0001193125-19-115109.txt : 20190423 0001193125-19-115109.hdr.sgml : 20190423 20190423172104 ACCESSION NUMBER: 0001193125-19-115109 CONFORMED SUBMISSION TYPE: 485BPOS PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20190423 DATE AS OF CHANGE: 20190423 EFFECTIVENESS DATE: 20190429 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL CENTRAL INDEX KEY: 0000858997 IRS NUMBER: 135581829 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1933 Act SEC FILE NUMBER: 033-57320 FILM NUMBER: 19762199 BUSINESS ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 212-578-9000 MAIL ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: METROPOLITAN LIFE SEPARATE ACCOUNT UL DATE OF NAME CHANGE: 19920703 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Metropolitan Life Separate Account UL CENTRAL INDEX KEY: 0000858997 IRS NUMBER: 135581829 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 485BPOS SEC ACT: 1940 Act SEC FILE NUMBER: 811-06025 FILM NUMBER: 19762198 BUSINESS ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 BUSINESS PHONE: 212-578-9000 MAIL ADDRESS: STREET 1: METROPOLITAN LIFE INSURANCE COMPANY STREET 2: 200 PARK AVENUE CITY: NEW YORK STATE: NY ZIP: 10166 FORMER COMPANY: FORMER CONFORMED NAME: METROPOLITAN LIFE SEPARATE ACCOUNT UL DATE OF NAME CHANGE: 19920703 0000858997 S000004219 Metropolitan Life Separate Account UL C000011872 MetFlex Flexible Premium Variable Life 485BPOS 1 d660247d485bpos.txt METLIFE METFLEX COLI POST-EFFECTIVE AMENDMENT NO. 32 AS FILED WITH THE U.S. SECURITIES AND EXCHANGE COMMISSION ON APRIL 23, 2019 REGISTRATION NOS. 033-57320 811-06025 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-6 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 POST-EFFECTIVE AMENDMENT NO. 32 [X] AND/OR REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 AMENDMENT NO. 93 [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 STEPHEN W. GAUSTER, 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 Vedder Price P.C. 1401 I Street, N.W. Suite 1100 Washington, D.C. 20005 Approximate Date of Proposed Public Offering: on April 29, 2019 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 April 29, 2019 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: Interests in Metropolitan Life Separate Account UL, which funds certain Variable Universal Life Insurance Policies. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE SEPARATE ACCOUNT UL METFLEX FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES SUPPLEMENT DATED APRIL 29, 2019 TO PROSPECTUS DATED APRIL 29, 2019 This supplement is prepared for Policy Owners of MetFlex C and MetFlex Policies issued prior to January 1, 2009. It describes certain differences in the charges imposed under your Policy and the charges described in the Fee Table of the current MetFlex Exec prospectus. You should read and retain this supplement. METFLEX C POLICIES For MetFlex C Policies issued on or after May 1, 1996 and before August 1, 2000, the current sales charge imposed in Policy years 1 to 10 is up to 9% of the annual target premium paid, and the current administrative charge imposed is up to 1.05% of the annual target premium paid. For MetFlex C Policies issued before January 1, 2009, the current charge for cost of insurance for coverage under the term benefit ranges from $0.03 to $13.93 per $1,000 of the term insurance amount. The maximum charge for cost of insurance for coverage under both the base Policy and the term benefit ranges from $0.09 to $30.45 per $1,000 of term insurance amount. For MetFlex C Policies, the current mortality and expense risk charge is 0.48% in Policy years 1 to 9, 0.36% in Policy years 10 to 20, and 0.30% thereafter. For MetFlex C Policies issued on or after November 5, 2001 and before February 1, 2004 with the Enhanced Cash Surrender Value Rider, if you request a full cash withdrawal in the first seven Policy years, we will refund the amounts shown in Table B below: TABLE B
PORTION OF COST OF TERM INSURANCE CHARGES DEDUCTED PORTION OF DURING POLICY YEAR OF POLICY YEAR OF CUMULATIVE PREMIUM FULL CASH WITHDRAWAL FULL CASH WITHDRAWAL CHARGES TO BE REFUNDED* TO BE REFUNDED ---------------------- ------------------------- --------------------------- 1 100% 75% 2 90% 50% 3 75% 25% 4 60% None 5 45% None 6 30% None 7 15% None 8 and later None None
* The percent shown is applied to the cumulative sales, tax, and administrative charges deducted from your premium. METFLEX POLICIES For MetFlex Policies issued on or after September 1, 1993 and before January 1, 2009, there is no current sales charge and the maximum sales charge imposed is 1.0% of annual target premium paid in all Policy years. The current administrative charge is up to 1.05% of annual target premium paid in any Policy year and the maximum administrative charge is up to 1.05% of all premiums paid in all Policy years. For MetFlex Policies issued before January 1, 2009, the maximum cost of term insurance charge ranges from $0.09 to $30.45 per $1,000 of the term insurance amount. The current mortality and expense risk charge is 0.60% in Policy years 1 to 9 and 0.30% thereafter. THIS PAGE INTENTIONALLY LEFT BLANK. PROSPECTUS FOR METFLEX, A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY ("POLICY") ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY ("METLIFE") APRIL 29, 2019 This prospectus provides you with important information about MetLife's MetFlex Policies. However, this prospectus is not the Policy. The Policy, rather, is a separate written agreement that MetLife issues to you. The Policy is designed to provide: o Life insurance coverage o Flexible premium payments o A choice among three death benefit options o A method of financing certain deferred compensation plans, post-retirement benefits and payroll deduction programs You may allocate premium payments to and transfer cash value among a fixed interest account ("Fixed Account") and the Metropolitan Life Separate Account UL Divisions (Divisions maybe referred to as "Investment Divisions" in your Policy and marketing materials) which invest in the following corresponding portfolios ("Portfolios"): AB VARIABLE PRODUCTS SERIES FUND, INC. -- CLASS B AB VPS Global Thematic Growth Portfolio AB VPS Intermediate Bond Portfolio AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) Invesco V.I. Comstock Fund -- Series II Invesco V.I. International Growth Fund -- Series I AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Growth Fund American Funds High-Income Bond Fund American Funds International Fund American Funds U.S. Government/AAA-Rated Securities Fund BRIGHTHOUSE FUNDS TRUST I Brighthouse Asset Allocation 100 Portfolio -- Class B Brighthouse Small Cap Value Portfolio -- Class B Brighthouse/Aberdeen Emerging Markets Equity Portfolio -- Class B Brighthouse/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 Small Cap Growth Portfolio -- Class B JPMorgan Small Cap Value Portfolio -- Class A MFS(R) Research International Portfolio -- Class B Morgan Stanley Discovery Portfolio -- Class A (formerly Morgan Stanley Mid Cap Growth Portfolio) Oppenheimer Global Equity Portfolio -- Class A PIMCO Inflation Protected Bond Portfolio -- Class A PIMCO Total Return Portfolio -- Class A T. Rowe Price Large Cap Value Portfolio -- Class A Victory Sycamore Mid Cap Value Portfolio -- Class A BRIGHTHOUSE FUNDS TRUST II Baillie Gifford International Stock Portfolio -- Class A BlackRock Bond Income Portfolio -- Class A BlackRock Capital Appreciation Portfolio -- Class A BlackRock Ultra-Short Term Bond Portfolio -- Class A Brighthouse Asset Allocation 20 Portfolio -- Class B Brighthouse Asset Allocation 40 Portfolio -- Class B Brighthouse Asset Allocation 60 Portfolio -- Class B Brighthouse/Artisan Mid Cap Value Portfolio -- Class B Brighthouse/Wellington Balanced Portfolio -- Class A Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class A Frontier Mid Cap Growth Portfolio -- Class A Jennison Growth Portfolio -- Class A Loomis Sayles Small Cap Core Portfolio -- Class A MetLife Aggregate Bond Index Portfolio -- Class A MetLife Mid Cap Stock Index Portfolio -- Class A MetLife MSCI EAFE(R) Index Portfolio -- Class A MetLife Russell 2000(R) Index Portfolio -- Class A MetLife Stock Index Portfolio -- Class A MFS(R) Total Return Portfolio -- Class B MFS(R) Value Portfolio -- Class A Neuberger Berman Genesis Portfolio -- Class A T. Rowe Price Large Cap Growth Portfolio -- Class A T. Rowe Price Small Cap Growth Portfolio -- Class A Western Asset Management Strategic Bond Opportunities Portfolio -- Class A DREYFUS VARIABLE INVESTMENT FUND -- SERVICE SHARES International Value Portfolio FIDELITY(R) VARIABLE INSURANCE PRODUCTS Asset Manager: Growth Portfolio -- Service Class Contrafund(R) Portfolio -- Service Class Equity-Income Portfolio -- Service Class Freedom 2020 Portfolio -- Initial Class Freedom 2025 Portfolio -- Initial Class Government Money Market Portfolio -- Initial Class High Income Portfolio -- Initial Class Investment Grade Bond Portfolio -- Service Class Mid Cap Portfolio -- Service Class 2 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Franklin Mutual Global Discovery VIP Fund -- Class 2 Templeton Foreign VIP Fund -- Class 1 Templeton Global Bond VIP Fund -- Class 1 GOLDMAN SACHS VARIABLE INSURANCE TRUST -- INSTITUTIONAL SHARES Goldman Sachs Small Cap Equity Insights Fund JANUS ASPEN SERIES Janus Henderson Balanced Portfolio -- Service Shares Janus Henderson Enterprise Portfolio -- Service Shares Janus Henderson Forty Portfolio -- Service Shares Janus Henderson Research Portfolio -- Institutional Shares MFS(R) VARIABLE INSURANCE TRUST -- SERVICE CLASS MFS(R) Global Equity Series MFS(R) New Discovery Series MFS(R) VARIABLE INSURANCE TRUST II -- SERVICE CLASS MFS(R) High Yield Portfolio MORGAN STANLEY VARIABLE INSURANCE FUND, INC. -- CLASS I Emerging Markets Debt Portfolio Emerging Markets Equity Portfolio PIMCO VARIABLE INSURANCE TRUST -- ADMINISTRATIVE CLASS PIMCO All Asset Portfolio PIMCO CommodityRealReturn(R) Strategy Portfolio PIMCO Long-Term U.S. Government Portfolio PIMCO Low Duration Portfolio PIONEER VARIABLE CONTRACTS TRUST -- CLASS I Pioneer Mid Cap Value VCT Portfolio PUTNAM VARIABLE TRUST -- CLASS IB Putnam VT International Value Fund ROYCE CAPITAL FUND -- INVESTMENT CLASS Royce Micro-Cap Portfolio Royce Small-Cap Portfolio Certain Portfolios have been subject to a name change. Please see Appendix A--"Additional Information Regarding the Portfolios." Separate prospectuses for AB Variable Products Series Fund, Inc., AIM Variable Insurance Funds (Invesco Insurance Funds), American Funds Insurance Series(R), Brighthouse Funds Trust I, Brighthouse Funds Trust II, Dreyfus Variable Investment Fund, Fidelity(R) Variable Insurance Products, Franklin Templeton Variable Insurance Products Trust, Goldman Sachs Variable Insurance Trust, Janus Aspen Series, MFS(R) Variable Insurance Trust, MFS(R) Variable Insurance Trust II, Morgan Stanley Variable Insurance Fund, Inc., PIMCO Variable Insurance Trust, Pioneer Variable Contracts Trust, Putnam Variable Trust and the Royce Capital Fund (each a "Portfolio") are available from us by calling 1-908-253-1400. They describe in greater detail an investment in the portfolios listed above. Before purchasing a Policy, read the information in this prospectus and in the prospectus for each Portfolio. Keep these prospectuses for future reference. We do not guarantee how any of the Portfolios will perform. Since the Fixed Account is not registered under the federal securities laws, this Prospectus contains only limited information about the Fixed Account. The Policy gives you more information on the operation of the Fixed Account. Policies issued in your state may provide different features and benefits from, and impose different costs than, those described in this Prospectus. Your actual Policy and any endorsements are the controlling documents. You should read the Policy carefully for any variations in your state. Neither the Securities and Exchange Commission ("SEC") nor any state securities authority has approved or disapproved of these securities, nor have they determined if this Prospectus is accurate or complete. Any representation otherwise is a criminal offense. This Prospectus does not constitute an offering in any jurisdiction where such offering may not lawfully be made. Interests in the Separate Account, the Fixed Account and the Portfolios are not deposits, obligations of, or insured or guaranteed by, the U.S. Government, any bank or other depository institution including the Federal Deposit Insurance Corporation ("FDIC"), the Federal Reserve Board or any other agency or entity or person. We do not authorize any representations about this offering other than as contained in this Prospectus or its supplements or in our authorized supplemental sales material. IMPORTANT INFORMATION Beginning on January 1, 2021, as permitted by regulations adopted by the Securities and Exchange Commission, paper copies of a Portfolio's shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from us. Instead, the shareholder reports will be made available on www.metlife.com, and you will be notified by mail each time a shareholder report is posted and provided with a website link to access the 2 shareholder report.If you already elected to receive your shareholder report electronically, you will not be affected by this change, and you need not take any action. You may elect to receive shareholder reports and other communications, including Portfolio prospectuses and other information we send you by contacting our Administrative Office.If you wish to continue to receive shareholder reports in paper on and after January 1, 2021, we will continue to send you all future reports in paper, free of charge. Please contact us at our Administrative Office if you wish to continue receiving paper copies of the Portfolios' shareholder reports. Your election to receive shareholder reports in paper will apply to all Portfolios available under your Policy. 3 TABLE OF CONTENTS
PAGE IN THIS SUBJECT PROSPECTUS ------------------------------------------------------------------------------- ----------- Contacting Us.................................................................. 5 Summary of Benefits and Risks.................................................. 5 Policy Benefits............................................................. 5 Risks of a Policy........................................................... 6 Fee Tables..................................................................... 7 Transaction Fees............................................................ 7 Periodic Charges Other Than Portfolio Operating Expenses.................... 9 Periodic Charges............................................................ 9 Portfolio Operating Expenses................................................ 10 MetLife........................................................................ 14 The Fixed Account........................................................... 15 Separate Account............................................................ 15 The Funds................................................................... 15 The Portfolio Share Classes that We Offer................................... 22 Substitution of Portfolios.................................................. 23 Purchase and Redemption of Portfolio Shares by the Separate Account......... 23 Voting Rights............................................................... 23 Issuing a Policy............................................................... 23 Payment and Allocation of Premiums............................................. 24 Paying Premiums............................................................. 24 Maximum and Minimum Premium Payments........................................ 24 Allocating Net Premium...................................................... 25 Insurance Proceeds............................................................. 25 Death Benefit Options....................................................... 26 Minimum Death Benefit....................................................... 27 Specified Face Amount....................................................... 27 Income Plans................................................................ 28 Cash Value, Transfers and Withdrawals.......................................... 28 Cash Value.................................................................. 28 Surrender and Withdrawal Privileges......................................... 32 Benefit at Final Date....................................................... 33 Loan Privileges................................................................ 33 Optional Rider Benefits........................................................ 34 Term Benefit................................................................ 34 Charges and Deductions......................................................... 35 Important Information Applicable to all Policy Charges and Deductions....... 35 Charges Deducted from Premiums.............................................. 36 Charges Included in the Monthly Deduction................................... 36 Charges for Certain Optional Rider Benefits................................. 37 Variations In Charges....................................................... 37 Portfolio Company Charges................................................... 38 Other Charges............................................................... 38 Policy Termination and Reinstatement........................................... 38 Federal Tax Matters............................................................ 38 Rights We Reserve.............................................................. 42 Other Policy Provisions........................................................ 43 Sales of Policies.............................................................. 45 Legal Proceedings.............................................................. 46 Restrictions on Financial Transactions......................................... 46 Financial Statements........................................................... 47
4 CONTACTING US You can communicate all of your requests, instructions and notifications to us by contacting us in writing at your Designated Office. We may require that certain requests, instructions and notifications be made on forms that we provide. To avoid delays, such requests, instructions and notifications generally must be received by us in "good order" (see "Good Order" below). These include: changing your beneficiary; taking a Policy loan; changing your death benefit option; taking a partial withdrawal; surrendering your Policy; making transfer requests; or changing your premium allocations. Your Designated Office is -MetLife--SBR, 501 Route 22, Bridgewater, NJ 08807. We may name additional or alternate Designated Offices. If we do, we will notify you in writing. GOOD ORDER. A request or transaction generally is considered in "good order" if it complies with our administrative procedures and the required information is complete and accurate. A request or transaction may be rejected or delayed if it is not in good order. If you have any questions about the procedures and requirements for any requests, instructions or notifications, you should contact us or your sales representative before submitting the form or request. SUMMARY OF BENEFITS AND RISKS This summary gives an overview of the Policy and is qualified by the more detailed information in the balance of this Prospectus and the Policy. Metropolitan Life Insurance Company ("MetLife") issues the Policies. We offer the Policies to employers, employer sponsored plans, or other organizations or individuals associated with such employers, plans or organizations. We designed the Policies for financing nonqualified deferred compensation plans, other post-employment benefits, certain employer sponsored payroll deduction programs or other purposes. POLICY BENEFITS PREMIUM PAYMENT FLEXIBILITY. The Policy allows flexibility in making premium payments. The Policy will remain in force as long as the cash surrender value is large enough to cover one monthly deduction, regardless of whether or not premium payments have been made. CASH VALUE. Your cash value in the Policy reflects your premium payments, the charges we deduct, interest we credit if you have cash value in our fixed interest account, any investment experience you have in our Separate Account, as well as your loan and withdrawal activity. SPECIFIED FACE AMOUNT OF INSURANCE. Within certain limits, you may choose your specified face amount of insurance when the Policy is issued. You may also change the amount at any time after the first Policy year, subject to our rules and procedures. DEATH BENEFIT OPTIONS. Generally, you have a choice among three options. These range from an amount equal to the specified face amount to an amount equal to the specified face amount plus the Policy Cash Value at the date of death. INCOME PLANS. The insurance proceeds can be paid under a variety of income plans that are available under the Policy. SURRENDERS, PARTIAL WITHDRAWALS AND LOANS. Within certain limits, you may take partial withdrawals and loans from the Policy. You may also surrender your Policy for its Cash Surrender Value. TAX ADVANTAGES. In general, you will not pay income taxes on any cash value that accrues in your Policy prior to a distribution. If you meet certain requirements, favorable distribution rules will apply. The death benefit may be subject to Federal and state estate taxes, but your beneficiary will generally not be subject to income tax on the death benefit. In the case of employer-owned life insurance as defined in Section 101(j) of the Internal Revenue Code (the "Code"), 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. As with any taxation matter, you should consult with and rely on the advice of your own tax adviser. 5 TERM RIDER. This rider provides coverage on the insured to age 95. The amount of sales charge you pay will be less if coverage is obtained through this rider rather than as part of the Policy. The current charges for the cost of insurance are lower for coverage under the term rider than under the base Policy. For details, see "Optional Rider Benefits--Term Benefit." OTHER OPTIONAL RIDER BENEFITS. You may be eligible for certain other benefits provided by rider, subject to certain underwriting requirements and the payment of additional premiums. We will deduct any charges for the rider(s) (other than the charge for the interim term insurance rider) as part of the monthly deduction. RISKS OF A POLICY. This Prospectus discusses the risks associated with purchasing the Policy. Prospectuses for the Portfolios discuss the risks associated with investment in the Portfolio described therein. Each of the Divisions that is available to you under the Policy invests solely in a corresponding "Portfolio" of a Fund. INVESTMENT RISK. MetLife does not guarantee the investment performance of the Divisions and you should consider your risk tolerance before selecting any of these options. You will be subject to the risk that investment performance will be unfavorable and that your cash value will decrease. In addition, we deduct certain 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, these deductions may have an even greater impact on your Policy's cash value. It is possible to lose your full investment and your Policy could terminate without value, unless you pay additional premiums. 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 2.5% (4% for Policies issued prior to February 24, 2012). SURRENDER AND WITHDRAWAL RISKS. The Policies are designed to provide lifetime insurance protection. They are not offered primarily as an investment, and are not suitable as a short-term savings vehicle. 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. RISK OF POLICY TERMINATION. Your Policy may terminate without value if you have paid an insufficient amount of premiums or if the investment experience of the Divisions is poor. If your cash surrender value is not enough to pay the monthly deduction, your Policy will terminate without value unless you make a premium payment sufficient to cover two monthly deductions within the 61-day grace period. If your Policy does terminate, your insurance coverage will terminate (although you will be given an opportunity to reinstate your coverage if you satisfy certain requirements). Lapse of a policy on which there is an outstanding loan may have adverse tax consequences. POLICY CHARGE AND EXPENSE INCREASE. We have the right to increase certain Policy charges. TAX LAW RISKS. We anticipate that the Policy should generally be deemed a life insurance contract under Federal tax law. The insurance proceeds payable upon death of the insured 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 Code, as in effect on the date the Policy was issued. The guidance, however, is not entirely clear in certain circumstances, for example, with respect to Policies issued on a substandard risk basis. In general, you should not be deemed to be in receipt of any portion of your Policy's cash value until there is an actual distribution from the Policy. Although the Beneficiary generally should not have to pay Federal income tax on the insurance proceeds, other taxes, such as estate taxes, may apply. 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. If you pay more than a certain amount of premiums, you may cause your Policy to become a "modified endowment contract." If it does, you will pay income taxes on loans and other amounts we pay out to you (except for payment of insurance proceeds) to the extent of any gains in your Policy (which is generally the excess of cash value over the premiums paid). In this case, an additional 10% tax penalty may also apply. 6 If the Policy is not a modified endowment contract, distributions generally will be treated first as a return of basis or investment in the contract and then as taxable income. Moreover, loans will generally not be treated as distributions prior to termination of your Policy, whether by lapse, surrender or exchange. Finally, neither distributions nor loans from a Policy that is not a modified endowment contract are subject to the 10% penalty tax. If your Policy is part of an equity split dollar arrangement under the economic benefit regime, there is a risk that some portion of the cash value may be taxed prior to any Policy distribution. Tax laws, regulations, and interpretations have often been changed in the past and such changes continue to be proposed. As with any taxation matter, you should consult with and rely on the advice of your own tax adviser. FEE TABLES The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Policy. The charges set forth in the first two tables may vary by group, based on anticipated variations in our costs or risks associated with the group or individuals in the group that the charge was intended to cover. Variations in the charges will be made in accordance with our established and uniformly applied administrative procedures. Any variations in charges will be reasonable and will not be unfairly discriminatory to the interests of any Policy Owner. In addition to the following tables, certain charges that we don't currently impose (but which we have the right to impose on your Policy in the future) are described under "Charges and Deductions--Other Charges," further back in this Prospectus. In certain cases, we have the right to increase our charges for new Policies, as well as for Policies already outstanding. The maximum charges in such cases are shown in the far right-hand columns of the first three tables below. TRANSACTION FEES This table describes the fees and expenses that you will pay at the time that you buy the Policy, surrender the Policy, or transfer cash value among the Divisions or the Fixed Account.
WHEN CHARGE CURRENT AMOUNT MAXIMUM AMOUNT CHARGE IS DEDUCTED DEDUCTED WE CAN DEDUCT Sales Charge1,2 On payment of premium Policy Years 1 to 10, up Policy Years 1 to 10, up to 6.5% of annual target to 9% of annual target premium paid premium paid Policy Years 11 and Policy Years 11 and later, up to 3% of annual later, same as Current target premium paid Amount for those years 0% on premiums paid in 0% on premiums paid in excess of annual target excess of annual target premium in all Policy premium in all Policy years years Charge for average On payment of premium 2.25% of each premium Same as Current expected state and local payment Amount taxes attributable to premiums Charge for expected On payment of premium 1.2% of each premium Same as Current federal taxes payment Amount attributable to premiums
7
WHEN CHARGE CURRENT AMOUNT MAXIMUM AMOUNT CHARGE IS DEDUCTED DEDUCTED WE CAN DEDUCT Administrative Charge1 On payment of premium Policy Years 1 to 10, up Up to 1.05% of annual to 0.55% of annual target premium paid in target premium paid all Policy years Policy Years 11 and 0.05% of premiums paid later, up to 1.05% of in excess of annual annual target premium target premium in all paid Policy years 0.05% on premiums paid in excess of annual target premium in all Policy years Transfer Fee On transfer of cash Not currently charged $25 per transfer value among Divisions or to or from the Fixed Account Interim Term Insurance On payment of first Highest: $13.93 per Highest: $24.65 per Benefit3 (applies only if premium if rider is $1,000 of term insurance $1,000 of term insurance you elected rider at elected amount amount issue) Highest and Lowest Lowest: $0.03 per $1,000 Lowest: $0.04 per $1,000 Charge Among All of term insurance of term insurance Possible Insureds amount amount Charge for male, issue $0.152 per $1,000 of $0.271 per $1,000 of age 47, nonsmoker, term insurance amount term insurance amount Guaranteed Issue underwriting class Enhanced Cash On premium payments 0.25% of each premium Same as Current Surrender Value Rider4 made during the first payment made during Amount five Policy years the first five Policy years Underwriting Charge On face amount increase Not currently charged Up to $3 per $1,000 of (applies only if you increase request an increase in your specified face amount)
1See "Charges and Deductions--Annual Target Premium" for a detailed discussion of the determination of the annual target premium. 2For Policies issued with the Refund of Sales Charge Rider, if you request a full cash withdrawal during the first five Policy years, we will refund any sales charges deducted within 365 days prior to the date the request is received at your Designated Office. This rider is not available in New Jersey. 3This charge varies based on individual characteristics of the insured or of individuals in the group that the charge was intended to cover, and may not be representative of the charge that you will pay. You can obtain more information about the charges that would apply by contacting your insurance sales representative. If you would like, we will provide you with an illustration of the impact of these and other charges under the Policy based on various assumptions. 4For Policies issued with the Enhanced Cash Surrender Value Rider on or after February 1, 2004, if you request a full cash withdrawal during the first ten Policy years, we will refund (a) part of the cumulative charges we have deducted from your premium payments and (b) part of the cost of term insurance we have deducted in the current Policy year, as shown in Table A below. However, we will not pay this refund if the full cash withdrawal is related to an exchange pursuant to Section 1035 of the Code. This rider is subject to state approval. 8 TABLE A
PORTION OF COST OF TERM INSURANCE CHARGES DEDUCTED PORTION OF DURING POLICY YEAR OF POLICY YEAR OF CUMULATIVE PREMIUM FULL CASH WITHDRAWAL FULL CASH WITHDRAWAL CHARGES TO BE REFUNDED* TO BE REFUNDED ---------------------- ------------------------- --------------------------- 1 100% 95% 2 95% 85% 3 90% 75% 4 85% 65% 5 80% 55% 6 75% 45% 7 70% 35% 8 65% 25% 9 60% 15% 10 55% 5% 11 and later None None
* The percent shown is applied to the cumulative sales, tax, and administrative charges deducted from your premium. PERIODIC CHARGES OTHER THAN PORTFOLIO OPERATING EXPENSES These tables describe other fees and expenses that you will pay periodically during the time that you own the Policy not including the fees and expenses of the Portfolios. PERIODIC CHARGES
WHEN CHARGE CURRENT AMOUNT MAXIMUM AMOUNT CHARGE IS DEDUCTED DEDUCTED WE CAN DEDUCT Cost of Term Insurance On each monthly Highest: $35.30 per Highest: $35.30 per for coverage under base anniversary of the $1,000 of term insurance $1,000 of term insurance policy 1, 2 Policy amount amount Highest and Lowest Lowest: $0.02 per $1,000 Lowest: $0.04 per $1,000 Charge Among All of term insurance of term insurance Possible Insureds amount amount Charge for male, issue $0.152 per $1,000 of $0.271 per $1,000 of age 47, nonsmoker, term insurance amount term insurance amount Guaranteed Issue underwriting class Cost of Term Insurance On each monthly Highest: $26.48 per Highest: $35.30 per for coverage under the anniversary of the $1,000 of term insurance $1,000 of term insurance term benefit 1, 2 Policy amount amount Highest and Lowest Lowest: $0.02 per $1,000 Lowest: $0.04 per $1,000 Charge Among All of term insurance of term insurance Possible Insureds amount amount Charge for male, issue $0.114 per $1,000 of $0.271 per $1,000 of age 47, nonsmoker, term insurance amount term insurance amount Guaranteed Issue underwriting class
9
WHEN CHARGE CURRENT AMOUNT MAXIMUM AMOUNT CHARGE IS DEDUCTED DEDUCTED WE CAN DEDUCT Mortality and Expense On each monthly Effective annual rate of Effective annual rate up Risk Charge 3 anniversary of the 0.40% of the cash value to 0.90% Policy in the Separate Account. We intend to reduce this charge after Policy year 9 to 0.20% and after Policy year 20 to 0.10%. Loan Interest Spread 4 Annually (or on loan Annual rate of 0.25% of Annual rate of 2% of the termination, if earlier) the loan amount loan amount
1The cost of term insurance charge varies based on anticipated variations in our costs or risks associated with the group or individuals in the group that the charge was intended to cover. See "Charges and Deductions--Cost of Term Insurance" for a more detailed discussion of factors affecting this charge. For Policies issued before January 1, 2009, the maximum cost of insurance charge ranges from $0.09 to $30.45 per $1,000 of term insurance amount. 2This charge varies based on individual characteristics of the insured or of individuals in the group that the charge was intended to cover, and may not be representative of the charge that you will pay. You can obtain more information about the charges that would apply by contacting your insurance sales representative. If you would like, we will provide you with an illustration of the impact of these and other charges under the Policy, based on various assumptions. 3We are waiving the following amounts of the Mortality and Expense Risk Charge: 0.08% for the Division investing in the Brighthouse/Wellington Large Cap Research Portfolio; and an amount equal to the underlying portfolio expenses that are in excess of 0.91% for the Division investing in the Brighthouse/Wellington Core Equity Opportunities Portfolio (Class A), in excess of 1.34% for the Division investing in the Brighthouse/Artisan Mid Cap Value Portfolio (Class B), in excess of 1.15% for the Division investing in the Brighthouse Small Cap Value Portfolio (Class B), and in excess of 0.62% for the Division investing in the Oppenheimer Global Equity Portfolio (Class A). 4We charge interest on Policy loans but credit you with interest on the amount of the cash value we hold as collateral for the loan. The loan interest spread is the excess of the interest rate we charge over the interest rate we credit. PORTFOLIO OPERATING EXPENSES Each of the Portfolios pays an investment management fee to its investment manager. Each of the Portfolios also incurs other direct expenses (see the applicable Portfolio Prospectus and the Statement of Additional Information referred to therein for each Portfolio). You bear indirectly your proportionate share of the fees and expenses of the Portfolios of each Portfolio that correspond to the Separate Account Divisions you are using. Most of the Portfolios offer various classes of shares, each of which has a different level of expenses, only one of which is available under a Policy. The available class of each Portfolio is specified in the expense table below and on the front cover pages of the Prospectus. The first table below shows the lowest and highest fees and expenses charged by any of the Portfolios for the fiscal year ended December 31, 2018. 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) 0.26% 2.07%
10 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 AB VARIABLE PRODUCTS SERIES FUND, INC. -- CLASS B AB VPS Global Thematic Growth Portfolio 0.75% 0.25% 0.25% AB VPS Intermediate Bond Portfolio 0.45% 0.25% 0.71% AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) Invesco V.I. Comstock Fund -- Series II 0.57% 0.25% 0.18% Invesco V.I. International Growth Fund -- Series I 0.71% -- 0.22% AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Growth Fund 0.32% 0.25% 0.02% American Funds High-Income Bond Fund 0.47% 0.25% 0.03% American Funds International Fund 0.49% 0.25% 0.04% American Funds U.S. Government/AAA-Rated Securities Fund 0.34% 0.25% 0.02% BRIGHTHOUSE FUNDS TRUST I Brighthouse Asset Allocation 100 Portfolio -- Class B 0.07% 0.25% 0.01% Brighthouse Small Cap Value Portfolio -- Class B 0.75% 0.25% 0.03% Brighthouse/Aberdeen Emerging Markets Equity Portfolio -- Class B 0.89% 0.25% 0.10% Brighthouse/Wellington Large Cap Research Portfolio -- Class A 0.56% -- 0.02% Clarion Global Real Estate Portfolio -- Class A 0.61% -- 0.05% ClearBridge Aggressive Growth Portfolio -- Class A 0.56% -- 0.02% Harris Oakmark International Portfolio -- Class A 0.77% -- 0.04% Invesco Small Cap Growth Portfolio -- Class B 0.85% 0.25% 0.03% JPMorgan Small Cap Value Portfolio -- Class A 0.78% -- 0.06% MFS(R) Research International Portfolio -- Class B 0.70% 0.25% 0.05% Morgan Stanley Discovery Portfolio -- Class A 0.64% -- 0.04% Oppenheimer Global Equity Portfolio -- Class A 0.66% -- 0.05% ACQUIRED FUND TOTAL FEE WAIVER NET TOTAL FEES ANNUAL AND/OR ANNUAL AND OPERATING EXPENSE OPERATING PORTFOLIO EXPENSES EXPENSES REIMBURSEMENT EXPENSES AB VARIABLE PRODUCTS SERIES FUND, INC. -- CLASS B AB VPS Global Thematic Growth Portfolio -- 1.25% 0.05% 1.20% AB VPS Intermediate Bond Portfolio -- 1.41% -- 1.41% AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) Invesco V.I. Comstock Fund -- Series II 0.01% 1.01% -- 1.01% Invesco V.I. International Growth Fund -- Series I 0.01% 0.94% 0.01% 0.93% AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Growth Fund -- 0.59% -- 0.59% American Funds High-Income Bond Fund -- 0.75% -- 0.75% American Funds International Fund -- 0.78% -- 0.78% American Funds U.S. Government/AAA-Rated Securities Fund -- 0.61% -- 0.61% BRIGHTHOUSE FUNDS TRUST I Brighthouse Asset Allocation 100 Portfolio -- Class B 0.67% 1.00% -- 1.00% Brighthouse Small Cap Value Portfolio -- Class B 0.08% 1.11% 0.01% 1.10% Brighthouse/Aberdeen Emerging Markets Equity Portfolio -- Class B -- 1.24% 0.05% 1.19% Brighthouse/Wellington Large Cap Research Portfolio -- Class A -- 0.58% 0.04% 0.54% Clarion Global Real Estate Portfolio -- Class A -- 0.66% 0.01% 0.65% ClearBridge Aggressive Growth Portfolio -- Class A -- 0.58% 0.02% 0.56% Harris Oakmark International Portfolio -- Class A -- 0.81% 0.02% 0.79% Invesco Small Cap Growth Portfolio -- Class B -- 1.13% 0.08% 1.05% JPMorgan Small Cap Value Portfolio -- Class A -- 0.84% 0.10% 0.74% MFS(R) Research International Portfolio -- Class B -- 1.00% 0.10% 0.90% Morgan Stanley Discovery Portfolio -- Class A -- 0.68% 0.02% 0.66% Oppenheimer Global Equity Portfolio -- Class A -- 0.71% 0.12% 0.59%
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DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER PORTFOLIO FEE (12B-1) FEES EXPENSES PIMCO Inflation Protected Bond Portfolio -- Class A 0.47% -- 0.77% PIMCO Total Return Portfolio -- Class A 0.48% -- 0.26% T. Rowe Price Large Cap Value Portfolio -- Class A 0.57% -- 0.02% T. Rowe Price Mid Cap Growth Portfolio -- Class B* 0.75% 0.25% 0.03% Victory Sycamore Mid Cap Value Portfolio -- Class A 0.65% -- 0.04% BRIGHTHOUSE FUNDS TRUST II Baillie Gifford International Stock Portfolio -- Class A 0.79% -- 0.05% BlackRock Bond Income Portfolio -- Class A 0.33% -- 0.10% BlackRock Capital Appreciation Portfolio -- Class A 0.69% -- 0.03% BlackRock Ultra-Short Term Bond Portfolio -- Class A 0.35% -- 0.04% Brighthouse Asset Allocation 20 Portfolio -- Class B 0.10% 0.25% 0.03% Brighthouse Asset Allocation 40 Portfolio -- Class B 0.06% 0.25% -- Brighthouse Asset Allocation 60 Portfolio -- Class B 0.05% 0.25% -- Brighthouse/Artisan Mid Cap Value Portfolio -- Class B 0.82% 0.25% 0.04% Brighthouse/Wellington Balanced Portfolio -- Class A 0.46% -- 0.07% Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class A 0.70% -- 0.02% Frontier Mid Cap Growth Portfolio -- Class A 0.71% -- 0.04% Jennison Growth Portfolio -- Class A 0.60% -- 0.02% Loomis Sayles Small Cap Core Portfolio -- Class A 0.90% -- 0.06% MetLife Aggregate Bond Index Portfolio -- Class A 0.25% -- 0.03% MetLife Mid Cap Stock Index Portfolio -- Class A 0.25% -- 0.05% MetLife MSCI EAFE(R) Index Portfolio -- Class A 0.30% -- 0.08% MetLife Russell 2000(R) Index Portfolio -- Class A 0.25% -- 0.06% MetLife Stock Index Portfolio -- Class A 0.25% -- 0.03% MFS(R) Total Return Portfolio -- Class B 0.56% 0.25% 0.06% MFS(R) Value Portfolio -- Class A 0.61% -- 0.02% Neuberger Berman Genesis Portfolio -- Class A 0.82% -- 0.03% ACQUIRED FUND TOTAL FEE WAIVER NET TOTAL FEES ANNUAL AND/OR ANNUAL AND OPERATING EXPENSE OPERATING PORTFOLIO EXPENSES EXPENSES REIMBURSEMENT EXPENSES PIMCO Inflation Protected Bond Portfolio -- Class A -- 1.24% 0.01% 1.23% PIMCO Total Return Portfolio -- Class A -- 0.74% 0.03% 0.71% T. Rowe Price Large Cap Value Portfolio -- Class A -- 0.59% 0.05% 0.54% T. Rowe Price Mid Cap Growth Portfolio -- Class B* -- 1.03% -- 1.03% Victory Sycamore Mid Cap Value Portfolio -- Class A -- 0.69% 0.09% 0.60% BRIGHTHOUSE FUNDS TRUST II Baillie Gifford International Stock Portfolio -- Class A -- 0.84% 0.12% 0.72% BlackRock Bond Income Portfolio -- Class A -- 0.43% -- 0.43% BlackRock Capital Appreciation Portfolio -- Class A -- 0.72% 0.09% 0.63% BlackRock Ultra-Short Term Bond Portfolio -- Class A -- 0.39% 0.03% 0.36% Brighthouse Asset Allocation 20 Portfolio -- Class B 0.61% 0.99% 0.03% 0.96% Brighthouse Asset Allocation 40 Portfolio -- Class B 0.62% 0.93% -- 0.93% Brighthouse Asset Allocation 60 Portfolio -- Class B 0.63% 0.93% -- 0.93% Brighthouse/Artisan Mid Cap Value Portfolio -- Class B -- 1.11% 0.05% 1.06% Brighthouse/Wellington Balanced Portfolio -- Class A -- 0.53% -- 0.53% Brighthouse/Wellington Core Equity Opportunities Portfolio -- Class A -- 0.72% 0.11% 0.61% Frontier Mid Cap Growth Portfolio -- Class A -- 0.75% 0.02% 0.73% Jennison Growth Portfolio -- Class A -- 0.62% 0.08% 0.54% Loomis Sayles Small Cap Core Portfolio -- Class A 0.02% 0.98% 0.08% 0.90% MetLife Aggregate Bond Index Portfolio -- Class A -- 0.28% 0.01% 0.27% MetLife Mid Cap Stock Index Portfolio -- Class A -- 0.30% -- 0.30% MetLife MSCI EAFE(R) Index Portfolio -- Class A 0.01% 0.39% -- 0.39% MetLife Russell 2000(R) Index Portfolio -- Class A -- 0.31% -- 0.31% MetLife Stock Index Portfolio -- Class A -- 0.28% 0.01% 0.27% MFS(R) Total Return Portfolio -- Class B -- 0.87% -- 0.87% MFS(R) Value Portfolio -- Class A -- 0.63% 0.06% 0.57% Neuberger Berman Genesis Portfolio -- Class A -- 0.85% 0.01% 0.84%
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DISTRIBUTION AND/OR MANAGEMENT SERVICE OTHER PORTFOLIO FEE (12B-1) FEES EXPENSES T. Rowe Price Large Cap Growth Portfolio -- Class A 0.60% -- 0.02% T. Rowe Price Small Cap Growth Portfolio -- Class A 0.47% -- 0.03% Western Asset Management Strategic Bond Opportunities Portfolio -- Class A 0.57% -- 0.03% DREYFUS VARIABLE INVESTMENT FUND -- SERVICE SHARES International Value Portfolio 1.00% 0.25% 0.42% FIDELITY(R) VARIABLE INSURANCE PRODUCTS Asset Manager: Growth Portfolio -- Service Class 0.54% 0.10% 0.14% Contrafund(R) Portfolio -- Service Class 0.54% 0.10% 0.08% Equity-Income Portfolio -- Service Class 0.44% 0.10% 0.09% Freedom 2020 Portfolio -- Initial Class -- -- -- Freedom 2025 Portfolio -- Initial Class -- -- -- Government Money Market Portfolio -- Initial Class 0.18% -- 0.08% High Income Portfolio -- Initial Class 0.56% -- 0.11% Investment Grade Bond Portfolio -- Service Class 0.31% 0.10% 0.09% Mid Cap Portfolio -- Service Class 2 0.54% 0.25% 0.08% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Franklin Mutual Global Discovery VIP Fund -- Class 2 0.88% 0.25% 0.06% Templeton Foreign VIP Fund -- Class 1 0.79% -- 0.04% Templeton Global Bond VIP Fund -- Class 1 0.46% -- 0.10% GOLDMAN SACHS VARIABLE INSURANCE TRUST -- INSTITUTIONAL SHARES Goldman Sachs Small Cap Equity Insights Fund 0.70% -- 0.26% JANUS ASPEN SERIES Janus Henderson Balanced Portfolio -- Service Shares 0.55% 0.25% 0.08% Janus Henderson Enterprise Portfolio -- Service Shares 0.64% 0.25% 0.08% Janus Henderson Forty Portfolio -- Service Shares 0.62% 0.25% 0.09% Janus Henderson Overseas Portfolio -- Service Shares** 0.49% 0.25% 0.11% Janus Henderson Research Portfolio -- Institutional Shares 0.48% -- 0.10% MFS(R) VARIABLE INSURANCE TRUST -- SERVICE CLASS MFS(R) Global Equity Series 0.90% 0.25% 0.23% ACQUIRED FUND TOTAL FEE WAIVER NET TOTAL FEES ANNUAL AND/OR ANNUAL AND OPERATING EXPENSE OPERATING PORTFOLIO EXPENSES EXPENSES REIMBURSEMENT EXPENSES T. Rowe Price Large Cap Growth Portfolio -- Class A -- 0.62% 0.05% 0.57% T. Rowe Price Small Cap Growth Portfolio -- Class A -- 0.50% -- 0.50% Western Asset Management Strategic Bond Opportunities Portfolio -- Class A -- 0.60% 0.06% 0.54% DREYFUS VARIABLE INVESTMENT FUND -- SERVICE SHARES International Value Portfolio -- 1.67% 0.56% 1.11% FIDELITY(R) VARIABLE INSURANCE PRODUCTS Asset Manager: Growth Portfolio -- Service Class 0.02% 0.80% -- 0.80% Contrafund(R) Portfolio -- Service Class -- 0.72% -- 0.72% Equity-Income Portfolio -- Service Class -- 0.63% -- 0.63% Freedom 2020 Portfolio -- Initial Class 0.54% 0.54% -- 0.54% Freedom 2025 Portfolio -- Initial Class 0.56% 0.56% -- 0.56% Government Money Market Portfolio -- Initial Class -- 0.26% -- 0.26% High Income Portfolio -- Initial Class -- 0.67% -- 0.67% Investment Grade Bond Portfolio -- Service Class -- 0.50% -- 0.50% Mid Cap Portfolio -- Service Class 2 -- 0.87% -- 0.87% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Franklin Mutual Global Discovery VIP Fund -- Class 2 0.01% 1.20% -- 1.20% Templeton Foreign VIP Fund -- Class 1 0.02% 0.85% 0.02% 0.83% Templeton Global Bond VIP Fund -- Class 1 0.09% 0.65% 0.11% 0.54% GOLDMAN SACHS VARIABLE INSURANCE TRUST -- INSTITUTIONAL SHARES Goldman Sachs Small Cap Equity Insights Fund -- 0.96% 0.15% 0.81% JANUS ASPEN SERIES Janus Henderson Balanced Portfolio -- Service Shares -- 0.88% -- 0.88% Janus Henderson Enterprise Portfolio -- Service Shares -- 0.97% -- 0.97% Janus Henderson Forty Portfolio -- Service Shares -- 0.96% -- 0.96% Janus Henderson Overseas Portfolio -- Service Shares** -- 0.85% -- 0.85% Janus Henderson Research Portfolio -- Institutional Shares -- 0.58% -- 0.58% MFS(R) VARIABLE INSURANCE TRUST -- SERVICE CLASS MFS(R) Global Equity Series -- 1.38% 0.16% 1.22%
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ACQUIRED DISTRIBUTION FUND TOTAL FEE WAIVER NET TOTAL AND/OR FEES ANNUAL AND/OR ANNUAL MANAGEMENT SERVICE OTHER AND OPERATING EXPENSE OPERATING PORTFOLIO FEE (12B-1) FEES EXPENSES EXPENSES EXPENSES REIMBURSEMENT EXPENSES MFS(R) New Discovery Series 0.90% 0.25% 0.06% -- 1.21% 0.02% 1.19% MFS(R) VARIABLE INSURANCE TRUST II -- SERVICE CLASS MFS(R) High Yield Portfolio 0.70% 0.25% 0.07% -- 1.02% 0.05% 0.97% MORGAN STANLEY VARIABLE INSURANCE FUND, INC. -- CLASS I Emerging Markets Debt Portfolio 0.75% -- 0.36% -- 1.11% -- 1.11% Emerging Markets Equity Portfolio 0.85% -- 0.38% -- 1.23% -- 1.23% PIMCO VARIABLE INSURANCE TRUST -- ADMINISTRATIVE CLASS PIMCO All Asset Portfolio 0.43% 0.15% -- 0.99% 1.57% 0.12% 1.45% PIMCO CommodityRealReturn(R) Strategy Portfolio 0.74% 0.15% 1.03% 0.15% 2.07% 0.15% 1.92% PIMCO Long-Term U.S. Government Portfolio 0.48% 0.15% 0.36% -- 0.99% -- 0.99% PIMCO Low Duration Portfolio 0.50% 0.15% 0.09% -- 0.74% -- 0.74% PIONEER VARIABLE CONTRACTS TRUST -- CLASS I Pioneer Mid Cap Value VCT Portfolio 0.74% -- 0.16% -- 0.90% -- 0.90% PUTNAM VARIABLE TRUST -- CLASS IB Putnam VT International Value Fund 0.69% 0.25% 0.23% -- 1.17% -- 1.17% ROYCE CAPITAL FUND -- INVESTMENT CLASS Royce Micro-Cap Portfolio 1.25% -- 0.14% -- 1.39% 0.06% 1.33% Royce Small-Cap Portfolio 1.00% -- 0.11% -- 1.11% 0.03% 1.08%
*Closed to new investments except under dollar cost averaging and rebalancing programs in existence at the time of closing. **Effective April 29, 2019, the Portfolio is closed to new investments and transfers. Certain Portfolios that have "Acquired Fund Fees and Expenses" may be "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. Additional information about the management fees and expenses of the Portfolios can be obtained in Portfolios' prospectuses and Statements of Additional Information. For information concerning compensation paid for the sale of the Policies, see "Sale of Policies." METLIFE Metropolitan Life Insurance Company ("MetLife") is a wholly-owned subsidiary of MetLife, Inc., a publicly traded company. Our main office is located at 200 Park Avenue, New York, New York 10166. MetLife has the legal obligation to pay all benefits and other amounts to which you are entitled under the terms of your Policy. 14 THE FIXED ACCOUNT The Fixed Account is part of our general assets that are not in any legally segregated separate accounts. Amounts in the Fixed Account are credited with interest at an effective annual rate of 2.5% (4% for Policies issued prior to February 24, 2012). We may also credit excess interest on such amounts. Different excess interest rates may apply to different amounts based upon when such amounts were allocated to the Fixed Account. Any partial amounts we remove from the Fixed Account (such as any portion of your Policy's monthly deduction that is allocable to the Fixed Account) will be taken from the most recently allocated amounts first. Any excess interest rate will be credited for at least 12 months before a new rate is credited. We can delay transfers, withdrawals, surrender and payment of Policy loans from the Fixed Account for up to 6 months. Since the Fixed Account is not registered under the federal securities laws, this Prospectus contains only limited information about the Fixed Account. The Policy gives you more information on the operation of the Fixed Account. SEPARATE ACCOUNT The Separate Account receives premium payments from the Policy described in this Prospectus and other variable life insurance policies that we issue. The assets in the Separate Account legally belong to us, but they are held solely for the benefit of investors in the Separate Account and no one else, including our other creditors. Income and realized and unrealized capital gains and losses of the Separate Account are credited to the Separate Account without regard to any of our other income or capital gains and losses. We will keep an amount in the Separate Account that at least equals the value of our commitments to Policy Owners that are based on their investments in the Separate Account. We can also keep charges that we deduct and other excess amounts in the Separate Account or we can transfer the excess out of 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 MetLife. 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 a Commodity Pool Operator. While we do 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 DIVISIONS. The Separate Account has subdivisions, called "Divisions." Each Division invests its assets exclusively in shares of a corresponding Portfolio of a Fund. We can add new Divisions to or eliminate Divisions from the Separate Account. You can designate how you would like your net premiums and cash value to be allocated among the available Divisions and our Fixed Account. In some cases, your employer retains the right to allocate the portion of any net premium it pays (rather than any premium you pay). If so, the Policy will state this. Amounts you allocate to each Division receive the investment experience of the Division, and you bear this investment risk. THE FUNDS Each of the Funds is a "series" type of mutual fund, which is registered as an open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"). Each Fund is divided into Portfolios, each of which represents a different class of stock in which a corresponding Division of the Separate Account invests. -PROSPECTUSES FOR THE PORTFOLIOS ARE AVAILABLE BY CALLING 1-908-253-1400 OR THROUGH YOUR REGISTERED REPRESENTATIVE. You should read each Portfolio prospectus carefully. The Portfolio Prospectuses contain information about each Fund and its Portfolios, including the investment objectives, strategies, risks and investment advisers that are associated with each Portfolio. 15 Some of the Portfolios have names and investment objectives that are very similar to certain publicly available mutual funds that are managed by the same money managers. These Portfolios are not those publicly available mutual funds and will not have the same performance. Different performance will result from such factors as different implementation of investment policies, different cash flows into and out of the Portfolios, different fees and different sizes. CERTAIN PAYMENTS WE RECEIVE WITH REGARD TO THE PORTFOLIOS. An investment adviser 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 MetLife's 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 and Certificate Owners, through their indirect investment in the Portfolios, bear 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 sub-advisers (or other affiliates) may pay us more than others. These percentages currently range up to 0.50%. Additionally, an investment adviser 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 sub-adviser (or their affiliate) with increased access to persons involved in the distribution of the Policies. On August 4, 2017, MetLife, Inc. completed the separation of Brighthouse Financial, Inc. and its subsidiaries ("Brighthouse") where MetLife, Inc. retained an ownership interest of 19.2% non-voting common stock outstanding of Brighthouse Financial, Inc. In June 2018, MetLife, Inc. sold Brighthouse Financial, Inc. common stock in exchange for MetLife, Inc. senior notes and Brighthouse was no longer considered a related party. At December 31, 2018, MetLife, Inc. no longer held any shares of Brighthouse Financial, Inc. for its own account; however, certain insurance company separate accounts managed by MetLife held shares of Brighthouse Financial, Inc. Brighthouse subsidiaries include Brighthouse Investment Advisers, LLC, which serves as the investment adviser for the Brighthouse Funds Trust I and Brighthouse Funds Trust II. We and our affiliated companies have entered into agreements with Brighthouse Investment Advisers, LLC, Brighthouse Funds Trust I and Brighthouse Funds Trust II whereby we receive payments for certain administrative, marketing and support services described in the previous paragraphs. Currently, the Portfolios in Brighthouse Funds Trust I and Brighthouse Funds Trust II are only available in variable annuity contracts and variable life insurance policies issued by MetLife and its affiliates, as well as Brighthouse Life Insurance Company and its affiliates. As of December 31, 2018, approximately 91% of Portfolio assets held in Separate Accounts of MetLife and its affiliates were allocated to Portfolios in Brighthouse Funds Trust I and Brighthouse Funds Trust II. Should we or Brighthouse Investment Advisers, LLC decide to terminate the agreements, would be required to find alternative Portfolios which could have higher or lower costs to the Policy Owner. In addition, the amount of payments we receive could cease or be substantially reduced which may have a material impact on our financial statements. Certain Funds have adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. A Fund's 12b-1 Plan, if any, is described in more detail in each Fund's prospectus. (See also "Fee Tables--Portfolio Operating Expenses.") 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. SELECTION OF 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 16 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. In some cases, we may include Portfolios based on recommendations made by selling firms through which the Policy is sold. These selling firms may receive payments from the Portfolios they recommend and may benefit accordingly from the allocation of cash value to such Portfolios. We review the Portfolios periodically and may remove a Portfolio or limit its availability to new premium payments 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 DO NOT PROVIDE 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. As of the end of each Valuation Period (see "Valuation Period" description in "Other Policy Provisions-- When Your Requests Become Effective"), we purchase and redeem Portfolio shares for the Separate Account at their net asset value without any sales or redemption charges. These purchases and redemptions reflect the amount of any of the following transactions that take effect at the end of the Valuation Period: o The allocation of net premiums to the Separate Account; o Dividends and distributions on Portfolio shares, which are reinvested as of the dates paid (which reduces the value of each share of the Portfolio and increases the number of Portfolio shares outstanding, but has no effect on the cash value in the Separate Account); o Policy loans and loan repayments allocated to the Separate Account; o Transfers to and among Divisions; o Withdrawals and surrenders taken from the Separate Account. The adviser, any sub-adviser and investment objective of each Portfolio are as follows:
PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER AB VARIABLE PRODUCTS SERIES FUND, INC. -- CLASS B AB VPS Global Thematic Growth Portfolio Seeks long-term growth of capital. AllianceBernstein L.P. AB VPS Intermediate Bond Portfolio Seeks to generate income and price AllianceBernstein L.P. appreciation without assuming what the Adviser considers undue risk. AIM VARIABLE INSURANCE FUNDS (INVESCO VARIABLE INSURANCE FUNDS) Invesco V.I. Comstock Fund -- Series II Seeks capital growth and income Invesco Advisers, Inc. through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks. Invesco V.I. International Growth Fund -- Series I Seeks long-term growth of capital. Invesco Advisers, Inc. AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Growth Fund Seeks growth of capital. Capital Research and Management Company(SM) American Funds High-Income Bond Fund Seeks a high level of current income. Capital Research and Management Its secondary investment objective is Company(SM) capital appreciation. American Funds International Fund Seeks long-term growth of capital. Capital Research and Management Company(SM) American Funds U.S. Government/AAA-Rated Seeks a high level of current income Capital Research and Management Securities Fund consistent with preservation of Company(SM) capital. BRIGHTHOUSE FUNDS TRUST I Brighthouse Asset Allocation 100 Portfolio -- Seeks growth of capital. Brighthouse Investment Advisers, Class B LLC
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PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER Brighthouse Small Cap Value Portfolio -- Class B Seeks long-term capital appreciation. Brighthouse Investment Advisers, LLC Subadvisers: Delaware Investments Fund Advisers; Wells Capital Management Incorporated Brighthouse/Aberdeen Emerging Markets Equity Seeks capital appreciation. Brighthouse Investment Advisers, Portfolio -- Class B LLC Subadviser: Aberdeen Asset Managers Limited Brighthouse/Wellington Large Cap Research Seeks long-term capital appreciation. Brighthouse Investment Advisers, Portfolio -- Class A LLC Subadviser: Wellington Management Company LLP Clarion Global Real Estate Portfolio -- Class A Seeks total return through Brighthouse Investment Advisers, investment in real estate securities, LLC emphasizing both capital appreciation Subadviser: CBRE Clarion and current income. Securities LLC ClearBridge Aggressive Growth Portfolio -- Seeks capital appreciation. Brighthouse Investment Advisers, Class A LLC Subadviser: ClearBridge Investments, LLC Harris Oakmark International Portfolio -- Class A Seeks long-term capital appreciation. Brighthouse Investment Advisers, LLC Subadviser: Harris Associates L.P. Invesco Small Cap Growth Portfolio -- Class B Seeks long-term growth of capital. Brighthouse Investment Advisers, LLC Subadviser: Invesco Advisers, Inc. JPMorgan Small Cap Value Portfolio -- Class A Seeks long-term capital growth. Brighthouse Investment Advisers, LLC Subadviser: J.P. Morgan Investment Management Inc. MFS(R) Research International Portfolio -- Class B Seeks capital appreciation. Brighthouse Investment Advisers, LLC Subadviser: Massachusetts Financial Services Company Morgan Stanley Discovery Portfolio -- Class A Seeks capital appreciation. Brighthouse Investment Advisers, (formerly Morgan Stanley Mid Cap Growth LLC Portfolio) Subadviser: Morgan Stanley Investment Management Inc. Oppenheimer Global Equity Portfolio -- Class A Seeks capital appreciation. Brighthouse Investment Advisers, LLC Subadviser: OppenheimerFunds, Inc. PIMCO Inflation Protected Bond Portfolio -- Seeks maximum real return, Brighthouse Investment Advisers, Class A consistent with preservation of LLC capital and prudent investment Subadviser: Pacific Investment management. Management Company LLC PIMCO Total Return Portfolio -- Class A Seeks maximum total return, Brighthouse Investment Advisers, consistent with the preservation of LLC capital and prudent investment Subadviser: Pacific Investment management. Management Company LLC T. Rowe Price Large Cap Value Portfolio -- Seeks long-term capital appreciation Brighthouse Investment Advisers, Class A by investing in common stocks LLC believed to be undervalued. Income is Subadviser: T. Rowe Price a secondary objective. Associates, Inc. T. Rowe Price Mid Cap Growth Portfolio -- Seeks long-term growth of capital. Brighthouse Investment Advisers, Class B* LLC Subadviser: T. Rowe Price Associates, Inc.
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PORTFOLIO INVESTMENT OBJECTIVE Victory Sycamore Mid Cap Value Portfolio -- Seeks high total return by investing Class A in equity securities of mid-sized companies. BRIGHTHOUSE FUNDS TRUST II Baillie Gifford International Stock Portfolio -- Seeks long-term growth of capital. Class A BlackRock Bond Income Portfolio -- Class A Seeks a competitive total return primarily from investing in fixed-income securities. BlackRock Capital Appreciation Portfolio -- Seeks long-term growth of capital. Class A BlackRock Ultra-Short Term Bond Portfolio -- Seeks a high level of current income Class A consistent with preservation of capital. Brighthouse Asset Allocation 20 Portfolio -- Seeks a high level of current income, Class B with growth of capital as a secondary objective. Brighthouse Asset Allocation 40 Portfolio -- Seeks high total return in the form of Class B income and growth of capital, with a greater emphasis on income. Brighthouse Asset Allocation 60 Portfolio -- Seeks a balance between a high level Class B of current income and growth of capital, with a greater emphasis on growth of capital. Brighthouse/Artisan Mid Cap Value Portfolio -- Seeks long-term capital growth. Class B Brighthouse/Wellington Balanced Portfolio -- Seeks long-term capital appreciation Class A with some current income. Brighthouse/Wellington Core Equity Seeks to provide a growing stream of Opportunities Portfolio -- Class A income over time and, secondarily, long-term capital appreciation and current income. Frontier Mid Cap Growth Portfolio -- Class A Seeks maximum capital appreciation. Jennison Growth Portfolio -- Class A Seeks long-term growth of capital. Loomis Sayles Small Cap Core Portfolio -- Class A Seeks long-term capital growth from investments in common stocks or other equity securities. MetLife Aggregate Bond Index Portfolio -- Seeks to track the performance of the Class A Bloomberg Barclays U.S. Aggregate Bond Index. PORTFOLIO INVESTMENT ADVISER/SUBADVISER Victory Sycamore Mid Cap Value Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: Victory Capital Management Inc. BRIGHTHOUSE FUNDS TRUST II Baillie Gifford International Stock Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: Baillie Gifford Overseas Limited BlackRock Bond Income Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: BlackRock Advisors, LLC BlackRock Capital Appreciation Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: BlackRock Advisors, LLC BlackRock Ultra-Short Term Bond Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: BlackRock Advisors, LLC Brighthouse Asset Allocation 20 Portfolio -- Brighthouse Investment Advisers, Class B LLC Brighthouse Asset Allocation 40 Portfolio -- Brighthouse Investment Advisers, Class B LLC Brighthouse Asset Allocation 60 Portfolio -- Brighthouse Investment Advisers, Class B LLC Brighthouse/Artisan Mid Cap Value Portfolio -- Brighthouse Investment Advisers, Class B LLC Subadviser: Artisan Partners Limited Partnership Brighthouse/Wellington Balanced Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: Wellington Management Company LLP Brighthouse/Wellington Core Equity Brighthouse Investment Advisers, Opportunities Portfolio -- Class A LLC Subadviser: Wellington Management Company LLP Frontier Mid Cap Growth Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: Frontier Capital Management Company, LLC Jennison Growth Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: Jennison Associates LLC Loomis Sayles Small Cap Core Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: Loomis, Sayles & Company, L.P. MetLife Aggregate Bond Index Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: MetLife Investment Advisors, LLC
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PORTFOLIO INVESTMENT OBJECTIVE MetLife Mid Cap Stock Index Portfolio -- Class A Seeks to track the performance of the Standard & Poor's MidCap 400(R) Composite Stock Price Index. MetLife MSCI EAFE(R) Index Portfolio -- Class A Seeks to track the performance of the MSCI EAFE(R) Index. MetLife Russell 2000(R) Index Portfolio -- Class A Seeks to track the performance of the Russell 2000(R) Index. MetLife Stock Index Portfolio -- Class A Seeks to track the performance of the Standard & Poor's 500(R) Composite Stock Price Index. MFS(R) Total Return Portfolio -- Class B Seeks a favorable total return through investment in a diversified portfolio. MFS(R) Value Portfolio -- Class A Seeks capital appreciation. Neuberger Berman Genesis Portfolio -- Class A Seeks high total return, consisting principally of capital appreciation. T. Rowe Price Large Cap Growth Portfolio -- Seeks long-term growth of capital. Class A T. Rowe Price Small Cap Growth Portfolio -- Seeks long-term capital growth. Class A Western Asset Management Strategic Bond Seeks to maximize total return Opportunities Portfolio -- Class A consistent with preservation of capital. DREYFUS VARIABLE INVESTMENT FUND -- SERVICE SHARES International Value Portfolio Seeks long-term capital growth. FIDELITY(R) VARIABLE INSURANCE PRODUCTS Asset Manager: Growth Portfolio -- Service Class Seeks to maximize total return by allocating its assets among stocks, bonds, short-term instruments, and other investments. Contrafund(R) Portfolio -- Service Class Seeks long-term capital appreciation. Equity-Income Portfolio -- Service Class Seeks reasonable income. The fund will also consider the potential for capital appreciation. The fund's goal is to achieve a yield which exceeds the composite yield on the securities comprising the S&P 500(R) Index. PORTFOLIO INVESTMENT ADVISER/SUBADVISER MetLife Mid Cap Stock Index Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: MetLife Investment Advisors, LLC MetLife MSCI EAFE(R) Index Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: MetLife Investment Advisors, LLC MetLife Russell 2000(R) Index Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: MetLife Investment Advisors, LLC MetLife Stock Index Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: MetLife Investment Advisors, LLC MFS(R) Total Return Portfolio -- Class B Brighthouse Investment Advisers, LLC Subadviser: Massachusetts Financial Services Company MFS(R) Value Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: Massachusetts Financial Services Company Neuberger Berman Genesis Portfolio -- Class A Brighthouse Investment Advisers, LLC Subadviser: Neuberger Berman Investment Advisers LLC T. Rowe Price Large Cap Growth Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: T. Rowe Price Associates, Inc. T. Rowe Price Small Cap Growth Portfolio -- Brighthouse Investment Advisers, Class A LLC Subadviser: T. Rowe Price Associates, Inc. Western Asset Management Strategic Bond Brighthouse Investment Advisers, Opportunities Portfolio -- Class A LLC Subadviser: Western Asset Management Company DREYFUS VARIABLE INVESTMENT FUND -- SERVICE SHARES International Value Portfolio The Dreyfus Corporation FIDELITY(R) VARIABLE INSURANCE PRODUCTS Asset Manager: Growth Portfolio -- Service Class Fidelity Management & Research Company Subadvisers: FMR Co., Inc.; Fidelity Investments Money Management, Inc. Contrafund(R) Portfolio -- Service Class Fidelity Management & Research Company Subadviser: FMR Co., Inc. Equity-Income Portfolio -- Service Class Fidelity Management & Research Company Subadviser: FMR Co., Inc.
