- -------- ----------- -------- ----------- --------- Total............... $ 32,108 $ 1,063 $ 837 $ 34,008 100.0% $ 34,343 100.0% =========== ========== ======== =========== ======== =========== ========= December 31, 2015 Loan-to-value ratios: Less than 65%......... $ 28,828 $ 909 $ 408 $ 30,145 90.2% $ 30,996 90.5% 65% to 75%............ 2,550 138 61 2,749 8.2 2,730 8.0 76% to 80%............ -- -- -- -- -- -- -- Greater than 80%...... 208 115 223 546 1.6 519 1.5 ----------- ---------- -------- ----------- -------- ----------- --------- Total............... $ 31,586 $ 1,162 $ 692 $ 33,440 100.0% $ 34,245 100.0% =========== ========== ======== =========== ======== =========== =========
62 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at:
December 31, ------------------------------------------------------- 2016 2015 --------------------------- --------------------------- Recorded % of Recorded Investment Total Investment % of Total -------------- ------------ -------------- ------------ (Dollars in millions) Loan-to-value ratios: Less than 65%......... $ 11,829 95.7% $ 10,975 94.1% 65% to 75%............ 424 3.4 609 5.2 76% to 80%............ 17 0.2 21 0.2 Greater than 80%...... 88 0.7 58 0.5 -------------- ------------ -------------- ------------ Total............... $ 12,358 100.0% $ 11,663 100.0% ============== ============ ============== ============
The estimated fair value of agricultural mortgage loans was $12.5 billion and $11.9 billion at December 31, 2016 and 2015, respectively. Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at:
December 31, --------------------------------------------------- 2016 2015 ------------------------- ------------------------- Recorded % of Recorded % of Investment Total Investment Total ------------- ----------- ------------- ----------- (Dollars in millions) Performance indicators: Performing.............. $ 9,563 96.6% $ 8,261 96.5% Nonperforming........... 332 3.4 301 3.5 ------------- ----------- ------------- ----------- Total................. $ 9,895 100.0% $ 8,562 100.0% ============= =========== ============= ===========
The estimated fair value of residential mortgage loans was $10.3 billion and $8.8 billion at December 31, 2016 and 2015, respectively. Past Due and Nonaccrual Mortgage Loans The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both December 31, 2016 and 2015. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans -- 60 days and agricultural mortgage loans -- 90 days. The past due and nonaccrual mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:
Greater than 90 Days Past Due and Still Past Due Accruing Interest Nonaccrual ------------------------------------- --------------------------------------- ------------------------------------- December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ (In millions) Commercial... $ -- $ -- $ -- $ -- $ -- $ -- Agricultural. 127 103 104 73 23 46 Residential.. 332 301 -- -- 332 301 ------------------ ------------------ ------------------ ------------------ ------------------ ------------------ Total...... $ 459 $ 404 $ 104 $ 73 $ 355 $ 347 ================== ================== ================== ================== ================== ==================
63 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Mortgage Loans Modified in a Troubled Debt Restructuring The Company may grant concessions related to borrowers experiencing financial difficulties, which are classified as troubled debt restructurings. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concessions granted are considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring. During the year ended December 31, 2016, the Company had 557 residential mortgage loans modified in a troubled debt restructuring with carrying value after specific valuation allowance of $136 million and $122 million pre-modification and post-modification, respectively. During the year ended December 31, 2015, the Company had 460 residential mortgage loans modified in a troubled debt restructuring with carrying value after specific valuation allowance of $108 million and $96 million pre-modification and post-modification, respectively. There were no commercial or agricultural mortgage loans modified in a troubled debt restructuring for both the years ended December 31, 2016 and 2015. During the years ended December 31, 2016 and 2015, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring with subsequent payment default. Other Invested Assets Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9) tax credit and renewable energy partnerships, loans to affiliates, leveraged leases, annuities funding structured settlement claims and direct financing leases. See "-- Related Party Investment Transactions" for information regarding loans to affiliates and annuities funding structured settlement claims. Tax Credit Partnerships The carrying value of tax credit partnerships was $1.7 billion and $1.6 billion at December 31, 2016 and 2015, respectively. Losses from tax credit partnerships included within net investment income were $166 million, $163 million, and $152 million for the years ended December 31, 2016, 2015 and 2014, respectively. Leveraged and Direct Financing Leases Investment in leveraged and direct financing leases consisted of the following at:
December 31, ------------------------------------------- 2016 2015 --------------------- --------------------- Direct Direct Leveraged Financing Leveraged Financing Leases Leases Leases Leases ----------- --------- ----------- --------- (In millions) Rental receivables, net.......................... $ 1,171 $ 300 $ 1,238 $ 376 Estimated residual values........................ 690 42 755 57 ----------- --------- ----------- --------- Subtotal....................................... 1,861 342 1,993 433 Unearned income.................................. (572) (127) (615) (159) ----------- --------- ----------- --------- Investment in leases, net of non-recourse debt. $ 1,289 $ 215 $ 1,378 $ 274 =========== ========= =========== =========
Rental receivables are generally due in periodic installments. The payment periods for leveraged leases generally range from one to 15 years but in certain circumstances can be over 25 years, while the payment periods for direct financing leases range from one to 20 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or nonperforming, which is assessed monthly. The Company generally defines nonperforming rental receivables as those that are 90 days or more past due. At December 31, 2016 and 2015, all leveraged lease receivables and direct financing rental receivables were performing. The deferred income tax liability related to leveraged leases was $1.3 billion at both December 31, 2016 and 2015. 64 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Cash Equivalents The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $4.7 billion and $3.9 billion at December 31, 2016 and 2015, respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity and equity securities AFS and the effect on DAC, VOBA, DSI, future policy benefits and the policyholder dividend obligation, that would result from the realization of the unrealized gains (losses), are included in net unrealized investment gains (losses) in AOCI. The components of net unrealized investment gains (losses), included in AOCI, were as follows:
Years Ended December 31, -------------------------------------- 2016 2015 2014 ----------- ----------- ------------ (In millions) Fixed maturity securities............................................................... $ 7,912 $ 7,331 $ 15,374 Fixed maturity securities with noncredit OTTI losses included in AOCI................... 10 (39) (66) ----------- ----------- ------------ Total fixed maturity securities....................................................... 7,922 7,292 15,308 Equity securities....................................................................... 72 27 173 Derivatives............................................................................. 2,244 2,208 1,649 Other................................................................................... 16 137 87 ----------- ----------- ------------ Subtotal.............................................................................. 10,254 9,664 17,217 ----------- ----------- ------------ Amounts allocated from: Future policy benefits.................................................................. (9) (7) (1,964) DAC and VOBA related to noncredit OTTI losses recognized in AOCI........................ (1) -- (3) DAC, VOBA and DSI....................................................................... (569) (572) (918) Policyholder dividend obligation........................................................ (1,931) (1,783) (3,155) ----------- ----------- ------------ Subtotal.............................................................................. (2,510) (2,362) (6,040) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI................................................................................... (3) 14 25 Deferred income tax benefit (expense)................................................... (2,690) (2,542) (3,928) ----------- ----------- ------------ Net unrealized investment gains (losses).............................................. 5,051 4,774 7,274 Net unrealized investment gains (losses) attributable to noncontrolling interests....... -- (1) (1) ----------- ----------- ------------ Net unrealized investment gains (losses) attributable to Metropolitan Life Insurance Company.............................................................................. $ 5,051 $ 4,773 $ 7,273 =========== =========== ============
The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:
Years Ended December 31, ------------------------------- 2016 2015 -------------- --------------- (In millions) Balance at January 1,................................... $ (39) $ (66) Noncredit OTTI losses and subsequent changes recognized. 10 5 Securities sold with previous noncredit OTTI loss....... 39 105 Subsequent changes in estimated fair value.............. -- (83) -------------- --------------- Balance at December 31,................................. $ 10 $ (39) ============== ===============
65 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The changes in net unrealized investment gains (losses) were as follows:
Years Ended December 31, --------------------------------------- 2016 2015 2014 ----------- ------------ ------------ (In millions) Balance at January 1,............................................................. $ 4,773 $ 7,273 $ 3,704 Fixed maturity securities on which noncredit OTTI losses have been recognized....................................................................... 49 27 83 Unrealized investment gains (losses) during the year.............................. 541 (7,580) 8,313 Unrealized investment gains (losses) relating to:................................. Future policy benefits............................................................ (2) 1,957 (1,354) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.................. (1) 3 (8) DAC, VOBA and DSI................................................................. 3 346 (197) Policyholder dividend obligation.................................................. (148) 1,372 (1,384) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI............................................................... (17) (11) (26) Deferred income tax benefit (expense)............................................. (148) 1,386 (1,858) ----------- ------------ ------------ Net unrealized investment gains (losses)........................................ 5,050 4,773 7,273 Net unrealized investment gains (losses) attributable to noncontrolling interests........................................................................ 1 -- -- ----------- ------------ ------------ Balance at December 31,........................................................... $ 5,051 $ 4,773 $ 7,273 =========== ============ ============ Change in net unrealized investment gains (losses)................................ $ 277 $ (2,500) $ 3,569 Change in net unrealized investment gains (losses) attributable to noncontrolling interests........................................................................ 1 -- -- ----------- ------------ ------------ Change in net unrealized investment gains (losses) attributable to Metropolitan Life Insurance Company........................................................... $ 278 $ (2,500) $ 3,569 =========== ============ ============
Concentrations of Credit Risk There were no investments in any counterparty that were greater than 10% of the Company's equity, other than the U.S. government and its agencies, at both December 31, 2016 and 2015. Securities Lending Elements of the securities lending program are presented below at:
December 31, ----------------------- 2016 2015 ----------- ----------- (In millions) Securities on loan: (1) Amortized cost....................................... $ 15,694 $ 16,257 Estimated fair value................................. $ 16,496 $ 17,700 Cash collateral on deposit from counterparties (2)..... $ 16,807 $ 18,053 Security collateral on deposit from counterparties (3). $ 14 $ 22 Reinvestment portfolio -- estimated fair value......... $ 16,821 $ 18,138
--------- (1)Included within fixed maturity securities and short-term investments. (2)Included within payables for collateral under securities loaned and other transactions. (3)Security collateral on deposit from counterparties may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. 66 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The cash collateral liability by loaned security type and remaining tenor of the agreements were as follows at:
December 31, 2016 December 31, 2015 --------------------------------------- --------------------------------------- Remaining Tenor of Securities Remaining Tenor of Securities Lending Agreements Lending Agreements ----------------------------- ----------------------------- 1 Month 1 to 6 1 Month 1 to 6 Open (1) or Less Months Total Open (1) or Less Months Total -------- -------- -------- --------- -------- -------- -------- --------- (In millions) Cash collateral liability by loaned security type: U.S. government and agency................... $ 4,033 $ 5,640 $ 7,134 $ 16,807 $ 6,260 $ 7,421 $ 4,303 $ 17,984 All other securities......................... -- -- -- -- 1 47 21 69 -------- -------- -------- --------- -------- -------- -------- --------- Total...................................... $ 4,033 $ 5,640 $ 7,134 $ 16,807 $ 6,261 $ 7,468 $ 4,324 $ 18,053 ======== ======== ======== ========= ======== ======== ======== =========
------------ (1) The related loaned security could be returned to the Company on the next business day which would require the Company to immediately return the cash collateral. If the Company is required to return significant amounts of cash collateral on short notice and is forced to sell securities to meet the return obligation, it may have difficulty selling such collateral that is invested in securities in a timely manner, be forced to sell securities in a volatile or illiquid market for less than what otherwise would have been realized under normal market conditions, or both. The estimated fair value of the securities on loan related to the cash collateral on open at December 31, 2016 was $4.0 billion, all of which were U.S. government and agency securities which, if put back to the Company, could be immediately sold to satisfy the cash requirement. The reinvestment portfolio acquired with the cash collateral consisted principally of fixed maturity securities (including agency RMBS, U.S. government and agency securities, cash equivalents, short-term investments and ABS) with 66% invested in agency RMBS, U.S. government and agency securities, cash equivalents, short-term investments or held in cash. If the securities on loan or the reinvestment portfolio become less liquid, the Company has the liquidity resources of most of its general account available to meet any potential cash demands when securities on loan are put back to the Company. Invested Assets on Deposit and Pledged as Collateral Invested assets on deposit and pledged as collateral are presented below at estimated fair value for all asset classes, except mortgage loans, which are presented at carrying value at:
December 31, ------------------------- 2016 2015 ------------ ------------ (In millions) Invested assets on deposit (regulatory deposits)............. $ 47 $ 1,245 Invested assets pledged as collateral (1).................... 20,750 19,011 ------------ ------------ Total invested assets on deposit and pledged as collateral. $ 20,797 $ 20,256 ============ ============
-------- (1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4), and derivative transactions (see Note 9). See "-- Securities Lending" for information regarding securities on loan and Note 7 for information regarding investments designated to the closed block. 67 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Purchased Credit Impaired Investments Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired ("PCI") investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI. The Company's PCI fixed maturity securities were as follows at:
December 31, --------------------------- 2016 2015 ------------- ------------- (In millions) Outstanding principal and interest balance (1). $ 5,859 $ 5,139 Carrying value (2)............................. $ 4,598 $ 3,937
----------- (1)Represents the contractually required payments, which is the sum of contractual principal, whether or not currently due, and accrued interest. (2)Estimated fair value plus accrued interest. The following table presents information about PCI fixed maturity securities acquired during the periods indicated:
Years Ended December 31, --------------------------- 2016 2015 ------------- ------------- (In millions) Contractually required payments (including interest). $ 1,831 $ 1,401 Cash flows expected to be collected (1).............. $ 1,644 $ 1,222 Fair value of investments acquired................... $ 1,206 $ 905
--------- (1)Represents undiscounted principal and interest cash flow expectations, at the date of acquisition. The following table presents activity for the accretable yield on PCI fixed maturity securities for:
Years Ended December 31, -------------------------- 2016 2015 ------------ ------------ (In millions) Accretable yield, January 1,........................ $ 1,784 $ 1,883 Investments purchased............................... 438 317 Accretion recognized in earnings.................... (277) (276) Disposals........................................... (138) (48) Reclassification (to) from nonaccretable difference. (129) (92) ------------ ------------ Accretable yield, December 31,...................... $ 1,678 $ 1,784 ============ ============
68 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Collectively Significant Equity Method Investments The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $10.8 billion at December 31, 2016. The Company's maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $3.4 billion at December 31, 2016. Except for certain real estate joint ventures, the Company's investments in real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities. As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company's consolidated pre-tax income (loss) from continuing operations for one of the three most recent annual periods: 2016. The Company is providing the following aggregated summarized financial data for such equity method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized financial data does not represent the Company's proportionate share of the assets, liabilities, or earnings of such entities. The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2016, 2015 and 2014. Aggregate total assets of these entities totaled $385.3 billion and $397.9 billion at December 31, 2016 and 2015, respectively. Aggregate total liabilities of these entities totaled $48.5 billion and $64.1 billion at December 31, 2016 and 2015, respectively. Aggregate net income (loss) of these entities totaled $27.6 billion, $23.4 billion and $33.7 billion for the years ended December 31, 2016, 2015 and 2014, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses). Variable Interest Entities The Company has invested in legal entities that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity. The determination of the VIE's primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party's relationship with or involvement in the entity, an estimate of the entity's expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. Consolidated VIEs Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company's obligation to the VIEs is limited to the amount of its committed investment. The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at December 31, 2016 and 2015.
December 31, ----------------------------------------- 2016 2015 -------------------- -------------------- Total Total Total Total Assets Liabilities Assets Liabilities -------- ----------- -------- ----------- (In millions) Real estate joint ventures (1). $ 1,124 $ -- $ -- $ -- Fixed maturity securities (2).. -- -- 104 50 Other investments (3).......... 62 12 89 13 -------- ----------- -------- ----------- Total........................ $ 1,186 $ 12 $ 193 $ 63 ======== =========== ======== ===========
------------ (1) The Company consolidates certain affiliated real estate joint ventures. At December 31, 2016, the Company and its affiliates invested $1.0 billion and $85 million, respectively, in these affiliated real estate joint ventures. 69 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) (2)The Company consolidates certain fixed maturity securities purchased in an investment structure which was partially funded with affiliated long-term debt. These investments were sold in June 2016. (3)Other investments is comprised primarily of other invested assets and other limited partnership interests. The Company consolidates entities that are structured as collateralized debt obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company's exposure was limited to that of its remaining investment in these entities of less than $1 million at estimated fair value at both December 31, 2016 and 2015. Unconsolidated VIEs The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:
December 31, --------------------------------------------------------------- 2016 2015 ------------------------------- ------------------------------- Maximum Maximum Carrying Exposure Carrying Exposure Amount to Loss (1) Amount to Loss (1) --------------- --------------- --------------- --------------- (In millions) Fixed maturity securities AFS: Structured Securities (2)......... $ 34,912 $ 34,912 $ 37,061 $ 37,061 U.S. and foreign corporate........ 1,167 1,167 1,593 1,593 Other limited partnership interests. 3,383 5,674 2,874 3,672 Other invested assets............... 2,089 2,666 1,564 2,116 Real estate joint ventures.......... 81 95 31 44 --------------- --------------- --------------- --------------- Total............................. $ 41,632 $ 44,514 $ 43,123 $ 44,486 =============== =============== =============== ===============
----------- (1) The maximum exposure to loss relating to fixed maturity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments. For certain of its investments in other invested assets, the Company's return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $150 million and $179 million at December 31, 2016 and 2015, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee. (2) For these variable interests, the Company's involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity. As described in Note 16, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during each of the years ended December 31, 2016, 2015 and 2014. 70 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Income The components of net investment income were as follows:
Years Ended December 31, ------------------------------------ 2016 2015 2014 ----------- ----------- ----------- (In millions) Investment income: Fixed maturity securities............................................................ $ 7,653 $ 7,930 $ 8,260 Equity securities.................................................................... 90 91 86 FVO and trading securities -- FVO general account and Actively traded securities (1). 3 (15) 23 Mortgage loans....................................................................... 2,539 2,514 2,378 Policy loans......................................................................... 404 435 448 Real estate and real estate joint ventures........................................... 488 743 725 Other limited partnership interests.................................................. 413 519 721 Cash, cash equivalents and short-term investments.................................... 43 25 26 Operating joint venture.............................................................. 9 9 2 Other................................................................................ 204 202 61 ----------- ----------- ----------- Subtotal........................................................................... 11,846 12,453 12,730 Less: Investment expenses............................................................ 763 876 838 ----------- ----------- ----------- Subtotal, net...................................................................... 11,083 11,577 11,892 ----------- ----------- ----------- FVO CSEs -- interest income: Securities........................................................................... -- -- 1 ----------- ----------- ----------- Subtotal........................................................................... -- -- 1 ----------- ----------- ----------- Net investment income.............................................................. $ 11,083 $ 11,577 $ 11,893 =========== =========== ===========
----------- (1) Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective years included in net investment income were less than $1 million, ($18) million and ($14) million for the years ended December 31, 2016, 2015 and 2014, respectively. See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income and investment expenses. 71 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Net Investment Gains (Losses) Components of Net Investment Gains (Losses) The components of net investment gains (losses) were as follows:
Years Ended December 31, ------------------------------- 2016 2015 2014 -------- ------------- -------- (In millions) Total gains (losses) on fixed maturity securities: Total OTTI losses recognized -- by sector and industry: U.S. and foreign corporate securities -- by industry: Industrial............................................................. $ (58) $ -- $ -- Utility................................................................ (20) (15) -- Communications......................................................... (3) -- -- Consumer............................................................... -- (21) (6) -------- -------- -------- Total U.S. and foreign corporate securities.......................... (81) (36) (6) RMBS................................................................... (16) (17) (20) State and political subdivision........................................ -- (1) -- -------- -------- -------- OTTI losses on fixed maturity securities recognized in earnings...... (97) (54) (26) Fixed maturity securities -- net gains (losses) on sales and disposals. 169 (114) (99) -------- -------- -------- Total gains (losses) on fixed maturity securities.................... 72 (168) (125) -------- -------- -------- Total gains (losses) on equity securities: Total OTTI losses recognized -- by sector: Common stock........................................................... (75) (37) (5) Non-redeemable preferred stock......................................... -- -- (16) -------- -------- -------- OTTI losses on equity securities recognized in earnings.............. (75) (37) (21) Equity securities -- net gains (losses) on sales and disposals......... 19 -- 42 -------- -------- -------- Total gains (losses) on equity securities............................ (56) (37) 21 -------- -------- -------- FVO and trading securities -- FVO general account securities........... -- -- 1 Mortgage loans......................................................... (20) (90) (36) Real estate and real estate joint ventures............................. 142 430 252 Other limited partnership interests.................................... (59) (66) (69) Other.................................................................. (33) (18) (108) -------- -------- -------- Subtotal............................................................. 46 51 (64) -------- -------- -------- FVO CSEs: Securities............................................................. 1 -- -- Long-term debt -- related to securities................................ -- -- (1) Non-investment portfolio gains (losses)................................ 85 208 208 -------- -------- -------- Subtotal............................................................. 86 208 207 -------- -------- -------- Total net investment gains (losses).................................. $ 132 $ 259 $ 143 ======== ======== ========
See "-- Variable Interest Entities" for discussion of CSEs. See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates. Gains (losses) from foreign currency transactions included within net investment gains (losses) were $89 million, $125 million and $132 million for the years ended December 31, 2016, 2015 and 2014, respectively. 72 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Sales or Disposals and Impairments of Fixed Maturity and Equity Securities Investment gains and losses on sales of securities are determined on a specific identification basis. Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) were as shown in the table below.
Years Ended December 31, ------------------------------------------------------------------------- 2016 2015 2014 2016 2015 2014 ----------- ----------- ----------- ---------- ---------- ---------- Fixed Maturity Securities Equity Securities ------------------------------------- ---------------------------------- (In millions) Proceeds........................ $ 58,812 $ 60,957 $ 44,906 $ 146 $ 105 $ 128 =========== =========== =========== ========== ========== ========== Gross investment gains.......... $ 755 $ 584 $ 260 $ 28 $ 28 $ 46 Gross investment losses......... (586) (698) (359) (9) (28) (4) OTTI losses..................... (97) (54) (26) (75) (37) (21) ----------- ----------- ----------- ---------- ---------- ---------- Net investment gains (losses). $ 72 $ (168) $ (125) $ (56) $ (37) $ 21 =========== =========== =========== ========== ========== ==========
Credit Loss Rollforward The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in OCI:
Years Ended December 31, -------------------------- 2016 2015 ------------ ------------ (In millions) Balance at January 1,................................................................................ $ 188 $ 263 Additions: Initial impairments -- credit loss OTTI on securities not previously impaired...................... 1 14 Additional impairments -- credit loss OTTI on securities previously impaired....................... 13 15 Reductions: Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI. (43) (102) Securities impaired to net present value of expected future cash flows............................. (1) -- Increase in cash flows -- accretion of previous credit loss OTTI................................... (1) (2) ------------ ------------ Balance at December 31,.............................................................................. $ 157 $ 188 ============ ============
Related Party Investment Transactions The Company transfers invested assets, primarily consisting of fixed maturity securities, to and from affiliates. Invested assets transferred to and from affiliates were as follows:
Years Ended December 31, ------------------------------ 2016 2015 2014 ---------- --------- --------- (In millions) Estimated fair value of invested assets transferred to affiliates... $ 5,678 $ 1,003 $ 97 Amortized cost of invested assets transferred to affiliates......... $ 5,338 $ 941 $ 89 Net investment gains (losses) recognized on transfers............... $ 340 $ 62 $ 8 Estimated fair value of invested assets transferred from affiliates. $ 1,583 $ 237 $ 882
73 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) In April 2016, the Company transferred investments and cash and cash equivalents with an amortized cost and estimated fair value of $4.0 billion and $4.3 billion, respectively, for the recapture of risks related to certain single premium deferred annuity contracts previously reinsured to Brighthouse Insurance, an affiliate, which are included in the table above. See Note 6 for additional information related to the transfer. Also, in November 2016, the Company transferred investments and cash and cash equivalents with an amortized cost and estimated fair value of $863 million and $933 million, respectively, for the recapture of risks related to certain single premium deferred annuity contracts previously reinsured to Brighthouse NY, an affiliate, which are included in the table above. In July 2014, the Company purchased from certain affiliates MetLife, Inc. affiliated loans with an unpaid principal balance of $400 million and estimated fair value of $437 million, which are included in the table above. The unpaid principal balance of MetLife, Inc. affiliated loans held by the Company totals $1.8 billion, bear interest at the following fixed rates, payable semiannually, and are due as follows: $500 million at 3.54% due on June 30, 2019, $250 million at 3.57% due on October 1, 2019, $358 million at 5.64% due on July 15, 2021 and $467 million at 5.86% due on December 16, 2021. In September 2016, an affiliated loan for $250 million matured and, subsequently, a new loan was issued for $250 million, which bears interest, payable semiannually, at a fixed rate of 3.03% and matures on September 30, 2020. The carrying value of these MetLife, Inc. affiliated loans totaled $1.8 billion and $2.0 billion at December 31, 2016 and 2015, respectively, and are included in other invested assets. Net investment income from these affiliated loans was $91 million, $95 million and $92 million for the years ended December 31, 2016, 2015 and 2014, respectively. As a structured settlements assignment company, the Company purchases annuities from affiliates to fund the periodic structured settlement claim payment obligations it assumes. Each annuity purchased is contractually designated to the assumed claim obligation it funds. The aggregate contract values of annuities funding structured settlement claims are recorded as an asset for which the Company has also recorded an unpaid claim obligation of equal amount. Such aggregated contract values were $1.3 billion at both December 31, 2016 and 2015. The related net investment income and corresponding policyholder benefits and claims recognized were $64 million and $63 million for the years ended December 31, 2016 and 2015, respectively. The Company had a surplus note outstanding from American Life Insurance Company, an affiliate, which was included in other invested assets, with a carrying value of $100 million at both December 31, 2016 and 2015. The loan, which bears interest at a fixed rate of 3.17%, payable semiannually, is due on June 30, 2020. Net investment income from this surplus note was $3 million, $3 million and less than $1 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company held preferred stock of Metropolitan Property and Casualty Insurance Company, an affiliate, which was included in other invested assets, with a carrying value of $315 million at both December 31, 2016 and 2015. Dividends are payable quarterly at a variable rate. Net investment income from the affiliated preferred stock dividends was $5 million, $4 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company provides investment administrative services to certain affiliates. The related investment administrative service charges to these affiliates were $172 million, $157 million and $179 million for the years ended December 31, 2016, 2015 and 2014, respectively. See "-- Variable Interest Entities" for information on investments in affiliated real estate joint ventures. See "-- Mortgage Loans -- Mortgage Loans by Portfolio Segment" for discussion of mortgage loan participation agreements with affiliates. 74 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives Accounting for Derivatives See Note 1 for a description of the Company's accounting policies for derivatives and Note 10 for information about the fair value hierarchy for derivatives. Derivative Strategies The Company is exposed to various risks relating to its ongoing business operations, including interest rate, foreign currency exchange rate, credit and equity market. The Company uses a variety of strategies to manage these risks, including the use of derivatives. Derivatives are financial instruments with values derived from interest rates, foreign currency exchange rates, credit spreads and/or other financial indices. Derivatives may be exchange-traded or contracted in the over-the-counter ("OTC") market. Certain of the Company's OTC derivatives are cleared and settled through central clearing counterparties ("OTC-cleared"), while others are bilateral contracts between two counterparties ("OTC-bilateral"). The types of derivatives the Company uses include swaps, forwards, futures and option contracts. To a lesser extent, the Company uses credit default swaps and structured interest rate swaps to synthetically replicate investment risks and returns which are not readily available in the cash markets. Interest Rate Derivatives The Company uses a variety of interest rate derivatives to reduce its exposure to changes in interest rates, including interest rate swaps, interest rate total return swaps, caps, floors, swaptions, futures and forwards. 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 amount. The Company utilizes interest rate swaps in fair value, cash flow and nonqualifying hedging relationships. The Company uses structured interest rate swaps to synthetically create investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and a cash instrument such as a U.S. government and agency, or other fixed maturity security. Structured interest rate swaps are included in interest rate swaps and are not designated as hedging instruments. Interest rate total return swaps are swaps whereby the Company agrees with another party to exchange, at specified intervals, the difference between the economic risk and reward of an asset or a market index and the London Interbank Offered Rate ("LIBOR"), calculated by reference to an agreed notional 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. Interest rate total return swaps are used by the Company to reduce market risks from changes in interest rates and to alter interest rate exposure arising from mismatches between assets and liabilities (duration mismatches). The Company utilizes interest rate total return swaps in nonqualifying hedging relationships. The Company purchases interest rate caps and floors primarily to protect its floating rate liabilities against rises in interest rates above a specified level, and against interest rate exposure arising from mismatches between assets and liabilities, as well as to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level, respectively. In certain instances, the Company locks in the economic impact of existing purchased caps and floors by entering into offsetting written caps and floors. The Company utilizes interest rate caps and floors in nonqualifying hedging relationships. Swaptions are used by the Company to hedge interest rate risk associated with the Company's long-term liabilities and invested assets. A swaption is an option to enter into a swap with a forward starting effective date. In certain instances, the Company locks in the economic impact of existing purchased swaptions by entering into offsetting written swaptions. The Company pays a premium for purchased swaptions and receives a premium for written swaptions. The Company utilizes swaptions in nonqualifying hedging relationships. Swaptions are included in interest rate options. The Company enters into interest rate forwards to buy and sell securities. The price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date. The Company utilizes interest rate forwards in cash flow and nonqualifying hedging relationships. To a lesser extent, the Company uses exchange-traded interest rate futures in nonqualifying hedging relationships. 75 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Foreign Currency Exchange Rate Derivatives The Company uses foreign currency exchange rate derivatives, including foreign currency swaps and foreign currency forwards, to reduce the risk from fluctuations in foreign currency exchange rates associated with its assets and liabilities denominated in foreign currencies. In a foreign currency swap transaction, the Company agrees with another party to exchange, at specified intervals, the difference between one currency and another at a fixed exchange rate, generally set at inception, calculated by reference to an agreed upon notional amount. The notional amount of each currency is exchanged at the inception and termination of the currency swap by each party. The Company utilizes foreign currency swaps in fair value, cash flow and nonqualifying hedging relationships. In a foreign currency forward transaction, the Company agrees with another party to deliver a specified amount of an identified currency at a specified future date. The price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date. The Company utilizes foreign currency forwards in nonqualifying hedging relationships. Credit Derivatives The Company enters into purchased credit default swaps to hedge against credit-related changes in the value of its investments. In a credit default swap transaction, the Company agrees with another party to pay, at specified intervals, a premium to hedge credit risk. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the delivery of par quantities of the referenced investment equal to the specified swap notional amount in exchange for the payment of cash amounts by the counterparty equal to the par value of the investment surrendered. Credit events vary by type of issuer but typically include bankruptcy, failure to pay debt obligations, repudiation, moratorium, involuntary restructuring or governmental intervention. In each case, payout on a credit default swap is triggered only after the Credit Derivatives Determinations Committee of the International Swaps and Derivatives Association, Inc. ("ISDA") deems that a credit event has occurred. The Company utilizes credit default swaps in nonqualifying hedging relationships. The Company enters into written credit default swaps to synthetically create credit investments that are either more expensive to acquire or otherwise unavailable in the cash markets. These transactions are a combination of a derivative and one or more cash instruments, such as U.S. government and agency securities, or other fixed maturity securities. These credit default swaps are not designated as hedging instruments. The Company also enters into certain purchased and written credit default swaps held in relation to trading portfolios for the purpose of generating profits on short-term differences in price. These credit default swaps are not designated as hedging instruments. At December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. The Company enters into forwards to lock in the price to be paid for forward purchases of certain securities. The price is agreed upon at the time of the contract and payment for the contract is made at a specified future date. When the primary purpose of entering into these transactions is to hedge against the risk of changes in purchase price due to changes in credit spreads, the Company designates these transactions as credit forwards. The Company utilizes credit forwards in cash flow hedging relationships. 76 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Equity Derivatives The Company uses a variety of equity derivatives to reduce its exposure to equity market risk, including equity index options, equity variance swaps, exchange-traded equity futures and equity total return swaps. Equity index options are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. To hedge against adverse changes in equity indices, the Company enters into contracts to sell the equity index within a limited time at a contracted price. The contracts will be net settled in cash based on differentials in the indices at the time of exercise and the strike price. Certain of these contracts may also contain settlement provisions linked to interest rates. In certain instances, the Company may enter into a combination of transactions to hedge adverse changes in equity indices within a pre-determined range through the purchase and sale of options. The Company utilizes equity index options in nonqualifying hedging relationships. Equity variance swaps are used by the Company primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. In an equity variance swap, the Company agrees with another party to exchange amounts in the future, based on changes in equity volatility over a defined period. The Company utilizes equity variance swaps in nonqualifying hedging relationships. In exchange-traded equity futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of equity securities, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded equity futures are used primarily to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded equity futures in nonqualifying hedging relationships. In an equity total return swap, 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 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. The Company uses equity total return swaps to hedge its equity market guarantees in certain of its insurance products. Equity total return swaps can be used as hedges or to synthetically create investments. The Company utilizes equity total return swaps in nonqualifying hedging relationships. 77 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Primary Risks Managed by Derivatives The following table presents the gross notional amount, estimated fair value and primary underlying risk exposure of the Company's derivatives, excluding embedded derivatives, held at:
December 31, -------------------------------------------------------------------- 2016 2015 --------------------------------- ---------------------------------- Estimated Fair Value Estimated Fair Value ---------------------- ---------------------- Gross Gross Notional Notional Primary Underlying Risk Exposure Amount Assets Liabilities Amount Assets Liabilities --------------------------------- ---------- --------- ------------ ----------- --------- ------------ (In millions) Derivatives Designated as Hedging Instruments: Fair value hedges: Interest rate swaps...... Interest rate.................... $ 4,993 $ 2,221 $ 6 $ 5,089 $ 2,177 $ 11 Foreign currency swaps... Foreign currency exchange rate... 1,200 29 224 2,133 61 159 ---------- --------- ---------- ----------- --------- ---------- Subtotal.................................................. 6,193 2,250 230 7,222 2,238 170 ---------- --------- ---------- ----------- --------- ---------- Cash flow hedges: Interest rate swaps...... Interest rate.................... 1,793 325 26 1,960 426 -- Interest rate forwards... Interest rate.................... 4,033 -- 370 70 15 -- Foreign currency swaps... Foreign currency exchange rate... 20,080 1,435 1,604 18,743 1,132 1,376 ---------- --------- ---------- ----------- --------- ---------- Subtotal................ 25,906 1,760 2,000 20,773 1,573 1,376 ---------- --------- ---------- ----------- --------- ---------- Total qualifying hedges................................... 32,099 4,010 2,230 27,995 3,811 1,546 ---------- --------- ---------- ----------- --------- ---------- Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate swaps...... Interest rate.................... 32,662 2,514 879 51,489 2,613 1,197 Interest rate floors..... Interest rate.................... 9,001 173 2 13,701 252 10 Interest rate caps....... Interest rate.................... 78,358 112 3 55,136 67 2 Interest rate futures.... Interest rate.................... 2,342 3 -- 2,023 -- 2 Interest rate options.... Interest rate.................... 850 144 1 2,295 227 4 Interest rate forwards... Interest rate.................... 396 -- 3 -- -- -- Interest rate total return swaps............ Interest rate.................... 1,549 2 127 -- -- -- Synthetic GICs........... Interest rate.................... 5,566 -- -- 4,216 -- -- Foreign currency swaps... Foreign currency exchange rate... 8,175 1,247 58 8,095 600 94 Foreign currency forwards Foreign currency exchange rate... 1,396 52 18 3,014 83 36 Credit default swaps -- purchased............... Credit........................... 961 12 6 819 28 8 Credit default swaps -- written................. Credit........................... 8,025 119 8 6,577 51 11 Equity futures........... Equity market.................... 1,851 10 -- 1,452 15 -- Equity index options..... Equity market.................... 11,119 260 426 7,364 326 349 Equity variance swaps.... Equity market.................... 5,579 69 193 5,676 62 160 Equity total return swaps Equity market.................... 1,013 1 42 952 11 9 ---------- --------- ---------- ----------- --------- ---------- Total non-designated or nonqualifying derivatives......... 168,843 4,718 1,766 162,809 4,335 1,882 ---------- --------- ---------- ----------- --------- ---------- Total..................................................... $ 200,942 $ 8,728 $ 3,996 $ 190,804 $ 8,146 $ 3,428 ========== ========= ========== =========== ========= ==========
78 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Based on gross notional amounts, a substantial portion of the Company's derivatives was not designated or did not qualify as part of a hedging relationship at both December 31, 2016 and 2015. The Company's use of derivatives includes (i) derivatives that serve as macro hedges of the Company's exposure to various risks and that generally do not qualify for hedge accounting due to the criteria required under the portfolio hedging rules; (ii) derivatives that economically hedge insurance liabilities that contain mortality or morbidity risk and that generally do not qualify for hedge accounting because the lack of these risks in the derivatives cannot support an expectation of a highly effective hedging relationship; (iii) derivatives that economically hedge embedded derivatives that do not qualify for hedge accounting because the changes in estimated fair value of the embedded derivatives are already recorded in net income; and (iv) written credit default swaps that are used to synthetically create credit investments and that do not qualify for hedge accounting because they do not involve a hedging relationship. For these nonqualified derivatives, changes in market factors can lead to the recognition of fair value changes on the statement of operations without an offsetting gain or loss recognized in earnings for the item being hedged. Net Derivative Gains (Losses) The components of net derivative gains (losses) were as follows:
Years Ended December 31, --------------------------------------- 2016 2015 2014 ------------- ------------ ------------ (In millions) Freestanding derivatives and hedging gains (losses) (1).................................... $ (715) $ 463 $ 1,207 Embedded derivatives gains (losses)............... (423) 418 (170) ------------- ------------ ------------ Total net derivative gains (losses)............. $ (1,138) $ 881 $ 1,037 ============= ============ ============
------------- (1)Includes foreign currency transaction gains (losses) on hedged items in cash flow and nonqualifying hedging relationships, which are not presented elsewhere in this note. The following table presents earned income on derivatives:
Years Ended December 31, ------------------------------------- 2016 2015 2014 ----------- ------------ ------------ (In millions) Qualifying hedges: Net investment income............................. $ 280 $ 227 $ 162 Interest credited to policyholder account balances (1) 28 106 Nonqualifying hedges: Net investment income............................. (1) (5) (4) Net derivative gains (losses)..................... 577 518 484 Policyholder benefits and claims.................. 4 2 8 ----------- ------------ ------------ Total........................................... $ 859 $ 770 $ 756 =========== ============ ============
79 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Nonqualifying Derivatives and Derivatives for Purposes Other Than Hedging The following table presents the amount and location of gains (losses) recognized in income for derivatives that were not designated or not qualifying as hedging instruments:
Net Net Policyholder Derivative Investment Benefits and Gains (Losses) Income (1) Claims (2) -------------- ----------- ------------ (In millions) Year Ended December 31, 2016 Interest rate derivatives.......... $ (1,088) $ -- $ -- Foreign currency exchange rate derivatives...................... 726 -- -- Credit derivatives -- purchased.... (23) -- -- Credit derivatives -- written...... 48 -- -- Equity derivatives................. (457) (14) (94) -------------- ----------- ------------ Total............................ $ (794) $ (14) $ (94) ============== =========== ============ Year Ended December 31, 2015 Interest rate derivatives.......... $ (243) $ -- $ -- Foreign currency exchange rate derivatives...................... 678 -- -- Credit derivatives -- purchased.... 17 (3) -- Credit derivatives -- written...... (57) -- -- Equity derivatives................. (152) (11) -- -------------- ----------- ------------ Total............................ $ 243 $ (14) $ -- ============== =========== ============ Year Ended December 31, 2014 Interest rate derivatives.......... $ 314 $ -- $ -- Foreign currency exchange rate derivatives...................... 554 -- -- Credit derivatives -- purchased.... (2) -- -- Credit derivatives -- written...... (1) -- -- Equity derivatives................. 11 (10) (10) -------------- ----------- ------------ Total............................ $ 876 $ (10) $ (10) ============== =========== ============
------------- (1)Changes in estimated fair value related to economic hedges of equity method investments in joint ventures and derivatives held in relation to trading portfolios. (2)Changes in estimated fair value related to economic hedges of variable annuity guarantees included in future policy benefits. Fair Value Hedges The Company designates and accounts for the following as fair value hedges when they have met the requirements of fair value hedging: (i) interest rate swaps to convert fixed rate assets and liabilities to floating rate assets and liabilities; and (ii) foreign currency swaps to hedge the foreign currency fair value exposure of foreign currency denominated assets and liabilities. 80 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The Company recognizes gains and losses on derivatives and the related hedged items in fair value hedges within net derivative gains (losses). The following table presents the amount of such net derivative gains (losses):
Net Derivative Net Derivative Ineffectiveness Gains (Losses) Gains (Losses) Recognized in Derivatives in Fair Value Hedged Items in Fair Value Recognized Recognized for Net Derivative Hedging Relationships Hedging Relationships for Derivatives Hedged Items Gains (Losses) -------------------------- ---------------------------------------------- --------------- -------------- --------------- (In millions) Year Ended December 31, 2016 Interest rate swaps: Fixed maturity securities..................... $ 8 $ (9) $ (1) Policyholder liabilities (1).................. (109) 90 (19) Foreign currency swaps: Foreign-denominated fixed maturity securities. 10 (9) 1 Foreign-denominated policyholder account balances (2)................................. (95) 92 (3) --------------- -------------- --------------- Total................................................................. $ (186) $ 164 $ (22) =============== ============== =============== Year Ended December 31, 2015 Interest rate swaps: Fixed maturity securities..................... $ 4 $ -- $ 4 Policyholder liabilities (1).................. (4) (6) (10) Foreign currency swaps: Foreign-denominated fixed maturity securities. 14 (5) 9 Foreign-denominated policyholder account balances (2)................................. (240) 231 (9) --------------- -------------- --------------- Total................................................................. $ (226) $ 220 $ (6) =============== ============== =============== Year Ended December 31, 2014 Interest rate swaps: Fixed maturity securities..................... $ 4 $ (1) $ 3 Policyholder liabilities (1).................. 649 (635) 14 Foreign currency swaps: Foreign-denominated fixed maturity securities. 13 (11) 2 Foreign-denominated policyholder account balances (2)................................. (283) 270 (13) --------------- -------------- --------------- Total................................................................. $ 383 $ (377) $ 6 =============== ============== ===============
------------- (1)Fixed rate liabilities reported in policyholder account balances or future policy benefits. (2)Fixed rate or floating rate liabilities. All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. Cash Flow Hedges The Company designates and accounts for the following as cash flow hedges when they have met the requirements of cash flow hedging: (i) interest rate swaps to convert floating rate assets and liabilities to fixed rate assets and liabilities; (ii) foreign currency swaps to hedge the foreign currency cash flow exposure of foreign currency denominated assets and liabilities; (iii) interest rate forwards and credit forwards to lock in the price to be paid for forward purchases of investments; (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed-rate investments; and (v) interest rate forwards to hedge forecasted fixed-rate borrowings. In certain instances, the Company discontinued cash flow hedge accounting because the forecasted transactions were no longer probable of occurring. Because certain of the forecasted transactions also were not probable of occurring within two months of the anticipated date, the Company reclassified amounts from AOCI into net derivative gains (losses). These amounts were $17 million, $14 million and ($14) million for the years ended December 31, 2016, 2015 and 2014, respectively. At both December 31, 2016 and 2015, the maximum length of time over which the Company was hedging its exposure to variability in future cash flows for forecasted transactions did not exceed five years. 81 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) At both December 31, 2016 and 2015, the balance in AOCI associated with cash flow hedges was $2.2 billion. The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations and the consolidated statements of equity:
Amount and Location Amount and Location Amount of Gains of Gains (Losses) of Gains (Losses) Derivatives in Cash Flow (Losses) Deferred in Reclassified from Recognized in Income Hedging Relationships AOCI on Derivatives AOCI into Income (Loss) (Loss) on Derivatives ------------------------- -------------------- ------------------------------- --------------------- (Effective Portion) (Effective Portion) (Ineffective Portion) - -------------------- ------------------------------- --------------------- Net Derivative Net Investment Net Derivative Gains (Losses) Income Gains (Losses) --------------- --------------- --------------------- (In millions) Year Ended December 31, 2016 Interest rate swaps...... $ 58 $ 57 $ 12 $ -- Interest rate forwards... (366) (1) 3 -- Foreign currency swaps... 167 (251) (1) -- Credit forwards.......... -- 3 1 -- -------------------- --------------- --------------- --------------------- Total.................. $ (141) $ (192) $ 15 $ -- ==================== =============== =============== ===================== Year Ended December 31, 2015 Interest rate swaps...... $ 76 $ 83 $ 11 $ 2 Interest rate forwards... (3) 4 2 -- Foreign currency swaps... (92) (679) (1) 7 Credit forwards.......... -- 1 1 -- -------------------- --------------- --------------- --------------------- Total.................. $ (19) $ (591) $ 13 $ 9 ==================== =============== =============== ===================== Year Ended December 31, 2014 Interest rate swaps...... $ 587 $ 41 $ 9 $ 3 Interest rate forwards... 34 (8) 2 -- Foreign currency swaps... (15) (725) (2) 2 Credit forwards.......... -- -- 1 -- -------------------- --------------- --------------- --------------------- Total.................. $ 606 $ (692) $ 10 $ 5 ==================== =============== =============== =====================
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. At December 31, 2016, the Company expected to reclassify ($156) million of deferred net gains (losses) on derivatives in AOCI to earnings within the next 12 months. Credit Derivatives In connection with synthetically created credit investment transactions and credit default swaps held in relation to the trading portfolio, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the nonqualifying derivatives and derivatives for purposes other than hedging table. If a credit event occurs, as defined by the contract, the contract may be cash settled or it may be settled gross by the Company paying the counterparty the specified swap notional amount in exchange for the delivery of par quantities of the referenced credit obligation. The Company's maximum amount at risk, assuming the value of all referenced credit obligations is zero, was $8.0 billion and $6.6 billion at December 31, 2016 and 2015, respectively. The Company can terminate these contracts at any time through cash settlement with the counterparty at an amount equal to the then current estimated fair value of the credit default swaps. At December 31, 2016 and 2015, the Company would have received $111 million and $40 million, respectively, to terminate all of these contracts. 82 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The following table presents the estimated fair value, maximum amount of future payments and weighted average years to maturity of written credit default swaps at:
December 31, --------------------------------------------------------------------------------- 2016 2015 ----------------------------------------- --------------------------------------- Maximum Maximum Estimated Amount Estimated Amount Fair Value of Future Weighted Fair Value of Future Weighted of Credit Payments under Average of Credit Payments under Average Rating Agency Designation of Referenced Default Credit Default Years to Default Credit Default Years to Credit Obligations (1) Swaps Swaps Maturity (2) Swaps Swaps Maturity (2) ----------------------------------------- ---------- -------------- -------------- ---------- -------------- ------------- ( Dollars in millions) Aaa/Aa/A Single name credit default swaps (3)..... $ 1 $ 229 2.7 $ 2 $ 245 2.5 Credit default swaps referencing indices. 32 2,093 3.5 5 1,366 3.3 ---------- -------------- ---------- -------------- Subtotal............................... 33 2,322 3.4 7 1,611 3.2 ---------- -------------- ---------- -------------- Baa Single name credit default swaps (3)..... 3 563 2.2 5 752 2.6 Credit default swaps referencing indices. 61 4,730 5.1 21 3,452 4.8 ---------- -------------- ---------- -------------- Subtotal............................... 64 5,293 4.8 26 4,204 4.4 ---------- -------------- ---------- -------------- Ba Single name credit default swaps (3)..... (2) 115 4.2 (2) 60 2.2 Credit default swaps referencing indices. -- -- -- (1) 100 1.0 ---------- -------------- ---------- -------------- Subtotal............................... (2) 115 4.2 (3) 160 1.4 ---------- -------------- ---------- -------------- B Single name credit default swaps (3)..... -- 70 1.8 -- -- -- Credit default swaps referencing indices. 16 225 5.0 10 602 4.9 ---------- -------------- ---------- -------------- Subtotal............................... 16 295 4.2 10 602 4.9 ---------- -------------- ---------- -------------- Total.................................. $ 111 $ 8,025 4.4 $ 40 $ 6,577 4.1 ========== ============== ========= ==============
------------- (1)The rating agency designations are based on availability and the midpoint of the applicable ratings among Moody's Investors Service ("Moody's"), S&P and Fitch Ratings. If no rating is available from a rating agency, then an internally developed rating is used. (2)The weighted average years to maturity of the credit default swaps is calculated based on weighted average gross notional amounts. (3)Single name credit default swaps may be referenced to the credit of corporations, foreign governments, or state and political subdivisions. The Company has also entered into credit default swaps to purchase credit protection on certain of the referenced credit obligations in the table above. As a result, the maximum amounts of potential future recoveries available to offset the $8.0 billion and $6.6 billion from the table above were $30 million and $70 million at December 31, 2016 and 2015, respectively. At December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. At December 31, 2015, written credit default swaps held in relation to the trading portfolio amounted to $20 million in gross notional amount and ($2) million in estimated fair value. 83 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) Credit Risk on Freestanding Derivatives The Company may be exposed to credit-related losses in the event of nonperformance by its counterparties to derivatives. Generally, the current credit exposure of the Company's derivatives is limited to the net positive estimated fair value of derivatives at the reporting date after taking into consideration the existence of master netting or similar agreements and any collateral received pursuant to such agreements. The Company manages its credit risk related to derivatives by entering into transactions with creditworthy counterparties and establishing and monitoring exposure limits. The Company's OTC-bilateral derivative transactions are generally governed by ISDA Master Agreements which provide for legally enforceable set-off and close-out netting of exposures to specific counterparties in the event of early termination of a transaction, which includes, but is not limited to, events of default and bankruptcy. In the event of an early termination, the Company is permitted to set off receivables from the counterparty against payables to the same counterparty arising out of all included transactions. Substantially all of the Company's ISDA Master Agreements also include Credit Support Annex provisions which require both the pledging and accepting of collateral in connection with its OTC-bilateral derivatives. The Company's OTC-cleared derivatives are effected through central clearing counterparties and its exchange-traded derivatives are effected through regulated exchanges. Such positions are marked to market and margined on a daily basis (both initial margin and variation margin), and the Company has minimal exposure to credit-related losses in the event of nonperformance by counterparties to such derivatives. See Note 10 for a description of the impact of credit risk on the valuation of derivatives. 84 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) The estimated fair values of the Company's net derivative assets and net derivative liabilities after the application of master netting agreements and collateral were as follows at:
December 31, -------------------------------------------------- 2016 2015 - ------------------------ ------------------------ Derivatives Subject to a Master Netting Arrangement or a Similar Arrangement Assets Liabilities Assets Liabilities -------------------------------------------------------------------- ----------- ----------- ----------- ----------- (In millions) Gross estimated fair value of derivatives: OTC-bilateral (1).................................................... $ 7,926 $ 3,349 $ 7,368 $ 2,667 OTC-cleared (1)...................................................... 905 611 909 783 Exchange-traded...................................................... 13 -- 15 2 ----------- ----------- ----------- ----------- Total gross estimated fair value of derivatives (1)................ 8,844 3,960 8,292 3,452 Amounts offset on the consolidated balance sheets.................... -- -- -- -- ----------- ----------- ----------- ----------- Estimated fair value of derivatives presented on the consolidated balance sheets (1)................................................ 8,844 3,960 8,292 3,452 Gross amounts not offset on the consolidated balance sheets: Gross estimated fair value of derivatives: (2) OTC-bilateral........................................................ (2,737) (2,737) (2,117) (2,117) OTC-cleared.......................................................... (391) (391) (776) (776) Exchange-traded...................................................... -- -- -- -- Cash collateral: (3), (4) OTC-bilateral........................................................ (3,418) -- (3,705) (3) OTC-cleared.......................................................... (497) (217) (119) -- Exchange-traded...................................................... -- -- -- -- Securities collateral: (5) OTC-bilateral........................................................ (1,560) (609) (1,345) (541) OTC-cleared.......................................................... -- -- -- -- Exchange-traded...................................................... -- -- -- -- ----------- ----------- ----------- ----------- Net amount after application of master netting agreements and collateral........................................................ $ 241 $ 6 $ 230 $ 15 =========== =========== =========== ===========
------------- (1)At December 31, 2016 and 2015, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $116 million and $146 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($36) million and $24 million, respectively. (2)Estimated fair value of derivatives is limited to the amount that is subject to set-off and includes income or expense accruals. (3)Cash collateral received by the Company for OTC-bilateral and OTC-cleared derivatives is included in cash and cash equivalents, short-term investments or in fixed maturity securities, and the obligation to return it is included in payables for collateral under securities loaned and other transactions on the balance sheet. (4)The receivable for the return of cash collateral provided by the Company is inclusive of initial margin on exchange-traded and OTC-cleared derivatives and is included in premiums, reinsurance and other receivables on the balance sheet. The amount of cash collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements. At December 31, 2016 and 2015, the Company received excess cash collateral of $77 million and $17 million, respectively, and provided excess cash collateral of $9 million and $58 million, respectively, which is not included in the table above due to the foregoing limitation. 85 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) (5)Securities collateral received by the Company is held in separate custodial accounts and is not recorded on the balance sheet. Subject to certain constraints, the Company is permitted by contract to sell or re-pledge this collateral, but at December 31, 2016, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities on the balance sheet. Subject to certain constraints, the counterparties are permitted by contract to sell or re-pledge this collateral. The amount of securities collateral offset in the table above is limited to the net estimated fair value of derivatives after application of netting agreements and cash collateral. At December 31, 2016 and 2015, the Company received excess securities collateral with an estimated fair value of $21 million and $71 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At December 31, 2016 and 2015, the Company provided excess securities collateral with an estimated fair value of $75 million and $81 million, respectively, for its OTC-bilateral derivatives, and $531 million and $239 million, respectively, for its OTC-cleared derivatives, and $116 million and $15 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation. The Company's collateral arrangements for its OTC-bilateral derivatives generally require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the amount owed by that party reaches a minimum transfer amount. A small number of these arrangements also include financial strength or credit rating contingent provisions that include a threshold above which collateral must be posted. Such agreements provide for a reduction of these thresholds (on a sliding scale that converges toward zero) in the event of downgrades in credit ratings of Metropolitan Life Insurance Company and/or the credit ratings of the counterparty. In addition, substantially all of the Company's netting agreements for derivatives contain provisions that require both Metropolitan Life Insurance Company and the counterparty to maintain a specific investment grade financial strength or credit rating from each of Moody's and S&P. If a party's financial strength or credit ratings were to fall below that specific investment grade financial strength or credit rating, that party would be in violation of these provisions, and the other party to the derivatives could terminate the transactions and demand immediate settlement and payment based on such party's reasonable valuation of the derivatives. The following table presents the estimated fair value of the Company's OTC-bilateral derivatives that are in a net liability position after considering the effect of netting agreements, together with the estimated fair value and balance sheet location of the collateral pledged. The table also presents the incremental collateral that Metropolitan Life Insurance Company would be required to provide if there was a one-notch downgrade in its financial strength or credit rating, as applicable, at the reporting date or if its financial strength or credit rating, as applicable, sustained a downgrade to a level that triggered full overnight collateralization or termination of the derivative position at the reporting date. OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table.
December 31, -------------------------------------------------------------------- 2016 2015 ---------------------------------- --------------------------------- Derivatives Derivatives Derivatives Derivatives Subject to Not Subject Subject to Not Subject Financial to Financial Financial to Financial Strength- Strength- Strength- Strength- Contingent Contingent Contingent Contingent Provisions Provisions Total Provisions Provisions Total ------------ ------------- ------- ----------- ------------- ------- (In millions) Estimated Fair Value of Derivatives in a Net Liability Position (1).............................. $ 612 $ -- $ 612 $ 547 $ 3 $ 550 Estimated Fair Value of Collateral Provided: Fixed maturity securities............................ $ 684 $ -- $ 684 $ 622 $ -- $ 622 Cash................................................. $ -- $ -- $ -- $ -- $ 4 $ 4 Estimated Fair Value of Incremental Collateral Provided Upon: One-notch downgrade in financial strength or credit rating, as applicable............................... $ -- $ -- $ -- $ -- $ -- $ -- Downgrade in financial strength or credit rating, as applicable, to a level that triggers full overnight collateralization or termination of the derivative position............................................ $ -- $ -- $ -- $ -- $ -- $ --
------------- 86 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) (1)After taking into consideration the existence of netting agreements. Embedded Derivatives The Company issues certain products or purchases certain investments that contain embedded derivatives that are required to be separated from their host contracts and accounted for as freestanding derivatives. These host contracts principally include: variable annuities with guaranteed minimum benefits, including GMWBs, GMABs and certain GMIBs; affiliated ceded reinsurance of guaranteed minimum benefits related to GMWBs, GMABs and certain GMIBs; affiliated assumed reinsurance of guaranteed minimum benefits related to GMWBs, GMABs, and certain GMIBs; funds withheld on ceded reinsurance and affiliated funds withheld on ceded reinsurance; funding agreements with equity or bond indexed crediting rates; fixed annuities with equity indexed returns; and certain debt and equity securities. The following table presents the estimated fair value and balance sheet location of the Company's embedded derivatives that have been separated from their host contracts at:
December 31, -------------------- Balance Sheet Location 2016 2015 -------------------------------------------- ---------- -------- (In millions) Embedded derivatives within asset host contracts: Ceded guaranteed minimum benefits......... Premiums, reinsurance and other receivables. $ 460 $ 712 Options embedded in debt or equity securities............................... Investments................................. (78) (142) ---------- -------- Embedded derivatives within asset host contracts..................................... $ 382 $ 570 ========== ======== Embedded derivatives within liability host contracts: Direct guaranteed minimum benefits........ Policyholder account balances............... $ 169 $ (284) Assumed guaranteed minimum benefits....... Policyholder account balances............... 390 126 Funds withheld on ceded reinsurance....... Other liabilities........................... 777 687 Fixed annuities with equity indexed returns.................................. Policyholder account balances............... 17 (3) ---------- -------- Embedded derivatives within liability host contracts................................. $ 1,353 $ 526 ========== ========
The following table presents changes in estimated fair value related to embedded derivatives:
Years Ended December 31, ------------------------------------------ 2016 2015 2014 -------------- ------------ -------------- (In millions) Net derivative gains (losses) (1), (2)....... $ (423) $ 418 $ (170)
------------- (1)The valuation of direct and assumed guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were $76 million, $29 million and $14 million for the years ended December 31, 2016, 2015 and 2014, respectively. In addition, the valuation of ceded guaranteed minimum benefits includes a nonperformance risk adjustment. The amounts included in net derivative gains (losses) in connection with this adjustment were ($29) million, ($4) million and ($9) million for the years ended December 31, 2016, 2015 and 2014, respectively. (2)See Note 6 for discussion of affiliated net derivative gains (losses). 87 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value When developing estimated fair values, the Company considers three broad valuation techniques: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation technique to use, given what is being measured and the availability of sufficient inputs, giving priority to observable inputs. The Company categorizes its assets and liabilities measured at estimated fair value into a three-level hierarchy, based on the significant input with the lowest level in its valuation. The input levels are as follows: Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities. The Company defines active markets based on average trading volume for equity securities. The size of the bid/ask spread is used as an indicator of market activity for fixed maturity securities. Level 2 Quoted prices in markets that are not active or inputs that are observable either directly or indirectly. These inputs can include quoted prices for similar assets or liabilities other than quoted prices in Level 1, quoted prices in markets that are not active, or other significant inputs that are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 Unobservable inputs that are supported by little or no market activity and are significant to the determination of estimated fair value of the assets or liabilities. Unobservable inputs reflect the reporting entity's own assumptions about the assumptions that market participants would use in pricing the asset or liability. Financial markets are susceptible to severe events evidenced by rapid depreciation in asset values accompanied by a reduction in asset liquidity. The Company's ability to sell securities, or the price ultimately realized for these securities, depends upon the demand and liquidity in the market and increases the use of judgment in determining the estimated fair value of certain securities. Considerable judgment is often required in interpreting market data to develop estimates of fair value, and the use of different assumptions or valuation methodologies may have a material effect on the estimated fair value amounts. Recurring Fair Value Measurements The assets and liabilities measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy, including those items for which the Company has elected the FVO, are presented below at: 88 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2016 ----------------------------------------------------------------- Fair Value Hierarchy -------------------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------------- ---------------- ---------------- -------------- (In millions) Assets Fixed maturity securities: U.S. corporate........................................... $ -- $ 51,303 $ 4,855 $ 56,158 U.S. government and agency............................... 17,597 18,018 -- 35,615 Foreign corporate........................................ -- 20,373 3,984 24,357 RMBS..................................................... -- 19,719 3,698 23,417 ABS...................................................... -- 6,745 759 7,504 State and political subdivision.......................... -- 7,126 10 7,136 CMBS..................................................... -- 4,851 84 4,935 Foreign government....................................... -- 3,977 21 3,998 ---------------- ---------------- ---------------- -------------- Total fixed maturity securities........................ 17,597 132,112 13,411 163,120 ---------------- ---------------- ---------------- -------------- Equity securities........................................ 408 1,011 420 1,839 FVO and trading securities (1)........................... -- 2 21 23 Short-term investments (2)............................... 2,945 1,720 25 4,690 Residential mortgage loans -- FVO........................ -- -- 566 566 Derivative assets: (3) Interest rate............................................ 3 5,489 2 5,494 Foreign currency exchange rate........................... -- 2,763 -- 2,763 Credit................................................... -- 101 30 131 Equity market............................................ 10 226 104 340 ---------------- ---------------- ---------------- -------------- Total derivative assets................................ 13 8,579 136 8,728 ---------------- ---------------- ---------------- -------------- Embedded derivatives within asset host contracts (4)..... -- -- 460 460 Separate account assets (5).............................. 27,633 105,055 1,148 133,836 ---------------- ---------------- ---------------- -------------- Total assets........................................... $ 48,596 $ 248,479 $ 16,187 $ 313,262 ================ ================ ================ ============== Liabilities Derivative liabilities: (3) Interest rate............................................ $ -- $ 917 $ 500 $ 1,417 Foreign currency exchange rate........................... -- 1,902 2 1,904 Credit................................................... -- 14 -- 14 Equity market............................................ -- 468 193 661 ---------------- ---------------- ---------------- -------------- Total derivative liabilities........................... -- 3,301 695 3,996 ---------------- ---------------- ---------------- -------------- Embedded derivatives within liability host contracts (4). -- -- 1,353 1,353 Long-term debt........................................... -- -- 74 74 Trading liabilities (6).................................. -- -- -- -- Separate account liabilities (5)......................... -- 16 7 23 ---------------- ---------------- ---------------- -------------- Total liabilities...................................... $ -- $ 3,317 $ 2,129 $ 5,446 ================ ================ ================ ==============
89 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2015 ----------------------------------------------------------------- Fair Value Hierarchy -------------------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------------- ---------------- ---------------- -------------- (In millions) Assets Fixed maturity securities: U.S. corporate........................................... $ -- $ 56,848 $ 4,709 $ 61,557 U.S. government and agency............................... 23,015 16,678 -- 39,693 Foreign corporate........................................ -- 23,222 3,573 26,795 RMBS..................................................... -- 20,585 3,330 23,915 ABS...................................................... -- 5,699 868 6,567 State and political subdivision.......................... -- 6,941 33 6,974 CMBS..................................................... -- 6,361 218 6,579 Foreign government....................................... -- 3,331 275 3,606 ---------------- ---------------- ---------------- -------------- Total fixed maturity securities........................ 23,015 139,665 13,006 175,686 ---------------- ---------------- ---------------- -------------- Equity securities........................................ 424 1,197 328 1,949 FVO and trading securities (1)........................... -- 402 29 431 Short-term investments (2)............................... 1,513 3,882 200 5,595 Residential mortgage loans -- FVO........................ -- -- 314 314 Derivative assets: (3) Interest rate............................................ -- 5,762 15 5,777 Foreign currency exchange rate........................... -- 1,876 -- 1,876 Credit................................................... -- 72 7 79 Equity market............................................ 15 282 117 414 ---------------- ---------------- ---------------- -------------- Total derivative assets................................ 15 7,992 139 8,146 ---------------- ---------------- ---------------- -------------- Embedded derivatives within asset host contracts (4)..... -- -- 712 712 Separate account assets (5).............................. 23,498 110,921 1,520 135,939 ---------------- ---------------- ---------------- -------------- Total assets........................................... $ 48,465 $ 264,059 $ 16,248 $ 328,772 ================ ================ ================ ============== Liabilities Derivative liabilities: (3) Interest rate............................................ $ 2 $ 1,224 $ -- $ 1,226 Foreign currency exchange rate........................... -- 1,665 -- 1,665 Credit................................................... -- 17 2 19 Equity market............................................ -- 358 160 518 ---------------- ---------------- ---------------- -------------- Total derivative liabilities........................... 2 3,264 162 3,428 ---------------- ---------------- ---------------- -------------- Embedded derivatives within liability host contracts (4). -- -- 526 526 Long-term debt........................................... -- 50 36 86 Trading liabilities (6).................................. 103 50 -- 153 Separate account liabilities (5)......................... -- -- -- -- ---------------- ---------------- ---------------- -------------- Total liabilities...................................... $ 105 $ 3,364 $ 724 $ 4,193 ================ ================ ================ ==============
------------- (1)In 2016, the Company reinvested its trading securities portfolio into other asset classes and, at December 31, 2016, the Company no longer held any actively traded securities. FVO and trading securities at December 31, 2016 were comprised primarily of FVO general account securities, while at December 31, 2015, FVO and trading securities was comprised primarily of actively traded securities. (2)Short-term investments as presented in the tables above differ from the amounts presented on the consolidated balance sheets because certain short-term investments are not measured at estimated fair value on a recurring basis. 90 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (3)Derivative assets are presented within other invested assets on the consolidated balance sheets and derivative liabilities are presented within other liabilities on the consolidated balance sheets. The amounts are presented gross in the tables above to reflect the presentation on the consolidated balance sheets, but are presented net for purposes of the rollforward in the Fair Value Measurements Using Significant Unobservable Inputs (Level 3) tables. (4)Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables and other invested assets on the consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances, future policy benefits and other liabilities on the consolidated balance sheets. At December 31, 2016 and 2015, debt and equity securities also included embedded derivatives of ($78) million and ($142) million, respectively. (5)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders whose liability is reflected within separate account liabilities. Separate account liabilities are set equal to the estimated fair value of separate account assets. Separate account liabilities presented in the tables above represent derivative liabilities. (6)Trading liabilities are presented within other liabilities on the consolidated balance sheets. The following describes the valuation methodologies used to measure assets and liabilities at fair value. The description includes the valuation techniques and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy. Investments Valuation Controls and Procedures On behalf of the Company and MetLife, Inc.'s Chief Investment Officer and Chief Financial Officer, a pricing and valuation committee that is independent of the trading and investing functions and comprised of senior management, provides oversight of control systems and valuation policies for securities, mortgage loans and derivatives. On a quarterly basis, this committee reviews and approves new transaction types and markets, ensures that observable market prices and market-based parameters are used for valuation, wherever possible, and determines that judgmental valuation adjustments, when applied, are based upon established policies and are applied consistently over time. This committee also provides oversight of the selection of independent third-party pricing providers and the controls and procedures to evaluate third-party pricing. Periodically, the Chief Accounting Officer reports to the Audit Committee of the Board of Directors of each of MetLife, Inc. and Metropolitan Life Insurance Company regarding compliance with fair value accounting standards. The Company reviews its valuation methodologies on an ongoing basis and revises those methodologies when necessary based on changing market conditions. Assurance is gained on the overall reasonableness and consistent application of input assumptions, valuation methodologies and compliance with fair value accounting standards through controls designed to ensure valuations represent an exit price. Several controls are utilized, including certain monthly controls, which include, but are not limited to, analysis of portfolio returns to corresponding benchmark returns, comparing a sample of executed prices of securities sold to the fair value estimates, comparing fair value estimates to management's knowledge of the current market, reviewing the bid/ask spreads to assess activity, comparing prices from multiple independent pricing services and ongoing due diligence to confirm that independent pricing services use market-based parameters. The process includes a determination of the observability of inputs used in estimated fair values received from independent pricing services or brokers by assessing whether these inputs can be corroborated by observable market data. The Company ensures that prices received from independent brokers, also referred to herein as "consensus pricing," represent a reasonable estimate of fair value by considering such pricing relative to the Company's knowledge of the current market dynamics and current pricing for similar financial instruments. While independent non-binding broker quotations are utilized, they are not used for a significant portion of the portfolio. For example, fixed maturity securities priced using independent non-binding broker quotations represent less than 1% of the total estimated fair value of fixed maturity securities and 4% of the total estimated fair value of Level 3 fixed maturity securities at December 31, 2016. 91 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The Company also applies a formal process to challenge any prices received from independent pricing services that are not considered representative of estimated fair value. If prices received from independent pricing services are not considered reflective of market activity or representative of estimated fair value, independent non-binding broker quotations are obtained, or an internally developed valuation is prepared. Internally developed valuations of current estimated fair value, which reflect internal estimates of liquidity and nonperformance risks, compared with pricing received from the independent pricing services, did not produce material differences in the estimated fair values for the majority of the portfolio; accordingly, overrides were not material. This is, in part, because internal estimates of liquidity and nonperformance risks are generally based on available market evidence and estimates used by other market participants. In the absence of such market-based evidence, management's best estimate is used. Securities, Short-term Investments, Long-term Debt and Trading Liabilities When available, the estimated fair value of these financial instruments is based on quoted prices in active markets that are readily and regularly obtainable. Generally, these are the most liquid of the Company's securities holdings and valuation of these securities does not involve management's judgment. When quoted prices in active markets are not available, the determination of estimated fair value is based on market standard valuation methodologies, giving priority to observable inputs. The significant inputs to the market standard valuation methodologies for certain types of securities with reasonable levels of price transparency are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. When observable inputs are not available, the market standard valuation methodologies rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs can be based in large part on management's judgment or estimation and cannot be supported by reference to market activity. Even though these inputs are unobservable, management believes they are consistent with what other market participants would use when pricing such securities and are considered appropriate given the circumstances. The estimated fair value of FVO securities held by consolidated securitization entities ("CSEs"), long-term debt and trading liabilities is determined on a basis consistent with the methodologies described herein for securities. 92 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The valuation of most instruments listed below is determined using independent pricing sources, matrix pricing, discounted cash flow methodologies or other similar techniques that use either observable market inputs or unobservable inputs.
Instrument Level 2 Level 3 Observable Inputs Unobservable Inputs --------------------------------------------------------------------------------------------------------------------------- Fixed Maturity Securities --------------------------------------------------------------------------------------------------------------------------- U.S. corporate and Foreign corporate securities --------------------------------------------------------------------------------------------------------------------------- Valuation Techniques: Principally the market and Valuation Techniques: Principally the market approach. income approaches. Key Inputs: Key Inputs: . quoted prices in markets that are not active . illiquidity premium . benchmark yields; spreads off benchmark yields; new . delta spread adjustments to reflect specific issuances; issuer rating credit-related issues . trades of identical or comparable securities; . credit spreads duration . Privately-placed securities are valued using the . quoted prices in markets that are not active for additional key inputs: identical or similar securities that are less . market yield curve; call provisions liquid and based on lower levels of trading . observable prices and spreads for similar public or activity than securities classified in Level 2 private securities that incorporate the credit . independent non-binding broker quotations quality and industry sector of the issuer . delta spread adjustments to reflect specific credit-related issues --------------------------------------------------------------------------------------------------------------------------- U.S. government and agency, State and political subdivision and Foreign government securities --------------------------------------------------------------------------------------------------------------------------- Valuation Techniques: Principally the market approach. Valuation Techniques: Principally the market approach. Key Inputs: Key Inputs: . quoted prices in markets that are not active . independent non-binding broker quotations . benchmark U.S. Treasury yield or other yields . the spread off the U.S. Treasury yield curve for the . quoted prices in markets that are not active for identical security identical or similar securities that are less . issuer ratings and issuer spreads; broker-dealer liquid and based on lower levels of trading quotes activity than securities classified in Level 2 . comparable securities that are actively traded . credit spreads --------------------------------------------------------------------------------------------------------------------------- Structured Securities --------------------------------------------------------------------------------------------------------------------------- Valuation Techniques: Principally the market and Valuation Techniques: Principally the market and income approaches. income approaches. Key Inputs: Key Inputs: . quoted prices in markets that are not active . credit spreads . spreads for actively traded securities; spreads off . quoted prices in markets that are not active for benchmark yields identical or similar securities that are less . expected prepayment speeds and volumes liquid and based on lower levels of trading . current and forecasted loss severity; ratings; activity than securities classified in Level 2 geographic region . independent non-binding broker quotations . weighted average coupon and weighted average maturity . average delinquency rates; debt-service coverage ratios . issuance-specific information, including, but not limited to: . collateral type; structure of the security; vintage of the loans . payment terms of the underlying assets . payment priority within the tranche; deal performance
93 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Level 2 Level 3 Instrument Observable Inputs Unobservable Inputs --------------------------------------------------------------------------------------------------------------------------- Equity Securities --------------------------------------------------------------------------------------------------------------------------- Valuation Techniques: Principally the market approach. Valuation Techniques: Principally the market and income approaches. Key Input: Key Inputs: . quoted prices in markets that are not considered active . credit ratings; issuance structures . quoted prices in markets that are not active for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2 . independent non-binding broker quotations --------------------------------------------------------------------------------------------------------------------------- FVO and trading securities and Short-term investments --------------------------------------------------------------------------------------------------------------------------- . FVO and trading securities and short-term . FVO and trading securities and short-term investments are of a similar nature and class to investments are of a similar nature and class to the fixed maturity and equity securities described the fixed maturity and equity securities described above; accordingly, the valuation techniques and above; accordingly, the valuation techniques and observable inputs used in their valuation are also unobservable inputs used in their valuation are similar to those described above. also similar to those described above. --------------------------------------------------------------------------------------------------------------------------- Residential mortgage loans -- FVO --------------------------------------------------------------------------------------------------------------------------- . N/A Valuation Techniques: Principally the market approach, including matrix pricing or other similar techniques. Key Inputs: . Inputs that are unobservable or cannot be derived principally from, or corroborated by, observable market data --------------------------------------------------------------------------------------------------------------------------- Separate Account Assets and Separate Account Liabilities (1) --------------------------------------------------------------------------------------------------------------------------- Mutual funds and hedge funds without readily determinable fair values as prices are not published publicly --------------------------------------------------------------------------------------------------------------------------- Key Input: . N/A . quoted prices or reported NAV provided by the fund managers --------------------------------------------------------------------------------------------------------------------------- Other limited partnership interests --------------------------------------------------------------------------------------------------------------------------- . N/A Valuation Techniques: Valued giving consideration to the underlying holdings of the partnerships and by applying a premium or discount, if appropriate. Key Inputs: .liquidity; bid/ask spreads; performance record of the fund manager .other relevant variables that may impact the exit value of the particular partnership interest ---------------------------------------------------------------------------------------------------------------------------
------------- (1)Estimated fair value equals carrying value, based on the value of the underlying assets, including: mutual fund interests, fixed maturity securities, equity securities, derivatives, hedge funds, other limited partnership interests, short-term investments and cash and cash equivalents. Fixed maturity securities, equity securities, derivatives, short-term investments and cash and cash equivalents are similar in nature to the instruments described under "-- Securities, Short-term Investments, Long-term Debt and Trading Liabilities" and "-- Derivatives -- Freestanding Derivatives." Derivatives The estimated fair value of derivatives is determined through the use of quoted market prices for exchange-traded derivatives, or through the use of pricing models for OTC-bilateral and OTC-cleared derivatives. The determination of estimated fair value, when quoted market values are not available, is based on market standard valuation methodologies and inputs that management believes are consistent with what other market participants would use when pricing such instruments. Derivative valuations can be affected by changes in interest rates, foreign currency exchange rates, financial indices, credit spreads, default risk, nonperformance risk, volatility, liquidity and changes in estimates and assumptions used in the pricing models. The valuation controls and procedures for derivatives are described in "-- Investments." The significant inputs to the pricing models for most OTC-bilateral and OTC-cleared derivatives are inputs that are observable in the market or can be derived principally from, or corroborated by, observable market data. Certain OTC-bilateral and OTC-cleared derivatives may rely on inputs that are significant to the estimated fair value that are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. These unobservable inputs may involve significant management judgment or estimation. Even though unobservable, these inputs are based on assumptions deemed appropriate given the circumstances and management believes they are consistent with what other market participants would use when pricing such instruments. 94 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Most inputs for OTC-bilateral and OTC-cleared derivatives are mid-market inputs but, in certain cases, liquidity adjustments are made when they are deemed more representative of exit value. Market liquidity, as well as the use of different methodologies, assumptions and inputs, may have a material effect on the estimated fair values of the Company's derivatives and could materially affect net income. The credit risk of both the counterparty and the Company are considered in determining the estimated fair value for all OTC-bilateral and OTC-cleared derivatives, and any potential credit adjustment is based on the net exposure by counterparty after taking into account the effects of netting agreements and collateral arrangements. The Company values its OTC-bilateral and OTC-cleared derivatives using standard swap curves which may include a spread to the risk-free rate, depending upon specific collateral arrangements. This credit spread is appropriate for those parties that execute trades at pricing levels consistent with similar collateral arrangements. As the Company and its significant derivative counterparties generally execute trades at such pricing levels and hold sufficient collateral, additional credit risk adjustments are not currently required in the valuation process. The Company's ability to consistently execute at such pricing levels is in part due to the netting agreements and collateral arrangements that are in place with all of its significant derivative counterparties. An evaluation of the requirement to make additional credit risk adjustments is performed by the Company each reporting period. Freestanding Derivatives Level 2 Valuation Techniques and Key Inputs: This level includes all types of derivatives utilized by the Company with the exception of exchange-traded derivatives included within Level 1 and those derivatives with unobservable inputs as described in Level 3. Level 3 Valuation Techniques and Key Inputs: These valuation methodologies generally use the same inputs as described in the corresponding sections for Level 2 measurements of derivatives. However, these derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Freestanding derivatives are principally valued using the income approach. Valuations of non-option-based derivatives utilize present value techniques, whereas valuations of option-based derivatives utilize option pricing models. Key inputs are as follows:
Instrument Interest Rate Foreign Currency Credit Equity Market Exchange Rate --------------------------------------------------------------------------------------------------------------------------------- Inputs common to . swap yield curves .swap yield curves .swap yield curves .swap yield curves Level 2 and Level 3 . basis curves .basis curves .credit curves .spot equity index levels by instrument type . interest rate .currency spot rates .recovery rates .dividend yield curves volatility (1) .cross currency basis .equity volatility (1) curves --------------------------------------------------------------------------------------------------------------------------------- Level 3 . swap yield curves (2) .swap yield curves (2) .swap yield curves (2) .dividend yield curves . basis curves (2) .basis curves (2) .credit curves (2) (2) . repurchase rates .cross currency basis .credit spreads .equity volatility (1), curves (2) .repurchase rates (2) .currency correlation .independent non-binding .correlation between broker quotations model inputs (1)
------------- (1)Option-based only. (2)Extrapolation beyond the observable limits of the curve(s). 95 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Embedded Derivatives Embedded derivatives principally include certain direct, assumed and ceded variable annuity guarantees, certain affiliated ceded reinsurance agreements related to such variable annuity guarantees, equity or bond indexed crediting rates within certain funding agreements and those related to funds withheld on ceded reinsurance agreements. Embedded derivatives are recorded at estimated fair value with changes in estimated fair value reported in net income. The Company issues certain variable annuity products with guaranteed minimum benefits. GMWBs, GMABs and certain GMIBs contain embedded derivatives, which are measured at estimated fair value separately from the host variable annuity contract, with changes in estimated fair value reported in net derivative gains (losses). These embedded derivatives are classified within policyholder account balances on the consolidated balance sheets. The Company's actuarial department calculates the fair value of these embedded derivatives, which are estimated as the present value of projected future benefits minus the present value of projected future fees using actuarial and capital market assumptions including expectations concerning policyholder behavior. The calculation is based on in-force business, and is performed using standard actuarial valuation software which projects future cash flows from the embedded derivative over multiple risk neutral stochastic scenarios using observable risk-free rates. Capital market assumptions, such as risk-free rates and implied volatilities, are based on market prices for publicly traded instruments to the extent that prices for such instruments are observable. Implied volatilities beyond the observable period are extrapolated based on observable implied volatilities and historical volatilities. Actuarial assumptions, including mortality, lapse, withdrawal and utilization, are unobservable and are reviewed at least annually based on actuarial studies of historical experience. The valuation of these guarantee liabilities includes nonperformance risk adjustments and adjustments for a risk margin related to non-capital market inputs. The nonperformance adjustment is determined by taking into consideration publicly available information relating to spreads in the secondary market for MetLife, Inc.'s debt, including related credit default swaps. These observable spreads are then adjusted, as necessary, to reflect the priority of these liabilities and the claims paying ability of the issuing insurance subsidiaries as compared to MetLife, Inc. Risk margins are established to capture the non-capital market risks of the instrument which represent the additional compensation a market participant would require to assume the risks related to the uncertainties of such actuarial assumptions as annuitization, premium persistency, partial withdrawal and surrenders. The establishment of risk margins requires the use of significant management judgment, including assumptions of the amount and cost of capital needed to cover the guarantees. These guarantees may be more costly than expected in volatile or declining equity markets. Market conditions including, but not limited to, changes in interest rates, equity indices, market volatility and foreign currency exchange rates; changes in nonperformance risk; and variations in actuarial assumptions regarding policyholder behavior, mortality and risk margins related to non-capital market inputs, may result in significant fluctuations in the estimated fair value of the guarantees that could materially affect net income. The Company ceded the risk associated with certain of the GMIBs, GMABs and GMWBs previously described. In addition to ceding risks associated with guarantees that are accounted for as embedded derivatives, the Company also ceded directly written GMIBs that are accounted for as insurance (i.e., not as embedded derivatives) but where the reinsurance agreement contains an embedded derivative. These embedded derivatives are included within premiums, reinsurance and other receivables on the consolidated balance sheets with changes in estimated fair value reported in net derivative gains (losses). The value of the embedded derivatives on the ceded risk is determined using a methodology consistent with that described previously for the guarantees directly written by the Company with the exception of the input for nonperformance risk that reflects the credit of the reinsurer. 96 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as previously described in "-- Investments -- Securities, Short-term Investments, Long-term Debt and Trading Liabilities." The estimated fair value of these embedded derivatives is included, along with their funds withheld hosts, in other liabilities on the consolidated balance sheets with changes in estimated fair value recorded in net derivative gains (losses). Changes in the credit spreads on the underlying assets, interest rates and market volatility may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. The estimated fair value of the embedded equity and bond indexed derivatives contained in certain funding agreements is determined using market standard swap valuation models and observable market inputs, including a nonperformance risk adjustment. The estimated fair value of these embedded derivatives are included, along with their funding agreements host, within policyholder account balances with changes in estimated fair value recorded in net derivative gains (losses). Changes in equity and bond indices, interest rates and the Company's credit standing may result in significant fluctuations in the estimated fair value of these embedded derivatives that could materially affect net income. Embedded Derivatives Within Asset and Liability Host Contracts Level 3 Valuation Techniques and Key Inputs: Direct and assumed guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. Valuations are based on option pricing techniques, which utilize significant inputs that may include swap yield curves, currency exchange rates and implied volatilities. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include: the extrapolation beyond observable limits of the swap yield curves and implied volatilities, actuarial assumptions for policyholder behavior and mortality and the potential variability in policyholder behavior and mortality, nonperformance risk and cost of capital for purposes of calculating the risk margin. Reinsurance ceded on certain guaranteed minimum benefits These embedded derivatives are principally valued using the income approach. The valuation techniques and significant market standard unobservable inputs used in their valuation are similar to those described above in "-- Direct and assumed guaranteed minimum benefits" and also include counterparty credit spreads. Embedded derivatives within funds withheld related to certain ceded reinsurance These embedded derivatives are principally valued using the income approach. The valuations are based on present value techniques, which utilize significant inputs that may include the swap yield curves and the fair value of assets within the reference portfolio. These embedded derivatives result in Level 3 classification because one or more of the significant inputs are not observable in the market or cannot be derived principally from, or corroborated by, observable market data. Significant unobservable inputs generally include the fair value of certain assets within the reference portfolio which are not observable in the market and cannot be derived principally from, or corroborated by, observable market data. Transfers between Levels Overall, transfers between levels occur when there are changes in the observability of inputs and market activity. Transfers into or out of any level are assumed to occur at the beginning of the period. Transfers between Levels 1 and 2: For assets and liabilities measured at estimated fair value and still held at December 31, 2016, there were no transfers between Levels 1 and 2. For assets and liabilities measured at estimated fair value and still held at December 31, 2015, transfers between Levels 1 and 2 were not significant. 97 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Transfers into or out of Level 3: Assets and liabilities are transferred into Level 3 when a significant input cannot be corroborated with market observable data. This occurs when market activity decreases significantly and underlying inputs cannot be observed, current prices are not available, and/or when there are significant variances in quoted prices, thereby affecting transparency. Assets and liabilities are transferred out of Level 3 when circumstances change such that a significant input can be corroborated with market observable data. This may be due to a significant increase in market activity, a specific event, or one or more significant input(s) becoming observable. Assets and Liabilities Measured at Fair Value Using Significant Unobservable Inputs (Level 3) The following table presents certain quantitative information about the significant unobservable inputs used in the fair value measurement, and the sensitivity of the estimated fair value to changes in those inputs, for the more significant asset and liability classes measured at fair value on a recurring basis using significant unobservable inputs (Level 3) at:
December 31, 2016 ---------------------------- Significant Weighted Valuation Techniques Unobservable Inputs Range Average (1) --------------------------- ----------------------- --------------- ----------- Fixed maturity securities (3) U.S. corporate and foreign corporate........................... Matrix pricing Offered quotes (4) 18 - 138 106 Delta spread adjustments (5) Market pricing Quoted prices (4) 25 - 700 117 Consensus pricing Offered quotes (4) 37 - 119 105 --------------------------------------------------------------------------------------- RMBS................................. Market pricing Quoted prices (4) 19 - 137 91 --------------------------------------------------------------------------------------- ABS.................................. Market pricing Quoted prices (4) 20 - 106 99 Consensus pricing Offered quotes (4) 98 - 100 100 --------------------------------------------------------------------------------------- Derivatives Interest rate........................ Present value techniques Swap yield (7) 200 - 300 Repurchase rates (9) (44) - 18 --------------------------------------------------------------------------------------- Foreign currency exchange rate....... Present value Swap yield (7) 50 - 236 techniques --------------------------------------------------------------------------------------- Credit............................... Present value Credit spreads (10) 97 - 98 techniques Consensus pricing Offered quotes (11) --------------------------------------------------------------------------------------- Equity market........................ Present value Volatility (12) 14% - 32% techniques or option pricing models Correlation (13) 40% - 40% --------------------------------------------------------------------------------------- Embedded derivatives Direct, assumed and ceded guaranteed Option pricing Mortality rates: minimum benefits.................... techniques Ages 0 - 40 0% - 0.09% Ages 41 - 60 0.04% - 0.65% Ages 61 - 115 0.26% - 100% Lapse rates: Durations 1 - 10 0.25% - 100% Durations 11 - 20 3% - 100% Durations 21 - 116 3% - 100% Utilization rates 0% - 25% Withdrawal rates 0.25% - 10% Long-term equity 17.40% - 25% volatilities Nonperformance risk 0.04% - 0.57% spread
December 31, 2015 -------------------------- Significant Weighted Valuation Techniques Unobservable Inputs Range Average (1) --------------------------- ----------------------- ------------- ----------- Fixed maturity securities (3) U.S. corporate and foreign corporate........................... Matrix pricing Offered quotes (4) 39 - 96 60 Delta spread adjustments (5) (65) - 240 37 Market pricing Quoted prices (4) -- - 385 125 Consensus pricing Offered quotes (4) 100 - 119 103 ------------------------------------------------------------------------------------- RMBS................................. Market pricing Quoted prices (4) 19 - 121 92 ------------------------------------------------------------------------------------- ABS.................................. Market pricing Quoted prices (4) 16 - 103 100 Consensus pricing Offered quotes (4) 97 - 105 99 ------------------------------------------------------------------------------------- Derivatives Interest rate........................ Present value techniques Swap yield (7) 307 - 307 Repurchase rates (9) -- - -- ------------------------------------------------------------------------------------- Foreign currency exchange rate....... Present value Swap yield (7) -- - -- techniques ------------------------------------------------------------------------------------- Credit............................... Present value Credit spreads (10) 98 - 100 techniques Consensus pricing Offered quotes (11) ------------------------------------------------------------------------------------- Equity market........................ Present value Volatility (12) 17% - 36% techniques or option pricing models Correlation (13) 70% - 70% ------------------------------------------------------------------------------------- Embedded derivatives Direct, assumed and ceded guaranteed Option pricing Mortality rates: minimum benefits.................... techniques Ages 0 - 40 0% - 0.09% Ages 41 - 60 0.04% - 0.65% Ages 61 - 115 0.26% - 100% Lapse rates: Durations 1 - 10 0.25% - 100% Durations 11 - 20 3% - 100% Durations 21 - 116 3% - 100% Utilization rates 0% - 25% Withdrawal rates 0.25% - 10% Long-term equity 17.40% - 25% volatilities Nonperformance risk 0.04% - 0.52% spread
Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------------- ----------------------- ------------------ Fixed maturity securities (3) U.S. corporate and foreign corporate........................... Matrix pricing Offered quotes (4) Increase Delta spread adjustments (5) Decrease Market pricing Quoted prices (4) Increase Consensus pricing Offered quotes (4) Increase -------------------------------------------------------------------------- RMBS................................. Market pricing Quoted prices (4) Increase (6) -------------------------------------------------------------------------- ABS.................................. Market pricing Quoted prices (4) Increase (6) Consensus pricing Offered quotes (4) Increase (6) -------------------------------------------------------------------------- Derivatives Interest rate........................ Present value techniques Swap yield (7) Increase (8) Repurchase rates (9) Decrease (8) -------------------------------------------------------------------------- Foreign currency exchange rate....... Present value Swap yield (7) Increase (8) techniques -------------------------------------------------------------------------- Credit............................... Present value Credit spreads (10) Decrease (8) techniques Consensus pricing Offered quotes (11) -------------------------------------------------------------------------- Equity market........................ Present value Volatility (12) Increase (8) techniques or option pricing models Correlation (13) -------------------------------------------------------------------------- Embedded derivatives Direct, assumed and ceded guaranteed Option pricing Mortality rates: minimum benefits.................... techniques Ages 0 - 40 Decrease (14) Ages 41 - 60 Decrease (14) Ages 61 - 115 Decrease (14) Lapse rates: Durations 1 - 10 Decrease (15) Durations 11 - 20 Decrease (15) Durations 21 - 116 Decrease (15) Utilization rates Increase (16) Withdrawal rates (17) Long-term equity Increase (18) volatilities Nonperformance risk Decrease (19) spread
------------- (1) The weighted average for fixed maturity securities is determined based on the estimated fair value of the securities. 98 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2) The impact of a decrease in input would have the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions; changes to ceded guaranteed minimum benefits are based on asset positions. (3) Significant increases (decreases) in expected default rates in isolation would result in substantially lower (higher) valuations. (4) Range and weighted average are presented in accordance with the market convention for fixed maturity securities of dollars per hundred dollars of par. (5) Range and weighted average are presented in basis points. (6) Changes in the assumptions used for the probability of default is accompanied by a directionally similar change in the assumption used for the loss severity and a directionally opposite change in the assumptions used for prepayment rates. (7) Ranges represent the rates across different yield curves and are presented in basis points. The swap yield curves are utilized among different types of derivatives to project cash flows, as well as to discount future cash flows to present value. Since this valuation methodology uses a range of inputs across a yield curve to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (8) Changes in estimated fair value are based on long U.S. dollar net asset positions and will be inversely impacted for short U.S. dollar net asset positions. (9) Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points. (10)Represents the risk quoted in basis points of a credit default event on the underlying instrument. Credit derivatives with significant unobservable inputs are primarily comprised of written credit default swaps. (11)At both December 31, 2016 and 2015, independent non-binding broker quotations were used in the determination of less than 1% of the total net derivative estimated fair value. (12)Ranges represent the underlying equity volatility quoted in percentage points. Since this valuation methodology uses a range of inputs across multiple volatility surfaces to value the derivative, presenting a range is more representative of the unobservable input used in the valuation. (13)Ranges represent the different correlation factors utilized as components within the valuation methodology. Presenting a range of correlation factors is more representative of the unobservable input used in the valuation. Increases (decreases) in correlation in isolation will increase (decrease) the significance of the change in valuations. (14)Mortality rates vary by age and by demographic characteristics such as gender. Mortality rate assumptions are based on company experience. A mortality improvement assumption is also applied. For any given contract, mortality rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (15)Base lapse rates are adjusted at the contract level based on a comparison of the actuarially calculated guaranteed values and the current policyholder account value, as well as other factors, such as the applicability of any surrender charges. A dynamic lapse function reduces the base lapse rate when the guaranteed amount is greater than the account value as in the money contracts are less likely to lapse. Lapse rates are also generally assumed to be lower in periods when a surrender charge applies. For any given contract, lapse rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (16)The utilization rate assumption estimates the percentage of contractholders with a GMIB or lifetime withdrawal benefit who will elect to utilize the benefit upon becoming eligible. The rates may vary by the type of guarantee, the amount by which the guaranteed amount is greater than the account value, the contract's withdrawal history and by the age of the policyholder. For any given contract, utilization rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. 99 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (17)The withdrawal rate represents the percentage of account balance that any given policyholder will elect to withdraw from the contract each year. The withdrawal rate assumption varies by age and duration of the contract, and also by other factors such as benefit type. For any given contract, withdrawal rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. For GMWBs, any increase (decrease) in withdrawal rates results in an increase (decrease) in the estimated fair value of the guarantees. For GMABs and GMIBs, any increase (decrease) in withdrawal rates results in a decrease (increase) in the estimated fair value. (18)Long-term equity volatilities represent equity volatility beyond the period for which observable equity volatilities are available. For any given contract, long-term equity volatility rates vary throughout the period over which cash flows are projected for purposes of valuing the embedded derivative. (19)Nonperformance risk spread varies by duration and by currency. For any given contract, multiple nonperformance risk spreads will apply, depending on the duration of the cash flow being discounted for purposes of valuing the embedded derivative. The following is a summary of the valuation techniques and significant unobservable inputs used in the fair value measurement of assets and liabilities classified within Level 3 that are not included in the preceding table. Generally, all other classes of securities classified within Level 3, including those within separate account assets and embedded derivatives within funds withheld related to certain ceded reinsurance, use the same valuation techniques and significant unobservable inputs as previously described for Level 3 securities. This includes matrix pricing and discounted cash flow methodologies, inputs such as quoted prices for identical or similar securities that are less liquid and based on lower levels of trading activity than securities classified in Level 2, as well as independent non-binding broker quotations. The residential mortgage loans -- FVO and long-term debt are valued using independent non-binding broker quotations and internal models including matrix pricing and discounted cash flow methodologies using current interest rates. The sensitivity of the estimated fair value to changes in the significant unobservable inputs for these other assets and liabilities is similar in nature to that described in the preceding table. The valuation techniques and significant unobservable inputs used in the fair value measurement for the more significant assets measured at estimated fair value on a nonrecurring basis and determined using significant unobservable inputs (Level 3) are summarized in "-- Nonrecurring Fair Value Measurements." 100 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The following tables summarize the change of all assets and (liabilities) measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3):
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) -------------------------------------------------------------------------------------- Fixed Maturity Securities ------------------------------------------------------- State and FVO and Structured Political Foreign Equity Trading Corporate (1) Securities Subdivision Government Securities Securities (2) -------------- ------------ ------------- ------------ ------------ ---------------- (In millions) Balance, January 1, 2015................ $ 8,528 $ 5,570 $ -- $ 202 $ 215 $ 31 Total realized/unrealized gains (losses) included in net income (loss) (3) (4)......................... 38 101 -- 1 12 (1) Total realized/unrealized gains (losses) included in AOCI.............. (399) (67) -- (1) (53) -- Purchases (5)........................... 1,546 1,393 33 120 127 -- Sales (5)............................... (1,018) (1,205) -- (1) (61) (1) Issuances (5)........................... -- -- -- -- -- -- Settlements (5)......................... -- -- -- -- -- -- Transfers into Level 3 (7).............. 635 32 -- -- 88 -- Transfers out of Level 3 (7)............ (1,048) (1,408) -- (46) -- -- ------------ ------------ ------------ ------------ ------------ ------------ Balance, December 31, 2015.............. 8,282 4,416 33 275 328 29 Total realized/unrealized gains (losses) included in net income (loss) (3) (4)................................ -- 100 1 -- (24) 2 Total realized/unrealized gains (losses) included in AOCI.............. (39) 47 2 (1) 21 -- Purchases (5)........................... 1,967 1,821 -- 7 23 -- Sales (5)............................... (1,226) (1,339) -- (40) (15) (5) Issuances (5)........................... -- -- -- -- -- -- Settlements (5)......................... -- -- -- -- -- -- Transfers into Level 3 (7).............. 848 18 7 -- 282 -- Transfers out of Level 3 (7)............ (993) (522) (33) (220) (195) (5) ------------ ------------ ------------ ------------ ------------ ------------ Balance, December 31, 2016.............. $ 8,839 $ 4,541 $ 10 $ 21 $ 420 $ 21 ============ ============ ============ ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2014: (8).............................. $ (4) $ 42 $ -- $ 1 $ (5) $ -- ============ ============ ============ ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015: (8).............................. $ 7 $ 102 $ -- $ 1 $ -- $ -- ============ ============ ============ ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016: (8).............................. $ -- $ 101 $ 1 $ -- $ (29) $ 2 ============ ============ ============ ============ ============ ============ Gains (Losses) Data for the year ended December 31, 2014 Total realized/unrealized gains (losses) included in net income (loss) (3) (4)......................... $ (5) $ 12 $ -- $ (49) $ 7 $ -- Total realized/unrealized gains (losses) included in AOCI.............. $ 218 $ 103 $ -- $ 22 $ 2 $ --
101 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ------------------------------------------------------------------------------------------ Residential Separate Short-term Mortgage Net Net Embedded Account Long-term Investments Loans - FVO Derivatives (9) Derivatives (10) Assets (11) Debt ------------ ------------ ---------------- ------------------ ------------ ------------ (In millions) Balance, January 1, 2015............... $ 230 $ 308 $ 6 $ (67) $ 1,615 $ (35) Total realized/unrealized gains (losses) included in net income (loss) (3) (4)..... -- 20 (27) 447 15 -- Total realized/unrealized gains (losses) included in AOCI... -- -- (2) -- -- -- Purchases (5)....... 200 136 3 -- 348 -- Sales (5)........... -- (121) -- -- (344) -- Issuances (5)....... -- -- -- -- 98 (38) Settlements (5)..... -- (29) (3) (194) (60) 37 Transfers into Level 3 (7)........ -- -- -- -- 1 -- Transfers out of Level 3 (7)........ (230) -- -- -- (153) -- ------------ ------------ ------------ ------------ ------------ ------------ Balance, December 31, 2015.. 200 314 (23) 186 1,520 (36) Total realized/unrealized gains (losses) included in net income (loss) (3) (4) (6). -- 8 (168) (870) (2) -- Total realized/unrealized gains (losses) included in AOCI... -- -- (366) -- -- -- Purchases (5)....... 28 297 27 -- 375 -- Sales (5)........... (3) (11) -- -- (474) -- Issuances (5)....... -- -- -- -- 62 (46) Settlements (5)..... -- (42) (29) (209) (51) 8 Transfers into Level 3 (7)........ -- -- -- -- 19 -- Transfers out of Level 3 (7)........ (200) -- -- -- (308) -- ------------ ------------ ------------ ------------ ------------ ------------ Balance, December 31, 2016.. $ 25 $ 566 $ (559) $ (893) $ 1,141 $ (74) ============ ============ ============ ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2014: (8)................ $ -- $ 20 $ 8 $ (115) $ -- $ -- ============ ============ ============ ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2015: (8)................ $ -- $ 20 $ (24) $ 461 $ -- $ -- ============ ============ ============ ============ ============ ============ Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016: (8)................ $ -- $ 8 $ (166) $ (863) $ -- $ -- ============ ============ ============ ============ ============ ============ Gains (Losses) Data for the year ended December 31, 2014 Total realized/unrealized gains (losses) included in net income (loss) (3) (4)..... $ (1) $ 20 $ 1 $ (144) $ 102 $ -- Total realized/unrealized gains (losses) included in AOCI... $ -- $ -- $ 40 $ -- $ -- $ --
------------- (1) Comprised of U.S. and foreign corporate securities. (2) Comprised of FVO general account securities, FVO securities held by CSEs and actively traded securities. (3) Amortization of premium/accretion of discount is included within net investment income. Impairments charged to net income (loss) on securities are included in net investment gains (losses), while changes in estimated fair value of residential mortgage loans -- FVO are included in net investment income. Lapses associated with net embedded derivatives are included in net derivative gains (losses). Substantially all realized/unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivatives gains (losses). (4) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (5) Items purchased/issued and then sold/settled in the same period are excluded from the rollforward. Fees attributed to embedded derivatives are included in settlements. Sales for the year ended December 31, 2016 included financial instruments related to the disposition of NELICO and GALIC of $345 million for corporate securities, $117 million for structured securities, $38 million for foreign government securities and less than $1 million for equity securities. See Note 3. 102 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (6) Includes $420 million for net embedded derivatives for the year ended December 31, 2016 related to the disposition of NELICO and GALIC. See Note 3. (7) Gains and losses, in net income (loss) and OCI, are calculated assuming transfers into and/or out of Level 3 occurred at the beginning of the period. Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (8) Changes in unrealized gains (losses) included in net income (loss) relate to assets and liabilities still held at the end of the respective periods. Substantially all changes in unrealized gains (losses) included in net income (loss) for net derivatives and net embedded derivatives are reported in net derivative gains (losses). (9) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (10)Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (11)Investment performance related to separate account assets is fully offset by corresponding amounts credited to contractholders within separate account liabilities. Therefore, such changes in estimated fair value are not recorded in net income (loss). For the purpose of this disclosure, these changes are presented within net investment gains (losses). Separate account assets and liabilities are presented net for the purposes of the rollforward. Fair Value Option The following table presents information for residential mortgage loans, which are accounted for under the FVO, and were initially measured at fair value.