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PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER Freedom 2020 Portfolio -- Initial Class Seeks high total return with a Fidelity Management & Research secondary objective of principal Company preservation as the fund approaches Subadviser: FMR Co., Inc. its target date and beyond. Freedom 2025 Portfolio -- Initial Class Seeks high total return with a Fidelity Management & Research secondary objective of principal Company preservation as the fund approaches Subadviser: FMR Co., Inc. its target date and beyond. Government Money Market Portfolio -- Initial Seeks as high a level of current Fidelity Management & Research Class income as is consistent with Company preservation of capital and liquidity. Subadviser: Fidelity Investments Money Management, Inc. High Income Portfolio -- Initial Class Seeks a high level of current income, Fidelity Management & Research while also considering growth of Company capital. Subadviser: FMR Co., Inc. Investment Grade Bond Portfolio -- Service Class Seeks as high a level of current Fidelity Management & Research income as is consistent with the Company preservation of capital. Subadviser: Fidelity Investments Money Management, Inc. Mid Cap Portfolio -- Service Class 2 Seeks long-term growth of capital. Fidelity Management & Research Company Subadviser: FMR Co., Inc. FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Franklin Mutual Global Discovery VIP Fund -- Seeks capital appreciation. Franklin Mutual Advisers, LLC Class 2 Templeton Foreign VIP Fund -- Class 1 Seeks long-term capital growth. Templeton Investment Counsel, LLC Templeton Global Bond VIP Fund -- Class 1 Seeks high current income, Franklin Advisers, Inc. consistent with preservation of capital, with capital appreciation as a secondary consideration. GOLDMAN SACHS VARIABLE INSURANCE TRUST -- INSTITUTIONAL SHARES Goldman Sachs Small Cap Equity Insights Fund Seeks long-term growth of capital. Goldman Sachs Asset Management, L.P. JANUS ASPEN SERIES Janus Henderson Balanced Portfolio -- Service Seeks long-term capital growth, Janus Capital Management LLC Shares consistent with preservation of capital and balanced by current income. Janus Henderson Enterprise Portfolio -- Service Seeks long-term growth of capital. Janus Capital Management LLC Shares Janus Henderson Forty Portfolio -- Service Seeks long-term growth of capital. Janus Capital Management LLC Shares Janus Henderson Overseas Portfolio -- Service Seeks long-term growth of capital. Janus Capital Management LLC Shares** Janus Henderson Research Portfolio -- Seeks long-term growth of capital. Janus Capital Management LLC Institutional Shares MFS(R) VARIABLE INSURANCE TRUST -- SERVICE CLASS MFS(R) Global Equity Series Seeks capital appreciation. Massachusetts Financial Services Company MFS(R) New Discovery Series Seeks capital appreciation. Massachusetts Financial Services Company
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PORTFOLIO INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER MFS(R) VARIABLE INSURANCE TRUST II -- SERVICE CLASS MFS(R) High Yield Portfolio Seeks total return with an emphasis Massachusetts Financial Services on high current income, but also Company considering capital appreciation. MORGAN STANLEY VARIABLE INSURANCE FUND, INC. -- CLASS I Emerging Markets Debt Portfolio Seeks high total return by investing Morgan Stanley Investment primarily in fixed income securities of Management Inc. government and government-related issuers and, to a lesser extent, of corporate issuers in emerging market countries. Emerging Markets Equity Portfolio Seeks long-term capital appreciation Morgan Stanley Investment by investing primarily in Management Inc. growth-oriented equity securities of Subadviser: Morgan Stanley issuers in emerging market Investment Management Company countries. PIMCO VARIABLE INSURANCE TRUST -- ADMINISTRATIVE CLASS PIMCO All Asset Portfolio Seeks maximum real return Pacific Investment Management consistent with preservation of real Company LLC capital and prudent investment Subadviser: Research Affiliates, LLC management. PIMCO CommodityRealReturn(R) Strategy Seeks maximum real return, Pacific Investment Management Portfolio consistent with prudent investment Company LLC management. PIMCO Long-Term U.S. Government Portfolio Seeks maximum total return, Pacific Investment Management consistent with preservation of Company LLC capital and prudent investment management. PIMCO Low Duration Portfolio Seeks maximum total return, Pacific Investment Management consistent with preservation of Company LLC capital and prudent investment management. PIONEER VARIABLE CONTRACTS TRUST -- CLASS I Pioneer Mid Cap Value VCT Portfolio Seeks capital appreciation by Amundi Pioneer Asset Management, investing in a diversified portfolio of Inc. securities consisting primarily of common stocks. PUTNAM VARIABLE TRUST -- CLASS IB Putnam VT International Value Fund Seeks capital growth. Current Putnam Investment Management, income is a secondary objective. LLC ROYCE CAPITAL FUND -- INVESTMENT CLASS Royce Micro-Cap Portfolio Seeks long-term growth of capital. Royce & Associates, LP Royce Small-Cap Portfolio Seeks long-term growth of capital. Royce & Associates, LP
*Closed to new investments except under dollar cost averaging and rebalancing programs in existence at the time of closing. **Effective April 29, 2019, the Portfolio is closed to new investments and transfers. THE PORTFOLIO SHARE CLASSES THAT WE OFFER The Portfolios offer various classes of shares, each of which has a different level of expenses. The Portfolio prospectuses may provide information for share classes or Portfolios that are not available through the Policy. When you consult the Portfolio prospectus for a Portfolio, you should be careful to refer only to the information regarding the Portfolio and class of shares that is available through the Policy. 22 SUBSTITUTION OF PORTFOLIOS If investment in the Portfolios or a particular Portfolio is no longer possible, in our judgment becomes inappropriate for the purposes of the Policies, or for any other reason in our sole discretion, we may substitute another portfolio without your consent. The substituted Portfolio may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future premium payments, or both. However, we will not make such substitution without any necessary approval of the Securities and Exchange Commission. Furthermore, we may make available or close Divisions to allocation of premium payments or cash value, or both, for some or all classes of Policies, at any time in our sole discretion. PURCHASE AND REDEMPTION OF PORTFOLIO SHARES BY THE SEPARATE ACCOUNT As of the end of each Valuation Period (see "Valuation Period" description below in "Other Policy Provisions--When Your Requests Become Effective"), purchases and redemptions of Fund shares for the Separate Account are made at their net asset value without any sales or redemption charges. These purchases and redemptions reflect the amount of any of the following transactions that take effect at the end of the Valuation Period: o The allocation of net premiums to the Separate Account; o Dividends and distributions on Fund shares, which are reinvested as of the dates paid (which reduces the value of each share of the Fund and increases the number of Fund shares outstanding, but has no effect on the cash value in the Separate Account); o Policy loans and loan repayments allocated to the Separate Account; o Transfers to and among Divisions; o Withdrawals and surrenders taken from the Separate Account. VOTING RIGHTS The Funds have shareholder meetings from time to time to, for example, elect directors and approve some changes in investment management arrangements. You can give us voting instructions on shares of each Portfolio of a Fund that are attributed to your Policy. We will vote the shares of each Portfolio that are attributed to your Policy based on your instructions. We will vote all shares in proportion to the instructions received. If we do not receive your instructions we will vote your shares in the same proportion as represented by the votes received from other Owners. The effect of this proportional voting is that a small number of Owners may control the outcome of a vote. Should we determine that the 1940 Act no longer requires us to do this, we may decide to vote Portfolio shares in our own right, without input from you or any other Owners of variable life insurance policies or variable annuity contracts that participate in a Portfolio of a Fund. ISSUING A POLICY If you want to own a Policy, then you must complete an application, which must be received by your Designated Office. We reserve the right to reject an application for any reason permitted by law, and our acceptance of an application is subject to our insurance underwriting rules. We offer other variable life insurance policies that have different death benefits, policy features, portfolio selections, and optional programs. However, these other policies also have different charges that would affect your performance and cash values. To obtain more information about these other policies, contact your Designated Office or your sales representative. There are three types of underwriting available under the Policy. We decide which type to use based on the total number of eligible possible insureds within the eligible group for whom a Policy could be purchased and the percentage of those insureds for whom a Policy is actually purchased. The three types of underwriting are: GUARANTEED ISSUE--requires the least evidence of insurability and rating classification; SIMPLIFIED UNDERWRITING--requires more evidence of insurability and rating classification; and 23 FULL UNDERWRITING--requires the most evidence of insurability and rating classification. An insured who is a standard risk under Simplified Underwriting or Guaranteed Issue may have a higher cost of term insurance rate than would apply to the same insured under Full Underwriting. Generally, we will issue a Policy only for insureds that are age 70 or less (although we may decide to permit an insured that is older) that have provided evidence of insurability that we find acceptable. An "insured" is the person upon whose life we issue the Policy. For the purpose of computing the insured's age under the Policy, we start with the insured's age on the Date of Policy which is set forth in the Policy. Age under the Policy at any other time is then computed using that issue age and adding the number of full Policy years completed. The Date of Policy is usually the date the Policy application is approved and premiums are accepted. We use the Date of Policy to calculate the Policy years (and Policy months and monthly anniversaries). To preserve a younger age for the insured, we may permit a Date of Policy that is earlier than the date the application is approved if there have been no material misrepresentations in the application. You may request that your Date of Policy be the same date the planned periodic premium is received. In these cases, you would incur a charge for insurance protection before insurance coverage starts. Insurance coverage under the Policy will generally begin at the time the application is approved. For coverage to be effective, the insured's health on the date of such approval must be the same as stated in the application and, in most states, we can require that the insured not have sought medical advice or treatment between the date of the application and the date of approval. PAYMENT AND ALLOCATION OF PREMIUMS You can make voluntary planned periodic premium payments and unscheduled premium payments. The payment of a given premium won't necessarily guarantee that your Policy will remain in force. Rather, this depends on your Policy's Cash Surrender Value. PAYING PREMIUMS We accept premium payments made by check or cashier's check. We do not accept cash, money orders or traveler's checks. You can make premium payments, subject to certain limitations discussed below. VOLUNTARY PLANNED PERIODIC PREMIUM SCHEDULE. You choose the schedule on your application. The schedule sets forth the amount of premiums, fixed payment intervals and the period of time that you intend to pay premiums. The schedule can be: (a) annual; (b) semi-annual; or (c) through another method to which we agree. After payment of the first planned periodic premium, you do not have to pay premiums in accordance with your voluntary planned period premium schedule. UNSCHEDULED PREMIUM PAYMENT OPTION. You also can make other premium payments at any time. Premium payments sent by regular U.S. mail should be addressed to: MetLife, P.O. Box 7369, Philadelphia, PA 19101-7369. Premium payments sent by express mail or courier service should be addressed to: MetLife, Lockbox #7369, Wells Fargo Bank Y1372-045, 401 Market Street, Philadelphia, PA 19106. If you send 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 payment or transaction to your Policy. MAXIMUM AND MINIMUM PREMIUM PAYMENTS o The first premium may not be less than the planned premium unless agreed to by us. o After the first Policy year, your voluntary planned periodic payments must be at least $100, whether on an annual or semi-annual basis. o Unscheduled premium payments must be at least $100 each. We may change this minimum amount on 90 days notice to you. o You may not pay premiums that exceed tax law premium limitations for life insurance policies. We will return any amounts that exceed these limits, except that we will keep any amounts that are required to 24 keep the Policy from terminating. We will let you make premium payments that would turn your Policy into a modified endowment contract, but we will tell you of this status in your annual statement, and if possible, we will tell you how to reverse the status. ("See Tax Matters--Modified Endowment Contracts.") o We reserve the right not to sell a Policy to any group or individual associated with such group if the total amount of annual premium that is expected to be paid in connection with all Policies sold to the group or individuals associated with such group is less than $250,000. o We may require evidence of insurability for premium payments that cause the minimum death benefit to exceed the death benefit then in effect under the death benefit option chosen. ALLOCATING NET PREMIUM Your allocations of net premiums to the Fixed Account are effective as of the Investment Start Date. See "Investment Start Date" description below in "Other Policy Provisions--When Your Requests Become Effective." Your allocations of net premiums to the Divisions of the Separate Account are effective as of the end of the free look period. See "Other Policy Provisions--Free Look Period." During the free look period, we allocate the net premium payments you allocated to the Divisions to a money market Division. At the end of the free look period, we will allocate your cash value in that Division among all the Divisions according to your net premium allocation instructions. For policies issued in California, we allocate net premiums to the Divisions as of the Investment Start Date. If you are age 60 or older, and you allocate 100% of your initial net premium to a money market Division in order to receive a refund of premiums should you cancel the Policy during the free look period, we will not automatically transfer your cash value or reallocate your future premiums once the free look period has ended. You must contact us to request a transfer or reallocation. You can instruct us to allocate your net premiums among the Fixed Account and the Divisions. You can change your allocations (effective after the end of the free look period) at any time by giving us written notification at your Designated Office or in any other manner that we permit. If you have cash value of at least $60,000,000 in the Fixed Account for all Policies you own, we will have to give prior approval to any allocation of net premium or transfer of cash value to the Fixed Account. INSURANCE PROCEEDS If the Policy is in force, we will pay your beneficiary the insurance proceeds as of the end of the Valuation Period that includes the insured's date of death. We will pay this amount after we receive documents that we request as due proof of the insured's death. We will pay the proceeds in one sum, including either by check, by placing the amount in an account that earns interest, or 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 Divisions of the Separate Account. More detailed information concerning settlement options is provided under "Income Plans" and on request from your 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. The beneficiary has one year from the date the insurance proceeds are paid to change the selection from a single sum payment to an income plan, as long as we have made no payments from the interest-bearing account. If the terms of the income plan permit the beneficiary to withdraw the entire amount from the plan, the beneficiary can also name contingent beneficiaries. 25 The insurance proceeds equal: o The death benefit under the death benefit option or minimum death benefit that is in effect on the date of death; plus o Any additional insurance proceeds provided by rider; minus o Any unpaid Policy loans and accrued interest thereon, and any due and unpaid charges accruing during a grace period. 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, Policy Owner or the Certificate Owner last resided, as shown on our books and records. ("Escheatment" is the formal, legal name for this process.) However, the state is obligated to pay the death benefit (without interest) if your beneficiary steps forward to claim it with the proper documentation. To prevent your Policy's death benefit from being paid to the state's abandoned or unclaimed property office, it is important that you update your beneficiary designation--including complete names and complete address--if and as they change. You should contact your Designated Office in order to make a change to your beneficiary designation. (See "Contacting Us.") DEATH BENEFIT OPTIONS You can choose among three options. You select which option you want in the Policy application. The three options are: o Option A: The death benefit is a level amount and equals the specified face amount of the Policy. o Option B: The death benefit varies and equals the specified face amount of the Policy plus the cash value on the date of death. o Option C: The death benefit varies and equals the specified face amount of the Policy plus the amount by which the Policy premiums paid exceed withdrawals made. There are issues that you should consider in choosing your death benefit option. For example, under Options B and C, the cash value or other amounts are added to the specified face amount. Therefore, the death benefit will generally be greater under these options than under Option A for Policies with the same specified face amount and premium payments. By the same token, the cost of insurance will generally be greater under Options B and C than under Option A. You can change your death benefit option after the first Policy year, provided that: o Your cash surrender value after the change would be enough to pay at least two monthly deductions. o The specified face amount continues to be no less than the minimum we allow after a decrease. o The total premiums you have paid do not exceed the then current maximum premium limitations permitted under IRS rules. o You provide evidence satisfactory to us of the insured's insurability, as we may require. Any change will be effective on the monthly anniversary on or immediately following the Date of Receipt of the request (or following the date we approve it if we require evidence of insurability). A change in death benefit option will cause us to automatically increase or decrease your specified face amount so that the amount of the death benefit is not changed on the effective date of the new death benefit option. Before you change your death benefit option you should consider the following: o If the term insurance portion of your death benefit changes, as it may with a change from Option A to B or C and vice versa, the term insurance charge will also change. This will affect your cash value and, in some cases, the death benefit levels. o If your specified face amount changes because of the change in death benefit option, consider also the issues presented by changing your specified face amount that are described under "Specified Face Amount," below. These issues include the possibility that your Policy would become a modified endowment contract; that you would receive a taxable distribution; and that the maximum premium amounts that you can pay would change. 26 MINIMUM DEATH BENEFIT In no event will the Policy death benefit (plus the proceeds under any term rider on the insured's life) be lower than the minimum amount required to maintain the Policy as life insurance under the federal income tax laws as in effect on the date your Policy is issued. We determine this minimum by applying either the: I. Cash Value Accumulation Test; or II. Guideline Premium/Cash Value Corridor Test. You choose the Cash Value Accumulation Test or the Guideline Premium/Cash Value Corridor Test before we issue your Policy, and the election cannot later be changed. Under the Cash Value Accumulation Test, your death benefit is never less than the amount of your Policy's cash value at the insured's date of death, multiplied by a factor set forth in your Policy. This factor varies depending upon the insured's age at the date of death, and it declines as the insured grows older. Under the Guideline Premium/Cash Value Corridor Test, there is a very similar minimum death benefit based on your Policy's cash value at the date of death. However, the factors set forth in your Policy are higher for the Guideline Premium/Cash Value Corridor Test (which results in a higher minimum death benefit, assuming the same cash value). Also, there are firm limits on the amount of premiums you can pay for the amount of coverage you have in force under the Guideline Premium/Cash Value Corridor Test, while the tax law imposes no such firm limits under the Cash Value Accumulation Test. Before choosing between these two Tests you should consider the following: o The Cash Value Accumulation Test may allow you to pay a greater amount in premiums for the same amount of death benefit under federal income tax laws and still qualify as life insurance. This is the case because the Policy will qualify as life insurance even though the Policy Owner is paying a higher level of premium than allowed under the Guideline Premium/Cash Value Accumulation Test. However, the death benefit under the Cash Value Accumulation Test (and thus the monthly cost of term insurance) could be higher. You should ask for an illustration comparing results under both tests. We reserve the right to return any premium to the extent it would cause the death benefit to increase above certain limits. o Increases in death benefits by operation of the Cash Value Accumulation Test will result in a higher monthly cost of term insurance. Such increases can also occur under the Guideline Premium/Cash Value Corridor Test, although this is less likely. o Any advantage of the Cash Value Accumulation Test may be eliminated if premium payments exceed the 7-pay test limit. The 7-pay test sets a limit on the amount of premiums which may be paid under a Policy during the 7-pay testing period (usually the first 7 Policy years after issue or after a material modification of the Policy) without incurring possible adverse tax consequences. If premiums paid exceed such limit during any 7-pay testing period, any partial withdrawals, Policy loan and other distributions may be subject to adverse federal income tax consequences. (See "Federal Tax Matters--Modified Endowment Contracts" below.) SPECIFIED FACE AMOUNT CHOOSING YOUR INITIAL SPECIFIED FACE AMOUNT. The specified face amount is the basic amount of insurance specified in your Policy. The Minimum Initial Specified Face amount is the smallest amount of specified face amount for which a Policy may be issued. Currently this amount is $100,000. If the term insurance rider is purchased, the specified face amount and term rider amount are combined to determine the Minimum Initial Specified Face Amount. You should consider whether to take all of your coverage as specified face amount or whether to take some coverage, if available, under our term insurance benefit. The term insurance benefit provides coverage on the insured to age 95. You may purchase this rider, if available, only at the time of Policy issue. By electing to take part of your coverage under the term insurance rider, you can reduce the amount of sales charges and current cost of insurance charges that you otherwise would pay. For details, see "Optional Rider Benefits--Term Benefit." CHANGING YOUR SPECIFIED FACE AMOUNT. Generally, you may change your specified face amount at any time after the first Policy year subject to certain criteria specified below. Any change will be effective on: the monthly anniversary on or next following the (a) Date of Receipt of your request; or (b) if we require evidence of insurability, the date we approve your request. 27 The Specified Face Amount of insurance may not be reduced to less than $100,000 during the first five Policy years or to less than $50,000 after the fifth Policy year. These minimums also apply to decreases that result from partial withdrawals or changes in death benefit options. If there have been previous specified face amount increases, any decreases in specified face amount will be made in the following order: (i) the specified face amount provided by the most recent increase; (ii) the next most recent increases successively; and (iii) the initial specified face amount. You may increase the specified face amount only if the cash surrender value after the change is large enough to cover at least two monthly deductions based on your most recent cost of term insurance charge. Any increase may require that we receive additional evidence of insurability that is satisfactory to us. We may also impose a one-time underwriting charge. Before you change your specified face amount you should consider the following: o The term insurance portion of your death benefit will change and so will the term insurance charge. This will affect the insurance charges, cash value and, in some cases, death benefit levels. o Reducing your specified face amount may result in our returning an amount to you which, if it occurs during the first 15 Policy years, could then be taxed on an income first basis. o The amount of additional premiums that the tax laws permit you to pay into your Policy may increase or decrease. The additional amount you can pay without causing your Policy to be a modified endowment contract for tax purposes may also increase or decrease. (See "Tax Matters--Modified Endowment Contracts.") o In some circumstances, the Policy could become a modified endowment contract. o For Policies issued on or after May 1, 1996 in connection with other than certain employer sponsored plans that became effective prior to August 1, 2000, the sales charge and the administration charge may change. This is because an increase or decrease in the specified face amount will result in an increase or decrease in the annual target premium on which these charges are based. INCOME PLANS Generally you can receive the Policy's insurance proceeds, amounts payable at the Final Date or amounts paid upon surrender under an income plan instead of in a lump sum. The insurance proceeds can be paid under a variety of income plans that are available under the Policy. Generally, we currently make the following income plans available: o Interest income o Installment Income for a Stated Period o Installment Income of a Stated Amount o Single Life Income--Guaranteed Payment Period o Single Life Income--Guaranteed Return o Joint and Survivor Life Income Before you choose an income plan you should consider: o The tax consequences associated with the Policy proceeds, which can vary considerably, depending on whether a plan is chosen. You or your beneficiary should consult with a qualified tax adviser about tax consequences. o That your Policy will terminate at the time you commence an income plan and you will receive a new contract, which describes the terms of the income plan. You should carefully review the terms of the new contract, because it contains important information about the terms and conditions of the income plan. o That the rates of return we credit under these plans are not based on the investment performance of any of the Portfolios. CASH VALUE, TRANSFERS AND WITHDRAWALS CASH VALUE Your Policy's cash value equals: o The Fixed Account cash value; plus o The -Policy Loan Account cash value; plus o The Separate Account cash value. 28 Your Policy's CASH SURRENDER VALUE equals your cash value minus any outstanding Policy loans (plus any accrued and unpaid loan interest). On your Investment Start Date, the Policy's cash value in a Division will equal the portion of any net premium allocated to the Division, reduced by the portion of any monthly deductions allocated to the Policy's cash value in that Division. Thereafter, at the end of each Valuation Period the cash value in a Division will equal: o The cash value in the Division at the beginning of the Valuation Period; plus o All net premiums, loan repayments and cash value transfers into the Division during the Valuation Period; minus o All partial cash withdrawals, loans and cash value transfers out of the Division during the Valuation Period; minus o The portion of any charges and deductions allocated to the cash value in the Division during the Valuation Period; plus o The net investment return for the Valuation Period on the amount of cash value in the Division at the beginning of the Valuation Period. The net investment return currently equals the rate of increase or decrease in the net asset value per share of the underlying Portfolio over the Valuation Period, adjusted upward to take appropriate account of any dividends and other distributions paid by the Portfolio during the period. CASH VALUE TRANSFERS You can transfer your cash value among the Divisions and the Fixed Account at any time beginning after the end of the free look period. The minimum amount you may transfer is $50 or, if less, the total amount in an investment option. You may make transfers at any time. The maximum amount that you may transfer or withdraw from the Fixed Account in any Policy year is the greater of $50 and 25% of the largest amount in the Fixed Account over the last four Policy years. Due to this limit, 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. This limit does not apply to a full surrender or any loans taken. We may also limit the number of investment options to which you may transfer cash value, and, under certain conditions, we may have to approve transfers to the Fixed Account. (See "Payment and Allocation of Premiums--Allocating Net Premiums.") RESTRICTIONS OF 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 intend to treat all American Funds Insurance Series(R) portfolios ("American Funds Portfolios") as Monitored Portfolios. In addition, we monitor transfer activity in the Portfolios below (the "Monitored Portfolios"): AB VPS Global Thematic Growth Portfolio American Funds High-Income Bond Fund American Funds International Fund Baillie Gifford International Stock Portfolio Brighthouse Small Cap Value Portfolio Brighthouse/Aberdeen Emerging Markets Equity Portfolio Clarion Global Real Estate Portfolio Emerging Markets Debt Portfolio 29 Emerging Markets Equity Portfolio Franklin Mutual Global Discovery VIP Fund Goldman Sachs Small Cap Equity Insights Fund Harris Oakmark International Portfolio High Income Portfolio International Value Portfolio Invesco Small Cap Growth Portfolio Invesco V.I. International Growth Fund Janus Henderson Overseas Portfolio* JPMorgan Small Cap Value Portfolio Loomis Sayles Small Cap Core Portfolio MetLife MSCI EAFE(R) Index Portfolio MetLife Russell 2000(R) Index Portfolio MFS(R) Global Equity Series MFS(R) High Yield Portfolio MFS(R) New Discovery Series MFS(R) Research International Portfolio Neuberger Berman Genesis Portfolio Oppenheimer Global Equity Portfolio Putnam VT International Value Fund Royce Micro-Cap Portfolio Royce Small-Cap Portfolio T. Rowe Price Small Cap Growth Portfolio Templeton Foreign VIP Fund Templeton Global Bond VIP Fund Western Asset Management Strategic Bond Opportunities Portfolio * Effective April 29, 2019, the Portfolio is closed to new investments and transfers. 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 Monitored 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(R) 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 under that Policy to be 30 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. The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those Portfolios that we believe are susceptible to arbitrage trading, or the determination of the transfer limits. Our ability to detect and/or restrict such transfer activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by Policy Owners to avoid such detection. Our ability to restrict such transfer activity may also 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 Portfolios 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 separate accounts funding variable insurance Policies. The omnibus orders reflect the aggregation and netting of multiple orders from individual Owners of variable insurance policies and/or individual retirement plan participants. The omnibus nature of these orders may limit the Portfolios in their ability to apply their frequent 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 the 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 Fund prospectuses for more details. RESTRICTIONS ON LARGE TRANSFERS. Large transfers may increase brokerage and administrative costs of the underlying Portfolios and may disrupt portfolio management strategy, requiring a Portfolio to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations. We do not monitor for large transfers to or from Portfolios except where the manager of a particular Portfolio has brought large transfer activity to our attention for investigation on a case-by-case basis. For example, some portfolio managers have asked us to monitor for "block transfers" where transfer requests have been submitted on behalf of multiple Owners by a third party such as an investment adviser. When we detect such large trades, we may impose restrictions similar to those described above where future transfer requests from that third party must be submitted in writing with an original signature. 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. 31 TRANSFERS BY TELEPHONE: Subject to our frequent transfer procedures, we may, if permitted by state law, decide in the future to allow you to make transfer requests, and changes to allocations of future net premium by phone. We may also allow you to authorize your sales representative to make such requests. The following procedures would apply: o We must have received your authorization in writing satisfactory to us, to act on instructions from any person that claims to be you or your sales representative, as applicable, as long as that person follows our procedures; o We will institute reasonable procedures to confirm that instructions we receive are genuine. Our procedures will include receiving from the caller your personalized data. Any telephone instructions that we reasonably believe to be genuine are your responsibility, including losses arising from such instructions. Because telephone transactions may be available to anyone who provides certain information about you and your Policy, you should protect that information. We may not be able to verify that you are the person providing telephone instructions, or that you have authorized any such person to act for you; o All telephone calls will be recorded; o You will receive a written confirmation of any transaction; o Neither the Separate Account nor we will be liable for any loss, expense or cost arising out of a telephone request if we reasonably believed the request to be genuine. Telephone, facsimile, and computer systems may not always be available. Any telephone, facsimile, or computer system, whether it is yours, your service provider's, your sales representative's, or ours, can experience outages or slowdowns for a variety of reasons. These outages or slowdowns may delay or prevent our processing of your request. Although we have taken precautions to help our systems handle heavy use, we cannot promise complete reliability under all circumstances. If you are experiencing problems, you should make your request by writing to your Designated Office. SURRENDER AND WITHDRAWAL PRIVILEGES You can surrender your Policy for its cash surrender value. We may ask you to return the Policy before we honor your request to surrender your Policy. -You can choose to have the proceeds paid in a single sum, or under an income plan. If the insured dies after you surrender the Policy but before the end of the Policy month in which you surrendered the Policy, we will pay your beneficiary an amount equal to the difference between the Policy's death benefit and its cash value, computed as of the surrender date. You can make partial withdrawals if: o the withdrawal would not result in the cash surrender value being less than sufficient to pay 2 monthly deductions; o the withdrawal is at least $250; o the withdrawal would not result in total premiums paid exceeding any then current maximum premium limitation determined by Code rules; and o the withdrawal would not result in your specified face amount falling below the minimum allowable amount after a decrease, as described under "Insurance Proceeds--Specified Amount--Changing Your Specified Face Amount," above. If you make a request for a partial withdrawal that is not permitted, we will tell you and you may then ask for a smaller withdrawal or surrender the Policy. We will deduct your withdrawal from the Fixed Account and the Divisions in the same proportion that the Policy's cash value in each such option bears to the total cash value of the Policy in the Fixed Account and the Divisions. The maximum amount that you may withdraw from the Fixed Account in any Policy year is the greater of $50 or 25% of the largest amount in the Fixed Account over the last four Policy years. We may withhold payment of surrender, withdrawal or loan proceeds if any portion of those proceeds would be derived from a check that has not yet cleared (i.e., that could still be dishonored by your banking institution). We may use telephone, fax, Internet or other means of communications to verify that payment from the 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. You 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. 32 Before surrendering your Policy or requesting a partial withdrawal, you should consider the following: o Amounts received may be taxable as income and, if your Policy is a modified endowment contract, subject to certain tax penalties (See "Tax Matters--Modified Endowment Contracts"); o Your Policy could become a modified endowment contract; o For partial withdrawals, your death benefit will decrease, generally by the amount of the withdrawal; o For partial withdrawals, your specified face amount may also decrease. For Option A Policies, your specified face amount will decrease by the amount of the withdrawal. For Option B Policies, a withdrawal will not decrease the specified face amount. For Option C Policies, your specified face amount will decrease by the amount, if any, by which cumulative withdrawals exceed cumulative premiums paid. In some cases you may be better off taking a Policy loan, rather than a partial withdrawal. BENEFIT AT FINAL DATE The Final Date is the Policy anniversary on which the insured is Age 95. Subject to certain conditions, we will allow you to extend that date where permitted by state law. If the insured is living on the Final Date, we will pay you the cash surrender value of the Policy. You can receive the cash surrender value in a single sum, in an account that earns interest, or under an available income plan. LOAN PRIVILEGES You can borrow from us and use your Policy as security for the loan. The amount of each loan must be: o At least -$250. o No more than -the greater of the cash surrender value less two monthly deductions and 75% of the cash surrender value (unless state law requires a different percentage to be applied, as set forth in your Policy) when added to all other outstanding Policy loans. As of your loan request's Date of Receipt, we will: o Remove an amount equal to the loan from your cash value in the Fixed Account and each Division of the Separate Account in the same proportion as the Policy's cash value in each such option bears to the total cash value of the Policy in the Fixed Account and the Divisions. o Transfer such cash value to the Policy loan account, where it will be credited with interest at a rate equal to the loan rate charged less a percentage charge, based on expenses associated with Policy loans, determined by us. This percentage charge will not exceed 2%, and the minimum rate we will credit to the Policy Loan Account will be 2.5% per year (4% for Policies issued prior to February 24, 2012). At least once a year, we will transfer any interest earned in your Policy loan account to the Fixed Account and the Divisions, according to the way that we then allocate your net premiums. o Charge you interest, which will accrue daily. We will tell you the initial interest rate that applies to your loan and mail you advance notices of any increases applicable to existing loans. The interest rate charged for a Policy year will never be more than the maximum allowed by law and will generally be the greater of: o The published monthly average for the calendar month ending two months before the start of such year; and o The guaranteed rate used to credit interest to the cash value allocated to the Fixed Account for the Policy, plus no more than 1%. The published monthly average means (a) Moody's Corporate Bond Yield Average Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor service; or (b) if the Moody's average is not published, a substantially similar average established by regulation issued by the insurance supervisory official of the state in which your Policy is delivered. Your interest payments are due at the end of each Policy year and if you don't pay the amount within 31 days after it is due, we will treat it as a new Policy loan, which will be taken from the Fixed Account and the Divisions by the same method as other loans. 33 Repaying your loans (plus accrued interest) is done by sending in payments at least equal to $25. You should designate whether a payment is intended as a loan repayment or a premium payment, since we will treat any payment for which no designation is made as a premium payment. We will allocate your repayment to the Fixed Account and the Divisions, in the same proportion that net premiums are then allocated, except that amounts borrowed from the Fixed Account will be repaid to the Fixed Account first. Before taking a Policy loan you should consider the following: o Interest payments on loans are generally not deductible for tax purposes; o Under certain situations, Policy loans could be considered taxable distributions; o Amounts held in your Policy loan account do not participate in the investment experience of the Divisions or receive the interest rate credited to the Fixed Account, either of which may be higher than the interest rate credited on the amount you borrow; o If you surrender your Policy or if we terminate your Policy, or at the Final Date, any outstanding loan amounts (plus accrued interest) will be taxed as a distribution (see "Federal Tax Matters--Loans" below); o A Policy loan increases the chances of our terminating your Policy due to insufficient cash value. We will terminate your Policy with no value if: (a) on a monthly anniversary your loans (plus accrued interest) exceed your cash value minus the monthly deduction; and (b) we tell you of the insufficiency and you do not make a sufficient payment within 61 days of the monthly anniversary; o Your Policy's death proceeds will be reduced by any unpaid loan (plus any accrued and unpaid loan interest). OPTIONAL RIDER BENEFITS You may be eligible for certain benefits provided by rider, subject to certain underwriting requirements and the payment of additional premiums. We will deduct any charges for the rider(s) -(other than the charge for the interim term insurance rider) as part of the monthly deduction. Generally, we currently make the following benefits available by rider: o Accelerated Death Benefit1 o Term Insurance Benefit2 o Interim Term Insurance Benefit o Enhanced Cash Surrender Value Rider3
1Payment under this rider may affect eligibility for benefits under state or federal law. 2This rider is discussed in more detail under "Term Benefit" below. 3This rider may be attached at issue if you request it, but not thereafter. Each rider contains important information, including limits and conditions that apply to the benefits. If you decide to purchase any of the riders, you should carefully review their provisions to be sure the benefit is something that you want. You should also consider: o That the addition of certain riders can restrict your ability to exercise certain rights under the Policy; o That the amount of benefits provided under the rider is not based on investment performance of a Separate Account; but, if the Policy terminates because of poor investment performance or any other reason, the rider generally will also terminate; o That there are tax consequences. You should consult with your tax adviser before purchasing one of the riders. TERM BENEFIT You have the flexibility to include, at Policy issue, a rider that provides a term benefit ("Term Rider"). The availability of the Term Rider is also subject to governmental approval in your state. The Term Rider is a rider to the Policy that, like the base Policy, provides coverage on the insured to age 95. You may purchase this rider, if available, only at Policy issue. Nevertheless, if you purchase the Term Rider, the amount of coverage under the rider will automatically increase and decrease with any changes to your specified face amount under the Policy, so that the ratio between the Policy's specified face amount and the amount of Term Rider coverage will always remain the same as you originally selected. 34 In almost all respects, coverage taken under the Term Rider has exactly the same effect as coverage taken as specified face amount under the Policy. An important difference, however, is that the sales charge depends on the amount of the coverage provided under the base Policy. The amount of Term Rider will impact the sales charge. Thus, in comparing two Policies with identical total insurance amounts, the one with the greater portion provided by the Term Rider will have a lower sales charge. Conversely, the Policy with the higher amount provided under the base Policy will have a higher sales charge. Additionally, the cost of term insurance rates currently applicable to coverage provided under the Term Rider are lower than those currently charged for coverage under the base Policy. Therefore, the larger the portion of coverage provided under the Term Rider, the lower the overall cost of insurance. Again comparing two Policies with identical total insurance amounts, the cost of insurance will be lower under the Policy with the higher portion of coverage provided under the Term Rider. To summarize, the lower sales charge and lower anticipated current cost of term insurance rates resulting from a greater portion of total coverage provided by the Term Rider will result in better overall performance under the Policy. You may elect to have up to 95% of your total coverage provided by the Term Rider. We are able to make these favorable terms available under the Term Rider largely because our costs of selling it (principally the commissions we pay) are lower than under the base Policy. See "Sales of Policies." CHARGES AND DEDUCTIONS IMPORTANT INFORMATION APPLICABLE TO ALL POLICY CHARGES AND DEDUCTIONS The charges discussed in the paragraphs that follow are all included in the Fee Tables on pages 7 -to 14 of this Prospectus. You should refer to these Fee Tables for information about the rates and amounts of such charges, as well as other information that is not covered below. The Policy charges compensate us for the services and benefits we provide, the costs and expenses we incur, and the 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: 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 -term insurance charges we may deduct are insufficient to meet our actual claims because the insureds die sooner than we estimate; o that the charges of providing the services and benefits under the Policies exceed the charges we deduct. We may profit from the charges, including the cost of term insurance charge and the mortality and expense risk charge. Any distinctions we make about the specific purposes of the different charges are imprecise, and we are free to keep and use our revenues or profits for any other purpose, including paying any of our costs and expenses in connection with the Policies. Our revenues from any particular charge may be more or less than any costs or expenses that charge may be intended primarily to cover. The following sets forth additional information about Policy charges. 35 CHARGES DEDUCTED FROM PREMIUMS ANNUAL TARGET PREMIUM. We use the concept of annual target premium to determine certain limits on sales and administrative charges (discussed immediately below). We define the annual target premium to be: For Policies issued prior to May 1, 1996 or issued in connection with certain employer sponsored plans that became effective prior to August 1, 2000, 50% of the estimated annual amount which satisfied the 7-Pay test under federal tax law based on the issue age of the insured and the initial specified face amount (see "Federal Tax Matters--Modified Endowment Contracts"); For all other Policies, 100% of the estimated annual amount that satisfied the 7-Pay test based on the issue age of the insured, the specified face amount of insurance of the base Policy only (excluding the Term Rider) and standard underwriting class. For such Policies, the annual target premium amount is increased and decreased proportionately for increases and decreases in the specified face amount of the Policy. This could, in turn, increase or decrease sales and administrative charges. SALES CHARGE. We deduct this charge primarily to help pay the cost of compensating sales representatives and other direct and indirect expenses of distributing the Policies. The charge is assessed directly against each premium. For premiums received in Policy years 1 through 10, the current rate is up to 6.5% of the premium paid until the total payments in each such year equal the annual target premium, and for Policy years 11 and later the rate we charge is up to 3% of each premium until the total payments in the year equal the annual target premium. No sales charge is or will be assessed against any premiums paid in any Policy year in excess of a total equal to the annual target premium. The maximum rate we can charge for premiums received up to a total equal to the annual target premium during Policy years 1 through 10 is 9%, and the maximum for Policy years 11 and later is the same as currently charged in those years. ADMINISTRATIVE CHARGE. We incur expenses in the administration of the Policy, including our underwriting and start-up expenses. We deduct up to 1.05% (currently, this deduction is .55% in Policy years 1-10) of each premium payment primarily to cover this expense up to a total of payments in any Policy year equal to the annual target premium, and .05% on any excess payments in any Policy year exceeding that total amount. Our charge will never exceed this rate. CHARGE FOR AVERAGE EXPECTED STATE AND LOCAL TAXES ATTRIBUTABLE TO PREMIUMS. We make this charge to reimburse us for the state premium taxes that we must pay on premiums we receive. Premium taxes vary from state to state and currently range from 0 to 3.50%. Our charge of 2.25% approximates the average tax rate we expect to pay on premiums we receive from all states. CHARGE FOR EXPECTED FEDERAL TAXES ATTRIBUTABLE TO PREMIUMS. Federal income tax law requires us to pay certain amounts of taxes that are related to the amount of premiums we receive. We deduct 1.2% of each premium payment to offset the cost to us of those additional taxes, which may be more or less than the amount we pay in respect of your premiums. CHARGE FOR INTERIM TERM INSURANCE BENEFIT. This charge is deducted only from your initial premium payment, and only if you elect the interim term insurance benefit. The interim term insurance benefit provides temporary initial life insurance coverage on the insured prior to the time that coverage under the Policy takes effect. This coverage is provided by adding a "rider" and is subject to several conditions and limitations. The charge for this benefit is described in the rider form. This charge is primarily to compensate us for the risk that the insured will die while coverage under this rider is in force. LOAN INTEREST SPREAD. We charge interest on Policy loans but credit you with interest on the amount of the cash value we hold as collateral for the loan. The loan interest spread is the excess of the interest rate we charge over the interest rate we credit. This charge is primarily to cover our expense in providing the loan. The charge is guaranteed to never exceed 2%. CHARGES INCLUDED IN THE MONTHLY DEDUCTION We allocate the monthly deduction (except for the monthly mortality and expense risk charge) among the Fixed Account and each Division of the Separate Account in the same proportion as the Policy's cash value in each such option bears to the total cash value of the Policy in the Fixed Account and the Divisions. We deduct the monthly deductions as of each monthly anniversary, commencing with the Date of Policy. 36 o COST OF TERM INSURANCE. This charge varies monthly based on many factors. Each month, we determine the charge by multiplying your cost of insurance rates by the term insurance amount. This is the amount that we are at risk if the insured dies. The term insurance amount is the death benefit at the beginning of the Policy month divided by a discount factor to account for an assumed return during the month; minus the cash value at the beginning of the Policy month after deduction of all other applicable charges. Factors that affect the term insurance amount include the specified face amount, the cash value and the death benefit option you choose (generally, the term insurance amount will be higher for Options B and C). The term insurance rate is based on our expectations as to future experience, taking into account the insured's sex (if permitted by law and applicable under your Policy), age, underwriting class and rate class. The rates will never exceed the guaranteed rates. The guaranteed rates are based on certain 2001 Commissioners Standard Ordinary Mortality Tables. For Policies issued prior to January 1, 2009, the guaranteed rates are based on the corresponding 1980 Commissioners Standard Ordinary Mortality Tables. Our current rates are lower than the maximums in most cases. We review our rates periodically and may adjust them, but we will apply the same rates to everyone who has had their Policy for the same amount of time and who is the same age, sex and rate class. As a general rule, the cost of insurance rate increases each year you own your Policy, as the insured's age increases. Rate class relates to the level of mortality risk we assume with respect to an insured. It can be the standard rate class, or one that is higher (and may be divided by smoking status). The insured's rate class will affect your cost of term insurance. You can also have more than one rate class in effect, if the insured's rate class has changed and you change your specified face amount. A better rate class will lower the cost of term insurance on your entire Policy and a worse rate class will affect the portion of your cost of term insurance charge attributable to the specified face amount increase. o MORTALITY AND EXPENSE RISK CHARGE. We make this monthly charge primarily to compensate us for mortality risks that insureds may live for a shorter period than we expect; and expense risks that our issuing and administrative expenses may be higher than we expect. This monthly charge is allocated proportionately to the cash value in each Division of the Separate Account. The maximum rate we may charge is equivalent to an effective annual rate of .90% of the cash value in the Separate Account. CHARGES FOR CERTAIN OPTIONAL RIDER BENEFITS The charge for an optional benefit that you add by rider to your Policy will generally be deducted as part of the monthly deduction. This includes the charge for the Term Benefit Rider. The purpose of the charge for each rider is primarily to compensate us for our direct and indirect costs and risks in providing that rider. The charge we deduct for any such additional benefits you can add by rider is described in the rider form. VARIATIONS IN CHARGES We may vary a charge by group, based on anticipated variations in our costs or risks associated with the group or individuals in the group that the charge was intended to cover. Our variations in the charges will be made in accordance with our established and uniformly applied administrative procedures. We consider a variety of factors in determining charges, including but not limited to: o The nature of the group and its organizational framework; o The method by which sales will be made to the individuals associated with the group; o The facility by which premiums will be paid; o The group's capabilities with respect to administrative tasks; o Our anticipated persistency of the Policies; o The size of the group and the number or years it has been in existence; o The aggregate amount of premiums we expect to be paid on the Policies owned by the group or by individuals associated with the group. 37 Any variations in charges will be reasonable and will not be unfairly discriminatory to the interests of any Policy Owner. PORTFOLIO COMPANY CHARGES Each Portfolio pays an investment management fee to its investment manager. Each Portfolio also incurs other direct expenses. See a more detailed description contained in the Fee Table section of this Prospectus (also see the Fund Prospectus and Statement of Additional Information referred to therein for each Portfolio). You bear indirectly your proportionate share of the fees and expenses of the Portfolios that correspond to the Separate Account Divisions you are using. OTHER CHARGES ADDITIONAL TAXES. In general, we don't expect to incur federal, state or local taxes upon the earnings or realized capital gains attributable to the assets in the Separate Account relating to the cash surrender value of the Policies. If we do incur such taxes, we reserve the right to charge cash value allocated to the Separate Account for these taxes. CASH VALUE TRANSFERS. We do not currently charge for any transfer amounts. We reserve the right to assess up to a $25 charge in the future against all transfers. Currently, transfers are not taxable transactions. POLICY TERMINATION AND REINSTATEMENT TERMINATION. We will terminate your Policy without any Cash Surrender Value if: o The Cash Surrender Value is less than the monthly deduction; and o We do not receive a sufficient premium payment within the 61-day grace period to cover the monthly deduction. We will mail you notice if any grace period starts. Reinstatement: Upon your request, we will reinstate your Policy (without reinstating any amounts in a Policy loan account), subject to certain terms and conditions that the Policy provides. We must receive your request within 3 years (or any longer period required by state law) after the end of the grace period and before the Final Date. You also must provide us: o A written application for reinstatement (the date we approve the application will be the effective date of the reinstatement). o Evidence of insurability that we find satisfactory. o An additional premium amount that the Policy prescribes for this purpose. FEDERAL TAX MATTERS The following is a brief summary of some tax rules that may apply to your Policy. Such discussion does not purport to be complete or to cover every situation. You must consult with and rely on the advice of your own tax or ERISA counsel, especially where the Policy is being purchased in connection with an employee benefit plan, such as a death benefit or deferred compensation plan, or is being purchased for estate, tax planning or similar purposes. You should also consult with your own tax adviser to find out how taxes can affect your benefits and rights under your Policy. Such consultation is especially important before you make unscheduled premium payments, change your specified face amount, -change your death benefit option, change coverage provided by riders, take a loan or withdrawal, or assign or surrender the Policy. Under current federal income tax law, the taxable portion of distributions from variable life -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. INSURANCE PROCEEDS o Insurance proceeds are generally excludable from your beneficiary's gross income to the extent provided in Section 101 of the Internal Revenue Code ("Code"). 38 o In the case of employer-owned life insurance as defined in Section 101(j) of the Code, 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. o The death proceeds may be subject to federal estate tax: (i) if paid to the insured's estate or (ii) if paid to a different beneficiary if the insured possessed incidents of ownership at or within three years before death. o If you die before the insured, the value of your Policy (determined under IRS rules) is included in your estate and may be subject to federal estate tax. o Whether or not any federal estate tax is due is based on a number of factors including the estate size. Please consult your tax adviser for the applicable estate tax rates. o The insurance proceeds payable upon death of the insured will never be less than the minimum amount required for the Policy to be treated as life insurance under Section 7702 of the Code, as in effect on the date the Policy was issued. The rules with respect to Policies issued on a substandard risk basis are not entirely clear. CASH VALUE (IF -YOUR POLICY IS NOT A MODIFIED ENDOWMENT CONTRACT) o You are generally not taxed on your cash value until you withdraw it or surrender your Policy or receive a distribution (such as when your Policy terminates on the Final Date). In these cases, you are generally permitted to take withdrawals and receive other distributions up to the amount of premiums paid without any tax consequences. However, withdrawals and other distributions will be treated as gain subject to ordinary income tax after you have received amounts equal to the total premiums you paid. Somewhat different rules may apply if there is a death benefit reduction in the first 15 Policy years. 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 o Loan amounts you receive will generally not be subject to income tax, unless your Policy is or becomes a modified endowment contract, is exchanged or terminates. o Interest on loans is generally not deductible. -For businesses that own a Policy, at least part of the interest deduction unrelated to the Policy may be disallowed unless the insured is a 20% owner, officer, director or employee of the business. o If your Policy terminates (upon surrender, cancellation, lapse, the Final Date or, in most cases, exchanges) while any Policy loan is outstanding, the amount of the loan plus accrued interest thereon will be deemed to be a "distribution" to you. Any such distribution will have the same tax consequences as any other Policy distribution. Thus, there will generally be federal income tax payable on the amount by which withdrawals and loans exceed -your remaining basis in the Policy. In the case of an exchange, -any outstanding Policy loan will generally be taxed to the extent of any -Policy gain. Please be advised that amounts borrowed and withdrawn reduce the Policy's cash value and any remaining Policy cash value may be insufficient to pay the income tax on your gains. MODIFIED ENDOWMENT CONTRACTS These contracts are life insurance policies where the premiums paid during the first 7 years after the Policy is issued, or after a material change in the Policy, exceeds tax law limits referred to as the "7-pay test." Material changes in the Policy include changes in the level of benefits, receipt of an unnecessary premium 39 and certain other changes to your Policy after the issue date. 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. Reductions in benefits during a 7-pay testing period also may cause your Policy to become a modified endowment contract. Generally, a life insurance policy that is received in exchange for a modified endowment contract will also be considered a modified endowment contract. The IRS has promulgated a procedure for the correction of inadvertent modified endowment contracts that may provide relief in limited circumstances. Due to the flexibility of the Policies as to premiums and benefits, the individual circumstances of each Policy will determine whether it is classified as a modified endowment contract. If your Policy is considered a modified endowment contract the following applies: o The death benefit will still generally be income tax free to your beneficiary, to the extent discussed above. o Amounts withdrawn or distributed before the insured's death, including (without limitation) loans taken from or secured by the Policy, assignments and pledges, are (to the extent of any gain in your Policy) treated as income first and subject to income tax. All modified endowment contracts you purchase from us and our affiliates during the same calendar year are treated as a single contract for purposes of determining the amount of any such income. o An additional 10% income tax generally applies to the taxable portion of the amounts you receive before age 59 1/2 except if you are disabled or if the distribution is part of a series of substantially equal periodic payments for your life (or life expectancy) or the joint lives (or joint life expectancies) of you and your beneficiary. -The foregoing exceptions to the 10% -additional tax generally do not apply to a Policy owner that is a non-natural person, such as a corporation. o If a Policy becomes a modified endowment contract, distributions that occur during the Policy year will be taxed as distributions from a modified endowment contract. In addition, distributions from a Policy within two years before it becomes a modified endowment contract will be taxed in this manner. This means that a distribution made from a Policy that is not a modified endowment contract could later become taxable as a distribution from a modified endowment contract. DIVERSIFICATION In order for your Policy to qualify as life insurance, we must comply with certain diversification standards with respect to the investments underlying the Policy. We believe that we satisfy and will continue to satisfy these diversification standards. Inadvertent failure to meet these standards may be able to be corrected. Failure to meet these standards would result in immediate taxation to Policy Owners of gains under their Policy. If Portfolio shares are sold directly to tax-qualified retirement plans that later lose their tax-qualified status, or to non-qualified plans, there could be adverse consequences under the diversification rules. INVESTOR CONTROL In some circumstances, Owners of variable -policies who retain excessive control over the investment of the underlying Separate Account assets may be treated as the Owners of those assets and may be subject to tax on income produced by those assets. Although published guidance in this area does not address certain aspects of the Policies, we believe that the Owner of a Policy should not be treated as an owner of the assets in our Separate Account. We reserve the right to modify the Policies to bring them into conformity with applicable standards should such modification be necessary to prevent Owners of the Policies from being treated as the owners of the underlying Separate Account assets. ESTATE, GIFT AND GENERATION-SKIPPING TRANSFER TAXES The transfer of the Policy or the designation of a Beneficiary may have Federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. When the insured dies, the death proceeds will generally be includable in the Policy Owner's estate for purposes of the Federal estate tax if the Policy Owner was the insured. If the Policy Owner was not the insured, the fair market value of the Policy would be included in the Policy Owner's estate upon the Policy Owner's death. -The Policy would not be includable in the insured's estate if the insured neither retained incidents of ownership at death nor had given up ownership within three years before death. 40 Moreover, under certain circumstances, the 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 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 transfer and other taxes. In general, current rules provide for a $10 million federal estate, gift and generation-skipping transfer tax exemption (as indexed for inflation) and a top tax rate of 40 percent through the year 2025. The complexity of the tax law, along with uncertainty as to how it might be modified in coming years, underscores the importance of seeking guidance from a qualified adviser to help ensure that your estate plan adequately addresses your needs and those of your beneficiaries under all possible scenarios. WITHHOLDING To the extent that Policy distributions are taxable, they are generally subject to withholding for the recipient's Federal income tax liability. Recipients can generally elect however, not to have tax withheld from distributions. LIFE INSURANCE PURCHASES BY 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 that are not U.S. citizens or residents are advised to consult with a qualified tax adviser regarding U.S. and foreign taxation with respect to a Policy purchase. BUSINESS USES OF POLICY Businesses can use the Policies in various arrangements, including nonqualified deferred compensation or salary continuation 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. The IRS has issued guidance on split dollar insurance plans. A tax adviser should be consulted with respect to this guidance if you have purchased or are considering the purchase of a Policy for a split dollar insurance plan. The Sarbanes-Oxley Act of 2002 (the "Act"), which was signed into law on July 30, 2002, prohibits, with limited exceptions, publicly-traded companies, including non-U.S. companies that have securities listed on exchanges in the United States, 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 as applying to split-dollar life insurance policies for directors and executive officers of such companies, since at least some such arrangements can arguably be viewed as involving a loan from the employer for at least some purposes. TRANSFER OF ISSUED LIFE INSURANCE POLICIES TO THIRD PARTIES. 41 If you transfer the Policy to a third party, including a sale of the Policy to a life settlement company, such transfer for value may be taxable. The death benefit will also be taxable in the case of a transfer for value unless certain exceptions apply. We may be required to report certain information to the IRS, as required under IRC section 6050Y and applicable regulations. You should consult with a qualified tax advisor for further information prior to transferring the Policy. Any affected business contemplating the payment of a premium on an existing Policy, or the purchase of a new Policy in connection with a split dollar life insurance arrangement should consult legal counsel. Split dollar insurance plans that provide deferred compensation may be subject to rules governing deferred compensation arrangements. Failure to adhere to these rules will result in adverse tax consequences. A tax adviser should be consulted with respect to such plans. In the case of a business-owned Policy, the provisions of Section 101(j) of the Code may limit the amount of the death benefit excludable from gross income unless a specified exception applies and a notice and consent requirement is satisfied, as discussed above. CHANGES TO TAX RULES AND INTERPRETATIONS Changes in applicable tax laws, rules and interpretations can adversely affect the tax treatment of your Policy. These changes may take effect retroactively. We reserve the right to amend the Policy in any way necessary to avoid any adverse tax treatment. Examples of changes that could create adverse tax consequences include: o Possible taxation of cash value transfers between investment options; o Possible taxation as if you were the owner of your allocable portion of the Separate Account's assets; o Possible changes in the tax treatment of Policy benefits and rights. To the extent permitted under the federal tax law, we may claim the benefit of certain foreign tax credits attributable to taxes paid by certain Funds to foreign jurisdictions. THE COMPANY'S INCOME TAXES Under current federal income tax law we are not taxed on the Separate Account's operations. Thus, currently we do not deduct a charge from the Separate Account for company federal income taxes. (We do deduct a charge for federal taxes from premiums.) We reserve the right to charge the Separate Account for any future federal income taxes we may incur. Under current laws we may incur state and local taxes (in addition to premium taxes). These taxes are not now significant and we are not currently charging for them. If they increase, we may deduct charges for such taxes. We 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 dividends received deductions, are not passed back to the Separate Account or to Policy Owners since we are the owner of the assets from which the tax benefits are derived. RIGHTS WE RESERVE We reserve the right to make certain changes if we believe the changes are in the best interest of our Policy Owners or would help carry out the purposes of the Policy. We will make these changes in the manner permitted by applicable law and only after getting any necessary Owner and regulatory approval. We will notify you of any changes that result in a material change in the underlying investments in the Divisions, and you will have a chance to transfer out of the affected Division (without charge). Some of the changes we may make include: o Operating the Separate Account in any other form that is permitted by applicable law; o Changes to obtain or continue exemptions from the 1940 Act; o Transferring assets among Divisions or to other separate accounts, or our general account or combining or removing Divisions from the Separate Account; o Substituting units in a Division for units of another Division of a Fund or another fund or investment permitted by law; 42 o Changing the way we assess charges without exceeding the aggregate amount of the Policy's guaranteed maximum charges; o Making any necessary technical changes to the Policy to conform it to the changes we have made. Some such changes might require us to obtain regulatory or Policy Owner approval. Whether regulatory or Policy Owner approval is required would depend on the nature of the change and, in many cases, the manner in which the change is implemented. You should not assume, therefore, that you necessarily will have an opportunity to approve or disapprove any such changes. Circumstances that could influence our determination to make any change might include changes in law or interpretations thereof; changes in financial or investment market conditions; changes in accepted methods of conducting operations in the relevant market; or a desire to achieve material operating economies or efficiencies. OTHER POLICY PROVISIONS FREE LOOK PERIOD Carefully review your Policy, which contains a full discussion of all its provisions. You can return the Policy during this period. The period ends on the later of: o 10 days after you receive the Policy (unless state law requires a longer -specified period); and o the date we receive a receipt signed by you. If you return your Policy, we will send you a complete refund of any premiums paid (or cash value plus any charges deducted if state law requires) within seven days. FOR POLICIES ISSUED IN CALIFORNIA: If you are age 60 or older, you may cancel the Policy within 30 days after you receive it. If you elected on the Policy application to allocate 100% of your initial net premium to a money market Division, we will refund the premiums you paid; if you elected to allocate your initial net premium to the other Divisions and/or the Fixed Account, we will refund the Policy's cash value. SUICIDE If the insured commits suicide within the first two Policy years (or any other period required by state law), your Beneficiary will receive all premiums paid (without interest), less any outstanding loans (plus accrued interest) and withdrawals taken. Similarly, we will pay the Beneficiary only the cost of any increase in specified face amount if the insured commits suicide within two years of such increase. ASSIGNMENT AND CHANGE IN OWNERSHIP You can assign your Policy as collateral if you notify us in writing. The assignment or release of the assignment is effective when it is recorded at your Designated Office. We are not responsible for determining the validity of the assignment or its release. Also, there could be serious adverse tax consequences to you or your beneficiary, so you should consult with your tax adviser before making any change of ownership or other assignment. REPORTS Generally, you will promptly receive statements confirming your significant transactions such as: o Change in specified face amount; o Change in death benefit option; o Transfers among Divisions ; o Partial withdrawals; o Loan amounts you request; o Loan repayments and premium payments. We will also send you an annual statement generally within 30 days after a Policy year. That statement will summarize the year's transactions and include information on: o Deductions and charges; o Status of the death benefit; 43 o Cash and cash surrender values; o Amounts in the Divisions and Fixed Account; o Status of Policy loans; o Automatic loans to pay interest; o Information on your modified endowment contract status (if applicable); We will also send you a Fund's annual and semi-annual reports to shareholders. WHEN YOUR REQUESTS BECOME EFFECTIVE Generally, requests, premium payments and other instructions and notifications received in "good order" (see "Good Order" in "Contacting Us") are effective on the Date of Receipt. In those cases, the effective time is at the end of the Valuation Period during which we receive them at your Designated Office. (Some exceptions to this general rule are noted below and elsewhere in this Prospectus.) A Valuation Period is the period between two successive Valuation Dates. A Valuation Period begins at the close of regular trading on the Exchange on a Valuation Date and ends at the close of regular trading on the Exchange on the next succeeding Valuation Date. The close of regular trading is 4:00 p.m., Eastern Time on most days. The Valuation Date is each day on which the Exchange is open for trading. Accordingly, if we receive your request, premium, or instructions after the close of regular trading on the Exchange, or if the Exchange is not open that day, then we will treat it as received on the next day when the Exchange is open. These rules apply regardless of the reason we did not receive your request, premium, or instructions by the close of regular trading on the Exchange, even if due to our delay (such as a delay in answering your telephone call). The end of the free look period is the effective time of the premium allocation instructions you make in your Policy application (and any changes in allocation or transfer requests you make on or before the end of the free look period). Your Investment Start Date is the date the first net premium is applied to the Fixed Account and/or the Separate Account and is the later of (1) the Date of Policy and (2) the Date of Receipt of your first premium payment. THIRD PARTY REQUESTS Generally, we accept requests for transactions or information only from you. Therefore, we reserve the right not to process transactions requested on your behalf by your agent with a power of attorney or any other authorization. This includes processing transactions by an agent you designate, through a power of attorney or other authorization, who has the ability to control the amount and timing of transfers for a number of other Policy Owners, and who simultaneously makes the same request or series of requests on behalf of other Policy Owners. EXCHANGE PRIVILEGE If you decide that you no longer want to take advantage of the Divisions, you may transfer all of your money into the Fixed Account. No charge will be imposed on a transfer of your entire cash value (or the cash value attributable to a specified face amount increase) to the Fixed Account within the first 24 Policy months (or within 24 Policy months after a specified face amount increase you have requested, as applicable). In some states, in order to exercise your exchange privilege, you must transfer, without charge, the Policy cash value (or the portion attributable to a specified face amount increase) to a flexible premium fixed benefit life insurance policy that we make available. 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 Funds 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. 44 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 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 cash 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. SALES OF POLICIES MetLife Investors Distribution Company ("MLIDC") is the principal underwriter and distributor of the Policies. MLIDC's principal executive offices are located at 200 Park Avenue, New York, New York 10166. MLIDC, which is our affiliate, is registered under the Securities Exchange Act of 1934 (the "34 Act") as a broker-dealer 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. The Policies are sold through licensed life insurance sales representatives associated with broker-dealers with which MLIDC enters into a selling agreement. We reimburse MLIDC for expenses MLIDC incurs in distributing the Policies, e.g., commissions payable to broker-dealers who sell the Policies. The payments described below do not result in a charge against the Policy in addition to the charges already described elsewhere in this prospectus. We may require all or part of the compensation to be returned to us if you do not continue the Policy for at least five years. MLIDC pays commissions to the broker-dealer through which the sales representative is registered. Commissions paid are based on a "gross dealer concession" model. Broker-dealers pay their sales representatives all or a portion of the gross dealer concession for their sales of the Policies. The portion that the broker-dealer passes through to its sales representatives is determined in accordance with the broker-dealer's internal compensation program. These programs may also include other types of cash and non-cash compensation and other benefits. Sales representatives of these broker-dealers may also receive non-cash compensation pursuant to the firm's guidelines or directly from us or MLIDC. The gross dealer concession for the Policies varies based on the Policy year and on whether the amount of premiums paid in a Policy year is greater or less than the Policy's Target Premium. The Target Premium is shown in your Policy. In the first Policy year, the gross dealer concession is 28% of premiums paid up to the amount of the Target Premium, and 2.5% of premiums paid in excess of the Target Premium; in Policy years 2 through 4, the gross dealer concession is 8.25% of premiums paid up to the amount of the Target Premium and 2.5% of any excess; in Policy year 5 and later, the gross dealer concession is 2.5% of all premiums paid; and in Policy year 8 and thereafter a gross dealer concession of 0.1% is paid on the Policy's cash value. Under alternative schedules that are available, the gross dealer concession in the first Policy year ranges from 10% to 21% premiums paid up to the Target Premium and 2% of any excess; in Policy years 2 through 10, it ranges from 8.5% to 10% of premiums paid up to the Target Premium and 1.5% of any excess; in Policy years 11 and later, it is 3% of premiums paid up to the Target Premium and 1.5% of any excess; and in Policy years 8 and thereafter, a gross dealer concession ranging from 0.1% to 0.15% is paid on the Policy's cash value. 45 MLIDC has entered into distribution arrangements with certain selected broker-dealers for the sale of the Policies and other variable insurance products, i.e., annuity contracts and life insurance policies, that we and our affiliates issue. MLIDC may pay additional compensation to these broker-dealers, including marketing allowances, introduction fees, persistency payments, preferred status fees and industry conference fees. Marketing allowances are periodic payments to certain broker-dealers, 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 (other than the Policies). 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 broker-dealers in connection with the addition of these variable products to the broker-dealer's line of investment products, including expenses relating to establishing the data communications systems necessary for the broker-dealer 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 broker-dealers' 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 broker-dealers' sales representatives. The additional types of compensation discussed above are not offered to all broker-dealers. The terms of any particular agreement governing compensation may vary among broker-dealers and the amounts may be significant. The prospect of receiving, or the receipt of, additional compensation as described above may provide broker-dealers 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 broker-dealer 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 broker-dealer for which he or she works may receive in connection with your purchase of a Policy. LEGAL PROCEEDINGS In the ordinary course of business, MetLife, similar to other life insurance companies, is involved in lawsuits (including class action lawsuits), arbitrations and other legal proceedings. Also, from time to time, state and federal regulators or other officials conduct formal and informal examinations or undertake other actions dealing with various aspects of the financial services and insurance 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. 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, 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. 46 FINANCIAL STATEMENTS The financial statements comprising each Division of the Separate Account and the financial statements of MetLife can be found in the Statement of Additional Information. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 47 In order to help you understand how the Policy's values would vary over time under different sets of assumptions, we will provide you with -personalized illustrations of death benefits, cash surrender values and cash values upon request. These will be based on the age and insurance risk characteristics of the person insured under the Policy and such factors as the specified face amount, premium payment amounts and rates of return (within limits) that you request. You can request such illustrations at any time without charge. We have filed an example of such an illustration as an exhibit to the registration statement referred to below. Additional information about the Policy and the Separate Account can be found in the Statement of Additional Information. This Prospectus incorporates by reference all of the information contained in the Statement of Additional Information, which is legally part of this Prospectus. You may obtain, without charge, a copy of the Statement of Additional Information or a personalized illustration of death benefits, Cash Surrender Values and cash values, by calling us at 1-908-253-1400 or contacting us through our website at www.metlife.com/sbr. 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 202-942-8090. 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. 811-06025 48 METFLEX A FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICY METROPOLITAN LIFE SEPARATE ACCOUNT UL ISSUED BY METROPOLITAN LIFE INSURANCE COMPANY STATEMENT OF ADDITIONAL INFORMATION APRIL 29, 2019 This Statement of Additional Information is not a prospectus. This Statement of Additional Information relates to the prospectus dated April 29, 2019 for MetFlex--A Flexible Premium Variable Life Insurance Policy. A copy of that prospectus may be obtained by writing to MetLife--SBR, 501 Route 22, Bridgewater, NJ 08807. 1 TABLE OF CONTENTS
PAGE ----- THE COMPANY AND THE SEPARATE ACCOUNT.............................. 3 ADDITIONAL INFORMATION ABOUT THE OPERATION OF THE POLICIES........ 3 LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY................ 3 MISSTATEMENT OF AGE OR SEX....................................... 3 DIVIDENDS........................................................ 3 PAYMENT AND DEFERMENT............................................ 4 ADDITIONAL INFORMATION ABOUT VOTING............................... 4 ADDITIONAL INFORMATION ABOUT SALES OF POLICIES.................... 5 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM..................... 5 FINANCIAL STATEMENTS.............................................. 5
2 THE COMPANY AND THE SEPARATE ACCOUNT Metropolitan Life Insurance Company (the "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. We established the Separate Account under New York law on December 13, 1988. The Separate Account receives premium payments from the Policies described in the Prospectus and other variable life insurance policies that we issue. We have registered the Separate Account as a unit investment trust under the Investment Company Act of 1940 (the "1940 Act"). For more information about MetLife, please visit our website at www.metlife.com ADDITIONAL INFORMATION ABOUT THE OPERATION OF THE POLICIES LIMITS TO METLIFE'S RIGHT TO CHALLENGE THE POLICY We will not contest: o Your Policy after two Policy years from issue or reinstatement (excluding riders added later); o An increase in a death benefit after it has been in effect for two years. MISSTATEMENT OF AGE OR SEX We will adjust benefits to reflect the correct age and sex of the insured, if this information isn't correct in the Policy application. DIVIDENDS The Policy is "nonparticipating," which means it is not eligible for dividends from us and does not share in any distributions of our surplus. 3 PAYMENT AND DEFERMENT We can delay transfers, withdrawals, surrender and payment of Policy loans from the Fixed Account for up to six months. Generally, we will pay or transfer amounts from the Separate Account within seven days after the Date of Receipt of all necessary documentation required for such payment or transfer. We can defer this if: o The New York Stock Exchange has an unscheduled closing. o There is an emergency so that we could not reasonably determine the investment experience of a Policy. o The Securities and Exchange Commission ("SEC") determines that an emergency exists. o The SEC by order permits us to do so for the protection of Policy Owners (provided that the delay is permitted under New York State insurance law and regulations). o With respect to the insurance proceeds, if entitlement to a payment is being questioned or is uncertain. o We are paying amounts attributable to a check. In that case we can wait for a reasonable time (15 days or less) to let the check clear. We currently pay interest on the amount of insurance proceeds at 3% per year (or higher if state law requires) from the date of death until the date we pay the benefit. ADDITIONAL INFORMATION ABOUT VOTING If you are eligible to give us voting instructions, we will send you informational material and a form to send back to us. We are entitled to disregard voting instructions in certain limited circumstances prescribed by the SEC. If we do so, we will give you our reasons in the next semi-annual report to Policy Owners. The number of shares for which you can give us voting instructions is determined as of the record date for the Fund shareholder meeting by dividing: Your Policy's cash value in the corresponding Division; by the net asset value of one share of that Portfolio. We will count fractional votes. If we do not receive timely voting instructions from Policy Owners and other insurance and annuity Owners that are entitled to give us voting instructions, we will vote those shares in the same proportion as the shares held in the same Separate Account for which we did receive voting instructions. Also, we will vote Portfolio shares that are not attributable to insurance or annuity Owners (including shares that we hold in our general account) or that are held in Separate Accounts that are not registered under the 1940 Act in the same proportion as the aggregate of the shares for which we received voting instructions from all insurance and annuity owners. 4 ADDITIONAL INFORMATION ABOUT SALES OF POLICIES Information about the distribution of the Policies is contained in the prospectus. (See "Sales of Policies.") Additional information is provided below. The Policies are offered to the public on a continuous basis. We anticipate continuing to offer the Policies, but reserve the right to discontinue the offering. MetLife Investors Distribution Company ("MLIDC") serves as principal underwriter for the Policies. MLIDC is a Missouri corporation and its principal office is located at 200 Park Avenue, New York, New York 10166-0188. MLIDC is an indirect wholly-owned subsidiary of MetLife, Inc. MLIDC is registered as a broker-dealer with the Securities and Exchange Commission under the Securities Exchange Act of 1934 and is a member of FINRA. MLIDC has entered into selling agreements with other broker-dealers and compensates them for their services. MLIDC received sales compensation with respect to the Policies in the following amounts during the periods indicated:
AGGREGATE AMOUNT OF AGGREGATE AMOUNT OF COMMISSIONS COMMISSION PAID TO RETAINED BY DISTRIBUTOR AFTER FISCAL YEAR DISTRIBUTOR PAYMENTS TO SELLING FIRMS --------------- --------------------- ------------------------------ 2018.........$ 997,392 $0 2017.........$1,082,621 $0 2016.........$1,108,961 $0
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM The financial statements and financial highlights comprising each of the 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 The financial statements of the Separate Account and the financial statements of Metropolitan Life Insurance Company are attached. Our financial statements should be considered only as bearing upon our ability to meet our obligations under the Policy. 5 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 OPINION ON THE FINANCIAL STATEMENTS AND FINANCIAL HIGHLIGHTS 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 Divisions listed in Note 2A and 3A as of December 31, 2018, the related statements of operations for the three years then ended, the statements of changes in net assets for each of the three years in the period then ended, and the financial highlights in Note 8 for each of the five years in the period then ended for the Divisions, except for the Divisions included in the table below; the related statements of operations, changes in net assets, and the financial highlights for the Divisions and periods indicated in the table below; and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Divisions constituting the Separate Account of the Company as of December 31, 2018, and the results of their operations for the three years then ended (or for the periods listed in the table below), the changes in their net assets for each of the three years in the period then ended (or for the periods listed in the table below), and the financial highlights for each of the five years in the period then ended (or for the periods listed in the table below), in conformity with accounting principles generally accepted in the United States of America.