December 31, --------------------- 2016 2015 ---------- ---------- (In millions) Unpaid principal balance................................................................ $ 794 $ 436 Difference between estimated fair value and unpaid principal balance.................... (228) (122) ---------- ---------- Carrying value at estimated fair value................................................ $ 566 $ 314 ========== ========== Loans in nonaccrual status.............................................................. $ 214 $ 122 Loans more than 90 days past due........................................................ $ 137 $ 72 Loans in nonaccrual status or more than 90 days past due, or both -- difference between aggregate estimated fair value and unpaid principal balance............................ $ (150) $ (52)
The following table presents information for long-term debt, which is accounted for under the FVO, and was initially measured at fair value.
Long-term Debt of Long-term Debt CSEs - FVO ------------------------------------- ------------------------------------- December 31, 2016 December 31, 2015 December 31, 2016 December 31, 2015 ------------------ ------------------ ------------------ ------------------ (In millions) Contractual principal balance. $ 71 $ 82 $ 25 $ 24 Difference between estimated fair value and contractual principal balance............ 3 4 (13) (13) ------------------ ------------------ ------------------ ------------------ Carrying value at estimated fair value (1)............. $ 74 $ 86 $ 12 $ 11 ================== ================== ================== ==================
------------- (1) Changes in estimated fair value are recognized in net investment gains (losses). Interest expense is recognized in other expenses. 103 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Nonrecurring Fair Value Measurements The following table presents information for assets measured at estimated fair value on a nonrecurring basis during the periods and still held at the reporting dates (for example, when there is evidence of impairment). The estimated fair values for these assets were determined using significant unobservable inputs (Level 3).
At December 31, Years Ended December 31, ------------------------------------------ -------------------------------------------- 2016 2015 2014 2016 2015 2014 ------------- ------------- -------------- -------------- -------------- -------------- Carrying Value After Measurement Gains (Losses) ------------------------------------------ -------------------------------------------- (In millions) Mortgage loans (1)...................... $ 8 $ 40 $ 94 $ -- $ (1) $ 2 Other limited partnership interests (2). $ 95 $ 57 $ 109 $ (59) $ (31) $ (70) Other assets (3)........................ $ -- $ -- $ -- $ (30) $ -- $ --
------------- (1)Estimated fair values for impaired mortgage loans are based on independent broker quotations or valuation models using unobservable inputs or, if the loans are in foreclosure or are otherwise determined to be collateral dependent, are based on the estimated fair value of the underlying collateral or the present value of the expected future cash flows. (2)For these cost method investments, estimated fair value is determined from information provided on the financial statements of the underlying entities including NAV data. These investments include private equity and debt funds that typically invest primarily in various strategies including domestic and international leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. Distributions will be generated from investment gains, from operating income from the underlying investments of the funds and from liquidation of the underlying assets of the funds. It is estimated that the underlying assets of the funds will be liquidated over the next two to 10 years. Unfunded commitments for these investments at both December 31, 2016 and 2015 were not significant. (3)During the year ended December 31, 2016, the Company recognized an impairment of computer software in connection with the sale to Massachusetts Mutual Life Insurance Company ("MassMutual") of MetLife, Inc.'s U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MetLife's affiliated broker-dealer, MetLife Securities, Inc. ("MSI"), a wholly-owned subsidiary of MetLife, Inc. See Note 18. Fair Value of Financial Instruments Carried at Other Than Fair Value The following tables provide fair value information for financial instruments that are carried on the balance sheet at amounts other than fair value. These tables exclude the following financial instruments: cash and cash equivalents, accrued investment income, payables for collateral under securities loaned and other transactions, short-term debt and those short-term investments that are not securities, such as time deposits, and therefore are not included in the three level hierarchy table disclosed in the "-- Recurring Fair Value Measurements" section. The estimated fair value of the excluded financial instruments, which are primarily classified in Level 2, approximates carrying value as they are short-term in nature such that the Company believes there is minimal risk of material changes in interest rates or credit quality. All remaining balance sheet amounts excluded from the tables below are not considered financial instruments subject to this disclosure. 104 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The carrying values and estimated fair values for such financial instruments, and their corresponding placement in the fair value hierarchy, are summarized as follows at:
December 31, 2016 ------------------------------------------------------------- Fair Value Hierarchy ----------------------------------- Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------ ----------- ----------- ----------- ------------ (In millions) Assets Mortgage loans.............................. $ 55,994 $ -- $ -- $ 57,171 $ 57,171 Policy loans................................ $ 5,945 $ -- $ 258 $ 6,695 $ 6,953 Real estate joint ventures.................. $ 4 $ -- $ -- $ 26 $ 26 Other limited partnership interests......... $ 336 $ -- $ -- $ 362 $ 362 Other invested assets....................... $ 2,263 $ -- $ 2,151 $ 151 $ 2,302 Premiums, reinsurance and other receivables. $ 14,888 $ -- $ 368 $ 15,421 $ 15,789 Liabilities Policyholder account balances............... $ 72,944 $ -- $ -- $ 74,052 $ 74,052 Long-term debt.............................. $ 1,503 $ -- $ 1,755 $ -- $ 1,755 Other liabilities........................... $ 14,731 $ -- $ 894 $ 13,920 $ 14,814 Separate account liabilities................ $ 65,545 $ -- $ 65,545 $ -- $ 65,545 December 31, 2015 ------------------------------------------------------------- Fair Value Hierarchy ----------------------------------- Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value ------------ ----------- ----------- ----------- ------------ (In millions) Assets Mortgage loans.............................. $ 53,408 $ -- $ -- $ 54,969 $ 54,969 Policy loans................................ $ 8,134 $ -- $ 330 $ 9,539 $ 9,869 Real estate joint ventures.................. $ 12 $ -- $ -- $ 39 $ 39 Other limited partnership interests......... $ 467 $ -- $ -- $ 553 $ 553 Other invested assets....................... $ 2,372 $ -- $ 2,197 $ 202 $ 2,399 Premiums, reinsurance and other receivables. $ 13,879 $ -- $ 229 $ 14,610 $ 14,839 Liabilities Policyholder account balances............... $ 71,331 $ -- $ -- $ 73,506 $ 73,506 Long-term debt.............................. $ 1,618 $ -- $ 1,912 $ -- $ 1,912 Other liabilities........................... $ 19,545 $ -- $ 323 $ 19,882 $ 20,205 Separate account liabilities................ $ 60,767 $ -- $ 60,767 $ -- $ 60,767
105 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) The methods, assumptions and significant valuation techniques and inputs used to estimate the fair value of financial instruments are summarized as follows: Mortgage Loans The estimated fair value of mortgage loans is primarily determined by estimating expected future cash flows and discounting them using current interest rates for similar mortgage loans with similar credit risk, or is determined from pricing for similar loans. Policy Loans Policy loans with fixed interest rates are classified within Level 3. The estimated fair values for these loans are determined using a discounted cash flow model applied to groups of similar policy loans determined by the nature of the underlying insurance liabilities. Cash flow estimates are developed by applying a weighted-average interest rate to the outstanding principal balance of the respective group of policy loans and an estimated average maturity determined through experience studies of the past performance of policyholder repayment behavior for similar loans. These cash flows are discounted using current risk-free interest rates with no adjustment for borrower credit risk, as these loans are fully collateralized by the cash surrender value of the underlying insurance policy. Policy loans with variable interest rates are classified within Level 2 and the estimated fair value approximates carrying value due to the absence of borrower credit risk and the short time period between interest rate resets, which presents minimal risk of a material change in estimated fair value due to changes in market interest rates. Real Estate Joint Ventures and Other Limited Partnership Interests The estimated fair values of these cost method investments are generally based on the Company's share of the NAV as provided on the financial statements of the investees. In certain circumstances, management may adjust the NAV by a premium or discount when it has sufficient evidence to support applying such adjustments. Other Invested Assets These other invested assets are principally comprised of loans to affiliates. The estimated fair value of loans to affiliates is determined by discounting the expected future cash flows using market interest rates currently available for instruments with similar terms and remaining maturities. Premiums, Reinsurance and Other Receivables Premiums, reinsurance and other receivables are principally comprised of certain amounts recoverable under reinsurance agreements, amounts on deposit with financial institutions to facilitate daily settlements related to certain derivatives and amounts receivable for securities sold but not yet settled. Amounts recoverable under ceded reinsurance agreements, which the Company has determined do not transfer significant risk such that they are accounted for using the deposit method of accounting, have been classified as Level 3. The valuation is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using interest rates determined to reflect the appropriate credit standing of the assuming counterparty. The amounts on deposit for derivative settlements, classified within Level 2, essentially represent the equivalent of demand deposit balances and amounts due for securities sold are generally received over short periods such that the estimated fair value approximates carrying value. Policyholder Account Balances These policyholder account balances include investment contracts which primarily include certain funding agreements, fixed deferred annuities, modified guaranteed annuities, fixed term payout annuities and total control accounts ("TCA"). The valuation of these investment contracts is based on discounted cash flow methodologies using significant unobservable inputs. The estimated fair value is determined using current market risk-free interest rates adding a spread to reflect the nonperformance risk in the liability. 106 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) Long-term Debt The estimated fair value of long-term debt is principally determined using market standard valuation methodologies. Valuations of instruments are based primarily on quoted prices in markets that are not active or using matrix pricing that use standard market observable inputs such as quoted prices in markets that are not active and observable yields and spreads in the market. Instruments valued using discounted cash flow methodologies use standard market observable inputs including market yield curve, duration, call provisions, observable prices and spreads for similar publicly traded or privately traded issues. Other Liabilities Other liabilities consist primarily of amounts due for securities purchased but not yet settled, funds withheld amounts payable, which are contractually withheld by the Company in accordance with the terms of the reinsurance agreements, and amounts payable under certain assumed reinsurance agreements, which are recorded using the deposit method of accounting. The Company evaluates the specific terms, facts and circumstances of each instrument to determine the appropriate estimated fair values, which are not materially different from the carrying values, with the exception of certain deposit type reinsurance payables. For such payables, the estimated fair value is determined as the present value of expected future cash flows, which are discounted using an interest rate determined to reflect the appropriate credit standing of the assuming counterparty. Separate Account Liabilities Separate account liabilities represent those balances due to policyholders under contracts that are classified as investment contracts. Separate account liabilities classified as investment contracts primarily represent variable annuities with no significant mortality risk to the Company such that the death benefit is equal to the account balance, funding agreements related to group life contracts and certain contracts that provide for benefit funding. Since separate account liabilities are fully funded by cash flows from the separate account assets which are recognized at estimated fair value as described in the section "-- Recurring Fair Value Measurements," the value of those assets approximates the estimated fair value of the related separate account liabilities. The valuation techniques and inputs for separate account liabilities are similar to those described for separate account assets. 11. Long-term and Short-term Debt Long-term and short-term debt outstanding was as follows:
December 31, ----------------------------------------------------------------------- Interest Rates (1) 2016 2015 -------------------- ----------------------------------- ----------------------------------- Unamor- Unamor- Unamo- tized Unamor- tized Weighted Face rtized Issuance Carrying Face tized Issuance Carrying Range Average Maturity Value Discount Costs Value Value Discount Costs Value (2) ----------- -------- -------------- ------- -------- --------- -------- ------- -------- -------- --------- (In millions) Surplus notes - affiliated........ 7.38% 7.38% 7.38% 2037 $ 700 $ (5) $ (5) $ 690 $ 700 $ (5) $ (5) $ 690 Surplus notes (3).. 7.63% 7.88% 7.83% 2024 - 2025 400 (1) (2) 397 507 (5) (2) 500 Senior notes - affiliated........ 1.01% 2.71% 1.94% -- -- -- -- -- 50 -- -- 50 Other notes........ 1.62% 6.49% 4.12% 2017 - 2031 494 -- (4) 490 457 -- (5) 452 ------- ------- --------- -------- ------- ------- ------- -------- Total long-term debt (4).......... 1,594 (6) (11) 1,577 1,714 (10) (12) 1,692 ------- ------- --------- -------- ------- ------- ------- -------- Total short-term debt............. 100 -- -- 100 100 -- -- 100 ------- ------- --------- -------- ------- ------- ------- -------- Total............ $1,694 $ (6) $ (11) $ 1,677 $1,814 $ (10) $ (12) $ 1,792 ======= ======= ========= ======== ======= ======= ======= ========
------------- (1)Range of interest rates and weighted average interest rates are for the year ended December 31, 2016. (2)Net of $12 million of unamortized issuance costs, which were reported in other assets at December 31, 2015. 107 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Long-term and Short-term Debt (continued) (3)In December 2016, the $107 million 7.625% surplus notes were deconsolidated due to the disposition of GALIC. See Note 3. (4)Excludes $12 million and $11 million of long-term debt relating to CSEs -- FVO at December 31, 2016 and 2015, respectively. See Note 10. The aggregate maturities of long-term debt at December 31, 2016 for the next five years and thereafter are $20 million in 2017, $0 in each of 2018 and 2019, $346 million in 2020, $0 in 2021 and $1.2 billion thereafter. Unsecured senior debt which consists of senior notes and other notes rank highest in priority. Payments of interest and principal on the Company's surplus notes are subordinate to all other obligations and may be made only with the prior approval of the insurance department of the state of domicile. Debt Issuance -- Other Notes In December 2015, MetLife Private Equity Holdings, LLC ("MPEH"), a wholly-owned indirect investment subsidiary of Metropolitan Life Insurance Company, entered into a five-year credit agreement (the "MPEH Credit Agreement") and borrowed $350 million under term loans that mature in December 2020. The loans bear interest at a variable rate of three-month LIBOR plus 3.70%, payable quarterly. In connection with the borrowing, $6 million of costs were incurred which have been capitalized and are being amortized over the term of the loans. Additionally, the MPEH Credit Agreement provides for MPEH to borrow up to $100 million on a revolving basis at a variable rate of three-month LIBOR plus 3.70%, payable quarterly. There were no revolving loans outstanding under the MPEH Credit Agreement at both December 31, 2016 and 2015. Term loans and revolving loans borrowed under the MPEH Credit Agreement are non-recourse to Metropolitan Life Insurance Company. Debt Repayments In December 2015, a wholly-owned real estate subsidiary of the Company repaid in cash $110 million of its mortgage loans issued to Brighthouse Insurance due in January 2016. In November 2015, the Company repaid in cash, at maturity, $188 million of surplus notes issued to MetLife Mexico S.A., an affiliate. The redemption was approved by the New York Superintendent of Financial Services (the "Superintendent"). In November 2015, the Company repaid in cash, at maturity, $200 million of surplus notes. The redemption was approved by the Superintendent. During 2015, a wholly-owned real estate subsidiary of the Company repaid in cash $132 million of its 7.26% mortgage loans issued to Brighthouse Insurance due in January 2020. In November 2014, a wholly-owned real estate subsidiary of the Company repaid in cash $60 million of its 7.01% mortgage loans issued to Brighthouse Insurance due in January 2020. It also repaid in cash $60 million of its 4.67% mortgage loans issued to Brighthouse Insurance due in January 2017. In September 2014, the Company repaid in cash, at maturity, $217 million of surplus notes issued to MetLife Mexico S.A. The redemption was approved by the Superintendent. Short-term Debt Short-term debt with maturities of one year or less was as follows:
December 31, ----------------------------- 2016 2015 -------------- -------------- (Dollars in millions) Commercial paper......... $ 100 $ 100 Average daily balance.... $ 100 $ 100 Average days outstanding. 40 days 68 days
During the years ended December 31, 2016, 2015 and 2014, the weighted average interest rate on short-term debt was 0.42%, 0.15% and 0.10%, respectively. 108 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 11. Long-term and Short-term Debt (continued) Interest Expense Interest expense included in other expenses was $112 million, $122 million and $150 million for the years ended December 31, 2016, 2015 and 2014, respectively. These amounts include $52 million, $67 million and $88 million of interest expense related to affiliated debt for the years ended December 31, 2016, 2015 and 2014, respectively. Such amounts do not include interest expense on long-term debt related to CSEs. See Note 8. Credit and Committed Facilities At December 31, 2016, MetLife, Inc. and MetLife Funding, Inc., a wholly-owned subsidiary of Metropolitan Life Insurance Company ("MetLife Funding"), maintained a $4.0 billion unsecured revolving credit facility (the "Credit Facility"), and Missouri Reinsurance, Inc., a wholly-owned subsidiary of Metropolitan Life Insurance Company, had access to a committed bank facility of MetLife, Inc., which provides letters of credit for the benefit of certain affiliates of MetLife, Inc., including Metropolitan Life Insurance Company and certain of its subsidiaries, subject to bank consent (the "Committed Facility"). When drawn upon, these facilities bear interest at varying rates in accordance with the respective agreements. Credit Facility The Credit Facility is used for general corporate purposes, to support the borrowers' commercial paper programs and for the issuance of letters of credit. Total fees associated with the Credit Facility were $8 million, $4 million and $4 million for the years ended December 31, 2016, 2015 and 2014, respectively, and were included in other expenses. Information on the Credit Facility at December 31, 2016 was as follows:
Letters of Credit Maximum Used by the Letters of Credit Borrower(s) Expiration Capacity Company (1) Used by Affiliates (1) Drawdowns ---------------------------------------- ----------------- ----------------- ----------------- ---------------------- ---------- (In millions) MetLife, Inc. and MetLife Funding, Inc.. May 2019 (2) (3) $ 4,000 (2) (3) $ 202 $ 528 $ --
Unused Borrower(s) Commitments ---------------------------------------- ------------- MetLife, Inc. and MetLife Funding, Inc.. $ 3,270
------------- (1)MetLife, Inc. and MetLife Funding are severally liable for their respective obligations under the Credit Facility. MetLife Funding was not an applicant under letters of credit outstanding as of December 31, 2016 and is not responsible for any reimbursement obligations under such letters of credit. (2)All borrowings under the Credit Facility must be repaid by May 30, 2019, except that letters of credit outstanding upon termination may remain outstanding until May 30, 2020. (3)In December 2016, MetLife, Inc. and MetLife Funding entered into an agreement to amend their existing $4.0 billion unsecured revolving credit facility, which provides, among other things, that the facility will be amended and restated upon the completion of the proposed Separation and the satisfaction of certain other conditions. As amended and restated, the unsecured revolving credit facility will provide for borrowings and the issuance of letters of credit in an aggregate amount of up to $3.0 billion. All borrowings under this amended unsecured revolving credit facility must be repaid by December 20, 2021, except that letters of credit outstanding upon termination may remain outstanding until December 20, 2022. Committed Facility The letters of credit issued under the Committed Facility are used for collateral for certain of the Company's affiliated reinsurance liabilities. Total fees associated with the Committed Facility were $4 million for each of the years ended December 31, 2016, 2015 and 2014 and were included in other expenses. Missouri Reinsurance, Inc. had $255 million in letters of credit outstanding and there was no remaining availability under the Committed Facility at December 31, 2016. The Committed Facility matures on June 20, 2018. In addition to the Committed Facility, see "-- Debt Issuance -- Other Notes" for information about an undrawn line of credit facility in the amount of $100 million. Debt and Facility Covenants Certain of the Company's debt instruments and the Credit Facility contain various administrative, reporting, legal and financial covenants. The Company believes it was in compliance with all applicable covenants at December 31, 2016. 109 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity Stock-Based Compensation Plans The Company does not issue any awards payable in its common stock or options to purchase its common stock. An affiliate employs the personnel who conduct most of the Company's business. In accordance with a services agreement with that affiliate, the Company bears a proportionate share of stock-based compensation expense for those employees. Stock-based compensation expense relate to Stock Options, Performance Shares, and Restricted Stock Units under the MetLife, Inc. 2005 Stock and Incentive Compensation Plan and the MetLife, Inc. 2015 Stock and Incentive Compensation Plan, most of which MetLife, Inc. granted in the first quarter of each year. The Company's expense related to stock-based compensation included in other expenses was $89 million, $85 million and $100 million for the years ended December 31, 2016, 2015 and 2014, respectively. Statutory Equity and Income See Note 3 for information on the disposition of NELICO and GALIC. The states of domicile of Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries each impose risk-based capital ("RBC") requirements that were developed by the National Association of Insurance Commissioners ("NAIC"). Regulatory compliance is determined by a ratio of a company's total adjusted capital, calculated in the manner prescribed by the NAIC ("TAC") to its authorized control level RBC, calculated in the manner prescribed by the NAIC ("ACL RBC"), based on the statutory-based filed financial statements. Companies below specific trigger levels or ratios are classified by their respective levels, each of which requires specified corrective action. The minimum level of TAC before corrective action commences is twice ACL RBC ("CAL RBC"). The CAL RBC ratios for Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries were each in excess of 400% for all periods presented. Metropolitan Life Insurance Company's foreign insurance operations are regulated by applicable authorities of the countries in which each entity operates and are subject to minimum capital and solvency requirements in those countries before corrective action commences. The aggregate required capital and surplus of Metropolitan Life Insurance Company's foreign insurance operations was $37 million and the aggregate actual regulatory capital and surplus was $493 million as of the date of the most recent required capital adequacy calculation for each jurisdiction. Each of those foreign insurance operations exceeded minimum capital and solvency requirements of their respective countries for all periods presented. Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries prepare statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile. The NAIC has adopted the Codification of Statutory Accounting Principles ("Statutory Codification"). Statutory Codification is 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. Modifications by the various state insurance departments may impact the effect of Statutory Codification on the statutory capital and surplus of Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries. Statutory accounting principles 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, reporting of reinsurance agreements and valuing securities on a different basis. In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and tax basis not expected to reverse and become recoverable within three years. Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries have no material state prescribed accounting practices, except as described below. New York has adopted certain prescribed accounting practices, primarily consisting of the continuous Commissioners' Annuity Reserve Valuation Method, which impacts deferred annuities, and the New York Special Consideration Letter, which mandates certain assumptions in asset adequacy testing. The collective impact of these prescribed accounting practices decreased the statutory capital and surplus of MLIC for the years ended December 31, 2016 and 2015 by an amount of $909 million and $1.2 billion, respectively, in excess of the amount of the decrease had capital and surplus been measured under NAIC guidance. 110 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) The tables below present amounts from Metropolitan Life Insurance Company and its former U.S. insurance subsidiaries, which are derived from their respective statutory-basis financial statements as filed with the insurance regulators. Statutory net income (loss) was as follows:
Years Ended December 31, ----------------------------------- Company State of Domicile 2016 2015 2014 -------------------------------------------- ------------------- ----------- ----------- ----------- (In millions) Metropolitan Life Insurance Company (1)..... New York $ 3,444 $ 3,703 $ 1,487 New England Life Insurance Company (1)...... Massachusetts N/A $ 157 $ 303 General American Life Insurance Company (1). Missouri N/A $ 204 $ 129
------------- (1)In December 2016, MLIC distributed all of the issued and outstanding shares of common stock of each of NELICO and GALIC to MetLife, Inc., in the form of a non-cash extraordinary dividend. Statutory capital and surplus was as follows at:
December 31, ----------------------------- Company 2016 2015 -------------------------------------------- -------------- -------------- (In millions) Metropolitan Life Insurance Company (1)..... $ 11,195 $ 14,485 New England Life Insurance Company (1)...... N/A $ 632 General American Life Insurance Company (1). N/A $ 984
------------- (1)In December 2016, MLIC distributed all of the issued and outstanding shares of common stock of each of NELICO and GALIC to MetLife, Inc., in the form of a non-cash extraordinary dividend. Dividend Restrictions The table below sets forth the dividends permitted to be paid by Metropolitan Life Insurance Company to MetLife, Inc. without insurance regulatory approval and dividends paid:
2017 2016 2015 ------------------- ---------------- ------------------ Permitted Without Company Approval Paid (1) (2) Paid (1) ------------------------------------ ------------------- ---------------- ------------------ (In millions) Metropolitan Life Insurance Company. $ 2,723 $ 5,740 $ 1,489
------------- (1)Reflects all amounts paid, including those requiring regulatory approval. (2)In 2016, MLIC paid an ordinary cash dividend to MetLife, Inc. in the amount of $3.6 billion. In addition, in December 2016, MLIC distributed to MetLife, Inc. as a non-cash extraordinary dividend all of the issued and outstanding shares of common stock of each of NELICO and GALIC in the amount of $981 million and $1.2 billion, respectively, as calculated on a statutory basis. 111 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) Effective for dividends paid during 2016 and going forward, the New York Insurance Law was amended permitting Metropolitan Life Insurance Company without prior insurance regulatory clearance, to pay stockholder dividends to MetLife, Inc. in any calendar year based on either of two standards. Under one standard, Metropolitan Life Insurance Company is permitted, without prior insurance regulatory clearance, to pay dividends out of earned surplus (defined as positive "unassigned funds (surplus)" excluding 85% of the change in net unrealized capital gains or losses (less capital gains tax), for the immediately preceding calendar year), in an amount up to the greater of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains), not to exceed 30% of surplus to policyholders as of the end of the immediately preceding calendar year. In addition, under this standard, Metropolitan Life Insurance Company may not, without prior insurance regulatory clearance, pay any dividends in any calendar year immediately following a calendar year for which its net gain from operations, excluding realized capital gains, was negative. Under the second standard, if dividends are paid out of other than earned surplus, Metropolitan Life Insurance Company may, without prior insurance regulatory clearance, pay an amount up to the lesser of: (i) 10% of its surplus to policyholders as of the end of the immediately preceding calendar year, or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding realized capital gains). In addition, Metropolitan Life Insurance Company will be permitted to pay a dividend to MetLife, Inc. in excess of the amounts allowed under both standards only if it files notice of its intention to declare such a dividend and the amount thereof with the Superintendent and the Superintendent either approves the distribution of the dividend or does not disapprove the dividend within 30 days of its filing. Under New York 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 stockholders. The table below sets forth the dividends paid by Metropolitan Life Insurance Company's former U.S. insurance subsidiaries to Metropolitan Life Insurance Company without regulatory approval:
2017 2016 2015 ------------------- ----------------- ------------------ Permitted Without Company Approval (1) Paid (2) Paid (2) --------------------------------------------- ------------------- ----------------- ------------------ (In millions) New England Life Insurance Company (1)...... N/A $ -- $ 199 General American Life Insurance Company (1). N/A $ -- $ --
------------- (1)As MLIC distributed all of the issued and outstanding common stock of each of NELICO and GALIC to MetLife, Inc. in December 2016, there are no dividend amounts that may be paid to Metropolitan Life Insurance Company in 2017. See Note 3. (2)Includes all amounts paid, including those requiring regulatory approval. 112 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) Accumulated Other Comprehensive Income (Loss) Information regarding changes in the balances of each component of AOCI attributable to Metropolitan Life Insurance Company, was as follows:
Unrealized Foreign Defined Investment Gains Unrealized Currency Benefit (Losses), Net of Gains (Losses) Translation Plans Related Offsets (1) on Derivatives Adjustments Adjustment Total -------------------- -------------- ------------- -------------- ------------- (In millions) Balance at December 31, 2013............ $ 3,468 $ 236 $ 31 $ (1,577) $ 2,158 OCI before reclassifications............ 4,095 606 (44) (1,181) 3,476 Deferred income tax benefit (expense)... (1,409) (212) 10 406 (1,205) ------------- ------------- ----------- -------------- ------------- AOCI before reclassifications, net of income tax........................... 6,154 630 (3) (2,352) 4,429 Amounts reclassified from AOCI.......... 70 682 -- 180 932 Deferred income tax benefit (expense)... (24) (239) -- (64) (327) ------------- ------------- ----------- -------------- ------------- Amounts reclassified from AOCI, net of income tax........................... 46 443 -- 116 605 ------------- ------------- ----------- -------------- ------------- Balance at December 31, 2014............ 6,200 1,073 (3) (2,236) 5,034 OCI before reclassifications............ (4,839) (19) (101) 113 (4,846) Deferred income tax benefit (expense)... 1,715 6 30 (40) 1,711 ------------- ------------- ----------- -------------- ------------- AOCI before reclassifications, net of income tax........................... 3,076 1,060 (74) (2,163) 1,899 Amounts reclassified from AOCI.......... 405 578 -- 229 1,212 Deferred income tax benefit (expense)... (144) (202) -- (80) (426) ------------- ------------- ----------- -------------- ------------- Amounts reclassified from AOCI, net of income tax........................... 261 376 -- 149 786 ------------- ------------- ----------- -------------- ------------- Balance at December 31, 2015............ 3,337 1,436 (74) (2,014) 2,685 OCI before reclassifications............ 792 (141) (11) (4) 636 Deferred income tax benefit (expense)... (286) 49 3 (5) (239) ------------- ------------- ----------- -------------- ------------- AOCI before reclassifications, net of income tax........................... 3,843 1,344 (82) (2,023) 3,082 Amounts reclassified from AOCI.......... 71 177 -- 191 439 Deferred income tax benefit (expense)... (26) (62) -- (60) (148) ------------- ------------- ----------- -------------- ------------- Amounts reclassified from AOCI, net of income tax........................... 45 115 -- 131 291 Dispositions (2)........................ (456) -- 23 30 (403) Deferred income tax benefit (expense)... 160 -- (8) (3) 149 ------------- ------------- ----------- -------------- ------------- Dispositions, net of income tax........ (296) -- 15 27 (254) ------------- ------------- ----------- -------------- ------------- Balance at December 31, 2016............ $ 3,592 $ 1,459 $ (67) $ (1,865) $ 3,119 ============= ============= =========== ============== =============
------------- (1)See Note 8 for information on offsets to investments related to future policy benefits, DAC, VOBA and DSI, and the policyholder dividend obligation. (2)See Note 3. 113 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 12. Equity (continued) Information regarding amounts reclassified out of each component of AOCI was as follows:
Consolidated Statement of Operations and Comprehensive Income (Loss) AOCI Components Amounts Reclassified from AOCI Locations ------------------------------------------------- --------------------------------------- ------------------------------ Years Ended December 31, --------------------------------------- 2016 2015 2014 ----------- ------------ ------------ (In millions) Net unrealized investment gains (losses):......... Net unrealized investment gains (losses).......... $ 10 $ (208) $ (103) Net investment gains (losses) Net unrealized investment gains (losses).......... 21 31 40 Net investment income Net unrealized investment gains (losses).......... (102) (228) (7) Net derivative gains (losses) ----------- ------------ ------------ Net unrealized investment gains (losses), before income tax..................................... (71) (405) (70) Income tax (expense) benefit...................... 26 144 24 ----------- ------------ ------------ Net unrealized investment gains (losses), net of income tax..................................... (45) (261) (46) =========== ============ ============ Unrealized gains (losses) on derivatives -- cash flow hedges: Interest rate swaps............................... 57 83 41 Net derivative gains (losses) Interest rate swaps............................... 12 11 9 Net investment income Interest rate forwards............................ (1) 4 (8) Net derivative gains (losses) Interest rate forwards............................ 3 2 2 Net investment income Foreign currency swaps............................ (251) (679) (725) Net derivative gains (losses) Foreign currency swaps............................ (1) (1) (2) Net investment income Credit forwards................................... 3 1 -- Net derivative gains (losses) Credit forwards................................... 1 1 1 Net investment income ----------- ------------ ------------ Gains (losses) on cash flow hedges, before income tax..................................... (177) (578) (682) Income tax (expense) benefit...................... 62 202 239 ----------- ------------ ------------ Gains (losses) on cash flow hedges, net of income tax..................................... (115) (376) (443) =========== ============ ============ Defined benefit plans adjustment: (1)............. Amortization of net actuarial gains (losses)...... (198) (233) (180) Amortization of prior service (costs) credit...... 7 4 -- ----------- ------------ ------------ Amortization of defined benefit plan items, before income tax.............................. (191) (229) (180) Income tax (expense) benefit...................... 60 80 64 ----------- ------------ ------------ Amortization of defined benefit plan items, net of income tax.................................. (131) (149) (116) =========== ============ ============ Total reclassifications, net of income tax....... $ (291) $ (786) $ (605) =========== ============ ============
------------- (1)These AOCI components are included in the computation of net periodic benefit costs. See Note 14. 114 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Other Expenses Information on other expenses was as follows:
Years Ended December 31, ------------------------------------------- 2016 2015 2014 ------------- ------------- ------------- (In millions) Compensation............................ $ 2,116 $ 2,056 $ 2,257 Pension, postretirement and postemployment benefit costs........... 251 241 322 Commissions............................. 687 685 828 Volume-related costs.................... 303 221 70 Affiliated expenses on ceded and assumed reinsurance.................... 923 807 1,009 Capitalization of DAC................... (332) (482) (424) Amortization of DAC and VOBA............ 441 742 695 Interest expense on debt................ 112 122 151 Premium taxes, licenses and fees........ 365 355 328 Professional services................... 924 1,133 1,013 Rent and related expenses, net of sublease income........................ 133 87 128 Other (1)............................... (120) 291 (306) ------------- ------------- ------------- Total other expenses................... $ 5,803 $ 6,258 $ 6,071 ============= ============= =============
------------- (1)See Note 15 for information on the charge related to income tax for the year ended December 31, 2015. Capitalization of DAC and Amortization of DAC and VOBA See Note 5 for additional information on DAC and VOBA including impacts of capitalization and amortization. See also Note 7 for a description of the DAC amortization impact associated with the closed block. Interest Expense on Debt See Note 11 for additional information on interest expense on debt. Affiliated Expenses Commissions, capitalization of DAC and amortization of DAC and VOBA include the impact of affiliated reinsurance transactions. See Notes 6, 11 and 18 for a discussion of affiliated expenses included in the table above. Restructuring Charges In 2016, the Company completed a previous enterprise-wide strategic initiative. These restructuring charges are included in other expenses. As the expenses relate to an enterprise-wide initiative, they are reported in Corporate & Other. Information regarding restructuring charges was as follows:
Years Ended December 31, ---------------------------------------------------------------------------------------------- 2016 2015 2014 ------------------------------ ------------------------------ ------------------------------ Lease and Lease and Lease and Asset Asset Asset Severance Impairment Total Severance Impairment Total Severance Impairment Total --------- ---------- ------- --------- ---------- ------- --------- ---------- ------- (In millions) Balance at January 1,........ $ 17 $ 4 $ 21 $ 31 $ 6 $ 37 $ 39 $ 6 $ 45 Restructuring charges........ -- 1 1 52 4 56 66 8 74 Cash payments................ (17) (4) (21) (66) (6) (72) (74) (8) (82) --------- ---------- ------- --------- ---------- ------- --------- ---------- ------- Balance at December 31,...... $ -- $ 1 $ 1 $ 17 $ 4 $ 21 $ 31 $ 6 $ 37 ========= ======== ======= ========= ========== ======= ========= ========== ======= Total restructuring charges incurred since inception of initiative.................. $ 306 $ 47 $ 353 $ 306 $ 46 $ 352 $ 254 $ 42 $ 296 ========= ======== ======= ========= ========== ======= ========= ========== =======
115 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans Pension and Other Postretirement Benefit Plans The Company sponsors and administers various qualified and nonqualified defined benefit pension plans and other postretirement employee benefit plans covering employees and sales representatives who meet specified eligibility requirements. Pension benefits are provided utilizing either a traditional formula or cash balance formula. The traditional formula provides benefits that are primarily based upon years of credited service and either final average or career average earnings. The cash balance formula utilizes hypothetical or notional accounts which credit participants with benefits equal to a percentage of eligible pay, as well as interest credits, determined annually based upon the annual rate of interest on 30-year U.S. Treasury securities, for each account balance. The nonqualified pension plans provide supplemental benefits in excess of limits applicable to a qualified plan. Participating affiliates are allocated an equitable share of net expense related to the plans, proportionate to other expenses being allocated to these affiliates. The Company also provides certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees. Employees of the Company who were hired prior to 2003 (or, in certain cases, rehired during or after 2003) and meet age and service criteria while working for the Company may become eligible for these other postretirement benefits, at various levels, in accordance with the applicable plans. Virtually all retirees, or their beneficiaries, contribute a portion of the total costs of postretirement medical benefits. Employees hired after 2003 are not eligible for any employer subsidy for postretirement medical benefits. Participating affiliates are allocated a proportionate share of net expense and contributions related to the postemployment and other postretirement plans. 116 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Obligations and Funded Status
December 31, -------------------------------------------------------------------- 2016 2015 ---------------------------------- -------------------------------- Other Other Pension Postretirement Pension Postretirement Benefits (1) Benefits Benefits (1) Benefits ---------------- ---------------- -------------- ---------------- (In millions) Change in benefit obligations: Benefit obligations at January 1,...................... $ 9,760 $ 1,905 $ 10,262 $ 2,129 Service costs.......................................... 203 9 217 15 Interest costs......................................... 415 82 404 88 Plan participants' contributions....................... -- 33 -- 30 Net actuarial (gains) losses........................... 298 (119) (626) (233) Divestitures, settlements and curtailments (2)......... (270) (8) -- -- Change in benefits and other........................... (11) (43) -- (14) Benefits paid.......................................... (558) (117) (497) (109) Effect of foreign currency translation................. -- -- -- (1) ---------------- ---------------- -------------- ---------------- Benefit obligations at December 31,.................. 9,837 1,742 9,760 1,905 ---------------- ---------------- -------------- ---------------- Change in plan assets: Estimated fair value of plan assets at January 1,...... 8,490 1,372 8,750 1,426 Actual return on plan assets........................... 620 75 (138) 3 Divestitures (2)....................................... (155) -- -- -- Plan participants' contributions....................... -- 33 -- 30 Employer contributions................................. 324 16 375 22 Benefits paid.......................................... (558) (117) (497) (109) ---------------- ---------------- -------------- ---------------- Estimated fair value of plan assets at December 31,.. 8,721 1,379 8,490 1,372 ---------------- ---------------- -------------- ---------------- Over (under) funded status at December 31,........... $ (1,116) $ (363) $ (1,270) $ (533) ================ ================ ============== ================ Amounts recognized on the consolidated balance sheets: Other assets........................................... $ -- $ -- $ -- $ -- Other liabilities...................................... (1,116) (363) (1,270) (533) ---------------- ---------------- -------------- ---------------- Net amount recognized................................ $ (1,116) $ (363) $ (1,270) $ (533) ================ ================ ============== ================ AOCI: Net actuarial (gains) losses........................... $ 2,839 $ 93 $ 2,894 $ 221 Prior service costs (credit)........................... (11) (48) (1) (14) ---------------- ---------------- -------------- ---------------- AOCI, before income tax.............................. $ 2,828 $ 45 $ 2,893 $ 207 ================ ================ ============== ================ Accumulated benefit obligation....................... $ 9,557 N/A $ 9,439 N/A ================ ==============
------------- (1) Includes nonqualified unfunded plans, for which the aggregate PBO was $1.1 billion at both December 31, 2016 and 2015. (2) Divestitures for the year ended December 31, 2016 include amounts related to the disposition of NELICO and GALIC. See Note 3. 117 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Information for pension plans with PBOs in excess of plan assets and accumulated benefit obligations ("ABO") in excess of plan assets was as follows at:
December 31, ----------------------------------------------------------------- 2016 2015 2016 2015 ------------ ------------ ------------ ------------ PBO Exceeds Estimated Fair Value ABO Exceeds Estimated Fair Value of Plan Assets of Plan Assets -------------------------------- -------------------------------- (In millions) Projected benefit obligations....... $ 9,837 $ 9,759 $ 1,093 $ 1,832 Accumulated benefit obligations..... $ 9,557 $ 9,439 $ 1,046 $ 1,751 Estimated fair value of plan assets. $ 8,721 $ 8,490 $ -- $ 646
Net Periodic Benefit Costs The components of net periodic benefit costs and other changes in plan assets and benefit obligations recognized in OCI were as follows:
Years Ended December 31, -------------------------------------------------------------------------------------- 2016 2015 2014 --------------------------- --------------------------- ---------------------------- Other Other Other Pension Postretirement Pension Postretirement Pension Postretirement Benefits Benefits Benefits Benefits Benefits Benefits ---------- --------------- ---------- --------------- ----------- --------------- (In millions) Net periodic benefit costs: Service costs........................... $ 203 $ 9 $ 217 $ 15 $ 200 $ 14 Interest costs.......................... 415 82 404 88 437 92 Settlement and curtailment costs (1).... 1 30 -- -- 14 2 Expected return on plan assets.......... (527) (74) (538) (80) (475) (75) Amortization of net actuarial (gains) losses................................. 188 10 190 43 169 11 Amortization of prior service costs (credit)............................... (1) (6) (1) (3) 1 (1) Allocated to affiliates................. (64) (9) (59) (18) (54) (11) ---------- --------------- ---------- --------------- ----------- --------------- Total net periodic benefit costs (credit)............................. 215 42 213 45 292 32 ---------- --------------- ---------- --------------- ----------- --------------- Other changes in plan assets and benefit obligations recognized in OCI: Net actuarial (gains) losses............ 176 (121) 50 (156) 996 222 Prior service costs (credit)............ (11) (40) -- (7) (18) (12) Dispositions (2)........................ (32) 2 -- -- -- -- Amortization of net actuarial (gains) losses................................. (188) (10) (190) (43) (169) (11) Amortization of prior service (costs) credit................................. 1 6 1 3 (1) 1 ---------- --------------- ---------- --------------- ----------- --------------- Total recognized in OCI................ (54) (163) (139) (203) 808 200 ---------- --------------- ---------- --------------- ----------- --------------- Total recognized in net periodic benefit costs and OCI................ $ 161 $ (121) $ 74 $ (158) $ 1,100 $ 232 ========== =============== ========== =============== =========== ===============
------------- (1) The Company recognized curtailment charges on certain postretirement benefit plans in connection with the sale to MassMutual of MetLife, Inc.'s U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MSI. See Note 18. (2) See Note 3. 118 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The estimated net actuarial (gains) losses and prior service costs (credit) for the defined benefit pension plans and other postretirement benefit plans that will be amortized from AOCI into net periodic benefit costs over the next year are $175 million and ($1) million, and $0 and ($22) million, respectively. Assumptions Assumptions used in determining benefit obligations were as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- December 31, 2016 Weighted average discount rate..... 4.30% 4.45% Rate of compensation increase...... 2.25% - 8.50% N/A December 31, 2015 Weighted average discount rate..... 4.50% 4.60% Rate of compensation increase...... 2.25% - 8.50% N/A
Assumptions used in determining net periodic benefit costs were as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- Year Ended December 31, 2016 Weighted average discount rate.......................... 4.13% 4.37% Weighted average expected rate of return on plan assets. 6.00% 5.53% Rate of compensation increase........................... 2.25% - 8.50% N/A Year Ended December 31, 2015 Weighted average discount rate.......................... 4.10% 4.10% Weighted average expected rate of return on plan assets. 6.25% 5.70% Rate of compensation increase........................... 2.25% - 8.50% N/A Year Ended December 31, 2014 Weighted average discount rate.......................... 5.15% 5.15% Weighted average expected rate of return on plan assets. 6.25% 5.70% Rate of compensation increase........................... 3.50% - 7.50% N/A
The weighted average discount rate is determined annually based on the yield, measured on a yield to worst basis, of a hypothetical portfolio constructed of high quality debt instruments available on the valuation date, which would provide the necessary future cash flows to pay the aggregate PBO when due. The weighted average 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 rate of 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 average expected rate of return on plan assets for use in that plan's valuation in 2017 is currently anticipated to be 6.00% for pension benefits and 5.35% for other postretirement benefits. 119 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:
December 31, --------------------------------------------- 2016 2015 ---------------------- ---------------------- Before Age 65 and Before Age 65 and Age 65 older Age 65 older --------- ------------ --------- ------------ Following year............................................. 6.8% 13% 6.3% 10.3% Ultimate rate to which cost increase is assumed to decline. 4.0% 4.3% 4.2% 4.6% Year in which the ultimate trend rate is reached........... 2077 2092 2086 2091
Assumed healthcare costs trend rates may have a significant effect on the amounts reported for healthcare plans. A 1% change in assumed healthcare costs trend rates would have the following effects as of December 31, 2016:
One Percent One Percent Increase Decrease ------------- ------------- (In millions) Effect on total of service and interest costs components. $ 12 $ (10) Effect of accumulated postretirement benefit obligations. $ 215 $ (177)
Plan Assets The Company provides employees with benefits under various Employee Retirement Income Security Act of 1974 ("ERISA") benefit plans. These include qualified pension plans, postretirement medical plans and certain retiree life insurance coverage. The assets of the Company's qualified pension plans are held in an insurance group annuity contract, and the vast majority of the assets of the postretirement medical plan and backing the retiree life coverage are held in a trust which largely utilizes insurance contracts to hold the assets. All of these contracts are issued by the Company's insurance affiliates, and the assets under the contracts are held in insurance separate accounts that have been established by the Company. The underlying assets of the separate accounts are principally comprised of cash and cash equivalents, short-term investments, fixed maturity and equity securities, derivatives, real estate, private equity investments and hedge fund investments. The insurance contract provider engages investment management firms ("Managers") to serve as sub-advisors for the separate accounts based on the specific investment needs and requests identified by the plan fiduciary. These Managers have portfolio management discretion over the purchasing and selling of securities and other investment assets pursuant to the respective investment management agreements and guidelines established for each insurance separate account. The assets of the qualified pension plans and postretirement medical plans (the "Invested Plans") are well diversified across multiple asset categories and across a number of different Managers, with the intent of minimizing risk concentrations within any given asset category or with any of the given Managers. 120 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The Invested Plans, other than those held in participant directed investment accounts, are managed in accordance with investment policies consistent with the longer-term nature of related benefit obligations and within prudent risk parameters. Specifically, investment policies are oriented toward (i) maximizing the Invested Plan's funded status; (ii) minimizing the volatility of the Invested Plan's funded status; (iii) generating asset returns that exceed liability increases; and (iv) targeting rates of return in excess of a custom benchmark and industry standards over appropriate reference time periods. These goals are expected to be met through identifying appropriate and diversified asset classes and allocations, ensuring adequate liquidity to pay benefits and expenses when due and controlling the costs of administering and managing the Invested Plan's investments. Independent investment consultants are periodically used to evaluate the investment risk of the Invested Plan's assets relative to liabilities, analyze the economic and portfolio impact of various asset allocations and management strategies and recommend asset allocations. Derivative contracts may be used to reduce investment risk, to manage duration and to replicate the risk/return profile of an asset or asset class. Derivatives may not be used to leverage a portfolio in any manner, such as to magnify exposure to an asset, asset class, interest rates or any other financial variable. Derivatives are also prohibited for use in creating exposures to securities, currencies, indices or any other financial variable that is otherwise restricted. The table below summarizes the actual weighted average allocation of the estimated fair value of total plan assets by asset class at December 31 for the years indicated and the approved target allocation by major asset class at December 31, 2016 for the Invested Plans:
December 31, --------------------------------------------------------------------------------- 2016 2015 --------------------------------------------------------------------------------- Other Postretirement Other Postretirement Pension Benefits Benefits (2) Pension Benefits Benefits (2) -------------------- -------------------- ------------------ -------------------- Actual Actual Actual Actual Target Allocation Target Allocation Allocation Allocation -------- ----------- -------- ----------- ------------------ -------------------- Asset Class (1) Fixed maturity securities 82% 81% 76% 76% 75% 75% Equity securities (3).... 10% 11% 24% 24% 15% 25% Alternative securities (4).......... 8% 8% --% --% 10% --% ----------- ----------- ------------------ -------------------- Total assets............ 100% 100% 100% 100% =========== =========== ================== ====================
------------- (1) Certain prior year amounts have been reclassified from alternative securities into fixed maturity securities to conform to the current year presentation. (2) Other postretirement benefits do not reflect postretirement life's plan assets invested in fixed maturity securities. (3) Equity securities percentage includes derivative assets. (4) Alternative securities primarily include hedges, private equity and real estate funds. Estimated Fair Value The pension and other postretirement benefit plan assets are categorized into a three-level fair value hierarchy, as described in Note 10, based upon the significant input with the lowest level in its valuation. The Level 2 asset category includes certain separate accounts that are primarily invested in liquid and readily marketable securities. The estimated fair value of such separate accounts is based upon reported NAV provided by fund managers and this value represents the amount at which transfers into and out of the respective separate account are effected. These separate accounts provide reasonable levels of price transparency and can be corroborated through observable market data. Directly held investments are primarily invested in U.S. and foreign government and corporate securities. The Level 3 asset category includes separate accounts that are invested in assets that provide little or no price transparency due to the infrequency with which the underlying assets trade and generally require additional time to liquidate in an orderly manner. Accordingly, the values for separate accounts invested in these alternative asset classes are based on inputs that cannot be readily derived from or corroborated by observable market data. 121 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) The pension and other postretirement plan assets measured at estimated fair value on a recurring basis and their corresponding placement in the fair value hierarchy are summarized as follows:
December 31, 2016 ------------------------------------------------------------------------------------ Pension Benefits Other Postretirement Benefits ------------------------------------------ ----------------------------------------- Fair Value Hierarchy Fair Value Hierarchy ------------------------------ ----------------------------- Total Total Estimated Estimated Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Fair Value --------- --------- --------- ----------- --------- --------- --------- ----------- (In millions) Assets Fixed maturity securities: Corporate......................... $ -- $ 3,406 $ -- $ 3,406 $ 20 $ 305 $ -- $ 325 U.S. government bonds............. 1,655 4 -- 1,659 210 1 -- 211 Foreign bonds..................... -- 775 -- 775 -- 72 -- 72 Federal agencies.................. -- 196 -- 196 -- 28 -- 28 Municipals........................ -- 313 -- 313 -- 23 -- 23 Short-term investments............ 118 212 -- 330 13 416 -- 429 Other (1)......................... -- 362 9 371 -- 55 -- 55 --------- --------- --------- ----------- --------- --------- --------- ----------- Total fixed maturity securities. 1,773 5,268 9 7,050 243 900 -- 1,143 --------- --------- --------- ----------- --------- --------- --------- ----------- Equity securities: Common stock - domestic........... 474 -- -- 474 113 -- -- 113 Common stock - foreign............ 380 -- -- 380 122 -- -- 122 --------- --------- --------- ----------- --------- --------- --------- ----------- Total equity securities......... 854 -- -- 854 235 -- -- 235 --------- --------- --------- ----------- --------- --------- --------- ----------- Other investments................. -- 105 634 739 -- -- -- -- Derivative assets................. 16 (2) 64 78 1 -- -- 1 --------- --------- --------- ----------- --------- --------- --------- ----------- Total assets.................... $ 2,643 $ 5,371 $ 707 $ 8,721 $ 479 $ 900 $ -- $ 1,379 ========= ========= ========= =========== ========= ========= ========= ===========
122 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued)
December 31, 2015 ----------------------------------------------------------------------------------- Pension Benefits Other Postretirement Benefits ----------------------------------------- ----------------------------------------- Fair Value Hierarchy Fair Value Hierarchy ----------------------------- ----------------------------- Total Total Estimated Estimated Level 1 Level 2 Level 3 Fair Value Level 1 Level 2 Level 3 Fair Value --------- --------- --------- ----------- --------- --------- --------- ----------- (In millions) Assets Fixed maturity securities: Corporate......................... $ -- $ 2,905 $ 78 $ 2,983 $ 18 $ 280 $ 1 $ 299 U.S. government bonds............. 994 493 -- 1,487 193 12 -- 205 Foreign bonds..................... -- 677 17 694 -- 61 -- 61 Federal agencies.................. -- 228 -- 228 -- 34 -- 34 Municipals........................ -- 302 -- 302 -- 55 -- 55 Short-term investments (2)........ 10 304 -- 314 1 431 -- 432 Other (1), (2).................... 9 403 7 419 -- 47 -- 47 --------- --------- --------- ----------- --------- --------- --------- ----------- Total fixed maturity securities. 1,013 5,312 102 6,427 212 920 1 1,133 --------- --------- --------- ----------- --------- --------- --------- ----------- Equity securities: Common stock - domestic........... 751 24 -- 775 126 -- -- 126 Common stock - foreign............ 378 -- -- 378 111 -- -- 111 --------- --------- --------- ----------- --------- --------- --------- ----------- Total equity securities......... 1,129 24 -- 1,153 237 -- -- 237 --------- --------- --------- ----------- --------- --------- --------- ----------- Other investments................. -- 84 722 806 -- -- -- -- Derivative assets................. 26 3 75 104 2 -- -- 2 --------- --------- --------- ----------- --------- --------- --------- ----------- Total assets.................... $ 2,168 $ 5,423 $ 899 $ 8,490 $ 451 $ 920 $ 1 $ 1,372 ========= ========= ========= =========== ========= ========= ========= ===========
------------- (1) Other primarily includes money market securities, mortgage-backed securities, collateralized mortgage obligations and ABS. (2) The prior year amounts have been reclassified into fixed maturity securities to conform to the current year presentation. 123 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) A rollforward of all pension and other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs was as follows:
Fair Value Measurements Using Significant Unobservable Inputs (Level 3) ---------------------------------------------------------------------- Pension Benefits ---------------------------------------------------------------------- Fixed Maturity Securities ---------------------------------------- Foreign Other Derivative Corporate Bonds Other (1) Investments Assets ----------- ---------- ----------- ------------- ------------ (In millions) Balance, January 1, 2015......................... $ 80 $ 17 $ 8 $ 743 $ 72 Realized gains (losses).......................... 1 -- -- -- (11) Unrealized gains (losses)........................ (5) -- 1 55 (9) Purchases, sales, issuances and settlements, net. 8 1 (1) (76) 23 Transfers into and/or out of Level 3............. (6) (1) (1) -- -- ----------- ---------- ----------- ------------- ------------ Balance, December 31, 2015....................... $ 78 $ 17 $ 7 $ 722 $ 75 Realized gains (losses).......................... 3 -- -- (1) 3 Unrealized gains (losses)........................ 3 (4) 1 32 (18) Purchases, sales, issuances and settlements, net. (22) (3) -- (119) 6 Transfers into and/or out of Level 3............. (62) (10) 1 -- (2) ----------- ---------- ----------- ------------- ------------ Balance, December 31, 2016....................... $ -- $ -- $ 9 $ 634 $ 64 =========== ========== =========== ============= ============
------------- (1) Other includes ABS and collateralized mortgage obligations. Other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs were not significant for the years ended December 31, 2016 and 2015. Expected Future Contributions and Benefit Payments It is the Company's practice to make contributions to the qualified pension plan to comply with minimum funding requirements of ERISA. In accordance with such practice, no contributions are required for 2017. The Company expects to make discretionary contributions to the qualified pension plan of $225 million in 2017. For information on employer contributions, see "-- Obligations and Funded Status." Benefit payments due under the nonqualified pension plans are primarily funded from the Company's general assets as they become due under the provision of the plans, therefore benefit payments equal employer contributions. The Company expects to make contributions of $70 million to fund the benefit payments in 2017. Postretirement benefits are either: (i) not vested under law; (ii) a non-funded obligation of the Company; or (iii) both. Current regulations do not require funding for these benefits. The Company uses its general assets, net of participant's contributions, to pay postretirement medical claims as they come due. As permitted under the terms of the governing trust document, the Company may be reimbursed from plan assets for postretirement medical claims paid from their general assets. The Company expects to make contributions of $50 million towards benefit obligations in 2017 to pay postretirement medical claims. 124 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) Gross benefit payments for the next 10 years, which reflect expected future service where appropriate, are expected to be as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- (In millions) 2017......................................... $ 534 $ 83 2018......................................... $ 547 $ 85 2019......................................... $ 559 $ 91 2020......................................... $ 580 $ 93 2021......................................... $ 587 $ 95 2022-2026.................................... $ 3,210 $ 494
Additional Information As previously discussed, most of the assets of the pension benefit plans are held in a group annuity contract issued by the Company while some of the assets of the postretirement benefit plans are held in a trust which largely utilizes life insurance contracts issued by the Company to hold such assets. Total revenues from these contracts recognized on the consolidated statements of operations were $57 million, $55 million and $50 million for the years ended December 31, 2016, 2015 and 2014, respectively, and included policy charges and net investment income from investments backing the contracts and administrative fees. Total investment income (loss), including realized and unrealized gains (losses), credited to the account balances was $660 million, ($130) million and $1.2 billion for the years ended December 31, 2016, 2015 and 2014, respectively. The terms of these contracts are consistent in all material respects with those the Company offers to unaffiliated parties that are similarly situated. Defined Contribution Plans The Company sponsors defined contribution plans for substantially all Company employees under which a portion of employee contributions are matched. The Company contributed $73 million, $72 million and $68 million for the years ended December 31, 2016, 2015 and 2014, respectively. 15. Income Tax The provision for income tax from continuing operations was as follows:
Years Ended December 31, -------------------------------------- 2016 2015 2014 ----------- ----------- ------------- (In millions) Current: Federal....................... $ 675 $ 1,384 $ 901 State and local............... 5 20 3 Foreign....................... 40 36 74 ----------- ----------- ------------- Subtotal.................... 720 1,440 978 ----------- ----------- ------------- Deferred: Federal....................... (531) 315 538 Foreign....................... 18 27 16 ----------- ----------- ------------- Subtotal.................... (513) 342 554 ----------- ----------- ------------- Provision for income tax expense (benefit).......... $ 207 $ 1,782 $ 1,532 =========== =========== =============
125 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The Company's income (loss) from continuing operations before income tax expense (benefit) from domestic and foreign operations were as follows:
Years Ended December 31, ------------------------ 2016 2015 2014 ------- ------- ------- (In millions) Income (loss) from continuing operations: Domestic...................... $2,401 $4,467 $5,335 Foreign....................... (438) 72 56 ------- ------- ------- Total....................... $1,963 $4,539 $5,391 ======= ======= =======
The reconciliation of the income tax provision at the U.S. statutory rate to the provision for income tax as reported for continuing operations was as follows:
Years Ended December 31, ------------------------ 2016 2015 2014 ------ ------- ------- (In millions) Tax provision at U.S. statutory rate.............. $ 687 $1,589 $1,887 Tax effect of: Dividend received deduction... (79) (82) (82) Tax-exempt income............. (38) (24) (40) Prior year tax (1)............ (33) 558 11 Low income housing tax credits (270) (221) (205) Other tax credits............. (98) (68) (66) Foreign tax rate differential. 1 (4) -- Change in valuation allowance. (1) (1) -- Other, net.................... 38 35 27 ------ ------- ------- Provision for income tax expense (benefit).......... $ 207 $1,782 $1,532 ====== ======= =======
------------- (1) As discussed further below, for the year ended December 31, 2015, prior year tax includes a $557 million non-cash charge related to an uncertain tax position. 126 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) Deferred income tax represents the tax effect of the differences between the book and tax bases of assets and liabilities. Net deferred income tax assets and liabilities consisted of the following at:
December 31, --------------------- 2016 2015 ----------- -------- (In millions) Deferred income tax assets: Policyholder liabilities and receivables... $ 174 $ 1,888 Net operating loss carryforwards........... 27 26 Employee benefits.......................... 828 922 Tax credit carryforwards................... 947 700 Litigation-related and government mandated. 212 231 Other...................................... 460 438 ----------- -------- Total gross deferred income tax assets.... 2,648 4,205 Less: Valuation allowance.................. 20 21 ----------- -------- Total net deferred income tax assets...... 2,628 4,184 ----------- -------- Deferred income tax liabilities:........... Investments, including derivatives......... 1,234 3,025 Intangibles................................ 53 53 DAC........................................ 1,150 1,461 Net unrealized investment gains............ 2,693 2,528 Other...................................... 1 5 ----------- -------- Total deferred income tax liabilities..... 5,131 7,072 ----------- -------- Net deferred income tax asset (liability). $ (2,503) $(2,888) =========== ========
The Company also has recorded a valuation allowance benefit of $1 million related to certain state net operating loss carryforwards for the year ended December 31, 2016. 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 state 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. The following table sets forth the domestic and state net operating loss carryforwards for tax purposes at December 31, 2016.