-------------------------------------------------------------------------------------------------------------------------- INDIVIDUAL DIVISIONS STATEMENTS OF COMPRISING THE SEPARATE STATEMENT OF CHANGES IN ACCOUNT OPERATIONS NET ASSETS FINANCIAL HIGHLIGHTS -------------------------------------------------------------------------------------------------------------------------- BHFTI Allianz Global For the period from January 1, 2018 to For the period from January 1, Investors Dynamic Multi- April 27, 2018 and the years ended 2018 to April 27, 2018 and the Asset Plus Division December 31, 2017 and 2016 years ended December 31, 2017, 2016, 2015, and the period from April 28, 2014 (commencement of operations) through December 31, 2014 -------------------------------------------------------------------------------------------------------------------------- BHFTI Schroders Global For the period from January 1, 2018 to For the period from January 1, Multi-Asset II Division April 27, 2018 and the years ended 2018 to April 27, 2018 and the December 31, 2017 and 2016 years ended December 31, 2017, 2016, 2015, and 2014 -------------------------------------------------------------------------------------------------------------------------- BHFTI PanAgora Global For the years ended December 31, 2018, For the years ended December 31, Diversified Risk Division 2017 and 2016 2018, 2017, 2016, 2015, and the period from April 28, 2014 through December 31, 2014 (commenced April 28, 2014 and began transactions in 2015) -------------------------------------------------------------------------------------------------------------------------- BHFTII MFS(R) Value II For the period from January 1, 2018 to For the period from January 1, Division April 27, 2018 and the years ended 2018 to April 27, 2018 and the December 31, 2017 and 2016 years ended December 31, 2017, 2016, 2015, and 2014 --------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------ INDIVIDUAL DIVISIONS STATEMENTS OF COMPRISING THE SEPARATE STATEMENT OF CHANGES IN ACCOUNT OPERATIONS NET ASSETS ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Government For the years ended December 31, 2018, 2017, and the period from April 29, Money Market Division 2016 (commencement of operations) through December 31, 2016 ------------------------------------------------------------------------------------------------------------------------------------ Janus Henderson Enterprise For the years ended December 31, 2018, 2017, and 2016 (commenced May 3, Division 2010 and began transactions in 2016) ------------------------------------------------------------------------------------------------------------------------------------ ------------------------------------------------------------------------------------------------------------------------------------ INDIVIDUAL DIVISIONS COMPRISING THE SEPARATE ACCOUNT FINANCIAL HIGHLIGHTS ------------------------------------------------------------------------------------------------------------------------------------ Fidelity VIP Government Money Market Division ------------------------------------------------------------------------------------------------------------------------------------ Janus Henderson Enterprise Division ------------------------------------------------------------------------------------------------------------------------------------
BASIS FOR OPINION These financial statements and financial highlights are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on the Separate Account's financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Separate Account in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting 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. Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of investments owned as of December 31, 2018, by correspondence with the custodian or mutual fund companies. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP Tampa, Florida March 22, 2019 We have served as the Separate Account's auditor since 1990. METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF ASSETS AND LIABILITIES DECEMBER 31, 2018
AMERICAN FUNDS(R) AB VPS GLOBAL AB VPS AMERICAN GLOBAL SMALL THEMATIC GROWTH INTERMEDIATE BOND FUNDS(R) BOND CAPITALIZATION DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value............ $ 31,667 $ 153,420 $ 5,696,032 $ 63,507,960 Due from Metropolitan Life Insurance Company.................. -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.................... 31,667 153,420 5,696,032 63,507,960 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company.................. -- -- 1 -- -------------------- -------------------- -------------------- -------------------- Total Liabilities............... -- -- 1 -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.............................. $ 31,667 $ 153,420 $ 5,696,031 $ 63,507,960 ==================== ==================== ==================== ====================
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, 2018
AMERICAN FUNDS(R) AMERICAN FUNDS(R) AMERICAN FUNDS(R) AMERICAN FUNDS(R) GROWTH GROWTH-INCOME HIGH-INCOME BOND INTERNATIONAL DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 185,071,907 $ 109,820,875 $ 8,286 $ 1,837,064 Due from Metropolitan Life Insurance Company........ 21 63 -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 185,071,928 109,820,938 8,286 1,837,064 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 185,071,928 $ 109,820,938 $ 8,286 $ 1,837,064 ==================== ==================== ==================== ==================== AMERICAN FUNDS(R) U.S. BHFTI AMERICAN BHFTI AMERICAN GOVERNMENT/AAA- BHFTI AB GLOBAL FUNDS(R) BALANCED FUNDS(R) GROWTH RATED SECURITIES DYNAMIC ALLOCATION ALLOCATION ALLOCATION DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 54,812 $ 77,749 $ 1,179,440 $ 2,141,745 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 54,812 77,749 1,179,440 2,141,745 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 54,812 $ 77,749 $ 1,179,440 $ 2,141,745 ==================== ==================== ==================== ==================== BHFTI AMERICAN BHFTI FUNDS(R) MODERATE AQR GLOBAL ALLOCATION RISK BALANCED DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 1,413,851 $ 144,867 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 1,413,851 144,867 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 1,413,851 $ 144,867 ==================== ====================
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, 2018
BHFTI BLACKROCK GLOBAL BHFTI BRIGHTHOUSE BHFTI BRIGHTHOUSE BHFTI BRIGHTHOUSE TACTICAL STRATEGIES ASSET ALLOCATION 100 BALANCED PLUS SMALL CAP VALUE DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 421,493 $ 22,677,558 $ 365,405 $ 927,713 Due from Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- --------------------- -------------------- Total Assets.......... 421,493 22,677,558 365,405 927,713 --------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- -- -- -- --------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 421,493 $ 22,677,558 $ 365,405 $ 927,713 ===================== ==================== ===================== ==================== BHFTI BRIGHTHOUSE/ BHFTI BRIGHTHOUSE/ BHFTI BRIGHTHOUSE/ ABERDEEN EMERGING TEMPLETON WELLINGTON BHFTI CLARION MARKETS EQUITY INTERNATIONAL BOND LARGE CAP RESEARCH GLOBAL REAL ESTATE DIVISION DIVISION DIVISION DIVISION -------------------- --------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 1,188,878 $ 257,603 $ 405,410,341 $ 25,078,849 Due from Metropolitan Life Insurance Company........ -- -- 2 -- -------------------- --------------------- -------------------- -------------------- Total Assets.......... 1,188,878 257,603 405,410,343 25,078,849 -------------------- --------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- --------------------- -------------------- -------------------- NET ASSETS.................... $ 1,188,878 $ 257,603 $ 405,410,343 $ 25,078,849 ==================== ===================== ==================== ==================== BHFTI HARRIS BHFTI CLEARBRIDGE OAKMARK AGGRESSIVE GROWTH INTERNATIONAL DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 38,082,044 $ 36,102,930 Due from Metropolitan Life Insurance Company........ -- 1 -------------------- -------------------- Total Assets.......... 38,082,044 36,102,931 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 38,082,044 $ 36,102,931 ==================== ====================
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, 2018
BHFTI INVESCO BHFTI JPMORGAN BALANCED-RISK BHFTI INVESCO GLOBAL BHFTI JPMORGAN ALLOCATION SMALL CAP GROWTH ACTIVE ALLOCATION SMALL CAP VALUE DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 55,693 $ 6,811,775 $ 213,265 $ 354,379 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 55,693 6,811,775 213,265 354,379 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 1 -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 55,693 $ 6,811,774 $ 213,265 $ 354,379 ==================== ==================== ==================== ==================== BHFTI BHFTI BHFTI BHFTI LOOMIS SAYLES METLIFE MULTI-INDEX MFS(R) RESEARCH MORGAN STANLEY GLOBAL MARKETS TARGETED RISK INTERNATIONAL MID CAP GROWTH DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 350,341 $ 152,733 $ 16,248,353 $ 258,506,705 Due from Metropolitan Life Insurance Company........ -- -- 1 -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 350,341 152,733 16,248,354 258,506,705 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- 8 -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- 8 -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 350,341 $ 152,733 $ 16,248,354 $ 258,506,697 ==================== ==================== ==================== ==================== BHFTI BHFTI OPPENHEIMER PANAGORA GLOBAL GLOBAL EQUITY DIVERSIFIED RISK DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 50,616,904 $ 406 Due from Metropolitan Life Insurance Company........ 34 -- -------------------- -------------------- Total Assets.......... 50,616,938 406 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 50,616,938 $ 406 ==================== ====================
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, 2018
BHFTI BHFTI PIMCO INFLATION BHFTI BHFTI SCHRODERS SSGA GROWTH AND PROTECTED BOND PIMCO TOTAL RETURN GLOBAL MULTI-ASSET INCOME ETF DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 9,403,724 $ 46,880,854 $ 88,678 $ 7,736,455 Due from Metropolitan Life Insurance Company........ 1 -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 9,403,725 46,880,854 88,678 7,736,455 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 1 -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 9,403,725 $ 46,880,853 $ 88,678 $ 7,736,455 ==================== ==================== ==================== ==================== BHFTI BHFTI BHFTI T. ROWE PRICE BHFTI T. ROWE PRICE VICTORY SYCAMORE SSGA GROWTH ETF LARGE CAP VALUE MID CAP GROWTH MID CAP VALUE DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 6,727,190 $ 2,873,608 $ 38,942,904 $ 77,710,771 Due from Metropolitan Life Insurance Company........ 1 -- 2 -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 6,727,191 2,873,608 38,942,906 77,710,771 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- 2 -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- 2 -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 6,727,191 $ 2,873,608 $ 38,942,906 $ 77,710,769 ==================== ==================== ==================== ==================== BHFTII BAILLIE GIFFORD BHFTII BLACKROCK INTERNATIONAL STOCK BOND INCOME DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 40,263,538 $ 71,825,598 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 40,263,538 71,825,598 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 3 8 -------------------- -------------------- Total Liabilities..... 3 8 -------------------- -------------------- NET ASSETS.................... $ 40,263,535 $ 71,825,590 ==================== ====================
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, 2018
BHFTII BLACKROCK BHFTII BLACKROCK ULTRA-SHORT BHFTII BRIGHTHOUSE BHFTII BRIGHTHOUSE CAPITAL APPRECIATION TERM BOND ASSET ALLOCATION 20 ASSET ALLOCATION 40 DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 12,506,977 $ 28,316,223 $ 4,080,074 $ 9,992,530 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- --------------------- -------------------- Total Assets.......... 12,506,977 28,316,223 4,080,074 9,992,530 -------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 12,506,977 $ 28,316,223 $ 4,080,074 $ 9,992,530 ==================== ==================== ===================== ==================== BHFTII BHFTII BRIGHTHOUSE BHFTII BRIGHTHOUSE BRIGHTHOUSE/ARTISAN BHFTII BRIGHTHOUSE/ ASSET ALLOCATION 60 ASSET ALLOCATION 80 MID CAP VALUE WELLINGTON BALANCED DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 50,471,247 $ 94,944,590 $ 54,171,269 $ 293,336,170 Due from Metropolitan Life Insurance Company........ -- -- 42 -- --------------------- -------------------- -------------------- --------------------- Total Assets.......... 50,471,247 94,944,590 54,171,311 293,336,170 --------------------- -------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- 20 --------------------- -------------------- -------------------- --------------------- Total Liabilities..... -- -- -- 20 --------------------- -------------------- -------------------- --------------------- NET ASSETS.................... $ 50,471,247 $ 94,944,590 $ 54,171,311 $ 293,336,150 ===================== ==================== ==================== ===================== BHFTII BRIGHTHOUSE/ WELLINGTON CORE BHFTII FRONTIER EQUITY OPPORTUNITIES MID CAP GROWTH DIVISION DIVISION --------------------- -------------------- ASSETS: Investments at fair value.. $ 75,138,201 $ 228,525,959 Due from Metropolitan Life Insurance Company........ 14 -- --------------------- -------------------- Total Assets.......... 75,138,215 228,525,959 --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 61 --------------------- -------------------- Total Liabilities..... -- 61 --------------------- -------------------- NET ASSETS.................... $ 75,138,215 $ 228,525,898 ===================== ====================
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, 2018
BHFTII BHFTII BHFTII BHFTII LOOMIS SAYLES LOOMIS SAYLES METLIFE AGGREGATE JENNISON GROWTH SMALL CAP CORE SMALL CAP GROWTH BOND INDEX DIVISION DIVISION DIVISION DIVISION ------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 38,434,348 $ 23,146,225 $ 13,028,160 $ 121,280,934 Due from Metropolitan Life Insurance Company........ -- 139 -- 4 ------------------- -------------------- -------------------- -------------------- Total Assets.......... 38,434,348 23,146,364 13,028,160 121,280,938 ------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ 1 -- 1 -- ------------------- -------------------- -------------------- -------------------- Total Liabilities..... 1 -- 1 -- ------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 38,434,347 $ 23,146,364 $ 13,028,159 $ 121,280,938 =================== ==================== ==================== ==================== BHFTII METLIFE BHFTII METLIFE BHFTII METLIFE BHFTII MID CAP STOCK INDEX MSCI EAFE(R) INDEX RUSSELL 2000(R) INDEX METLIFE STOCK INDEX DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- --------------------- -------------------- ASSETS: Investments at fair value.. $ 89,622,035 $ 81,621,222 $ 71,931,103 $ 1,015,481,035 Due from Metropolitan Life Insurance Company........ 1 8 20 -- -------------------- -------------------- --------------------- -------------------- Total Assets.......... 89,622,036 81,621,230 71,931,123 1,015,481,035 -------------------- -------------------- --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- 22 -------------------- -------------------- --------------------- -------------------- Total Liabilities..... -- -- -- 22 -------------------- -------------------- --------------------- -------------------- NET ASSETS.................... $ 89,622,036 $ 81,621,230 $ 71,931,123 $ 1,015,481,013 ==================== ==================== ===================== ==================== BHFTII MFS(R) TOTAL RETURN BHFTII MFS(R) VALUE DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 30,340,416 $ 106,961,713 Due from Metropolitan Life Insurance Company........ -- 20 -------------------- -------------------- Total Assets.......... 30,340,416 106,961,733 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 30,340,416 $ 106,961,733 ==================== ====================
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, 2018
BHFTII BHFTII BHFTII BHFTII NEUBERGER T. ROWE PRICE T. ROWE PRICE VAN ECK GLOBAL BERMAN GENESIS LARGE CAP GROWTH SMALL CAP GROWTH NATURAL RESOURCES DIVISION DIVISION DIVISION DIVISION -------------------- --------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 106,797,638 $ 98,275,866 $ 117,460,331 $ 265,912 Due from Metropolitan Life Insurance Company........ 29 8 -- -- -------------------- --------------------- -------------------- --------------------- Total Assets.......... 106,797,667 98,275,874 117,460,331 265,912 -------------------- --------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- 27 -- -------------------- --------------------- -------------------- --------------------- Total Liabilities..... -- -- 27 -- -------------------- --------------------- -------------------- --------------------- NET ASSETS.................... $ 106,797,667 $ 98,275,874 $ 117,460,304 $ 265,912 ==================== ===================== ==================== ===================== BHFTII WESTERN ASSET MANAGEMENT BHFTII WESTERN STRATEGIC ASSET MANAGEMENT DREYFUS VIF FIDELITY(R) VIP ASSET BOND OPPORTUNITIES U.S. GOVERNMENT INTERNATIONAL VALUE MANAGER: GROWTH DIVISION DIVISION DIVISION DIVISION -------------------- --------------------- -------------------- ---------------------- ASSETS: Investments at fair value.. $ 48,635,628 $ 16,039,098 $ 201,583 $ 1,894,386 Due from Metropolitan Life Insurance Company........ 5 1 -- -- -------------------- --------------------- -------------------- ---------------------- Total Assets.......... 48,635,633 16,039,099 201,583 1,894,386 -------------------- --------------------- -------------------- ---------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- ---------------------- Total Liabilities..... -- -- -- -- -------------------- --------------------- -------------------- ---------------------- NET ASSETS.................... $ 48,635,633 $ 16,039,099 $ 201,583 $ 1,894,386 ==================== ===================== ==================== ====================== FIDELITY(R) VIP FIDELITY(R) VIP CONTRAFUND EQUITY-INCOME DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 2,703,695 $ 1,508 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 2,703,695 1,508 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 2,703,695 $ 1,508 ==================== ====================
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, 2018
FIDELITY(R) VIP FIDELITY(R) VIP FIDELITY(R) VIP FIDELITY(R) VIP FREEDOM 2010 FREEDOM 2020 FREEDOM 2025 FREEDOM 2030 DIVISION DIVISION DIVISION DIVISION --------------------- --------------------- --------------------- --------------------- ASSETS: Investments at fair value.. $ 144,962 $ 519,686 $ 471,525 $ 247,569 Due from Metropolitan Life Insurance Company....... -- -- -- -- --------------------- --------------------- --------------------- --------------------- Total Assets.......... 144,962 519,686 471,525 247,569 --------------------- --------------------- --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....... -- -- -- -- --------------------- --------------------- --------------------- --------------------- Total Liabilities..... -- -- -- -- --------------------- --------------------- --------------------- --------------------- NET ASSETS.................... $ 144,962 $ 519,686 $ 471,525 $ 247,569 ===================== ===================== ===================== ===================== FIDELITY(R) VIP FIDELITY(R) VIP FIDELITY(R) VIP GOVERNMENT FIDELITY(R) VIP FREEDOM 2040 FREEDOM 2050 MONEY MARKET HIGH INCOME DIVISION DIVISION DIVISION DIVISION --------------------- --------------------- --------------------- --------------------- ASSETS: Investments at fair value.. $ 249,528 $ 206,173 $ 2,990,902 $ 488,004 Due from Metropolitan Life Insurance Company....... -- -- 1 -- --------------------- --------------------- --------------------- --------------------- Total Assets.......... 249,528 206,173 2,990,903 488,004 --------------------- --------------------- --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....... -- 12 -- -- --------------------- --------------------- --------------------- --------------------- Total Liabilities..... -- 12 -- -- --------------------- --------------------- --------------------- --------------------- NET ASSETS.................... $ 249,528 $ 206,161 $ 2,990,903 $ 488,004 ===================== ===================== ===================== ===================== FIDELITY(R) VIP INVESTMENT FIDELITY(R) VIP GRADE BOND MID CAP DIVISION DIVISION --------------------- --------------------- ASSETS: Investments at fair value.. $ 1,177,337 $ 212,284 Due from Metropolitan Life Insurance Company....... -- -- --------------------- --------------------- Total Assets.......... 1,177,337 212,284 --------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company....... -- -- --------------------- --------------------- Total Liabilities..... -- -- --------------------- --------------------- NET ASSETS.................... $ 1,177,337 $ 212,284 ===================== =====================
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, 2018
FTVIPT FTVIPT FRANKLIN MUTUAL FTVIPT FRANKLIN FTVIPT TEMPLETON FRANKLIN INCOME VIP GLOBAL DISCOVERY VIP MUTUAL SHARES VIP FOREIGN VIP DIVISION DIVISION DIVISION DIVISION -------------------- --------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 67,461 $ 641,216 $ 104,011 $ 6,481,304 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- -------------------- Total Assets.......... 67,461 641,216 104,011 6,481,304 -------------------- --------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- --------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- --------------------- -------------------- -------------------- NET ASSETS.................... $ 67,461 $ 641,216 $ 104,011 $ 6,481,304 ==================== ===================== ==================== ==================== GOLDMAN SACHS FTVIPT TEMPLETON GOLDMAN SMALL CAP EQUITY GLOBAL BOND VIP SACHS MID-CAP VALUE INSIGHTS INVESCO V.I. COMSTOCK DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- --------------------- ASSETS: Investments at fair value.. $ 861,342 $ 51,582 $ 6,624 $ 460,713 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- --------------------- Total Assets.......... 861,342 51,582 6,624 460,713 -------------------- -------------------- -------------------- --------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- --------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- --------------------- NET ASSETS.................... $ 861,342 $ 51,582 $ 6,624 $ 460,713 ==================== ==================== ==================== ===================== INVESCO V.I. JANUS INTERNATIONAL GROWTH HENDERSON BALANCED DIVISION DIVISION --------------------- -------------------- ASSETS: Investments at fair value.. $ 323,273 $ 1,329,030 Due from Metropolitan Life Insurance Company........ -- -- --------------------- -------------------- Total Assets.......... 323,273 1,329,030 --------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- --------------------- -------------------- Total Liabilities..... -- -- --------------------- -------------------- NET ASSETS.................... $ 323,273 $ 1,329,030 ===================== ====================
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, 2018
JANUS HENDERSON JANUS JANUS JANUS ENTERPRISE HENDERSON FORTY HENDERSON OVERSEAS HENDERSON RESEARCH DIVISION DIVISION DIVISION DIVISION --------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 363,384 $ 332,413 $ 24,385 $ 330,470 Due from Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- -------------------- -------------------- Total Assets.......... 363,384 332,413 24,385 330,470 --------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- --------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- --------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 363,384 $ 332,413 $ 24,385 $ 330,470 ===================== ==================== ==================== ==================== MORGAN STANLEY MFS(R) VIT MFS(R) VIT MFS(R) VIT II VIF EMERGING GLOBAL EQUITY NEW DISCOVERY HIGH YIELD MARKETS DEBT DIVISION DIVISION DIVISION DIVISION -------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 39,820 $ 19,366 $ 150,350 $ 1,085,951 Due from Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Assets.......... 39,820 19,366 150,350 1,085,951 -------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -- -- -------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- -- -- -- -------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 39,820 $ 19,366 $ 150,350 $ 1,085,951 ==================== ==================== ==================== ==================== MORGAN STANLEY VIF EMERGING PIMCO VIT MARKETS EQUITY ALL ASSET DIVISION DIVISION -------------------- -------------------- ASSETS: Investments at fair value.. $ 4,401,714 $ 140,438 Due from Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Assets.......... 4,401,714 140,438 -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -- -------------------- -------------------- Total Liabilities..... -- -- -------------------- -------------------- NET ASSETS.................... $ 4,401,714 $ 140,438 ==================== ====================
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 -- (CONCLUDED) DECEMBER 31, 2018
PIMCO VIT COMMODITYREALRETURN(R) PIMCO VIT PUTNAM VT STRATEGY LOW DURATION INTERNATIONAL VALUE ROYCE MICRO-CAP DIVISION DIVISION DIVISION DIVISION ---------------------- -------------------- -------------------- -------------------- ASSETS: Investments at fair value.. $ 24,125 $ 959,123 $ 4,441 $ 10,008 Due from Metropolitan Life Insurance Company........ -- -- -- -- ---------------------- -------------------- -------------------- -------------------- Total Assets.......... 24,125 959,123 4,441 10,008 ---------------------- -------------------- -------------------- -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- 1 -- -- ---------------------- -------------------- -------------------- -------------------- Total Liabilities..... -- 1 -- -- ---------------------- -------------------- -------------------- -------------------- NET ASSETS.................... $ 24,125 $ 959,122 $ 4,441 $ 10,008 ====================== ==================== ==================== ==================== ROYCE SMALL-CAP DIVISION -------------------- ASSETS: Investments at fair value.. $ 13,520 Due from Metropolitan Life Insurance Company........ -- -------------------- Total Assets.......... 13,520 -------------------- LIABILITIES: Due to Metropolitan Life Insurance Company........ -- -------------------- Total Liabilities..... -- -------------------- NET ASSETS.................... $ 13,520 ====================
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 OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
AB VPS GLOBAL THEMATIC GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 88 $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... -- 88 -- -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 255 2,867 877 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 255 2,867 877 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,771) 8,219 (1,193) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (3,516) 11,086 (316) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (3,516) $ 11,174 $ (316) ==================== ==================== ==================== AB VPS INTERMEDIATE BOND DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,502 $ 3,922 $ 2,736 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,502 3,922 2,736 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,128 1,238 1,264 Realized gains (losses) on sale of investments....... (128) (3,842) (186) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 2,000 (2,604) 1,078 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,792) 2,197 49 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,792) (407) 1,127 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (290) $ 3,515 $ 3,863 ==================== ==================== ==================== AMERICAN FUNDS(R) BOND DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 143,554 $ 128,797 $ 110,564 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,184 9,943 9,571 -------------------- -------------------- -------------------- Net investment income (loss).................... 134,370 118,854 100,993 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 8,476 98,810 23,172 Realized gains (losses) on sale of investments....... (58,891) (4,363) 1,509 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (50,415) 94,447 24,681 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (150,359) 12,429 45,632 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (200,774) 106,876 70,313 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (66,404) $ 225,730 $ 171,306 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 24 The accompanying notes are an integral part of these financial statements. 25 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF OPERATIONS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
AMERICAN FUNDS(R) GLOBAL SMALL CAPITALIZATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 60,502 $ 302,899 $ 159,045 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 87,722 83,802 77,911 -------------------- -------------------- -------------------- Net investment income (loss).................... (27,220) 219,097 81,134 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,364,592 -- 11,923,223 Realized gains (losses) on sale of investments....... 1,028,140 493,132 (19,783) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 4,392,732 493,132 11,903,440 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (11,769,834) 15,300,486 (10,777,574) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (7,377,102) 15,793,618 1,125,866 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (7,404,322) $ 16,012,715 $ 1,207,000 ==================== ==================== ==================== AMERICAN FUNDS(R) GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 886,745 $ 940,051 $ 1,259,429 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 188,253 168,990 147,194 -------------------- -------------------- -------------------- Net investment income (loss).................... 698,492 771,061 1,112,235 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 20,636,517 17,857,311 14,591,335 Realized gains (losses) on sale of investments....... 4,289,446 3,386,491 1,564,440 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 24,925,963 21,243,802 16,155,775 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (24,996,188) 23,936,579 (2,560,394) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (70,225) 45,180,381 13,595,381 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 628,267 $ 45,951,442 $ 14,707,616 ==================== ==================== ==================== AMERICAN FUNDS(R) GROWTH-INCOME DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,702,454 $ 1,583,807 $ 1,500,084 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 118,217 110,967 100,558 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,584,237 1,472,840 1,399,526 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 8,360,753 7,249,514 11,252,001 Realized gains (losses) on sale of investments....... 2,193,496 1,686,109 993,174 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 10,554,249 8,935,623 12,245,175 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (13,751,075) 12,349,992 (2,551,087) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (3,196,826) 21,285,615 9,694,088 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (1,612,589) $ 22,758,455 $ 11,093,614 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
AMERICAN FUNDS(R) HIGH-INCOME BOND DIVISION ------------------------------------------- 2018 2017 (a) -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 530 $ 468 -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -------------------- -------------------- Net investment income (loss).................... 530 468 -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- Realized gains (losses) on sale of investments....... (7) -- -------------------- -------------------- Net realized gains (losses)..................... (7) -- -------------------- -------------------- Change in unrealized gains (losses) on investments... (720) (375) -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (727) (375) -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (197) $ 93 ==================== ==================== AMERICAN FUNDS(R) INTERNATIONAL DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 33,657 $ 7,618 $ 4,799 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 33,657 7,618 4,799 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 90,607 6,927 28,955 Realized gains (losses) on sale of investments....... (1,756) 7,074 (7,617) -------------------- --------------------- -------------------- Net realized gains (losses)..................... 88,851 14,001 21,338 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (417,075) 132,723 (18,823) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (328,224) 146,724 2,515 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (294,567) $ 154,342 $ 7,314 ==================== ===================== ==================== AMERICAN FUNDS(R) U.S. GOVERNMENT/AAA-RATED SECURITIES DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 975 $ 724 $ 737 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 975 724 737 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 1,010 Realized gains (losses) on sale of investments....... (138) (41) (42) -------------------- --------------------- -------------------- Net realized gains (losses)..................... (138) (41) 968 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (457) 178 (1,163) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (595) 137 (195) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 380 $ 861 $ 542 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI AB GLOBAL DYNAMIC ALLOCATION DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,338 $ 1,050 $ 977 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 1,338 1,050 977 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 325 -- 630 Realized gains (losses) on sale of investments....... 276 227 (200) -------------------- --------------------- -------------------- Net realized gains (losses)..................... 601 227 430 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (7,744) 7,735 769 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (7,143) 7,962 1,199 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (5,805) $ 9,012 $ 2,176 ==================== ===================== ==================== BHFTI ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS DIVISION ------------------------------------------------------------------- 2018 (B) 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 125 $ 94 $ 2 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- -------------------- Net investment income (loss).................... 125 94 2 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 306 -- -- Realized gains (losses) on sale of investments....... 133 101 (12) -------------------- --------------------- -------------------- Net realized gains (losses)..................... 439 101 (12) -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (693) 685 80 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (254) 786 68 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (129) $ 880 $ 70 ==================== ===================== ==================== BHFTI AMERICAN FUNDS(R) BALANCED ALLOCATION DIVISION ------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 21,884 $ 19,259 $ 18,208 --------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- -------------------- Net investment income (loss).................... 21,884 19,259 18,208 --------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 64,740 53,965 77,498 Realized gains (losses) on sale of investments....... 3,011 1,827 (552) --------------------- -------------------- -------------------- Net realized gains (losses)..................... 67,751 55,792 76,946 --------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (138,831) 98,370 (22,963) --------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (71,080) 154,162 53,983 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (49,196) $ 173,421 $ 72,191 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI AMERICAN FUNDS(R) GROWTH ALLOCATION DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 33,504 $ 29,710 $ 26,959 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 33,504 29,710 26,959 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 127,865 125,095 165,604 Realized gains (losses) on sale of investments....... 16,892 2,793 (5,416) ------------------- ------------------- -------------------- Net realized gains (losses)..................... 144,757 127,888 160,188 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (302,410) 236,441 (37,021) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (157,653) 364,329 123,167 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (124,149) $ 394,039 $ 150,126 =================== =================== ==================== BHFTI AMERICAN FUNDS(R) MODERATE ALLOCATION DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 30,889 $ 27,088 $ 23,999 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 30,889 27,088 23,999 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 71,305 56,192 68,764 Realized gains (losses) on sale of investments....... (2,660) (553) (1,035) ------------------- ------------------- -------------------- Net realized gains (losses)..................... 68,645 55,639 67,729 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (144,806) 80,012 (16,232) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (76,161) 135,651 51,497 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (45,272) $ 162,739 $ 75,496 =================== =================== ==================== BHFTI AQR GLOBAL RISK BALANCED DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 581 $ 2,366 $ -- -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- ------------------- Net investment income (loss).................... 581 2,366 -- -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 14,063 6,628 -- Realized gains (losses) on sale of investments....... (2,977) (1,940) (7,843) -------------------- ------------------- ------------------- Net realized gains (losses)..................... 11,086 4,688 (7,843) -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (21,378) 6,767 18,548 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (10,292) 11,455 10,705 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (9,711) $ 13,821 $ 10,705 ==================== =================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI BLACKROCK GLOBAL TACTICAL STRATEGIES DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 6,588 $ 2,651 $ 4,216 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 6,588 2,651 4,216 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 32,982 4,771 23,769 Realized gains (losses) on sale of investments....... (2,141) (105) (756) -------------------- -------------------- --------------------- Net realized gains (losses)..................... 30,841 4,666 23,013 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (70,520) 40,461 (13,208) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (39,679) 45,127 9,805 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (33,091) $ 47,778 $ 14,021 ==================== ==================== ===================== BHFTI BRIGHTHOUSE ASSET ALLOCATION 100 DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 323,815 $ 349,648 $ 523,833 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 16,824 15,750 14,780 -------------------- --------------------- --------------------- Net investment income (loss).................... 306,991 333,898 509,053 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 924,071 1,313,399 2,664,123 Realized gains (losses) on sale of investments....... 295,201 313,827 102,098 -------------------- --------------------- --------------------- Net realized gains (losses)..................... 1,219,272 1,627,226 2,766,221 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (3,976,492) 2,972,083 (1,391,486) -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (2,757,220) 4,599,309 1,374,735 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,450,229) $ 4,933,207 $ 1,883,788 ==================== ===================== ===================== BHFTI BRIGHTHOUSE BALANCED PLUS DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,389 $ 5,462 $ 7,951 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,389 5,462 7,951 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 32,825 17,375 3,078 Realized gains (losses) on sale of investments....... 1,438 860 (955) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 34,263 18,235 2,123 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (69,687) 35,046 12,397 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (35,424) 53,281 14,520 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (29,035) $ 58,743 $ 22,471 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI BRIGHTHOUSE SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 7,790 $ 6,610 $ 8,421 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 7,790 6,610 8,421 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 40,963 26,213 21,554 Realized gains (losses) on sale of investments....... 4,882 9,255 (31,090) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 45,845 35,468 (9,536) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (239,971) 41,355 191,373 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (194,126) 76,823 181,837 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (186,336) $ 83,433 $ 190,258 ==================== ==================== ==================== BHFTI BRIGHTHOUSE/ABERDEEN EMERGING MARKETS EQUITY DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 25,457 $ 9,611 $ 6,049 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- ------------------- Net investment income (loss).................... 25,457 9,611 6,049 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 5,756 7,574 (30,698) -------------------- ------------------- ------------------- Net realized gains (losses)..................... 5,756 7,574 (30,698) -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (176,226) 170,725 89,323 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (170,470) 178,299 58,625 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (145,013) $ 187,910 $ 64,674 ==================== =================== =================== BHFTI BRIGHTHOUSE/TEMPLETON INTERNATIONAL BOND DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- 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.......................... -- 100 486 Realized gains (losses) on sale of investments....... (2,152) (1,448) (2,171) ------------------- ------------------- -------------------- Net realized gains (losses)..................... (2,152) (1,348) (1,685) ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... 5,338 2,100 4,976 ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 3,186 752 3,291 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,186 $ 752 $ 3,291 =================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI BRIGHTHOUSE/WELLINGTON LARGE CAP RESEARCH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 4,769,893 $ 4,789,366 $ 9,605,133 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 2,376,878 2,236,275 2,007,407 -------------------- -------------------- -------------------- Net investment income (loss).................... 2,393,015 2,553,091 7,597,726 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 52,915,129 16,060,148 26,127,082 Realized gains (losses) on sale of investments....... 7,449,838 9,245,393 4,953,703 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 60,364,967 25,305,541 31,080,785 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (90,699,272) 57,041,217 (8,253,818) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (30,334,305) 82,346,758 22,826,967 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (27,941,290) $ 84,899,849 $ 30,424,693 ==================== ==================== ==================== BHFTI CLARION GLOBAL REAL ESTATE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,695,231 $ 1,053,750 $ 679,349 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 26,861 27,604 29,090 -------------------- -------------------- -------------------- Net investment income (loss).................... 1,668,370 1,026,146 650,259 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (37,998) 11,186 31,945 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (37,998) 11,186 31,945 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (4,019,685) 1,949,598 (362,033) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (4,057,683) 1,960,784 (330,088) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,389,313) $ 2,986,930 $ 320,171 ==================== ==================== ==================== BHFTI CLEARBRIDGE AGGRESSIVE GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 362,296 $ 411,128 $ 270,534 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 38,636 38,033 36,607 -------------------- --------------------- -------------------- Net investment income (loss).................... 323,660 373,095 233,927 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,042,880 -- -- Realized gains (losses) on sale of investments....... 1,792,006 1,758,844 970,623 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 3,834,886 1,758,844 970,623 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (6,744,510) 5,283,206 (103,509) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (2,909,624) 7,042,050 867,114 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,585,964) $ 7,415,145 $ 1,101,041 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI HARRIS OAKMARK INTERNATIONAL DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 864,792 $ 809,196 $ 861,973 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 56,149 57,884 49,021 -------------------- -------------------- -------------------- Net investment income (loss).................... 808,643 751,312 812,952 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,816,908 -- 2,415,203 Realized gains (losses) on sale of investments....... 174,708 298,648 (640,681) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,991,616 298,648 1,774,522 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (14,097,059) 10,649,156 446,527 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (12,105,443) 10,947,804 2,221,049 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (11,296,800) $ 11,699,116 $ 3,034,001 ==================== ==================== ==================== BHFTI INVESCO BALANCED-RISK ALLOCATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 716 $ 1,933 $ 63 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 716 1,933 63 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,805 2,679 -- Realized gains (losses) on sale of investments....... (1,079) 1 (528) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,726 2,680 (528) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (8,568) 724 4,887 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (4,842) 3,404 4,359 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (4,126) $ 5,337 $ 4,422 ==================== ==================== ==================== BHFTI INVESCO SMALL CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 9,936 8,930 8,076 ------------------- -------------------- -------------------- Net investment income (loss).................... (9,936) (8,930) (8,076) ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 995,359 722,548 1,137,318 Realized gains (losses) on sale of investments....... 35,226 (32,646) (110,635) ------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,030,585 689,902 1,026,683 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,648,375) 961,544 (318,719) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (617,790) 1,651,446 707,964 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (627,726) $ 1,642,516 $ 699,888 =================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI JPMORGAN GLOBAL ACTIVE ALLOCATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 4,106 $ 5,628 $ 3,855 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 4,106 5,628 3,855 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 13,795 -- 3,091 Realized gains (losses) on sale of investments....... 353 761 (510) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 14,148 761 2,581 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (35,582) 28,770 (1,187) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (21,434) 29,531 1,394 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (17,328) $ 35,159 $ 5,249 ==================== ==================== ==================== BHFTI JPMORGAN SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 6,199 $ 7,780 $ 6,286 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 6,199 7,780 6,286 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 27,152 27,983 22,605 Realized gains (losses) on sale of investments....... 189 12,875 2,029 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 27,341 40,858 24,634 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (83,319) (24,944) 79,671 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (55,978) 15,914 104,305 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (49,779) $ 23,694 $ 110,591 ==================== ==================== ==================== BHFTI LOOMIS SAYLES GLOBAL MARKETS DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 7,771 $ 6,635 $ 6,758 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 7,771 6,635 6,758 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 23,454 1,769 11,125 Realized gains (losses) on sale of investments....... 28,212 6,743 1,573 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 51,666 8,512 12,698 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (79,434) 71,276 (1,350) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (27,768) 79,788 11,348 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (19,997) $ 86,423 $ 18,106 ==================== ==================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI METLIFE MULTI-INDEX TARGETED RISK DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 2,857 $ 2,477 $ 1,944 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- ------------------- Net investment income (loss).................... 2,857 2,477 1,944 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 10,572 4,511 -- Realized gains (losses) on sale of investments....... 1,259 1,795 (37) -------------------- ------------------- ------------------- Net realized gains (losses)..................... 11,831 6,306 (37) -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (26,654) 15,712 4,590 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (14,823) 22,018 4,553 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (11,966) $ 24,495 $ 6,497 ==================== =================== =================== BHFTI MFS(R) RESEARCH INTERNATIONAL DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 402,618 $ 365,364 $ 378,662 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 17,303 16,781 15,460 -------------------- -------------------- ------------------- Net investment income (loss).................... 385,315 348,583 363,202 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 430,859 120,626 (113,918) -------------------- -------------------- ------------------- Net realized gains (losses)..................... 430,859 120,626 (113,918) -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (3,418,696) 4,288,325 (396,420) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (2,987,837) 4,408,951 (510,338) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (2,602,522) $ 4,757,534 $ (147,136) ==================== ==================== =================== BHFTI MORGAN STANLEY MID CAP GROWTH DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 795,262 $ -- ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 850,555 672,898 581,093 ------------------- -------------------- -------------------- Net investment income (loss).................... (850,555) 122,364 (581,093) ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 50,863,381 -- -- Realized gains (losses) on sale of investments....... 8,538,350 6,098,517 3,185,085 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 59,401,731 6,098,517 3,185,085 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (32,615,883) 66,869,811 (20,525,720) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 26,785,848 72,968,328 (17,340,635) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 25,935,293 $ 73,090,692 $ (17,921,728) =================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI OPPENHEIMER GLOBAL EQUITY DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 741,251 $ 631,796 $ 540,111 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 158,814 143,449 112,319 -------------------- ------------------- ------------------- Net investment income (loss).................... 582,437 488,347 427,792 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,598,037 -- 2,248,912 Realized gains (losses) on sale of investments....... 2,033,817 2,246,334 1,062,963 -------------------- ------------------- ------------------- Net realized gains (losses)..................... 7,631,854 2,246,334 3,311,875 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (15,951,838) 14,255,607 (3,785,262) -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (8,319,984) 16,501,941 (473,387) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (7,737,547) $ 16,990,288 $ (45,595) ==================== =================== =================== BHFTI PANAGORA GLOBAL DIVERSIFIED RISK DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- 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.......................... 24 -- -- Realized gains (losses) on sale of investments....... (1) 81 1 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 23 81 1 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (46) 16 (1) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (23) 97 -- -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (23) $ 97 $ -- ==================== ==================== =================== BHFTI PIMCO INFLATION PROTECTED BOND DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 187,843 $ 184,363 $ -- ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 15,966 17,161 17,989 ------------------- -------------------- -------------------- Net investment income (loss).................... 171,877 167,202 (17,989) ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (178,843) (123,809) (134,822) ------------------- -------------------- -------------------- Net realized gains (losses)..................... (178,843) (123,809) (134,822) ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (228,280) 327,314 652,775 ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (407,123) 203,505 517,953 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (235,246) $ 370,707 $ 499,964 =================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI PIMCO TOTAL RETURN DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 751,586 $ 849,953 $ 1,232,049 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 50,991 52,719 55,405 -------------------- -------------------- -------------------- Net investment income (loss).................... 700,595 797,234 1,176,644 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- 211,560 -- Realized gains (losses) on sale of investments....... (156,469) (75,048) (107,899) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (156,469) 136,512 (107,899) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (573,439) 1,034,223 134,407 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (729,908) 1,170,735 26,508 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (29,313) $ 1,967,969 $ 1,203,152 ==================== ==================== ==================== BHFTI SCHRODERS GLOBAL MULTI-ASSET DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,307 $ 508 $ 675 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,307 508 675 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,392 1,219 658 Realized gains (losses) on sale of investments....... 174 255 (11) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 4,566 1,474 647 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (14,319) 6,574 1,558 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (9,753) 8,048 2,205 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (8,446) $ 8,556 $ 2,880 ==================== ==================== ==================== BHFTI SCHRODERS GLOBAL MULTI-ASSET II DIVISION ------------------------------------------------------------------ 2018 (b) 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 267 $ 116 $ 47 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 267 116 47 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,081 1 16 Realized gains (losses) on sale of investments....... (1,358) 43 (9) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 723 44 7 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (1,577) 1,539 239 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (854) 1,583 246 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (587) $ 1,699 $ 293 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI SSGA GROWTH AND INCOME ETF DIVISION --------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 218,265 $ 220,103 $ 201,907 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 8,299 8,503 8,489 ------------------- ------------------- ------------------- Net investment income (loss)..................... 209,966 211,600 193,418 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 373,779 25,075 439,798 Realized gains (losses) on sale of investments....... 44,773 31,915 (17,565) ------------------- ------------------- ------------------- Net realized gains (losses)...................... 418,552 56,990 422,233 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (1,161,353) 993,368 (166,860) ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (742,801) 1,050,358 255,373 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (532,835) $ 1,261,958 $ 448,791 =================== =================== =================== BHFTI SSGA GROWTH ETF DIVISION -------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------ ------------------- INVESTMENT INCOME: Dividends............................................ $ 177,323 $ 183,120 $ 159,959 ------------------- ------------------ ------------------- EXPENSES: Mortality and expense risk charges................... 7,744 7,493 7,001 ------------------- ------------------ ------------------- Net investment income (loss)..................... 169,579 175,627 152,958 ------------------- ------------------ ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 444,221 82,762 424,639 Realized gains (losses) on sale of investments....... 79,167 70,763 (36,140) ------------------- ------------------ ------------------- Net realized gains (losses)...................... 523,388 153,525 388,499 ------------------- ------------------ ------------------- Change in unrealized gains (losses) on investments... (1,317,908) 1,057,422 (116,079) ------------------- ------------------ ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (794,520) 1,210,947 272,420 ------------------- ------------------ ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (624,941) $ 1,386,574 $ 425,378 =================== ================== =================== BHFTI T. ROWE PRICE LARGE CAP VALUE DIVISION --------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 55,375 $ 56,019 $ 63,487 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- ------------------- Net investment income (loss)..................... 55,375 56,019 63,487 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 258,158 211,170 241,959 Realized gains (losses) on sale of investments....... 14,760 7,745 22,893 ------------------- ------------------- ------------------- Net realized gains (losses)...................... 272,918 218,915 264,852 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (630,098) 129,307 1,148 ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (357,180) 348,222 266,000 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (301,805) $ 404,241 $ 329,487 =================== =================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI T. ROWE PRICE MID CAP GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 57,557 53,030 45,975 -------------------- -------------------- -------------------- Net investment income (loss).................... (57,557) (53,030) (45,975) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,657,019 3,182,369 4,929,907 Realized gains (losses) on sale of investments....... 586,722 414,597 274,363 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,243,741 3,596,966 5,204,270 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (6,867,777) 4,985,555 (3,017,999) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (624,036) 8,582,521 2,186,271 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (681,593) $ 8,529,491 $ 2,140,296 ==================== ==================== ==================== BHFTI VICTORY SYCAMORE MID CAP VALUE DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 715,890 $ 1,006,939 $ 727,789 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 83,689 82,275 77,755 -------------------- -------------------- -------------------- Net investment income (loss).................... 632,201 924,664 650,034 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 15,510,953 -- 3,889,123 Realized gains (losses) on sale of investments....... 489,826 763,180 11,246 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 16,000,779 763,180 3,900,369 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (25,172,760) 6,544,581 7,673,646 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (9,171,981) 7,307,761 11,574,015 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (8,539,780) $ 8,232,425 $ 12,224,049 ==================== ==================== ==================== BHFTII BAILLIE GIFFORD INTERNATIONAL STOCK DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 555,119 $ 553,050 $ 627,145 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 218,023 209,721 179,611 -------------------- --------------------- -------------------- Net investment income (loss).................... 337,096 343,329 447,534 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 545,059 322,047 (310,525) -------------------- --------------------- -------------------- Net realized gains (losses)..................... 545,059 322,047 (310,525) -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (9,369,507) 12,519,996 1,728,920 -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (8,824,448) 12,842,043 1,418,395 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (8,487,352) $ 13,185,372 $ 1,865,929 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BLACKROCK BOND INCOME DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 2,524,969 $ 2,411,937 $ 2,531,954 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 262,304 272,659 278,834 -------------------- -------------------- ------------------- Net investment income (loss).................... 2,262,665 2,139,278 2,253,120 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (360,052) (33,084) 30,488 -------------------- -------------------- ------------------- Net realized gains (losses)..................... (360,052) (33,084) 30,488 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (2,511,644) 749,028 (97,803) -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (2,871,696) 715,944 (67,315) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (609,031) $ 2,855,222 $ 2,185,805 ==================== ==================== =================== BHFTII BLACKROCK CAPITAL APPRECIATION DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 16,615 $ 11,274 $ -- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 16,344 11,518 9,977 ------------------- ------------------- -------------------- Net investment income (loss).................... 271 (244) (9,977) ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,760,862 248,842 852,431 Realized gains (losses) on sale of investments....... 426,638 337,629 195,339 ------------------- ------------------- -------------------- Net realized gains (losses)..................... 2,187,500 586,471 1,047,770 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (1,958,446) 2,528,190 (1,066,351) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 229,054 3,114,661 (18,581) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 229,325 $ 3,114,417 $ (28,558) =================== =================== ==================== BHFTII BLACKROCK ULTRA-SHORT TERM BOND DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 295,427 $ 91,995 $ 16,356 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 27,731 31,108 34,740 ------------------- -------------------- -------------------- Net investment income (loss).................... 267,696 60,887 (18,384) ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,698 532 487 Realized gains (losses) on sale of investments....... 45,399 25,191 3,225 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 47,097 25,723 3,712 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 157,511 119,513 60,725 ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 204,608 145,236 64,437 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 472,304 $ 206,123 $ 46,053 =================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BRIGHTHOUSE ASSET ALLOCATION 20 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 102,219 $ 126,677 $ 185,658 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 8,431 7,207 7,760 --------------------- --------------------- --------------------- Net investment income (loss).................... 93,788 119,470 177,898 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 53,466 87,901 179,520 Realized gains (losses) on sale of investments....... (38,606) (47,017) (57,458) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 14,860 40,884 122,062 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (220,034) 193,850 (54,551) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (205,174) 234,734 67,511 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (111,386) $ 354,204 $ 245,409 ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 40 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 246,761 $ 243,164 $ 380,608 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 16,035 15,988 15,456 --------------------- --------------------- -------------------- Net investment income (loss).................... 230,726 227,176 365,152 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 332,035 340,561 653,875 Realized gains (losses) on sale of investments....... (38,307) 8,343 (4,511) --------------------- --------------------- -------------------- Net realized gains (losses)..................... 293,728 348,904 649,364 --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (1,013,336) 555,970 (402,883) --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (719,608) 904,874 246,481 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (488,882) $ 1,132,050 $ 611,633 ===================== ===================== ==================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 60 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,053,491 $ 1,067,522 $ 1,741,228 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... 80,173 79,507 80,187 --------------------- --------------------- --------------------- Net investment income (loss).................... 973,318 988,015 1,661,041 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,115,913 2,146,384 4,622,045 Realized gains (losses) on sale of investments....... 392,182 456,295 180,894 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 2,508,095 2,602,679 4,802,939 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (6,730,312) 3,901,633 (2,834,262) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (4,222,217) 6,504,312 1,968,677 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (3,248,899) $ 7,492,327 $ 3,629,718 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BRIGHTHOUSE ASSET ALLOCATION 80 DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,641,433 $ 1,815,853 $ 3,023,030 -------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 94,356 89,663 80,568 -------------------- --------------------- -------------------- Net investment income (loss).................... 1,547,077 1,726,190 2,942,462 -------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,666,674 5,578,827 11,163,996 Realized gains (losses) on sale of investments....... 1,357,981 1,298,195 857,817 -------------------- --------------------- -------------------- Net realized gains (losses)..................... 6,024,655 6,877,022 12,021,813 -------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (15,781,080) 9,496,898 (7,365,543) -------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (9,756,425) 16,373,920 4,656,270 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (8,209,348) $ 18,100,110 $ 7,598,732 ==================== ===================== ==================== BHFTII BRIGHTHOUSE/ARTISAN MID CAP VALUE DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 397,910 $ 441,768 $ 623,203 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 55,047 54,893 49,909 -------------------- -------------------- -------------------- Net investment income (loss).................... 342,863 386,875 573,294 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,368,314 -- 6,218,111 Realized gains (losses) on sale of investments....... 746,054 643,877 158,671 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 4,114,368 643,877 6,376,782 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (12,674,858) 6,536,022 4,919,832 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (8,560,490) 7,179,899 11,296,614 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (8,217,627) $ 7,566,774 $ 11,869,908 ==================== ==================== ==================== BHFTII BRIGHTHOUSE/WELLINGTON BALANCED DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 5,606,001 $ 6,002,089 $ 8,164,072 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 1,687,659 1,662,608 1,586,955 -------------------- -------------------- -------------------- Net investment income (loss).................... 3,918,342 4,339,481 6,577,117 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 23,957,136 7,530,180 13,751,650 Realized gains (losses) on sale of investments....... 2,733,442 2,933,892 1,873,457 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 26,690,578 10,464,072 15,625,107 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (43,500,876) 27,671,155 (3,743,348) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (16,810,298) 38,135,227 11,881,759 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (12,891,956) $ 42,474,708 $ 18,458,876 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BRIGHTHOUSE/WELLINGTON CORE EQUITY OPPORTUNITIES DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 1,411,380 $ 1,196,624 $ 1,178,342 ------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 61,310 58,748 55,978 ------------------- ------------------- ------------------- Net investment income (loss).................... 1,350,070 1,137,876 1,122,364 ------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,282,724 2,824,131 3,218,161 Realized gains (losses) on sale of investments....... 639,830 379,451 (89,698) ------------------- ------------------- ------------------- Net realized gains (losses)..................... 4,922,554 3,203,582 3,128,463 ------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (6,175,203) 9,056,499 855,321 ------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,252,649) 12,260,081 3,983,784 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 97,421 $ 13,397,957 $ 5,106,148 =================== =================== =================== BHFTII FRONTIER MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 1,754,856 1,632,964 1,459,027 -------------------- -------------------- -------------------- Net investment income (loss).................... (1,754,856) (1,632,964) (1,459,027) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 28,331,222 5,792,652 25,696,515 Realized gains (losses) on sale of investments....... 4,778,324 5,416,830 2,622,698 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 33,109,546 11,209,482 28,319,213 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (46,139,301) 43,545,366 (16,692,072) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (13,029,755) 54,754,848 11,627,141 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (14,784,611) $ 53,121,884 $ 10,168,114 ==================== ==================== ==================== BHFTII JENNISON GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 135,573 $ 84,450 $ 66,617 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 24,797 17,500 14,334 -------------------- -------------------- -------------------- Net investment income (loss).................... 110,776 66,950 52,283 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,749,143 1,883,231 2,948,170 Realized gains (losses) on sale of investments....... 670,411 374,997 177,425 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 6,419,554 2,258,228 3,125,595 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (6,671,580) 6,383,010 (3,197,364) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (252,026) 8,641,238 (71,769) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (141,250) $ 8,708,188 $ (19,486) ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII LOOMIS SAYLES SMALL CAP CORE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 5,587 $ 75,600 $ 76,360 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 27,358 26,031 22,984 -------------------- -------------------- -------------------- Net investment income (loss).................... (21,771) 49,569 53,376 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,792,999 1,682,939 2,113,583 Realized gains (losses) on sale of investments....... 352,664 473,735 122,418 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,145,663 2,156,674 2,236,001 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (5,945,164) 1,501,241 1,915,532 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (2,799,501) 3,657,915 4,151,533 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (2,821,272) $ 3,707,484 $ 4,204,909 ==================== ==================== ==================== BHFTII LOOMIS SAYLES SMALL CAP GROWTH DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ -- $ -- ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 12,018 9,721 9,163 ------------------- ------------------- -------------------- Net investment income (loss).................... (12,018) (9,721) (9,163) ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,921,803 548,702 1,165,890 Realized gains (losses) on sale of investments....... 280,750 214,228 56,242 ------------------- ------------------- -------------------- Net realized gains (losses)..................... 2,202,553 762,930 1,222,132 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (2,123,091) 2,111,346 (582,015) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 79,462 2,874,276 640,117 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 67,444 $ 2,864,555 $ 630,954 =================== =================== ==================== BHFTII METLIFE AGGREGATE BOND INDEX DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 3,810,820 $ 3,851,349 $ 3,556,980 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 40,049 41,255 40,599 -------------------- -------------------- -------------------- Net investment income (loss).................... 3,770,771 3,810,094 3,516,381 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (845,236) (60,039) 157,844 -------------------- -------------------- -------------------- Net realized gains (losses)..................... (845,236) (60,039) 157,844 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,257,308) 463,003 (713,953) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (4,102,544) 402,964 (556,109) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (331,773) $ 4,213,058 $ 2,960,272 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII METLIFE MID CAP STOCK INDEX DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,356,581 $ 1,393,301 $ 1,110,219 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 75,164 73,593 65,628 ------------------- -------------------- -------------------- Net investment income (loss).................... 1,281,417 1,319,708 1,044,591 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 8,878,478 6,351,214 6,666,040 Realized gains (losses) on sale of investments....... 2,094,579 2,402,793 1,488,577 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 10,973,057 8,754,007 8,154,617 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (23,434,639) 4,956,766 7,196,356 ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (12,461,582) 13,710,773 15,350,973 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (11,180,165) $ 15,030,481 $ 16,395,564 =================== ==================== ==================== BHFTII METLIFE MSCI EAFE(R) INDEX DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,694,273 $ 2,349,651 $ 1,978,825 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 41,726 40,550 35,536 ------------------- -------------------- -------------------- Net investment income (loss).................... 2,652,547 2,309,101 1,943,289 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 1,021,937 1,359,240 101,562 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 1,021,937 1,359,240 101,562 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (16,649,850) 15,314,940 (990,605) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (15,627,913) 16,674,180 (889,043) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (12,975,366) $ 18,983,281 $ 1,054,246 =================== ==================== ==================== BHFTII METLIFE RUSSELL 2000(R) INDEX DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 945,477 $ 973,933 $ 959,940 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 57,241 54,478 46,857 ------------------- ------------------- -------------------- Net investment income (loss).................... 888,236 919,455 913,083 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,684,074 3,194,653 4,042,248 Realized gains (losses) on sale of investments....... 3,015,270 2,846,816 1,662,177 ------------------- ------------------- -------------------- Net realized gains (losses)..................... 8,699,344 6,041,469 5,704,425 ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (17,938,965) 4,109,388 7,347,406 ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (9,239,621) 10,150,857 13,051,831 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (8,351,385) $ 11,070,312 $ 13,964,914 =================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII METLIFE STOCK INDEX DIVISION ---------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 20,232,875 $ 19,102,288 $ 19,282,251 ------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 2,506,370 2,334,132 2,114,804 ------------------- -------------------- ------------------- Net investment income (loss).................... 17,726,505 16,768,156 17,167,447 ------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 63,212,282 30,024,000 42,275,909 Realized gains (losses) on sale of investments....... 30,717,054 34,571,519 15,702,100 ------------------- -------------------- ------------------- Net realized gains (losses)..................... 93,929,336 64,595,519 57,978,009 ------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (159,803,991) 126,477,450 31,292,870 ------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (65,874,655) 191,072,969 89,270,879 ------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (48,148,150) $ 207,841,125 $ 106,438,326 =================== ==================== =================== BHFTII MFS(R) TOTAL RETURN DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 682,160 $ 265,892 $ 287,267 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 9,715 9,874 9,492 -------------------- ------------------- ------------------- Net investment income (loss).................... 672,445 256,018 277,775 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,954,294 556,179 417,334 Realized gains (losses) on sale of investments....... 77,778 137,114 162,191 -------------------- ------------------- ------------------- Net realized gains (losses)..................... 2,032,072 693,293 579,525 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (4,570,024) 1,181,033 3,086 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (2,537,952) 1,874,326 582,611 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (1,865,507) $ 2,130,344 $ 860,386 ==================== =================== =================== BHFTII MFS(R) VALUE DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 1,817,803 $ 1,881,888 $ 1,901,086 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 91,293 74,868 68,482 -------------------- ------------------- ------------------- Net investment income (loss).................... 1,726,510 1,807,020 1,832,604 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,633,263 5,556,050 7,583,219 Realized gains (losses) on sale of investments....... 717,887 820,001 440,263 -------------------- ------------------- ------------------- Net realized gains (losses)..................... 8,351,150 6,376,051 8,023,482 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (21,548,270) 7,634,853 1,456,878 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (13,197,120) 14,010,904 9,480,360 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (11,470,610) $ 15,817,924 $ 11,312,964 ==================== =================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII MFS(R) VALUE II DIVISION ----------------------------------------------------------------- 2018 (b) 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 681,104 $ 550,421 $ 319,165 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 7,965 24,035 22,545 ------------------- -------------------- -------------------- Net investment income (loss).................... 673,139 526,386 296,620 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,662,958 -- 1,458,734 Realized gains (losses) on sale of investments....... (7,669,155) (221,837) (389,249) ------------------- -------------------- -------------------- Net realized gains (losses)..................... (2,006,197) (221,837) 1,069,485 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... 673,673 1,234,077 1,883,740 ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,332,524) 1,012,240 2,953,225 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (659,385) $ 1,538,626 $ 3,249,845 =================== ==================== ==================== BHFTII NEUBERGER BERMAN GENESIS DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 427,961 $ 467,365 $ 488,023 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... 103,468 97,289 88,644 -------------------- -------------------- ------------------- Net investment income (loss).................... 324,493 370,076 399,379 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 14,931,674 9,271,091 -- Realized gains (losses) on sale of investments....... 2,455,941 2,786,014 1,826,763 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 17,387,615 12,057,105 1,826,763 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (25,138,689) 4,394,645 15,758,188 -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (7,751,074) 16,451,750 17,584,951 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (7,426,581) $ 16,821,826 $ 17,984,330 ==================== ==================== =================== BHFTII T. ROWE PRICE LARGE CAP GROWTH DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 463,194 $ 290,388 $ 49,087 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 80,800 68,479 57,405 ------------------- -------------------- -------------------- Net investment income (loss).................... 382,394 221,909 (8,318) ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 19,742,610 5,723,064 10,221,524 Realized gains (losses) on sale of investments....... 2,588,381 2,250,944 1,301,214 ------------------- -------------------- -------------------- Net realized gains (losses)..................... 22,330,991 7,974,008 11,522,738 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (23,124,361) 19,425,313 (10,229,673) ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (793,370) 27,399,321 1,293,065 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (410,976) $ 27,621,230 $ 1,284,747 =================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII T. ROWE PRICE SMALL CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 159,008 $ 383,598 $ 278,411 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 462,454 422,353 374,021 -------------------- -------------------- -------------------- Net investment income (loss).................... (303,446) (38,755) (95,610) -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 10,935,636 7,083,773 13,259,903 Realized gains (losses) on sale of investments....... 3,925,105 2,988,428 2,246,255 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 14,860,741 10,072,201 15,506,158 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (22,939,008) 14,656,850 (3,850,598) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (8,078,267) 24,729,051 11,655,560 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (8,381,713) $ 24,690,296 $ 11,559,950 ==================== ==================== ==================== BHFTII VAN ECK GLOBAL NATURAL RESOURCES DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 567 $ 290 $ 1,967 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 567 290 1,967 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (2,432) (3,647) (7,201) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (2,432) (3,647) (7,201) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (96,127) 5,530 88,581 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (98,559) 1,883 81,380 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (97,992) $ 2,173 $ 83,347 ==================== ==================== ==================== BHFTII WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,776,967 $ 2,088,016 $ 831,199 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 80,667 86,369 69,295 -------------------- -------------------- -------------------- Net investment income (loss).................... 2,696,300 2,001,647 761,904 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 89,897 364,897 119,058 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 89,897 364,897 119,058 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (4,895,547) 1,796,363 2,417,251 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (4,805,650) 2,161,260 2,536,309 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (2,109,350) $ 4,162,907 $ 3,298,213 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII WESTERN ASSET MANAGEMENT U.S. GOVERNMENT DIVISION -------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 360,455 $ 418,500 $ 416,577 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... 16,625 16,252 16,155 --------------------- --------------------- -------------------- Net investment income (loss).................... 343,830 402,248 400,422 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (86,126) (35,219) (10,757) --------------------- --------------------- -------------------- Net realized gains (losses)..................... (86,126) (35,219) (10,757) --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (115,445) (80,512) (199,711) --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (201,571) (115,731) (210,468) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 142,259 $ 286,517 $ 189,954 ===================== ===================== ==================== DREYFUS VIF INTERNATIONAL VALUE DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 3,466 $ 2,916 $ 3,283 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 3,466 2,916 3,283 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (123) (300) (5,322) -------------------- -------------------- --------------------- Net realized gains (losses)..................... (123) (300) (5,322) -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (44,641) 51,516 (2,271) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (44,764) 51,216 (7,593) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (41,298) $ 54,132 $ (4,310) ==================== ==================== ===================== FIDELITY(R) VIP ASSET MANAGER: GROWTH DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 28,546 $ 24,598 $ 23,502 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 28,546 24,598 23,502 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 82,828 254,110 25,657 Realized gains (losses) on sale of investments....... 24,180 39,851 35,213 -------------------- -------------------- --------------------- Net realized gains (losses)..................... 107,008 293,961 60,870 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (293,123) 9,749 (48,668) -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (186,115) 303,710 12,202 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (157,569) $ 328,308 $ 35,704 ==================== ==================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP CONTRAFUND DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 18,473 $ 25,600 $ 18,813 --------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- -------------------- --------------------- Net investment income (loss).................... 18,473 25,600 18,813 --------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 260,686 151,989 215,517 Realized gains (losses) on sale of investments....... 55,502 64,249 49,752 --------------------- -------------------- --------------------- Net realized gains (losses)..................... 316,188 216,238 265,269 --------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (515,972) 321,303 (89,763) --------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (199,784) 537,541 175,506 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (181,311) $ 563,141 $ 194,319 ===================== ==================== ===================== FIDELITY(R) VIP EQUITY-INCOME DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 36 $ 40 $ 351 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 36 40 351 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 75 208 873 Realized gains (losses) on sale of investments....... 1 645 (15) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 76 853 858 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (250) (214) 1,277 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (174) 639 2,135 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (138) $ 679 $ 2,486 ===================== ===================== ===================== FIDELITY(R) VIP FREEDOM 2010 DIVISION --------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,455 $ 2,182 $ 439 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 2,455 2,182 439 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 3,961 1,201 455 Realized gains (losses) on sale of investments....... (395) 700 (28) -------------------- --------------------- --------------------- Net realized gains (losses)..................... 3,566 1,901 427 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (11,906) 324 369 -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (8,340) 2,225 796 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (5,885) $ 4,407 $ 1,235 ==================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP FREEDOM 2020 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 8,406 $ 8,288 $ 8,579 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 8,406 8,288 8,579 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 17,605 15,960 16,688 Realized gains (losses) on sale of investments....... 6,369 17,690 2,623 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 23,974 33,650 19,311 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (64,092) 50,769 4,403 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (40,118) 84,419 23,714 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (31,712) $ 92,707 $ 32,293 ===================== ===================== ===================== FIDELITY(R) VIP FREEDOM 2025 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 7,186 $ 7,280 $ 6,677 --------------------- --------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- -------------------- Net investment income (loss).................... 7,186 7,280 6,677 --------------------- --------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 9,975 13,035 13,619 Realized gains (losses) on sale of investments....... 1,100 687 (312) --------------------- --------------------- -------------------- Net realized gains (losses)..................... 11,075 13,722 13,307 --------------------- --------------------- -------------------- Change in unrealized gains (losses) on investments... (51,118) 58,295 6,315 --------------------- --------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (40,043) 72,017 19,622 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (32,857) $ 79,297 $ 26,299 ===================== ===================== ==================== FIDELITY(R) VIP FREEDOM 2030 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 3,464 $ 3,686 $ 2,599 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 3,464 3,686 2,599 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 6,179 7,522 4,822 Realized gains (losses) on sale of investments....... 13,421 8,178 (1,669) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 19,600 15,700 3,153 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (40,198) 21,517 4,716 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (20,598) 37,217 7,869 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (17,134) $ 40,903 $ 10,468 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP FREEDOM 2040 DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 3,024 $ 2,654 $ 2,084 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 3,024 2,654 2,084 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,014 5,908 3,682 Realized gains (losses) on sale of investments....... 8,456 6,961 (877) -------------------- --------------------- --------------------- Net realized gains (losses)..................... 13,470 12,869 2,805 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (41,836) 24,961 5,080 -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (28,366) 37,830 7,885 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (25,342) $ 40,484 $ 9,969 ==================== ===================== ===================== FIDELITY(R) VIP FREEDOM 2050 DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 2,456 $ 2,270 $ 1,500 -------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- --------------------- --------------------- Net investment income (loss).................... 2,456 2,270 1,500 -------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 5,193 4,679 2,239 Realized gains (losses) on sale of investments....... 5,282 3,738 (570) -------------------- --------------------- --------------------- Net realized gains (losses)..................... 10,475 8,417 1,669 -------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (34,149) 19,567 2,841 -------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (23,674) 27,984 4,510 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (21,218) $ 30,254 $ 6,010 ==================== ===================== ===================== FIDELITY(R) VIP GOVERNMENT MONEY MARKET DIVISION -------------------------------------------------------------------- 2018 2017 2016 (c) -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 56,758 $ 22,875 $ 4,167 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 56,758 22,875 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................................... $ 56,758 $ 22,875 $ 4,167 ==================== ==================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP HIGH INCOME DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 28,272 $ 24,337 $ 18,971 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 28,272 24,337 18,971 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (649) (18) (443) --------------------- --------------------- --------------------- Net realized gains (losses)..................... (649) (18) (443) --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (43,948) 2,185 19,200 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (44,597) 2,167 18,757 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (16,325) $ 26,504 $ 37,728 ===================== ===================== ===================== FIDELITY(R) VIP INVESTMENT GRADE BOND DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 28,459 $ 28,197 $ 28,927 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 28,459 28,197 28,927 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,286 5,616 587 Realized gains (losses) on sale of investments....... (1,484) (2,296) (2,116) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 5,802 3,320 (1,529) --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (41,933) 18,959 27,988 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (36,131) 22,279 26,459 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (7,672) $ 50,476 $ 55,386 ===================== ===================== ===================== FIDELITY(R) VIP MID CAP DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 1,054 $ 1,285 $ 766 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 1,054 1,285 766 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 23,976 12,504 14,495 Realized gains (losses) on sale of investments....... 5,031 3,777 (682) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 29,007 16,281 13,813 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (65,288) 31,948 9,442 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (36,281) 48,229 23,255 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (35,227) $ 49,514 $ 24,021 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FTVIPT FRANKLIN INCOME VIP DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 2,119 $ 2,194 $ 2,059 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 2,119 2,194 2,059 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 5,563 186 (110) -------------------- -------------------- ------------------- Net realized gains (losses)..................... 5,563 186 (110) -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (10,139) 6,858 3,968 -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (4,576) 7,044 3,858 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (2,457) $ 9,238 $ 5,917 ==================== ==================== =================== FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 16,822 $ 9,201 $ 8,262 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 16,822 9,201 8,262 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 8,912 29,295 39,176 Realized gains (losses) on sale of investments....... (775) 1,492 (2,198) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 8,137 30,787 36,978 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (108,582) 6,135 13,065 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (100,445) 36,922 50,043 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (83,623) $ 46,123 $ 58,305 ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL SHARES VIP DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 2,853 $ 2,384 $ 1,664 -------------------- ------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- ------------------- Net investment income (loss).................... 2,853 2,384 1,664 -------------------- ------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 4,442 4,324 6,856 Realized gains (losses) on sale of investments....... (352) (2) (444) -------------------- ------------------- ------------------- Net realized gains (losses)..................... 4,090 4,322 6,412 -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... (17,095) 1,445 4,437 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (13,005) 5,767 10,849 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (10,152) $ 8,151 $ 12,513 ==================== =================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FTVIPT TEMPLETON FOREIGN VIP DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 219,516 $ 225,978 $ 114,022 -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- -------------------- Net investment income (loss).................... 219,516 225,978 114,022 -------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 89,391 Realized gains (losses) on sale of investments....... 137,505 5,599 (69,876) -------------------- ------------------- -------------------- Net realized gains (losses)..................... 137,505 5,599 19,515 -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (1,579,348) 996,224 260,337 -------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,441,843) 1,001,823 279,852 -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (1,222,327) $ 1,227,801 $ 393,874 ==================== =================== ==================== FTVIPT TEMPLETON GLOBAL BOND VIP DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- 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.......................... -- 1,934 449 Realized gains (losses) on sale of investments....... (1,042) (2,105) (4,156) -------------------- ------------------- ------------------- Net realized gains (losses)..................... (1,042) (171) (3,707) -------------------- ------------------- ------------------- Change in unrealized gains (losses) on investments... 19,604 11,918 24,908 -------------------- ------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 18,562 11,747 21,201 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 18,562 $ 11,747 $ 21,201 ==================== =================== =================== GOLDMAN SACHS MID-CAP VALUE DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 780 $ 623 $ 1,071 -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- -------------------- Net investment income (loss).................... 780 623 1,071 -------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 7,077 4,676 43 Realized gains (losses) on sale of investments....... 766 316 (9,872) -------------------- ------------------- -------------------- Net realized gains (losses)..................... 7,843 4,992 (9,829) -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (15,671) 3,256 25,433 -------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (7,828) 8,248 15,604 -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (7,048) $ 8,871 $ 16,675 ==================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 37 $ 41 $ 413 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 37 41 413 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 1,104 836 986 Realized gains (losses) on sale of investments....... 144 3,260 (839) --------------------- --------------------- --------------------- Net realized gains (losses)..................... 1,248 4,096 147 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (1,847) (3,129) 6,057 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (599) 967 6,204 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (562) $ 1,008 $ 6,617 ===================== ===================== ===================== INVESCO V.I. COMSTOCK DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 10,995 $ 10,939 $ 4,913 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 10,995 10,939 4,913 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 75,626 23,965 29,536 Realized gains (losses) on sale of investments....... 45,604 4,332 2,231 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 121,230 28,297 31,767 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (184,052) 52,013 25,839 --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (62,822) 80,310 57,606 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (51,827) $ 91,249 $ 62,519 ===================== ===================== ===================== INVESCO V.I. INTERNATIONAL GROWTH DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 7,440 $ 4,975 $ 4,874 --------------------- --------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- --------------------- --------------------- --------------------- Net investment income (loss).................... 7,440 4,975 4,874 --------------------- --------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 2,520 -- -- Realized gains (losses) on sale of investments....... 2,195 6,211 630 --------------------- --------------------- --------------------- Net realized gains (losses)..................... 4,715 6,211 630 --------------------- --------------------- --------------------- Change in unrealized gains (losses) on investments... (67,377) 61,391 (8,246) --------------------- --------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (62,662) 67,602 (7,616) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (55,222) $ 72,577 $ (2,742) ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
JANUS HENDERSON BALANCED DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 23,404 $ 15,832 $ 20,153 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 23,404 15,832 20,153 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 33,075 2,191 14,217 Realized gains (losses) on sale of investments....... 6,353 11,402 8,012 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 39,428 13,593 22,229 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (64,594) 160,350 (19) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (25,166) 173,943 22,210 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (1,762) $ 189,775 $ 42,363 ==================== ==================== ==================== JANUS HENDERSON ENTERPRISE DIVISION ------------------------------------------------------------------- 2018 2017 2016 (d) -------------------- -------------------- --------------------- INVESTMENT INCOME: Dividends............................................ $ 446 $ 710 $ 107 -------------------- -------------------- --------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- --------------------- Net investment income (loss).................... 446 710 107 -------------------- -------------------- --------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 20,616 32,459 38,700 Realized gains (losses) on sale of investments....... 16,295 20,860 (534) -------------------- -------------------- --------------------- Net realized gains (losses)..................... 36,911 53,319 38,166 -------------------- -------------------- --------------------- Change in unrealized gains (losses) on investments... (40,219) 49,008 289 -------------------- -------------------- --------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (3,308) 102,327 38,455 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................... $ (2,862) $ 103,037 $ 38,562 ==================== ==================== ===================== JANUS HENDERSON FORTY DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- 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.......................... 51,565 29,535 67,914 Realized gains (losses) on sale of investments....... 812 20,272 (8,107) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 52,377 49,807 59,807 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (46,227) 82,066 (58,944) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... 6,150 131,873 863 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ 6,150 $ 131,873 $ 863 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
JANUS HENDERSON OVERSEAS DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 400 $ 358 $ 1,672 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 400 358 1,672 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- 1,129 Realized gains (losses) on sale of investments....... (52) (10,688) (7,649) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (52) (10,688) (6,520) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,790) 18,215 1,900 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (3,842) 7,527 (4,620) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (3,442) $ 7,885 $ (2,948) ==================== ==================== ==================== JANUS HENDERSON RESEARCH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 1,975 $ 1,234 $ 1,500 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 1,975 1,234 1,500 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 17,143 2,957 17,243 Realized gains (losses) on sale of investments....... 4,135 2,574 45,098 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 21,278 5,531 62,341 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (31,506) 68,064 (66,733) -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (10,228) 73,595 (4,392) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (8,253) $ 74,829 $ (2,892) ==================== ==================== ==================== MFS(R) VIT GLOBAL EQUITY DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 2,659 $ 1,698 $ 1,326 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 2,659 1,698 1,326 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 16,597 9,831 9,731 Realized gains (losses) on sale of investments....... 57,295 2,533 695 -------------------- -------------------- -------------------- Net realized gains (losses)..................... 73,892 12,364 10,426 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (71,225) 40,361 736 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... 2,667 52,725 11,162 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 5,326 $ 54,423 $ 12,488 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
MFS(R) VIT NEW DISCOVERY DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- 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.......................... 3,132 4,695 9,401 Realized gains (losses) on sale of investments....... 277 37,307 (174) -------------------- -------------------- -------------------- Net realized gains (losses)..................... 3,409 42,002 9,227 -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (3,646) (961) 7,467 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (237) 41,041 16,694 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (237) $ 41,041 $ 16,694 ==================== ==================== ==================== MFS(R) VIT II HIGH YIELD DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 8,422 $ 9,827 $ 9,347 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 8,422 9,827 9,347 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (212) (95) (220) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (212) (95) (220) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (13,260) (254) 9,158 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (13,472) (349) 8,938 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (5,050) $ 9,478 $ 18,285 ==================== ==================== ==================== MORGAN STANLEY VIF EMERGING MARKETS DEBT DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 86,325 $ 70,167 $ 59,307 -------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- -------------------- Net investment income (loss).................... 86,325 70,167 59,307 -------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (84,029) (7,471) (12,131) -------------------- -------------------- -------------------- Net realized gains (losses)..................... (84,029) (7,471) (12,131) -------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments... (126,520) 58,835 45,652 -------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments.................................... (210,549) 51,364 33,521 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................... $ (124,224) $ 121,531 $ 92,828 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
MORGAN STANLEY VIF EMERGING MARKETS EQUITY DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ 15,121 $ 29,128 $ 12,938 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... 15,121 29,128 12,938 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 37,607 244,612 (37,991) -------------------- -------------------- ------------------- Net realized gains (losses)..................... 37,607 244,612 (37,991) -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (717,637) 807,706 171,862 -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (680,030) 1,052,318 133,871 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (664,909) $ 1,081,446 $ 146,809 ==================== ==================== =================== PIMCO VIT ALL ASSET DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 4,773 $ 6,628 $ 3,261 -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- -------------------- Net investment income (loss).................... 4,773 6,628 3,261 -------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (152) (130) (833) -------------------- ------------------- -------------------- Net realized gains (losses)..................... (152) (130) (833) -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (12,773) 11,089 12,619 -------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (12,925) 10,959 11,786 -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (8,152) $ 17,587 $ 15,047 ==================== =================== ==================== PIMCO VIT COMMODITYREALRETURN(R) STRATEGY DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 503 $ 1,293 $ 111 -------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- ------------------- -------------------- Net investment income (loss).................... 503 1,293 111 -------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (347) (3,603) (957) -------------------- ------------------- -------------------- Net realized gains (losses)..................... (347) (3,603) (957) -------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (3,284) 2,335 2,262 -------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (3,631) (1,268) 1,305 -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (3,128) $ 25 $ 1,416 ==================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
PIMCO VIT LOW DURATION DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 18,308 $ 12,109 $ 13,010 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 18,308 12,109 13,010 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... (478) (327) (325) ------------------- ------------------- -------------------- Net realized gains (losses)..................... (478) (327) (325) ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (14,452) 386 (271) ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (14,930) 59 (596) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ 3,378 $ 12,168 $ 12,414 =================== =================== ==================== PUTNAM VT INTERNATIONAL VALUE DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INVESTMENT INCOME: Dividends............................................ $ 124 $ 86 $ 122 ------------------- ------------------- -------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- ------------------- ------------------- -------------------- Net investment income (loss).................... 124 86 122 ------------------- ------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... -- -- -- Realized gains (losses) on sale of investments....... 71 45 (165) ------------------- ------------------- -------------------- Net realized gains (losses)..................... 71 45 (165) ------------------- ------------------- -------------------- Change in unrealized gains (losses) on investments... (1,236) 1,055 58 ------------------- ------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,165) 1,100 (107) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (1,041) $ 1,186 $ 15 =================== =================== ==================== ROYCE MICRO-CAP DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INVESTMENT INCOME: Dividends............................................ $ -- $ 73 $ 61 -------------------- -------------------- ------------------- EXPENSES: Mortality and expense risk charges................... -- -- -- -------------------- -------------------- ------------------- Net investment income (loss).................... -- 73 61 -------------------- -------------------- ------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions.......................... 519 1,139 -- Realized gains (losses) on sale of investments....... (33) 5 71 -------------------- -------------------- ------------------- Net realized gains (losses)..................... 486 1,144 71 -------------------- -------------------- ------------------- Change in unrealized gains (losses) on investments... (1,513) (673) 1,525 -------------------- -------------------- ------------------- Net realized and changes in unrealized gains (losses) on investments..................................... (1,027) 471 1,596 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations.................................... $ (1,027) $ 544 $ 1,657 ==================== ==================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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 -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
ROYCE SMALL-CAP DIVISION ------------------------------------------------------------------ 2018 2017 2016 ------------------- -------------------- -------------------- INVESTMENT INCOME: Dividends............................................... $ 116 $ 136 $ 1,115 ------------------- -------------------- -------------------- EXPENSES: Mortality and expense risk charges...................... -- -- -- ------------------- -------------------- -------------------- Net investment income (loss)....................... 116 136 1,115 ------------------- -------------------- -------------------- NET REALIZED AND CHANGES IN UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions............................. 190 -- 11,025 Realized gains (losses) on sale of investments.......... (35) (13,382) (4,843) ------------------- -------------------- -------------------- Net realized gains (losses)........................ 155 (13,382) 6,182 ------------------- -------------------- -------------------- Change in unrealized gains (losses) on investments...... (1,492) 13,095 2,799 ------------------- -------------------- -------------------- Net realized and changes in unrealized gains (losses) on investments........................................ (1,337) (287) 8,981 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations....................................... $ (1,221) $ (151) $ 10,096 =================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 98 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, 2018, 2017 AND 2016
AB VPS GLOBAL THEMATIC GROWTH DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ 88 $ -- Net realized gains (losses)......................... 255 2,867 877 Change in unrealized gains (losses) on investments.. (3,771) 8,219 (1,193) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (3,516) 11,174 (316) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,269 1,269 1,269 Net transfers (including fixed account)............. 29 (9,295) (7,397) Policy charges...................................... (790) (859) (883) Transfers for Policy benefits and terminations...... -- -- (90) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 508 (8,885) (7,101) ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (3,008) 2,289 (7,417) NET ASSETS: Beginning of year................................... 34,675 32,386 39,803 ------------------- -------------------- -------------------- End of year......................................... $ 31,667 $ 34,675 $ 32,386 =================== ==================== ==================== AB VPS INTERMEDIATE BOND DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,502 $ 3,922 $ 2,736 Net realized gains (losses)......................... 2,000 (2,604) 1,078 Change in unrealized gains (losses) on investments.. (3,792) 2,197 49 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (290) 3,515 3,863 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 644 644 -- Net transfers (including fixed account)............. 79,043 32,033 33,741 Policy charges...................................... (2,284) (2,761) (3,112) Transfers for Policy benefits and terminations...... (1) (52,174) -- ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 77,402 (22,258) 30,629 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 77,112 (18,743) 34,492 NET ASSETS: Beginning of year................................... 76,308 95,051 60,559 ------------------- -------------------- -------------------- End of year......................................... $ 153,420 $ 76,308 $ 95,051 =================== ==================== ==================== AMERICAN FUNDS(R) BOND DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 134,370 $ 118,854 $ 100,993 Net realized gains (losses)......................... (50,415) 94,447 24,681 Change in unrealized gains (losses) on investments.. (150,359) 12,429 45,632 -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (66,404) 225,730 171,306 -------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 555,280 560,778 594,195 Net transfers (including fixed account)............. (631,291) 341,614 266,964 Policy charges...................................... (322,021) (355,918) (399,254) Transfers for Policy benefits and terminations...... (527,467) (446,430) (479,171) -------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (925,499) 100,044 (17,266) -------------------- ------------------- -------------------- Net increase (decrease) in net assets............. (991,903) 325,774 154,040 NET ASSETS: Beginning of year................................... 6,687,934 6,362,160 6,208,120 -------------------- ------------------- -------------------- End of year......................................... $ 5,696,031 $ 6,687,934 $ 6,362,160 ==================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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 CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
AMERICAN FUNDS(R) GLOBAL SMALL CAPITALIZATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (27,220) $ 219,097 $ 81,134 Net realized gains (losses)......................... 4,392,732 493,132 11,903,440 Change in unrealized gains (losses) on investments.. (11,769,834) 15,300,486 (10,777,574) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (7,404,322) 16,012,715 1,207,000 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,258,017 4,572,438 4,934,049 Net transfers (including fixed account)............. (343,468) (860,452) (1,739,842) Policy charges...................................... (3,387,233) (3,422,778) (3,505,140) Transfers for Policy benefits and terminations...... (4,953,677) (4,732,036) (4,322,961) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,426,361) (4,442,828) (4,633,894) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (11,830,683) 11,569,887 (3,426,894) NET ASSETS: Beginning of year................................... 75,338,643 63,768,756 67,195,650 -------------------- -------------------- -------------------- End of year......................................... $ 63,507,960 $ 75,338,643 $ 63,768,756 ==================== ==================== ==================== AMERICAN FUNDS(R) GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 698,492 $ 771,061 $ 1,112,235 Net realized gains (losses)......................... 24,925,963 21,243,802 16,155,775 Change in unrealized gains (losses) on investments.. (24,996,188) 23,936,579 (2,560,394) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ 628,267 45,951,442 14,707,616 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,272,427 9,971,466 10,568,668 Net transfers (including fixed account)............. (3,230,540) (2,105,090) (1,947,160) Policy charges...................................... (9,188,345) (9,064,646) (8,879,484) Transfers for Policy benefits and terminations...... (12,764,495) (13,311,865) (10,245,919) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (15,910,953) (14,510,135) (10,503,895) -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. (15,282,686) 31,441,307 4,203,721 NET ASSETS: Beginning of year................................... 200,354,614 168,913,307 164,709,586 -------------------- -------------------- ------------------- End of year......................................... $ 185,071,928 $ 200,354,614 $ 168,913,307 ==================== ==================== =================== AMERICAN FUNDS(R) GROWTH-INCOME DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,584,237 $ 1,472,840 $ 1,399,526 Net realized gains (losses)......................... 10,554,249 8,935,623 12,245,175 Change in unrealized gains (losses) on investments.. (13,751,075) 12,349,992 (2,551,087) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (1,612,589) 22,758,455 11,093,614 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,941,744 6,390,830 6,753,905 Net transfers (including fixed account)............. (1,373,890) (931,937) (1,474,231) Policy charges...................................... (5,836,042) (5,833,783) (5,885,637) Transfers for Policy benefits and terminations...... (7,740,945) (7,681,451) (6,406,059) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (9,009,133) (8,056,341) (7,012,022) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (10,621,722) 14,702,114 4,081,592 NET ASSETS: Beginning of year................................... 120,442,660 105,740,546 101,658,954 -------------------- -------------------- -------------------- End of year......................................... $ 109,820,938 $ 120,442,660 $ 105,740,546 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 102 The accompanying notes are an integral part of these financial statements. 103 METROPOLITAN LIFE SEPARATE ACCOUNT UL OF METROPOLITAN LIFE INSURANCE COMPANY STATEMENTS OF CHANGES IN NET ASSETS -- (CONTINUED) FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
AMERICAN FUNDS(R) HIGH-INCOME BOND DIVISION ------------------------------------------- 2018 2017 (a) -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 530 $ 468 Net realized gains (losses)......................... (7) -- Change in unrealized gains (losses) on investments.. (720) (375) -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (197) 93 -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- Net transfers (including fixed account)............. -- 8,614 Policy charges...................................... (169) (55) Transfers for Policy benefits and terminations...... -- -- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (169) 8,559 -------------------- -------------------- Net increase (decrease) in net assets............. (366) 8,652 NET ASSETS: Beginning of year................................... 8,652 -- -------------------- -------------------- End of year......................................... $ 8,286 $ 8,652 ==================== ==================== AMERICAN FUNDS(R) INTERNATIONAL DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 33,657 $ 7,618 $ 4,799 Net realized gains (losses)......................... 88,851 14,001 21,338 Change in unrealized gains (losses) on investments.. (417,075) 132,723 (18,823) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (294,567) 154,342 7,314 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 48,327 37,367 2,192 Net transfers (including fixed account)............. 1,521,821 217,535 -- Policy charges...................................... (40,694) (15,980) (6,055) Transfers for Policy benefits and terminations...... (51,108) (88,369) (70,171) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 1,478,346 150,553 (74,034) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,183,779 304,895 (66,720) NET ASSETS: Beginning of year................................... 653,285 348,390 415,110 -------------------- -------------------- -------------------- End of year......................................... $ 1,837,064 $ 653,285 $ 348,390 ==================== ==================== ==================== AMERICAN FUNDS(R) U.S. GOVERNMENT/AAA-RATED SECURITIES DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 975 $ 724 $ 737 Net realized gains (losses)......................... (138) (41) 968 Change in unrealized gains (losses) on investments.. (457) 178 (1,163) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 380 861 542 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,331 1,253 5,191 Net transfers (including fixed account)............. 13 1 9 Policy charges...................................... (1,609) (1,725) (1,778) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (265) (471) 3,422 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 115 390 3,964 NET ASSETS: Beginning of year................................... 54,697 54,307 50,343 -------------------- -------------------- -------------------- End of year......................................... $ 54,812 $ 54,697 $ 54,307 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI AB GLOBAL DYNAMIC ALLOCATION DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,338 $ 1,050 $ 977 Net realized gains (losses)......................... 601 227 430 Change in unrealized gains (losses) on investments.. (7,744) 7,735 769 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (5,805) 9,012 2,176 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 14,086 14,853 15,256 Net transfers (including fixed account)............. 2,399 4,736 (2,468) Policy charges...................................... (8,963) (8,465) (8,319) Transfers for Policy benefits and terminations...... (3,669) (2,345) (5,916) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 3,853 8,779 (1,447) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,952) 17,791 729 NET ASSETS: Beginning of year................................... 79,701 61,910 61,181 -------------------- -------------------- -------------------- End of year......................................... $ 77,749 $ 79,701 $ 61,910 ==================== ==================== ==================== BHFTI ALLIANZ GLOBAL INVESTORS DYNAMIC MULTI-ASSET PLUS DIVISION -------------------------------------------------------------------- 2018 (b) 2017 2016 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 125 $ 94 $ 2 Net realized gains (losses)......................... 439 101 (12) Change in unrealized gains (losses) on investments.. (693) 685 80 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (129) 880 70 --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 382 3,038 3,715 Net transfers (including fixed account)............. (6,050) 19 274 Policy charges...................................... (408) (1,306) (1,293) Transfers for Policy benefits and terminations...... (361) (851) -- --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (6,437) 900 2,696 --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (6,566) 1,780 2,766 NET ASSETS: Beginning of year................................... 6,566 4,786 2,020 --------------------- -------------------- --------------------- End of year......................................... $ -- $ 6,566 $ 4,786 ===================== ==================== ===================== BHFTI AMERICAN FUNDS(R) BALANCED ALLOCATION DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 21,884 $ 19,259 $ 18,208 Net realized gains (losses)......................... 67,751 55,792 76,946 Change in unrealized gains (losses) on investments.. (138,831) 98,370 (22,963) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (49,196) 173,421 72,191 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 127,551 143,128 85,094 Net transfers (including fixed account)............. (14,157) (1,238) 21,073 Policy charges...................................... (85,731) (81,299) (69,192) Transfers for Policy benefits and terminations...... (15,339) (8,464) (12,455) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 12,324 52,127 24,520 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (36,872) 225,548 96,711 NET ASSETS: Beginning of year................................... 1,216,312 990,764 894,053 -------------------- --------------------- -------------------- End of year......................................... $ 1,179,440 $ 1,216,312 $ 990,764 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI AMERICAN FUNDS(R) GROWTH ALLOCATION DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 33,504 $ 29,710 $ 26,959 Net realized gains (losses)......................... 144,757 127,888 160,188 Change in unrealized gains (losses) on investments.. (302,410) 236,441 (37,021) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (124,149) 394,039 150,126 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 277,431 312,058 271,362 Net transfers (including fixed account)............. (5,838) 23,444 26,046 Policy charges...................................... (153,134) (159,833) (153,833) Transfers for Policy benefits and terminations...... (137,497) (46,322) (70,269) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (19,038) 129,347 73,306 -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. (143,187) 523,386 223,432 NET ASSETS: Beginning of year................................... 2,284,932 1,761,546 1,538,114 -------------------- -------------------- ------------------- End of year......................................... $ 2,141,745 $ 2,284,932 $ 1,761,546 ==================== ==================== =================== BHFTI AMERICAN FUNDS(R) MODERATE ALLOCATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 30,889 $ 27,088 $ 23,999 Net realized gains (losses)......................... 68,645 55,639 67,729 Change in unrealized gains (losses) on investments.. (144,806) 80,012 (16,232) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (45,272) 162,739 75,496 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 259,339 283,128 234,792 Net transfers (including fixed account)............. (68,869) 6,385 22,400 Policy charges...................................... (130,196) (137,260) (128,785) Transfers for Policy benefits and terminations...... (46,457) (28,322) (14,859) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 13,817 123,931 113,548 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (31,455) 286,670 189,044 NET ASSETS: Beginning of year................................... 1,445,306 1,158,636 969,592 -------------------- -------------------- -------------------- End of year......................................... $ 1,413,851 $ 1,445,306 $ 1,158,636 ==================== ==================== ==================== BHFTI AQR GLOBAL RISK BALANCED DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 581 $ 2,366 $ -- Net realized gains (losses)......................... 11,086 4,688 (7,843) Change in unrealized gains (losses) on investments.. (21,378) 6,767 18,548 -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (9,711) 13,821 10,705 -------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 29,791 32,619 40,240 Net transfers (including fixed account)............. (13,114) (4,180) (10,383) Policy charges...................................... (14,754) (14,372) (20,166) Transfers for Policy benefits and terminations...... (8,516) (2,595) (19,162) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (6,593) 11,472 (9,471) -------------------- ------------------- ------------------- Net increase (decrease) in net assets............. (16,304) 25,293 1,234 NET ASSETS: Beginning of year................................... 161,171 135,878 134,644 -------------------- ------------------- ------------------- End of year......................................... $ 144,867 $ 161,171 $ 135,878 ==================== =================== ===================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI BLACKROCK GLOBAL TACTICAL STRATEGIES DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,588 $ 2,651 $ 4,216 Net realized gains (losses)......................... 30,841 4,666 23,013 Change in unrealized gains (losses) on investments.. (70,520) 40,461 (13,208) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (33,091) 47,778 14,021 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 83,111 85,970 84,543 Net transfers (including fixed account)............. (10,010) 3,878 26,959 Policy charges...................................... (28,152) (28,027) (25,547) Transfers for Policy benefits and terminations...... (14,037) (3,363) (9,699) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 30,912 58,458 76,256 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (2,179) 106,236 90,277 NET ASSETS: Beginning of year................................... 423,672 317,436 227,159 --------------------- --------------------- --------------------- End of year......................................... $ 421,493 $ 423,672 $ 317,436 ===================== ===================== ===================== BHFTI BRIGHTHOUSE ASSET ALLOCATION 100 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 306,991 $ 333,898 $ 509,053 Net realized gains (losses)......................... 1,219,272 1,627,226 2,766,221 Change in unrealized gains (losses) on investments.. (3,976,492) 2,972,083 (1,391,486) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (2,450,229) 4,933,207 1,883,788 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,088,452 2,127,500 2,219,202 Net transfers (including fixed account)............. (212,878) (38,240) (470,839) Policy charges...................................... (1,139,508) (1,156,903) (1,181,948) Transfers for Policy benefits and terminations...... (983,737) (2,194,731) (1,188,155) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (247,671) (1,262,374) (621,740) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (2,697,900) 3,670,833 1,262,048 NET ASSETS: Beginning of year................................... 25,375,458 21,704,625 20,442,577 --------------------- --------------------- --------------------- End of year......................................... $ 22,677,558 $ 25,375,458 $ 21,704,625 ===================== ===================== ===================== BHFTI BRIGHTHOUSE BALANCED PLUS DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,389 $ 5,462 $ 7,951 Net realized gains (losses)......................... 34,263 18,235 2,123 Change in unrealized gains (losses) on investments.. (69,687) 35,046 12,397 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (29,035) 58,743 22,471 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 64,922 76,917 69,223 Net transfers (including fixed account)............. (830) 18,013 10,477 Policy charges...................................... (42,490) (39,341) (34,809) Transfers for Policy benefits and terminations...... (24,908) (33,545) (11,096) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,306) 22,044 33,795 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (32,341) 80,787 56,266 NET ASSETS: Beginning of year................................... 397,746 316,959 260,693 --------------------- --------------------- --------------------- End of year......................................... $ 365,405 $ 397,746 $ 316,959 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI BRIGHTHOUSE SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,790 $ 6,610 $ 8,421 Net realized gains (losses)......................... 45,845 35,468 (9,536) Change in unrealized gains (losses) on investments.. (239,971) 41,355 191,373 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (186,336) 83,433 190,258 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 13,680 13,771 27,558 Net transfers (including fixed account)............. 343,067 (68,948) (158,661) Policy charges...................................... (13,611) (16,210) (18,270) Transfers for Policy benefits and terminations...... (15,355) (173) (68,518) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 327,781 (71,560) (217,891) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 141,445 11,873 (27,633) NET ASSETS: Beginning of year................................... 786,268 774,395 802,028 -------------------- -------------------- -------------------- End of year......................................... $ 927,713 $ 786,268 $ 774,395 ==================== ==================== ==================== BHFTI BRIGHTHOUSE/ABERDEEN EMERGING MARKETS EQUITY DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 25,457 $ 9,611 $ 6,049 Net realized gains (losses)......................... 5,756 7,574 (30,698) Change in unrealized gains (losses) on investments.. (176,226) 170,725 89,323 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (145,013) 187,910 64,674 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 87,159 102,644 132,505 Net transfers (including fixed account)............. 423,997 21,155 50,504 Policy charges...................................... (37,856) (36,046) (33,644) Transfers for Policy benefits and terminations...... (17,592) (49,717) (100,287) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 455,708 38,036 49,078 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 310,695 225,946 113,752 NET ASSETS: Beginning of year................................... 878,183 652,237 538,485 -------------------- -------------------- -------------------- End of year......................................... $ 1,188,878 $ 878,183 $ 652,237 ==================== ==================== ==================== BHFTI BRIGHTHOUSE/TEMPLETON INTERNATIONAL BOND DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... (2,152) (1,348) (1,685) Change in unrealized gains (losses) on investments.. 5,338 2,100 4,976 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,186 752 3,291 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 41,073 55,578 49,471 Net transfers (including fixed account)............. (2,258) 3,740 10,118 Policy charges...................................... (21,574) (21,986) (19,999) Transfers for Policy benefits and terminations...... (14,529) (5,055) (7,706) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,712 32,277 31,884 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 5,898 33,029 35,175 NET ASSETS: Beginning of year................................... 251,705 218,676 183,501 -------------------- -------------------- -------------------- End of year......................................... $ 257,603 $ 251,705 $ 218,676 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI BRIGHTHOUSE/WELLINGTON LARGE CAP RESEARCH DIVISION ------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,393,015 $ 2,553,091 $ 7,597,726 Net realized gains (losses)......................... 60,364,967 25,305,541 31,080,785 Change in unrealized gains (losses) on investments.. (90,699,272) 57,041,217 (8,253,818) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (27,941,290) 84,899,849 30,424,693 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 22,836,479 23,708,302 24,784,013 Net transfers (including fixed account)............. (860,112) (10,690,456) (2,994,332) Policy charges...................................... (25,513,033) (25,868,642) (26,012,789) Transfers for Policy benefits and terminations...... (22,647,762) (22,138,025) (21,189,207) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (26,184,428) (34,988,821) (25,412,315) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (54,125,718) 49,911,028 5,012,378 NET ASSETS: Beginning of year................................... 459,536,061 409,625,033 404,612,655 --------------------- -------------------- -------------------- End of year......................................... $ 405,410,343 $ 459,536,061 $ 409,625,033 ===================== ==================== ==================== BHFTI CLARION GLOBAL REAL ESTATE DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,668,370 $ 1,026,146 $ 650,259 Net realized gains (losses)......................... (37,998) 11,186 31,945 Change in unrealized gains (losses) on investments.. (4,019,685) 1,949,598 (362,033) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (2,389,313) 2,986,930 320,171 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,824,839 1,960,709 2,067,349 Net transfers (including fixed account)............. (1,472,469) 293,430 (931,910) Policy charges...................................... (1,287,017) (1,382,360) (1,519,377) Transfers for Policy benefits and terminations...... (1,628,214) (1,474,396) (1,814,112) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,562,861) (602,617) (2,198,050) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (4,952,174) 2,384,313 (1,877,879) NET ASSETS: Beginning of year................................... 30,031,023 27,646,710 29,524,589 -------------------- -------------------- -------------------- End of year......................................... $ 25,078,849 $ 30,031,023 $ 27,646,710 ==================== ==================== ==================== BHFTI CLEARBRIDGE AGGRESSIVE GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 323,660 $ 373,095 $ 233,927 Net realized gains (losses)......................... 3,834,886 1,758,844 970,623 Change in unrealized gains (losses) on investments.. (6,744,510) 5,283,206 (103,509) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (2,585,964) 7,415,145 1,101,041 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,669,117 2,977,490 3,112,659 Net transfers (including fixed account)............. (1,098,421) (1,093,022) (1,658,736) Policy charges...................................... (2,141,566) (2,255,371) (2,334,139) Transfers for Policy benefits and terminations...... (3,262,306) (3,530,000) (2,140,654) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,833,176) (3,900,903) (3,020,870) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (6,419,140) 3,514,242 (1,919,829) NET ASSETS: Beginning of year................................... 44,501,184 40,986,942 42,906,771 -------------------- -------------------- -------------------- End of year......................................... $ 38,082,044 $ 44,501,184 $ 40,986,942 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI HARRIS OAKMARK INTERNATIONAL DIVISION ------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 808,643 $ 751,312 $ 812,952 Net realized gains (losses)......................... 1,991,616 298,648 1,774,522 Change in unrealized gains (losses) on investments.. (14,097,059) 10,649,156 446,527 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (11,296,800) 11,699,116 3,034,001 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,642,563 2,813,108 2,947,689 Net transfers (including fixed account)............. 1,028,435 (487,527) (726,193) Policy charges...................................... (1,931,322) (2,050,005) (1,927,311) Transfers for Policy benefits and terminations...... (2,618,337) (3,161,406) (2,331,900) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (878,661) (2,885,830) (2,037,715) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (12,175,461) 8,813,286 996,286 NET ASSETS: Beginning of year................................... 48,278,392 39,465,106 38,468,820 --------------------- -------------------- -------------------- End of year......................................... $ 36,102,931 $ 48,278,392 $ 39,465,106 ===================== ==================== ==================== BHFTI INVESCO BALANCED-RISK ALLOCATION DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 716 $ 1,933 $ 63 Net realized gains (losses)......................... 3,726 2,680 (528) Change in unrealized gains (losses) on investments.. (8,568) 724 4,887 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (4,126) 5,337 4,422 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 13,267 16,796 15,956 Net transfers (including fixed account)............. (1,713) 2,860 (1,153) Policy charges...................................... (6,431) (6,613) (5,759) Transfers for Policy benefits and terminations...... (9,543) -- (6,082) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,420) 13,043 2,962 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (8,546) 18,380 7,384 NET ASSETS: Beginning of year................................... 64,239 45,859 38,475 -------------------- --------------------- -------------------- End of year......................................... $ 55,693 $ 64,239 $ 45,859 ==================== ===================== ==================== BHFTI INVESCO SMALL CAP GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (9,936) $ (8,930) $ (8,076) Net realized gains (losses)......................... 1,030,585 689,902 1,026,683 Change in unrealized gains (losses) on investments.. (1,648,375) 961,544 (318,719) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (627,726) 1,642,516 699,888 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 368,523 384,742 407,148 Net transfers (including fixed account)............. 29,855 (138,396) (213,557) Policy charges...................................... (314,670) (302,479) (295,102) Transfers for Policy benefits and terminations...... (482,626) (470,556) (427,897) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (398,918) (526,689) (529,408) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,026,644) 1,115,827 170,480 NET ASSETS: Beginning of year................................... 7,838,418 6,722,591 6,552,111 -------------------- -------------------- -------------------- End of year......................................... $ 6,811,774 $ 7,838,418 $ 6,722,591 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI JPMORGAN GLOBAL ACTIVE ALLOCATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,106 $ 5,628 $ 3,855 Net realized gains (losses)......................... 14,148 761 2,581 Change in unrealized gains (losses) on investments.. (35,582) 28,770 (1,187) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (17,328) 35,159 5,249 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 35,221 39,817 41,651 Net transfers (including fixed account)............. (16,476) 2,080 2,362 Policy charges...................................... (26,846) (26,387) (25,382) Transfers for Policy benefits and terminations...... (12,266) (3,100) (6,113) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (20,367) 12,410 12,518 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (37,695) 47,569 17,767 NET ASSETS: Beginning of year................................... 250,960 203,391 185,624 -------------------- -------------------- -------------------- End of year......................................... $ 213,265 $ 250,960 $ 203,391 ==================== ==================== ==================== BHFTI JPMORGAN SMALL CAP VALUE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 6,199 $ 7,780 $ 6,286 Net realized gains (losses)......................... 27,341 40,858 24,634 Change in unrealized gains (losses) on investments.. (83,319) (24,944) 79,671 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (49,779) 23,694 110,591 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 46,398 51,003 42,502 Net transfers (including fixed account)............. (55,674) 9,535 (23,758) Policy charges...................................... (28,010) (31,389) (27,602) Transfers for Policy benefits and terminations...... (2,161) (18,537) (2,886) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (39,447) 10,612 (11,744) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (89,226) 34,306 98,847 NET ASSETS: Beginning of year................................... 443,605 409,299 310,452 -------------------- -------------------- -------------------- End of year......................................... $ 354,379 $ 443,605 $ 409,299 ==================== ==================== ==================== BHFTI LOOMIS SAYLES GLOBAL MARKETS DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,771 $ 6,635 $ 6,758 Net realized gains (losses)......................... 51,666 8,512 12,698 Change in unrealized gains (losses) on investments.. (79,434) 71,276 (1,350) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (19,997) 86,423 18,106 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 72,986 55,503 52,697 Net transfers (including fixed account)............. (91,243) (831) 16,922 Policy charges...................................... (31,286) (36,611) (36,634) Transfers for Policy benefits and terminations...... (29,422) (26,763) (6,534) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (78,965) (8,702) 26,451 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (98,962) 77,721 44,557 NET ASSETS: Beginning of year................................... 449,303 371,582 327,025 -------------------- -------------------- -------------------- End of year......................................... $ 350,341 $ 449,303 $ 371,582 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI METLIFE MULTI-INDEX TARGETED RISK DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,857 $ 2,477 $ 1,944 Net realized gains (losses)......................... 11,831 6,306 (37) Change in unrealized gains (losses) on investments.. (26,654) 15,712 4,590 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (11,966) 24,495 6,497 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 21,109 24,213 27,195 Net transfers (including fixed account)............. (5,605) (7,266) 14,107 Policy charges...................................... (15,736) (15,476) (14,951) Transfers for Policy benefits and terminations...... (11,817) (17,570) (583) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (12,049) (16,099) 25,768 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (24,015) 8,396 32,265 NET ASSETS: Beginning of year................................... 176,748 168,352 136,087 -------------------- -------------------- -------------------- End of year......................................... $ 152,733 $ 176,748 $ 168,352 ==================== ==================== ==================== BHFTI MFS(R) RESEARCH INTERNATIONAL DIVISION ------------------------------------------------------------------ 2018 2017 2016 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 385,315 $ 348,583 $ 363,202 Net realized gains (losses)......................... 430,859 120,626 (113,918) Change in unrealized gains (losses) on investments.. (3,418,696) 4,288,325 (396,420) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (2,602,522) 4,757,534 (147,136) ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 914,864 991,117 1,065,950 Net transfers (including fixed account)............. (1,053,903) (330,753) (137,625) Policy charges...................................... (778,814) (838,473) (829,989) Transfers for Policy benefits and terminations...... (960,627) (1,056,169) (900,863) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,878,480) (1,234,278) (802,527) ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (4,481,002) 3,523,256 (949,663) NET ASSETS: Beginning of year................................... 20,729,356 17,206,100 18,155,763 ------------------- -------------------- -------------------- End of year......................................... $ 16,248,354 $ 20,729,356 $ 17,206,100 =================== ==================== ==================== BHFTI MORGAN STANLEY MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (850,555) $ 122,364 $ (581,093) Net realized gains (losses)......................... 59,401,731 6,098,517 3,185,085 Change in unrealized gains (losses) on investments.. (32,615,883) 66,869,811 (20,525,720) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 25,935,293 73,090,692 (17,921,728) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 15,903,068 16,448,838 17,390,742 Net transfers (including fixed account)............. (1,500,555) (1,158,342) (2,231,512) Policy charges...................................... (14,469,164) (13,161,117) (12,792,889) Transfers for Policy benefits and terminations...... (15,081,357) (13,535,181) (10,991,989) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (15,148,008) (11,405,802) (8,625,648) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 10,787,285 61,684,890 (26,547,376) NET ASSETS: Beginning of year................................... 247,719,412 186,034,522 212,581,898 -------------------- -------------------- -------------------- End of year......................................... $ 258,506,697 $ 247,719,412 $ 186,034,522 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI OPPENHEIMER GLOBAL EQUITY DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 582,437 $ 488,347 $ 427,792 Net realized gains (losses)......................... 7,631,854 2,246,334 3,311,875 Change in unrealized gains (losses) on investments.. (15,951,838) 14,255,607 (3,785,262) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (7,737,547) 16,990,288 (45,595) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,151,957 3,244,364 2,752,403 Net transfers (including fixed account)............. 274,573 678,986 (1,108,515) Policy charges...................................... (2,359,816) (2,364,753) (2,302,561) Transfers for Policy benefits and terminations...... (3,741,907) (3,776,926) (2,511,117) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,675,193) (2,218,329) (3,169,790) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (10,412,740) 14,771,959 (3,215,385) NET ASSETS: Beginning of year................................... 61,029,678 46,257,719 49,473,104 -------------------- -------------------- -------------------- End of year......................................... $ 50,616,938 $ 61,029,678 $ 46,257,719 ==================== ==================== ==================== BHFTI PANAGORA GLOBAL DIVERSIFIED RISK DIVISION ------------------------------------------------------------------ 2018 2017 2016 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 23 81 1 Change in unrealized gains (losses) on investments.. (46) 16 (1) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (23) 97 -- ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 230 313 29 Net transfers (including fixed account)............. -- 59 -- Policy charges...................................... (128) (141) (24) Transfers for Policy benefits and terminations...... (1) (15) -- ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 101 216 5 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 78 313 5 NET ASSETS: Beginning of year................................... 328 15 10 ------------------- -------------------- -------------------- End of year......................................... $ 406 $ 328 $ 15 =================== ==================== ==================== BHFTI PIMCO INFLATION PROTECTED BOND DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 171,877 $ 167,202 $ (17,989) Net realized gains (losses)......................... (178,843) (123,809) (134,822) Change in unrealized gains (losses) on investments.. (228,280) 327,314 652,775 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (235,246) 370,707 499,964 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 744,228 814,655 856,782 Net transfers (including fixed account)............. (147,599) 43,919 (25,570) Policy charges...................................... (571,093) (608,502) (670,606) Transfers for Policy benefits and terminations...... (681,485) (685,248) (448,728) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (655,949) (435,176) (288,122) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (891,195) (64,469) 211,842 NET ASSETS: Beginning of year................................... 10,294,920 10,359,389 10,147,547 -------------------- -------------------- -------------------- End of year......................................... $ 9,403,725 $ 10,294,920 $ 10,359,389 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI PIMCO TOTAL RETURN DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 700,595 $ 797,234 $ 1,176,644 Net realized gains (losses)......................... (156,469) 136,512 (107,899) Change in unrealized gains (losses) on investments.. (573,439) 1,034,223 134,407 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (29,313) 1,967,969 1,203,152 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,176,594 3,438,184 3,607,110 Net transfers (including fixed account)............. 5,993,462 446,327 (511,885) Policy charges...................................... (2,550,725) (2,583,508) (2,866,241) Transfers for Policy benefits and terminations...... (3,046,065) (2,772,964) (2,911,492) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 3,573,266 (1,471,961) (2,682,508) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 3,543,953 496,008 (1,479,356) NET ASSETS: Beginning of year................................... 43,336,900 42,840,892 44,320,248 -------------------- -------------------- --------------------- End of year......................................... $ 46,880,853 $ 43,336,900 $ 42,840,892 ==================== ==================== ===================== BHFTI SCHRODERS GLOBAL MULTI-ASSET DIVISION ------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,307 $ 508 $ 675 Net realized gains (losses)......................... 4,566 1,474 647 Change in unrealized gains (losses) on investments.. (14,319) 6,574 1,558 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (8,446) 8,556 2,880 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 20,931 17,420 20,016 Net transfers (including fixed account)............. 16,374 1,670 3,252 Policy charges...................................... (8,927) (7,406) (7,221) Transfers for Policy benefits and terminations...... (3,467) (343) (4,272) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 24,911 11,341 11,775 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 16,465 19,897 14,655 NET ASSETS: Beginning of year................................... 72,213 52,316 37,661 --------------------- -------------------- -------------------- End of year......................................... $ 88,678 $ 72,213 $ 52,316 ===================== ==================== ==================== BHFTI SCHRODERS GLOBAL MULTI-ASSET II DIVISION ------------------------------------------------------------------ 2018 (b) 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 267 $ 116 $ 47 Net realized gains (losses)......................... 723 44 7 Change in unrealized gains (losses) on investments.. (1,577) 1,539 239 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (587) 1,699 293 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,047 6,204 6,148 Net transfers (including fixed account)............. (14,986) 104 421 Policy charges...................................... (754) (2,164) (1,837) Transfers for Policy benefits and terminations...... (1) -- (196) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (13,694) 4,144 4,536 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (14,281) 5,843 4,829 NET ASSETS: Beginning of year................................... 14,281 8,438 3,609 -------------------- -------------------- -------------------- End of year......................................... $ -- $ 14,281 $ 8,438 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI SSGA GROWTH AND INCOME ETF DIVISION ---------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 209,966 $ 211,600 $ 193,418 Net realized gains (losses)......................... 418,552 56,990 422,233 Change in unrealized gains (losses) on investments.. (1,161,353) 993,368 (166,860) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................. (532,835) 1,261,958 448,791 ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 615,712 707,289 817,890 Net transfers (including fixed account)............. (200,085) (395,331) (55,673) Policy charges...................................... (474,309) (484,758) (475,048) Transfers for Policy benefits and terminations...... (539,120) (344,355) (255,414) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions........................ (597,802) (517,155) 31,755 ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. (1,130,637) 744,803 480,546 NET ASSETS: Beginning of year................................... 8,867,092 8,122,289 7,641,743 ------------------- ------------------- ------------------- End of year......................................... $ 7,736,455 $ 8,867,092 $ 8,122,289 =================== =================== =================== BHFTI SSGA GROWTH ETF DIVISION ---------------------------------------------------------------- 2018 2017 2016 -------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 169,579 $ 175,627 $ 152,958 Net realized gains (losses)......................... 523,388 153,525 388,499 Change in unrealized gains (losses) on investments.. (1,317,908) 1,057,422 (116,079) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................. (624,941) 1,386,574 425,378 -------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 669,676 760,215 957,099 Net transfers (including fixed account)............. (187,264) (687,768) (419,927) Policy charges...................................... (355,802) (319,979) (381,379) Transfers for Policy benefits and terminations...... (788,709) (266,828) (150,373) -------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions........................ (662,099) (514,360) 5,420 -------------------- ------------------- ------------------- Net increase (decrease) in net assets............. (1,287,040) 872,214 430,798 NET ASSETS: Beginning of year................................... 8,014,231 7,142,017 6,711,219 -------------------- ------------------- ------------------- End of year......................................... $ 6,727,191 $ 8,014,231 $ 7,142,017 ==================== =================== =================== BHFTI T. ROWE PRICE LARGE CAP VALUE DIVISION ---------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 55,375 $ 56,019 $ 63,487 Net realized gains (losses)......................... 272,918 218,915 264,852 Change in unrealized gains (losses) on investments.. (630,098) 129,307 1,148 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................. (301,805) 404,241 329,487 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 17,277 3,636 4,540 Net transfers (including fixed account)............. 451,644 45,576 57,340 Policy charges...................................... (39,478) (34,475) (30,407) Transfers for Policy benefits and terminations...... -- (8) (63,517) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions........................ 429,443 14,729 (32,044) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 127,638 418,970 297,443 NET ASSETS: Beginning of year................................... 2,745,970 2,327,000 2,029,557 ------------------- ------------------- -------------------- End of year......................................... $ 2,873,608 $ 2,745,970 $ 2,327,000 =================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTI T. ROWE PRICE MID CAP GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (57,557) $ (53,030) $ (45,975) Net realized gains (losses)......................... 6,243,741 3,596,966 5,204,270 Change in unrealized gains (losses) on investments.. (6,867,777) 4,985,555 (3,017,999) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (681,593) 8,529,491 2,140,296 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,980,276 2,065,072 2,103,996 Net transfers (including fixed account)............. 120,879 456,210 419,067 Policy charges...................................... (1,821,566) (1,760,965) (1,724,543) Transfers for Policy benefits and terminations...... (2,541,552) (2,147,279) (2,214,117) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,261,963) (1,386,962) (1,415,597) -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (2,943,556) 7,142,529 724,699 NET ASSETS: Beginning of year................................... 41,886,462 34,743,933 34,019,234 -------------------- --------------------- -------------------- End of year......................................... $ 38,942,906 $ 41,886,462 $ 34,743,933 ==================== ===================== ==================== BHFTI VICTORY SYCAMORE MID CAP VALUE DIVISION -------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 632,201 $ 924,664 $ 650,034 Net realized gains (losses)......................... 16,000,779 763,180 3,900,369 Change in unrealized gains (losses) on investments.. (25,172,760) 6,544,581 7,673,646 --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (8,539,780) 8,232,425 12,224,049 --------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,854,883 5,231,778 5,540,189 Net transfers (including fixed account)............. (722,192) (641,335) (1,504,903) Policy charges...................................... (4,340,445) (4,566,534) (4,725,378) Transfers for Policy benefits and terminations...... (5,244,279) (5,546,494) (5,462,656) --------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,452,033) (5,522,585) (6,152,748) --------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (13,991,813) 2,709,840 6,071,301 NET ASSETS: Beginning of year................................... 91,702,582 88,992,742 82,921,441 --------------------- -------------------- --------------------- End of year......................................... $ 77,710,769 $ 91,702,582 $ 88,992,742 ===================== ==================== ===================== BHFTII BAILLIE GIFFORD INTERNATIONAL STOCK DIVISION -------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 337,096 $ 343,329 $ 447,534 Net realized gains (losses)......................... 545,059 322,047 (310,525) Change in unrealized gains (losses) on investments.. (9,369,507) 12,519,996 1,728,920 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (8,487,352) 13,185,372 1,865,929 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,051,653 3,220,885 3,389,861 Net transfers (including fixed account)............. 801,427 (148,010) (547,175) Policy charges...................................... (2,621,652) (2,700,122) (2,612,067) Transfers for Policy benefits and terminations...... (2,464,139) (2,532,657) (2,000,028) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,232,711) (2,159,904) (1,769,409) --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (9,720,063) 11,025,468 96,520 NET ASSETS: Beginning of year................................... 49,983,598 38,958,130 38,861,610 --------------------- -------------------- -------------------- End of year......................................... $ 40,263,535 $ 49,983,598 $ 38,958,130 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BLACKROCK BOND INCOME DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,262,665 $ 2,139,278 $ 2,253,120 Net realized gains (losses)......................... (360,052) (33,084) 30,488 Change in unrealized gains (losses) on investments.. (2,511,644) 749,028 (97,803) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (609,031) 2,855,222 2,185,805 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,611,513 5,963,012 6,132,147 Net transfers (including fixed account)............. (2,277,326) 626,685 326,685 Policy charges...................................... (4,938,671) (5,216,503) (5,607,933) Transfers for Policy benefits and terminations...... (3,903,197) (3,563,517) (4,113,027) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,507,681) (2,190,323) (3,262,128) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (6,116,712) 664,899 (1,076,323) NET ASSETS: Beginning of year................................... 77,942,302 77,277,403 78,353,726 -------------------- -------------------- -------------------- End of year......................................... $ 71,825,590 $ 77,942,302 $ 77,277,403 ==================== ==================== ==================== BHFTII BLACKROCK CAPITAL APPRECIATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 271 $ (244) $ (9,977) Net realized gains (losses)......................... 2,187,500 586,471 1,047,770 Change in unrealized gains (losses) on investments.. (1,958,446) 2,528,190 (1,066,351) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 229,325 3,114,417 (28,558) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 706,424 713,936 736,403 Net transfers (including fixed account)............. 988,018 183,165 (3,208) Policy charges...................................... (646,565) (575,499) (570,923) Transfers for Policy benefits and terminations...... (812,900) (896,039) (856,815) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 234,977 (574,437) (694,543) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 464,302 2,539,980 (723,101) NET ASSETS: Beginning of year................................... 12,042,675 9,502,695 10,225,796 -------------------- -------------------- -------------------- End of year......................................... $ 12,506,977 $ 12,042,675 $ 9,502,695 ==================== ==================== ==================== BHFTII BLACKROCK ULTRA-SHORT TERM BOND DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 267,696 $ 60,887 $ (18,384) Net realized gains (losses)......................... 47,097 25,723 3,712 Change in unrealized gains (losses) on investments.. 157,511 119,513 60,725 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 472,304 206,123 46,053 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 498,055 493,430 567,291 Net transfers (including fixed account)............. 1,187,838 5,565,246 (1,366,452) Policy charges...................................... (876,535) (892,674) (907,994) Transfers for Policy benefits and terminations...... (510,967) (483,837) (365,895) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 298,391 4,682,165 (2,073,050) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 770,695 4,888,288 (2,026,997) NET ASSETS: Beginning of year................................... 27,545,528 22,657,240 24,684,237 -------------------- -------------------- -------------------- End of year......................................... $ 28,316,223 $ 27,545,528 $ 22,657,240 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BRIGHTHOUSE ASSET ALLOCATION 20 DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 93,788 $ 119,470 $ 177,898 Net realized gains (losses)......................... 14,860 40,884 122,062 Change in unrealized gains (losses) on investments.. (220,034) 193,850 (54,551) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (111,386) 354,204 245,409 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 425,649 436,850 475,558 Net transfers (including fixed account)............. 356,680 657,738 274,364 Policy charges...................................... (468,973) (497,021) (539,657) Transfers for Policy benefits and terminations...... (561,657) (1,579,139) (823,306) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (248,301) (981,572) (613,041) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (359,687) (627,368) (367,632) NET ASSETS: Beginning of year................................... 4,439,761 5,067,129 5,434,761 --------------------- --------------------- --------------------- End of year......................................... $ 4,080,074 $ 4,439,761 $ 5,067,129 ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 40 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 230,726 $ 227,176 $ 365,152 Net realized gains (losses)......................... 293,728 348,904 649,364 Change in unrealized gains (losses) on investments.. (1,013,336) 555,970 (402,883) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (488,882) 1,132,050 611,633 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 937,521 939,941 946,570 Net transfers (including fixed account)............. 72,828 326,039 238,465 Policy charges...................................... (792,600) (790,214) (796,923) Transfers for Policy benefits and terminations...... (1,069,923) (647,227) (274,767) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (852,174) (171,461) 113,345 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (1,341,056) 960,589 724,978 NET ASSETS: Beginning of year................................... 11,333,586 10,372,997 9,648,019 --------------------- --------------------- --------------------- End of year......................................... $ 9,992,530 $ 11,333,586 $ 10,372,997 ===================== ===================== ===================== BHFTII BRIGHTHOUSE ASSET ALLOCATION 60 DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 973,318 $ 988,015 $ 1,661,041 Net realized gains (losses)......................... 2,508,095 2,602,679 4,802,939 Change in unrealized gains (losses) on investments.. (6,730,312) 3,901,633 (2,834,262) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (3,248,899) 7,492,327 3,629,718 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,862,259 4,213,884 4,497,839 Net transfers (including fixed account)............. 1,046,723 171,111 27,071 Policy charges...................................... (3,387,947) (3,453,056) (3,556,897) Transfers for Policy benefits and terminations...... (3,844,794) (4,940,179) (3,005,552) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,323,759) (4,008,240) (2,037,539) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (5,572,658) 3,484,087 1,592,179 NET ASSETS: Beginning of year................................... 56,043,905 52,559,818 50,967,639 --------------------- --------------------- --------------------- End of year......................................... $ 50,471,247 $ 56,043,905 $ 52,559,818 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BRIGHTHOUSE ASSET ALLOCATION 80 DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,547,077 $ 1,726,190 $ 2,942,462 Net realized gains (losses)......................... 6,024,655 6,877,022 12,021,813 Change in unrealized gains (losses) on investments.. (15,781,080) 9,496,898 (7,365,543) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (8,209,348) 18,100,110 7,598,732 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 7,345,519 7,718,644 8,365,149 Net transfers (including fixed account)............. (1,429,318) (246,902) (1,384,318) Policy charges...................................... (5,194,677) (5,348,857) (5,526,010) Transfers for Policy benefits and terminations...... (6,076,393) (7,915,157) (6,463,563) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,354,869) (5,792,272) (5,008,742) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (13,564,217) 12,307,838 2,589,990 NET ASSETS: Beginning of year................................... 108,508,807 96,200,969 93,610,979 -------------------- --------------------- --------------------- End of year......................................... $ 94,944,590 $ 108,508,807 $ 96,200,969 ==================== ===================== ===================== BHFTII BRIGHTHOUSE/ARTISAN MID CAP VALUE DIVISION -------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 342,863 $ 386,875 $ 573,294 Net realized gains (losses)......................... 4,114,368 643,877 6,376,782 Change in unrealized gains (losses) on investments.. (12,674,858) 6,536,022 4,919,832 --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (8,217,627) 7,566,774 11,869,908 --------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,574,453 3,822,689 3,977,996 Net transfers (including fixed account)............. 364,615 (582,080) (613,228) Policy charges...................................... (3,065,372) (3,236,913) (3,245,776) Transfers for Policy benefits and terminations...... (4,173,374) (4,024,252) (3,402,376) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,299,678) (4,020,556) (3,283,384) --------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (11,517,305) 3,546,218 8,586,524 NET ASSETS: Beginning of year................................... 65,688,616 62,142,398 53,555,874 --------------------- --------------------- -------------------- End of year......................................... $ 54,171,311 $ 65,688,616 $ 62,142,398 ===================== ===================== ==================== BHFTII BRIGHTHOUSE/WELLINGTON BALANCED DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,918,342 $ 4,339,481 $ 6,577,117 Net realized gains (losses)......................... 26,690,578 10,464,072 15,625,107 Change in unrealized gains (losses) on investments.. (43,500,876) 27,671,155 (3,743,348) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (12,891,956) 42,474,708 18,458,876 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 19,534,182 20,315,289 21,296,974 Net transfers (including fixed account)............. (919,937) 324,049 (1,837,317) Policy charges...................................... (21,224,054) (21,609,300) (22,205,884) Transfers for Policy benefits and terminations...... (15,518,149) (16,611,763) (16,090,657) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (18,127,958) (17,581,725) (18,836,884) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (31,019,914) 24,892,983 (378,008) NET ASSETS: Beginning of year................................... 324,356,064 299,463,081 299,841,089 -------------------- --------------------- --------------------- End of year......................................... $ 293,336,150 $ 324,356,064 $ 299,463,081 ==================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII BRIGHTHOUSE/WELLINGTON CORE EQUITY OPPORTUNITIES DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,350,070 $ 1,137,876 $ 1,122,364 Net realized gains (losses)......................... 4,922,554 3,203,582 3,128,463 Change in unrealized gains (losses) on investments.. (6,175,203) 9,056,499 855,321 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 97,421 13,397,957 5,106,148 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,106,915 4,437,684 4,745,132 Net transfers (including fixed account)............. (1,498,129) (902,918) (230,740) Policy charges...................................... (3,670,556) (3,769,635) (3,977,030) Transfers for Policy benefits and terminations...... (4,632,250) (5,948,302) (4,646,198) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,694,020) (6,183,171) (4,108,836) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (5,596,599) 7,214,786 997,312 NET ASSETS: Beginning of year................................... 80,734,814 73,520,028 72,522,716 -------------------- -------------------- -------------------- End of year......................................... $ 75,138,215 $ 80,734,814 $ 73,520,028 ==================== ==================== ==================== BHFTII FRONTIER MID CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (1,754,856) $ (1,632,964) $ (1,459,027) Net realized gains (losses)......................... 33,109,546 11,209,482 28,319,213 Change in unrealized gains (losses) on investments.. (46,139,301) 43,545,366 (16,692,072) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (14,784,611) 53,121,884 10,168,114 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 11,707,321 12,186,623 12,817,058 Net transfers (including fixed account)............. (812,008) (7,255,002) (1,665,871) Policy charges...................................... (12,952,988) (12,987,997) (13,012,542) Transfers for Policy benefits and terminations...... (12,326,397) (12,680,835) (10,971,677) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (14,384,072) (20,737,211) (12,833,032) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (29,168,683) 32,384,673 (2,664,918) NET ASSETS: Beginning of year................................... 257,694,581 225,309,908 227,974,826 -------------------- -------------------- -------------------- End of year......................................... $ 228,525,898 $ 257,694,581 $ 225,309,908 ==================== ==================== ==================== BHFTII JENNISON GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 110,776 $ 66,950 $ 52,283 Net realized gains (losses)......................... 6,419,554 2,258,228 3,125,595 Change in unrealized gains (losses) on investments.. (6,671,580) 6,383,010 (3,197,364) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (141,250) 8,708,188 (19,486) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,277,438 1,299,752 1,333,946 Net transfers (including fixed account)............. 4,465,218 5,991,640 2,483 Policy charges...................................... (1,461,886) (1,281,802) (1,218,365) Transfers for Policy benefits and terminations...... (1,767,865) (1,623,326) (1,425,516) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,512,905 4,386,264 (1,307,452) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 2,371,655 13,094,452 (1,326,938) NET ASSETS: Beginning of year................................... 36,062,692 22,968,240 24,295,178 -------------------- -------------------- -------------------- End of year......................................... $ 38,434,347 $ 36,062,692 $ 22,968,240 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII LOOMIS SAYLES SMALL CAP CORE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (21,771) $ 49,569 $ 53,376 Net realized gains (losses)......................... 3,145,663 2,156,674 2,236,001 Change in unrealized gains (losses) on investments.. (5,945,164) 1,501,241 1,915,532 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (2,821,272) 3,707,484 4,204,909 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,177,226 1,274,560 1,334,562 Net transfers (including fixed account)............. 82,493 (516,348) (285,957) Policy charges...................................... (1,166,364) (1,191,127) (1,187,314) Transfers for Policy benefits and terminations...... (1,449,611) (1,805,701) (1,306,062) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,356,256) (2,238,616) (1,444,771) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (4,177,528) 1,468,868 2,760,138 NET ASSETS: Beginning of year................................... 27,323,892 25,855,024 23,094,886 -------------------- -------------------- -------------------- End of year......................................... $ 23,146,364 $ 27,323,892 $ 25,855,024 ==================== ==================== ==================== BHFTII LOOMIS SAYLES SMALL CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (12,018) $ (9,721) $ (9,163) Net realized gains (losses)......................... 2,202,553 762,930 1,222,132 Change in unrealized gains (losses) on investments.. (2,123,091) 2,111,346 (582,015) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 67,444 2,864,555 630,954 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 675,806 688,741 747,090 Net transfers (including fixed account)............. 751,196 (344,283) (235,047) Policy charges...................................... (627,101) (570,448) (586,052) Transfers for Policy benefits and terminations...... (929,909) (670,562) (620,076) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (130,008) (896,552) (694,085) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (62,564) 1,968,003 (63,131) NET ASSETS: Beginning of year................................... 13,090,723 11,122,720 11,185,851 -------------------- -------------------- -------------------- End of year......................................... $ 13,028,159 $ 13,090,723 $ 11,122,720 ==================== ==================== ==================== BHFTII METLIFE AGGREGATE BOND INDEX DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,770,771 $ 3,810,094 $ 3,516,381 Net realized gains (losses)......................... (845,236) (60,039) 157,844 Change in unrealized gains (losses) on investments.. (3,257,308) 463,003 (713,953) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (331,773) 4,213,058 2,960,272 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,446,645 10,119,467 10,321,297 Net transfers (including fixed account)............. (7,593,708) 8,297,879 1,939,507 Policy charges...................................... (7,792,999) (8,103,229) (8,491,979) Transfers for Policy benefits and terminations...... (7,512,341) (6,849,400) (6,293,235) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (13,452,403) 3,464,717 (2,524,410) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (13,784,176) 7,677,775 435,862 NET ASSETS: Beginning of year................................... 135,065,114 127,387,339 126,951,477 -------------------- -------------------- -------------------- End of year......................................... $ 121,280,938 $ 135,065,114 $ 127,387,339 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII METLIFE MID CAP STOCK INDEX DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,281,417 $ 1,319,708 $ 1,044,591 Net realized gains (losses)......................... 10,973,057 8,754,007 8,154,617 Change in unrealized gains (losses) on investments.. (23,434,639) 4,956,766 7,196,356 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (11,180,165) 15,030,481 16,395,564 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,919,805 5,357,530 5,416,314 Net transfers (including fixed account)............. (2,079,632) 4,274,293 (936,758) Policy charges...................................... (4,728,080) (4,778,563) (4,718,498) Transfers for Policy benefits and terminations...... (6,151,681) (6,221,097) (4,649,606) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (8,039,588) (1,367,837) (4,888,548) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (19,219,753) 13,662,644 11,507,016 NET ASSETS: Beginning of year................................... 108,841,789 95,179,145 83,672,129 -------------------- -------------------- -------------------- End of year......................................... $ 89,622,036 $ 108,841,789 $ 95,179,145 ==================== ==================== ==================== BHFTII METLIFE MSCI EAFE(R) INDEX DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,652,547 $ 2,309,101 $ 1,943,289 Net realized gains (losses)......................... 1,021,937 1,359,240 101,562 Change in unrealized gains (losses) on investments.. (16,649,850) 15,314,940 (990,605) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (12,975,366) 18,983,281 1,054,246 ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,659,461 5,958,371 6,241,891 Net transfers (including fixed account)............. 6,739,174 450,416 813,637 Policy charges...................................... (4,269,734) (4,348,604) (4,254,888) Transfers for Policy benefits and terminations...... (5,835,065) (5,191,027) (3,939,562) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,293,836 (3,130,844) (1,138,922) ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. (10,681,530) 15,852,437 (84,676) NET ASSETS: Beginning of year................................... 92,302,760 76,450,323 76,534,999 ------------------- ------------------- ------------------- End of year......................................... $ 81,621,230 $ 92,302,760 $ 76,450,323 =================== =================== =================== BHFTII METLIFE RUSSELL 2000(R) INDEX DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 888,236 $ 919,455 $ 913,083 Net realized gains (losses)......................... 8,699,344 6,041,469 5,704,425 Change in unrealized gains (losses) on investments.. (17,938,965) 4,109,388 7,347,406 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (8,351,385) 11,070,312 13,964,914 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,670,286 4,793,790 4,810,814 Net transfers (including fixed account)............. 755,288 (1,452,551) (461,739) Policy charges...................................... (3,662,583) (3,676,061) (3,605,728) Transfers for Policy benefits and terminations...... (5,730,826) (5,164,111) (4,191,102) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,967,835) (5,498,933) (3,447,755) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (12,319,220) 5,571,379 10,517,159 NET ASSETS: Beginning of year................................... 84,250,343 78,678,964 68,161,805 -------------------- -------------------- -------------------- End of year......................................... $ 71,931,123 $ 84,250,343 $ 78,678,964 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII METLIFE STOCK INDEX DIVISION ------------------------------------------------------------------ 2018 2017 2016 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 17,726,505 $ 16,768,156 $ 17,167,447 Net realized gains (losses)......................... 93,929,336 64,595,519 57,978,009 Change in unrealized gains (losses) on investments.. (159,803,991) 126,477,450 31,292,870 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (48,148,150) 207,841,125 106,438,326 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 59,473,244 64,139,582 67,338,784 Net transfers (including fixed account)............. (6,993,616) (45,284,438) (2,630,167) Policy charges...................................... (46,860,566) (47,182,585) (47,351,375) Transfers for Policy benefits and terminations...... (75,710,209) (68,817,043) (60,879,042) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (70,091,147) (97,144,484) (43,521,800) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. (118,239,297) 110,696,641 62,916,526 NET ASSETS: Beginning of year................................... 1,133,720,310 1,023,023,669 960,107,143 ------------------- ------------------- -------------------- End of year......................................... $ 1,015,481,013 $ 1,133,720,310 $ 1,023,023,669 =================== =================== ==================== BHFTII MFS(R) TOTAL RETURN DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 672,445 $ 256,018 $ 277,775 Net realized gains (losses)......................... 2,032,072 693,293 579,525 Change in unrealized gains (losses) on investments.. (4,570,024) 1,181,033 3,086 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (1,865,507) 2,130,344 860,386 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 682,520 684,608 866,669 Net transfers (including fixed account)............. 297,395 20,897,739 183,218 Policy charges...................................... (846,307) (679,171) (622,365) Transfers for Policy benefits and terminations...... (795,962) (574,164) (685,850) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (662,354) 20,329,012 (258,328) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (2,527,861) 22,459,356 602,058 NET ASSETS: Beginning of year................................... 32,868,277 10,408,921 9,806,863 -------------------- -------------------- -------------------- End of year......................................... $ 30,340,416 $ 32,868,277 $ 10,408,921 ==================== ==================== ==================== BHFTII MFS(R) VALUE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,726,510 $ 1,807,020 $ 1,832,604 Net realized gains (losses)......................... 8,351,150 6,376,051 8,023,482 Change in unrealized gains (losses) on investments.. (21,548,270) 7,634,853 1,456,878 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (11,470,610) 15,817,924 11,312,964 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,917,233 5,176,715 5,385,806 Net transfers (including fixed account)............. 18,679,409 7,193,791 (616,694) Policy charges...................................... (5,233,649) (4,697,059) (4,746,152) Transfers for Policy benefits and terminations...... (7,169,022) (5,665,116) (5,299,972) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 12,193,971 2,008,331 (5,277,012) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 723,361 17,826,255 6,035,952 NET ASSETS: Beginning of year................................... 106,238,372 88,412,117 82,376,165 -------------------- -------------------- -------------------- End of year......................................... $ 106,961,733 $ 106,238,372 $ 88,412,117 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII MFS(R) VALUE II DIVISION ----------------------------------------------------------------- 2018 (b) 2017 2016 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 673,139 $ 526,386 $ 296,620 Net realized gains (losses)......................... (2,006,197) (221,837) 1,069,485 Change in unrealized gains (losses) on investments.. 673,673 1,234,077 1,883,740 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (659,385) 1,538,626 3,249,845 ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 478,113 1,479,679 1,545,784 Net transfers (including fixed account)............. (20,725,212) 421,641 (30,878) Policy charges...................................... (333,719) (1,081,681) (1,098,505) Transfers for Policy benefits and terminations...... (498,088) (1,629,097) (1,075,384) ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (21,078,906) (809,458) (658,983) ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. (21,738,291) 729,168 2,590,862 NET ASSETS: Beginning of year................................... 21,738,291 21,009,123 18,418,261 ------------------- ------------------- ------------------- End of year......................................... $ -- $ 21,738,291 $ 21,009,123 =================== =================== =================== BHFTII NEUBERGER BERMAN GENESIS DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 324,493 $ 370,076 $ 399,379 Net realized gains (losses)......................... 17,387,615 12,057,105 1,826,763 Change in unrealized gains (losses) on investments.. (25,138,689) 4,394,645 15,758,188 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (7,426,581) 16,821,826 17,984,330 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,114,884 6,489,836 6,799,075 Net transfers (including fixed account)............. (511,261) (977,458) (1,167,465) Policy charges...................................... (5,837,143) (5,884,389) (5,931,913) Transfers for Policy benefits and terminations...... (7,102,740) (7,393,489) (6,477,508) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (7,336,260) (7,765,500) (6,777,811) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (14,762,841) 9,056,326 11,206,519 NET ASSETS: Beginning of year................................... 121,560,508 112,504,182 101,297,663 -------------------- -------------------- -------------------- End of year......................................... $ 106,797,667 $ 121,560,508 $ 112,504,182 ==================== ==================== ==================== BHFTII T. ROWE PRICE LARGE CAP GROWTH DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 382,394 $ 221,909 $ (8,318) Net realized gains (losses)......................... 22,330,991 7,974,008 11,522,738 Change in unrealized gains (losses) on investments.. (23,124,361) 19,425,313 (10,229,673) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (410,976) 27,621,230 1,284,747 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,594,744 4,795,916 4,913,132 Net transfers (including fixed account)............. (478,448) 477,359 143,272 Policy charges...................................... (4,907,176) (4,722,995) (4,630,873) Transfers for Policy benefits and terminations...... (6,450,964) (6,543,490) (5,259,756) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (7,241,844) (5,993,210) (4,834,225) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (7,652,820) 21,628,020 (3,549,478) NET ASSETS: Beginning of year................................... 105,928,694 84,300,674 87,850,152 -------------------- -------------------- -------------------- End of year......................................... $ 98,275,874 $ 105,928,694 $ 84,300,674 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII T. ROWE PRICE SMALL CAP GROWTH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ (303,446) $ (38,755) $ (95,610) Net realized gains (losses)......................... 14,860,741 10,072,201 15,506,158 Change in unrealized gains (losses) on investments.. (22,939,008) 14,656,850 (3,850,598) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (8,381,713) 24,690,296 11,559,950 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 6,649,841 6,652,241 6,771,118 Net transfers (including fixed account)............. 1,345,645 1,786,581 (896,281) Policy charges...................................... (5,217,405) (5,234,546) (5,218,226) Transfers for Policy benefits and terminations...... (8,623,095) (8,669,274) (7,068,348) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (5,845,014) (5,464,998) (6,411,737) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (14,226,727) 19,225,298 5,148,213 NET ASSETS: Beginning of year................................... 131,687,031 112,461,733 107,313,520 -------------------- -------------------- --------------------- End of year......................................... $ 117,460,304 $ 131,687,031 $ 112,461,733 ==================== ==================== ===================== BHFTII VAN ECK GLOBAL NATURAL RESOURCES DIVISION ------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 567 $ 290 $ 1,967 Net realized gains (losses)......................... (2,432) (3,647) (7,201) Change in unrealized gains (losses) on investments.. (96,127) 5,530 88,581 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (97,992) 2,173 83,347 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 55,840 58,187 56,552 Net transfers (including fixed account)............. 26,538 28,003 (24,534) Policy charges...................................... (21,551) (21,430) (19,533) Transfers for Policy benefits and terminations...... (7,755) (15,365) (10,218) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 53,072 49,395 2,267 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (44,920) 51,568 85,614 NET ASSETS: Beginning of year................................... 310,832 259,264 173,650 --------------------- -------------------- -------------------- End of year......................................... $ 265,912 $ 310,832 $ 259,264 ===================== ==================== ==================== BHFTII WESTERN ASSET MANAGEMENT STRATEGIC BOND OPPORTUNITIES DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,696,300 $ 2,001,647 $ 761,904 Net realized gains (losses)......................... 89,897 364,897 119,058 Change in unrealized gains (losses) on investments.. (4,895,547) 1,796,363 2,417,251 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (2,109,350) 4,162,907 3,298,213 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,409,248 3,662,710 3,165,030 Net transfers (including fixed account)............. (1,226,322) (114,949) 26,947,040 Policy charges...................................... (2,643,832) (2,872,301) (2,541,922) Transfers for Policy benefits and terminations...... (3,206,148) (3,348,106) (2,942,766) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (3,667,054) (2,672,646) 24,627,382 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (5,776,404) 1,490,261 27,925,595 NET ASSETS: Beginning of year................................... 54,412,037 52,921,776 24,996,181 -------------------- -------------------- --------------------- End of year......................................... $ 48,635,633 $ 54,412,037 $ 52,921,776 ==================== ==================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