Net Operating Loss Carryforwards ---------------------------------- Domestic State ------------ ------------- (In millions) Expiration: 2017-2021... $ -- $ 38 2022-2026... -- 59 2027-2031... -- 29 2032-2036... 19 2 Indefinite.. -- -- ------------ ------------- $ 19 $ 128 ============ =============
127 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The following table sets forth the general business credits, foreign tax credits, and other credit carryforwards for tax purposes at December 31, 2016.
Tax Credit Carryforwards -------------------------------------------------- General Business Credits Foreign Tax Credits Other ---------------- ------------------- ------------- (In millions) Expiration: 2017-2021.......................... $ -- $ -- $ -- 2022-2026.......................... -- 187 -- 2027-2031.......................... 178 -- -- 2032-2036.......................... 661 -- -- Indefinite......................... -- -- 149 ---------------- ------------------- ------------- $ 839 $ 187 $ 149 ================ =================== =============
The Company participates in a tax sharing agreement with MetLife, Inc., as described in Note 1. Pursuant to this tax sharing agreement, the amounts due to (from) affiliates included ($60) million, and $124 million for the years ended December 31, 2016 and 2015, respectively. The Company files income tax returns with the U.S. federal government and various state and local jurisdictions, as well as foreign jurisdictions. The Company is under continuous examination by the IRS and other tax authorities in jurisdictions in which the Company has significant business operations. The income tax years under examination vary by jurisdiction and subsidiary. The Company is no longer subject to U.S. federal, state, or local income tax examinations for years prior to 2007, except for i) 2000 through 2002 where the IRS disallowance relates to certain tax credits claimed -- in April 2015, the Company received a Statutory Notice of Deficiency (the "Notice") and paid the tax thereon in September 2015 (see note (1) below); and ii) 2003 through 2006, where the IRS disallowance relates predominantly to certain tax credits claimed and the Company is engaged with IRS Appeals. Management believes it has established adequate tax liabilities and final resolution for the years 2000 through 2006 is not expected to have a material impact on the Company's consolidated financial statements. The IRS audit cycle for the years 2007-2009, which began in December of 2015, is scheduled to conclude in 2017. 128 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The Company's liability for unrecognized tax benefits may increase or decrease in the next 12 months. A reasonable estimate of the increase or decrease cannot be made at this time. However, the Company continues to believe that the ultimate resolution of the pending issues will not result in a material change to its consolidated financial statements, although the resolution of income tax matters could impact the Company's effective tax rate for a particular future period. A reconciliation of the beginning and ending amount of unrecognized tax benefits was as follows:
Years Ended December 31, --------------------------------------------- 2016 2015 2014 ------------- --------------- ------------- (In millions) Balance at January 1,......................................................... $ 1,075 $ 546 $ 532 Additions for tax positions of prior years (1)................................ 7 558 27 Reductions for tax positions of prior years (2)............................... (109) -- (13) Additions for tax positions of current year................................... 6 4 3 Settlements with tax authorities.............................................. (48) (33) (3) ------------- --------------- ------------- Balance at December 31,....................................................... $ 931 $ 1,075 $ 546 ============= =============== ============= Unrecognized tax benefits that, if recognized would impact the effective rate. $ 931 $ 1,060 $ 497 ============= =============== =============
------------- (1) The significant increase in 2015 is related to a non-cash charge the Company recorded to net income of $792 million, net of tax. The charge was related to an uncertain tax position and was comprised of a $557 million charge included in provision for income tax expense (benefit) and a $362 million ($235 million, net of tax) charge included in other expenses. This charge is the result of the Company's consideration of recent decisions of the U.S. Court of Appeals for the Second Circuit upholding the disallowance of foreign tax credits claimed by other corporate entities not affiliated with the Company. The Company's action relates to tax years from 2000 to 2009, during which MLIC held non-U.S. investments in support of its life insurance business through a United Kingdom investment subsidiary that was structured as a joint venture at the time. (2) Included for 2016 is the impact of the dividend by Metropolitan Life Insurance Company of all of the issued and outstanding shares of common stock of each of NELICO and GALIC to MetLife, Inc. The Company classifies interest accrued related to unrecognized tax benefits in interest expense, included within other expenses, while penalties are included in income tax expense. Interest was as follows:
Years Ended December 31, --------------------------------------- 2016 2015 2014 ------------- ------------ ------------ (In millions) Interest recognized on the consolidated statements of operations (1).......... $ (33) $ 382 $ 37 December 31, ------------------------- 2016 2015 ------------ ------------ (In millions) Interest included in other liabilities on the consolidated balance sheets (1). $ 606 $ 647
------------- (1) The significant increase in 2015 is related to the non-cash charge discussed above. The Company had no penalties for the years ended December 31, 2016, 2015 and 2014. 129 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) There has been no change in the Company's position on the disallowance of its foreign tax credits by the IRS. The Company continues to contest the disallowance of these foreign tax credits by the IRS as management believes the facts strongly support the Company's position. The Company will defend its position vigorously and does not expect any additional charges related to this matter. Also related to the aforementioned foreign tax credit matter, on April 9, 2015, the IRS issued the Notice to the Company. The Notice asserted that the Company owes additional taxes and interest for 2000 through 2002 primarily due to the disallowance of foreign tax credits. The transactions that are the subject of the Notice continue through 2009, and it is likely that the IRS will seek to challenge these later periods. On September 18, 2015, the Company paid the assessed tax and interest of $444 million for 2000 through 2002 and will subsequently file a claim for a refund. On November 19, 2015, $9 million of this amount was refunded from the IRS as an overpayment of interest. The U.S. Treasury Department and the IRS have indicated that they intend to address through regulations the methodology to be followed in determining the dividends received deduction ("DRD"), related to variable life insurance and annuity contracts. The DRD reduces the amount of dividend income subject to tax and is a significant component of the difference between the actual tax expense and expected amount determined using the federal statutory tax rate of 35%. Any regulations that the IRS ultimately proposes for issuance in this area will be subject to public notice and comment, at which time insurance companies and other interested parties will have the opportunity to raise legal and practical questions about the content, scope and application of such regulations. As a result, the ultimate timing and substance of any such regulations are unknown at this time. For the years ended December 31, 2016, 2015 and 2014, the Company recognized an income tax benefit of $75 million, $76 million and $92 million, respectively, related to the separate account DRD. The 2014 benefit included a benefit of $16 million related to a true-up of the 2013 tax return. 16. 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 U.S. permits considerable variation in the assertion of monetary damages or other relief. Jurisdictions may permit claimants not to specify the monetary damages sought or may permit claimants to state only that the amount sought is sufficient to invoke the jurisdiction of the trial court. In addition, jurisdictions may permit plaintiffs to allege monetary damages in amounts well exceeding reasonably possible verdicts in the jurisdiction for similar matters. This variability in pleadings, together with the actual experience of the Company in litigating or resolving through settlement numerous claims over an extended period of time, demonstrates to management that the monetary relief which may be specified in a lawsuit or claim bears little relevance to its merits or disposition value. Due to the vagaries of litigation, the outcome of a litigation matter and the amount or range of potential loss at particular points in time may normally be difficult to ascertain. Uncertainties can include how fact finders will evaluate documentary evidence and the credibility and effectiveness of witness testimony, and how trial and appellate courts will apply the law in the context of the pleadings or evidence presented, whether by motion practice, or at trial or on appeal. Disposition valuations are also subject to the uncertainty of how opposing parties and their counsel will themselves view the relevant evidence and applicable law. The Company establishes liabilities for litigation and regulatory loss contingencies when it is probable that a loss has been incurred and the amount of the loss can be reasonably estimated. Liabilities have been established for 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 reasonably estimated at December 31, 2016. While the potential future charges could be material in the particular quarterly or annual periods in which they are recorded, based on information currently known to management, management does not believe any such charges are likely to have a material effect on the Company's financial position. 130 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Matters as to Which an Estimate Can Be Made For some of the matters disclosed below, the Company is able to estimate a reasonably possible range of loss. For such matters where a loss is believed to be reasonably possible, but not probable, no accrual has been made. As of December 31, 2016, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $275 million. Matters as to Which an Estimate Cannot Be Made For other matters disclosed below, the Company is not currently able to estimate the reasonably possible loss or range of loss. The Company is often unable to estimate the possible loss or range of loss until developments in such matters have provided sufficient information to support an assessment of the range of possible loss, such as quantification of a damage demand from plaintiffs, discovery from other parties and investigation of factual allegations, rulings by the court on motions or appeals, analysis by experts, and the progress of settlement negotiations. On a quarterly and annual basis, the Company reviews relevant information with respect to litigation contingencies and updates its accruals, disclosures and estimates of reasonably possible losses or ranges of loss based on such reviews. Asbestos-Related Claims Metropolitan Life Insurance Company is and has been a defendant in a large number of asbestos-related suits filed primarily in state courts. These suits principally allege that the plaintiff or plaintiffs suffered personal injury resulting from exposure to asbestos and seek both actual and punitive damages. Metropolitan Life Insurance Company has never engaged in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products nor has Metropolitan Life Insurance Company issued liability or workers' compensation insurance to companies in the business of manufacturing, producing, distributing or selling asbestos or asbestos-containing products. The lawsuits principally have focused on allegations with respect to certain research, publication and other activities of one or more of Metropolitan Life Insurance Company's employees during the period from the 1920's through approximately the 1950's and allege that Metropolitan Life Insurance Company 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 Insurance Company believes that it should not have legal liability in these cases. The outcome of most asbestos litigation matters, however, is uncertain and can be impacted by numerous variables, including differences in legal rulings in various jurisdictions, the nature of the alleged injury and factors unrelated to the ultimate legal merit of the claims asserted against Metropolitan Life Insurance Company. Metropolitan Life Insurance Company employs a number of resolution strategies to manage its asbestos loss exposure, including seeking resolution of pending litigation by judicial rulings and settling individual or groups of claims or lawsuits under appropriate circumstances. Claims asserted against Metropolitan Life Insurance Company have included negligence, intentional tort and conspiracy concerning the health risks associated with asbestos. Metropolitan Life Insurance Company's defenses (beyond denial of certain factual allegations) include that: (i) Metropolitan Life Insurance Company 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 did not rely on any actions of Metropolitan Life Insurance Company; (iii) Metropolitan Life Insurance Company's conduct was not the cause of the plaintiffs' injuries; (iv) plaintiffs' exposure occurred after the dangers of asbestos were known; and (v) the applicable time with respect to filing suit has expired. During the course of the litigation, certain trial courts have granted motions dismissing claims against Metropolitan Life Insurance Company, while other trial courts have denied Metropolitan Life Insurance Company's motions. There can be no assurance that Metropolitan Life Insurance Company will receive favorable decisions on motions in the future. While most cases brought to date have settled, Metropolitan Life Insurance Company intends to continue to defend aggressively against claims based on asbestos exposure, including defending claims at trials. 131 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) The approximate total number of asbestos personal injury claims pending against Metropolitan Life Insurance Company as of the dates indicated, the approximate number of new claims during the years ended on those dates and the approximate total settlement payments made to resolve asbestos personal injury claims at or during those years are set forth in the following table:
December 31, -------------------------------------------- 2016 2015 2014 -------------- -------------- -------------- (In millions, except number of claims) Asbestos personal injury claims at year end. 67,223 67,787 68,460 Number of new claims during the year........ 4,146 3,856 4,636 Settlement payments during the year (1)..... $ 50.2 $ 56.1 $ 46.0
------------- (1) Settlement payments represent payments made by Metropolitan Life Insurance Company during the year in connection with settlements made in that year and in prior years. Amounts do not include Metropolitan Life Insurance Company's attorneys' fees and expenses. The number of asbestos cases that may be brought, the aggregate amount of any liability that Metropolitan Life Insurance Company may incur, and the total amount paid in settlements in any given year are uncertain and may vary significantly from year to year. The ability of Metropolitan Life Insurance Company to estimate its ultimate asbestos exposure is subject to considerable uncertainty, and the conditions impacting its liability can be dynamic and subject to change. The availability of reliable data is limited and it is difficult to predict the 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 in pending and future claims, the impact of the number of new claims filed in a particular jurisdiction and variations in the law in the jurisdictions in which claims are filed, the possible impact of tort reform efforts, the willingness of courts to allow plaintiffs to pursue claims against Metropolitan Life Insurance Company when exposure to asbestos took place after the dangers of asbestos exposure were well known, and the impact of any possible future adverse verdicts and their amounts. The ability to make estimates regarding ultimate asbestos exposure declines significantly as the estimates relate to years further in the future. In the Company's judgment, there is a future point after which losses cease to be probable and reasonably estimable. It is reasonably possible that the Company's total exposure to asbestos claims may be materially greater than the asbestos liability currently accrued and that future charges to income may be necessary. While the potential future charges could be material in the 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 effect on the Company's financial position. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for asbestos-related claims. Metropolitan Life Insurance Company's recorded asbestos liability is based on its estimation of the following elements, as informed by the facts presently known to it, its understanding of current law and its past experiences: (i) the probable and reasonably estimable liability for asbestos claims already asserted against Metropolitan Life Insurance Company, including claims settled but not yet paid; (ii) the probable and reasonably estimable liability for asbestos claims not yet asserted against Metropolitan Life Insurance Company, but which Metropolitan Life Insurance Company believes are reasonably probable of assertion; and (iii) the legal defense costs associated with the foregoing claims. Significant assumptions underlying Metropolitan Life Insurance Company's analysis of the adequacy of its recorded liability with respect to asbestos litigation include: (i) the number of future claims; (ii) the cost to resolve claims; and (iii) the cost to defend claims. 132 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Metropolitan Life Insurance Company reevaluates on a quarterly and annual basis its exposure from asbestos litigation, including studying its claims experience, reviewing external literature regarding asbestos claims experience in the United States, assessing relevant trends impacting asbestos liability and considering numerous variables that can affect its asbestos liability exposure on an overall or per claim basis. These variables include bankruptcies of other companies involved in asbestos litigation, legislative and judicial developments, the number of pending claims involving serious disease, the number of new claims filed against it and other defendants and the jurisdictions in which claims are pending. As previously disclosed, in 2014, Metropolitan Life Insurance Company increased its recorded liability for asbestos-related claims to $690 million. Based upon its regular reevaluation of its exposure from asbestos litigation, Metropolitan Life Insurance Company has updated its liability analysis for asbestos-related claims through December 31, 2016. Regulatory Matters The Company receives and responds to subpoenas or other inquiries seeking a broad range of information from state regulators, including state insurance commissioners; state attorneys general or other state governmental authorities; federal regulators, including the SEC; federal governmental authorities, including congressional committees; and the Financial Industry Regulatory Authority ("FINRA"). The issues involved in information requests and regulatory matters vary widely. The Company cooperates in these inquiries. In the Matter of Chemform, Inc. Site, Pompano Beach, Broward County, Florida In July 2010, the Environmental Protection Agency ("EPA") advised Metropolitan Life Insurance Company that it believed payments were due under two settlement agreements, known as "Administrative Orders on Consent," that New England Mutual Life Insurance Company ("New England Mutual") signed in 1989 and 1992 with respect to the cleanup of a Superfund site in Florida (the "Chemform Site"). The EPA originally contacted Metropolitan Life Insurance Company (as successor to New England Mutual) and a third party in 2001, and advised that they owed additional clean-up costs for the Chemform Site. The matter was not resolved at that time. The EPA is requesting payment of an amount under $1 million from Metropolitan Life Insurance Company and such third party for past costs and an additional amount for future environmental testing costs at the Chemform Site. In September 2012, the EPA, Metropolitan Life Insurance Company and the third party executed an Administrative Order on Consent under which Metropolitan Life Insurance Company and the third party have agreed to be responsible for certain environmental testing at the Chemform Site. The Company estimates that its costs for the environmental testing will not exceed $100,000. The September 2012 Administrative Order on Consent does not resolve the EPA's claim for past clean-up costs. The EPA may seek additional costs if the environmental testing identifies issues. The Company estimates that the aggregate cost to resolve this matter will not exceed $1 million. Sales Practices Regulatory Matters. Regulatory authorities in a number of states and FINRA, and occasionally the SEC, have had investigations or inquiries relating to sales of individual life insurance policies or annuities or other products by Metropolitan Life Insurance Company. These investigations often focus on the conduct of particular financial services representatives and the sale of unregistered or unsuitable products or the misuse of client assets. Over the past several years, these and a number of investigations by other regulatory authorities were resolved for monetary payments and certain other relief, including restitution payments. The Company may continue to resolve investigations in a similar manner. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for these sales practices-related investigations or inquiries. Unclaimed Property Litigation West Virginia Lawsuits On September 20, 2012, the West Virginia Treasurer filed an action against Metropolitan Life Insurance Company in West Virginia state court (West Virginia ex rel. John D. Perdue v. Metropolitan Life Insurance Company, Circuit Court of Putnam County, Civil Action No. 12-C-295) alleging that Metropolitan Life Insurance Company violated the West Virginia Uniform Unclaimed Property Act, seeking to compel compliance with the Act, and seeking payment of unclaimed property, interest and penalties. On January 31, 2017, the parties entered into a settlement agreement resolving these actions. 133 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Total Control Accounts Litigation Metropolitan Life Insurance Company is a defendant in a lawsuit related to its use of retained asset accounts, known as TCA, as a settlement option for death benefits. Owens v. Metropolitan Life Insurance Company (N.D. Ga., filed April 17, 2014) Plaintiff filed this putative class action lawsuit on behalf of all persons for whom Metropolitan Life Insurance Company established a retained asset account, known as a TCA, to pay death benefits under an ERISA plan. The action alleges that Metropolitan Life Insurance Company's use of the TCA as the settlement option for life insurance benefits under some group life insurance policies violates Metropolitan Life Insurance Company's fiduciary duties under ERISA. As damages, plaintiff seeks disgorgement of profits that Metropolitan Life Insurance Company realized on accounts owned by members of the putative class. On September 27, 2016, the court denied Metropolitan Life Insurance Company's summary judgment motion in full and granted plaintiff's partial summary judgment motion. The Company intends to defend this action vigorously. Reinsurance Litigation Robainas, et al. v. Metropolitan Life Insurance Company (S.D.N.Y., December 16, 2014) Plaintiffs filed this putative class action lawsuit on behalf of themselves and all persons and entities who, directly or indirectly, purchased, renewed or paid premiums on life insurance policies issued by Metropolitan Life Insurance Company from 2009 through 2014 (the "Policies"). Two similar actions were subsequently filed, Yale v. Metropolitan Life Ins. Co. (S.D.N.Y., January 12, 2015) and International Association of Machinists and Aerospace Workers District Lodge 15 v. Metropolitan Life Ins. Co. (E.D.N.Y., February 2, 2015). Both of these actions were consolidated with the Robainas action. The consolidated complaint alleges that Metropolitan Life Insurance Company inadequately disclosed in its statutory annual statements that certain reinsurance transactions with affiliated reinsurance companies were collateralized using "contractual parental guarantees," and thereby allegedly misrepresented its financial condition and the adequacy of its reserves. The lawsuit sought recovery under Section 4226 of the New York Insurance Law of a statutory penalty in the amount of the premiums paid for the Policies. On October 9, 2015, the court granted Metropolitan Life Insurance Company's motion to dismiss the consolidated complaint, finding that plaintiffs lacked Article III standing because they did not allege any concrete injury as a result of the alleged conduct. On February 23, 2017, the Second Circuit Court of Appeals affirmed this decision. Intoccia v. Metropolitan Life Insurance Company (S.D.N.Y., April 20, 2015) Plaintiffs filed this putative class action on behalf of themselves and all persons and entities who, directly or indirectly, purchased, renewed or paid premiums for Guaranteed Benefits Insurance Riders attached to variable annuity contracts with Metropolitan Life Insurance Company from 2009 through 2015 (the "Annuities"). The court consolidated Weilert v. Metropolitan Life Ins. Co. (S.D.N.Y., April 30, 2015) with the Intoccia case, and the consolidated, amended complaint alleges that Metropolitan Life Insurance Company inadequately disclosed in its statutory annual statements that certain reinsurance transactions with affiliated reinsurance companies were collateralized using "contractual parental guarantees," and thereby allegedly misrepresented its financial condition and the adequacy of its reserves. The lawsuits seek recovery under Section 4226 of the New York Insurance Law of a statutory penalty in the amount of the premiums paid for Guaranteed Benefits Insurance Riders attached to the Annuities. The Court granted Metropolitan Life Insurance Company's motion to dismiss, adopting the reasoning of the Robainas decision. On February 23, 2017, the Second Circuit Court of Appeals affirmed this decision. 134 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Other Litigation Sun Life Assurance Company of Canada Indemnity Claim In 2006, Sun Life Assurance Company of Canada ("Sun Life"), as successor to the purchaser of Metropolitan Life Insurance Company's Canadian operations, filed a lawsuit in Toronto, seeking a declaration that Metropolitan Life Insurance Company remains liable for "market conduct claims" related to certain individual life insurance policies sold by Metropolitan Life Insurance Company that were subsequently transferred to Sun Life. In January 2010, the court found that Sun Life had given timely notice of its claim for indemnification but, because it found that Sun Life had not yet incurred an indemnifiable loss, granted Metropolitan Life Insurance Company's motion for summary judgment. Both parties agreed to consider the indemnity claim through arbitration. In September 2010, Sun Life notified Metropolitan Life Insurance Company that a purported class action lawsuit was filed against Sun Life in Toronto alleging sales practices claims regarding the policies sold by Metropolitan Life Insurance Company and transferred to Sun Life. On August 30, 2011, Sun Life notified Metropolitan Life Insurance Company that another purported class action lawsuit was filed against Sun Life in Vancouver, BC alleging sales practices claims regarding certain of the same policies sold by Metropolitan Life Insurance Company and transferred to Sun Life. Sun Life contends that Metropolitan Life Insurance Company is obligated to indemnify Sun Life for some or all of the claims in these lawsuits. These sales practices cases against Sun Life are ongoing, and the Company is unable to estimate the reasonably possible loss or range of loss arising from this litigation. Fauley v. Metropolitan Life Insurance Company, et al. (Circuit Court of the 19th Judicial Circuit, Lake County, Ill., July 3, 2014). On September 28, 2016, the Illinois Supreme Court denied an objector's petition for leave to appeal from an order approving Metropolitan Life Insurance Company's $23 million settlement of a class action alleging violation of the Telephone Consumer Protection Act. Metropolitan Life Insurance Company paid out the settlement funds in January 2017. Voshall v. Metropolitan Life Insurance Company (Superior Court of the State of California, County of Los Angeles, April 8, 2015) Plaintiff filed this putative class action lawsuit on behalf of himself and all persons covered under a long-term group disability income insurance policy issued by Metropolitan Life Insurance Company to public entities in California between April 8, 2011 and April 8, 2015. Plaintiff alleges that Metropolitan Life Insurance Company improperly reduced benefits by including cost of living adjustments and employee paid contributions in the employer retirement benefits and other income that reduces the benefit payable under such policies. Plaintiff asserts causes of action for declaratory relief, violation of the California Business & Professions Code, breach of contract and breach of the implied covenant of good faith and fair dealing. The Company intends to defend this action vigorously. Martin v. Metropolitan Life Insurance Company (Superior Court of the State of California, County of Contra Costa, filed December 17, 2015) Plaintiffs filed this putative class action lawsuit on behalf of themselves and all California persons who have been charged compound interest by Metropolitan Life Insurance Company in life insurance policy and/or premium loan balances within the last four years. Plaintiffs allege that Metropolitan Life Insurance Company has engaged in a pattern and practice of charging compound interest on life insurance policy and premium loans without the borrower authorizing such compounding, and that this constitutes an unlawful business practice under California law. Plaintiff asserts causes of action for declaratory relief, violation of California's Unfair Competition Law and Usury Law, and unjust enrichment. Plaintiff seeks declaratory and injunctive relief, restitution of interest, and damages in an unspecified amount. On April 12, 2016, the court granted Metropolitan Life Insurance Company's motion to dismiss. Plaintiffs have filed a notice appealing this ruling. 135 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Lau v. Metropolitan Life Insurance Company (S.D.N.Y. filed, December 3, 2015) This putative class action lawsuit was filed by a single defined contribution plan participant on behalf of all ERISA plans whose assets were invested in Metropolitan Life Insurance Company's "Group Annuity Contract Stable Value Funds" within the past six years. The suit alleges breaches of fiduciary duty under ERISA and challenges the "spread" with respect to the stable value fund group annuity products sold to retirement plans. The allegations focus on the methodology Metropolitan Life Insurance Company uses to establish and reset the crediting rate, the terms under which plan participants are permitted to transfer funds from a stable value option to another investment option, the procedures followed if an employer terminates a contract, and the level of disclosure provided. Plaintiff seeks declaratory and injunctive relief, as well as damages in an unspecified amount. The Company intends to defend this action vigorously. Newman v. Metropolitan Life Insurance Company (N.D. Ill., filed March 23, 2016) Plaintiff filed this putative class action alleging causes of action for breach of contract, fraud, and violations of the Illinois Consumer Fraud and Deceptive Business Practices Act, based on Metropolitan Life Insurance Company's class-wide increase in premiums charged for long-term care insurance policies. Plaintiff alleges a class consisting of herself and all persons over age 65 who selected a Reduced Pay at Age 65 payment feature and whose premium rates were increased after age 65. Plaintiff asserts that premiums could not be increased for these class members and/or that marketing material was misleading as to Metropolitan Life Insurance Company's right to increase premiums. Plaintiff seeks unspecified compensatory, statutory and punitive damages as well as recessionary and injunctive relief. On March 9, 2017, the court granted Metropolitan Life Insurance Company's motion to dismiss, without prejudice. The Company intends to defend this action vigorously. Sales Practices Claims Over the past several years, the Company has faced numerous claims, including class action lawsuits, alleging improper marketing or sales of individual life insurance policies, annuities, mutual funds, other products or the misuse of client assets. Some of the current cases seek substantial damages, including punitive and treble damages and attorneys' fees. The Company continues to defend vigorously against the claims in these matters. The Company believes adequate provision has been made in its consolidated financial statements for all probable and reasonably estimable losses for sales practices matters. Summary Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed previously and those otherwise provided for in the Company's consolidated financial statements, have arisen in the course of the Company's business, including, but not limited to, in connection with its activities as an insurer, investor and taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct investigations concerning the Company's compliance with applicable insurance and other laws and regulations. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. In some of the matters referred to previously, 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 effect upon the Company's financial position, based on information currently known by the Company's management, in its opinion, the outcomes of such pending investigations and legal proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a material effect on the Company's consolidated net income or cash flows in particular quarterly or annual periods. Insolvency Assessments Most of the jurisdictions in which the Company is admitted to transact business require 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 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. 136 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Assets and liabilities held for insolvency assessments were as follows:
December 31, ------------------------- 2016 2015 ------------ ------------ (In millions) Other Assets: Premium tax offset for future discounted and undiscounted assessments. $ 24 $ 29 Premium tax offsets currently available for paid assessments.......... 32 50 ------------ ------------ Total............................................................... $ 56 $ 79 ============ ============ Other Liabilities: Insolvency assessments................................................ $ 37 $ 43 ============ ============
Commitments Leases The Company, as lessee, has entered into various lease and sublease agreements for office space, information technology, aircrafts and other equipment. Future minimum gross rental payments relating to these lease arrangements are as follows:
Amount --------------- (In millions) 2017....... $ 216 2018....... 213 2019....... 191 2020....... 191 2021....... 178 Thereafter. 987 --------------- Total.... $ 1,976 ===============
Total minimum rentals to be received in the future under non-cancelable subleases were $374 million as of December 31, 2016. Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3.9 billion and $4.2 billion at December 31, 2016 and 2015, respectively. Commitments to Fund Partnership Investments, Bank Credit Facilities, Bridge Loans and Private Corporate Bond Investments The Company commits to fund partnership investments and to lend funds under bank credit facilities, bridge loans and private corporate bond investments. The amounts of these unfunded commitments were $4.2 billion and $4.4 billion at December 31, 2016 and 2015, respectively. 137 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees (continued) Guarantees In the normal course of its business, the Company has provided certain indemnities, guarantees and commitments to third parties such that 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 $127 million, with a cumulative maximum of $416 million, 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 that could become due under these guarantees in the future. Management believes that it is unlikely the Company will have to make any material payments under these indemnities, guarantees, or commitments. In addition, the Company indemnifies its directors and officers as provided in its charters and by-laws. Also, the Company indemnifies 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 that could become due under these indemnities in the future. The Company's recorded liabilities were $5 million and $4 million at December 31, 2016 and 2015, respectively, for indemnities, guarantees and commitments. 138 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 17. Quarterly Results of Operations (Unaudited) The unaudited quarterly results of operations for 2016 and 2015 are summarized in the table below:
Three Months Ended ------------------------------------------------------ March 31, June 30, September 30, December 31, ------------ ------------ ------------- ------------ (In millions) 2016 Total revenues................................................... $ 8,794 $ 9,082 $ 9,876 $ 8,738 Total expenses................................................... $ 8,196 $ 8,749 $ 9,123 $ 8,459 Income (loss) from continuing operations, net of income tax...... $ 496 $ 326 $ 630 $ 304 Net income (loss)................................................ $ 496 $ 326 $ 630 $ 304 Less: Net income (loss) attributable to noncontrolling interests. $ -- $ (2) $ (7) $ 1 Net income (loss) attributable to Metropolitan Life Insurance Company......................................................... $ 496 $ 328 $ 637 $ 303 2015 Total revenues................................................... $ 9,862 $ 8,833 $ 10,772 $ 9,304 Total expenses................................................... $ 8,170 $ 7,945 $ 9,637 $ 8,480 Income (loss) from continuing operations, net of income tax...... $ 1,190 $ 668 $ 268 $ 631 Net income (loss)................................................ $ 1,190 $ 668 $ 268 $ 631 Less: Net income (loss) attributable to noncontrolling interests. $ 1 $ 6 $ (8) $ 1 Net income (loss) attributable to Metropolitan Life Insurance Company......................................................... $ 1,189 $ 662 $ 276 $ 630
18. Related Party Transactions Service Agreements The Company has entered into various agreements with affiliates for services necessary to conduct its activities. Typical services provided under these agreements include personnel, policy administrative functions and distribution services. For certain agreements, charges are based on various performance measures or activity-based costing. The bases for such charges are modified and adjusted by management when necessary or appropriate to reflect fairly and equitably the actual cost incurred by the Company and/or affiliate. Expenses and fees incurred with affiliates related to these agreements, recorded in other expenses, were $2.1 billion for each of the years ended December 31, 2016, 2015 and 2014. Revenues received from affiliates related to these agreements, recorded in universal life and investment-type product policy fees, were $138 million, $135 million and $129 million for the years ended December 31, 2016, 2015 and 2014, respectively. Revenues received from affiliates related to these agreements, recorded in other revenues, were $113 million, $151 million and $177 million for the years ended December 31, 2016, 2015 and 2014, respectively. The Company also entered into agreements with affiliates to provide additional services necessary to conduct the affiliates' activities. Typical services provided under these agreements include management, policy administrative functions, investment advice and distribution services. Expenses incurred by the Company related to these agreements, included in other expenses, were $1.5 billion for both of the years ended December 31, 2016 and 2015 and $1.8 billion for the year ended December 31, 2014, and were reimbursed to the Company by these affiliates. The Company had net payables to affiliates, related to the items discussed above, of $165 million and $282 million at December 31, 2016 and 2015, respectively. See Notes 6, 8, 11, 12 and 14 for additional information on related party transactions. Sales Distribution Services In July 2016, MetLife, Inc. completed the sale to MassMutual of MetLife, Inc.'s U.S. retail advisor force and certain assets associated with the MetLife Premier Client Group, including all of the issued and outstanding shares of MSI. MassMutual assumed all of the liabilities related to such assets and that arise or occur after the closing of the sale. 139 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 19. Subsequent Events Reinsurance Effective January 1, 2017, Brighthouse NY and NELICO recaptured risks related to certain variable annuities, including guaranteed minimum benefits, reinsured by the Company. This recapture resulted in a decrease in cash and cash equivalents of approximately $34 million, a decrease in premiums, reinsurance and other receivables of approximately $77 million, a decrease in future policy benefits of approximately $79 million, a decrease in policyholder account balances of approximately $387 million and an increase in other liabilities of approximately $76 million. The Company will recognize a gain of approximately $178 million, net of income tax, as a result of this transaction. Effective January 1, 2017, the Company recaptured risks related to guaranteed minimum benefit guarantees on certain variable annuities reinsured by Brighthouse Insurance, an affiliate. This recapture resulted in an increase in investments and cash and cash equivalents of approximately $568 million and a decrease in premiums, reinsurance and other receivables of approximately $565 million. The Company will recognize a gain of approximately $2 million, net of income tax, as a result of this transaction. 140 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule I Consolidated Summary of Investments -- Other Than Investments in Related Parties December 31, 2016 (In millions)
Estimated Amount at Cost or Fair Which Shown on Amortized Cost (1) Value Balance Sheet Types of Investments ----------------------- --------------- --------------------- Fixed maturity securities: Bonds: U.S. government and agency securities........ $ 32,834 $ 35,615 $ 35,615 Public utilities............................. 6,893 7,465 7,465 State and political subdivision securities... 6,252 7,136 7,136 Foreign government securities................ 3,565 3,998 3,998 All other corporate bonds.................... 69,592 72,236 72,236 ----------------------- --------------- --------------------- Total bonds................................ 119,136 126,450 126,450 Mortgage-backed and asset-backed securities.. 35,229 35,856 35,856 Redeemable preferred stock................... 776 814 814 ----------------------- --------------- --------------------- Total fixed maturity securities............ 155,141 163,120 163,120 ----------------------- --------------- --------------------- FVO and trading securities................. 36 23 23 ----------------------- --------------- --------------------- Equity securities: Common stock: Industrial, miscellaneous and all other.... 1,127 1,177 1,177 Public utilities........................... 93 122 122 Non-redeemable preferred stock............... 565 540 540 ----------------------- --------------- --------------------- Total equity securities.................... 1,785 1,839 1,839 ----------------------- --------------- --------------------- Mortgage loans............................... 56,560 56,560 Policy loans................................. 5,945 5,945 Real estate and real estate joint ventures... 6,329 6,329 Real estate acquired in satisfaction of debt. 57 57 Other limited partnership interests.......... 3,725 3,725 Short-term investments....................... 4,690 4,690 Other invested assets........................ 17,232 17,232 ----------------------- --------------------- Total investments......................... $ 251,500 $ 259,520 ======================= =====================
-------- (1) Cost or amortized cost for fixed maturity securities and mortgage loans represents original cost reduced by repayments, valuation allowances and impairments from other-than-temporary declines in estimated fair value that are charged to earnings and adjusted for amortization of premiums or accretion of discounts; for equity securities, cost represents original cost reduced by impairments from other-than-temporary declines in estimated fair value; for real estate, cost represents original cost reduced by impairments and depreciation; for real estate joint ventures and other limited partnership interests, cost represents original cost reduced for impairments or original cost adjusted for equity in earnings and distributions. 141 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information December 31, 2016, 2015 and 2014 (In millions)
Future Policy Benefits, Other Policy-Related DAC Balances and Policyholder Policyholder and Policyholder Dividend Account Dividends Unearned Unearned Segment VOBA Obligation Balances Payable Premiums (1), (2) Revenue (1) ------------------ --------- ----------------------- ------------ ------------ ----------------- ------------ 2016 U.S............... $ 421 $ 57,862 $ 66,643 $ -- $ 133 $ 30 MetLife Holdings.. 4,317 66,019 25,823 510 167 182 Corporate & Other. 5 337 -- -- -- -- --------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 4,743 $ 124,218 $ 92,466 $ 510 $ 300 $ 212 ========= ======================= ============ ============ ================= ============ 2015 U.S............... $ 418 $ 56,090 $ 63,716 $ -- $ 136 $ 33 MetLife Holdings.. 5,000 70,302 29,827 621 171 201 Corporate & Other. 625 1,506 877 3 1 321 --------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 6,043 $ 127,898 $ 94,420 $ 624 $ 308 $ 555 ========= ======================= ============ ============ ================= ============ 2014 U.S............... $ 406 $ 54,374 $ 65,343 $ -- $ 176 $ 41 MetLife Holdings.. 4,894 70,522 29,665 612 179 204 Corporate & Other. 675 1,501 894 3 1 323 --------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 5,975 $ 126,397 $ 95,902 $ 615 $ 356 $ 568 ========= ======================= ============ ============ ================= ============
-------- (1) Amounts are included within the future policy benefits, other policy-related balances and policyholder dividend obligation column. (2) Includes premiums received in advance. 142 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information -- (continued) December 31, 2016, 2015 and 2014 (In millions)
Policyholder Amortization of Benefits and DAC and Premiums and Claims and VOBA Universal Life Net Interest Credited Charged to Other and Investment-Type Investment to Policyholder Other Operating Segment Product Policy Fees Income Account Balances Expenses Expenses (1) ------------------ ------------------- ------------ ----------------- --------------- ------------- 2016 U.S............... $ 18,909 $ 5,811 $ 20,230 $ 56 $ 2,721 MetLife Holdings.. 5,739 5,355 7,139 342 2,797 Corporate & Other. 287 (83) 155 43 1,044 ------------------- ------------ ----------------- --------------- ------------- Total........... $ 24,935 $ 11,083 $ 27,524 $ 441 $ 6,562 =================== ============ ================= =============== ============= 2015 U.S............... $ 18,281 $ 5,874 $ 19,582 $ 59 $ 2,658 MetLife Holdings.. 5,910 5,613 6,962 631 2,678 Corporate & Other. 327 90 166 52 1,444 ------------------- ------------ ----------------- --------------- ------------- Total........... $ 24,518 $ 11,577 $ 26,710 $ 742 $ 6,780 =================== ============ ================= =============== ============= 2014 U.S............... $ 17,678 $ 5,817 $ 19,002 $ 54 $ 2,574 MetLife Holdings.. 5,825 5,749 6,859 551 2,625 Corporate & Other. 347 327 168 90 1,417 ------------------- ------------ ----------------- --------------- ------------- Total........... $ 23,850 $ 11,893 $ 26,029 $ 695 $ 6,616 =================== ============ ================= =============== =============
-------- (1) Includes other expenses and policyholder dividends, excluding amortization of DAC and VOBA charged to other expenses. 143 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule IV Consolidated Reinsurance December 31, 2016, 2015 and 2014 (Dollars in millions)
% Amount Assumed Gross Amount Ceded Assumed Net Amount to Net --------------- ----------- ----------- ------------- ---------- 2016 Life insurance in-force..... $ 3,013,618 $ 277,693 $ 777,037 $ 3,512,962 22.1% =============== =========== =========== ============= Insurance premium Life insurance (1).......... $ 14,931 $ 1,101 $ 1,668 $ 15,498 10.8% Accident & health insurance. 7,000 124 19 6,895 0.3% --------------- ----------- ----------- ------------- Total insurance premium.... $ 21,931 $ 1,225 $ 1,687 $ 22,393 7.5% =============== =========== =========== ============= 2015 Life insurance in-force..... $ 3,035,399 $ 361,355 $ 811,435 $ 3,485,479 23.3% =============== =========== =========== ============= Insurance premium Life insurance (1).......... $ 14,449 $ 1,143 $ 1,638 $ 14,944 11.0% Accident & health insurance. 7,048 99 41 6,990 0.6% --------------- ----------- ----------- ------------- Total insurance premium.... $ 21,497 $ 1,242 $ 1,679 $ 21,934 7.7% =============== =========== =========== ============= 2014 Life insurance in-force..... $ 2,935,363 $ 372,886 $ 830,980 $ 3,393,457 24.5% =============== =========== =========== ============= Insurance premium Life insurance (1).......... $ 14,135 $ 1,159 $ 1,630 $ 14,606 11.2% Accident & health insurance. 6,828 93 43 6,778 0.6% --------------- ----------- ----------- ------------- Total insurance premium.... $ 20,963 $ 1,252 $ 1,673 $ 21,384 7.8% =============== =========== =========== =============
-------- (1) Includes annuities with life contingencies. For the year ended December 31, 2016, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $17.6 billion and $258.3 billion, respectively, and life insurance premiums of $45 million and $727 million, respectively. For the year ended December 31, 2015, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $23.1 billion and $276.7 billion, respectively, and life insurance premiums of $40 million and $701 million, respectively. For the year ended December 31, 2014, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $23.9 billion and $277.9 billion, respectively, and life insurance premiums of $36 million and $681 million, respectively. 144 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 (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement (File No. 033-47927) filed April 30, 1997.) (b) None (c) (i) Form of Broker Agreement (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement (File No. 033-47927) filed April 30, 1997.) (ii) Forms of Selling Agreement (Incorporated herein by reference to the Post-Effective Amendment No. 18 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 30, 2004.) (iii) Form of Retail Sales Agreement (Incorporated herein by reference to Post-Effective Amendment No. 20 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 25, 2006.) (iv) Principal Underwriting Agreement (Incorporation herein by reference to Post-Effective Amendment No. 3 to Paragon Separate Account B's Registration Statement on Form N-6 (File No. 333-133675) filed January 16, 2008.) (v) Enterprise Sales Agreement between MetLife Investors Distribution Company and broker-dealers dated February 2010 (Incorporated herein by reference to Exhibit 3(b)(ii) in Post-Effective Amendment No. 14 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) as filed April 13, 2010.) (vi) Master Retail Sales Agreement between MetLife Investors Distribution Company and broker-dealers dated September 2012 (Incorporated herein by reference to Post-Effective Amendment No. 27 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 11, 2013.) (d) (i) Flexible Premium Variable Life Policy (Incorporated herein by reference to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 4, 2008.) (ii) Riders: Accelerated Death Benefit Rider, Accidental Death Benefit Rider, Children's Term Insurance, Guaranteed Minimum Death Benefit Rider, Guaranteed Survivor Income Benefit Rider, Options to Purchase Additional Insurance Coverage Rider, Overloan Protection Rider, Waiver of Monthly Deduction Rider, Waiver of Specified Premium Rider ((Incorporated herein by reference to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 4, 2008.) (e) (i) Enterprise Application for Policy (Incorporated herein by reference to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed November 19, 2007.) (ii) Application Supplements (Incorporated herein by reference to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 4, 2008.) (f) (i) Restated Charter and By-Laws of Metropolitan Life (Incorporated herein by reference to Post-Effective Amendment No. 3 to the Registrant's Registration Statement on Form S-6 (File No. 333-40161) filed on April 6, 2000.) (ii) Amended and Restated Charter and By-laws of Metropolitan Life (Incorporated herein by reference to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed March 5, 2002.) (iii) Amended and Restated By-Laws of Metropolitan Life (Incorporation herein by reference to Post-Effective Amendment No. 3 to Paragon Separate Account B's Registration Statement on Form N-6 (File No. 333-133675) filed January 16, 2008.) (iv) Amended and Restated Bylaws of Metropolitan Life Insurance Company (Incorporated herein by reference to Post-Effective Amendment No. 19 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-176654) filed April 12, 2017.) (g) (i) Reinsurance Contracts (Incorporated herein by reference to Post-Effective Amendment No. 4 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 12, 2012.) (ii) Reinsurance Contract Amendments dated June 25, 2012 and November 30, 2012 (Incorporated herein by reference to Post-Effective Amendment No.5 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 11, 2013.) (iii) Reinsurance Contract Amendments (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 14, 2016.) (h) (i) Participation Agreement among Metropolitan Series Fund, Inc., MetLife Advisers, LLC, MetLife Investors Distribution Company and Metropolitan Life Insurance Company (8/31/07) (Incorporated herein by reference to Post-Effective Amendment No. 9 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed September 10, 2007.) (ii) Participation Agreement among Met Investors Series Trust, Metropolitan Life Insurance Company, Met Investors Advisory Corp and MetLife Investors Distribution Company (Incorporated herein by reference to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed March 5, 2002.) (iii) Participation Agreement among American Funds Insurance Series, Capital Research and Management Company and Metropolitan Life Insurance Company dated April 30th, 2001 (Incorporated herein by reference to Metropolitan Life Separate Account E's Registration Statement of Form N-4 (File No. 333-52366) filed August 3, 2001.) (iv) Participation Agreement among Franklin Templeton Variable Insurance Products Trust, Franklin Templeton Distributors, Inc. and Metropolitan Life Insurance Company dated April 30, 2004 (Incorporated herein by reference to Post-Effective Amendment No. 16 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 30, 2004.) (v) First and Second Amendments to the Participation Agreement with Met Investors Series Trust (Incorporated herein by reference to Post-Effective Amendment No. 22 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 16, 2009.) (vi) Amendment to the American Funds Insurance Series Participation Agreement dated April 30, 2010 (Incorporated herein by reference to Exhibit (3)(d)(i) in Post-Effective Amendment No. 15 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-83716) filed April 12, 2011.) (vii) Amendment to the Participation Agreement with Franklin Templeton Variable Insurance Trust (Incorporated herein by reference to Post-Effective Amendment No. 24 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 14, 2011.) (viii) Amendments to the Participation Agreements with Franklin Templeton Variable Insurance Products Trust, Met Investors Series Trust and Metropolitan Series Fund, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 25 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 12, 2012.) (ix) Amendment to the Participation Agreement with Franklin Templeton Variable Insurance Products Trust (Incorporated herein by reference to Post-Effective Amendment No. 26 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 11, 2013.) (x) Amendment No. 5 to Amended and Restated Participation Agreement with Franklin Templeton Variable Insurance Products Trust (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 11, 2014.) (xi) Amendment No. 4 to Participation Agreement between Metropolitan Life Insurance Company, American Funds Insurance Series and Capital Research and Management Company dated November 19, 2014 (Incorporated herein by reference to Post-Effective Amendment No. 18 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-176654) filed April 13, 2016.) (xii) Amendment to Amended and Restated Participation Agreement with Franklin Templeton Variable Insurance Products Trust (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 14, 2016.) (xiii) Amendment No. 3 dated May 1, 2016 to the Participation Agreement dated May 16, 1998 among Metropolitan Life Insurance Company, American Funds Insurance Series and Capital Research and Management Company (Incorporated herein by reference to Post-Effective Amendment No. 19 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-176654) filed April 12, 2017.) (xiv) Participation Agreement dated March 6, 2017 by and among Brighthouse Funds Trust I, Metropolitan Life Insurance Company, Brighthouse Investement Advisers, LLC and Brighthouse Securities, LLC (Incorporated herein by reference to Post-Effective Amendment No. 19 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-176654) filed April 12, 2017.) (xv) Participation Agreement dated March 6, 2017 by and among Brighthouse Funds Trust II, Metropolitan Life Insurance Company, Brighthouse Investement Advisers, LLC and Brighthouse Securities, LLC (Incorporated herein by reference to Post-Effective Amendment No. 19 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-176654) filed April 12, 2017.) (i) None (j) None (k) Opinion and Consent of Marie C. Swift as to the legality of the securities being registered (Incorporated herein by reference to Pre-Effective Amendment No. 2 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 4, 2008.) (l) Actuarial Opinion and Consent (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 14, 2016.) (m) Calculation Exhibit (Incorporated herein by reference to Post-Effective Amendment No. 9 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 14, 2016.) (n) Consent of Independent Registered Public Accounting Firm (Filed herewith) (o) None (p) None (q) (i) Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement (File No. 033-47927) filed April 30, 1997.) (ii) Addendum to Memoranda describing certain procedures filed pursuant to Rule 6e-3(T)(b)(12)(iii) (Incorporated herein by reference to Post-Effective Amendment No. 21 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 18, 2007.) (r) Powers of Attorney (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 14, 2016.) ITEM 27. DIRECTORS AND OFFICERS OF DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS POSITION AND OFFICES WITH DEPOSITOR ------------------------------------- ------------------------------------------------------------------- Steven A. Kandarian Chairman of the Board, President and Chief Executive Officer and a MetLife, Inc, and Metropolitan Life Director Insurance Company 200 Park Avenue New York, NY 10166
Cheryl W. Gris Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Carlos M. Gutierrez Director Co-Chair Albright Stonebridge Group (ASG) 601 Thirteenth Street, NW Suite 500 Washington, D.C. 20005
David Herzog Director Former Chief Financial Officer 200 Park Avenue New York, NY 10166
R. Glenn Hubbard Director Dean and Russell L. Carson Professor of Finance and Economics Graduate School of Business Columbia University Uris Hall, Room 101 3022 BroadwayNew York, NY 10027-6902
Alfred F. Kelly, Jr. Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Edward J. Kelly, III Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
William E. Kennard Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
James M. Kilts Director Founding Partner Centerview Capital 3 Greenwich Office Park 2nd Floor Greenwich, CT 06831
Catherine R. Kinney Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Denise M. Morrison Director President and Chief Executive Officer Campbell Soup Company One Campbell Place Camden, NJ 08103
Kenton J. Sicchitano Director c/o MetLife, Inc. and Metropolitan Life Insurance Company 200 Park Avenue New York, NY 10166
Lulu C. Wang Director Chief Executive Officer Tupelo Capital Management LLC 340 Madison Avenue, 19th Floor New York, NY 10173
Set forth below is a list of certain principal officers of Metropolitan Life Insurance Company. The principal business address of each principal officer is 200 Park Avenue, New York, NY 10166 unless otherwise indicated.
NAME POSITIONS WITH DEPOSITOR --------------------- ------------------------------------------------------------------- Steven A. Kandarian Chairman of the Board, President and Chief Executive Officer and a Director
Michel A. Khalaf President, Europe/Middle East/Africa Division The Gate Building Dubai International Financial Center 07th Floor, West Wing Dubai, United Arab Emirates
Christopher G. Townsend President, Asia 39/F Dorset House 979 King's Road Hong Kong, Hong Kong
William J. Wheeler President, Americas
Ricardo A. Anzaldua Executive Vice President and General Counsel
Peter M. Carlson Executive Vice President and Chief Accounting Officer
Steven J. Goulart Executive Vice President and Chief Investment Officer 10 Park Avenue Morristown, NJ 07962
John C.R. Hele Executive Vice President and Chief Financial Officer
Franciscus Hijkoop Executive Vice President and Chief Human Resources Officer
Todd B. Katz Executive Vice President
Robin Lenna Executive Vice President 200 Park Avenue, 12th Floor New York, NY 10166
Martin J. Lippert Executive Vice President, Global Technology & Operations
Maria R. Morris Executive Vice President, Global Employee Benefits
Anthony J. Nugent Executive Vice President 1200 South Pine Island Road Suite 770 Plantation, FL 33324
Oscar Schmidt Executive Vice President
Eric T. Steigerwalt Executive Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Stanley J. Talbi Executive Vice President