BHFTII WESTERN ASSET MANAGEMENT U.S. GOVERNMENT DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 343,830 $ 402,248 $ 400,422 Net realized gains (losses)......................... (86,126) (35,219) (10,757) Change in unrealized gains (losses) on investments.. (115,445) (80,512) (199,711) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 142,259 286,517 189,954 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,591,853 1,666,603 1,678,562 Net transfers (including fixed account)............. 857,254 455,559 141,399 Policy charges...................................... (1,234,027) (1,243,499) (1,306,280) Transfers for Policy benefits and terminations...... (1,159,111) (980,456) (908,115) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 55,969 (101,793) (394,434) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 198,228 184,724 (204,480) NET ASSETS: Beginning of year................................... 15,840,871 15,656,147 15,860,627 --------------------- --------------------- --------------------- End of year......................................... $ 16,039,099 $ 15,840,871 $ 15,656,147 ===================== ===================== ===================== DREYFUS VIF INTERNATIONAL VALUE DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,466 $ 2,916 $ 3,283 Net realized gains (losses)......................... (123) (300) (5,322) Change in unrealized gains (losses) on investments.. (44,641) 51,516 (2,271) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (41,298) 54,132 (4,310) --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. 1 -- (12,134) Policy charges...................................... (2,353) (2,197) (2,110) Transfers for Policy benefits and terminations...... -- -- -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,352) (2,197) (14,244) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (43,650) 51,935 (18,554) NET ASSETS: Beginning of year................................... 245,233 193,298 211,852 --------------------- --------------------- --------------------- End of year......................................... $ 201,583 $ 245,233 $ 193,298 ===================== ===================== ===================== FIDELITY(R) VIP ASSET MANAGER: GROWTH DIVISION -------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 28,546 $ 24,598 $ 23,502 Net realized gains (losses)......................... 107,008 293,961 60,870 Change in unrealized gains (losses) on investments.. (293,123) 9,749 (48,668) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (157,569) 328,308 35,704 --------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 31,907 53,311 69,385 Net transfers (including fixed account)............. 3,736 162,659 6,528 Policy charges...................................... (66,673) (65,514) (69,707) Transfers for Policy benefits and terminations...... (83,043) (111,829) (113,789) --------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (114,073) 38,627 (107,583) --------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (271,642) 366,935 (71,879) NET ASSETS: Beginning of year................................... 2,166,028 1,799,093 1,870,972 --------------------- --------------------- -------------------- End of year......................................... $ 1,894,386 $ 2,166,028 $ 1,799,093 ===================== ===================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP CONTRAFUND DIVISION ----------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- ---------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 18,473 $ 25,600 $ 18,813 Net realized gains (losses)......................... 316,188 216,238 265,269 Change in unrealized gains (losses) on investments.. (515,972) 321,303 (89,763) --------------------- --------------------- ---------------------- Net increase (decrease) in net assets resulting from operations................................ (181,311) 563,141 194,319 --------------------- --------------------- ---------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 64,336 66,230 82,242 Net transfers (including fixed account)............. 36,511 (24,949) (6,803) Policy charges...................................... (92,690) (93,243) (91,600) Transfers for Policy benefits and terminations...... (157,452) (152,087) (278,347) --------------------- --------------------- ---------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (149,295) (204,049) (294,508) --------------------- --------------------- ---------------------- Net increase (decrease) in net assets............ (330,606) 359,092 (100,189) NET ASSETS: Beginning of year................................... 3,034,301 2,675,209 2,775,398 --------------------- --------------------- ---------------------- End of year......................................... $ 2,703,695 $ 3,034,301 $ 2,675,209 ===================== ===================== ====================== FIDELITY(R) VIP EQUITY-INCOME DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 36 $ 40 $ 351 Net realized gains (losses)......................... 76 853 858 Change in unrealized gains (losses) on investments.. (250) (214) 1,277 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (138) 679 2,486 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- 143 1,787 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (14) (39) (227) Transfers for Policy benefits and terminations...... -- (16,006) (1) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (14) (15,902) 1,559 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (152) (15,223) 4,045 NET ASSETS: Beginning of year................................... 1,660 16,883 12,838 --------------------- --------------------- --------------------- End of year......................................... $ 1,508 $ 1,660 $ 16,883 ===================== ===================== ===================== FIDELITY(R) VIP FREEDOM 2010 DIVISION ----------------------------------------------------------------------- 2018 2017 2016 ---------------------- --------------------- ---------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,455 $ 2,182 $ 439 Net realized gains (losses)......................... 3,566 1,901 427 Change in unrealized gains (losses) on investments.. (11,906) 324 369 ---------------------- --------------------- ---------------------- Net increase (decrease) in net assets resulting from operations................................ (5,885) 4,407 1,235 ---------------------- --------------------- ---------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 59,813 63,343 54,823 Net transfers (including fixed account)............. -- 103,209 -- Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (54,827) (54,488) (45,887) ---------------------- --------------------- ---------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 4,986 112,064 8,936 ---------------------- --------------------- ---------------------- Net increase (decrease) in net assets............ (899) 116,471 10,171 NET ASSETS: Beginning of year................................... 145,861 29,390 19,219 ---------------------- --------------------- ---------------------- End of year......................................... $ 144,962 $ 145,861 $ 29,390 ====================== ===================== ======================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP FREEDOM 2020 DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- ---------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 8,406 $ 8,288 $ 8,579 Net realized gains (losses)......................... 23,974 33,650 19,311 Change in unrealized gains (losses) on investments.. (64,092) 50,769 4,403 --------------------- --------------------- ---------------------- Net increase (decrease) in net assets resulting from operations................................ (31,712) 92,707 32,293 --------------------- --------------------- ---------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 186,562 178,672 159,769 Net transfers (including fixed account)............. (220) (78,756) (46) Policy charges...................................... (6,873) (6,488) (6,174) Transfers for Policy benefits and terminations...... (196,785) (184,941) (146,943) --------------------- --------------------- ---------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (17,316) (91,513) 6,606 --------------------- --------------------- ---------------------- Net increase (decrease) in net assets............ (49,028) 1,194 38,899 NET ASSETS: Beginning of year................................... 568,714 567,520 528,621 --------------------- --------------------- ---------------------- End of year......................................... $ 519,686 $ 568,714 $ 567,520 ===================== ===================== ====================== FIDELITY(R) VIP FREEDOM 2025 DIVISION ---------------------------------------------------------------------- 2018 2017 2016 ---------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,186 $ 7,280 $ 6,677 Net realized gains (losses)......................... 11,075 13,722 13,307 Change in unrealized gains (losses) on investments.. (51,118) 58,295 6,315 ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (32,857) 79,297 26,299 ---------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. -- 1 -- Policy charges...................................... (11,854) (11,328) (10,760) Transfers for Policy benefits and terminations...... -- -- -- ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (11,854) (11,327) (10,760) ---------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (44,711) 67,970 15,539 NET ASSETS: Beginning of year................................... 516,236 448,266 432,727 ---------------------- --------------------- --------------------- End of year......................................... $ 471,525 $ 516,236 $ 448,266 ====================== ===================== ===================== FIDELITY(R) VIP FREEDOM 2030 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,464 $ 3,686 $ 2,599 Net realized gains (losses)......................... 19,600 15,700 3,153 Change in unrealized gains (losses) on investments.. (40,198) 21,517 4,716 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (17,134) 40,903 10,468 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 476,107 399,414 337,954 Net transfers (including fixed account)............. 2,409 (17,095) (74) Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (493,082) (325,781) (286,393) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (14,566) 56,538 51,487 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (31,700) 97,441 61,955 NET ASSETS: Beginning of year................................... 279,269 181,828 119,873 --------------------- --------------------- --------------------- End of year......................................... $ 247,569 $ 279,269 $ 181,828 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP FREEDOM 2040 DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 3,024 $ 2,654 $ 2,084 Net realized gains (losses)......................... 13,470 12,869 2,805 Change in unrealized gains (losses) on investments.. (41,836) 24,961 5,080 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (25,342) 40,484 9,969 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 379,309 308,883 263,618 Net transfers (including fixed account)............. (183) -- (142) Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (341,320) (271,312) (203,651) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 37,806 37,571 59,825 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 12,464 78,055 69,794 NET ASSETS: Beginning of year................................... 237,064 159,009 89,215 -------------------- -------------------- -------------------- End of year......................................... $ 249,528 $ 237,064 $ 159,009 ==================== ==================== ==================== FIDELITY(R) VIP FREEDOM 2050 DIVISION --------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,456 $ 2,270 $ 1,500 Net realized gains (losses)......................... 10,475 8,417 1,669 Change in unrealized gains (losses) on investments.. (34,149) 19,567 2,841 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (21,218) 30,254 6,010 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 226,938 199,787 171,698 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... -- -- -- Transfers for Policy benefits and terminations...... (190,628) (146,021) (122,043) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 36,310 53,766 49,655 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 15,092 84,020 55,665 NET ASSETS: Beginning of year................................... 191,069 107,049 51,384 --------------------- --------------------- --------------------- End of year......................................... $ 206,161 $ 191,069 $ 107,049 ===================== ===================== ===================== FIDELITY(R) VIP GOVERNMENT MONEY MARKET DIVISION --------------------------------------------------------------------- 2018 2017 2016 (C) --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 56,758 $ 22,875 $ 4,167 Net realized gains (losses)......................... -- -- -- Change in unrealized gains (losses) on investments.. -- -- -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 56,758 22,875 4,167 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 157,732 133,488 256,858 Net transfers (including fixed account)............. (1,425,593) 623,595 3,598,871 Policy charges...................................... (76,478) (65,496) (34,257) Transfers for Policy benefits and terminations...... (78,235) (183,382) -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,422,574) 508,205 3,821,472 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............. (1,365,816) 531,080 3,825,639 NET ASSETS: Beginning of year................................... 4,356,719 3,825,639 -- --------------------- --------------------- --------------------- End of year......................................... $ 2,990,903 $ 4,356,719 $ 3,825,639 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FIDELITY(R) VIP HIGH INCOME DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 28,272 $ 24,337 $ 18,971 Net realized gains (losses)......................... (649) (18) (443) Change in unrealized gains (losses) on investments.. (43,948) 2,185 19,200 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (16,325) 26,504 37,728 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 69,180 88,023 35,555 Net transfers (including fixed account)............. (32,673) -- 96,126 Policy charges...................................... (7,851) (7,437) (6,565) Transfers for Policy benefits and terminations...... -- (1) -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 28,656 80,585 125,116 --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ 12,331 107,089 162,844 NET ASSETS: Beginning of year................................... 475,673 368,584 205,740 --------------------- --------------------- --------------------- End of year......................................... $ 488,004 $ 475,673 $ 368,584 ===================== ===================== ===================== FIDELITY(R) VIP INVESTMENT GRADE BOND DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 28,459 $ 28,197 $ 28,927 Net realized gains (losses)......................... 5,802 3,320 (1,529) Change in unrealized gains (losses) on investments.. (41,933) 18,959 27,988 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (7,672) 50,476 55,386 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 929 1,122 293 Net transfers (including fixed account)............. 151,380 97,158 (24,137) Policy charges...................................... (14,315) (14,491) (14,328) Transfers for Policy benefits and terminations...... (155,671) (173,140) -- --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (17,677) (89,351) (38,172) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (25,349) (38,875) 17,214 NET ASSETS: Beginning of year................................... 1,202,686 1,241,561 1,224,347 --------------------- --------------------- --------------------- End of year......................................... $ 1,177,337 $ 1,202,686 $ 1,241,561 ===================== ===================== ===================== FIDELITY(R) VIP MID CAP DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,054 $ 1,285 $ 766 Net realized gains (losses)......................... 29,007 16,281 13,813 Change in unrealized gains (losses) on investments.. (65,288) 31,948 9,442 --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (35,227) 49,514 24,021 --------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,110 1,110 1,018 Net transfers (including fixed account)............. (26,019) (9,016) 261 Policy charges...................................... (4,806) (5,116) (4,768) Transfers for Policy benefits and terminations...... (127) (15,522) (43,917) --------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (29,842) (28,544) (47,406) --------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (65,069) 20,970 (23,385) NET ASSETS: Beginning of year................................... 277,353 256,383 279,768 --------------------- --------------------- --------------------- End of year......................................... $ 212,284 $ 277,353 $ 256,383 ===================== ===================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FTVIPT FRANKLIN INCOME VIP DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,119 $ 2,194 $ 2,059 Net realized gains (losses)......................... 5,563 186 (110) Change in unrealized gains (losses) on investments.. (10,139) 6,858 3,968 ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (2,457) 9,238 5,917 ------------------- ------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 4,334 7,835 4,179 Net transfers (including fixed account)............. 24,490 (9,352) 10,302 Policy charges...................................... (2,843) (3,310) (3,200) Transfers for Policy benefits and terminations...... (12,108) (4,397) -- ------------------- ------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 13,873 (9,224) 11,281 ------------------- ------------------- ------------------- Net increase (decrease) in net assets............. 11,416 14 17,198 NET ASSETS: Beginning of year................................... 56,045 56,031 38,833 ------------------- ------------------- ------------------- End of year......................................... $ 67,461 $ 56,045 $ 56,031 =================== =================== =================== FTVIPT FRANKLIN MUTUAL GLOBAL DISCOVERY VIP DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 16,822 $ 9,201 $ 8,262 Net realized gains (losses)......................... 8,137 30,787 36,978 Change in unrealized gains (losses) on investments.. (108,582) 6,135 13,065 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (83,623) 46,123 58,305 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 74,204 96,318 55,906 Net transfers (including fixed account)............. 68,002 (33,115) (15,004) Policy charges...................................... (7,952) (10,889) (11,796) Transfers for Policy benefits and terminations...... (13,744) (53,287) (7,814) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 120,510 (973) 21,292 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 36,887 45,150 79,597 NET ASSETS: Beginning of year................................... 604,329 559,179 479,582 -------------------- -------------------- -------------------- End of year......................................... $ 641,216 $ 604,329 $ 559,179 ==================== ==================== ==================== FTVIPT FRANKLIN MUTUAL SHARES VIP DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,853 $ 2,384 $ 1,664 Net realized gains (losses)......................... 4,090 4,322 6,412 Change in unrealized gains (losses) on investments.. (17,095) 1,445 4,437 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (10,152) 8,151 12,513 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 14,591 18,402 14,420 Net transfers (including fixed account)............. (183) 1,080 9,226 Policy charges...................................... (9,419) (9,419) (7,976) Transfers for Policy benefits and terminations...... (2,210) (3,131) (3,186) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,779 6,932 12,484 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (7,373) 15,083 24,997 NET ASSETS: Beginning of year................................... 111,384 96,301 71,304 -------------------- -------------------- -------------------- End of year......................................... $ 104,011 $ 111,384 $ 96,301 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
FTVIPT TEMPLETON FOREIGN VIP DIVISION ----------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- ------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 219,516 $ 225,978 $ 114,022 Net realized gains (losses)......................... 137,505 5,599 19,515 Change in unrealized gains (losses) on investments.. (1,579,348) 996,224 260,337 -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from operations................................ (1,222,327) 1,227,801 393,874 -------------------- -------------------- ------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 308,292 375,066 450,424 Net transfers (including fixed account)............. (2,214,759) 2,927,494 (43,239) Policy charges...................................... (199,782) (222,574) (193,490) Transfers for Policy benefits and terminations...... (201,932) (58,419) (189,973) -------------------- -------------------- ------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,308,181) 3,021,567 23,722 -------------------- -------------------- ------------------- Net increase (decrease) in net assets............. (3,530,508) 4,249,368 417,596 NET ASSETS: Beginning of year................................... 10,011,812 5,762,444 5,344,848 -------------------- -------------------- ------------------- End of year......................................... $ 6,481,304 $ 10,011,812 $ 5,762,444 ==================== ==================== =================== FTVIPT TEMPLETON GLOBAL BOND VIP DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... (1,042) (171) (3,707) Change in unrealized gains (losses) on investments.. 19,604 11,918 24,908 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 18,562 11,747 21,201 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 111,613 142,166 66,454 Net transfers (including fixed account)............. 3,030 35,287 5,683 Policy charges...................................... (27,066) (25,311) (25,780) Transfers for Policy benefits and terminations...... -- (33,359) (2,149) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 87,577 118,783 44,208 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 106,139 130,530 65,409 NET ASSETS: Beginning of year................................... 755,203 624,673 559,264 -------------------- -------------------- -------------------- End of year......................................... $ 861,342 $ 755,203 $ 624,673 ==================== ==================== ==================== GOLDMAN SACHS MID-CAP VALUE DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 780 $ 623 $ 1,071 Net realized gains (losses)......................... 7,843 4,992 (9,829) Change in unrealized gains (losses) on investments.. (15,671) 3,256 25,433 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (7,048) 8,871 16,675 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. (11,875) -- (183,580) Policy charges...................................... (984) (4,651) (4,736) Transfers for Policy benefits and terminations...... (15,456) -- (1) ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (28,315) (4,651) (188,317) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. (35,363) 4,220 (171,642) NET ASSETS: Beginning of year................................... 86,945 82,725 254,367 ------------------- ------------------- -------------------- End of year......................................... $ 51,582 $ 86,945 $ 82,725 =================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
GOLDMAN SACHS SMALL CAP EQUITY INSIGHTS DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- ---------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 37 $ 41 $ 413 Net realized gains (losses)......................... 1,248 4,096 147 Change in unrealized gains (losses) on investments.. (1,847) (3,129) 6,057 --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (562) 1,008 6,617 --------------------- ---------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,112 6,029 10,556 Net transfers (including fixed account)............. -- (37,089) -- Policy charges...................................... (1,690) (1,675) (3,587) Transfers for Policy benefits and terminations...... -- (62) (7,826) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (578) (32,797) (857) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets............ (1,140) (31,789) 5,760 NET ASSETS: Beginning of year................................... 7,764 39,553 33,793 --------------------- ---------------------- --------------------- End of year......................................... $ 6,624 $ 7,764 $ 39,553 ===================== ====================== ===================== INVESCO V.I. COMSTOCK DIVISION ----------------------------------------------------------------------- 2018 2017 2016 ---------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 10,995 $ 10,939 $ 4,913 Net realized gains (losses)......................... 121,230 28,297 31,767 Change in unrealized gains (losses) on investments.. (184,052) 52,013 25,839 ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (51,827) 91,249 62,519 ---------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 118,466 157,051 59,070 Net transfers (including fixed account)............. (277,333) (7,282) 257 Policy charges...................................... (9,765) (9,718) (8,620) Transfers for Policy benefits and terminations...... -- (14) -- ---------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (168,632) 140,037 50,707 ---------------------- --------------------- --------------------- Net increase (decrease) in net assets............ (220,459) 231,286 113,226 NET ASSETS: Beginning of year................................... 681,172 449,886 336,660 ---------------------- --------------------- --------------------- End of year......................................... $ 460,713 $ 681,172 $ 449,886 ====================== ===================== ===================== INVESCO V.I. INTERNATIONAL GROWTH DIVISION ---------------------------------------------------------------------- 2018 2017 2016 --------------------- ---------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 7,440 $ 4,975 $ 4,874 Net realized gains (losses)......................... 4,715 6,211 630 Change in unrealized gains (losses) on investments.. (67,377) 61,391 (8,246) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (55,222) 72,577 (2,742) --------------------- ---------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- 7,874 16,357 Net transfers (including fixed account)............. 29,917 (59,675) 40,410 Policy charges...................................... (15,876) (15,059) (16,023) Transfers for Policy benefits and terminations...... -- (65) (9,023) --------------------- ---------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 14,041 (66,925) 31,721 --------------------- ---------------------- --------------------- Net increase (decrease) in net assets............ (41,181) 5,652 28,979 NET ASSETS: Beginning of year................................... 364,454 358,802 329,823 --------------------- ---------------------- --------------------- End of year......................................... $ 323,273 $ 364,454 $ 358,802 ===================== ====================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
JANUS HENDERSON BALANCED DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 23,404 $ 15,832 $ 20,153 Net realized gains (losses)......................... 39,428 13,593 22,229 Change in unrealized gains (losses) on investments.. (64,594) 160,350 (19) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (1,762) 189,775 42,363 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 32,777 40,337 55,816 Net transfers (including fixed account)............. 109,516 (46,193) (14,696) Policy charges...................................... (30,911) (30,609) (32,106) Transfers for Policy benefits and terminations...... -- (7,289) (79,063) -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 111,382 (43,754) (70,049) -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 109,620 146,021 (27,686) NET ASSETS: Beginning of year................................... 1,219,410 1,073,389 1,101,075 -------------------- --------------------- --------------------- End of year......................................... $ 1,329,030 $ 1,219,410 $ 1,073,389 ==================== ===================== ===================== JANUS HENDERSON ENTERPRISE DIVISION -------------------------------------------------------------------- 2018 2017 2016 (d) -------------------- --------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 446 $ 710 $ 107 Net realized gains (losses)......................... 36,911 53,319 38,166 Change in unrealized gains (losses) on investments.. (40,219) 49,008 289 -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ (2,862) 103,037 38,562 -------------------- --------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. 78,556 (139,404) 417,833 Policy charges...................................... (4,750) (4,932) (3,776) Transfers for Policy benefits and terminations...... (57,714) (61,166) -- -------------------- --------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 16,092 (205,502) 414,057 -------------------- --------------------- --------------------- Net increase (decrease) in net assets............. 13,230 (102,465) 452,619 NET ASSETS: Beginning of year................................... 350,154 452,619 -- -------------------- --------------------- --------------------- End of year......................................... $ 363,384 $ 350,154 $ 452,619 ==================== ===================== ===================== JANUS HENDERSON FORTY DIVISION -------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 52,377 49,807 59,807 Change in unrealized gains (losses) on investments.. (46,227) 82,066 (58,944) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 6,150 131,873 863 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,207 9,767 21,593 Net transfers (including fixed account)............. -- (53,562) -- Policy charges...................................... (6,801) (12,150) (15,394) Transfers for Policy benefits and terminations...... -- (250,103) (106,582) -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,594) (306,048) (100,383) -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. 1,556 (174,175) (99,520) NET ASSETS: Beginning of year................................... 330,857 505,032 604,552 -------------------- -------------------- --------------------- End of year......................................... $ 332,413 $ 330,857 $ 505,032 ==================== ==================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
JANUS HENDERSON OVERSEAS DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 400 $ 358 $ 1,672 Net realized gains (losses)......................... (52) (10,688) (6,520) Change in unrealized gains (losses) on investments.. (3,790) 18,215 1,900 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (3,442) 7,885 (2,948) -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 5,199 18,271 21,555 Net transfers (including fixed account)............. -- (37,562) -- Policy charges...................................... (4,676) (4,253) (6,610) Transfers for Policy benefits and terminations...... -- (87) (4,970) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 523 (23,631) 9,975 -------------------- --------------------- -------------------- Net increase (decrease) in net assets............. (2,919) (15,746) 7,027 NET ASSETS: Beginning of year................................... 27,304 43,050 36,023 -------------------- --------------------- -------------------- End of year......................................... $ 24,385 $ 27,304 $ 43,050 ==================== ===================== ==================== JANUS HENDERSON RESEARCH DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 1,975 $ 1,234 $ 1,500 Net realized gains (losses)......................... 21,278 5,531 62,341 Change in unrealized gains (losses) on investments.. (31,506) 68,064 (66,733) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (8,253) 74,829 (2,892) -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 7,651 8,642 3,252 Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (12,327) (11,111) (11,346) Transfers for Policy benefits and terminations...... (91) (69) (187,482) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (4,767) (2,538) (195,576) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (13,020) 72,291 (198,468) NET ASSETS: Beginning of year................................... 343,490 271,199 469,667 -------------------- -------------------- -------------------- End of year......................................... $ 330,470 $ 343,490 $ 271,199 ==================== ==================== ==================== MFS(R) VIT GLOBAL EQUITY DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- --------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 2,659 $ 1,698 $ 1,326 Net realized gains (losses)......................... 73,892 12,364 10,426 Change in unrealized gains (losses) on investments.. (71,225) 40,361 736 -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from operations................................ 5,326 54,423 12,488 -------------------- -------------------- --------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 46,832 70,644 27,743 Net transfers (including fixed account)............. (346,823) 7,066 (176) Policy charges...................................... (4,065) (4,554) (4,103) Transfers for Policy benefits and terminations...... -- (7,604) -- -------------------- -------------------- --------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (304,056) 65,552 23,464 -------------------- -------------------- --------------------- Net increase (decrease) in net assets............. (298,730) 119,975 35,952 NET ASSETS: Beginning of year................................... 338,550 218,575 182,623 -------------------- -------------------- --------------------- End of year......................................... $ 39,820 $ 338,550 $ 218,575 ==================== ==================== =====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
MFS(R) VIT NEW DISCOVERY DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ -- $ -- Net realized gains (losses)......................... 3,409 42,002 9,227 Change in unrealized gains (losses) on investments.. (3,646) (961) 7,467 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (237) 41,041 16,694 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. -- -- -- Policy charges...................................... (1,137) (6,131) (6,581) Transfers for Policy benefits and terminations...... (56) (220,519) (38) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (1,193) (226,650) (6,619) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,430) (185,609) 10,075 NET ASSETS: Beginning of year................................... 20,796 206,405 196,330 -------------------- -------------------- -------------------- End of year......................................... $ 19,366 $ 20,796 $ 206,405 ==================== ==================== ==================== MFS(R) VIT II HIGH YIELD DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 8,422 $ 9,827 $ 9,347 Net realized gains (losses)......................... (212) (95) (220) Change in unrealized gains (losses) on investments.. (13,260) (254) 9,158 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (5,050) 9,478 18,285 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ -- -- -- Net transfers (including fixed account)............. 1 -- 1 Policy charges...................................... (2,599) (2,591) (2,483) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (2,598) (2,591) (2,482) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (7,648) 6,887 15,803 NET ASSETS: Beginning of year................................... 157,998 151,111 135,308 -------------------- -------------------- -------------------- End of year......................................... $ 150,350 $ 157,998 $ 151,111 ==================== ==================== ==================== MORGAN STANLEY VIF EMERGING MARKETS DEBT DIVISION ------------------------------------------------------------------- 2018 2017 2016 --------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 86,325 $ 70,167 $ 59,307 Net realized gains (losses)......................... (84,029) (7,471) (12,131) Change in unrealized gains (losses) on investments.. (126,520) 58,835 45,652 --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (124,224) 121,531 92,828 --------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 2,171 2,113 3,052 Net transfers (including fixed account)............. (498,022) 377,231 264,923 Policy charges...................................... (27,590) (24,084) (19,895) Transfers for Policy benefits and terminations...... -- -- (18) --------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (523,441) 355,260 248,062 --------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (647,665) 476,791 340,890 NET ASSETS: Beginning of year................................... 1,733,616 1,256,825 915,935 --------------------- -------------------- -------------------- End of year......................................... $ 1,085,951 $ 1,733,616 $ 1,256,825 ===================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
MORGAN STANLEY VIF EMERGING MARKETS EQUITY DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 15,121 $ 29,128 $ 12,938 Net realized gains (losses)......................... 37,607 244,612 (37,991) Change in unrealized gains (losses) on investments.. (717,637) 807,706 171,862 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (664,909) 1,081,446 146,809 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 13,359 9,120 4,305 Net transfers (including fixed account)............. 1,946,865 (995,326) 831,692 Policy charges...................................... (65,532) (61,562) (47,189) Transfers for Policy benefits and terminations...... (7,677) (14,962) (296) ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 1,887,015 (1,062,730) 788,512 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 1,222,106 18,716 935,321 NET ASSETS: Beginning of year................................... 3,179,608 3,160,892 2,225,571 ------------------- -------------------- -------------------- End of year......................................... $ 4,401,714 $ 3,179,608 $ 3,160,892 =================== ==================== ==================== PIMCO VIT ALL ASSET DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 4,773 $ 6,628 $ 3,261 Net realized gains (losses)......................... (152) (130) (833) Change in unrealized gains (losses) on investments.. (12,773) 11,089 12,619 ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (8,152) 17,587 15,047 ------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 9,625 9,625 8,337 Net transfers (including fixed account)............. 1 -- 76 Policy charges...................................... (7,430) (7,019) (7,013) Transfers for Policy benefits and terminations...... (2) -- -- ------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 2,194 2,606 1,400 ------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (5,958) 20,193 16,447 NET ASSETS: Beginning of year................................... 146,396 126,203 109,756 ------------------- -------------------- -------------------- End of year......................................... $ 140,438 $ 146,396 $ 126,203 =================== ==================== ==================== PIMCO VIT COMMODITYREALRETURN(R) STRATEGY DIVISION ----------------------------------------------------------------- 2018 2017 2016 ------------------- ------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 503 $ 1,293 $ 111 Net realized gains (losses)......................... (347) (3,603) (957) Change in unrealized gains (losses) on investments.. (3,284) 2,335 2,262 ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (3,128) 25 1,416 ------------------- ------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,968 2,720 -- Net transfers (including fixed account)............. 23,629 (6,206) -- Policy charges...................................... (3,023) (1,439) (1,699) Transfers for Policy benefits and terminations...... (349) -- -- ------------------- ------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 22,225 (4,925) (1,699) ------------------- ------------------- -------------------- Net increase (decrease) in net assets............. 19,097 (4,900) (283) NET ASSETS: Beginning of year................................... 5,028 9,928 10,211 ------------------- ------------------- -------------------- End of year......................................... $ 24,125 $ 5,028 $ 9,928 =================== =================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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, 2018, 2017 AND 2016
PIMCO VIT LOW DURATION DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 18,308 $ 12,109 $ 13,010 Net realized gains (losses)......................... (478) (327) (325) Change in unrealized gains (losses) on investments.. (14,452) 386 (271) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ 3,378 12,168 12,414 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 3,335 3,335 3,335 Net transfers (including fixed account)............. 47,033 49,928 48,327 Policy charges...................................... (16,600) (16,019) (16,404) Transfers for Policy benefits and terminations...... -- (18) (14) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 33,768 37,226 35,244 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. 37,146 49,394 47,658 NET ASSETS: Beginning of year................................... 921,976 872,582 824,924 -------------------- -------------------- -------------------- End of year......................................... $ 959,122 $ 921,976 $ 872,582 ==================== ==================== ==================== PUTNAM VT INTERNATIONAL VALUE DIVISION ------------------------------------------------------------------ 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ 124 $ 86 $ 122 Net realized gains (losses)......................... 71 45 (165) Change in unrealized gains (losses) on investments.. (1,236) 1,055 58 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (1,041) 1,186 15 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 1,288 1,288 -- Net transfers (including fixed account)............. -- -- 1 Policy charges...................................... (1,333) (1,208) (1,450) Transfers for Policy benefits and terminations...... -- -- -- -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... (45) 80 (1,449) -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,086) 1,266 (1,434) NET ASSETS: Beginning of year................................... 5,527 4,261 5,695 -------------------- -------------------- -------------------- End of year......................................... $ 4,441 $ 5,527 $ 4,261 ==================== ==================== ==================== ROYCE MICRO-CAP DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- -------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)........................ $ -- $ 73 $ 61 Net realized gains (losses)......................... 486 1,144 71 Change in unrealized gains (losses) on investments.. (1,513) (673) 1,525 -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from operations................................ (1,027) 544 1,657 -------------------- -------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners........ 58 -- 939 Net transfers (including fixed account)............. 42 -- -- Policy charges...................................... (91) (101) (81) Transfers for Policy benefits and terminations...... -- -- (71) -------------------- -------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions....................... 9 (101) 787 -------------------- -------------------- -------------------- Net increase (decrease) in net assets............. (1,018) 443 2,444 NET ASSETS: Beginning of year................................... 11,026 10,583 8,139 -------------------- -------------------- -------------------- End of year......................................... $ 10,008 $ 11,026 $ 10,583 ==================== ==================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. 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 -- (CONCLUDED) FOR THE YEARS ENDED DECEMBER 31, 2018, 2017 AND 2016
ROYCE SMALL-CAP DIVISION ------------------------------------------------------------------- 2018 2017 2016 -------------------- --------------------- -------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss)............................... $ 116 $ 136 $ 1,115 Net realized gains (losses)................................ 155 (13,382) 6,182 Change in unrealized gains (losses) on investments......... (1,492) 13,095 2,799 -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from operations....................................... (1,221) (151) 10,096 -------------------- --------------------- -------------------- POLICY TRANSACTIONS: Premium payments received from Policy owners............... 1,110 10,945 21,194 Net transfers (including fixed account).................... -- (62,685) -- Policy charges............................................. (1,358) (1,574) (4,548) Transfers for Policy benefits and terminations............. -- (96) (12,165) -------------------- --------------------- -------------------- Net increase (decrease) in net assets resulting from Policy transactions.............................. (248) (53,410) 4,481 -------------------- --------------------- -------------------- Net increase (decrease) in net assets.................... (1,469) (53,561) 14,577 NET ASSETS: Beginning of year.......................................... 14,989 68,550 53,973 -------------------- --------------------- -------------------- End of year................................................ $ 13,520 $ 14,989 $ 68,550 ==================== ===================== ====================
(a) Had no net assets at December 31, 2016. (b) For the period January 1, 2018 to April 27, 2018. (c) For the period April 29, 2016 to December 31, 2016. (d) Commenced May 3, 2010 and began transactions in 2016. The accompanying notes are an integral part of these financial statements. 174 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.................. 1 Financial Statements at December 31, 2018 and 2017 and for the Years Ended December 31, 2018, 2017 and 2016: 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....................................... 27 Note 3 -- Disposition............................................... 32 Note 4 -- Insurance................................................. 32 Note 5 -- Deferred Policy Acquisition Costs, Value of Business Acquired and Other Intangibles.................................... 44 Note 6 -- Reinsurance............................................... 47 Note 7 -- Closed Block.............................................. 54 Note 8 -- Investments............................................... 56 Note 9 -- Derivatives............................................... 78 Note 10 -- Fair Value............................................... 91 Note 11 -- Long-term and Short-term Debt............................ 108 Note 12 -- Equity................................................... 110 Note 13 -- Other Revenues and Other Expenses........................ 114 Note 14 -- Employee Benefit Plans................................... 115 Note 15 -- Income Tax............................................... 123 Note 16 -- Contingencies, Commitments and Guarantees................ 130 Note 17 -- Quarterly Results of Operations (Unaudited).............. 137 Note 18 -- Related Party Transactions............................... 137 Financial Statement Schedules at December 31, 2018 and 2017 and for the Years Ended December 31, 2018, 2017 and 2016: Schedule I -- Consolidated Summary of Investments -- Other Than Investments in Related Parties........................................ 139 Schedule III -- Consolidated Supplementary Insurance Information....... 140 Schedule IV -- Consolidated Reinsurance................................ 142
1 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the stockholder and the Board of Directors of Metropolitan Life Insurance Company Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Metropolitan Life Insurance Company and subsidiaries (the "Company") as of December 31, 2018 and 2017, 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, 2018, and the related notes and the schedules listed in the Index to Consolidated Financial Statements, Notes and Schedules (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. 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, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting 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. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ DELOITTE & TOUCHE LLP New York, New York March 18, 2019 We have served as the Company's auditor since at least 1968; however, an earlier year could not be reliably determined. 2 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Balance Sheets December 31, 2018 and 2017 (In millions, except share and per share data)
2018 2017 ------------- ------------- Assets Investments: Fixed maturity securities available-for-sale, at estimated fair value (amortized cost: $155,175 and $157,809, respectively)...................... $ 159,073 $ 170,272 Equity securities, at estimated fair value........ 773 1,658 Mortgage loans (net of valuation allowances of $291 and $271, respectively; includes $210 and $0, respectively, relating to variable interest entities; includes $299 and $520, respectively, under the fair value option)..................... 63,687 58,459 Policy loans...................................... 6,061 6,006 Real estate and real estate joint ventures (includes $1,394 and $1,077, respectively, relating to variable interest entities; includes $0 and $25, respectively, of real estate held-for-sale)................................... 6,152 6,656 Other limited partnership interests............... 4,481 3,991 Short-term investments, principally at estimated fair value....................................... 1,506 3,155 Other invested assets (includes $113 and $131, respectively, relating to variable interest entities)........................................ 15,690 14,911 ------------- ------------- Total investments............................... 257,423 265,108 Cash and cash equivalents, principally at estimated fair value (includes $14 and $12, respectively, relating to variable interest entities)........................................ 6,882 5,069 Accrued investment income (includes $1 and $0, respectively, relating to variable interest entities)........................................ 2,050 2,042 Premiums, reinsurance and other receivables (includes $2 and $3, respectively, relating to variable interest entities)...................... 21,829 22,098 Deferred policy acquisition costs and value of business acquired................................ 4,117 4,348 Current income tax recoverable.................... -- 64 Deferred income tax asset......................... 43 -- Other assets (includes $2 and $2, respectively, relating to variable interest entities).......... 3,723 4,741 Separate account assets........................... 110,850 130,825 ------------- ------------- Total assets.................................... $ 406,917 $ 434,295 ============= ============= Liabilities and Equity Liabilities Future policy benefits............................ $ 126,099 $ 119,415 Policyholder account balances..................... 90,656 93,939 Other policy-related balances..................... 7,264 7,176 Policyholder dividends payable.................... 494 499 Policyholder dividend obligation.................. 428 2,121 Payables for collateral under securities loaned and other transactions........................... 18,472 19,871 Short-term debt................................... 129 243 Long-term debt (includes $5 and $6, respectively, at estimated fair value, relating to variable interest entities)............................... 1,567 1,667 Current income tax payable........................ 611 -- Deferred income tax liability..................... -- 1,369 Other liabilities (includes $0 and $3, respectively, relating to variable interest entities)........................................ 24,620 27,409 Separate account liabilities...................... 110,850 130,825 ------------- ------------- Total liabilities............................... 381,190 404,534 ------------- ------------- 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........................ 12,450 14,150 Retained earnings................................. 9,512 10,035 Accumulated other comprehensive income (loss)..... 3,562 5,428 ------------- ------------- Total Metropolitan Life Insurance Company stockholder's equity........................... 25,529 29,618 Noncontrolling interests.......................... 198 143 ------------- ------------- Total equity.................................... 25,727 29,761 ------------- ------------- Total liabilities and equity.................... $ 406,917 $ 434,295 ============= =============
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, 2018, 2017 and 2016 (In millions)
2018 2017 2016 ------------ ------------ ------------ Revenues Premiums.......................................... $ 26,613 $ 22,925 $ 22,393 Universal life and investment-type product policy fees............................................. 2,124 2,227 2,542 Net investment income............................. 10,919 10,513 11,083 Other revenues.................................... 1,586 1,570 1,478 Net investment gains (losses): Other-than-temporary impairments on fixed maturity securities available-for-sale........... (23) (7) (87) Other-than-temporary impairments on fixed maturity securities available-for-sale transferred to other comprehensive income (loss). -- 1 (10) Other net investment gains (losses)............... 176 340 229 ------------ ------------ ------------ Total net investment gains (losses).............. 153 334 132 Net derivative gains (losses)..................... 766 (344) (1,138) ------------ ------------ ------------ Total revenues................................... 42,161 37,225 36,490 ------------ ------------ ------------ Expenses Policyholder benefits and claims.................. 29,097 25,792 25,313 Interest credited to policyholder account balances 2,479 2,235 2,233 Policyholder dividends............................ 1,085 1,097 1,200 Other expenses.................................... 5,191 5,135 5,803 ------------ ------------ ------------ Total expenses................................... 37,852 34,259 34,549 ------------ ------------ ------------ Income (loss) before provision for income tax.... 4,309 2,966 1,941 Provision for income tax expense (benefit)........ 173 (561) 199 ------------ ------------ ------------ Net income (loss)................................ 4,136 3,527 1,742 Less: Net income (loss) attributable to noncontrolling interests......................... 6 2 (8) ------------ ------------ ------------ Net income (loss) attributable to Metropolitan Life Insurance Company......................... $ 4,130 $ 3,525 $ 1,750 ============ ============ ============
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, 2018, 2017 and 2016 (In millions)
2018 2017 2016 ----------- ----------- ----------- Net income (loss)................................. $ 4,136 $ 3,527 $ 1,742 Other comprehensive income (loss): Unrealized investment gains (losses), net of related offsets.................................. (6,318) 4,079 406 Unrealized gains (losses) on derivatives.......... 346 (848) 36 Foreign currency translation adjustments.......... (20) 26 13 Defined benefit plans adjustment.................. 2,409 129 217 ----------- ----------- ----------- Other comprehensive income (loss), before income tax............................................ (3,583) 3,386 672 Income tax (expense) benefit related to items of other comprehensive income (loss)................ 793 (1,077) (238) ----------- ----------- ----------- Other comprehensive income (loss), net of income tax............................................ (2,790) 2,309 434 ----------- ----------- ----------- Comprehensive income (loss)....................... 1,346 5,836 2,176 Less: Comprehensive income (loss) attributable to noncontrolling interest, net of income tax....... 6 2 (8) ----------- ----------- ----------- Comprehensive income (loss) attributable to Metropolitan Life Insurance Company............ $ 1,340 $ 5,834 $ 2,184 =========== =========== ===========
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, 2018, 2017 and 2016 (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, 2015.. $ 5 $ 14,444 $ 13,535 $ 2,685 $ 30,669 $ 372 $ 31,041 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)............. 1,750 1,750 (8) 1,742 Other comprehensive income (loss), net of income tax.... 434 434 434 -------- ----------- ---------- ---------- -------------- --------- --------- Balance at December 31, 2016.. 5 14,413 9,033 3,119 26,570 190 26,760 Capital contributions from MetLife, Inc................. 6 6 6 Returns of capital............ (20) (20) (20) Purchase of operating joint venture interest from an affiliate (Note 8)........... (249) (249) (249) Dividends paid to MetLife, Inc.......................... (2,523) (2,523) (2,523) Change in equity of noncontrolling interests..... -- (49) (49) Net income (loss)............. 3,525 3,525 2 3,527 Other comprehensive income (loss), net of income tax.... 2,309 2,309 2,309 -------- ----------- ---------- ---------- -------------- --------- --------- Balance at December 31, 2017.. 5 14,150 10,035 5,428 29,618 143 29,761 Cumulative effects of changes in accounting principles, net of income tax (Note 1)... (917) 924 7 7 -------- ----------- ---------- ---------- -------------- --------- --------- Balance at January 1, 2018.... 5 14,150 9,118 6,352 29,625 143 29,768 Capital contributions from MetLife, Inc................. 74 74 74 Returns of capital............ (2) (2) (2) Transfer of employee benefit plans to an affiliate (Note 14).......................... (1,772) (1,772) (1,772) Dividends paid to MetLife, Inc.......................... (3,736) (3,736) (3,736) Change in equity of noncontrolling interests..... -- 49 49 Net income (loss)............. 4,130 4,130 6 4,136 Other comprehensive income (loss), net of income tax.... (2,790) (2,790) (2,790) -------- ----------- ---------- ---------- -------------- --------- --------- Balance at December 31, 2018.. $ 5 $ 12,450 $ 9,512 $ 3,562 $ 25,529 $ 198 $ 25,727 ======== =========== ========== ========== ============== ========= =========
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, 2018, 2017 and 2016 (In millions)
2018 2017 2016 -------------- -------------- -------------- Cash flows from operating activities Net income (loss)................................ $ 4,136 $ 3,527 $ 1,742 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization expenses.......... 264 395 367 Amortization of premiums and accretion of discounts associated with investments, net..... (907) (823) (975) (Gains) losses on investments and from sales of businesses, net................................ (153) (334) (132) (Gains) losses on derivatives, net.............. (346) 900 1,865 (Income) loss from equity method investments, net of dividends or distributions.............. 375 314 483 Interest credited to policyholder account balances....................................... 2,479 2,235 2,233 Universal life and investment-type product policy fees.................................... (2,124) (2,227) (2,542) Change in fair value option and trading securities..................................... 3 17 406 Change in accrued investment income............. 11 (40) 81 Change in premiums, reinsurance and other receivables.................................... (309) 277 (2,606) Change in deferred policy acquisition costs and value of business acquired, net................ 436 180 108 Change in income tax............................ 911 (2,200) (438) Change in other assets.......................... 947 309 701 Change in insurance-related liabilities and policy-related balances........................ 3,997 4,029 2,741 Change in other liabilities..................... (1,675) (156) 1,731 Other, net...................................... (19) (49) 39 -------------- -------------- -------------- Net cash provided by (used in) operating activities................................... 8,026 6,354 5,804 -------------- -------------- -------------- Cash flows from investing activities Sales, maturities and repayments of: Fixed maturity securities available-for-sale.... 67,609 53,984 74,985 Equity securities............................... 135 831 859 Mortgage loans.................................. 8,908 8,810 11,286 Real estate and real estate joint ventures...... 1,131 955 762 Other limited partnership interests............. 479 565 830 Purchases and originations of: Fixed maturity securities available-for-sale.... (61,109) (55,973) (72,414) Equity securities............................... (161) (607) (771) Mortgage loans.................................. (13,968) (10,680) (16,039) Real estate and real estate joint ventures...... (463) (885) (1,390) Other limited partnership interests............. (871) (794) (809) Cash received in connection with freestanding derivatives..................................... 1,798 1,661 1,372 Cash paid in connection with freestanding derivatives..................................... (2,258) (2,688) (2,451) Net change in policy loans....................... (55) (61) 85 Net change in short-term investments............. 1,671 1,623 694 Net change in other invested assets.............. 351 (177) (434) Net change in property, equipment and leasehold improvements.................................... 209 (177) (227) Other, net....................................... 4 -- -- -------------- -------------- -------------- Net cash provided by (used in) investing activities..................................... $ 3,410 $ (3,613) $ (3,662) -------------- -------------- --------------
See accompanying notes to the consolidated financial statements. 7 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Consolidated Statements of Cash Flows -- (continued) For the Years Ended December 31, 2018, 2017 and 2016 (In millions)
2018 2017 2016 --------------- --------------- --------------- Cash flows from financing activities Policyholder account balances: Deposits....................................... $ 74,550 $ 70,258 $ 64,962 Withdrawals.................................... (78,746) (70,215) (61,252) Net change in payables for collateral under securities loaned and other transactions........ (1,399) (525) (696) Long-term debt issued............................ 24 169 45 Long-term debt repaid............................ (109) (92) (58) Financing element on certain derivative instruments and other derivative related transactions, net............................... (149) (300) (321) Dividend of subsidiaries......................... -- -- (115) Dividends paid to MetLife, Inc................... (3,736) (2,523) (3,600) Return of capital associated with the purchase of operating joint venture interest from an affiliate....................................... -- (249) -- Other, net....................................... (54) 88 (44) --------------- --------------- --------------- Net cash provided by (used in) financing activities.................................... (9,619) (3,389) (1,079) --------------- --------------- --------------- Effect of change in foreign currency exchange rates on cash and cash equivalents balances..... (4) 3 -- --------------- --------------- --------------- Change in cash and cash equivalents............ 1,813 (645) 1,063 Cash and cash equivalents, beginning of year..... 5,069 5,714 4,651 --------------- --------------- --------------- Cash and cash equivalents, end of year......... $ 6,882 $ 5,069 $ 5,714 =============== =============== =============== Supplemental disclosures of cash flow information Net cash paid (received) for: Interest......................................... $ 107 $ 105 $ 114 =============== =============== =============== Income tax....................................... $ 483 $ 1,693 $ 819 =============== =============== =============== Non-cash transactions Capital contributions from MetLife, Inc.......... $ 74 $ 6 $ 10 =============== =============== =============== Returns of capital............................... $ -- $ 15 $ -- =============== =============== =============== Transfer of employee benefit plans to an affiliate (Note 14)............................. $ 1,772 $ -- $ -- =============== =============== =============== Fixed maturity securities available-for-sale received in connection with pension risk transfer transactions........................... $ 3,016 $ -- $ 985 =============== =============== =============== Transfer of fixed maturity securities available-for-sale from affiliates.............. $ -- $ 292 $ 367 =============== =============== =============== Transfer of fixed maturity securities available-for-sale to affiliates................ $ -- $ -- $ 3,940 =============== =============== =============== Transfer of mortgage loans to affiliates......... $ -- $ -- $ 626 =============== =============== =============== Deconsolidation of real estate investment vehicles: Reduction of real estate and real estate joint ventures...................................... $ -- $ -- $ 354 =============== =============== =============== Reduction of noncontrolling interests.......... $ -- $ -- $ 354 =============== =============== =============== Disposal of subsidiaries: Assets disposed.................................. $ -- $ -- $ 27,476 Liabilities disposed............................. -- -- (24,572) --------------- --------------- --------------- Net assets disposed............................ -- -- 2,904 Cash disposed.................................... -- -- (115) Dividend of interests in subsidiaries............ -- -- (2,789) --------------- --------------- --------------- Loss on dividend of interests in subsidiaries.. $ -- $ -- $ -- =============== =============== ===============
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 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. 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. Reclassifications Certain amounts in the prior years' consolidated financial statements and related footnotes thereto have been reclassified to conform to the current year presentation as discussed throughout the Notes to the Consolidated Financial Statements. 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) 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 life of the contract 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 S&P 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. 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. 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 issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits that provide the policyholder a minimum return based on their initial deposit adjusted for 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 a 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 life-contingent portion of guaranteed minimum withdrawal benefits ("GMWBs"), elective annuitizations of guaranteed minimum income benefits ("GMIBs") and the life contingent portion of GMIBs that require annuitization when the account balance goes to zero. Guarantees accounted for as embedded derivatives in policyholder account balances include guaranteed minimum accumulation benefits ("GMABs"), the non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs. 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, premiums received in advance, unearned revenue liabilities, obligations assumed under structured settlement assignments, policyholder dividends due and unpaid, and policyholder dividends left on deposit. 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 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. 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. 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. Premiums related to short-duration non-medical health, disability and accident & health 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. 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) 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 at inception 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 Securities The majority of the Company's fixed maturity 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. Sales of securities 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 premium and accretion of discount, 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 "-- Fixed Maturity Securities AFS -- Methodology for Amortization of Premium and Accretion of Discount on Structured Securities." The amortization of premium and accretion of discount also takes into consideration call and maturity dates. The Company periodically evaluates these 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 "-- Fixed Maturity Securities AFS -- Evaluation of Fixed Maturity Securities AFS for OTTI and Evaluating Temporarily Impaired Fixed Maturity Securities AFS." For securities in an unrealized loss position, an other-than-temporary impairment ("OTTI") is recognized in earnings within net investment gains (losses) 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. 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) Equity Securities Equity securities are reported at their estimated fair value, with changes in estimated fair value included in net investment gains (losses). Sales of securities are determined on a specific identification basis. Dividends are recognized in net investment income when declared. 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 premium and accretion of discount. Also included in mortgage loans are residential mortgage loans for which the fair value option ("FVO") was elected and which 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. 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. Real Estate Joint Ventures and Other Limited Partnership Interests The Company uses the equity method of accounting for real estate joint ventures and other limited partnership interests ("investee") 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 in net investment income 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 accounts for its interest in real estate joint ventures and other limited partnership interests in which it has virtually no influence over the investee's operations at fair value. Changes in estimated fair value of these investments are included in net investment gains (losses). Because of the nature and structure of these investments, they do not meet the characteristics of an equity security in accordance with applicable accounting standards. The Company routinely evaluates its equity 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. 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) Short-term Investments Short-term investments include highly liquid securities and other investments with remaining maturities of one year or less, but greater than three months, at the time of purchase. Securities included within short-term investments are stated at estimated fair value, while other investments included within short-term investments are stated at 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. See Note 15. . Affiliated investments include affiliated loans and affiliated preferred stock. Affiliated loans are stated at unpaid principal balance, adjusted for any unamortized premium or discount. Interest income is recognized using an effective yield method giving effect to amortization of premium and accretion of discount. Affiliated preferred stock is stated at cost. Dividends are recognized in net investment income when declared. . 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. . Leveraged leases net investment is equal to the minimum lease payments plus the unguaranteed residual value, less the unearned income, and is recorded net of non-recourse debt. Income is determined by applying the leveraged lease's estimated rate of return to the net investment in the lease in those periods in which the net investment at the beginning of the period is positive. Leveraged leases derive investment returns in part from their income tax treatment. The Company regularly reviews residual values for impairment. . Investments in Federal Home Loan Bank ("FHLB") common stock are carried at redemption value and are considered restricted investments until redeemed by the respective FHLB regional banks ("FHLBanks"). . Investment in an operating joint venture that engages in insurance underwriting activities accounted for under the equity method. . Fair value option securities ("FVO Securities") are primarily investments in fixed maturity securities held-for-investment that are managed on a total return basis where the FVO has been elected, with changes in estimated fair value, included in net investment income. . Direct financing leases net investment is equal to the minimum lease payments plus the unguaranteed residual value, less unearned income. Income is determined 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. Securities Lending and Repurchase Agreements The Company accounts for securities lending transactions and repurchase agreements as financing arrangements and the associated liability is recorded at the amount of cash received. Income and expenses associated with securities lending transactions and repurchase agreements are reported as investment income and investment expense, respectively, within net investment income. 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 The Company enters into securities lending transactions, whereby blocks of securities are loaned to third parties, primarily brokerage firms and commercial banks. 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. Repurchase Agreements The Company participates in short-term repurchase agreements with unaffiliated financial institutions. Under these agreements, the Company lends fixed maturity securities and receives cash as collateral in an amount generally equal to 95% to 100% of the estimated fair value of the securities loaned at the inception of the transaction. The Company monitors the estimated fair value of the collateral and the securities loaned throughout the duration of the transaction and additional collateral is obtained as necessary. Securities loaned under such transactions may be sold or re-pledged by the transferee. 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 derivative's 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 unadjusted quoted prices are not available, estimated 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's judgment are used to determine the estimated fair value of assets and liabilities. Employee Benefit Plans Through September 30, 2018, the Company sponsored and/or administered various qualified and nonqualified defined benefit pension plans and other postretirement employee benefit plans covering eligible employees 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. As of October 1, 2018, except for the nonqualified defined pension plan, the plan sponsor was changed from the Company to an affiliate. Following such change, the Company remains a participating affiliate in these plans. Accordingly, beginning October 1, 2018, the Company's obligation and expense related to such plans is limited to the amount of associated expense allocated to it as a participating affiliate. The Company recognizes the funded status of each of its defined benefit pension and other 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's 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. Through September 30, 2018, the Company also sponsored defined contribution plans for substantially all employees under which a portion of employee contributions is matched. Applicable matching contributions were made each payroll period. Accordingly, the Company recognized compensation cost for current matching contributions. As of October 1, 2018, except for the nonqualified defined contribution plan, the plan sponsor was changed from the Company to an affiliate. See Note 14 for information on the plan sponsor change. 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) 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 insurance and non-life insurance 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. 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 jurisdictions; . 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. On December 22, 2017, President Trump signed into law H.R. 1, commonly referred to as the Tax Cuts and Jobs Act of 2017 ("U.S. Tax Reform"). See Note 15 for additional information on U.S. Tax Reform and related Staff Accounting Bulletin ("SAB") 118 provisional amounts. 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) Litigation Contingencies The Company is a defendant in a large number of litigation matters and is involved in a number of regulatory investigations. 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. 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 consolidated financial statements. Other Accounting Policies Stock-Based Compensation The Company recognizes stock-based compensation on its consolidated results of operations based on MetLife, Inc.'s allocation. MetLife, Inc. applies the accounting policies described below to determine those expenses. MetLife, Inc. grants certain employees stock-based compensation awards under various plans that are subject to specific vesting conditions. MetLife, Inc. measures the cost of all stock-based transactions at fair value at the grant date and recognizes it over the period during which a grantee must provide services in exchange for the award. MetLife, Inc. remeasures performance shares and cash-payable awards quarterly. Employees who meet certain age-and-service criteria receive payment or may exercise their awards regardless of ending employment. However, the award's payment or exercisability takes place at the originally-scheduled time, i.e., is not accelerated. As a result, the award does not require the employee to provide any substantive service after attaining those age-and-service criteria. Accordingly, MetLife, Inc. recognizes compensation expense related to stock-based awards from the beginning of the vesting to the earlier of the end of the vesting period or the date the employee attains the age-and-service criteria. MetLife, Inc. incorporates an estimation of future forfeitures of stock-based awards into the determination of compensation expense when recognizing expense over the requisite service period. Cash and Cash Equivalents The Company considers 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. Securities included within cash equivalents are stated at estimated fair value, while other investments included within 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 $926 million and $1.2 billion at December 31, 2018 and 2017, respectively. Accumulated depreciation and amortization of property, equipment and leasehold improvements was $572 million and $614 million at December 31, 2018 and 2017, respectively. Related depreciation and amortization expense was $81 million, $124 million and $139 million for the years ended December 31, 2018, 2017 and 2016, 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 $1.3 billion and $1.7 billion at December 31, 2018 and 2017, respectively. Accumulated amortization of capitalized software was $1.3 billion at both December 31, 2018 and 2017. Related amortization expense was $90 million, $164 million and $132 million for the years ended December 31, 2018, 2017 and 2016, respectively. During the year ended December 31, 2018, the Company sold to an affiliate certain property, equipment, leasehold improvements and computer software at carrying value for a total of $785 million. 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) Other Revenues Other revenues primarily include, in addition to items described elsewhere herein, fees related to service contracts from customers related to prepaid legal plans, administrative services-only ("ASO") contracts, and recordkeeping and related services. Substantially all of the revenue from the services is recognized over time as the applicable services are provided or are made available to the customers. The revenue recognized includes variable consideration to the extent it is probable that a significant reversal will not occur. In addition to the service fees, other revenues also include certain stable value fees and reinsurance ceded. These fees are recognized as earned. 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. 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 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 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 quantitative impairment test. In performing the 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 2018 annual goodwill impairment tests, the Company concluded that goodwill was not impaired. The goodwill balance was $70 million in the U.S. segment and $31 million in the MetLife Holdings segment, at both December 31, 2018 and 2017. 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) Recent Accounting Pronouncements Changes to GAAP are established by the Financial Accounting Standards Board ("FASB") in the form of accounting standards updates ("ASUs") to the FASB Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. The following tables provide a description of new ASUs issued by the FASB and the impact of the adoption on the Company's consolidated financial statements. Adoption of New Accounting Pronouncements Except as noted below, the ASUs adopted by the Company effective January 1, 2018 did not have a material impact on its consolidated financial statements.
Standard Description Effective Date and Method of Adoption ------------------------------------------------------------------------------------------------------------------------ ASU 2018-02, Income The new guidance allows a reclassification of AOCI January 1, 2018, the Statement--Reporting Comprehensive to retained earnings for stranded tax effects resulting Company applied the Income (Topic 220): Reclassification of from the U.S. Tax Reform. Due to the change in ASU in the period of Certain Tax Effects from Accumulated corporate tax rates resulting from the U.S. Tax adoption. Other Comprehensive Income Reform, the Company reported stranded tax effects in AOCI related to unrealized gains and losses on AFS securities, cumulative foreign translation adjustments and deferred costs on pension benefit plans. ------------------------------------------------------------------------------------------------------------------------ ASU 2016-01, Financial Instruments -- The new guidance changed the previous accounting January 1, 2018, the Overall (Subtopic 825-10): Recognition guidance related to (i) the classification and Company adopted, and Measurement of Financial Assets and measurement of certain equity investments, (ii) the using a modified Financial Liabilities, as clarified and presentation of changes in the fair value of financial retrospective amended by ASU 2018-03, Technical liabilities measured under the FVO that are due to approach. Corrections and Improvements to instrument-specific credit risk, and (iii) certain Financial Instruments-Overall (Subtopic disclosures associated with the fair value of financial 825-10): Recognition and Measurement of instruments. There is no longer a requirement to Financial Assets and Financial assess equity securities for impairment since such Liabilities. securities are now measured at fair value through net income. Additionally, there is no longer a requirement to assess equity securities for embedded derivatives requiring bifurcation. ------------------------------------------------------------------------------------------------------------------------ ASU 2014-09, Revenue from Contracts The new guidance supersedes nearly all existing January 1, 2018, the with Customers (Topic 606) revenue recognition guidance under GAAP. Company adopted, However, it does not impact the accounting for using a modified insurance and investment contracts within the scope retrospective of FASB Accounting Standard Codification Topic approach. 944, Financial Services - Insurance, leases, financial instruments and certain guarantees. For those contracts that are impacted, the new guidance requires 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.
Standard Impact on Financial Statements -------------------------------------------------------------------------------------- ASU 2018-02, Income The adoption of this guidance resulted in Statement--Reporting Comprehensive the release of stranded tax effects in AOCI Income (Topic 220): Reclassification of resulting from the U.S. Tax Reform by Certain Tax Effects from Accumulated decreasing retained earnings as of Other Comprehensive Income January 1, 2018 by $1.0 billion with a corresponding increase to AOCI. The Company's accounting policy for the release of stranded tax effects in AOCI is on an aggregate portfolio basis. -------------------------------------------------------------------------------------- ASU 2016-01, Financial Instruments -- The adoption of this guidance resulted in a Overall (Subtopic 825-10): Recognition $101 million, net of income tax, increase to and Measurement of Financial Assets and retained earnings largely offset by a Financial Liabilities, as clarified and decrease to AOCI that was primarily amended by ASU 2018-03, Technical attributable to $925 million of equity Corrections and Improvements to securities previously classified and Financial Instruments-Overall (Subtopic measured as equity securities AFS. The 825-10): Recognition and Measurement of Company has included the required Financial Assets and Financial disclosures related to equity securities AFS Liabilities. within Note 8. -------------------------------------------------------------------------------------- ASU 2014-09, Revenue from Contracts The adoption of the guidance did not have with Customers (Topic 606) a material impact on the Company's consolidated financial statements other than expanded disclosures in Note 13.
Other Effective January 16, 2018, the London Clearing House ("LCH") amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. These amendments impacted the accounting treatment of the Company's centrally cleared derivatives, for which the LCH serves as the central clearing party. As of the effective date, the application of the amended rulebook reduced gross derivative assets by $2 million, gross derivative liabilities by $182 million, accrued investment income by $4 million, and collateral receivables recorded within premiums, reinsurance and other receivables by $176 million. 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) 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 impacted the accounting treatment of the Company's centrally cleared derivatives for which the CME serves as the central clearing party. As of the effective date, the application of the amended rulebook reduced gross derivative assets by $751 million, gross derivative liabilities by $603 million, accrued investment income by $55 million, accrued investment expense recorded within other liabilities by $10 million, collateral receivables recorded within premiums, reinsurance and other receivables by $226 million, and collateral payables recorded within payables for collateral under securities loaned and other transactions by $419 million. Future Adoption of New Accounting Pronouncements ASUs not listed below were assessed and either determined to be not applicable or are not expected to have a material impact on the Company's consolidated financial statements. ASUs issued but not yet adopted as of December 31, 2018 that are being assessed and may or may not have a material impact on the Company's consolidated financial statements are summarized in the table below.
Effective Date and Standard Description Method of Adoption ----------------------------------------------------------------------------------------------------------------- ASU 2018-17, The new guidance provides that indirect interests held January 1, 2020, to be Consolidation (Topic 810): through related parties in common control arrangements applied retrospectively Targeted Improvements to should be considered on a proportional basis for with a cumulative Related Party Guidance for determining whether fees paid to decisionmakers and effect adjustment to Variable Interest Entities service providers are variable interests. retained earnings at the beginning of the earliest period presented. ----------------------------------------------------------------------------------------------------------------- ASU 2018-16, Derivatives The new guidance permits the use of the overnight index January 1, 2019, to be and Hedging (Topic 815): swap rate based on the SOFR as a U.S. benchmark applied prospectively Inclusion of the Secured interest rate for hedge accounting purposes under Topic for qualifying new or Overnight Financing Rate 815. redesignated hedging (SOFR) Overnight Index relationships entered Swap (OIS) Rate as a into after January 1, Benchmark Interest Rate 2019. for Hedge Accounting Purposes ----------------------------------------------------------------------------------------------------------------- ASU 2018-15, The new guidance requires a customer in a cloud January 1, 2020. The Intangibles--Goodwill and computing arrangement that is a service contract to new guidance can be Other--Internal-Use follow the internal-use software guidance to determine applied either Software (Subtopic which implementation costs to capitalize as an asset and prospectively to 350-40): Customer's which costs to expense as incurred. Implementation costs eligible costs incurred Accounting for that are capitalized under the new guidance are required on or after the Implementation Costs to be amortized over the term of the hosting arrangement, guidance is first Incurred in a Cloud beginning when the module or component of the hosting applied, or Computing Arrangement arrangement is ready for its intended use. retrospectively to all That Is a Service Contract periods presented. ----------------------------------------------------------------------------------------------------------------- ASU 2018-14, The new guidance removes certain disclosures that no December 31, 2020, to Compensation--Retirement longer are considered cost beneficial, clarifies the be applied on a Benefits--Defined Benefit specific requirements of disclosures, and adds disclosure retrospective basis to Plans--General (Subtopic requirements identified as relevant for employers that all periods presented 715-20): Disclosure sponsor defined benefit pension or other postretirement (with early adoption Framework--Changes to plans. permitted). the Disclosure Requirements for Defined Benefit Plans
Standard Impact on Financial Statements ------------------------------------------------------------------ ASU 2018-17, The Company does not expect the Consolidation (Topic 810): adoption to have a material impact Targeted Improvements to on its consolidated financial Related Party Guidance for statements. Variable Interest Entities ------------------------------------------------------------------ ASU 2018-16, Derivatives The Company does not expect the and Hedging (Topic 815): adoption to have a material impact Inclusion of the Secured on its consolidated financial Overnight Financing Rate statements. (SOFR) Overnight Index Swap (OIS) Rate as a Benchmark Interest Rate for Hedge Accounting Purposes ------------------------------------------------------------------ ASU 2018-15, The Company is currently evaluating Intangibles--Goodwill and the impact of the new guidance on its Other--Internal-Use consolidated financial statements. Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract ------------------------------------------------------------------ ASU 2018-14, The Company is currently evaluating Compensation--Retirement the impact of the new guidance on its Benefits--Defined Benefit consolidated financial statements. Plans--General (Subtopic 715-20): Disclosure Framework--Changes to the Disclosure Requirements for Defined Benefit Plans
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)
Effective Date and Standard Description Method of Adoption ------------------------------------------------------------------------------------------------------------------- ASU 2018-13, Fair Value The new guidance modifies the disclosure requirements January 1, 2020. Measurement (Topic 820): on fair value by removing some requirements, modifying Amendments related to Disclosure Framework-- others, adding changes in unrealized gains and losses changes in unrealized Changes to the Disclosure included in OCI for recurring Level 3 fair value gains and losses, the Requirements for Fair measurements, and under certain circumstances, range and weighted Value Measurement providing the option to disclose certain other quantitative average of significant information with respect to significant unobservable unobservable inputs inputs in lieu of a weighted average. used to develop Level 3 fair value measurements, and the narrative description of measurement uncertainty should be applied prospectively. All other amendments should be applied retrospectively. ------------------------------------------------------------------------------------------------------------------- ASU 2018-12, Financial The new guidance (i) prescribes the discount rate to be January 1, 2021, to be Services--Insurance (Topic used in measuring the liability for future policy benefits applied retrospectively 944): Targeted for traditional and limited payment long-duration to January 1, 2019 Improvements to the contracts, and requires assumptions for those liability (with early adoption Accounting for Long- valuations to be updated after contract inception, permitted). Duration Contracts (ii) requires more market-based product guarantees on certain separate account and other account balance long- duration contracts to be accounted for at fair value, (iii) simplifies the amortization of DAC for virtually all long-duration contracts, and (iv) introduces certain financial statement presentation requirements, as well as significant additional quantitative and qualitative disclosures. ------------------------------------------------------------------------------------------------------------------- ASU 2017-12, Derivatives The new guidance simplifies the application of hedge January 1, 2019, to be and Hedging (Topic 815): accounting in certain situations and amends the hedge applied on a modified Targeted Improvements to accounting model to enable entities to better portray the retrospective basis Accounting for Hedging economics of their risk management activities in their through a cumulative Activities financial statements. effect adjustment to retained earnings. ------------------------------------------------------------------------------------------------------------------- ASU 2017-08, Receivables The new guidance shortens the amortization period for January 1, 2019, to be --Nonrefundable Fees and certain callable debt securities held at a premium and applied on a modified Other Costs requires the premium to be amortized to the earliest call retrospective basis (Subtopic 310-20), date. However, the new guidance does not require an through a cumulative Premium Amortization on accounting change for securities held at a discount whose effect adjustment to Purchased Callable Debt discount continues to be amortized to maturity. retained earnings. Securities ------------------------------------------------------------------------------------------------------------------- ASU 2017-04, The new guidance simplifies the current two-step January 1, 2020, to be Intangibles--Goodwill and goodwill impairment test by eliminating Step 2 of the applied on a Other (Topic 350): test. The new guidance requires a one-step impairment prospective basis. Simplifying the Test for test in which an entity compares the fair value of a Early adoption is Goodwill Impairment reporting unit with its carrying amount and recognizes an permitted for interim impairment charge for the amount by which the carrying or annual goodwill amount exceeds the reporting unit's fair value, if any. impairment tests performed on testing dates after January 1, 2017.
Standard Impact on Financial Statements ------------------------------------------------------------------- ASU 2018-13, Fair Value As of December 31, 2018, the Measurement (Topic 820): Company early adopted the Disclosure Framework-- provisions of the guidance that Changes to the Disclosure removed the requirements relating to Requirements for Fair transfers between fair value Value Measurement hierarchy levels and certain disclosures about valuation processes for Level 3 fair value measurements. The Company will adopt the remainder of the new guidance at the effective date, and is currently evaluating the impact of those changes on its consolidated financial statements. ------------------------------------------------------------------- ASU 2018-12, Financial The Company has started its Services--Insurance (Topic implementation efforts and is 944): Targeted currently evaluating the impact of the Improvements to the new guidance. Given the nature and Accounting for Long- extent of the required changes to a Duration Contracts significant portion of the Company's operations, the adoption of this standard is expected to have a material impact on its consolidated financial statements. ------------------------------------------------------------------- ASU 2017-12, Derivatives Upon adoption, the Company will and Hedging (Topic 815): make certain changes to its Targeted Improvements to assessment of hedge effectiveness Accounting for Hedging for fair value hedging relationships, Activities and the Company will also reclassify hedge ineffectiveness for cash flow hedging relationships existing as of the adoption date, which was previously recorded to earnings, to AOCI. The estimated impact of adoption is a decrease to retained earnings of less than $250 million. ------------------------------------------------------------------- ASU 2017-08, Receivables The adoption of the new guidance --Nonrefundable Fees and will not have a material impact on Other Costs the Company's consolidated (Subtopic 310-20), financial statements. Premium Amortization on Purchased Callable Debt Securities ------------------------------------------------------------------- ASU 2017-04, The new guidance will reduce the Intangibles--Goodwill and complexity involved with the Other (Topic 350): evaluation of goodwill for Simplifying the Test for impairment. The impact of the new Goodwill Impairment guidance will depend on the outcomes of future goodwill impairment tests.
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)
Effective Date and Standard Description Method of Adoption -------------------------------------------------------------------------------------------- ASU 2016-13, Financial This new guidance replaces the January 1, 2020. For Instruments--Credit Losses incurred loss impairment methodology substantially all (Topic 326): Measurement with one that reflects expected financial assets, the of Credit Losses on credit losses. The measurement of ASU is to be applied Financial Instruments, as expected credit losses should be on a modified clarified and amended by based on historical loss information, retrospective basis ASU 2018-19, Codification current conditions, and reasonable through a cumulative Improvements to Topic 326, and supportable forecasts. The new effect adjustment to Financial Instruments-- guidance requires that an OTTI on a retained earnings. For Credit Losses debt security will be recognized as previously impaired an allowance going forward, such that debt securities and improvements in expected future cash certain debt securities flows after an impairment will no acquired with evidence longer be reflected as a prospective of credit quality yield adjustment through net deterioration since investment income, but rather a origination, the new reversal of the previous impairment guidance is to be and recognized through realized applied prospectively. investment gains and losses. The guidance also requires enhanced disclosures. In November 2018, the FASB issued ASU 2018-19, clarifying that receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. 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. -------------------------------------------------------------------------------------------- ASU 2016-02, Leases The new guidance requires a lessee to January 1, 2019, to be (Topic 842), as clarified recognize assets and liabilities for applied on a modified and amended by ASU leases with lease terms of more than retrospective basis 2018-10, Codification 12 months. Leases would be classified using the optional Improvements to Topic 842, as finance or operating leases and transition method with Leases, ASU 2018-11, both types of leases will be a cumulative effect Leases (Topic 842): recognized on the balance sheet. adjustment recorded at Targeted Improvements, Lessor accounting will remain largely January 1, 2019. and ASU 2018-20, Leases unchanged from current guidance (Topic 842): Narrow-Scope except for certain targeted changes. Improvements for Lessors The new guidance will also require new qualitative and quantitative disclosures. In July 2018, two amendments to the new guidance were issued. The amendments provide the option to adopt the new guidance prospectively without adjusting comparative periods. Also, the amendments provide lessors with a practical expedient not to separate lease and non-lease components for certain operating leases. In December 2018, an amendment was issued to clarify lessor accounting relating to taxes, certain lessor's costs and variable payments related to both lease and non-lease components. The Company will adopt the new guidance and related amendments on January 1, 2019 and expects to elect certain practical expedients permitted under the transition guidance. In addition, the Company will elect the prospective transition option and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has been executing an integrated implementation plan which includes a multi-functional working group with a project governance structure to address any resource, system, data and process gaps related to the implementation of the new standard. The Company is currently integrating a lease accounting technology solution and finalizing updated reporting processes and additional internal controls to facilitate compliance with the new guidance. --------------------------------------------------------------------------------------------
Description Impact on Financial Statements ----------------------------------------------------------------------------- This new guidance replaces the The Company believes that the incurred loss impairment methodology most significant impact upon with one that reflects expected adoption will be to its mortgage credit losses. The measurement of loan investments. The Company is expected credit losses should be currently evaluating the impact of based on historical loss information, the new guidance on its current conditions, and reasonable consolidated financial statements. 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. In November 2018, the FASB issued ASU 2018-19, clarifying that receivables arising from operating leases should be accounted for in accordance with Topic 842, Leases. 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 new guidance requires a lessee to The Company believes the most recognize assets and liabilities for significant changes relate to (i) the leases with lease terms of more than recognition of new right of use 12 months. Leases would be classified assets and lease liabilities on the as finance or operating leases and consolidated balance sheet for real both types of leases will be estate operating leases; and (ii) the recognized on the balance sheet. recognition of deferred gains Lessor accounting will remain largely associated with previous sale- unchanged from current guidance leaseback transactions as a except for certain targeted changes. cumulative effect adjustment to The new guidance will also require retained earnings. On adoption, the new qualitative and quantitative Company will recognize additional disclosures. In July 2018, two operating liabilities, with amendments to the new guidance were corresponding right of use assets of issued. The amendments provide the the same amount adjusted for option to adopt the new guidance prepaid/deferred rent, unamortized prospectively without adjusting initial direct costs and potential comparative periods. Also, the impairment of right of use assets amendments provide lessors with a based on the present value of the practical expedient not to separate remaining minimum rental lease and non-lease components for payments. These assets and certain operating leases. In December liabilities will represent less than 2018, an amendment was issued to 1% of the Company's total assets clarify lessor accounting relating to and total liabilities. The adoption taxes, certain lessor's costs and will not have a material impact on variable payments related to both its consolidated financial lease and non-lease components. The statements. Company will adopt the new guidance and related amendments on January 1, 2019 and expects to elect certain practical expedients permitted under the transition guidance. In addition, the Company will elect the prospective transition option and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption. The Company has been executing an integrated implementation plan which includes a multi-functional working group with a project governance structure to address any resource, system, data and process gaps related to the implementation of the new standard. The Company is currently integrating a lease accounting technology solution and finalizing updated reporting processes and additional internal controls to facilitate compliance with the new guidance. -----------------------------------------------------------------------------
26 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 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. 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 ("RIS"). . The Group Benefits business offers life, dental, group short- and long-term disability, individual disability, accidental death and dismemberment, vision and accident & health coverages, as well as prepaid legal plans. This business also sells ASO arrangements to some employers. . The RIS business offers a broad range of life and annuity-based insurance and investment products, including stable value and pension risk transfer products, institutional income annuities, tort settlements, and capital markets investment products, as well as solutions for funding postretirement benefits and company-, bank- or trust-owned life insurance. MetLife Holdings The MetLife Holdings segment consists of operations relating to products and businesses that the Company no longer actively markets, such as variable, universal, term and whole life insurance, variable, fixed and index-linked annuities and long-term care insurance. 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. Additionally, Corporate & Other includes run-off businesses. Corporate & Other also includes the Company's ancillary international operations, 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. For the year ended December 31, 2016, Corporate & Other includes business of the Company that was transferred to Brighthouse Financial, Inc. and its subsidiaries ("Brighthouse"). In addition, Corporate & Other includes the elimination of intersegment amounts, which generally relate to affiliated reinsurance and intersegment loans, which bear interest rates commensurate with related borrowings. Financial Measures and Segment Accounting Policies Adjusted earnings is used by management to evaluate performance and allocate resources. Consistent with GAAP guidance for segment reporting, adjusted earnings is also the Company's GAAP measure of segment performance and is reported below. Adjusted earnings should not be viewed as a substitute for net income (loss). The Company believes the presentation of adjusted 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. Adjusted earnings is defined as adjusted revenues less adjusted expenses, net of income tax. The financial measures of adjusted revenues and adjusted 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 certain entities required to be consolidated under GAAP. Also, these measures exclude results of discontinued operations under GAAP and other businesses that have been or will be sold or exited by MLIC but do not meet the discontinued operations criteria under GAAP and are referred to as divested businesses. Divested businesses also includes the net impact of transactions with exited businesses that have been eliminated in consolidation under GAAP and costs relating to businesses that have been or will be sold or exited by MLIC that do not meet the criteria to be included in results of discontinued operations under GAAP. Adjusted revenues also excludes net investment gains (losses) and net derivative gains (losses). 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 revenues, in the line items indicated, in calculating adjusted 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) excludes post-tax adjusted earnings adjustments relating to insurance joint ventures accounted for under the equity method, (iii) excludes certain amounts related to securitization entities that are VIEs consolidated under GAAP and (iv) includes distributions of profits from certain other limited partnership interests that were previously accounted for under the cost method, but are now accounted for at estimated fair value, where the change in estimated fair value is recognized in net investment gains (losses) under GAAP. The following additional adjustments are made to expenses, in the line items indicated, in calculating adjusted 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 and other pass-through adjustments, (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: (i) noncontrolling interests, (ii) acquisition, integration and other costs, and (iii) 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. Additionally, the provision for income tax (expense) benefit also includes the impact related to the timing of certain tax credits, as well as certain tax reforms. 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, 2018, 2017 and 2016 and at December 31, 2018 and 2017. The segment accounting policies are the same as those used to prepare the Company's consolidated financial statements, except for adjusted 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, net income (loss) or adjusted earnings. 28 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) 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.
MetLife Corporate Total Year Ended December 31, 2018 U.S. Holdings & Other Total Adjustments Consolidated -------------------------------------------------- ----------- ----------- --------- ------------ ----------- ------------ (In millions) Revenues Premiums.......................................... $ 23,388 $ 3,205 $ 20 $ 26,613 $ -- $ 26,613 Universal life and investment-type product policy fees............................................. 1,023 1,008 -- 2,031 93 2,124 Net investment income............................. 6,678 4,780 (154) 11,304 (385) 10,919 Other revenues.................................... 775 240 571 1,586 -- 1,586 Net investment gains (losses)..................... -- -- -- -- 153 153 Net derivative gains (losses)..................... -- -- -- -- 766 766 ----------- ----------- --------- ------------ ----------- ------------ Total revenues.................................. 31,864 9,233 437 41,534 627 42,161 ----------- ----------- --------- ------------ ----------- ------------ Expenses Policyholder benefits and claims and policyholder dividends........................................ 24,202 5,870 5 30,077 105 30,182 Interest credited to policyholder account balances......................................... 1,735 748 -- 2,483 (4) 2,479 Capitalization of DAC............................. (40) 6 -- (34) -- (34) Amortization of DAC and VOBA...................... 75 245 -- 320 150 470 Interest expense on debt.......................... 12 8 88 108 -- 108 Other expenses.................................... 2,838 980 834 4,652 (5) 4,647 ----------- ----------- --------- ------------ ----------- ------------ Total expenses.................................. 28,822 7,857 927 37,606 246 37,852 ----------- ----------- --------- ------------ ----------- ------------ Provision for income tax expense (benefit)........ 648 269 (823) 94 79 173 ----------- ----------- --------- ------------ ------------ Adjusted earnings............................... $ 2,394 $ 1,107 $ 333 3,834 =========== =========== ========= Adjustments to: Total revenues.................................... 627 Total expenses.................................... (246) Provision for income tax (expense) benefit........ (79) ------------ Net income (loss).......................................... $ 4,136 $ 4,136 ============ ============
MetLife Corporate At December 31, 2018 U.S. Holdings & Other Total ----------------------------- ----------- ----------- ---------- ----------- (In millions) Total assets................. $ 233,998 $ 147,498 $ 25,421 $ 406,917 Separate account assets...... $ 69,328 $ 41,522 $ -- $ 110,850 Separate account liabilities. $ 69,328 $ 41,522 $ -- $ 110,850
29 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
MetLife Corporate Total Year Ended December 31, 2017 U.S. Holdings & Other Total Adjustments Consolidated ------------------------------------------- ------------ ------------ ---------- ------------ ------------ ------------ (In millions) Revenues Premiums................................... $ 19,496 $ 3,420 $ 9 $ 22,925 $ -- $ 22,925 Universal life and investment-type product policy fees............................... 1,004 1,126 -- 2,130 97 2,227 Net investment income...................... 6,206 4,920 (243) 10,883 (370) 10,513 Other revenues............................. 781 200 589 1,570 -- 1,570 Net investment gains (losses).............. -- -- -- -- 334 334 Net derivative gains (losses).............. -- -- -- -- (344) (344) ------------ ------------ ---------- ------------ ------------ ------------ Total revenues........................... 27,487 9,666 355 37,508 (283) 37,225 ------------ ------------ ---------- ------------ ------------ ------------ Expenses Policyholder benefits and claims and policyholder dividends.................... 20,558 6,006 4 26,568 321 26,889 Interest credited to policyholder account balances.................................. 1,459 779 -- 2,238 (3) 2,235 Capitalization of DAC...................... (48) (13) -- (61) -- (61) Amortization of DAC and VOBA............... 56 303 -- 359 (118) 241 Interest expense on debt................... 11 8 87 106 -- 106 Other expenses............................. 2,717 1,201 930 4,848 1 4,849 ------------ ------------ ---------- ------------ ------------ ------------ Total expenses........................... 24,753 8,284 1,021 34,058 201 34,259 ------------ ------------ ---------- ------------ ------------ ------------ Provision for income tax expense (benefit). 954 427 (368) 1,013 (1,574) (561) ------------ ------------ ---------- ------------ ------------ Adjusted earnings........................ $ 1,780 $ 955 $ (298) 2,437 ============ ============ ========== Adjustments to: Total revenues............................. (283) Total expenses............................. (201) Provision for income tax (expense) benefit. 1,574 ------------ Net income (loss)........................ $ 3,527 $ 3,527 ============ ============
MetLife Corporate At December 31, 2017 U.S. Holdings & Other Total ----------------------------- ------------- ------------- ------------ ------------- (In millions) Total assets................. $ 245,750 $ 163,397 $ 25,148 $ 434,295 Separate account assets...... $ 80,240 $ 50,585 $ -- $ 130,825 Separate account liabilities. $ 80,240 $ 50,585 $ -- $ 130,825
30 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued)
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......................................... 18,968 7,244 130 26,342 171 26,513 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................................... 23,041 10,416 1,133 34,590 (41) 34,549 ----------- ----------- ---------- ----------- ---------- ----------- Provision for income tax expense (benefit)......... 963 274 (551) 686 (487) 199 ----------- ----------- ---------- ----------- ------------ Adjusted earnings................................ $ 1,730 $ 673 $ 246 2,649 =========== =========== ========== Adjustments to: Total revenues..................................... (1,435) Total expenses..................................... 41 Provision for income tax (expense) benefit......... 487 ----------- Net income (loss)................................ $ 1,742 $ 1,742 =========== ============
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, ----------------------------- 2018 2017 2016 --------- --------- --------- (In millions) Life insurance............................... $ 13,251 $ 13,139 $ 13,907 Accident & health insurance.................. 8,071 7,933 7,889 Annuities.................................... 8,685 5,390 4,379 Other........................................ 316 260 238 --------- --------- --------- Total....................................... $ 30,323 $ 26,722 $ 26,413 ========= ========= =========
Substantially all of the Company's consolidated premiums, universal life and investment-type product policy fees and other revenues originated in the U.S. 31 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 2. Segment Information (continued) Revenues derived from two U.S. segment customers each exceeded 10% of consolidated premiums, universal life and investment-type product policy fees and other revenues. Revenues derived from the first U.S. segment customer were $6.0 billion for the year ended December 31, 2018, which represented 20% of consolidated premiums, universal life and investment-type product policy fees and other revenues. The revenue was from a single premium received for a pension risk transfer. Revenues derived from the second U.S. customer were $3.1 billion, $2.8 billion and $2.8 billion for the years ended December 31, 2018, 2017 and 2016, respectively, which represented 10%, 11% and 10%, of consolidated premiums, universal life and investment-type product policy fees and other revenues, respectively. 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, 2018, 2017 and 2016. 3. Disposition 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, New England Life Insurance Company ("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. 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, ----------------- 2018 2017 -------- -------- (In millions) U.S............... $135,003 $131,224 MetLife Holdings.. 88,725 89,012 Corporate & Other. 291 294 -------- -------- Total........... $224,019 $220,530 ======== ========
See Note 6 for discussion of affiliated reinsurance liabilities included in the table above. 32 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) 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 future expected benefit payments and related expenses less the present value of future expected 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 future expected traditional fixed annuities payments. Interest rate assumptions after annuitization used in establishing such liabilities range from 1% to 11%. -------------------------------------------------------------------- Non-medical health insurance The net level premium method and 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 1% 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%. -------------------------------------------------------------------- Participating business represented 3% and 4% of the Company's life insurance in-force at December 31, 2018 and 2017, respectively. Participating policies represented 20%, 21% and 26% of gross traditional life insurance premiums for the years ended December 31, 2018, 2017 and 2016, 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. 33 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) Guarantees The Company issues directly and assumes through reinsurance variable annuity products with guaranteed minimum benefits. GMABs, the non-life contingent portion of GMWBs and certain non-life contingent portions of GMIBs 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 upon . Present value of expected death benefits in excess death even if the account value is of the projected account balance recognizing the reduced to zero. 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 those used for available for an additional fee. 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 benefits in excess determined at the time of issuance of the projected account balance at any future of the variable annuity contract, date of annuitization and recognizing the excess a minimum accumulation of purchase ratably over the accumulation period based on payments, even if the account present value of total expected assessments. value is reduced to zero, that can be annuitized to receive a monthly income stream that is not less than a specified amount. . Certain contracts also provide for . Assumptions are consistent with those used for a guaranteed lump sum return of estimating GMDB liabilities. purchase premium in 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 contingent payments and partial withdrawals, even if the expected assessments using assumptions account value is reduced to zero, consistent with those used for estimating the provided that cumulative GMDB liabilities. withdrawals in a contract year do not exceed a certain limit. . 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. 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 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 ---------------------- ---------------------- GMDBs and Secondary Paid-Up GMWBs GMIBs Guarantees Guarantees Total ---------- ---------- ---------- ---------- ------------ (In millions) Direct: Balance at January 1, 2016... $ 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 Incurred guaranteed benefits. 58 112 105 7 282 Paid guaranteed benefits..... -- -- -- -- -- ---------- ---------- ---------- --------- ------------ Balance at December 31, 2017. 326 579 725 109 1,739 Incurred guaranteed benefits. 3 162 95 5 265 Paid guaranteed benefits..... (12) (3) -- -- (15) ---------- ---------- ---------- --------- ------------ Balance at December 31, 2018. $ 317 $ 738 $ 820 $ 114 $ 1,989 ========== ========== ========== ========= ============ Ceded: Balance at January 1, 2016... $ 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 Incurred guaranteed benefits. (44) 21 23 5 5 Paid guaranteed benefits..... -- -- -- -- -- ---------- ---------- ---------- --------- ------------ Balance at December 31, 2017. -- -- 272 76 348 Incurred guaranteed benefits. -- -- 29 4 33 Paid guaranteed benefits..... -- -- -- -- -- ---------- ---------- ---------- --------- ------------ Balance at December 31, 2018. $ -- $ -- $ 301 $ 80 $ 381 ========== ========== ========== ========= ============ Net: Balance at January 1, 2016... $ 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 Incurred guaranteed benefits. 102 91 82 2 277 Paid guaranteed benefits..... -- -- -- -- -- ---------- ---------- ---------- --------- ------------ Balance at December 31, 2017. 326 579 453 33 1,391 Incurred guaranteed benefits. 3 162 66 1 232 Paid guaranteed benefits..... (12) (3) -- -- (15) ---------- ---------- ---------- --------- ------------ Balance at December 31, 2018. $ 317 $ 738 $ 519 $ 34 $ 1,608 ========== ========== ========== ========= ============
-------- (1) See Note 3. 35 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, ----------------------------------------------------------------------- 2018 2017 --------------------------------- --------------------------------- In the At In the At Event of Death Annuitization Event of Death Annuitization ---------------- --------------- ---------------- --------------- (Dollars in millions) Annuity Contracts: Variable Annuity Guarantees: Total account value (1), (2).......... $ 47,393 $ 20,692 $ 56,136 $ 25,257 Separate account value (1)............ $ 37,342 $ 19,839 $ 45,431 $ 24,336 Net amount at risk.................... $ 2,433 (3) $ 418 (4) $ 990 (3) $ 353 (4) Average attained age of contractholders. 67 years 65 years 66 years 65 years Other Annuity Guarantees: Total account value (1), (2).......... N/A $ 144 N/A $ 141 Net amount at risk.................... N/A $ 85 (5) N/A $ 92 (5) Average attained age of contractholders. N/A 53 years N/A 52 years December 31, ----------------------------------------------------------------------- 2018 2017 --------------------------------- --------------------------------- Secondary Paid-Up Secondary Paid-Up Guarantees Guarantees Guarantees Guarantees ---------------- --------------- ---------------- --------------- (Dollars in millions) Universal and Variable Life Contracts: Total account value (1), (2).......... $ 4,614 $ 937 $ 4,679 $ 977 Net amount at risk (6)................ $ 44,596 $ 6,290 $ 46,704 $ 6,713 Average attained age of policyholders... 55 years 63 years 54 years 62 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. 36 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, --------------------------- 2018 2017 ------------- ------------- (In millions) Fund Groupings: Equity.......... $ 18,073 $ 21,464 Balanced........ 15,831 19,443 Bond............ 2,885 3,798 Money Market.... 53 57 ------------- ------------- Total......... $ 36,842 $ 44,762 ============= =============
Obligations Assumed Under Structured Settlement Assignments The Company assumed 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 received 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 purchased annuities from Brighthouse to fund these periodic payment claim obligations and designates payments to be made directly to the claimant by Brighthouse as the 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, 2018, 2017 and 2016, the Company issued $41.8 billion, $42.7 billion and $39.7 billion, respectively, and repaid $43.7 billion, $41.4 billion and $38.5 billion, respectively, of such funding agreements. At December 31, 2018 and 2017, liabilities for funding agreements outstanding, which are included in policyholder account balances, were $32.3 billion and $34.2 billion, respectively. Metropolitan Life Insurance Company is a member of the FHLB of New York. Holdings of common stock of the FHLB of New York, included in other invested assets, were $724 million and $733 million at December 31, 2018 and 2017, respectively. 37 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 the FHLB of New York and a subsidiary of 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, ----------------------------------------------------------- 2018 2017 2018 2017 ------------ ------------ ---------------- ---------------- (In millions) FHLB of New York (1). $ 14,245 $ 14,445 $ 16,340 (2) $ 16,605 (2) Farmer Mac (3)....... $ 2,550 $ 2,550 $ 2,639 $ 2,644
-------- (1) Represents funding agreements issued to the FHLB of New York in exchange for cash and for which the FHLB of New York has been granted a lien on certain assets, some of which are in the custody of the FHLB of New York, 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 the FHLB of New York 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, the FHLB of New York's recovery on the collateral is limited to the amount of the Company's liability to the FHLB of New York. (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, 2018. 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 2018 is presented as supplementary information. 38 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, 2018 ---------------------------------------------------------------------------------- ---------------------------- For the Years Ended December 31, Total IBNR ---------------------------------------------------------------------------------- Liabilities Plus (Unaudited) Expected Cumulative ------------------------------------------------------------------------- Development on Number of Incurral Reported Reported Year 2011 2012 2013 2014 2015 2016 2017 2018 Claims Claims -------- ----------- ----------- --------- --------- --------- --------- --------- -------- ---------------- ----------- (Dollars in millions) 2011.. $ 6,318 $ 6,290 $ 6,293 $ 6,269 $ 6,287 $ 6,295 $ 6,294 $ 6,295 $ 1 207,608 2012.. 6,503 6,579 6,569 6,546 6,568 6,569 6,569 1 209,047 2013.. 6,637 6,713 6,719 6,720 6,730 6,720 3 211,341 2014.. 6,986 6,919 6,913 6,910 6,914 5 213,388 2015.. 7,040 7,015 7,014 7,021 11 213,243 2016.. 7,125 7,085 7,095 14 210,706 2017.. 7,432 7,418 31 246,364 2018.. 7,757 899 203,329 -------- Total................................................................. 55,789 Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance..................................................... (53,786) All outstanding liabilities for incurral years prior to 2011, net of reinsurance............................................................ 9 -------- Total unpaid claims and claim adjustment expenses, net of reinsurance.......................................................... $ 2,012 ========
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 2017 2018 ------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------------ (In millions) 2011......... $ 4,982 $ 6,194 $ 6,239 $ 6,256 $ 6,281 $ 6,290 $ 6,292 $ 6,295 2012......... 5,132 6,472 6,518 6,532 6,558 6,565 6,566 2013......... 5,216 6,614 6,664 6,678 6,711 6,715 2014......... 5,428 6,809 6,858 6,869 6,902 2015......... 5,524 6,913 6,958 6,974 2016......... 5,582 6,980 7,034 2017......... 5,761 7,292 2018......... 6,008 ------------ Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance $ 53,786 ============
Average Annual Percentage Payout The following is supplementary information about average historical claims duration as of December 31, 2018:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ----------------------------------------------------------------------------------- Years............. 1 2 3 4 5 6 7 8 Group Life - Term. 78.2% 20.2% 0.7% 0.2% 0.4% 0.1% --% --%
39 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, 2018 ------------------------------------------------------------------------------------ ---------------------------- For the Years Ended December 31, Total IBNR ------------------------------------------------------------------------------------ Liabilities Plus (Unaudited) Expected Cumulative ---------------------------------------------------------------------------- Development on Number of Incurral Reported Reported Year 2011 2012 2013 2014 2015 2016 2017 2018 Claims Claims -------- --------- --------- --------- --------- --------- --------- --------- ------- ---------------- ----------- (Dollars in millions) 2011.... $ 955 $ 916 $ 894 $ 914 $ 924 $ 923 $ 918 $ 917 $ -- 21,643 2012.... 966 979 980 1,014 1,034 1,037 1,021 -- 20,085 2013.... 1,008 1,027 1,032 1,049 1,070 1,069 -- 21,135 2014.... 1,076 1,077 1,079 1,101 1,109 -- 22,846 2015.... 1,082 1,105 1,093 1,100 -- 21,177 2016.... 1,131 1,139 1,159 6 17,897 2017.... 1,244 1,202 29 15,968 2018.... 1,240 621 8,208 ------- Total................................................................................ 8,817 Cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance (3,815) All outstanding liabilities for incurral years prior to 2011, net of reinsurance....... 2,110 ------- Total unpaid claims and claim adjustment expenses, net of reinsurance................ $ 7,112 =======
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 2017 2018 ------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- (In millions) 2011......... $ 44 $ 217 $ 337 $ 411 $ 478 $ 537 $ 588 $ 635 2012......... 43 229 365 453 524 591 648 2013......... 43 234 382 475 551 622 2014......... 51 266 428 526 609 2015......... 50 264 427 524 2016......... 49 267 433 2017......... 56 290 2018......... 54 ---------- Total cumulative paid claims and paid allocated claim adjustment expenses, net of reinsurance $ 3,815 ==========
Average Annual Percentage Payout The following is supplementary information about average historical claims duration as of December 31, 2018:
Average Annual Percentage Payout of Incurred Claims by Age, Net of Reinsurance ----------------------------------------------------------------------------------- Years...................... 1 2 3 4 5 6 7 8 Group Long-Term Disability. 4.4% 18.9% 14.0% 8.6% 7.2% 6.5% 5.6% 5.1%
40 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 4. Insurance (continued) 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. 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 2018 compared to the 2017 incurral year due to the growth in the size of the business. There were no significant changes in methodologies during 2018. 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 $6.0 billion at both December 31, 2018 and 2017. 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, 2018 and 2017. The amount of interest accretion recognized was $509 million, $510 million and $565 million for the years ended December 31, 2018, 2017 and 2016, 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. 41 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, 2018 ----------------------------- (In millions) Short-Duration: Unpaid claims and allocated claims adjustment expenses, net of reinsurance: U.S.: Group Life - Term............................................................................ $ 2,012 Group Long-Term Disability................................................................... 7,112 -------------- Total...................................................................................... $ 9,124 Other insurance lines - all segments combined................................................ 517 -------------- Total unpaid claims and allocated claims adjustment expenses, net of reinsurance........... 9,641 -------------- Reinsurance recoverables on unpaid claims: U.S.: Group Life - Term............................................................................ 20 Group Long-Term Disability................................................................... 109 -------------- Total...................................................................................... 129 Other insurance lines - all segments combined................................................ 26 -------------- Total reinsurance recoverable on unpaid claims............................................. 155 -------------- Total unpaid claims and allocated claims adjustment expense................................ 9,796 Discounting.................................................................................. (1,253) -------------- Liability for unpaid claims and claim adjustment liabilities - short-duration................ 8,543 Liability for unpaid claims and claim adjustment liabilities - all long-duration lines....... 4,047 -------------- Total liability for unpaid claims and claim adjustment expense (included in future policy benefits and other policy-related balances)............................................... $ 12,590 ==============
42 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, ------------------------------------------------- 2018 2017 2016 --------------- --------------- --------------- (In millions) Balance at December 31 of prior period..... $ 12,090 $ 11,621 $ 7,527 Less: Reinsurance recoverables........... 1,401 1,251 273 --------------- --------------- --------------- Net balance at December 31 of prior period. 10,689 10,370 7,254 Cumulative adjustment (1).................. -- -- 3,277 --------------- --------------- --------------- Net balance at January 1,.................. 10,689 10,370 10,531 Incurred related to: Current year............................. 16,714 16,264 15,978 Prior years (2).......................... 241 175 322 --------------- --------------- --------------- Total incurred......................... 16,955 16,439 16,300 Paid related to: Current year............................. (12,359) (12,212) (12,454) Prior years.............................. (4,192) (3,908) (3,905) --------------- --------------- --------------- Total paid............................. (16,551) (16,120) (16,359) Dispositions (3)........................... -- -- (102) --------------- --------------- --------------- Net balance at December 31,................ 11,093 10,689 10,370 Add: Reinsurance recoverables............ 1,497 1,401 1,251 --------------- --------------- --------------- Balance at December 31,.................... $ 12,590 $ 12,090 $ 11,621 =============== =============== ===============
-------- (1) Reflects the accumulated adjustment, net of reinsurance, upon implementation of the 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. (2) During 2018 and 2017, claims and claim adjustment expenses associated with prior years increased due to events incurred in prior years but reported during current year. During 2016, claims and claim adjustment expenses associated with prior years increased due to the implementation of guidance related to short-duration contracts. (3) See Note 3. Separate Accounts Separate account assets and liabilities include two categories of account types: pass-through separate accounts totaling $66.0 billion and $75.2 billion at December 31, 2018 and 2017, 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 $44.8 billion and $55.6 billion at December 31, 2018 and 2017, respectively. The latter category consisted primarily of guaranteed interest contracts ("GICs"). The average interest rate credited on these contracts was 2.68% and 2.40% at December 31, 2018 and 2017, respectively. For the years ended December 31, 2018, 2017 and 2016, there were no investment gains (losses) on transfers of assets from the general account to the separate accounts. 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 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. 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) 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. 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 DAC and VOBA was as follows:
Years Ended December 31, ------------------------------------------------- 2018 2017 2016 --------------- --------------- --------------- (In millions) DAC: Balance at January 1,........................................... $ 4,320 $ 4,714 $ 5,977 Capitalizations................................................. 34 61 332 Amortization related to: Net investment gains (losses) and net derivative gains (losses). (114) 91 353 Other expenses.................................................. (355) (331) (791) --------------- --------------- --------------- Total amortization............................................ (469) (240) (438) --------------- --------------- --------------- Unrealized investment gains (losses)............................ 204 (215) (12) Dispositions (1)................................................ -- -- (1,145) --------------- --------------- --------------- Balance at December 31,......................................... 4,089 4,320 4,714 --------------- --------------- --------------- VOBA: Balance at January 1,........................................... 28 29 66 Amortization related to: Other expenses.................................................. (1) (1) (3) --------------- --------------- --------------- Total amortization............................................ (1) (1) (3) --------------- --------------- --------------- Unrealized investment gains (losses)............................ 1 -- 13 Dispositions (1)................................................ -- -- (47) --------------- --------------- --------------- Balance at December 31,......................................... 28 28 29 --------------- --------------- --------------- Total DAC and VOBA: Balance at December 31,......................................... $ 4,117 $ 4,348 $ 4,743 =============== =============== ===============
-------- (1)See Note 3. Information regarding total DAC and VOBA by segment, as well as Corporate & Other, was as follows at:
December 31, --------------------------- 2018 2017 ------------- ------------- (In millions) U.S............... $ 403 $ 413 MetLife Holdings.. 3,709 3,930 Corporate & Other. 5 5 ------------- ------------- Total........... $ 4,117 $ 4,348 ============= =============
46 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, ---------------------------------- 2018 2017 2016 ---------- ---------- ---------- (In millions) DSI: Balance at January 1,................ $ 93 $ 105 $ 130 Capitalization....................... 1 1 4 Amortization......................... (15) (8) (16) Unrealized investment gains (losses). 14 (5) 1 Dispositions (1)..................... $ -- $ -- $ (14) ---------- ---------- ---------- Balance at December 31,.............. $ 93 $ 93 $ 105 ========== ========== ========== VODA and VOCRA: Balance at January 1,................ $ 207 $ 235 $ 265 Amortization......................... (26) (28) (30) ---------- ---------- ---------- Balance at December 31,.............. $ 181 $ 207 $ 235 ========== ========== ========== Accumulated amortization........... $ 276 $ 250 $ 222 ========== ========== ==========
------------- (1)See Note 3. The estimated future amortization expense to be reported in other expenses for the next five years was as follows:
VOBA VODA and VOCRA ------------ -------------- (In millions) 2019.............................................. $ 2 $ 24 2020.............................................. $ 2 $ 22 2021.............................................. $ 2 $ 19 2022.............................................. $ 2 $ 17 2023.............................................. $ 2 $ 15
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 its 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. 47 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) The Company's RIS business has periodically engaged in reinsurance activities, on an opportunistic basis. There were no such 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. 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. Catastrophe Coverage The Company has exposure to catastrophes which could contribute to significant fluctuations in its results of operations. The Company purchases catastrophe coverage to reinsure risks issued within territories that it believes are subject to the greatest catastrophic risks. The Company uses excess of retention and quota share reinsurance agreements to provide greater diversification of risk and minimize exposure to larger risks. Excess of retention reinsurance agreements provide for a portion of a risk to remain with the direct writing company and quota share reinsurance agreements provide for the direct writing company to transfer a fixed percentage of all risks of a class of policies. 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, 2018 and 2017 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 of unsecured unaffiliated reinsurance recoverable balances at both December 31, 2018 and 2017. At December 31, 2018, the Company had $2.9 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $2.0 billion, or 69%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.3 billion of net unaffiliated ceded reinsurance recoverables which were unsecured. At December 31, 2017, the Company had $2.9 billion of net unaffiliated ceded reinsurance recoverables. Of this total, $2.1 billion, or 72%, were with the Company's five largest unaffiliated ceded reinsurers, including $1.3 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. 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 statements of operations include the impact of reinsurance. Information regarding the significant effects of reinsurance was as follows:
Years Ended December 31, ------------------------------------------- 2018 2017 2016 ------------- ------------- ------------- (In millions) Premiums Direct premiums............................................... $ 26,883 $ 23,062 $ 21,931 Reinsurance assumed........................................... 752 1,116 1,687 Reinsurance ceded............................................. (1,022) (1,253) (1,225) ------------- ------------- ------------- Net premiums................................................ $ 26,613 $ 22,925 $ 22,393 ============= ============= ============= Universal life and investment-type product policy fees Direct universal life and investment-type product policy fees. $ 2,382 $ 2,492 $ 3,006 Reinsurance assumed........................................... 9 12 60 Reinsurance ceded............................................. (267) (277) (524) ------------- ------------- ------------- Net universal life and investment-type product policy fees.. $ 2,124 $ 2,227 $ 2,542 ============= ============= ============= Other revenues Direct other revenues......................................... $ 1,017 $ 930 $ 851 Reinsurance assumed........................................... (11) 35 (2) Reinsurance ceded............................................. 580 605 629 ------------- ------------- ------------- Net other revenues.......................................... $ 1,586 $ 1,570 $ 1,478 ============= ============= ============= Policyholder benefits and claims Direct policyholder benefits and claims....................... $ 29,589 $ 26,199 $ 25,248 Reinsurance assumed........................................... 691 875 1,496 Reinsurance ceded............................................. (1,183) (1,282) (1,431) ------------- ------------- ------------- Net policyholder benefits and claims........................ $ 29,097 $ 25,792 $ 25,313 ============= ============= ============= Interest credited to policyholder account balances Direct interest credited to policyholder account balances..... $ 2,446 $ 2,199 $ 2,279 Reinsurance assumed........................................... 46 49 35 Reinsurance ceded............................................. (13) (13) (81) ------------- ------------- ------------- Net interest credited to policyholder account balances...... $ 2,479 $ 2,235 $ 2,233 ============= ============= ============= Other expenses Direct other expenses......................................... $ 4,650 $ 4,489 $ 4,830 Reinsurance assumed........................................... 71 138 583 Reinsurance ceded............................................. 470 508 390 ------------- ------------- ------------- Net other expenses.......................................... $ 5,191 $ 5,135 $ 5,803 ============= ============= =============
49 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, --------------------------------------------------------------------------- 2018 2017 ------------------------------------- ------------------------------------- Total Total Balance Balance Direct Assumed Ceded Sheet Direct Assumed Ceded Sheet --------- ------- -------- --------- --------- ------- -------- --------- (In millions) Assets Premiums, reinsurance and other receivables................................ $ 2,094 $ 518 $19,217 $ 21,829 $ 2,491 $ 448 $19,159 $ 22,098 Deferred policy acquisition costs and value of business acquired....................... 4,343 15 (241) 4,117 4,581 17 (250) 4,348 --------- ------- -------- --------- --------- ------- -------- --------- Total assets.............................. $ 6,437 $ 533 $18,976 $ 25,946 $ 7,072 $ 465 $18,909 $ 26,446 ========= ======= ======== ========= ========= ======= ======== ========= Liabilities Future policy benefits...................... $124,787 $1,313 $ (1) $126,099 $118,077 $1,342 $ (4) $119,415 Policyholder account balances............... 90,489 167 -- 90,656 93,758 181 -- 93,939 Other policy-related balances............... 7,021 231 12 7,264 6,914 247 15 7,176 Other liabilities........................... 6,084 2,242 16,294 24,620 8,498 2,242 16,669 27,409 --------- ------- -------- --------- --------- ------- -------- --------- Total liabilities......................... $228,381 $3,953 $16,305 $248,639 $227,247 $4,012 $16,680 $247,939 ========= ======= ======== ========= ========= ======= ======== =========
In December 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, for the year ended December 31, 2016, 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 $14.1 billion and $14.3 billion at December 31, 2018 and 2017, respectively. The deposit liabilities on reinsurance were $1.8 billion and $1.9 billion at December 31, 2018 and 2017, respectively. Related Party Reinsurance Transactions The Company has reinsurance agreements with certain of MetLife, Inc.'s subsidiaries, including MetLife Reinsurance Company of Charleston ("MRC"), MetLife Reinsurance Company of Vermont, and Metropolitan Tower Life Insurance Company, all of which are related parties. Additionally, the Company has reinsurance agreements with Brighthouse Life Insurance Company ("Brighthouse Insurance"), Brighthouse Life Insurance Company of NY ("Brighthouse NY") and NELICO, former subsidiaries of MetLife, Inc. In August 2017, MetLife, Inc. completed the separation of Brighthouse and retained 19.2% of Brighthouse Financial, Inc. common stock outstanding. In June 2018, MetLife, Inc. sold its Brighthouse Financial, Inc. common stock and Brighthouse was no longer considered a related party. 50 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, ------------------------------------- 2018 2017 2016 ----------- ----------- ----------- (In millions) Premiums Reinsurance assumed.......................................... $ 9 $ 122 $ 727 Reinsurance ceded............................................ (117) (132) (45) ----------- ----------- ----------- Net premiums............................................... $ (108) $ (10) $ 682 =========== =========== =========== Universal life and investment-type product policy fees Reinsurance assumed.......................................... $ (1) $ 12 $ 60 Reinsurance ceded............................................ (18) (19) (138) ----------- ----------- ----------- Net universal life and investment-type product policy fees. $ (19) $ (7) $ (78) =========== =========== =========== Other revenues Reinsurance assumed.......................................... $ -- $ 37 $ (1) Reinsurance ceded............................................ 541 563 575 ----------- ----------- ----------- Net other revenues......................................... $ 541 $ 600 $ 574 =========== =========== =========== Policyholder benefits and claims Reinsurance assumed.......................................... $ 11 $ 69 $ 697 Reinsurance ceded............................................ (120) (122) (110) ----------- ----------- ----------- Net policyholder benefits and claims....................... $ (109) $ (53) $ 587 =========== =========== =========== Interest credited to policyholder account balances Reinsurance assumed.......................................... $ 38 $ 47 $ 34 Reinsurance ceded............................................ (13) (13) (81) ----------- ----------- ----------- Net interest credited to policyholder account balances..... $ 25 $ 34 $ (47) =========== =========== =========== Other expenses Reinsurance assumed.......................................... $ 10 $ 40 $ 490 Reinsurance ceded............................................ 543 600 570 ----------- ----------- ----------- Net other expenses......................................... $ 553 $ 640 $ 1,060 =========== =========== ===========
51 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 balance sheets was as follows at:
December 31, -------------------------------------------------- 2018 2017 ------------------------ ------------------------ Assumed Ceded Assumed (1) Ceded ----------- ------------ ----------- ------------ (In millions) Assets Premiums, reinsurance and other receivables...................... $ -- $ 12,676 $ 47 $ 12,762 Deferred policy acquisition costs and value of business acquired. -- (175) -- (180) ----------- ------------ ----------- ------------ Total assets................................................... $ -- $ 12,501 $ 47 $ 12,582 =========== ============ =========== ============ Liabilities Future policy benefits........................................... $ 61 $ (1) $ 380 $ (4) Policyholder account balances.................................... 141 -- 166 -- Other policy-related balances.................................... 6 12 104 15 Other liabilities................................................ 841 12,366 1,858 12,970 ----------- ------------ ----------- ------------ Total liabilities.............................................. $ 1,049 $ 12,377 $ 2,508 $ 12,981 =========== ============ =========== ============
-------- (1)Includes $1.4 billion of total liabilities related to assumed risks from Brighthouse, which effective July 1, 2018 was no longer considered a related party. 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 were $4 million and $16 million at December 31, 2018 and 2017, respectively. Net derivative gains (losses) associated with these embedded derivatives were $12 million, ($6) million and ($2) million for the years ended December 31, 2018, 2017 and 2016, 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 included within net derivative gains (losses). There were no embedded derivatives associated with the cessions included within premiums, reinsurance and other receivables at December 31, 2018 and 2017. Net derivative gains (losses) associated with the embedded derivatives were $0, ($110) million and $33 million for the years ended December 31, 2018, 2017 and 2016, 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 is included within other liabilities and was $461 million and $882 million at December 31, 2018 and 2017, respectively. Net derivative gains (losses) associated with the embedded derivative were $421 million, ($115) million and ($73) million for the years ended December 31, 2018, 2017 and 2016, respectively. The Company assumed 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 $0 and $3 million at December 31, 2018 and 2017, respectively. Net derivative gains (losses) associated with the embedded derivatives were $1 million, $263 million and ($32) million for the years ended December 31, 2018, 2017 and 2016, respectively. In January 2017, Brighthouse NY and NELICO recaptured risks related to certain variable annuities, including guaranteed minimum benefits, reinsured by the Company. These recaptures resulted in a decrease in cash and cash equivalents of $34 million, a decrease in premiums, reinsurance and other receivables of $77 million, a decrease in future policy benefits of $79 million, a decrease in policyholder account balances of $387 million and an increase in other liabilities of $76 million. The Company recognized a gain of $178 million, net of income tax, for the year ended December 31, 2017, as a result of these transactions. 52 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 6. Reinsurance (continued) In January 2017, the Company recaptured risks related to guaranteed minimum benefit guarantees on certain variable annuities reinsured by Brighthouse Insurance. This recapture resulted in an increase in investments and cash and cash equivalents of $428 million and a decrease in premiums, reinsurance and other receivables of $565 million. The Company recognized a loss of $89 million, net of income tax, for the year ended December 31, 2017, as a result of this transaction. 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, for the year ended December 31, 2016, 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 $451 million and $13 million of unsecured affiliated reinsurance recoverable balances at December 31, 2018 and 2017, 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 $11.4 billion and $11.5 billion at December 31, 2018 and 2017, respectively. The deposit liabilities on affiliated reinsurance were $837 million and $1.8 billion at December 31, 2018 and 2017, respectively. 53 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 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. 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 from the Demutualization Date. 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 net of income tax, to the closed block. 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 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. 54 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, ------------------------------ 2018 2017 -------------- -------------- (In millions) Closed Block Liabilities Future policy benefits........................................................................ $ 40,032 $ 40,463 Other policy-related balances................................................................. 317 222 Policyholder dividends payable................................................................ 431 437 Policyholder dividend obligation.............................................................. 428 2,121 Deferred income tax liability................................................................. 28 -- Other liabilities............................................................................. 328 212 -------------- -------------- Total closed block liabilities.............................................................. 41,564 43,455 -------------- -------------- Assets Designated to the Closed Block Investments: Fixed maturity securities available-for-sale, at estimated fair value......................... 25,354 27,904 Equity securities, at estimated fair value.................................................... 61 70 Contractholder-directed equity securities and fair value option securities, at estimated fair value........................................................................................ 43 -- Mortgage loans................................................................................ 6,778 5,878 Policy loans.................................................................................. 4,527 4,548 Real estate and real estate joint ventures.................................................... 544 613 Other invested assets......................................................................... 643 731 -------------- -------------- Total investments........................................................................... 37,950 39,744 Accrued investment income..................................................................... 443 477 Premiums, reinsurance and other receivables; cash and cash equivalents........................ 83 14 Current income tax recoverable................................................................ 69 35 Deferred income tax asset..................................................................... -- 36 -------------- -------------- Total assets designated to the closed block................................................. 38,545 40,306 -------------- -------------- Excess of closed block liabilities over assets designated to the closed block............... 3,019 3,149 -------------- -------------- Amounts included in AOCI: Unrealized investment gains (losses), net of income tax....................................... 1,089 1,863 Unrealized gains (losses) on derivatives, net of income tax................................... 86 (7) Allocated to policyholder dividend obligation, net of income tax.............................. (338) (1,379) -------------- -------------- Total amounts included in AOCI.............................................................. 837 477 -------------- -------------- Maximum future earnings to be recognized from closed block assets and liabilities........... $ 3,856 $ 3,626 ============== ==============
55 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 7. Closed Block (continued) See Note 1 for discussion of new accounting guidance related to U.S. Tax Reform. Information regarding the closed block policyholder dividend obligation was as follows:
Years Ended December 31, --------------------------------------- 2018 2017 2016 ----------- ------------- ------------ (In millions) Balance at January 1,........................ $ 2,121 $ 1,931 $ 1,783 Change in unrealized investment and derivative gains (losses)................... (1,693) 190 148 ----------- ------------- ------------ Balance at December 31,...................... $ 428 $ 2,121 $ 1,931 =========== ============= ============
Information regarding the closed block revenues and expenses was as follows:
Years Ended December 31, ---------------------------------------- 2018 2017 2016 ------------ ------------ ------------ (In millions) Revenues Premiums..................................... $ 1,672 $ 1,736 $ 1,804 Net investment income........................ 1,758 1,818 1,902 Net investment gains (losses)................ (71) 1 (10) Net derivative gains (losses)................ 22 (32) 25 ------------ ------------ ------------ Total revenues.............................. 3,381 3,523 3,721 ------------ ------------ ------------ Expenses Policyholder benefits and claims............. 2,475 2,453 2,563 Policyholder dividends....................... 968 976 953 Other expenses............................... 117 125 133 ------------ ------------ ------------ Total expenses.............................. 3,560 3,554 3,649 ------------ ------------ ------------ Revenues, net of expenses before provision for income tax expense (benefit).......... (179) (31) 72 Provision for income tax expense (benefit)... (39) 12 24 ------------ ------------ ------------ Revenues, net of expenses and provision for income tax expense (benefit).............. $ (140) $ (43) $ 48 ============ ============ ============
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. 56 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities ("ABS") and certain structured investment transactions) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned. Fixed Maturity Securities AFS Fixed Maturity Securities AFS by Sector The following table presents the fixed maturity securities AFS by sector. Municipals includes taxable and tax-exempt revenue bonds, and to a much lesser extent, general obligations of states, municipalities and political subdivisions. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities AFS. Included within fixed maturity securities AFS are structured securities including RMBS, ABS and commercial mortgage-backed securities ("CMBS") (collectively, "Structured Securities").