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 December 31, 2016 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2016. 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 Home Loans LLC (DE) C. Metropolitan Tower Life Insurance Company (DE) 1. EntreCap Real Estate II LLC (DE) a) PREFCO Dix-Huit LLC (CT) b) PREFCO X Holdings LLC (CT) c) PREFCO Ten Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Ten Limited Partnership is held by EntreCap Real Estate II LLC and 0.1% general partnership is held by PREFCO X Holdings LLC. d) PREFCO Vingt LLC (CT) e) PREFCO Twenty Limited Partnership (CT) - a 99% limited partnership interest of PREFCO Twenty Limited Partnership is held by EntreCap Real Estate II LLC and 1% general partnership is held by PREFCO Vingt LLC. 2. Plaza Drive Properties, LLC (DE) 3. MTL Leasing, LLC (DE) a) PREFCO IX Realty LLC (CT) b) PREFCO XIV Holdings LLC (CT) c) PREFCO Fourteen Limited Partnership (CT) - a 99.9% limited partnership interest of PREFCO Fourteen Limited Partnership is held by MTL Leasing, LLC and 0.1% general partnership is held by PREFCO XIV Holdings LLC. d) 1320 Venture LLC (DE) i) 1320 Owner LP (DE) - a 99.9% limited partnership of 1320 Owner LP is held by 1320 Venture LLC and 0.1% general partnership is held by 1320 GP LLC. e) 1320 GP LLC (DE) D. MetLife Chile Inversiones Limitada (Chile) - 72.35109659% is owned by MetLife, Inc., 24.8823628% by American Life Insurance Company ("ALICO"), 2.76654057% is owned by Inversiones MetLife Holdco Dos Limitada and 0.00000004% is owned by Natiloportem Holdings, LLC. 1. MetLife Chile Seguros de Vida S.A. (Chile) - 99.996% of MetLife Chile Seguros de Vida S.A. is held by MetLife Chile Inversiones Limitada and 0.003% by International Technical and Advisory Services Limited ("ITAS") and the rest by third parties. a) MetLife Chile Administradora de Mutuos Hipotecarios S.A. (Chile) - 99.9% of MetLife Chile Administradora de Mutuos Hipotecarios S.A. is held by MetLife Chile Seguros de Vida S.A. and 0.1% is held by MetLife Chile Inversiones Limitada. 2. Legal Chile S.A. (Chile) - 51% of Legal Chile S.A. is owned by MetLife Chile Inversiones Limitada and the remaining interest is owned by a third party. a) Legagroup S.A. (Chile) - 99% of Legagroup S.A. is owned by Legal Chile S.A. and the remaining interest is owned by a third party. 3. Inversiones MetLife Holdco Tres Limitada (Chile) - 97.13% of Inversiones MetLife Holdco Tres Limitada is owned by MetLife Chile Inversiones Limitada and 2.87% is owned by Inversiones MetLife Holdco Dos Limitada. a) AFP Provida S.A. (Chile) - 42.3815% of AFP Provida S.A. is owned by Inversiones MetLife Holdco Dos Limitada., 42.3815% is owned by Inversiones MetLife Holdco Tres Limitada, 10.9224% is owned by MetLife Chile Inversiones Limitada and the remainder is owned by the public. i) Provida Internacional S.A. (Chile) - 99.99% of Provida Internacional S.A. is owned by AFP Provida S.A and 0.01% is owned by MetLife Chile Inversiones Limitada. 1) AFP Genesis Administradora de Fondos y Fidecomisos S.A. (Ecuador) - 99.9% of AFP Genesis Administradora de Fondos y Fidecomisos S.A. is owned by Provida Internacional S.A. and 0.1% by AFP Provida S.A. 4. MetLife Chile Seguros Generales S.A. (Chile) - 99.98% of MetLife Chile Seguros Generales, S.A. is owned by MetLife Chile Inversiones Limitada and 0.02% is owned by Inversiones MetLife Holdco Dos Limitada. E. Enterprise General Insurance Agency, Inc. (DE) F. 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. MetLife Auto & Home Insurance Agency, Inc. (RI) 5. Metropolitan Group Property and Casualty Insurance Company (RI) 6. 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. 7. Economy Fire & Casualty Company (IL) a) Economy Preferred Insurance Company (IL) b) Economy Premier Assurance Company (IL) G. First MetLife Investors Insurance Company (NY) H. Newbury Insurance Company, Limited (DE) I. MetLife Investors Group, LLC (DE) 1. MetLife Investors Distribution Company (MO) 2. MetLife Investments Securities, LLC (DE) 1 J. Metropolitan Life Insurance Company ("MLIC") (NY) 1. 334 Madison Euro Investments, Inc. (DE) 2. St. James Fleet Investments Two Limited (Cayman Islands) a) Park Twenty Three Investments Company (United Kingdom) i) Convent Station Euro Investments Four Company (United Kingdom) 1) OMI MLIC Investments Limited (Cayman Islands) 3. Sandpiper Cove Associates II, LLC (DE) 4. MLIC Asset Holdings II LLC (DE) a) El Conquistador MAH II LLC (DE) b) Mansell Office, LLC (DE) - 73.0284% is owned by MLIC Asset Holdings II, LLC and 29.9716% is owned by MLIC CB Holdings LLC. i) Mansell Retail, LLC (DE) - 73.0284% is owned by MLIC Asset Holdings II, LLC and 29.9716% is owned by MLIC CB Holdings LLC. 5. CC Holdco Manager, LLC (DE) 6. Alternative Fuels I, LLC (DE) 7. Transmountain Land & Livestock Company (MT) 8. HPZ Assets LLC (DE) 9. Missouri Reinsurance, Inc. (Cayman Islands) 10. Metropolitan Tower Realty Company, Inc. (DE) a) Midtown Heights, LLC (DE) 11. ML New River Village III, LLC (DE) 12. MetLife RC SF Member, LLC (DE) 13. 23rd Street Investments, Inc. (DE) a) MetLife Capital Credit L.P. (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. b) MetLife Capital, Limited Partnership (DE)- 1% General Partnership interest is held by 23rd Street Investments, Inc. and 99% Limited Partnership interest is held by Metropolitan Life Insurance Company. i) Long Island Solar Farm, LLC ("LISF")(DE) - 9.61% membership interest is held by MetLife Renewables Holding, LLC and 90.39% membership interest is held by LISF Solar Trust in which MetLife Capital Limited Partnership has 100% beneficial interest. ii) Met Canada Solar ULC (Canada) 14. Hyatt Legal Plans, Inc. (DE) a) Hyatt Legal Plans of Florida, Inc. (FL) 15. MetLife Holdings, Inc. (DE) a) MetLife Credit Corp. (DE) b) MetLife Funding, Inc. (DE) 16. MetLife Investments Limited (United Kingdom)- 23rd Street Investments, Inc. holds one share of MetLife Investments Limited. 17. MetLife Latin America Asesorias e Inversiones Limitada (Chile)- 23rd Street Investments, Inc. holds 0.01% of MetLife Latin America Asesorias e Inversiones Limitada. 18. Corporate Real Estate Holdings, LLC (DE) 19. MetLife Tower Resources Group, Inc. (DE) 20. Headland-Pacific Palisades, LLC (CA) 21. Headland Properties Associates (CA) - 99% is owned by Metropolitan Life Insurance Company and 1% is owned by Headland-Pacific Palisades, LLC. 22. WFP 1000 Holding Company GP, LLC (DE) 23. White Oak Royalty Company (OK) 24. 500 Grant Street GP LLC (DE) 25. 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. 26. MetLife Mall Ventures Limited Partnership (DE) - 99% LP interest of MetLife Mall Ventures Limited Partnership is owned by MLIC and 1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 27. MetLife Retirement Services LLC (NJ) 28. Euro CL Investments, LLC (DE) 29. MEX DF Properties, LLC (DE) a) LAR Vivienda XVII, S. de R.L. de C.V. (Mexico) - 99.99% of LAR Vivienda XVII S. de R.L. de C.V. is owned by MEX DF Properties, LLC and 0.01% is owned by Euro CL Investments LLC. 30. MSV Irvine Property, LLC (DE) - 4% of MSV Irvine Property, LLC is owned by Metropolitan Tower Realty Company, Inc. and 96% is owned by Metropolitan Life Insurance Company. 31. MetLife Properties Ventures, LLC (DE) a) Citypoint Holdings II Limited (United Kingdom) 32. Housing Fund Manager, LLC (DE) a) MTC Fund I, LLC (DE) - 0.01% of MTC Fund I, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. b) MTC Fund II, LLC (DE) - 0.01% of MTC Fund II, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. c) MTC Fund III, LLC (DE) - 0.01% of MTC Fund III, LLC is held by Housing Fund Manager, LLC. - Housing Fund Manager, LLC is the managing member LLC and the remaining interests are held by a third party member. 33. MLIC Asset Holdings LLC (DE) 34. 85 Broad Street Mezzanine LLC (DE) 35. The Building at 575 Fifth Avenue Mezzanine LLC (DE) a) The Building at 575 Fifth Retail Holding LLC (DE) b) The Building at 575 Fifth Retail Owner LLC (DE) 36. ML Bridgeside Apartments LLC (DE) 37. Para-Met Plaza Associates (FL)- 75% of the General Partnership is held by Metropolitan Life Insurance Company and 25% of the General Partnership is held by Metropolitan Tower Realty Company, Inc. 38. MLIC CB Holdings LLC (DE) 39. MetLife CC Member, LLC (DE) - 95.122% of MetLife CC Member, LLC is owned by Metropolitan Life Insurance Company and 4.878% is owned by General American Life Insurance Company. 40. Oconee Hotel Company, LLC (DE) 41. Oconee Land Company, LLC (DE) a) Oconee Land Development Company, LLC (DE) b) Oconee Golf Company, LLC (DE) c) Oconee Marina Company, LLC (DE) 2 42. 1201 TAB Manager, LLC (DE) 43. MetLife 1201 TAB Member, LLC (DE) - 96.9% of MetLife 1201 TAB Member, LLC is owned by Metropolitan Life Insurance Company and 3.1% is owned by Metropolitan Property and Casualty Insurance Company. 44. MetLife LHH Member, LLC (DE) - 99% of MetLife LHH Member, LLC is owned by Metropolitan Life Insurance Company, and 1% is owned by General American Life Insurance Company. 45. 1001 Properties, LLC (DE) 46. Riverway Residential, LP (DE) - 99.9% LP interest of Riverway Residential, LP is owned by Metropolitan Life Insurance Company and 0.1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 47. 6104 Hollywood, LLC (DE) 48. Boulevard Residential, LLC (DE) 49. ML-AI MetLife Member 3, LLC (DE) 50. Ashton Judiciary Square, LLC (DE) 51. Sandpiper Cove Associates, LLC (DE) - 90.59% membership interest of Sandpiper Cove Associates, LLC is owned by MLIC and 9.41% is owned by Metropolitan Tower Realty Company. 52. 1900 McKinney Properties, LP (DE) - 99.9% LP interest of 1900 McKinney Properties, LP is owned by MLIC and 0.1% GP interest is owned by Metropolitan Tower Realty Company, Inc. 53. Marketplace Residences, LLC (DE) 54. ML Swan Mezz, LLC (DE) a) ML Swan GP, LLC (DE) 55. ML Dolphin Mezz, LLC (DE) a) ML Dolphin GP, LLC (DE) 56. Haskell East Village, LLC (DE) 57. MetLife Cabo Hilton Member, LLC (DE) - 54.129% of MetLife Cabo Hilton Member, LLC is owned by MLIC, 16.9% by General American Life Insurance Company, 28.971% by MetLife Insurance Company USA 58. ML Terraces, LLC (DE) 59. Chestnut Flats Wind, LLC (DE) 60. MetLife 425 MKT Member, LLC (DE) 61. MetLife OFC Member, LLC (DE) 62. MetLife THR Investor, LLC (DE) 63. ML Southmore, LLC (DE) - 99% of ML Southmore, LLC is owned by MLIC and 1% by General American Life Insurance Company. 64. ML - AI MetLife Member 1, LLC (DE) - 95.199% of the membership interest is owned by MLIC and 4.801% by Metropolitan Property and Casualty Insurance Company. 65. MetLife CB W/A, LLC (DE) 66. MetLife Camino Ramon Member, LLC (DE) - 99% of MetLife Camino Ramon Member, LLC is owned by MLIC and 1% by General American Life Insurance Company. 67. 10700 Wilshire, LLC (DE) 68. Viridian Miracle Mile, LLC (DE) 69. MetLife 555 12th Member, LLC (DE) - 94.6% is owned by MLIC and 5.4% by General American Life Insurance Company 70. MetLife OBS Member, LLC (DE) 71. MetLife 1007 Stewart, LLC (DE) 72. ML-AI MetLife Member 2, LLC (DE) - 98.97% of ML-AI MetLife Member 2, LLC's ownership interest is owned by MLIC and 1.03% by General American Life Insurance Company. 73. MetLife Treat Towers Member, LLC (DE) 74. MetLife FM Hotel Member, LLC (DE) a) LHCW Holdings (U.S.) LLC (DE) i) LHC Holdings (U.S.) LLC (DE) 1) LHCW Hotel Holding LLC (DE) aa) LHCW Hotel Holding (2002) LLC (DE) bb) LHCW Hotel Operating Company (2002) LLC (DE) 75. ML Mililani Member, LLC (DE)- is owned at 95% by MLIC and 5% by General American Life Insurance Company. 76. MetLife SP Holdings, LLC (DE) a) MetLife Private Equity Holdings, LLC (DE) 77. Buford Logistics Center, LLC (DE) 78. ML North Brand Member, LLC (DE) 79. MetLife Park Tower Member, LLC (DE) a) Park Tower REIT, Inc. (DE) i) Park Tower JV Member, LLC (DE) 80. MCPP Owners, LLC (DE) - 84.503% is owned by MLIC, 0.603% by General American Life Insurance Company, 1.616% by Metropolitan Tower Life Insurance Company, and 13.278% by MTL Leasing, LLC. 81. MetLife HCMJV 1 GP, LLC (DE) 82. MetLife ConSquare Member, LLC (DE) 83. MetLife Ontario Street Member, LLC (DE) 84. 1925 WJC Owner, LLC (DE) K. MetLife Capital Trust IV (DE) L. MetLife Insurance Company USA (DE) 1. MetLife Property Ventures Canada ULC (Canada) 2. MetLife Canadian Property Ventures LLC (NY) 3. Metropolitan Connecticut Properties Ventures, LLC (DE) 4. Euro TI Investments LLC (DE) 5. One Financial Place Corporation (DE) - 100% is owned in the aggregate by MetLife Insurance Company USA. 6. MetLife USA Assignment Company (CT) 7. TIC European Real Estate LP, LLC (DE) 8. Euro TL Investments LLC (DE) 9. TLA Holdings LLC (DE) a) The Prospect Company (DE) 10. MetLife Renewables Holding, LLC (DE) a) Greater Sandhill I, LLC (DE) 11. TLA Holdings II LLC (DE) 12. TLA Holdings III LLC (DE) 13. Sino-US United MetLife Insurance Co., Ltd. (China) - Sino-US United MetLife Insurance Co., Ltd. is owned at 27.8% by MetLife Insurance Company USA, 22.2% by MLIC and 50% by a third party. 14. ML 1065 Hotel, LLC 15. Daniel/MetLife Midtown Atlanta Master Limited Liability Company (DE) a) 1075 Peachtree, LLC (DE) 16. Brighthouse Reinsurance Company of Delaware (DE) 3 M. MetLife Reinsurance Company of South Carolina (SC) N. MetLife Investment Advisors, LLC (DE) 1. MetLife Alternatives GP, LLC (DE) a) MetLife International PE Fund I, LP (Cayman Islands) - 92.593% of the Limited Partnership interests of this entity is owned by MetLife Insurance K.K., 4.115% is owned by MetLife Mexico S.A., 2.716% is owned by MetLife Limited (Hong Kong) and the remaining 0.576% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. b) MetLife International PE Fund II, LP (Cayman Islands) - 94.54% of the limited partnership interests of MetLife International PE Fund II, LP is owned by MetLife Insurance K.K., 2.77% is owned by MetLife Limited (Hong Kong), 2.1% by MetLife Mexico, S.A. and 0.59% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. c) MetLife International HF Partners, LP (Cayman Islands) - 88.22% of the Limited partnership interests of this entity is owned by MetLife Insurance K.K. and 9.47% is owned by MetLife Insurance Company of Korea Limited, 2.29% is owned by MetLife Limited (Hong Kong) and 0.02% is owned by MetLife Alternatives, GP d) MetLife International PE Fund III, LP - 88.93% of the limited partnership interests of MetLife International PE Fund III LP is owned by MetLife Insurance K.K, 7.91% is owned by MetLife Insurance Company of Korea Limited, 2.61% is owned by MetLife Limited (Hong Kong), and 0.55% is owned by Metropolitan Life Insurance Company of Hong Kong Limited. e) MetLife International PE Fund IV, LP (Cayman Islands) - 94.70% of the limited partnership interests of MetLife International PE Fund IV, LP is owned by MetLife Insurance K.K, 3.79% is owned by MetLife Insurance Company of Korea Limited, 1.51% is owned by Metlife Limited (Hong Kong). 2. MetLife Loan Asset Management LLC (DE) 3. MetLife Core Property Fund GP, LLC (DE) a) MetLife Core Property Fund, LP (DE) - MetLife Core Property Fund GP, LLC is the general partner of MetLife Core Property Fund, LP (the "Fund"). A substantial majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 20.06%, Metropolitan Life Insurance Company (on behalf of Separate Account 746) owns 3.24%, MetLife Insurance Company of Korea Limited owns 2.91%, General American Life Insurance Company owns 0.07% and MetLife Insurance Company USA owns 0.14%. i) MetLife Core Property REIT, LLC (DE) 1) MetLife Core Property Holdings, LLC - MetLife Core Property Holdings, LLC also holds the following single-property limited liability companies: MCP Alley 24 East, LLC, MCP Denver Pavilions Member, LLC, MCP SoCal Industrial-Springdale, LLC, MCP SoCal Industrial-Redondo, LLC, MCP SoCal Industrial-Concourse, LLC, MCP SoCal Industrial-Kellwood, LLC, MCP SoCal Industrial-Bernardo, LLC, MCP SoCal Industrial-Canyon, LLC, MCP SoCal Industrial-Anaheim, LLC, MCP SoCal Industrial-LAX, LLC, MCP SoCal Industrial-Fullerton, LLC, MCP SoCal Industrial-Ontario, LLC, MCP SoCal Industrial-Loker, LLC, MCP Paragon Point, LLC, MCP 4600 South Syracuse, LLC, MCP The Palms Doral, LLC, MCP Waterford Atrium, LLC, MCP EnV Chicago, LLC, MCP 100 Congress, LLC, MCP 1900 McKinney, LLC, MCP 550 West Washington, LLC, MCP Main Street Village, LLC, MCP Lodge At Lakecrest LLC, MCP Ashton South End, LLC, MCP 3040 Post Oak, LLC, MCP Plaza at Legacy, LLC, MCP VOA Holdings, LLC, MCP VOA I& III, LLC, MCP VOA II, LLC, MCP Highland Park Lender, LLC, MCP One Westside, LLC, MCP 7 Riverway, LLC, MCP Trimble Campus, LLC, MCP 9020 Murphy Road, LLC, MCP Buford Logistics Center 2 Member, LLC, and MCPF Acquisition, LLC, MCP 60 11th Street Member, LLC, MCP Magnolia Park Member, LLC, and MCP Fife Enterprise Member, LLC, MCP Northyards Holdco, LLC, MCP Northyards Owner, LLC, MCP Northyards Master Lessee, LLC, 60 11th Street, LLC, Magnolia Park Greenville,Venture, LLC, Magnolia Park Greenville, LLC, MCP 22745 & 22755 Relocation Drive, LLC, MCP DMCBP Phase II Member, LLC, MetLife Core Property TRS, LLC. aa) MCP Property Management, LLC (DE) 4. MIM Property Management, LLC (DE) 5. MetLife Commercial Mortgage Income Fund GP, LLC (DE) a) MetLife Commercial Mortgage Income Fund, LP (DE) - MetLife Commercial Mortgage Income Fund GP, LLC is the general partner of MetLife Commercial Mortgage Income Fund, LP (the "Fund"). A majority of the limited partnership interests in the Fund are held by third parties. The following affiliates hold a minority share of the limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 28.83%, MetLife Insurance Company USA owns 9.61%, MetLife Insurance Company of Korea, Limited. owns 5.66%, MetLife Limited owns 3.81%, and Metropolitan Life Insurance Company of Hong Kong Limited owns 0.76%. i) MetLife Commercial Mortgage REIT, LLC (DE) 1) MetLife Commercial Mortgage Originator, LLC (DE) aa) MCMIF Holdco I, LLC (DE) O. MetLife Standby I, LLC (DE) P. MetLife Services and Solutions, LLC (DE) 1. MetLife Solutions Pte. Ltd. (Singapore) a) MetLife Services East Private Limited (India) b) MetLife Global Operations Support Center Private Limited (India) - 99.99999% is owned by MetLife Solutions Pte. Ltd. and 0.00001% is owned by Natiloportem Holdings, LLC. Q. SafeGuard Health Enterprises, Inc. (DE) 1. MetLife Health Plans, Inc. (DE) 2. SafeGuard Health Plans, Inc. (CA) 3. SafeHealth Life Insurance Company (CA) 4. SafeGuard Health Plans, Inc. (FL) 5. SafeGuard Health Plans, Inc. (NV) 6. SafeGuard Health Plans, Inc. (TX) R. MetLife Capital Trust X (DE) S. Cova Life Management Company (DE) T. MetLife Reinsurance Company of Charleston (SC) U. MetLife Reinsurance Company of Vermont (VT) V. Delaware American Life Insurance Company (DE) W. Federal Flood Certification LLC (TX) X. MetLife Global Benefits, Ltd. (Cayman Islands) Y. Inversiones Metlife Holdco Dos Limitada (Chile) - 99.99946% of Inversiones MetLife Holdco Dos Limitada is owned by MetLife, Inc., 0.000535% is owned by MetLife International Holdings, LLC and 0.0000054% is owned by Natiloportem Holdings, LLC. Z. MetLife Consumer Services, Inc. (DE) AA. MetLife Reinsurance Company of Delaware (DE) AB. MetLife Global, Inc. (DE) AC. Brighthouse Services, LLC (DE) AD. Brighthouse Holdings, LLC (DE) AE. Brighthouse Securities, LLC (DE) AF. Brighthouse Financial, Inc. (DE) AG. MetLife Insurance Brokerage, Inc. (NY) 4 AH. American Life Insurance Company (ALICO) (DE) 1. MetLife Insurance K.K. (Japan) a) Communication One Kabushiki Kaisha (Japan) 2. MetLife Global Holding Company I GmbH (Swiss I) (Switzerland) a) MetLife, Life Insurance Company (Egypt) - 84.125% of MetLife, Life Insurance Company is owned by MetLife Global Holding Company I GmbH and the remaining interests are owned by third parties. b) MetLife Global Holding Company II GmbH (Swiss II) (Switzerland) i) MetLife Emeklilik ve Hayat A.S. (Turkey) - 99.98% of MetLife Emeklilik ve Hayat A.S. is owned by Metlife Global Holding Company II GmbH (Swiss II) and the remainder by third parties. ii) ALICO European Holdings Limited (Ireland) 1) ZAO Master D (Russia) aa) Joint Stock Company MetLife Insurance Company (Russia) - 51% of Joint Stock Company MetLife Insurance Company is owned by ZAO Master D and 49% is owned by MetLife Global Holding Company II GmbH. iii) MetLife Asia Holding Company Pte. Ltd. (Singapore) 1) MetLife Innovation Centre Pte. Ltd. (Singapore) iv) MetLife Reinsurance Company of Bermuda Ltd. (Bermuda) v) MetLife Investment Management Limited (United Kingdom) vi) MM Global Operations Support Center, S.A. de C.V. (Mexico) - 99.999509% of MM Global Operations Support Center, S.A. de C.V. is held by MetLife Global Holding Company II GmbH (Swiss) and 0.000491% is held by MetLife Global Holding Company I GmbH (Swiss). 1. Fundacion MetLife Mexico, A.C. (Mexico) vii) MetLife Colombia Seguros de Vida S.A. (Colombia) - 89.999966393% of MetLife Colombia Seguros de Vida S.A. is owned by MetLife Global Holding Company II GmbH, 10.000029508% is owned by MetLife Global Holding Company I GmbH, 0.000001366% is owned by International Technical and Advisory Services Limited, 0.000001366% is owned by Borderland Investments Limited and 0.000001366% by Natiloportem Holdings, LLC. viii) PJSC MetLife (Ukraine) - 99.9988% of PJSC MetLife is owned by MetLife Global Holding Company II GmbH, .0006% is owned by ITAS and the remaining .0006% is owned by Borderland Investments Limited. ix) MetLife Innovation Centre Limited (Ireland) x) MetLife EU Holding Company Limited (Ireland) 1) MetLife Europe d.a.c (Ireland) - MetLife EU Holding Company Limited holds 96.00315040176985% of this entity. ALICO holds 3.996758255760741% and ITAS holds 0.000091342469407%. 1. MetLife Pension Trustees Limited (United Kingdom) 2) Agenvita S.r.l. (Italy) 3) MetLife Europe Insurance d.a.c (Ireland)- 93% of MetLife Europe Insurance d.a.c is owned by MetLife EU Holding Company Limited and 7% is owned by ALICO. 4) MetLife Europe Services Limited (Ireland) 5) MetLife Insurance Limited (United Kingdom) 6) MetLife Services, Sociedad Limitada (Spain) 7) MetLife Slovakia S.r.o. (Slovakia) - 99.956% of MetLife Slovakia S.r.o. is owned by MetLife EU Holding Company Limited and 0.044% is owned by ITAS. 8) MetLife Solutions S.A.S. (France) 9) Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. (Romania) - 99.9836% of Metropolitan Life Societate de Administrare a unui Fond de Pensii Administrat Privat S.A. is owned by MetLife EU Holding Company Limited and 0.0164% is owned by MetLife Services Sp z.o.o. 10) MetLife Towarzystwo Ubezpieczen na Zycie I Reasekuracji S.A. (Poland) aa) MetLife Services Sp z.o.o. (Poland) bb) MetLife Towarzystwo Funduszy Inwestycyjnych, S.A. (Poland) cc) MetLife Powszechne Towarzystwo Emerytalne S.A. (Poland) 11) MetLife Services Cyprus Limited (Cyprus) aa) Hellenic Alico Life Insurance Company, Ltd. (Cyprus) - 27.5% of Hellenic Alico Life Insurance Company, Ltd. Is owned by MetLife Services Cyprus Limited and the remaining is owned by a third party. 12) MetLife Services EOOD (Bulgaria) 13) MetLife Life Insurance S.A. (Greece) aa) MetLife Mutual Fund Company (Greece) - 90% of MetLife Mutual Fund Company is owned by MetLife Life Insurance S.A. (Greece) and the remaining interests are owned by third parties. 14) First American-Hungarian Insurance Agency Limited (Hungary) 15) MetLife SK, s.r.o. (Slovakia) - 99.8788% of MetLife SK, s.r.o. is owned by MetLife EU Holding Company Limited, 0.1212% is owned by ITAS 16) UBB-MetLife Zhivotozastrahovatelno Drujestvo AD (Bulgaria) - 40% of UBB-MetLife Zhivotozastrahovatelno Drujestvo AD is owned by MetLife EU Holding Company Limited and the rest by third parties. xi) MetLife International Holdings, LLC (DE) 1. Natiloportem Holdings, LLC (DE) aa) Excelencia Operativa y Tecnologica, S.A. de C.V. (Mexico) - 99% of Excelencia Operativa y Tecnologica, S.A. de C.V. is held by Natiloportem Holdings, LLC and 1% by MetLife Mexico Servicios S.A. de C.V. i) MLA Comercial, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. ii) MLA Servicios, S.A. de C.V. (Mexico) 99% is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. 2. PNB MetLife India Insurance Company Limited (India)- 26% is owned by MetLife International Holdings, LLC and 74% is owned by third parties. 3. Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99935% is owned by MetLife International Holdings, Inc. and 0.00065% is owned by Natiloporterm Holdings, LLC. 4. MetLife Seguros S.A. (Argentina)- 95.5242% is owned by MetLife International Holdings, LLC, 2.6753% is owned by Natiloportem Holdings, LLC and 1.8005% by ITAS. 5. Metropolitan Life Seguros e Previdencia Privada S.A. (Brazil)-66.662% is owned by MetLife International Holdings, LLC, 33.337% is owned by MetLife Worldwide Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 6. MetLife Administradora de Fundos Multipatrocinados Ltda. (Brazil) - 99.99998% of MetLife Administradora de Fundos Multipatrocinados Ltda. is owned by MetLife International Holdings, LLC and 0.00002% by Natiloportem Holdings, LLC. 7. MetLife Seguros de Retiro S.A. (Argentina) - 96.8897% is owned by MetLife International Holdings, LLC, 3.1102% is owned by Natiloportem Holdings, LLC and 0.0001% by ITAS 8. Best Market S.A. (Argentina) - 5% of the shares are held by Natiloportem Holdings, LLC and 95% is owned by MetLife International Holdings, LLC. 9. Compania Inversora MetLife S.A. (Argentina) - 95.46% is owned by MetLife International Holdings, LLC and 4.54% is owned by Natiloportem Holdings, LLC. aa) MetLife Servicios S.A. (Argentina) - 18.87% of the shares of MetLife Servicios S.A. are held by Compania Inversora MetLife S.A., 79.88% is owned by MetLife Seguros S.A., 0.99% is held by Natiloportem Holdings, LLC and 0.26% is held by MetLife Seguros de Retiro S.A. 10. MetLife Worldwide Holdings, LLC (DE) aa) MetLife Limited (Hong Kong) i) BIDV MetLife Life Insurance Limited Liability Company (Vietnam) - 60% of BIDV MetLife Life Insurance Limited Liability Company is held by MetLife Limited (Hong Kong) and the remainder by third parties 11. MetLife International Limited, LLC (DE) 12. MetLife Planos Odontologicos Ltda. (Brazil) - 99.999% is owned by MetLife International Holdings, LLC and 0.001% is owned by Natiloportem Holdings, LLC. 13. MetLife Asia Limited (Hong Kong) 14. AmMetLife Insurance Berhad (Malaysia) - 50.000001% of AmMetLife Insurance Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 15. AmMetLife Takaful Berhad (Malaysia) - 49.999999% of AmMetLife Takaful Berhad is owned by MetLife International Holdings, LLC and the remainder is owned by a third party. 16. MAXIS GBN S.A.S. (France) - 50% of MAXIS GBN S.A.S. is held by MetLife International Holdings, LLC and the remainder by third parties. 17. MetLife Mas S.A. de C.V. (Mexico) - 99.99964399% MetLife Mas, SA de CV is owned by MetLife International Holdings, LLC and .00035601% is owned by International Technical and Advisory Services Limited. 5 18. MetLife Ireland Holdings One Limited (Ireland) aa) MetLife Global Holdings Corporation S.A. de C.V. (Mexico/Ireland) - 98.9% is owned by MetLife Ireland Holdings One Limited and 1.1% is owned by MetLife International Limited, LLC. i) MetLife Ireland Treasury d.a.c (Ireland) 1) MetLife General Insurance Limited (Australia) 2) MetLife Insurance Limited (Australia) - 91.16468% of MetLife Insurance Limited (Australia) is owned by MetLife Ireland Treasury Limited and 8.83532% is owned by MetLife Global Holdings Corp. S.A. de C.V. a) The Direct Call Centre PTY Limited (Australia) b) MetLife Investments PTY Limited (Australia) i) MetLife Insurance and Investment Trust (Australia) - MetLife Insurance and Investment Trust is a trust vehicle, the trustee of which is MetLife Investments PTY Limited ("MIPL"). MIPL is a wholly owned subsidiary of MetLife Insurance Limited. ii) Metropolitan Global Management, LLC (DE/Ireland) - 99.7% is owned by MetLife Global Holdings Corporation S.A. de C.V. and 0.3% is owned by MetLife International Holdings, LLC. aaa) MetLife Pensiones Mexico S.A. (Mexico)- 97.5125% is owned by Metropolitan Global Management, LLC and 2.4875% is owned by MetLife International Holdings, LLC. bbb) MetLife Mexico Servicios, S.A. de C.V. (Mexico) - 98% is owned by Metropolitan Global Management, LLC and 2% is owned by MetLife International Holdings, LLC. ccc) MetLife Mexico S.A. (Mexico)- 99.050271% is owned by Metropolitan Global Management, LLC and 0.949729% is owned by MetLife International Holdings, LLC. 1) MetLife Afore, S.A. de C.V. (Mexico)- 99.99% is owned by MetLife Mexico S.A. and 0.01% is owned by MetLife Pensiones Mexico S.A. aaaa) 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. bbbb) 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. cccc) MetA SIEFORE Adicional, 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. dddd) Met3 SIEFORE Basica, 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. eeee) Met4 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. ffff) Met0 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. 2) ML Capacitacion Comercial S.A. de C.V.(Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Cares, S.A. de C.V. ddd) MetLife Insurance Company of Korea Limited (South Korea)- 14.64% is owned by MetLife Mexico, S.A. and 85.36% is owned by Metropolitan Global Management, LLC. 1) MetLife Financial Services, Co., Ltd. eee) MetLife Mexico Holdings, S. de R.L. de C.V. (Mexico) - 99.99995% is owned by Metropolitan Global Management, LLC, and the remainder is owned by Excelencia Operativa y Tecnologica, S.A. de C.V. xii) MetLife Investment Management Holding (Ireland) Limited aaa) MetLife Investment Asia Limited (Hong Kong) xiii) ALICO Operations LLC (DE) aaa) MetLife Asset Management Corp. (Japan) bbb) MetLife Seguros S.A. (Uruguay) 3. International Investment Holding Company Limited (Russia) 4. Borderland Investments Limited (USA-Delaware) a) ALICO Hellas Single Member Limited Liability Company (Greece) 5. International Technical and Advisory Services Limited ("ITAS") (USA-Delaware) 6. ALICO Properties, Inc. (USA-Delaware) - 51% of ALICO Properties, Inc. is owned by ALICO and the remaining interests are owned by third parties. a) Global Properties, Inc. (USA-Delaware) 7. Alpha Properties, Inc. (USA-Delaware) 8. Beta Properties, Inc. (USA-Delaware) 9. Delta Properties Japan, Inc. (USA-Delaware) 10. Epsilon Properties Japan, Inc. (USA-Delaware) 11. Iris Properties, Inc. (USA-Delaware) 12. Kappa Properties Japan, Inc. (USA-Delaware) 13. MetLife American International Group and Arab National Bank Cooperative Insurance Company (Saudi Arabia) - 30% of MetLife American International Group and Arab National Bank Cooperative Insurance Company is owned by ALICO and the remaining interest by third parties. The Delaware Department of Insurance approved a disclaimer of affiliation and therefore, this company is not considered an affiliate under Delaware Law. AI. General American Life Insurance Company (MO) a. GALIC Holdings LLC (DE) AJ. New England Life Insurance Company (MA) AK. MetLife European Holdings, LLC (DE) 1) 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. 2) 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. 3) 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. 4) MetLife Services EEIG is a cost-sharing mechanism used in the EU for EU- affiliated members. 6 ITEM 29. INDEMNIFICATION As described in their respective governing documents, MetLife, Inc. (the ultimate parent of the Depositor and MetLife Investors Distribution Company, the Registrant's principal underwriter (the "Underwriter")), which is incorporated in the state of Delaware, and the Depositor, which is incorporated in the state of New York, shall indemnify any person who is made or is threatened to be made a party to any civil or criminal suit, or any administrative or investigative proceeding, by reason of the fact that such person is or was a director or officer of the respective company, under certain circumstances, against liabilities and expenses incurred by such person. MetLife, Inc. also has adopted a policy to indemnify employees ("MetLife Employees") of MetLife, Inc. or its affiliates ("MetLife"), including any MetLife Employees serving as directors or officers of the Depositor or the Underwriter. Under the policy, MetLife, Inc. will, under certain circumstances, indemnify MetLife Employees for losses and expenses incurred in connection with legal actions threatened or brought against them as a result of their service to MetLife. The policy excludes MetLife directors and others who are not MetLife Employees, whose rights to indemnification, if any, are as described in the charter, bylaws or other arrangement of the relevant company. MetLife, Inc. also maintains a Directors and Officers Liability and Corporate Reimbursement Insurance Policy under which the Depositor and the Underwriter, as well as certain other subsidiaries of MetLife, are covered. MetLife, Inc. also has secured a Financial Institutions Bond. Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Company, pursuant to the foregoing provisions, or otherwise, the 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 the Company of expenses incurred or paid by a director, officer or controlling person of the 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, the Company 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) MetLife Investors Distribution Company is the principal underwriter for the following investment companies: General American Separate Account Two General American Separate Account Eleven General American Separate Account Twenty-Eight General American Separate Account Twenty-Nine Metropolitan Life Separate Account E Metropolitan Life Separate Account UL Metropolitan Life Variable Annuity Separate Account II Metropolitan Tower Separate Account One Metropolitan Tower Separate Account Two New England Life Retirement Investment Account New England Variable Annuity Fund I Paragon Separate Account A Paragon Separate Account B Paragon Separate Account C Paragon Separate Account D Security Equity Separate Account Twenty-Six Security Equity Separate Account Twenty-Seven Separate Account No. 13S (b)MetLife Investors Distribution Company is the principal underwriter for the Policies. The following persons are the officers and directors of MetLife Investors Distribution Company. The principal business address for MetLife Investors Distribution Company is 200 Park Avenue, New York, NY 10166.
NAME AND PRINCIPAL BUSINESS OFFICE POSITIONS AND OFFICES WITH UNDERWRITER ------------------------------------ --------------------------------------- Elizabeth M. Forget Director Gragg Building 11225 North Community House Road Charlotte, NC 28277
Paul A. LaPiana Director Gragg Building 11225 North Community House Road Charlotte, NC 28277
Gerard Nigro Director and Senior Vice President One MetLife Plaza 27-01 Queens Plaza, North Long Island City, NY 11101
Lance Carlson President One MetLife Plaza 27-01 Queens Plaza, North Long Island City, NY 11101
Kieran R. Mullins Executive Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Barbara A. Dare Senior Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
Donald Leintz Senior Vice President Gragg Building 11225 North Community House Road Charlotte, NC 28277
John P. Kyne, III Vice President and Chief Compliance Officer Gragg Building 11225 North Community House Road Charlotte, NC 28277
John G. Martinez Vice President and Chief Financial Officer 18210 Crane Nest Drive Tampa, FL 33647
Tyla L. Reynolds Vice President and Secretary 600 North King Street Wilmington, DE 19801
Marlene B. Debel Treasurer Metropolitan Life Insurance Company 1095 Avenue of the Americas New York, NY 10036
(c) Compensation from the Registrant.
(3) COMPENSATION ON EVENTS (2) OCCASIONING THE (1) NET UNDERWRITING DEDUCTION OF A (5) NAME OF PRINCIPAL DISCOUNTS AND DEFERRED SALES (4) OTHER UNDERWRITER COMMISSIONS LOAD BROKERAGE COMMISSIONS COMPENSATION ---------------------------------------- ------------------ ---------------- ----------------------- ------------- MetLife Investors Distribution Insurance Company................................. $5,657,520 $0 $0 $0
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 (c) MetLife Investors Distribution Company 200 Park Avenue New York, NY 10166 (d) Metropolitan Life Insurance Company 18210 Crane Nest Drive Tampa, FL 33647 (e) Metropolitan Life Insurance Company One Financial Center Boston, MA 02111 ITEM 32. MANAGEMENT SERVICES Not applicable ITEM 33. FEE REPRESENTATION Metropolitan Life represents that the fees and charges deducted under the Policy 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. SIGNATURES As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets the requirements of Securities Rule 485(b) for effectiveness of this Registration Statement and has caused this Registration Statement to be signed on its behalf, in the city of Charlotte, and state of North Carolina on April 13, 2017. Metropolitan Life Separate Account UL (Registrant) BY: Metropolitan Life Insurance Company (Depositor) BY: /s/ GREGORY E. ILLSON ----------------------------------- GREGORY E. ILLSON VICE PRESIDENT BY: Metropolitan Life Insurance Company (Depositor) BY: /s/ GREGORY E. ILLSON ----------------------------------- GREGORY E. ILLSON VICE PRESIDENT SIGNATURES As required by the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities indicated, on April 13, 2017.
SIGNATURE TITLE --------------------------------- --------------------------------------------- * --------------------------------- Director, Chairman, President and Chief Steven A. Kandarian Executive Officer * --------------------------------- Executive Vice President and Chief Peter M. Carlson Accounting Officer * --------------------------------- Executive Vice President and Chief John C.R. Hele Financial Officer * --------------------------------- Director Cheryl W. Grise * --------------------------------- Director Carlos M. Gutierrez --------------------------------- Director David Herzog * Director --------------------------------- R. Glenn Hubbard * Director --------------------------------- Alfred F. Kelly, Jr. --------------------------------- Director Edward J. Kelly, III * Director --------------------------------- William E. Kennard * Director --------------------------------- James M. Kilts
SIGNATURE TITLE --------------------------------- --------------------------------------------- * --------------------------------- Director Catherine R. Kinney * --------------------------------- Director Denise M. Morrison * --------------------------------- Director Kenton J. Sicchitano * --------------------------------- Director Lulu C. Wang *By: /s/ John M. Richards, Esq ---------------------------- John M. Richards, Esq Attorney-in-Fact April 13, 2017
*Metropolitan Life Insurance Company. Executed by John M. Richards, Esq., on behalf of those indicated pursuant to powers of attorney incorporated herein by reference to Registrant's Post-Effective Amendment No. 8 to the Registration Statement on Form N-6 (File No. 333-147508/811-06025) filed as Exhibit (r) on April 14, 2016. EXHIBIT INDEX (n) Consent of Independent Registered Public Accounting Firm