December 31, 2018 December 31, 2017 ------------------------------------------------ ------------------------------------------------- Gross Unrealized Gross Unrealized --------------------------- Estimated ---------------------------- Estimated Amortized Temporary OTTI Fair Amortized Temporary OTTI Fair Cost Gains Losses Losses (1) Value Cost Gains Losses Losses (1) Value --------- ------- --------- ---------- --------- --------- -------- --------- ---------- --------- (In millions) U.S. corporate....... $ 53,927 $ 2,440 $ 1,565 $ -- $ 54,802 $ 53,291 $ 5,037 $ 238 $ -- $ 58,090 U.S. government and agency.............. 28,139 2,388 366 -- 30,161 35,021 3,755 231 -- 38,545 Foreign corporate.... 26,592 674 1,303 -- 25,963 24,367 1,655 426 -- 25,596 RMBS................. 22,186 831 305 (25) 22,737 21,735 1,039 181 (41) 22,634 ABS.................. 8,599 40 112 -- 8,527 7,808 73 15 -- 7,866 Municipals........... 6,070 907 30 -- 6,947 6,310 1,245 3 1 7,551 CMBS................. 5,471 48 75 -- 5,444 5,390 124 26 -- 5,488 Foreign government... 4,191 408 107 -- 4,492 3,887 641 26 -- 4,502 --------- ------- --------- ------- --------- --------- -------- --------- ------- --------- Total fixed maturity securities AFS.... $ 155,175 $ 7,736 $ 3,863 $ (25) $ 159,073 $ 157,809 $ 13,569 $ 1,146 $ (40) $ 170,272 ========= ======= ========= ======= ========= ========= ======== ========= ======= =========
------------- (1) Noncredit OTTI losses included in AOCI in an unrealized gain position are 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 AFS with an estimated fair value of $14 million and $4 million with unrealized gains (losses) of ($1) million and ($3) million at December 31, 2018 and 2017, 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 and certain prepayment-sensitive Structured Securities, the effective yield is recalculated on a prospective basis. For all other Structured Securities, the effective yield is recalculated on a retrospective basis. 57 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 AFS The amortized cost and estimated fair value of fixed maturity securities AFS, by contractual maturity date, were as follows at December 31, 2018:
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 AFS ------------ ------------- -------------- ------------- ------------ -------------- (In millions) Amortized cost....... $ 7,499 $ 27,652 $ 28,623 $ 55,145 $ 36,256 $ 155,175 Estimated fair value. $ 7,436 $ 27,705 $ 28,543 $ 58,681 $ 36,708 $ 159,073
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities AFS 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 Securities AFS by Sector The following table presents the estimated fair value and gross unrealized losses of fixed maturity 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, 2018 December 31, 2017 ------------------------------------------- ------------------------------------------- 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) U.S. corporate...... $ 23,398 $ 1,176 $ 3,043 $ 389 $ 3,727 $ 57 $ 2,523 $ 181 U.S. government and agency............. 4,322 29 7,948 337 13,905 76 3,018 155 Foreign corporate... 12,911 893 2,138 410 1,677 43 3,912 383 RMBS................ 5,611 107 4,482 173 3,673 30 3,332 110 ABS................. 5,958 105 223 7 732 3 358 12 Municipals.......... 675 22 94 8 106 1 120 3 CMBS................ 2,455 45 344 30 844 6 193 20 Foreign government.. 1,364 83 191 24 247 6 265 20 ---------- --------- ---------- --------- ---------- ------- ---------- ------- Total fixed maturity securities AFS... $ 56,694 $ 2,460 $ 18,463 $ 1,378 $ 24,911 $ 222 $ 13,721 $ 884 ========== ========= ========== ========= ========== ======= ========== ======= Total number of securities in an unrealized loss position........... 5,263 1,125 1,295 1,103 ========== ========== ========== ==========
58 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Evaluation of Fixed Maturity Securities AFS for OTTI and Evaluating Temporarily Impaired Fixed Maturity Securities AFS 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 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) 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 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 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 the following types of securities: U.S. and foreign corporate, foreign government and municipals, 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. 59 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The amortized cost of 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 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 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 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, 2018. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), and changes in credit ratings, collateral valuation, and foreign currency exchange rates. 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 AFS increased $2.7 billion during the year ended December 31, 2018 to $3.8 billion. The increase in gross unrealized losses for the year ended December 31, 2018, was primarily attributable to increases in interest rates, widening credit spreads and, to a lesser extent, the impact of weakening of certain foreign currencies on non-functional currency denominated fixed maturity securities AFS. At December 31, 2018, $132 million of the total $3.8 billion of gross unrealized losses were from 22 fixed maturity securities AFS with an unrealized loss position of 20% or more of amortized cost for six months or greater. Investment Grade Fixed Maturity Securities AFS Of the $132 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $82 million, or 62%, were related to gross unrealized losses on 10 investment grade fixed maturity securities AFS. Unrealized losses on investment grade fixed maturity securities AFS are principally related to widening credit spreads since purchase and, with respect to fixed-rate fixed maturity securities AFS, rising interest rates since purchase. Below Investment Grade Fixed Maturity Securities AFS Of the $132 million of gross unrealized losses on fixed maturity securities AFS with an unrealized loss of 20% or more of amortized cost for six months or greater, $50 million, or 38%, were related to gross unrealized losses on 12 below investment grade fixed maturity securities AFS. Unrealized losses on below investment grade fixed maturity securities AFS are principally related to U.S. and foreign corporate securities (primarily industrial and utility securities) and CMBS and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainty. 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 and evaluates CMBS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, the payment terms of the underlying assets backing a particular security and the payment priority within the tranche structure of the security. 60 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Equity Securities Equity securities are summarized as follows at:
December 31, 2018 December 31, 2017 -------------------- --------------------- Estimated Estimated Fair % of Fair % of Value Total Value Total --------- ---------- ---------- ---------- (Dollars in millions) Common stock...................................... $ 442 57.2% $ 1,251 75.5% Non-redeemable preferred stock.................... 331 42.8 407 24.5 -------- ---------- ---------- ---------- Total equity securities.......................... $ 773 100.0% $ 1,658 100.0% ======== ========== ========== ==========
In connection with the adoption of new guidance related to the recognition and measurement of financial instruments (see Note 1), effective January 1, 2018, the Company has reclassified its investment in common stock in FHLB from equity securities to other invested assets. These investments are carried at redemption value and are considered restricted investments until redeemed by the respective FHLBanks. The carrying value of these investments at December 31, 2017 was $733 million. Mortgage Loans Mortgage Loans by Portfolio Segment Mortgage loans are summarized as follows at:
December 31, --------------------------------------------- 2018 2017 ---------------------- ---------------------- Carrying % of Carrying % of Value Total Value Total ----------- ---------- ----------- ---------- (Dollars in millions) Mortgage loans: Commercial...................................... $ 38,123 59.9% $ 35,440 60.6% Agricultural.................................... 14,164 22.2 12,712 21.8 Residential..................................... 11,392 17.9 10,058 17.2 ----------- ---------- ----------- ---------- Total recorded investment...................... 63,679 100.0 58,210 99.6 Valuation allowances............................ (291) (0.5) (271) (0.5) ----------- ---------- ----------- ---------- Subtotal mortgage loans, net................... 63,388 99.5 57,939 99.1 Residential -- FVO.............................. 299 0.5 520 0.9 ----------- ---------- ----------- ---------- Total mortgage loans, net...................... $ 63,687 100.0% $ 58,459 100.0% =========== ========== =========== ==========
Information on commercial, agricultural and residential mortgage loans is presented in the tables below. Information on residential mortgage loans -- FVO is presented in Note 10. The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. The amount of net discounts, included within total recorded investment, is primarily attributable to residential mortgage loans, and at December 31, 2018 and 2017 was $907 million and $1.0 billion, respectively. The carrying value of foreclosed mortgage loans included in real estate and real estate joint ventures was $42 million and $44 million at December 31, 2018 and 2017, respectively. Purchases of mortgage loans, primarily residential, were $3.4 billion, $3.1 billion and $2.9 billion for the years ended December 31, 2018, 2017 and 2016, respectively. 61 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The Company originates and acquires unaffiliated mortgage loans and simultaneously sells a portion to affiliates under master participation agreements. The aggregate amount of mortgage loan participation interests in unaffiliated mortgage loans sold by the Company to affiliates during the years ended December 31, 2018, 2017 and 2016 was $1.5 billion, $2.5 billion and $3.6 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 $1.5 billion, $1.8 billion and $2.1 billion during the years ended December 31, 2018, 2017 and 2016, respectively. The Company purchases unaffiliated mortgage loan participation interests under a master participation agreement from an affiliate, simultaneously with the affiliate's origination or acquisition of mortgage loans. The aggregate amount of unaffiliated mortgage loan participation interests purchased by the Company from such affiliate during the year ended December 31, 2018 was $3.7 billion. The Company did not purchase any unaffiliated mortgage loan participation interests during the years ended December 31, 2017 and 2016. In connection with the mortgage loan participations, the affiliate collected mortgage loan principal and interest payments on the Company's behalf and the affiliate remitted such payments to the Company in the amount of $119 million during the year ended December 31, 2018. 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, 2018 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 38,123 $ 190 $ -- $ -- Agricultural...... 31 31 3 169 169 13,964 41 197 123 Residential....... -- -- -- 431 386 11,006 57 386 358 ---------- ---------- --------- ----------- ----------- ------------ --------- --------- --------- Total........... $ 31 $ 31 $ 3 $ 600 $ 555 $ 63,093 $ 288 $ 583 $ 481 ========== ========== ========= =========== =========== ============ ========= ========= ========= December 31, 2017 Commercial........ $ -- $ -- $ -- $ -- $ -- $ 35,440 $ 173 $ -- $ 5 Agricultural...... 22 21 2 27 27 12,664 38 46 32 Residential....... -- -- -- 358 324 9,734 58 324 285 ---------- ---------- --------- ----------- ----------- ------------ --------- --------- --------- Total........... $ 22 $ 21 $ 2 $ 385 $ 351 $ 57,838 $ 269 $ 370 $ 322 ========== ========== ========= =========== =========== ============ ========= ========= =========
The average recorded investment for impaired commercial, agricultural and residential mortgage loans was $30 million, $49 million and $188 million, respectively, for the year ended December 31, 2016. 62 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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, 2016..... $ 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 Provision (release)............ 6 4 8 18 Charge-offs, net of recoveries. -- (2) (12) (14) -------------- ------------- ------------- -------------- Balance at December 31, 2017... 173 40 58 271 Provision (release)............ 17 4 7 28 Charge-offs, net of recoveries. -- -- (8) (8) -------------- ------------- ------------- -------------- Balance at December 31, 2018... $ 190 $ 44 $ 57 $ 291 ============== ============= ============= ==============
------------- (1) See Note 3. 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 with 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 capture 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. 63 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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. 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. 64 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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, 2018 Loan-to-value ratios: Less than 65%......... $ 31,282 $ 723 $ 85 $ 32,090 84.2% $ 32,440 84.3% 65% to 75%............ 4,759 -- 21 4,780 12.5 4,829 12.6 76% to 80%............ 340 210 56 606 1.6 585 1.5 Greater than 80%...... 480 167 -- 647 1.7 613 1.6 ----------- ---------- -------- ----------- -------- ----------- --------- Total............... $ 36,861 $ 1,100 $ 162 $ 38,123 100.0% $ 38,467 100.0% =========== ========== ======== =========== ======== =========== ========= December 31, 2017 Loan-to-value ratios: Less than 65%......... $ 29,346 $ 1,359 $ 198 $ 30,903 87.2% $ 31,563 87.5% 65% to 75%............ 3,245 95 114 3,454 9.7 3,465 9.6 76% to 80%............ 149 171 57 377 1.1 363 1.0 Greater than 80%...... 400 159 147 706 2.0 665 1.9 ----------- ---------- -------- ----------- -------- ----------- --------- Total............... $ 33,140 $ 1,784 $ 516 $ 35,440 100.0% $ 36,056 100.0% =========== ========== ======== =========== ======== =========== =========
Credit Quality of Agricultural Mortgage Loans The credit quality of agricultural mortgage loans was as follows at:
December 31, -------------------------------------------------- 2018 2017 ------------------------ ------------------------ Recorded % of Recorded % of Investment Total Investment Total -------------- --------- -------------- --------- (Dollars in millions) Loan-to-value ratios: Less than 65%......... $ 13,075 92.3% $ 12,082 95.0% 65% to 75%............ 1,034 7.3 581 4.6 76% to 80%............ 32 0.2 40 0.3 Greater than 80%...... 23 0.2 9 0.1 -------------- --------- -------------- --------- Total............. $ 14,164 100.0% $ 12,712 100.0% ============== ========= ============== =========
The estimated fair value of agricultural mortgage loans was $14.1 billion and $12.8 billion at December 31, 2018 and 2017, respectively. 65 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Credit Quality of Residential Mortgage Loans The credit quality of residential mortgage loans was as follows at:
December 31, ------------------------------------------------- 2018 2017 ------------------------ ------------------------ Recorded % of Recorded % of Investment Total Investment Total ------------- ---------- ------------- ---------- (Dollars in millions) Performance indicators: Performing.............. $ 10,990 96.5% $ 9,614 95.6% Nonperforming (1)....... 402 3.5 444 4.4 ------------- ---------- ------------- ---------- Total................. $ 11,392 100.0% $ 10,058 100.0% ============= ========== ============= ==========
------------- (1)Includes residential mortgage loans in process of foreclosure of $140 million and $132 million at December 31, 2018 and 2017, respectively. The estimated fair value of residential mortgage loans was $11.8 billion and $10.6 billion at December 31, 2018 and 2017, 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, 2018 and 2017. 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, 2018 December 31, 2017 December 31, 2018 December 31, 2017 December 31, 2018 December 31, 2017 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- (In millions) Commercial... $ -- $ -- $ -- $ -- $167 $ -- Agricultural. 204 134 109 125 105 36 Residential.. 402 444 -- -- 402 444 ----------------- ----------------- ----------------- ----------------- ----------------- ----------------- Total...... $606 $578 $109 $125 $674 $480 ================= ================= ================= ================= ================= =================
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. For the year ended December 31, 2018, the Company had 440 residential mortgage loans modified in a troubled debt restructuring with carrying value of $96 million and $92 million pre-modification and post-modification, respectively. For the year ended December 31, 2017, the Company had 500 residential mortgage loans modified in a troubled debt restructuring with carrying value of $120 million and $108 million pre-modification and post-modification, respectively. For the years ended December 31, 2018 and 2017, the Company did not have a significant amount of agricultural mortgage loans and no commercial mortgage loans modified in a troubled debt restructuring. For both the years ended December 31, 2018 and 2017, the Company did not have a significant amount of mortgage loans modified in a troubled debt restructuring with subsequent payment default. 66 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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, affiliated investments, annuities funding structured settlement claims, leveraged and direct financing leases and FHLB common stock. See "-- Related Party Investment Transactions" for information regarding affiliated investments and annuities funding structured settlement claims. Tax Credit Partnerships The carrying value of tax credit partnerships was $1.7 billion and $1.8 billion at December 31, 2018 and 2017, respectively. Losses from tax credit partnerships included within net investment income were $257 million, $259 million, and $166 million for the years ended December 31, 2018, 2017 and 2016, respectively. Leveraged and Direct Financing Leases Investment in leveraged and direct financing leases consisted of the following at:
December 31, ------------------------------------------------ 2018 2017 ---------------------- ------------------------ Direct Direct Leveraged Financing Leveraged Financing Leases Leases Leases Leases ---------- ---------- ------------ ---------- (In millions) Rental receivables, net... $ 715 $ 256 $ 911 $ 278 Estimated residual values. 618 42 649 42 ---------- ---------- ------------ ---------- Subtotal................ 1,333 298 1,560 320 Unearned income........... (401) (100) (448) (113) ---------- ---------- ------------ ---------- Investment in leases.... $ 932 $ 198 $ 1,112 $ 207 ========== ========== ============ ==========
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 generally range from one to 25 years but in certain circumstances can be over 25 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 both December 31, 2018 and 2017, all leveraged lease receivables and direct financing rental receivables were performing. The Company's deferred income tax liability related to leveraged leases was $465 million and $875 million at December 31, 2018 and 2017, respectively. 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 $5.0 billion and $3.1 billion at December 31, 2018 and 2017, respectively. Net Unrealized Investment Gains (Losses) Unrealized investment gains (losses) on fixed maturity securities AFS, equity securities and derivatives 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. 67 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The components of net unrealized investment gains (losses), included in AOCI, were as follows:
Years Ended December 31, -------------------------------------- 2018 2017 2016 ----------- ------------ ----------- (In millions) Fixed maturity securities AFS........... $ 3,890 $ 12,349 $ 7,912 Fixed maturity securities AFS with noncredit OTTI losses included in AOCI. 25 40 10 ----------- ------------ ----------- Total fixed maturity securities AFS.... 3,915 12,389 7,922 Equity securities....................... -- 119 72 Derivatives............................. 1,742 1,396 2,244 Other................................... 231 1 16 ----------- ------------ ----------- Subtotal............................... 5,888 13,905 10,254 ----------- ------------ ----------- Amounts allocated from: Future policy benefits.................. (5) (19) (9) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.............. -- -- (1) DAC, VOBA and DSI....................... (571) (790) (569) Policyholder dividend obligation........ (428) (2,121) (1,931) ----------- ------------ ----------- Subtotal............................... (1,004) (2,930) (2,510) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI..................... (5) (14) (3) Deferred income tax benefit (expense)... (982) (3,704) (2,690) ----------- ------------ ----------- Net unrealized investment gains (losses) $ 3,897 $ 7,257 $ 5,051 =========== ============ ===========
The changes in net unrealized investment gains (losses) were as follows:
Years Ended December 31, ------------------------------------- 2018 2017 2016 ----------- ----------- ----------- (In millions) Balance at January 1,................... $ 7,257 $ 5,051 $ 4,773 Cumulative effects of changes in accounting principles, net of income tax (Note 1)........................... 1,310 -- -- Fixed maturity securities AFS on which noncredit OTTI losses have been recognized............................. (15) 30 49 Unrealized investment gains (losses) during the year........................ (7,883) 3,621 541 Unrealized investment gains (losses) relating to:........................... Future policy benefits.................. 14 (10) (2) DAC and VOBA related to noncredit OTTI losses recognized in AOCI.............. -- 1 (1) DAC, VOBA and DSI....................... 219 (221) 3 Policyholder dividend obligation........ 1,693 (190) (148) Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI..................... 9 (11) (17) Deferred income tax benefit (expense)... 1,293 (1,014) (148) ----------- ----------- ----------- Net unrealized investment gains (losses)............................. 3,897 7,257 5,050 Net unrealized investment gains (losses) attributable to noncontrolling interests............... -- -- 1 ----------- ----------- ----------- Balance at December 31,................. $ 3,897 $ 7,257 $ 5,051 =========== =========== =========== Change in net unrealized investment gains (losses)......................... $ (3,360) $ 2,206 $ 277 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.... $ (3,360) $ 2,206 $ 278 =========== =========== ===========
68 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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, 2018 and 2017. Securities Lending and Repurchase Agreements Securities, Collateral and Reinvestment Portfolio A summary of the securities lending and repurchase agreements transactions is as follows:
December 31, ------------------------------------------------------------------------------------------------------------- 2018 2017 ------------------------------------------------------ ------------------------------------------------------ Securities on Loan (1) Securities on Loan (1) -------------------------- -------------------------- Cash Cash Collateral Reinvestment Collateral Reinvestment Received from Portfolio at Received from Portfolio at Amortized Estimated Counterparties Estimated Amortized Estimated Counterparties Estimated Cost Fair Value (2) (3) Fair Value Cost Fair Value (2) (3) Fair Value ----------- ----------- -------------- ------------ ----------- ----------- -------------- ------------ (In millions) Securities lending.... $ 12,521 $ 13,138 $ 13,351 $ 13,376 $ 13,887 $ 14,852 $ 15,170 $ 15,188 Repurchase agreements. $ 974 $ 1,020 $ 1,000 $ 1,001 $ 900 $ 1,031 $ 1,000 $ 1,000
--------------- (1)Securities on loan in connection with securities lending are included within fixed maturities securities AFS and securities on loan in connection with repurchase agreements are included within fixed maturities securities AFS, cash equivalents and short-term investments. (2)In connection with securities lending, in addition to cash collateral received, the Company received from counterparties security collateral of $64 million and $11 million at December 31, 2018 and 2017, respectively, which may not be sold or re-pledged, unless the counterparty is in default, and is not reflected on the consolidated financial statements. (3)The securities lending liability for cash collateral is included within payables for collateral under securities loaned and other transactions; and the repurchase agreements liability for cash collateral is included within payables for collateral under securities loaned and other transactions and other liabilities. 69 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Contractual Maturities A summary of the remaining contractual maturities of securities lending agreements and repurchase agreements is as follows:
December 31, ------------------------------------------------------------------- 2018 2017 --------------------------------- --------------------------------- Remaining Maturities of the Remaining Maturities of the Agreements Agreements --------------------------------- --------------------------------- Over Over 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: Securities lending: U.S. government and agency..................... $ 1,970 $ 7,426 $ 3,955 $ 13,351 $ 2,927 $ 5,279 $ 6,964 $ 15,170 Repurchase agreements: U.S. government and agency..................... $ -- $ 1,000 $ -- $ 1,000 $ -- $ 1,000 $ -- $ 1,000
------------- (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. The estimated fair value of the securities on loan related to this cash collateral at December 31, 2018 was $1.9 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. 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 securities lending and repurchase agreements reinvestment portfolios acquired with the cash collateral consisted principally of high quality, liquid, publicly-traded fixed maturity securities AFS, short-term investments, cash equivalents 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, ----------------------- 2018 2017 ----------- ----------- (In millions) Invested assets on deposit (regulatory deposits)............. $ 47 $ 49 Invested assets pledged as collateral (1).................... 20,207 20,775 ----------- ----------- Total invested assets on deposit and pledged as collateral. $ 20,254 $ 20,824 =========== ===========
------------- (1) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Note 4), derivative transactions (see Note 9) and secured debt (See Note 11). 70 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) See "-- Securities Lending and Repurchase Agreements" for information regarding securities supporting securities lending and repurchase agreement transactions and Note 7 for information regarding investments designated to the closed block. In addition, the restricted investment in FHLB common stock was $724 million and $733 million, at redemption value, at December 31, 2018 and 2017, respectively (see Note 1). 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 investments had an outstanding principal balance of $3.9 billion and $4.6 billion at December 31, 2018 and 2017, respectively, which represents the contractually required principal and accrued interest payments whether or not currently due and a carrying value (estimated fair value of the investments plus accrued interest) of $3.2 billion and $3.8 billion at December 31, 2018 and 2017, respectively. Accretion of accretable yield on PCI investments recognized in earnings in net investment income was $266 million and $273 million for the years ended December 31, 2018 and 2017, respectively. Purchases of PCI investments were insignificant in both of the years ended December 31, 2018 and 2017. 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 $11.5 billion at December 31, 2018. 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 $3.1 billion at December 31, 2018. Except for certain real estate joint ventures and certain funds, the Company's investments in its remaining 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) for two of the three most recent annual periods: 2017 and 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, 2018, 2017 and 2016. Aggregate total assets of these entities totaled $466.8 billion and $450.0 billion at December 31, 2018 and 2017, respectively. Aggregate total liabilities of these entities totaled $56.3 billion and $59.5 billion at December 31, 2018 and 2017, respectively. Aggregate net income (loss) of these entities totaled $42.7 billion, $35.0 billion and $27.6 billion for the years ended December 31, 2018, 2017 and 2016, 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. 71 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) 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 investment related VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at:
December 31, --------------------------------------------- 2018 2017 ---------------------- ---------------------- Total Total Total Total Assets Liabilities Assets Liabilities ---------- ----------- ---------- ----------- (In millions) Real estate joint ventures (1)................. $ 1,394 $ -- $ 1,077 $ -- Renewable energy partnership (2)............... 102 -- 116 3 Investment fund (primarily mortgage loans) (3). 219 -- -- -- Other investments (2).......................... 21 5 32 6 ---------- ----------- ---------- ----------- Total........................................ $ 1,736 $ 5 $ 1,225 $ 9 ========== =========== ========== ===========
------------- (1) The Company's investment in these affiliated real estate joint ventures was $1.3 billion and $1.0 billion at December 31, 2018 and 2017, respectively. Other affiliates' investments in these affiliated real estate joint ventures were $123 million and $85 million at December 31, 2018 and 2017, respectively. (2) Assets of the renewable energy partnership and other investments primarily consisted of other invested assets. (3) The investment by the Company and its affiliate in this affiliated investment fund was $178 million and $41 million, respectively, at December 31, 2018. 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, ------------------------------------------------------- 2018 2017 --------------------------- --------------------------- Maximum Maximum Carrying Exposure Carrying Exposure Amount to Loss (1) Amount to Loss (1) ------------- ------------- ------------- ------------- (In millions) Fixed maturity securities AFS: Structured Securities (2)......... $ 35,112 $ 35,112 $ 34,284 $ 34,284 U.S. and foreign corporate........ 669 669 1,166 1,166 Other limited partnership interests. 3,979 6,405 3,561 5,765 Other invested assets............... 1,914 2,066 2,172 2,506 Real estate joint ventures.......... 33 37 38 43 ------------- ------------- ------------- ------------- Total............................. $ 41,707 $ 44,289 $ 41,221 $ 43,764 ============= ============= ============= =============
------------- 72 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) (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 $93 million and $117 million at December 31, 2018 and 2017, 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, 2018, 2017 and 2016. During 2018 and 2017, the Company securitized certain residential mortgage loans and acquired an interest in the related RMBS issued. While the Company has a variable interest in the issuer of the securities, it is not the primary beneficiary of the issuer of the securities since it does not have any rights to remove the servicer or veto rights over the servicer's actions. The carrying value and the estimated fair value of mortgage loans were $451 million and $478 million, respectively, for loans sold during 2018, and $319 million and $339 million, respectively, for loans sold during 2017. Gains on securitizations of $27 million and $20 million during the years ended December 31, 2018 and 2017, respectively, were included within net investment gains (losses). The estimated fair value of RMBS acquired in connection with the securitizations was $98 million and $52 million at December 31, 2018 and 2017, respectively, which was included in the carrying amount and maximum exposure to loss for Structured Securities presented above. See Note 10 for information on how the estimated fair value of mortgage loans and RMBS is determined, the valuation approaches and key inputs, their placement in the fair value hierarchy, and for certain RMBS, quantitative information about the significant unobservable inputs and the sensitivity of their estimated fair value to changes in those inputs. Net Investment Income The components of net investment income were as follows:
Years Ended December 31, ----------------------------------------- 2018 2017 2016 ------------- ------------- ------------- (In millions) Investment income: Fixed maturity securities AFS..................... $ 7,268 $ 7,057 $ 7,653 Equity securities................................. 42 97 90 Mortgage loans.................................... 2,822 2,647 2,539 Policy loans...................................... 297 310 404 Real estate and real estate joint ventures........ 472 446 488 Other limited partnership interests............... 519 625 413 Cash, cash equivalents and short-term investments. 121 74 43 FVO Securities (1)................................ 22 -- 3 Operating joint venture........................... 37 19 9 Other............................................. 261 133 204 ------------- ------------- ------------- Subtotal........................................ 11,861 11,408 11,846 Less: Investment expenses......................... 942 895 763 ------------- ------------- ------------- Net investment income........................... $ 10,919 $ 10,513 $ 11,083 ============= ============= =============
------------- 73 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) (1) Changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods included in net investment income were $22 million for the year ended December 31, 2018. There were no changes in estimated fair value subsequent to purchase for investments still held as of the end of the respective periods for the years ended December 31, 2017 and 2016. See "-- Related Party Investment Transactions" for discussion of affiliated net investment income and investment expenses. The Company invests in real estate joint ventures, other limited partnership interests and tax credit and renewable energy partnerships, and also does business through an operating joint venture, the majority of which are accounted for under the equity method. Net investment income from other limited partnership interests and an operating joint venture, accounted for under the equity method; and real estate joint ventures and tax credit and renewable energy partnerships, primarily accounted for under the equity method, totaled $344 million, $300 million and $239 million for the years ended December 31, 2018, 2017, and 2016, respectively. 74 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, ------------------------------------- 2018 2017 2016 ----------- ----------- ----------- (In millions) Total gains (losses) on fixed maturity securities AFS: Total OTTI losses recognized -- by sector and industry: U.S. and foreign corporate securities -- by industry: Consumer................................ $ (19) $ (5) $ -- Industrial.............................. (2) -- (58) Finance................................. (2) -- -- Utility................................. -- -- (20) Communications.......................... -- -- (3) ----------- ----------- ----------- Total U.S. and foreign corporate securities........................... (23) (5) (81) RMBS.................................... -- -- (16) Municipals.............................. -- (1) -- ----------- ----------- ----------- OTTI losses on fixed maturity securities AFS recognized in earnings (23) (6) (97) Fixed maturity securities AFS -- net gains (losses) on sales and disposals.. 107 23 169 ----------- ----------- ----------- Total gains (losses) on fixed maturity securities AFS....................... 84 17 72 ----------- ----------- ----------- Total gains (losses) on equity securities: Total OTTI losses recognized -- by security type: Common stock............................ -- (23) (75) Non-redeemable preferred stock.......... -- (1) -- ----------- ----------- ----------- OTTI losses on equity securities recognized in earnings............... -- (24) (75) Equity securities -- net gains (losses) on sales and disposals................. 17 7 19 Change in estimated fair value of equity securities (1).................. (101) -- -- ----------- ----------- ----------- Total gains (losses) on equity securities........................... (84) (17) (56) Mortgage loans.......................... (50) (34) (20) Real estate and real estate joint ventures............................... 311 607 142 Other limited partnership interests..... 8 (52) (59) Other (2)............................... (162) (115) (32) ----------- ----------- ----------- Subtotal............................... 107 406 47 ----------- ----------- ----------- Change in estimated fair value of other limited partnership interests and real estate joint ventures.................. 11 -- -- Non-investment portfolio gains (losses). 35 (72) 85 ----------- ----------- ----------- Total net investment gains (losses).... $ 153 $ 334 $ 132 =========== =========== ===========
-------- (1)Changes in estimated fair value subsequent to purchase for equity securities still held as of the end of the period included in net investment gains (losses) were ($82) million for the year ended December 31, 2018. See Note 1. (2)Other gains (losses) included a renewable energy partnership realized loss of $83 million and a leveraged lease impairment of $105 million for the year ended December 31, 2018. See "-- Related Party Investment Transactions" for discussion of affiliated net investment gains (losses) related to transfers of invested assets to affiliates. 75 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) Gains (losses) from foreign currency transactions included within net investment gains (losses) were $21 million, ($142) million and $89 million for the years ended December 31, 2018, 2017 and 2016, respectively. Sales or Disposals and Impairments of Fixed Maturity Securities AFS Sales of securities are determined on a specific identification basis. Proceeds from sales or disposals and the components of net investment gains (losses) were as shown in the table below:
Years Ended December 31, ------------------------------------- 2018 2017 2016 ----------- ----------- ----------- (In millions) Proceeds........................ $ 53,042 $ 34,483 $ 58,812 =========== =========== =========== Gross investment gains.......... $ 604 $ 278 $ 755 Gross investment losses......... (497) (255) (586) OTTI losses..................... (23) (6) (97) ----------- ----------- ----------- Net investment gains (losses). $ 84 $ 17 $ 72 =========== =========== ===========
Credit Loss Rollforward of Fixed Maturity Securities AFS The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities AFS still held for which a portion of the OTTI loss was recognized in OCI:
Years Ended December 31, --------------------------- 2018 2017 ---------- ----------- (In millions) Balance at January 1,................................................................................ $ 110 $ 157 Additions: Initial impairments -- credit loss OTTI on securities not previously impaired...................... -- 1 Reductions: Sales (maturities, pay downs or prepayments) of securities previously impaired as credit loss OTTI. (38) (47) Increase in cash flows -- accretion of previous credit loss OTTI................................... (2) (1) ---------- ----------- Balance at December 31,.............................................................................. $ 70 $ 110 ========== ===========
Related Party Investment Transactions Recurring related party investments and related net investment income were as follows at and for the years ended:
December 31, Years Ended December 31, ----------------- ------------------------ 2018 2017 2018 2017 2016 -------- -------- ----- ----- ----- Investment Type/Balance Sheet Category Related Party Carrying Value Net Investment Income -------------------------------------- ----------------------------------- ----------------- ------------------------ (In millions) Affiliated investments (1)............................. MetLife, Inc. $ 1,798 $ 1,843 $ 31 $ 78 $ 91 Affiliated investments (2)............................. American Life Insurance Company 100 100 3 3 3 Affiliated investments Metropolitan Property and Casualty (3)............................. Insurance Company 315 315 10 6 5 -------- -------- ----- ----- ----- Other invested assets............ $ 2,213 $ 2,258 $ 44 $ 87 $ 99 ======== ======== ===== ===== ===== Money market pool (4)............ Metropolitan Money Market Pool $ 52 $ 70 $ 1 $ 1 $ -- -------- -------- ----- ----- ----- Short-term investments........... $ 52 $ 70 $ 1 $ 1 $ -- ======== ======== ===== ===== =====
-------- 76 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) (1)Represents an investment in affiliated senior notes. In March 2018, three senior notes previously issued by MetLife, Inc. to the Company were redenominated to Japanese yen. A $500 million senior note was redenominated to a new 53.3 billion Japanese yen senior note to the Company. The 53.3 billion Japanese yen senior note matures in June 2019 and bears interest at a rate per annum of 1.45%, payable semi-annually. A $250 million senior note was redenominated to a new 26.5 billion Japanese yen senior note to the Company. The 26.5 billion Japanese yen senior note matures in October 2019 and bears interest at a rate per annum of 1.72%, payable semi-annually. Another $250 million senior note was also redenominated to a new 26.5 billion Japanese yen senior note to the Company. The 26.5 billion Japanese yen senior note matures in September 2020 and bears interest at a rate per annum of 0.82%, payable semi-annually. In the second quarter of 2018, the remaining $825 million of affiliated senior notes previously issued by MetLife, Inc. to the Company were redenominated into two new senior notes totaling 38.5 billion Japanese yen which mature in July 2021 and bear interest at a rate per annum of 2.97%, payable semi-annually, and into two new senior notes totaling 51.0 billion Japanese yen which mature in December 2021 and bear interest at a rate per annum of 3.14%, payable semi-annually. (2)Represents an investment in an affiliated surplus note. The surplus note, which bears interest at a fixed rate of 3.17%, payable semiannually, is due on June 30, 2020. (3)Represents an investment in affiliated preferred stock. Dividends are payable quarterly at a variable rate. (4)The investment has a variable rate of return. The Company transfers invested assets, primarily consisting of fixed maturity securities AFS, to and from affiliates. Invested assets transferred to and from affiliates were as follows:
Years Ended December 31, ----------------------------- 2018 2017 (1) 2016 (2) ------- ---------- ---------- (In millions) Estimated fair value of invested assets transferred to affiliates... $ -- $ 453 $ 5,678 Amortized cost of invested assets transferred to affiliates......... $ -- $ 416 $ 5,338 Net investment gains (losses) recognized on transfers............... $ -- $ 37 $ 340 Estimated fair value of invested assets transferred from affiliates. $ 77 $ 306 $ 1,583
-------- (1)In January 2017, the Company received transferred investments with an estimated fair value of $292 million, which are included in the table above, in addition to $275 million in cash related to the recapture by the Company of risks from minimum benefit guarantees on certain variable annuities previously reinsured by Brighthouse Insurance. See Note 6 for additional information related to the separation of Brighthouse. (2)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 by Brighthouse Insurance of risks related to certain single premium deferred annuity contracts previously reinsured to Brighthouse Insurance, which are included in the table above. 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 by Brighthouse NY of risks related to certain single premium deferred annuity contracts previously reinsured to Brighthouse NY, which are included in the table above. See Note 6 for additional information related to the separation of Brighthouse. As a structured settlements assignment company, the Company purchased annuities from Brighthouse to fund the periodic structured settlement claim payment obligations it assumed. Each annuity purchased is contractually designated to the assumed claim obligation it funds. The aggregate related party annuity contract values recorded, for which the Company has also recorded unpaid claim obligations of equal amounts, were $1.3 billion at December 31, 2017. The related party net investment income and corresponding policyholder benefits and claims recognized were $36 million, $69 million and $64 million for the years ended December 31, 2018, 2017 and 2016, respectively. See Note 6 for information related to the separation of Brighthouse. 77 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 8. Investments (continued) The related party funds withheld from Brighthouse had a carrying value of $157 million at December 31, 2017. The related party other revenue and corresponding policyholder benefits and claims recognized were $7 million, $20 million and $11 million for the years ended December 31, 2018, 2017 and 2016, respectively. See Note 6 for information related to the separation of Brighthouse and related party reinsurance transactions. In March 2017, the Company purchased from Brighthouse Insurance an interest in an operating joint venture for $286 million, which was settled in cash in April 2017. Through March 31, 2018, the Company provided investment administrative services to certain affiliates. The related investment administrative service charges to these affiliates were $19 million, $73 million and $172 million for the years ended December 31, 2018, 2017 and 2016, respectively. Effective April 1, 2018, the Company receives investment advisory services from an affiliate. The related affiliated investment advisory charges to the Company since April 1, 2018 were $198 million for the year ended December 31, 2018. See "-- Mortgage Loans -- Mortgage Loans by Portfolio Segment" for discussion of mortgage loan participation agreements with affiliates. See "-- Variable Interest Entities" for information on investments in affiliated real estate joint ventures and affiliated investment fund. 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 securities AFS. Structured interest rate swaps are included in interest rate swaps and are not designated as hedging instruments. 78 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) 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 a benchmark interest rate, 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 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, and interest rate floors primarily to protect its minimum rate guarantee liabilities against declines in interest rates below a specified level. 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. In exchange-traded interest rate (Treasury and swap) futures transactions, the Company agrees to purchase or sell a specified number of contracts, the value of which is determined by the different classes of interest rate securities, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. The Company enters into exchange-traded futures with regulated futures commission merchants that are members of the exchange. Exchange-traded interest rate (Treasury and swap) futures are used primarily to hedge mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, to hedge against changes in value of securities the Company owns or anticipates acquiring, to hedge against changes in interest rates on anticipated liability issuances by replicating Treasury or swap curve performance, and to hedge minimum guarantees embedded in certain variable annuity products offered by the Company. The Company utilizes exchange-traded interest rate futures 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. A synthetic GIC is a contract that simulates the performance of a traditional GIC through the use of financial instruments. Under a synthetic GIC, the contractholder owns the underlying assets. The Company guarantees a rate of return on those assets for a premium. Synthetic GICs are not designated as hedging instruments. 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. 79 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) 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 and involuntary restructuring for corporate obligors, as well as repudiation, moratorium or governmental intervention for sovereign obligors. 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, or other fixed maturity securities AFS. These credit default swaps are not designated as hedging instruments. The Company also entered 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 were not designated as hedging instruments. As of 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. 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 underlying 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, to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts and to pledge initial margin based on futures exchange requirements. 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. 80 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) 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 a benchmark interest rate, 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. Primary Risks Managed by Derivatives The following table presents the primary underlying risk exposure, gross notional amount and estimated fair value of the Company's derivatives, excluding embedded derivatives, held at:
December 31, -------------------------------------------------------------------- 2018 2017 --------------------------------- ---------------------------------- 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 $ 2,446 $ 2,197 $ 2 $ 3,826 $ 2,289 $ 3 Foreign currency swaps... Foreign currency exchange rate 1,191 49 -- 1,082 47 17 ---------- --------- ---------- ----------- --------- ---------- Subtotal................ 3,637 2,246 2 4,908 2,336 20 ---------- --------- ---------- ----------- --------- ---------- Cash flow hedges: Interest rate swaps...... Interest rate 3,181 139 1 3,337 234 -- Interest rate forwards... Interest rate 3,023 -- 216 3,333 -- 127 Foreign currency swaps... Foreign currency exchange rate 26,239 1,218 1,318 22,287 795 1,078 ---------- --------- ---------- ----------- --------- ---------- Subtotal................ 32,443 1,357 1,535 28,957 1,029 1,205 ---------- --------- ---------- ----------- --------- ---------- Total qualifying hedges. 36,080 3,603 1,537 33,865 3,365 1,225 ---------- --------- ---------- ----------- --------- ---------- Derivatives Not Designated or Not Qualifying as Hedging Instruments: Interest rate swaps...... Interest rate 36,238 1,507 85 43,028 1,722 336 Interest rate floors..... Interest rate 12,701 102 -- 7,201 91 -- Interest rate caps....... Interest rate 54,576 154 1 53,079 78 2 Interest rate futures.... Interest rate 794 -- 1 2,257 1 2 Interest rate options.... Interest rate 24,340 185 -- 7,525 142 11 Interest rate total return swaps............ Interest rate 1,048 33 2 1,048 8 2 Synthetic GICs........... Interest rate 18,006 -- -- 11,318 -- -- Foreign currency swaps... Foreign currency exchange rate 5,986 700 79 6,739 547 164 Foreign currency forwards Foreign currency exchange rate 943 15 14 961 16 7 Credit default swaps -- purchased............... Credit 858 24 4 980 7 8 Credit default swaps -- written................. Credit 7,864 67 13 7,874 181 -- Equity futures........... Equity market 1,006 1 6 1,282 5 1 Equity index options..... Equity market 23,162 706 396 14,408 384 476 Equity variance swaps.... Equity market 1,946 32 81 3,530 45 169 Equity total return swaps Equity market 886 89 -- 1,077 -- 39 ---------- --------- ---------- --------------------- ---------- Total non-designated or nonqualifying derivatives........ 190,354 3,615 682 162,307 3,227 1,217 ---------- --------- ---------- --------------------- ---------- Total.................................................... $ 226,434 $ 7,218 $ 2,219 $ 196,172 $ 6,592 $ 2,442 ========== ========= ========== =========== ========= ==========
81 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, 2018 and 2017. 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 and interest rate swaps that are used to synthetically create 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, -------------------------------------- 2018 2017 2016 ---------- ------------ ------------- (In millions) Freestanding derivative and hedging gains (losses) (1). $ 390 $ (771) $ (715) Embedded derivative gains (losses)..................... 376 427 (423) ---------- ------------ ------------- Total net derivative gains (losses).................. $ 766 $ (344) $ (1,138) ========== ============ =============
------------- (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, -------------------------------------- 2018 2017 2016 ----------- ------------ ------------ (In millions) Qualifying hedges: Net investment income.............................. $ 371 $ 302 $ 280 Interest credited to policyholder account balances. (113) (64) (1) Nonqualifying hedges: Net investment income.............................. -- -- (1) Net derivative gains (losses)...................... 339 406 577 Policyholder benefits and claims................... 8 5 4 ----------- ------------ ------------ Total............................................ $ 605 $ 649 $ 859 =========== ============ ============
82 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, 2018 Interest rate derivatives............... $ (340) $ 4 $ -- Foreign currency exchange rate derivatives............................ 429 -- -- Credit derivatives -- purchased......... 9 -- -- Credit derivatives -- written........... (90) -- -- Equity derivatives...................... 166 1 45 -------------- ---------- ------------ Total.................................. $ 174 $ 5 $ 45 ============== ========== ============ Year Ended December 31, 2017 Interest rate derivatives............... $ (343) $ 1 $ -- Foreign currency exchange rate derivatives............................ (746) -- -- Credit derivatives -- purchased......... (16) -- -- Credit derivatives -- written........... 102 -- -- Equity derivatives...................... (536) (6) (216) -------------- ---------- ------------ Total.................................. $ (1,539) $ (5) $ (216) ============== ========== ============ 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) ============== ========== ============
------------- (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. As of December 31, 2016, the Company no longer maintained a trading portfolio for derivatives. (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. 83 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, 2018 Interest rate swaps: Fixed maturity securities AFS..................... $ 1 $ (1) $ -- Policyholder liabilities (1)...................... (221) 227 6 Foreign currency swaps: Foreign-denominated fixed maturity securities AFS and mortgage loans............................... 52 (55) (3) Foreign-denominated policyholder account balances (2)..................................... 23 (23) -- ----------------- -------------- ---------------- Total.................................................................... $(145) $ 148 $ 3 ================= ============== ================ Year Ended December 31, 2017 Interest rate swaps: Fixed maturity securities AFS..................... $ 4 $ (5) $ (1) Policyholder liabilities (1)...................... (69) 134 65 Foreign currency swaps: Foreign-denominated fixed maturity securities AFS.............................................. (24) 27 3 Foreign-denominated policyholder account balances (2)..................................... 65 (43) 22 ----------------- -------------- ---------------- Total.................................................................... $ (24) $ 113 $ 89 ================= ============== ================ Year Ended December 31, 2016 Interest rate swaps: Fixed maturity securities AFS..................... $ 8 $ (9) $ (1) Policyholder liabilities (1)...................... (109) 90 (19) Foreign currency swaps: Foreign-denominated fixed maturity securities AFS.............................................. 10 (9) 1 Foreign-denominated policyholder account balances (2)..................................... (95) 92 (3) ----------------- -------------- ---------------- Total.................................................................... $(186) $ 164 $(22) ================= ============== ================
------------- (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; and (iv) interest rate swaps and interest rate forwards to hedge the forecasted purchases of fixed rate investments. 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 $0, $20 million and $17 million for the years ended December 31, 2018, 2017 and 2016, respectively. At December 31, 2018 and 2017, 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 four years and five years, respectively. 84 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 9. Derivatives (continued) At December 31, 2018 and 2017, the balance in AOCI associated with cash flow hedges was $1.7 billion and $1.4 billion, respectively. The following table presents the effects of derivatives in cash flow hedging relationships on the consolidated statements of operations, consolidated statements of comprehensive income (loss) 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, 2018 Interest rate swaps...... $ (148) $ 23 $ 18 $ 2 Interest rate forwards... (114) (1) 2 -- Foreign currency swaps... 180 (469) (3) 5 Credit forwards.......... -- 1 1 -- --------------------- -------------- -------------- --------------------- Total.................. $ (82) $ (446) $ 18 $ 7 ===================== ============== ============== ===================== Year Ended December 31, 2017 Interest rate swaps...... $ 73 $ 24 $ 16 $ 18 Interest rate forwards... 210 (11) 2 (2) Foreign currency swaps... (161) 938 (1) -- Credit forwards.......... -- 1 1 -- --------------------- -------------- -------------- --------------------- Total.................. $ 122 $ 952 $ 18 $ 16 ===================== ============== ============== ===================== 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 $ -- ===================== ============== ============== =====================
All components of each derivative's gain or loss were included in the assessment of hedge effectiveness. At December 31, 2018, the Company expected to reclassify $109 million of deferred net gains (losses) on derivatives in AOCI, included in the table above, to earnings within the next 12 months. Credit Derivatives In connection with synthetically created credit investment transactions, the Company writes credit default swaps for which it receives a premium to insure credit risk. Such credit derivatives are included within the 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 $7.9 billion at both December 31, 2018 and 2017. 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, 2018 and 2017, the Company would have received $54 million and $181 million, respectively, to terminate all of these contracts. 85 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, ----------------------------------------------------------------------------- 2018 2017 -------------------------------------- -------------------------------------- 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)..... $ 2 $ 154 2.0 $ 3 $ 159 2.8 Credit default swaps referencing indices. 27 2,079 2.5 42 2,193 2.7 --------- ------------ -------- ------------- Subtotal............................... 29 2,233 2.5 45 2,352 2.7 --------- ------------ -------- ------------- Baa Single name credit default swaps (3)..... 1 277 1.6 4 416 1.5 Credit default swaps referencing indices. 20 5,124 5.2 111 4,761 5.2 --------- ------------ -------- ------------- Subtotal............................... 21 5,401 5.0 115 5,177 4.9 --------- ------------ -------- ------------- Ba Single name credit default swaps (3)..... -- 10 1.5 1 105 3.4 Credit default swaps referencing indices. -- -- -- -- -- -- --------- ------------ -------- ------------- Subtotal............................... -- 10 1.5 1 105 3.4 --------- ------------ -------- ------------- B Single name credit default swaps (3)..... -- -- -- 2 20 3.5 Credit default swaps referencing indices. 4 220 5.0 18 220 5.0 --------- ------------ -------- ------------- Subtotal............................... 4 220 5.0 20 240 4.9 --------- ------------ -------- ------------- Total.................................. $ 54 $ 7,864 4.3 $ 181 $ 7,874 4.2 ========= ============ ======== =============
------------- (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 $7.9 billion of future payments under credit default provisions at both December 31, 2018 and 2017 set forth in the table above were $16 million and $27 million at December 31, 2018 and 2017, respectively. 86 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 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. 87 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, -------------------------------------------------- 2018 2017 ------------------------ ------------------------ 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)............................................................ $ 7,255 $ 2,166 $ 6,478 $ 2,203 OTC-cleared (1), (6)......................................................... 52 24 168 216 Exchange-traded.............................................................. 1 7 6 3 ----------- ----------- ----------- ----------- Total gross estimated fair value of derivatives (1)........................ 7,308 2,197 6,652 2,422 Amounts offset on the consolidated balance sheets............................ -- -- -- -- ----------- ----------- ----------- ----------- Estimated fair value of derivatives presented on the consolidated balance sheets (1), (6)........................................................... 7,308 2,197 6,652 2,422 Gross amounts not offset on the consolidated balance sheets: Gross estimated fair value of derivatives: (2) OTC-bilateral................................................................ (1,988) (1,988) (1,891) (1,891) OTC-cleared.................................................................. (20) (20) (31) (31) Exchange-traded.............................................................. -- -- -- -- Cash collateral: (3), (4) OTC-bilateral................................................................ (4,000) -- (3,448) -- OTC-cleared.................................................................. (26) -- (131) (179) Exchange-traded.............................................................. -- -- -- -- Securities collateral: (5) OTC-bilateral................................................................ (1,136) (178) (954) (312) OTC-cleared.................................................................. -- (4) -- (6) Exchange-traded.............................................................. -- (7) -- (3) ----------- ----------- ----------- ----------- Net amount after application of master netting agreements and collateral................................................................ $ 138 $ -- $ 197 $ -- =========== =========== =========== ===========
------------- (1)At December 31, 2018 and 2017, derivative assets included income or (expense) accruals reported in accrued investment income or in other liabilities of $90 million and $60 million, respectively, and derivative liabilities included (income) or expense accruals reported in accrued investment income or in other liabilities of ($22) million and ($20) 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 AFS, 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, 2018 and 2017, the Company received excess cash collateral of $95 million and $122 million, respectively, and provided excess cash collateral of $1 million and $9 million, respectively, which is not included in the table above due to the foregoing limitation. 88 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, 2018, none of the collateral had been sold or re-pledged. Securities collateral pledged by the Company is reported in fixed maturity securities AFS 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, 2018 and 2017, the Company received excess securities collateral with an estimated fair value of $28 million and $30 million, respectively, for its OTC-bilateral derivatives, which are not included in the table above due to the foregoing limitation. At December 31, 2018 and 2017, the Company provided excess securities collateral with an estimated fair value of $94 million and $152 million, respectively, for its OTC-bilateral derivatives, and $231 million and $299 million, respectively, for its OTC-cleared derivatives, and $52 million and $50 million, respectively, for its exchange-traded derivatives, which are not included in the table above due to the foregoing limitation. (6)Effective January 16, 2018, the LCH amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. Effective January 3, 2017, the CME amended its rulebook, resulting in the characterization of variation margin transfers as settlement payments, as opposed to adjustments to collateral. See Note 1 for further information on the LCH and CME amendments. The Company's collateral arrangements for its OTC-bilateral derivatives require the counterparty in a net liability position, after considering the effect of netting agreements, to pledge collateral when the collateral amount owed by that counterparty reaches a minimum transfer amount. 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 were 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. OTC-bilateral derivatives that are not subject to collateral agreements are excluded from this table.
December 31, ----------------------------------------------------------------- 2018 2017 -------------------------------- -------------------------------- 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).......................................... $ 178 $ -- $ 178 $ 313 $ -- $ 313 Estimated Fair Value of Collateral Provided: Fixed maturity securities AFS.......................... $ 187 $ -- $ 187 $ 399 $ -- $ 399 Cash................................................... $ 1 $ -- $ 1 $ -- $ -- $ --
------------- (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; fixed annuities with equity indexed returns; and certain debt and equity securities. 89 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 and balance sheet location of the Company's embedded derivatives that have been separated from their host contracts at:
December 31, ------------------ Balance Sheet Location 2018 2017 ------------------------------ -------- --------- (In millions) Embedded derivatives within asset host contracts: Options embedded in debt or equity securities (1)..... Investments................... -- (113) -------- --------- Embedded derivatives within asset host contracts................................. $ -- $ (113) ======== ========= Embedded derivatives within liability host contracts: Direct guaranteed minimum benefits.................... Policyholder account balances. $ 178 $ (94) Assumed guaranteed minimum benefits................... Policyholder account balances. 3 3 Funds withheld on ceded reinsurance................... Other liabilities............. 465 898 Fixed annuities with equity indexed returns........... Policyholder account balances. 58 69 -------- --------- Embedded derivatives within liability host contracts............................. $ 704 $ 876 ======== =========
-------- (1)Effective January 1, 2018, in connection with the adoption of new guidance related to the recognition and measurement of financial instruments, the Company was no longer required to bifurcate and account separately for derivatives embedded in equity securities (see Note 1). Beginning January 1, 2018, the change in fair value of equity securities was recognized as a component of net investment gains and losses. The following table presents changes in estimated fair value related to embedded derivatives:
Years Ended December 31, ----------------------------------- 2018 2017 2016 ------------ ------------ --------- (In millions) Net derivative gains (losses) (1), (2). $ 376 $ 427 $ (423)
-------- (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 $51 million, ($65) million and $76 million for the years ended December 31, 2018, 2017 and 2016, 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 $0, less than $1 million, and ($29) million for the years ended December 31, 2018, 2017 and 2016, respectively. (2)See Note 6 for discussion of affiliated net derivative gains (losses). 90 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 approaches: (i) the market approach, (ii) the income approach, and (iii) the cost approach. The Company determines the most appropriate valuation approach 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 AFS. 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, as well as 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. 91 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) 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:
December 31, 2018 --------------------------------------------------------------------- Fair Value Hierarchy --------------------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------------- ----------------- ---------------- ----------------- (In millions) Assets Fixed maturity securities AFS: U.S. corporate........................................... $ -- $ 51,676 $ 3,126 $ 54,802 U.S. government and agency............................... 12,310 17,851 -- 30,161 Foreign corporate........................................ -- 21,988 3,975 25,963 RMBS..................................................... -- 19,719 3,018 22,737 ABS...................................................... -- 8,072 455 8,527 Municipals............................................... -- 6,947 -- 6,947 CMBS..................................................... -- 5,376 68 5,444 Foreign government....................................... -- 4,482 10 4,492 ---------------- ----------------- ---------------- ----------------- Total fixed maturity securities AFS.................... 12,310 136,111 10,652 159,073 ---------------- ----------------- ---------------- ----------------- Equity securities........................................ 341 76 356 773 Short-term investments................................... 698 783 25 1,506 Residential mortgage loans -- FVO........................ -- -- 299 299 Other investments........................................ -- 1 215 216 Derivative assets: (1) Interest rate............................................ -- 4,284 33 4,317 Foreign currency exchange rate........................... -- 1,982 -- 1,982 Credit................................................... -- 62 29 91 Equity market............................................ 1 776 51 828 ---------------- ----------------- ---------------- ----------------- Total derivative assets................................ 1 7,104 113 7,218 ---------------- ----------------- ---------------- ----------------- Embedded derivatives within asset host contracts (2)..... -- -- -- -- Separate account assets (3).............................. 20,558 89,348 944 110,850 ---------------- ----------------- ---------------- ----------------- Total assets (4)....................................... $ 33,908 $ 233,423 $ 12,604 $ 279,935 ================ ================= ================ ================= Liabilities Derivative liabilities: (1) Interest rate............................................ $ 1 $ 89 $ 218 $ 308 Foreign currency exchange rate........................... -- 1,410 1 1,411 Credit................................................... -- 13 4 17 Equity market............................................ 6 395 82 483 ---------------- ----------------- ---------------- ----------------- Total derivative liabilities........................... 7 1,907 305 2,219 ---------------- ----------------- ---------------- ----------------- Embedded derivatives within liability host contracts (2). -- -- 704 704 Long-term debt........................................... -- -- -- -- Separate account liabilities (3)......................... 1 20 7 28 ---------------- ----------------- ---------------- ----------------- Total liabilities...................................... $ 8 $ 1,927 $ 1,016 $ 2,951 ================ ================= ================ =================
92 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2017 ----------------------------------------------------------------- Fair Value Hierarchy -------------------------------------------------- Total Estimated Level 1 Level 2 Level 3 Fair Value ---------------- ---------------- ---------------- -------------- (In millions) Assets Fixed maturity securities AFS: U.S. corporate........................................... $ -- $ 54,629 $ 3,461 $ 58,090 U.S. government and agency............................... 18,802 19,743 -- 38,545 Foreign corporate........................................ -- 21,471 4,125 25,596 RMBS..................................................... -- 19,372 3,262 22,634 ABS...................................................... -- 7,079 787 7,866 Municipals............................................... -- 7,551 -- 7,551 CMBS..................................................... -- 5,461 27 5,488 Foreign government....................................... -- 4,471 31 4,502 ---------------- ---------------- ---------------- -------------- Total fixed maturity securities AFS.................... 18,802 139,777 11,693 170,272 ---------------- ---------------- ---------------- -------------- Equity securities........................................ 399 893 366 1,658 Short-term investments................................... 2,056 1,092 7 3,155 Residential mortgage loans -- FVO........................ -- -- 520 520 Other investments........................................ -- -- -- -- Derivative assets: (1) Interest rate............................................ 1 4,556 8 4,565 Foreign currency exchange rate........................... -- 1,405 -- 1,405 Credit................................................... -- 149 39 188 Equity market............................................ 5 363 66 434 ---------------- ---------------- ---------------- -------------- Total derivative assets................................ 6 6,473 113 6,592 ---------------- ---------------- ---------------- -------------- Embedded derivatives within asset host contracts (2)..... -- -- -- -- Separate account assets (3).............................. 23,571 106,294 960 130,825 ---------------- ---------------- ---------------- -------------- Total assets........................................... $ 44,834 $ 254,529 $ 13,659 $ 313,022 ================ ================ ================ ============== Liabilities Derivative liabilities: (1) Interest rate............................................ $ 2 $ 351 $ 130 $ 483 Foreign currency exchange rate........................... -- 1,261 5 1,266 Credit................................................... -- 8 -- 8 Equity market............................................ 1 515 169 685 ---------------- ---------------- ---------------- -------------- Total derivative liabilities........................... 3 2,135 304 2,442 ---------------- ---------------- ---------------- -------------- Embedded derivatives within liability host contracts (2). -- -- 876 876 Long-term debt........................................... -- -- -- -- Separate account liabilities (3)......................... -- 7 2 9 ---------------- ---------------- ---------------- -------------- Total liabilities...................................... $ 3 $ 2,142 $ 1,182 $ 3,327 ================ ================ ================ ==============
---------- (1)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. 93 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (2)Embedded derivatives within asset host contracts are presented within premiums, reinsurance and other receivables on the consolidated balance sheets. Embedded derivatives within liability host contracts are presented within policyholder account balances and other liabilities on the consolidated balance sheets. At December 31, 2018 and 2017, debt and equity securities also included embedded derivatives of $0 and ($113) million, respectively. (3)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. (4)In connection with the adoption of new guidance related to the recognition and measurement of financial instruments (see Note 1), other limited partnership interests are measured at estimated fair value on a recurring basis effective January 1, 2018. This represents the former cost method investments held as of January 1, 2018 that were measured at estimated fair value on a recurring basis upon adoption of this guidance. Total assets included in the fair value hierarchy exclude these other limited partnership interests that are measured at estimated fair value using the net asset value ("NAV") per share (or its equivalent) practical expedient. At December 31, 2018, the estimated fair value of such investments was $140 million. The following describes the valuation methodologies used to measure assets and liabilities at fair value. Investments Securities, Short-term Investments, Other Investments and Long-term Debt 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 other investments and long-term debt is determined on a basis consistent with the methodologies described herein for securities. The valuation approaches and key inputs for each category of assets or liabilities that are classified within Level 2 and Level 3 of the fair value hierarchy are presented below. 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. 94 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) ----------------------------------------------------------------------------- Level 3 Instrument Level 2 Observable Inputs Unobservable Inputs ----------------------------------------------------------------------------- Fixed maturity securities AFS ----------------------------------------------------------------------------- U.S. corporate and Foreign corporate securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market and Principally the market approach. income approaches. Key Inputs: Key Inputs: . quoted prices in markets that . illiquidity premium are not active . benchmark yields; spreads off . delta spread adjustments to benchmark yields; new reflect specific issuances; issuer rating credit-related issues . trades of identical or . credit spreads comparable securities; duration . Privately-placed securities . quoted prices in markets that are valued using the are not active for identical additional key inputs: or similar securities that . market yield curve; call are less liquid and based on provisions lower levels of trading . observable prices and spreads activity than securities for similar public or private classified in Level 2 securities that incorporate . independent non-binding the credit quality and broker quotations industry sector of the issuer . delta spread adjustments to reflect specific credit-related issues ----------------------------------------------------------------------------- U.S. government and agency securities, Municipals and Foreign government securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market approach. Principally the market approach. Key Inputs: Key Inputs: . quoted prices in markets that . independent non-binding are not active broker quotations . benchmark U.S. Treasury yield . quoted prices in markets that or other yields are not active for identical or similar securities that are less liquid and based on . the spread off the U.S. lower levels of trading Treasury yield curve for the activity than securities identical security classified in Level 2 . issuer ratings and issuer spreads; broker-dealer quotes . credit spreads . comparable securities that are actively traded ----------------------------------------------------------------------------- Structured Securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market and 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 . quoted prices in markets that securities; spreads off are not active for identical benchmark yields or similar securities that . expected prepayment speeds are less liquid and based on and volumes lower levels of trading . current and forecasted loss activity than securities severity; ratings; geographic classified in Level 2 region . independent non-binding . weighted average coupon and broker quotations 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 ----------------------------------------------------------------------------- 95 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) ----------------------------------------------------------------------------- Level 3 Instrument Level 2 Observable Inputs Unobservable Inputs ----------------------------------------------------------------------------- Equity securities ----------------------------------------------------------------------------- Valuation Approaches: Valuation Approaches: Principally the market approach. Principally the market and income approaches. Key Input: Key Inputs: . quoted prices in markets that . credit ratings; issuance are not considered active 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 ----------------------------------------------------------------------------- Short-term investments and Other investments ----------------------------------------------------------------------------- . Short-term investments and . Short-term investments and other investments are of a other investments are of a similar nature and class to similar nature and class to the fixed maturity the fixed maturity securities AFS and equity securities AFS and equity securities described above; securities described above; accordingly, the valuation accordingly, the valuation approaches and observable approaches and unobservable inputs used in their inputs used in their valuation are also similar valuation are also similar to those described above. to those described above. ----------------------------------------------------------------------------- Residential mortgage loans -- FVO ----------------------------------------------------------------------------- . N/A Valuation Approaches: Principally the market approach. Valuation Techniques and Key Inputs: These investments are based primarily on matrix pricing or other similar techniques that utilize inputs from mortgage servicers 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 Valued giving consideration to the underlying holdings of the partnerships and adjusting, 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, Other Investments and Long-term Debt" 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 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. 96 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 Approaches 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 Approaches 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:
Foreign Instrument Interest Rate Currency Exchange Rate Credit Equity Market --------------------------------------------------------------------------------------------------------------------------------- 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). 97 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 and assumed variable annuity guarantees, equity or bond indexed crediting rates within certain funding agreements and annuity contracts, 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 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, projecting 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. The estimated fair value of the embedded derivatives within funds withheld related to certain ceded reinsurance is determined based on the change in estimated fair value of the underlying assets held by the Company in a reference portfolio backing the funds withheld liability. The estimated fair value of the underlying assets is determined as described in "-- Investments -- Securities, Short-term Investments, Other Investments and Long-term Debt." 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. 98 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 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 Approaches 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 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. 99 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) 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, 2018 ---------------------------- Significant Weighted Valuation Techniques Unobservable Inputs Range Average (1) --------------------------- ----------------------- --------------- ----------- Fixed maturity securities AFS (3) U.S. corporate and foreign corporate..................... Matrix pricing Offered quotes (4) 85 - 134 105 Market pricing Quoted prices (4) 25 - 638 107 -------------------------------------------------------------------------------------- RMBS........................... Market pricing Quoted prices (4) -- - 106 94 -------------------------------------------------------------------------------------- ABS............................ Market pricing Quoted prices (4) 10 - 101 97 Consensus pricing Offered quotes (4) -------------------------------------------------------------------------------------- Derivatives Interest rate.................. Present value techniques Swap yield (6) 268 - 317 Repurchase rates (8) (5) - 6 -------------------------------------------------------------------------------------- Foreign currency exchange rate. Present value Swap yield (6) (20) - (5) techniques -------------------------------------------------------------------------------------- Credit......................... Present value Credit spreads (9) 97 - 103 techniques Consensus pricing Offered quotes (10) -------------------------------------------------------------------------------------- Equity market.................. Present value Volatility (11) 21% - 26% techniques or option pricing models Correlation (12) 10% - 30% -------------------------------------------------------------------------------------- Embedded derivatives Direct and assumed guaranteed Option pricing Mortality rates: minimum benefits.............. techniques Ages 0 - 40 0.01% - 0.18% Ages 41 - 60 0.04% - 0.57% Ages 61 - 115 0.26% - 100% Lapse rates: Durations 1 - 10 0.25% - 100% Durations 11 - 20 3% - 100% Durations 21 - 116 2.5% - 100% Utilization rates 0% - 25% Withdrawal rates 0.25% - 10% Long-term equity 16.50% - 22% volatilities Nonperformance risk 0.05% - 0.59% spread
December 31, 2017 ---------------------------- Significant Weighted Valuation Techniques Unobservable Inputs Range Average (1) --------------------------- ----------------------- --------------- ----------- Fixed maturity securities AFS (3) U.S. corporate and foreign corporate..................... Matrix pricing Offered quotes (4) 83 - 142 111 Market pricing Quoted prices (4) 10 - 443 123 -------------------------------------------------------------------------------------- RMBS........................... Market pricing Quoted prices (4) -- - 126 94 -------------------------------------------------------------------------------------- ABS............................ Market pricing Quoted prices (4) 27 - 104 100 Consensus pricing Offered quotes (4) 100 - 101 100 -------------------------------------------------------------------------------------- Derivatives Interest rate.................. Present value techniques Swap yield (6) 200 - 300 Repurchase rates (8) (5) - 5 -------------------------------------------------------------------------------------- Foreign currency exchange rate. Present value Swap yield (6) (14) - (3) techniques -------------------------------------------------------------------------------------- Credit......................... Present value Credit spreads (9) -- - -- techniques Consensus pricing Offered quotes (10) -------------------------------------------------------------------------------------- Equity market.................. Present value Volatility (11) 11% - 31% techniques or option pricing models Correlation (12) 10% - 30% -------------------------------------------------------------------------------------- Embedded derivatives Direct and assumed 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 0.02% - 0.44% spread
Impact of Increase in Input Significant on Estimated Valuation Techniques Unobservable Inputs Fair Value (2) --------------------------- ----------------------- ----------------- Fixed maturity securities AFS (3) U.S. corporate and foreign corporate..................... Matrix pricing Offered quotes (4) Increase Market pricing Quoted prices (4) Increase ----------------------------------------------------------------------- RMBS........................... Market pricing Quoted prices (4) Increase (5) ----------------------------------------------------------------------- ABS............................ Market pricing Quoted prices (4) Increase (5) Consensus pricing Offered quotes (4) Increase (5) ----------------------------------------------------------------------- Derivatives Interest rate.................. Present value techniques Swap yield (6) Increase (7) Repurchase rates (8) Decrease (7) ----------------------------------------------------------------------- Foreign currency exchange rate. Present value Swap yield (6) Increase (7) techniques ----------------------------------------------------------------------- Credit......................... Present value Credit spreads (9) Decrease (7) techniques Consensus pricing Offered quotes (10) ----------------------------------------------------------------------- Equity market.................. Present value Volatility (11) Increase (7) techniques or option pricing models Correlation (12) ----------------------------------------------------------------------- Embedded derivatives Direct and assumed guaranteed Option pricing Mortality rates: minimum benefits.............. techniques Ages 0 - 40 Decrease (13) Ages 41 - 60 Decrease (13) Ages 61 - 115 Decrease (13) Lapse rates: Durations 1 - 10 Decrease (14) Durations 11 - 20 Decrease (14) Durations 21 - 116 Decrease (14) Utilization rates Increase (15) Withdrawal rates (16) Long-term equity Increase (17) volatilities Nonperformance risk Decrease (18) spread
-------- (1) The weighted average for fixed maturity securities AFS is determined based on the estimated fair value of the securities. (2) The impact of a decrease in input would have resulted in the opposite impact on estimated fair value. For embedded derivatives, changes to direct and assumed guaranteed minimum benefits are based on liability positions. (3) Significant increases (decreases) in expected default rates in isolation would have resulted in substantially lower (higher) valuations. (4) Range and weighted average are presented in accordance with the market convention for fixed maturity securities AFS of dollars per hundred dollars of par. (5) Changes in the assumptions used for the probability of default would have been 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. 100 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (6) 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. (7) 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. (8) Ranges represent different repurchase rates utilized as components within the valuation methodology and are presented in basis points. (9) 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. (10)At both December 31, 2018 and 2017, independent non-binding broker quotations were used in the determination of less than 1% of the total net derivative estimated fair value. (11)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. (12)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. (13)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. (14)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. (15)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. (16)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. (17)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. (18)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. 101 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) 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." 102 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 AFS --------------------------------------------------- Structured Foreign Equity Short-term Corporate (1) Securities Municipals Government Securities Investments -------------- ------------ ----------- ----------- ----------- ------------ (In millions) Balance, January 1, 2017................ $ 8,839 $ 4,541 $ 10 $ 21 $ 420 $ 25 Total realized/unrealized gains (losses) included in net income (loss) (2) (3)................................ (2) 95 -- -- -- -- Total realized/unrealized gains (losses) included in AOCI.............. 416 109 -- -- 17 -- Purchases (4)........................... 2,451 900 -- 19 14 6 Sales (4)............................... (1,408) (1,282) -- (2) (51) -- Issuances (4)........................... -- -- -- -- -- -- Settlements (4)......................... -- -- -- -- -- -- Transfers into Level 3 (5).............. 58 63 -- -- -- -- Transfers out of Level 3 (5)............ (2,768) (350) (10) (7) (34) (24) ------------ ------------ --------- --------- ---------- --------- Balance, December 31, 2017.............. 7,586 4,076 -- 31 366 7 Total realized/unrealized gains (losses) included in net income (loss) (2) (3)................................ 2 79 -- 1 (30) -- Total realized/unrealized gains (losses) included in AOCI.............. (463) (31) -- (1) -- -- Purchases (4)........................... 1,377 752 -- -- 3 24 Sales (4)............................... (1,241) (755) -- (21) (26) (1) Issuances (4)........................... -- -- -- -- -- -- Settlements (4)......................... -- -- -- -- -- -- Transfers into Level 3 (5).............. 151 58 -- -- 52 -- Transfers out of Level 3 (5)............ (311) (638) -- -- (9) (5) ------------ ------------ --------- --------- ---------- --------- Balance, December 31, 2018.............. $ 7,101 $ 3,541 $ -- $ 10 $ 356 $ 25 ============ ============ ========= ========= ========== ========= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016: (6).............................. $ -- $ 101 $ 1 $ -- $ (29) $ -- ============ ============ ========= ========= ========== ========= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2017: (6).............................. $ (7) $ 83 $ -- $ -- $ (17) $ -- ============ ============ ========= ========= ========== ========= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2018: (6).............................. $ (5) $ 68 $ -- $ -- $ (22) $ -- ============ ============ ========= ========= ========== ========= Gains (Losses) Data for the year ended December 31, 2016...................... Total realized/unrealized gains (losses) included in net income (loss) (2) (3)................................ $ -- $ 100 $ 1 $ -- $ (24) $ -- Total realized/unrealized gains (losses) included in AOCI.............. $ (39) $ 47 $ 2 $ (1) $ 21 $ --
103 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) --------------------------------------------------------------------- Net Residential Net Embedded Separate Mortgage Other Derivatives Derivatives Account Long-term Loans - FVO Investments (7) (8) Assets (9) Debt ----------- ----------- ----------- ----------- ---------- --------- (In millions) Balance, January 1, 2017...... $ 566 $ -- $ (559) $ (893) $ 1,141 $ (74) Total realized/unrealized gains (losses) included in net income (loss) (2) (3).... 40 -- 21 450 (8) -- Total realized/unrealized gains (losses) included in AOCI......................... -- -- 207 -- -- -- Purchases (4)................. 175 -- -- -- 186 -- Sales (4)..................... (179) -- -- -- (80) -- Issuances (4)................. -- -- -- -- 1 -- Settlements (4)............... (82) -- 140 (433) (93) 34 Transfers into Level 3 (5).... -- -- -- -- 35 -- Transfers out of Level 3 (5).. -- -- -- -- (224) 40 ---------- ---------- ---------- ---------- ---------- --------- Balance, December 31, 2017.... 520 -- (191) (876) 958 -- Total realized/unrealized gains (losses) included in net income (loss) (2) (3).... 7 22 (69) 376 7 -- Total realized/unrealized gains (losses) included in AOCI......................... -- -- (110) -- -- -- Purchases (4)................. -- 196 4 -- 198 -- Sales (4)..................... (162) (2) -- -- (168) -- Issuances (4)................. -- -- (1) -- (3) -- Settlements (4)............... (66) -- 175 (204) (1) -- Transfers into Level 3 (5).... -- -- -- -- 53 -- Transfers out of Level 3 (5).. -- (1) -- -- (107) -- ---------- ---------- ---------- ---------- ---------- --------- Balance, December 31, 2018.... $ 299 $ 215 $ (192) $ (704) $ 937 $ -- ========== ========== ========== ========== ========== ========= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2016: (6).... $ 8 $ -- $ (166) $ (863) $ -- $ -- ========== ========== ========== ========== ========== ========= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2017: (6).... $ 27 $ -- $ (18) $ 452 $ -- $ -- ========== ========== ========== ========== ========== ========= Changes in unrealized gains (losses) included in net income (loss) for the instruments still held at December 31, 2018: (6).... $ (15) $ 23 $ 18 $ 387 $ -- $ -- ========== ========== ========== ========== ========== ========= Gains (Losses) Data for the year ended December 31, 2016. Total realized/unrealized gains (losses) included in net income (loss) (2) (3) (10)..................... $ 8 $ -- $ (168) $ 870 $ (2) $ -- Total realized/unrealized gains (losses) included in AOCI......................... $ -- $ -- $ (366) $ -- $ -- $ --
-------- (1) Comprised of U.S. and foreign corporate securities. (2) 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 derivative gains (losses). (3) Interest and dividend accruals, as well as cash interest coupons and dividends received, are excluded from the rollforward. (4) 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. (5) Items transferred into and then out of Level 3 in the same period are excluded from the rollforward. (6) 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). 104 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (7) Freestanding derivative assets and liabilities are presented net for purposes of the rollforward. (8) Embedded derivative assets and liabilities are presented net for purposes of the rollforward. (9) 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. (10)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. Fair Value Option The Company elects the FVO for certain residential mortgage loans that are managed on a total return basis. 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, ------------------------ 2018 2017 ---------- ------------ (In millions) Unpaid principal balance................................................................ $ 344 $ 650 Difference between estimated fair value and unpaid principal balance.................... (45) (130) ---------- ------------ Carrying value at estimated fair value.................................................. $ 299 $ 520 ========== ============ Loans in nonaccrual status.............................................................. $ 89 $ 198 Loans more than 90 days past due........................................................ $ 41 $ 94 Loans in nonaccrual status or more than 90 days past due, or both -- difference between aggregate estimated fair value and unpaid principal balance............................ $ (36) $ (102)
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, ------------------------------- --------------------------------- 2018 2017 2016 2018 2017 2016 ------- --------- --------- ----- ----------- ----------- Carrying Value After Measurement Gains (Losses) ------------------------------- --------------------------------- (In millions) Other limited partnership interests (1)...... N/A (2) $ 58 $ 95 N/A (2) $ (65) $ (59) Other assets (3).... $ -- $ -- $ -- $ -- $ 4 $ (30)
-------- (1)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 leveraged buyout funds; power, energy, timber and infrastructure development funds; venture capital funds; and below investment grade debt and mezzanine debt funds. In the future, 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, the exact timing of which is uncertain. (2)In connection with the adoption of new guidance related to the recognition and measurement of financial instruments (see Note 1), other limited partnership interests are measured at estimated fair value on a recurring basis, effective January 1, 2018. 105 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued) (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., a wholly-owned subsidiary of MetLife, Inc. (collectively, the "U.S. Retail Advisor Force Divestiture"). 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. 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, 2018 ------------------------------------------------ Fair Value Hierarchy --------------------------- Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value --------- ------- --------- --------- ---------- (In millions) Assets Mortgage loans.............................. $ 63,388 $ -- $ -- $ 64,409 $ 64,409 Policy loans................................ $ 6,061 $ -- $ 269 $ 6,712 $ 6,981 Other invested assets....................... $ 2,940 $ -- $ 2,673 $ 146 $ 2,819 Premiums, reinsurance and other receivables. $ 14,228 $ -- $ 113 $ 14,673 $ 14,786 Liabilities Policyholder account balances............... $ 72,194 $ -- $ -- $ 72,689 $ 72,689 Long-term debt.............................. $ 1,562 $ -- $ 1,746 $ -- $ 1,746 Other liabilities........................... $ 13,593 $ -- $ 448 $ 13,189 $ 13,637 Separate account liabilities................ $ 50,578 $ -- $ 50,578 $ -- $ 50,578
106 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 10. Fair Value (continued)
December 31, 2017 ------------------------------------------------ Fair Value Hierarchy --------------------------- Total Carrying Estimated Value Level 1 Level 2 Level 3 Fair Value --------- ------- --------- --------- ---------- (In millions) Assets Mortgage loans.............................. $ 57,939 $ -- $ -- $ 59,465 $ 59,465 Policy loans................................ $ 6,006 $ -- $ 261 $ 6,797 $ 7,058 Other limited partnership interests......... $ 214 $ -- $ -- $ 212 $ 212 Other invested assets....................... $ 2,260 $ -- $ 2,028 $ 154 $ 2,182 Premiums, reinsurance and other receivables. $ 15,024 $ -- $ 679 $ 14,859 $ 15,538 Liabilities Policyholder account balances............... $ 75,323 $ -- $ -- $ 76,452 $ 76,452 Long-term debt.............................. $ 1,661 $ -- $ 2,021 $ -- $ 2,021 Other liabilities........................... $ 13,954 $ -- $ 547 $ 13,490 $ 14,037 Separate account liabilities................ $ 61,757 $ -- $ 61,757 $ -- $ 61,757
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 Long-term and short-term debt outstanding, excluding debt relating to consolidated securitization entities, was as follows:
December 31, ------------------------------------------------------------------ Interest Rates (1) 2018 2017 ---------------------- -------------------------------- --------------------------------- Unamortized Unamortized Weighted Face Discount and Carrying Face Discount and Carrying Range Average Maturity Value Issuance Costs Value Value Issuance Costs Value (2) ------------- -------- ----------- -------- -------------- -------- -------- -------------- --------- (In millions) Surplus notes - affiliated........ 7.38% - 7.38% 7.38% 2037 $ 700 $ (9) $ 691 $ 700 $ (10) $ 690 Surplus notes...... 7.80% - 7.88% 7.83% 2024 - 2025 400 (2) 398 400 (3) 397 Other notes (2).... 2.99% - 6.50% 4.92% 2020 - 2058 477 (4) 473 578 (4) 574 -------- ------- -------- -------- ------- -------- Total long-term debt............. 1,577 (15) 1,562 1,678 (17) 1,661 -------- ------- -------- -------- ------- -------- Total short-term debt.............. 129 -- 129 243 -- 243 -------- ------- -------- -------- ------- -------- Total............ $ 1,706 $ (15) $ 1,691 $ 1,921 $ (17) $ 1,904 ======== ======= ======== ======== ======= ========
-------- (1)Range of interest rates and weighted average interest rates are for the year ended December 31, 2018. (2)During 2017, a subsidiary of Metropolitan Life Insurance Company issued $139 million of long-term debt to a third party. The aggregate maturities of long-term debt at December 31, 2018 for the next five years and thereafter are $0 in 2019, $3 million in 2020, $0 in 2021, $297 million in 2022, $0 in 2023 and $1.3 billion thereafter. Unsecured senior debt which consists of senior notes and other notes rank highest in priority. Payments of interest and principal on Metropolitan Life Insurance Company's surplus notes are subordinate to all other obligations and may be made only with the prior approval of the New York State Department of Financial Services ("NYDFS"). Term Loans MetLife Private Equity Holdings, LLC ("MPEH"), a wholly-owned indirect investment subsidiary, borrowed $350 million in December 2015 under a five-year credit agreement included within other notes in the table above. In November 2017, this agreement was amended to extend the maturity to November 2022, change the amount MPEH may borrow on a revolving basis to $75 million from $100 million, and change the interest rate to a variable rate of three-month London Interbank Offered Rate ("LIBOR") plus 3.25%, payable quarterly, from a variable rate of three-month LIBOR plus 3.70%. In December 2018, this agreement was further amended to change the interest rate to a variable rate of three-month LIBOR plus 3.10%. In connection with the initial borrowing in 2015, $6 million of costs were incurred, and additional costs of $1 million were incurred in connection with the 2017 amendment, which have been capitalized and are being amortized over the term of the loans. MPEH has pledged invested assets to secure the loans; however, these loans are non-recourse to Metropolitan Life Insurance Company. In December 2018, MPEH repaid $50 million of the initial borrowing. 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) Short-term Debt Short-term debt with maturities of one year or less was as follows:
December 31, --------------------- 2018 2017 ---------- ---------- (Dollars in millions) Commercial paper.......... $ 99 $ 100 Short-term borrowings (1). 30 143 ---------- ---------- Total short-term debt..... $ 129 $ 243 ========== ========== Average daily balance..... $ 213 $ 129 Average days outstanding.. 42 days 97 days
-------- (1) Represents short-term debt related to repurchase agreements, secured by assets of a subsidiary. During the years ended December 31, 2018, 2017 and 2016, the weighted average interest rate on short-term debt was 3.03%, 1.63% and 0.42%, respectively. Interest Expense Interest expense included in other expenses was $108 million, $106 million and $112 million for the years ended December 31, 2018, 2017 and 2016, respectively. These amounts include $52 million of interest expense related to affiliated debt for each of the three years ended December 31, 2018, 2017 and 2016. Credit Facility At December 31, 2018, MetLife, Inc. and MetLife Funding, Inc., a wholly-owned subsidiary of Metropolitan Life Insurance Company ("MetLife Funding"), maintained a $3.0 billion unsecured revolving credit facility (the "Credit Facility"). When drawn upon, this facility bears interest at varying rates in accordance with the agreement. The Company's 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 $6 million, $5 million and $8 million for the years ended December 31, 2018, 2017 and 2016, respectively, and were included in other expenses. Information on the Credit Facility at December 31, 2018 was as follows:
Letters of Credit Maximum Used by the Letters of Credit Unused Borrower(s) Expiration Capacity Company (1) Used by Affiliates (1) Drawdowns Commitments ----------- ------------------ ---------------- ----------------- ---------------------- --------- ----------- (In millions) MetLife, Inc. and MetLife Funding, Inc...... December 2021 (2) $ 3,000 (2) $ 412 $ 34 $ -- $ 2,554
-------- (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, 2018 and is not responsible for any reimbursement obligations under such letters of credit. (2) All borrowings under the Credit Facility must be repaid by December 20, 2021, except that letters of credit outstanding upon termination may remain outstanding until December 20, 2022. 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 financial covenants at December 31, 2018. 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 $35 million, $74 million and $89 million for the years ended December 31, 2018, 2017 and 2016, respectively. Statutory Equity and Income See Note 3 for information on the disposition of NELICO and GALIC. Metropolitan Life Insurance Company prepares statutory-basis financial statements in accordance with statutory accounting practices prescribed or permitted by the NYDFS. 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 state insurance department may impact the effect of Statutory Codification on the statutory capital and surplus of Metropolitan Life Insurance Company. The state of domicile of Metropolitan Life Insurance Company imposes 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"), with modifications by the state insurance department, 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 were in excess of 350% and 370% at December 31, 2018 and 2017, respectively. Metropolitan Life Insurance Company's foreign insurance operations are regulated by applicable authorities of the jurisdictions in which each entity operates and are subject to minimum capital and solvency requirements in those jurisdictions before corrective action commences. The aggregate required capital and surplus of Metropolitan Life Insurance Company's foreign insurance operations was $332 million and the aggregate actual regulatory capital and surplus of such operations was $378 million as of the date of the most recent required capital adequacy calculation for each jurisdiction. The Company's foreign insurance operations exceeded the minimum capital and solvency requirements as of the date of the most recent fiscal year-end capital adequacy calculation for each jurisdiction. 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 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 Metropolitan Life Insurance 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. Further, statutory accounting principles do not give recognition to purchase accounting adjustments. New York has adopted certain prescribed accounting practices, that apply to Metropolitan Life Insurance Company, 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 Metropolitan Life Insurance Company for the years ended December 31, 2018 and 2017 by $1.2 billion and $1.1 billion, respectively, compared to what capital and surplus would have been had it 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, which are derived from the statutory-basis financial statements as filed with the NYDFS. Statutory net income (loss) was as follows:
Years Ended December 31, ----------------------------------- Company State of Domicile 2018 2017 2016 ---------------------------------------- ----------------- ----------- ----------- ----------- (In millions) Metropolitan Life Insurance Company (1). New York $ 3,656 $ 1,982 $ 3,444
(1)In December 2016, Metropolitan Life Insurance Company transferred all of the issued and outstanding shares of the 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 2018 2017 ------------------------------------ -------------- --------------- (In millions) Metropolitan Life Insurance Company. $ 11,098 $ 10,384
Dividend Restrictions Under the New York State Insurance Law, Metropolitan Life Insurance Company is permitted, 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 New York Superintendent of Financial Services (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 the New York State Insurance Law, the Superintendent has broad discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its stockholder. Metropolitan Life Insurance Company paid $3.7 billion and $2.5 billion in dividends to MetLife, Inc. during the years ended December 31, 2018 and 2017, respectively, including amounts where regulatory approval was obtained as required. Under New York State Insurance Law, Metropolitan Life Insurance Company has calculated that it may pay approximately $3.1 billion to MetLife, Inc. without prior insurance regulatory approval during the year ended December 31, 2019. 111 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, 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 OCI before reclassifications... 3,977 122 26 (30) 4,095 Deferred income tax benefit (expense)........... (1,287) (43) (6) 11 (1,325) ------------- ------------- ----------- ------------ ------------- AOCI before reclassifications, net of income tax............... 6,282 1,538 (47) (1,884) 5,889 Amounts reclassified from AOCI................ 102 (970) -- 159 (709) Deferred income tax benefit (expense)........... (33) 338 -- (57) 248 ------------- ------------- ----------- ------------ ------------- Amounts reclassified from AOCI, net of income tax..... 69 (632) -- 102 (461) ------------- ------------- ----------- ------------ ------------- Balance at December 31, 2017... 6,351 906 (47) (1,782) 5,428 OCI before reclassifications... (6,326) (82) (20) 67 (6,361) Deferred income tax benefit (expense)........... 1,381 19 -- (45) 1,355 ------------- ------------- ----------- ------------ ------------- AOCI before reclassifications, net of income tax............... 1,406 843 (67) (1,760) 422 Amounts reclassified from AOCI................ 8 428 -- 34 470 Deferred income tax benefit (expense)........... (2) (96) -- (13) (111) ------------- ------------- ----------- ------------ ------------- Amounts reclassified from AOCI, net of income tax..... 6 332 -- 21 359 ------------- ------------- ----------- ------------ ------------- Cumulative effects of changes in accounting principles.......... (119) -- -- -- (119) Deferred income tax benefit (expense), cumulative effects of changes in accounting principles.......... 1,222 207 (7) (379) 1,043 ------------- ------------- ----------- ------------ ------------- Cumulative effects of changes in accounting principles, net of income tax (3)............... 1,103 207 (7) (379) 924 ------------- ------------- ----------- ------------ ------------- Transfer to affiliate, net of tax (4)............. -- -- -- 1,857 1,857 ------------- ------------- ----------- ------------ ------------- Balance at December 31, 2018... $ 2,515 $ 1,382 $ (74) $ (261) $ 3,562 ============= ============= =========== ============ =============
------------- (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. (3) See Note 1 for further information on adoption of new accounting pronouncements. (4) See Note 14. 112 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 Statements of AOCI Components Amounts Reclassified from AOCI Operations Locations ------------------------------------------------- --------------------------------------- ------------------------------ Years Ended December 31, --------------------------------------- 2018 2017 2016 ------------ ----------- ------------ (In millions) Net unrealized investment gains (losses): Net unrealized investment gains (losses).......... $ 89 $ 12 $ 10 Net investment gains (losses) Net unrealized investment gains (losses).......... 18 3 21 Net investment income Net unrealized investment gains (losses).......... (115) (117) (102) Net derivative gains (losses) ------------ ----------- ------------ Net unrealized investment gains (losses), before income tax..................................... (8) (102) (71) Income tax (expense) benefit...................... 2 33 26 ------------ ----------- ------------ Net unrealized investment gains (losses), net of income tax..................................... (6) (69) (45) ------------ ----------- ------------ Unrealized gains (losses) on derivatives - cash flow hedges: Interest rate swaps............................... 23 24 57 Net derivative gains (losses) Interest rate swaps............................... 18 16 12 Net investment income Interest rate forwards............................ (1) (11) (1) Net derivative gains (losses) Interest rate forwards............................ 2 2 3 Net investment income Foreign currency swaps............................ (469) 938 (251) Net derivative gains (losses) Foreign currency swaps............................ (3) (1) (1) Net investment income Credit forwards................................... 1 1 3 Net derivative gains (losses) Credit forwards................................... 1 1 1 Net investment income ------------ ----------- ------------ Gains (losses) on cash flow hedges, before income tax..................................... (428) 970 (177) Income tax (expense) benefit...................... 96 (338) 62 ------------ ----------- ------------ Gains (losses) on cash flow hedges, net of income tax..................................... (332) 632 (115) ------------ ----------- ------------ Defined benefit plans adjustment: (1) Amortization of net actuarial gains (losses)...... (35) (179) (198) Amortization of prior service (costs) credit...... 1 20 7 ------------ ----------- ------------ Amortization of defined benefit plan items, before income tax.............................. (34) (159) (191) Income tax (expense) benefit...................... 13 57 60 ------------ ----------- ------------ Amortization of defined benefit plan items, net of income tax.................................. (21) (102) (131) ------------ ----------- ------------ Total reclassifications, net of income tax....... $ (359) $ 461 $ (291) ============ =========== ============
------------- (1)These AOCI components are included in the computation of net periodic benefit costs. See Note 14. 113 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Other Revenues and Other Expenses Other Revenues Information on other revenues, which primarily includes fees related to service contracts from customers, was as follows:
Year Ended ----------------- December 31, 2018 ----------------- (In millions) Prepaid legal plans.................................... $ 286 Recordkeeping and administrative services (1).......... 220 Administrative services-only contracts................. 205 Other revenue from service contracts from customers.... 38 ------------- Total revenues from service contracts from customers. $ 749 Other (2).............................................. 837 ------------- Total other revenues................................. $ 1,586 =============
-------- (1)Related to products and businesses no longer actively marketed by the Company. (2)Other primarily includes reinsurance ceded. See Note 6. Other Expenses Information on other expenses was as follows:
Years Ended December 31, ---------------------- 2018 2017 2016 ------ ------ ------ (In millions) General and administrative expenses...................... $2,458 $2,608 $2,598 Pension, postretirement and postemployment benefit costs. 66 167 251 Premium taxes, other taxes, and licenses & fees.......... 366 273 367 Commissions and other variable expenses.................. 1,757 1,801 2,366 Capitalization of DAC.................................... (34) (61) (332) Amortization of DAC and VOBA............................. 470 241 441 Interest expense on debt................................. 108 106 112 ------ ------ ------ Total other expenses................................... $5,191 $5,135 $5,803 ====== ====== ======
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. Expenses related to Debt See Note 11 for additional information on interest expense on debt. Affiliated Expenses Commissions and other variable expenses, 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. 114 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 13. Other Revenues and Other Expenses (continued) 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:
Year Ended December 31, 2016 --------------------------------- Lease and Asset Severance Impairment Total ---------- ---------- ---------- (In millions) Balance at January 1,.............................................. $ 17 $ 4 $ 21 Restructuring charges.............................................. -- 1 1 Cash payments...................................................... (17) (4) (21) ---------- --------- ---------- Balance at December 31,............................................ $ -- $ 1 $ 1 ========== ========= ========== Total restructuring charges incurred since inception of initiative. $ 306 $ 47 $ 353 ========== ========= ==========
14. Employee Benefit Plans Pension and Other Postretirement Benefit Plans Through September 30, 2018, the Company sponsored and administered various qualified and nonqualified defined benefit pension plans and other postretirement employee benefit plans covering employees 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. In September 2018, the qualified and nonqualified defined benefit pension plans were amended, effective January 1, 2023, to provide benefits accruals for all active participants under the cash balance formula and to cease future accruals under the traditional formula. 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. Through September 30, 2018, the Company also provided certain postemployment benefits and certain postretirement medical and life insurance benefits for retired employees. Employees of MetLife 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 of MetLife 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. In September 2018, the postretirement medical and life insurance benefit plans were amended, effective January 1, 2023, to discontinue the accrual of the employer subsidy credits for eligible employees. As of October 1, 2018, except for the nonqualified defined benefit pension plan, the plan sponsor was changed from the Company to an affiliate (the "Transferred Plans"). The Company transferred the net benefit obligation and plan assets at book value as of September 30, 2018 as an additional paid-in-capital transaction, including the related unrecognized AOCI. The Company remains a participating affiliate of the Transferred Plans. 115 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, ---------------------------------------------------------------- 2018 2017 -------------------------------- ------------------------------ Other Other Pension Postretirement Pension Postretirement Benefits (1) Benefits Benefits (1) Benefits ---------------- ---------------- ------------- ---------------- (In millions) Change in benefit obligations: Benefit obligations at January 1,................. $ 10,479 $ 1,656 $ 9,837 $ 1,742 Transfer to affiliate (2)......................... (9,316) (1,648) -- -- Service costs..................................... 18 -- 169 6 Interest costs.................................... 42 1 415 75 Plan participants' contributions.................. -- -- -- 33 Plan amendments................................... (20) -- -- -- Net actuarial (gains) losses...................... (40) (2) 618 (96) Divestitures, settlements and curtailments........ -- 15 3 2 Benefits paid..................................... (83) (1) (563) (106) Effect of foreign currency translation............ -- (2) -- -- -------------- ------------- ------------- ------------- Benefit obligations at December 31,.............. 1,080 19 10,479 1,656 -------------- ------------- ------------- ------------- Change in plan assets: Estimated fair value of plan assets at January 1,. 9,371 1,426 8,721 1,379 Transfer to affiliate (2)......................... (9,371) (1,426) -- -- Actual return on plan assets...................... -- 2 947 124 Divestitures, settlements and curtailments........ -- 18 -- -- Plan participants' contributions.................. -- -- -- 33 Employer contributions............................ 83 -- 266 (4) Benefits paid..................................... (83) (1) (563) (106) Foreign exchange impact........................... -- (1) -- -- -------------- ------------- ------------- ------------- Estimated fair value of plan assets at December 31,................................... -- 18 9,371 1,426 -------------- ------------- ------------- ------------- Over (under) funded status at December 31,....... $ (1,080) $ (1) $ (1,108) $ (230) ============== ============= ============= ============= Amounts recognized on the consolidated balance sheets: Other assets...................................... $ -- $ 5 $ 55 $ 160 Other liabilities................................. (1,080) (6) (1,163) (390) -------------- ------------- ------------- ------------- Net amount recognized............................ $ (1,080) $ (1) $ (1,108) $ (230) ============== ============= ============= ============= AOCI: Net actuarial (gains) losses...................... $ 360 $ (5) $ 2,831 $ (55) Prior service costs (credit)...................... (22) 1 (10) (26) -------------- ------------- ------------- ------------- AOCI, before income tax.......................... $ 338 $ (4) $ 2,821 $ (81) ============== ============= ============= ============= Accumulated benefit obligation................... $ 1,040 N/A $ 10,180 N/A ============== =============
-------- (1) Includes nonqualified unfunded plans, for which the aggregate PBO was $1.1 billion and $1.2 billion at December 31, 2018 and 2017, respectively. (2) Transfer to affiliate represents the Transferred Plans' book value as of September 30, 2018, net of the related 2018 net periodic benefit costs. See "-- Net Periodic Benefit Costs." 116 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, ----------------------------------------------------------------- 2018 2017 2018 2017 ------------ ------------ ------------ ------------ PBO Exceeds Estimated Fair Value ABO Exceeds Estimated Fair Value of Plan Assets of Plan Assets -------------------------------- -------------------------------- (In millions) Projected benefit obligations........... $ 1,080 $ 1,163 $ 1,080 $ 1,163 Accumulated benefit obligations......... $ 1,040 $ 1,116 $ 1,040 $ 1,116 Estimated fair value of plan assets..... $ -- $ -- $ -- $ --
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, ------------------------------------------------------------------------------------- 2018 2017 2016 --------------------------- --------------------------- --------------------------- Other Other Other Pension Postretirement Pension Postretirement Pension Postretirement Benefits Benefits Benefits Benefits Benefits Benefits ---------- ---------------- ---------- ---------------- ---------- ---------------- (In millions) Net periodic benefit costs: Service costs............................. $ 123 $ 4 $ 169 $ 6 $ 203 $ 9 Interest costs............................ 290 41 415 75 415 82 Settlement and curtailment costs (1)...... -- -- 3 2 1 30 Expected return on plan assets............ (394) (54) (509) (72) (527) (74) Amortization of net actuarial (gains) losses................................... 142 (26) 189 -- 188 10 Amortization of prior service costs (credit)................................. (1) (14) (1) (22) (1) (6) Allocated to affiliates................... (66) 19 (48) 1 (64) (9) ---------- ------------ ---------- -------------- ---------- --------- Total net periodic benefit costs (credit) (2)........................... 94 (30) 218 (10) 215 42 ---------- ------------ ---------- -------------- ---------- --------- Other changes in plan assets and benefit obligations recognized in OCI: Net actuarial (gains) losses.............. (40) (4) 181 (148) 176 (121) Prior service costs (credit).............. (20) -- -- -- (11) (40) Amortization of net actuarial (gains) losses................................... (35) -- (189) -- (188) (10) Amortization of prior service (costs) credit................................... 1 -- 1 22 1 6 Transfer to affiliate (3)................. (2,389) 81 -- -- -- -- Dispositions (4).......................... -- -- -- -- (32) 2 ---------- ------------ ---------- -------------- ---------- --------- Total recognized in OCI.................. (2,483) 77 (7) (126) (54) (163) ---------- ------------ ---------- -------------- ---------- --------- Total recognized in net periodic benefit costs and OCI.......................... $ (2,389) $ 47 $ 211 $ (136) $ 161 $ (121) ========== ============ ========== ============== ========== =========
-------- (1) The Company recognized curtailment charges in 2016 on certain postretirement benefit plans in connection with the U.S. Retail Advisor Force Divestiture. See Note 18. (2) Includes costs (credit) related to Transferred Plans of $65 million and ($49) million for pension benefits and other postretirement benefits, respectively, for the year ended December 31, 2018. 117 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) (3) Transfer to affiliate represents the Transferred Plans' book value as of September 30, 2018, net of the related 2018 other changes in plan assets and benefit obligations recognized in OCI. (4) See Note 3. The estimated net actuarial (gains) losses and prior service costs (credit) for the defined benefit pension plans that will be amortized from AOCI into net periodic benefit costs over the next year are $25 million and ($3) million, respectively. Assumptions Assumptions used in determining benefit obligations were as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- December 31, 2018 Weighted average discount rate 4.35% 3.75% Rate of compensation increase. 2.25% - 8.50% N/A December 31, 2017 Weighted average discount rate 3.65% 3.70% Rate of compensation increase. 2.25% - 8.50% N/A
Assumptions used in determining net periodic benefit costs for the U.S. plans were as follows:
Pension Benefits Other Postretirement Benefits -------------------- ------------------------------- Year Ended December 31, 2018 Weighted average discount rate 3.65% 3.70% Weighted average expected rate of return on plan assets 5.75% 5.11% Rate of compensation increase. 2.25% - 8.50% N/A Year Ended December 31, 2017 Weighted average discount rate 4.30% 4.45% Weighted average expected rate of return on plan assets 6.00% 5.36% Rate of compensation increase. 2.25% - 8.50% N/A 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
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 the plan valuation in 2019 is currently anticipated to be 4.00% for other postretirement benefits. 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 assumed healthcare costs trend rates used in measuring the APBO and net periodic benefit costs were as follows:
December 31, --------------------------------------------- 2018 2017 ---------------------- ---------------------- Before Age 65 and Before Age 65 and Age 65 older Age 65 older --------- ------------ --------- ------------ Following year.................................... 6.6% 6.6% 5.6% 6.6% Ultimate rate to which cost increase is assumed to decline....................................... 4.0% 4.0% 4.0% 4.3% Year in which the ultimate trend rate is reached.. 2040 2040 2086 2098
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, 2018:
One Percent One Percent Increase Decrease ------------- ------------- (In millions) Effect on total of service and interest costs components. $ -- $ -- Effect of accumulated postretirement benefit obligations. $ 1 $ (1)
Plan Assets Through September 30, 2018, the Company provided MetLife 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, 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 securities AFS, 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. 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 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. As part of the plan sponsor changes, the plan assets associated with the table below were transferred to an affiliate as of October 1, 2018. The table below summarizes the actual weighted average allocation of the estimated fair value of total plan assets by major asset class at December 31, 2017 for the Invested Plans:
Other Postretirement Pension Benefits Benefits (1) -------------------- ---------------------- Actual Actual Allocation Allocation -------------------- ---------------------- Asset Class Fixed maturity securities AFS........... 82% 84% Equity securities (2)................... 10% 15% Alternative securities (3).............. 8% 1% -------------- -------------- Total assets......................... 100% 100% ============== ==============
------------- (1) Other postretirement benefits do not reflect postretirement life insurance plan assets invested in fixed maturity securities AFS. (2) Equity securities percentage includes derivative assets. (3) Alternative securities primarily include hedge, 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. 120 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) At December 31, 2018, other postretirement plan assets measured at estimated fair value on a recurring basis were $18 million and were classified as short-term investments Level 2. At December 31, 2017, 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, 2017 ----------------------------------------------------------------------------------- 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 AFS: Corporate.......................... $ -- $ 3,726 $ 1 $ 3,727 $ 20 $ 362 $-- $ 382 U.S. government bonds.............. 1,256 528 -- 1,784 269 6 -- 275 Foreign bonds...................... -- 937 -- 937 -- 94 -- 94 Federal agencies................... 35 134 -- 169 -- 17 -- 17 Municipals......................... -- 335 -- 335 -- 28 -- 28 Short-term investments............. 135 192 -- 327 8 391 -- 399 Other (1).......................... 7 383 9 399 -- 68 -- 68 -------- --------- ------- --------- ------- ------- ---- --------- Total fixed maturity securities AFS............................. 1,433 6,235 10 7,678 297 966 -- 1,263 -------- --------- ------- --------- ------- ------- ---- --------- Equity securities.................. 797 91 3 891 153 -- -- 153 Other investments.................. -- 144 622 766 -- 9 -- 9 Derivative assets.................. 33 2 1 36 1 -- -- 1 -------- --------- ------- --------- ------- ------- ---- --------- Total assets..................... $ 2,263 $ 6,472 $ 636 $ 9,371 $ 451 $ 975 $-- $ 1,426 ======== ========= ======= ========= ======= ======= ==== =========
------------- (1) Other primarily includes money market securities, mortgage-backed securities, collateralized mortgage obligations and ABS. 121 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 AFS: -------------------------- Equity Other Derivative Corporate Other (1) Securities Investments Assets ---------- ---------- ----------- ------------ ----------- (In millions) Balance, January 1, 2017......................... $ -- $ 9 $ -- $ 634 $ 64 Realized gains (losses).......................... (10) -- 2 -- (22) Unrealized gains (losses)........................ 10 -- -- (12) 6 Purchases, sales, issuances and settlements, net. -- 7 (4) -- (47) Transfers into and/or out of Level 3............. 1 (7) 5 -- -- ---------- ---------- ----------- ------------ ----------- Balance, December 31, 2017....................... $ 1 $ 9 $ 3 $ 622 $ 1 Realized gains (losses).......................... -- -- -- -- -- Unrealized gains (losses)........................ -- -- -- -- -- Purchases, sales, issuances and settlements, net. -- -- -- -- -- Transfers into and/or out of Level 3............. -- -- -- -- -- Transfer to affiliate............................ (1) (9) (3) (622) (1) ---------- ---------- ----------- ------------ ----------- Balance, December 31, 2018....................... $ -- $ -- $ -- $ -- $ -- ========== ========== =========== ============ ===========
-------- (1) Other includes ABS and collateralized mortgage obligations. For the years ended December 31, 2018 and 2017, there were no other postretirement benefit plan assets measured at estimated fair value on a recurring basis using significant unobservable (Level 3) inputs. Expected Future Contributions and Benefit Payments Benefit payments due under the nonqualified pension plans are primarily funded from the Company's general assets as they become due under the provisions of the plans, and therefore benefit payments equal employer contributions. The Company expects to make contributions of $70 million to fund the benefit payments in 2019. 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. 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) 2019..................... $ 69 $ 1 2020..................... $ 73 $ 1 2021..................... $ 64 $ 1 2022..................... $ 68 $ 1 2023..................... $ 73 $ 1 2024-2028................ $ 381 $ 6
122 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 14. Employee Benefit Plans (continued) 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 $56 million, $56 million and $57 million for the years ended December 31, 2018, 2017 and 2016, 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 (debited) to the account balances was ($448) million, $1.1 billion and $660 million for the years ended December 31, 2018, 2017 and 2016, 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 Through September 30, 2018, the Company sponsored defined contribution plans for substantially all MetLife employees under which a portion of employee contributions are matched. As of October 1, 2018, the plan's sponsor for the defined contribution plans was moved from the Company to an affiliate. The Company contributed $42 million, $65 million and $73 million for the years ended December 31, 2018, 2017 and 2016, respectively. 15. Income Tax The provision for income tax was as follows:
Years Ended December 31, ----------------------- 2018 2017 2016 ------ ------- ------ (In millions) Current: U.S. federal................................ $ 217 $ 1,511 $ 675 U.S. state and local........................ 9 4 5 Non-U.S..................................... 91 14 40 ------ ------- ------ Subtotal................................... 317 1,529 720 ------ ------- ------ Deferred: U.S. federal................................ (88) (2,099) (539) Non-U.S..................................... (56) 9 18 ------ ------- ------ Subtotal................................... (144) (2,090) (521) ------ ------- ------ Provision for income tax expense (benefit). $ 173 $ (561) $ 199 ====== ======= ======
The Company's income (loss) before income tax expense (benefit) was as follows:
Years Ended December 31, ------------------------- 2018 2017 2016 ------- -------- ------- (In millions) Income (loss): U.S............ $1,202 $ 4,045 $2,379 Non-U.S........ 3,107 (1,079) (438) ------- -------- ------- Total......... $4,309 $ 2,966 $1,941 ======= ======== =======
123 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The reconciliation of the income tax provision at the U.S. statutory rate (21% in 2018; 35% in 2017 and 2016) to the provision for income tax as reported was as follows:
Years Ended December 31, ------------------------ 2018 2017 2016 ------ -------- ------ (In millions) Tax provision at U.S. statutory rate........ $ 905 $ 1,039 $ 679 Tax effect of: Dividend received deduction................. (34) (65) (79) Tax-exempt income........................... (13) (49) (38) Prior year tax (1).......................... (175) (29) (33) Low income housing tax credits.............. (284) (278) (270) Other tax credits........................... (77) (101) (98) Foreign tax rate differential............... (8) -- 1 Change in valuation allowance............... 1 -- (1) U.S. Tax Reform impact (2) (3).............. (139) (1,089) -- Other, net.................................. (3) 11 38 ------ -------- ------ Provision for income tax expense (benefit). $ 173 $ (561) $ 199 ====== ======== ======
-------- (1) As discussed further below, for the year ended December 31, 2018, prior year tax includes a $168 million non-cash benefit related to an uncertain tax position. (2) For the year ended December 31, 2018, U.S. Tax Reform impact includes a $139 million tax benefit related to the adjustment of deferred taxes due to the U.S. tax rate change. This excludes $12 million of tax provision at the U.S. statutory rate for a total tax reform benefit of $151 million. (3) For the year ended December 31, 2017, U.S. Tax Reform impact of ($1.1) billion excludes ($23) million of tax provision at the U.S. statutory rate for a total tax reform benefit of ($1.1) billion. On December 22, 2017, President Trump signed into law U.S. Tax Reform. U.S. Tax Reform includes numerous changes in tax law, including a permanent reduction in the U.S. federal corporate income tax rate from 35% to 21%, which took effect for taxable years beginning on or after January 1, 2018. U.S. Tax Reform moves the United States from a worldwide tax system to a participation exemption system by providing corporations a 100% dividends received deduction for dividends distributed by a controlled foreign corporation. To transition to that new system, U.S. Tax Reform imposed a one-time deemed repatriation tax on unremitted earnings and profits at a rate of 8.0% for illiquid assets and 15.5% for cash and cash equivalents. 124 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) The incremental financial statement impact related to U.S. Tax Reform was as follows:
Years Ended December 31, ------------------------- 2018 2017 ---------- ------------- (In millions) Income (loss) before provision for income tax............................... $ (58) $ (66) Provision for income tax expense (benefit): Deferred tax revaluation.................................................... (151) (1,112) ---------- ------------- Total provision for income tax expense (benefit)........................... (151) (1,112) ---------- ------------- Income (loss), net of income tax............................................ 93 1,046 Income tax (expense) benefit related to items of other comprehensive income (loss).................................................................... -- 133 ---------- ------------- Increase to net equity from U.S. Tax Reform................................. $ 93 $ 1,179 ========== =============
In accordance with SAB 118 issued by the U.S. Securities and Exchange Commission ("SEC") in December 2017, the Company recorded provisional amounts for certain items for which the income tax accounting is not complete. For these items, the Company recorded a reasonable estimate of the tax effects of U.S. Tax Reform. The estimates were reported as provisional amounts during the measurement period, which did not exceed one year from the date of enactment of U.S. Tax Reform. The Company reflected adjustments to its provisional amounts upon obtaining, preparing, or analyzing additional information about facts and circumstances that existed as of the enactment date that, if known, would have affected the income tax effects initially reported as provisional amounts. As of December 31, 2017, the following items were considered provisional estimates due to complexities and ambiguities in U.S. Tax Reform which resulted in incomplete accounting for the tax effects of these provisions. Further guidance, either legislative or interpretive, and analysis were completed during the measurement period. As a result, the following updates were made to complete the accounting for these items as of December 31, 2018: . Deemed Repatriation Transition Tax - The Company recorded a $1 million charge for this item for the year ended December 31, 2017. For the year ended December 31, 2018, the Company did not record an additional tax charge. . Global Intangible Low-Tax Income ("GILTI") - U.S. Tax Reform imposes a minimum tax on GILTI, which is generally the excess income of foreign subsidiaries over a 10% rate of routine return on tangible business assets. For the year ended December 31, 2017, the Company did not record a tax charge for this item. In 2018, the Company established an accounting policy in which it treats taxes due on GILTI as a current-period expense when incurred. For the year ended December 31, 2018, the Company did not record a tax charge. . Compensation and Fringe Benefits - U.S. Tax Reform limits certain employer deductions for fringe benefit and related expenses and also repeals the exception allowing the deduction of certain performance-based compensation paid to certain senior executives. The Company recorded an $8 million tax charge, included within the deferred tax revaluation as of December 31, 2017. The Company determined that no additional adjustment was required for the year ended December 31, 2018. 125 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 15. Income Tax (continued) . Alternative Minimum Tax Credits - U.S. Tax Reform eliminates the corporate alternative minimum tax and allows for minimum tax credit carryforwards to be used to offset future regular tax or to be refunded 50% each tax year beginning in 2018, with any remaining balance fully refunded in 2021. However, pursuant to the requirements of the Balanced Budget and Emergency Deficit Control Act of 1985, as amended, refund payments issued for corporations claiming refundable prior year alternative minimum tax credits are subject to a sequestration rate of 6.2%. The application of this fee to refunds in future years is subject to further guidance. Additionally, the sequestration reduction rate in effect at the time is subject to uncertainty. For the year ended December 31, 2017, the Company recorded a $7 million tax charge included within the deferred tax revaluation. For the year ended December 31, 2018, the Company determined that no additional adjustment was required. In early 2019, the Internal Revenue Service ("IRS") issued guidance indicating that for years beginning after December 31, 2017, refund payments and credit elect and refund offset transactions due to refundable minimum tax credits will not be subject to sequestration. The Company will incorporate the impacts of this IRS announcement in 2019. . Tax Credit Partnerships - The reduction in the federal corporate income tax rate due to U.S. Tax Reform required adjustments for multiple investment portfolios, including tax credit partnerships and tax-advantaged leveraged leases. Certain tax credit partnership investments derive returns in part from income tax credits. The Company recognizes changes in tax attributes at the partnership level when reported by the investee in its financial information. The Company did not receive the necessary investee financial information to determine the impact of U.S. Tax Reform on the tax attributes of its tax credit partnership investments until the third quarter of 2018. Accordingly, prior to the third quarter of 2018, the Company applied prior law to these equity method investments in accordance with SAB 118. For the year ended December 31, 2018, after receiving additional investee information, a reduction in tax credit partnerships' equity method income of $46 million, net of income tax, was included in net investment income. The tax-advantaged leveraged lease portfolio is valued on an after-tax yield-basis. In 2018, the Company received third party data that was used to complete a comprehensive review of its portfolio to determine the full and complete impact of U.S. Tax Reform on these investments. As a result of this review, a tax benefit of $126 million was recorded for the year ended December 31, 2018. 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, -------------- 2018 2017 ------ ------- (In millions) Deferred income tax assets: Policyholder liabilities and receivables..... $1,491 $ 1,361 Net operating loss carryforwards............. 22 23 Employee benefits............................ 518 595 Tax credit carryforwards..................... 1,038 1,127 Litigation-related and government mandated... 131 117 Other........................................ -- 437 ------ ------- Total gross deferred income tax assets..... 3,200 3,660 Less: Valuation allowance.................... 21 20 ------ ------- Total net deferred income tax assets....... 3,179 3,640 ------ ------- Deferred income tax liabilities: Investments, including derivatives........... 1,516 1,989 Intangibles.................................. 32 32 DAC.......................................... 558 673 Net unrealized investment gains.............. 987 2,313 Other........................................ 43 2 ------ ------- Total deferred income tax liabilities...... 3,136 5,009 ------ ------- Net deferred income tax asset (liability).. $ 43 $(1,369) ====== =======
The Company also has recorded a valuation allowance charge of $1 million related to certain U.S. state net operating loss carryforwards for the year ended December 31, 2018. 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 U.S. 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. U.S. state net operating loss carryforwards of $140 million at December 31, 2018 will expire beginning in 2034. 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 and other credit carryforwards for tax return purposes at December 31, 2018.
Tax Credit Carryforwards ----------------------------- General Business Credits Other ---------------- ------------ (In millions) Expiration: 2019-2023... $ -- $ -- 2024-2028... -- -- 2029-2033... 200 -- 2034-2038... 1,139 -- Indefinite.. -- 90 ------------- ------------ $ 1,339 $ 90 ============= ============
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 from affiliates included $27 million and $203 million for the years ended December 31, 2018 and 2017, respectively. The Company files income tax returns with the U.S. federal government and various U.S. state and local jurisdictions, as well as non-U.S. 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 refund claims filed in 2017 with the IRS for 2000 through 2002 to recover tax and interest predominantly related to the disallowance of certain foreign tax credits for which the Company received a statutory notice of deficiency in 2015 and paid the tax thereon. The disallowed foreign tax credits relate to certain non-U.S. investments held by Metropolitan Life Insurance Company in support of its life insurance business through a United Kingdom investment subsidiary that was structured as a joint venture until early 2009. For tax years 2003 through 2006, the Company entered into binding agreements with the IRS under which all remaining issues, including the foreign tax credit matter noted above, for these years were resolved. Accordingly, in the fourth quarter of 2018, the Company recorded a non-cash benefit to net income of $349 million, net of tax, comprised of a $168 million tax benefit recorded in provision for income tax expense (benefit) and a $229 million interest benefit ($181 million, net of tax) included in other expenses. For tax years 2000 through 2002 (which are closed to IRS examination except for the refund claim described above) and 2007 through 2009 (which are the subject of the current IRS examination), the Company has established adequate reserves for tax liabilities. The Company continues to pursue final resolution of disallowed foreign tax credits, as well as related issues, for the open tax years in a manner consistent with the final resolution of such issues for 2003 through 2006. Although the final timing and details of any such resolution remain uncertain, and could be affected by many factors, closure with the IRS for tax years 2000 through 2002, and 2007 through 2009, may occur in 2019. 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. For example, federal tax legislation and regulation could impact unrecognized tax benefits. 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, ---------------------- 2018 2017 2016 ------ ----- ------- (In millions) Balance at January 1,......................................................... $ 890 $931 $1,075 Additions for tax positions of prior years.................................... 3 -- 7 Reductions for tax positions of prior years (1)............................... (169) (38) (109) Additions for tax positions of current year................................... 3 4 6 Reductions for tax positions of current year.................................. -- (1) -- Settlements with tax authorities (2).......................................... (285) (6) (48) ------ ----- ------- Balance at December 31,....................................................... $ 442 $890 $ 931 ====== ===== ======= Unrecognized tax benefits that, if recognized would impact the effective rate. $ 442 $890 $ 931 ====== ===== =======
-------- (1) The decrease in 2018 is primarily related to the non-cash benefit from the tax audit settlement discussed above. (2) The decrease in 2018 is primarily related to the tax audit settlement, of which $284 million was reclassified to the current income tax payable account. 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, ----------------------- 2018 2017 2016 ------ ---- ---- (In millions) Interest expense (benefit) recognized on the consolidated statements of operations (1).................................................. $(457) $ 47 $(33) December 31, ------------- 2018 2017 ---- ---- (In millions) Interest included in other liabilities on the consolidated balance sheets............................................................. $196 $653
-------- (1) The decrease in 2018 is primarily related to the tax audit settlement, of which $184 million was recorded in other expenses and $273 million was reclassified to the current income tax payable account. The Company had no penalties for the years ended December 31, 2018, 2017 and 2016. 129 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 16. Contingencies, Commitments and Guarantees Contingencies Litigation The Company is a defendant in a large number of litigation matters. Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those discussed below 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, mortgage lending bank, employer, investor, investment advisor, broker-dealer, and taxpayer. The Company also 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, as well as from local and national regulators and government authorities in jurisdictions outside the United States where the Company conducts business. The issues involved in information requests and regulatory matters vary widely, but can include inquiries or investigations concerning the Company's compliance with applicable insurance and other laws and regulations. The Company cooperates in these inquiries. 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. It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings. 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, 2018. 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. 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. 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 matters where a loss is believed to be reasonably possible, but not probable, the Company has not made an accrual. As of December 31, 2018, the Company estimates the aggregate range of reasonably possible losses in excess of amounts accrued for these matters to be $0 to $425 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. 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) 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. 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, -------------------------------------- 2018 2017 2016 ------------ ------------ ------------ (In millions, except number of claims) Asbestos personal injury claims at year end. 62,522 62,930 67,223 Number of new claims during the year........ 3,359 3,514 4,146 Settlement payments during the year (1)..... $ 51.4 $ 48.6 $ 50.2
------------- (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. 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 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. 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. Based upon its regular reevaluation of its exposure from asbestos litigation, Metropolitan Life Insurance Company has updated its recorded liability for asbestos-related claims to $502 million at December 31, 2018. 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. 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 agreed to be responsible for certain environmental testing at the Chemform Site. The EPA may seek additional costs if the environmental testing identifies issues. The EPA and Metropolitan Life Insurance Company have reached a settlement in principle on the EPA's claim for past costs. The Company estimates that the aggregate cost to resolve this matter, including the settlement for claims of past costs and the costs of environmental testing, will not exceed $300 thousand. 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) 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. 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 (the "Ontario Litigation"). 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. In September 2018, the Court of Appeal for Ontario affirmed the lower court's decision to not certify the sales practices claims in the Ontario Litigation. 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. Owens v. Metropolitan Life Insurance Company (N.D. Ga., filed April 17, 2014) Plaintiff filed this class action lawsuit on behalf of persons for whom Metropolitan Life Insurance Company established a Total Control Account ("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 class. In addition, plaintiff, on behalf of a subgroup of the class, seeks interest under Georgia's delayed settlement interest statute, alleging that the use of the TCA as the settlement option did not constitute payment. 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. On September 29, 2017, the court certified a nationwide class. The court also certified a Georgia subclass. The Company intends to defend this action vigorously. 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 parties reached a settlement, which the court approved on January 3, 2019. 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. Plaintiffs assert causes of action for declaratory relief, violation of California's Unfair Competition Law and Usury Law, and unjust enrichment. Plaintiffs seek 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 appealed this ruling to the United States Court of Appeals for the Ninth Circuit. The Company intends to defend this action vigorously. 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) 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, on behalf of herself and all persons over age 65 who selected a Reduced Pay at Age 65 payment feature on their long-term care insurance policies and whose premium rates were increased after age 65. Plaintiff seeks unspecified compensatory, statutory and punitive damages, as well as recessionary and injunctive relief. On April 12, 2017, the court granted Metropolitan Life Insurance Company's motion to dismiss the action. Plaintiff appealed this ruling and the United States Court of Appeals for the Seventh Circuit reversed and remanded the case to the district court for further proceedings. The Company intends to defend this action vigorously. Julian & McKinney v. Metropolitan Life Insurance Company (S.D.N.Y., filed February 9, 2017) Plaintiffs filed this putative class and collective action on behalf of themselves and all current and former long-term disability ("LTD") claims specialists between February 2011 and the present for alleged wage and hour violations under the Fair Labor Standards Act, the New York Labor Law, and the Connecticut Minimum Wage Act. The suit alleges that Metropolitan Life Insurance Company improperly reclassified the plaintiffs and similarly situated LTD claims specialists from non-exempt to exempt from overtime pay in November 2013. As a result, they and members of the putative class were no longer eligible for overtime pay even though they allege they continued to work more than 40 hours per week. Plaintiffs seek unspecified compensatory and punitive damages, as well as other relief. On March 22, 2018, the Court conditionally certified the case as a collective action, requiring that notice be mailed to LTD claims specialists who worked for the Company from February 8, 2014 to the present. The Company intends to defend this action vigorously. Total Asset Recovery Services, LLC. v. MetLife, Inc., et al. (Supreme Court of the State of New York, County of New York, filed December 27, 2017) Total Asset Recovery Services ("The Relator") brought an action under the qui tam provision of the New York False Claims Act (the "Act") on behalf of itself and the State of New York. The Relator originally filed this action under seal in 2010, and the complaint was unsealed on December 19, 2017. The Relator alleges that MetLife, Inc., Metropolitan Life Insurance Company and several other insurance companies violated the Act by filing false unclaimed property reports with the State of New York from 1986 to 2017, to avoid having to escheat the proceeds of more than 25,000 life insurance policies, including policies for which the defendants escheated funds as part of their demutualizations in the late 1990s. The Relator seeks treble damages and other relief. The defendants intend to defend this action vigorously. Miller, et al. v. Metropolitan Life Insurance Company (S.D.N.Y., filed January 4, 2019) Plaintiff filed a second amended complaint in this putative class action, purporting to assert claims on behalf of all persons who replaced their MetLife Optional Term Life or Group Universal Life policy with a Group Variable Universal Life policy wherein Metropolitan Life Insurance Company allegedly charged smoker rates for certain non-smokers. Plaintiff seeks unspecified compensatory and punitive damages, as well as other relief. The Company intends to defend this action vigorously. Regulatory and Litigation Matters Related to Group Annuity Benefits In 2018, the Company announced that it identified a material weakness in its internal control over financial reporting related to the practices and procedures for estimating reserves for certain group annuity benefits. The Company is exposed to lawsuits and regulatory investigations, and could be exposed to additional legal actions relating to these issues. These may result in payments, including damages, fines, penalties, interest and other amounts assessed or awarded by courts or regulatory authorities under applicable escheat, tax, securities, ERISA, or other laws or regulations. The Company could incur significant costs in connection with these actions. Regulatory Matters The NYDFS examined these issues and other unrelated issues as part of its quinquennial exam and entered into a consent order with Metropolitan Life Insurance Company on January 28, 2019. Several additional regulators have made similar inquiries and it is possible that other jurisdictions may pursue similar investigations or inquiries. 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) Litigation Matters Roycroft v. MetLife, Inc., et al. (S.D.N.Y., filed June 18, 2018) Plaintiff filed this putative class action on behalf of all persons due benefits under group annuity contracts but who did not receive the entire amount to which they were entitled. Plaintiff asserts claims for unjust enrichment, accounting, and restitution based on allegations that Metropolitan Life Insurance Company and MetLife, Inc. failed to timely pay annuity benefits to certain group annuitants. Plaintiff seeks declaratory and injunctive relief, as well as unspecified compensatory and punitive damages, and other relief. The court dismissed this matter as to all defendants on January 15, 2019. Insolvency Assessments Many 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 or those that may become impaired, insolvent or fail. These associations levy assessments, up to prescribed limits, on all member insurers in a particular jurisdiction 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. In addition, certain jurisdictions have government owned or controlled organizations providing life, health and property and casualty insurance to their citizens, whose activities could place additional stress on the adequacy of guaranty fund assessments. Many of these organizations have the power to levy assessments similar to those of the guaranty associations. Some jurisdictions permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and liabilities held for insolvency assessments were as follows:
December 31, ------------------------- 2018 2017 ------------ ------------ (In millions) Other Assets: Premium tax offset for future discounted and undiscounted assessments.................... $ 42 $ 51 Premium tax offset currently available for paid assessments............................ 43 49 ------------ ------------ Total....................................... $ 85 $ 100 ============ ============ Other Liabilities: Insolvency assessments....................... $ 57 $ 66 ============ ============
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) Commitments Leases The Company, as lessee, has entered into various lease and sublease agreements for office space and equipment. Future minimum gross rental payments relating to these lease arrangements are as follows:
Amount --------------- (In millions) 2019....... $ 125 2020....... 137 2021....... 136 2022....... 134 2023....... 122 Thereafter. 567 --------------- Total.... $ 1,221 ===============
Operating lease expense was $116 million, $187 million, and $204 million for the years ended December 31, 2018, 2017 and 2016, respectively. Effective January 1, 2018, the Company assigned certain leases to an affiliate. The Company, as assignor, remains liable under the leases to the extent that the affiliate, as assignee, cannot meet any obligations. Total minimum rental payments to be received in the future under non-cancelable subleases were $628 million as of December 31, 2018. Non-cancelable sublease income was $66 million, $40 million and $17 million for the years ended December 31, 2018, 2017 and 2016, respectively. Mortgage Loan Commitments The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were $3.6 billion and $3.3 billion at December 31, 2018 and 2017, 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 $4.6 billion and $3.9 billion at December 31, 2018 and 2017, respectively. 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 $442 million, with a cumulative maximum of $827 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. 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) The Company's recorded liabilities were $5 million and $4 million at December 31, 2018 and 2017, respectively, for indemnities, guarantees and commitments. 17. Quarterly Results of Operations (Unaudited) The unaudited quarterly results of operations for 2018 and 2017 are summarized in the table below:
Three Months Ended --------------------------------------------- March 31, June 30, September 30, December 31, --------- --------- ------------- ------------ (In millions) 2018 Total revenues........................................................ $ 8,446 $ 14,809 $ 9,751 $ 9,155 Total expenses........................................................ $ 7,711 $ 13,709 $ 8,847 $ 7,585 Net income (loss)..................................................... $ 672 $ 1,007 $ 816 $ 1,641 Less: Net income (loss) attributable to noncontrolling interests...... $ 3 $ 5 $ 2 $ (4) Net income (loss) attributable to Metropolitan Life Insurance Company. $ 669 $ 1,002 $ 814 $ 1,645 2017 Total revenues........................................................ $ 8,645 $ 9,342 $ 10,286 $ 8,952 Total expenses........................................................ $ 7,978 $ 8,534 $ 9,411 $ 8,336 Net income (loss)..................................................... $ 547 $ 644 $ 708 $ 1,628 Less: Net income (loss) attributable to noncontrolling interests...... $ 1 $ 2 $ 5 $ (6) Net income (loss) attributable to Metropolitan Life Insurance Company. $ 546 $ 642 $ 703 $ 1,634
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. 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, $2.2 billion and $2.1 billion for the years ended December 31, 2018, 2017 and 2016, respectively. Total revenues received from affiliates related to these agreements were $135 million, $234 million and $251 million for the years ended December 31, 2018, 2017 and 2016, 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 $1.1 billion, $1.4 billion and $1.5 billion for the years ended December 31, 2018, 2017 and 2016, respectively, and were reimbursed to the Company by these affiliates. In 2018, the Company and the MetLife enterprise updated its shared facilities and services structure to more efficiently share enterprise assets and services. Effective as of October 1, 2018, the Company entered into new service agreements with its affiliates, which replaced existing agreements. Under the new agreements, the Company will no longer be the primary provider of services to affiliates and will receive further services from affiliates to conduct its activities. The Company had net payables to affiliates, related to the items discussed above, of $181 million and $205 million at December 31, 2018 and 2017, respectively. See Notes 1, 6, 8, 11, 12 and 14 for additional information on related party transactions. Also, see Note 6 for information related to the separation of Brighthouse. 137 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Notes to the Consolidated Financial Statements -- (continued) 18. Related Party Transactions (continued) Sales Distribution Services In July 2016, MetLife, Inc. completed the U.S. Retail Advisor Force Divestiture. MassMutual assumed all of the liabilities related to such assets and that arise or occur after the closing of the sale. 138 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, 2018 (In millions)
Estimated Amount at Cost or Fair Which Shown on Amortized Cost (1) Value Balance Sheet Types of Investments ---------------------- ------------- -------------------- Fixed maturity securities AFS: Bonds: U.S. government and agency................... $ 28,139 $ 30,161 $ 30,161 Public utilities............................. 6,822 7,149 7,149 Municipals................................... 6,070 6,947 6,947 Foreign government........................... 4,191 4,492 4,492 All other corporate bonds.................... 72,886 72,766 72,766 ---------------------- ------------- -------------------- Total bonds................................ 118,108 121,515 121,515 Mortgage-backed and asset-backed securities.. 36,256 36,708 36,708 Redeemable preferred stock................... 811 850 850 ---------------------- ------------- -------------------- Total fixed maturity securities AFS........ 155,175 159,073 159,073 ---------------------- ------------- -------------------- Equity securities: Common stock: Industrial, miscellaneous and all other.... 360 368 368 Public utilities........................... 83 74 74 Non-redeemable preferred stock............... 352 331 331 ---------------------- ------------- -------------------- Total equity securities.................... 795 773 773 ---------------------- ------------- -------------------- Mortgage loans............................... 63,687 63,687 Policy loans................................. 6,061 6,061 Real estate and real estate joint ventures... 6,110 6,110 Real estate acquired in satisfaction of debt. 42 42 Other limited partnership interests.......... 4,481 4,481 Short-term investments....................... 1,506 1,506 Other invested assets........................ 15,690 15,690 ---------------------- -------------------- Total investments.......................... $ 253,547 $ 257,423 ====================== ====================
-------- (1) Amortized cost for fixed maturity securities AFS 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 premium or accretion of discount; for equity securities, cost represents original cost; 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. 139 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information December 31, 2018 and 2017 (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) ------------------ -------- ----------------------- ------------ ------------ ----------------- ------------ 2018 U.S............... $ 403 $ 67,770 $ 67,233 $ -- $ 137 $ 26 MetLife Holdings.. 3,709 65,730 23,423 494 159 167 Corporate & Other. 5 291 -- -- -- -- -------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 4,117 $ 133,791 $ 90,656 $ 494 $ 296 $ 193 ======== ======================= ============ ============ ================= ============ 2017 U.S............... $ 413 $ 61,665 $ 69,559 $ -- $ 165 $ 23 MetLife Holdings.. 3,930 66,753 24,380 499 162 179 Corporate & Other. 5 294 -- -- -- -- -------- ----------------------- ------------ ------------ ----------------- ------------ Total........... $ 4,348 $ 128,712 $ 93,939 $ 499 $ 327 $ 202 ======== ======================= ============ ============ ================= ============
-------- (1) Amounts are included within the future policy benefits, other policy-related balances and policyholder dividend obligation column. (2) Includes premiums received in advance. 140 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule III Consolidated Supplementary Insurance Information -- (continued) For the Years Ended December 31, 2018, 2017 and 2016 (In millions)
Policyholder Amortization of Benefits and DAC and Premiums and Claims and VOBA Universal Life Net Interest Credited Charged to and Investment-Type Investment to Policyholder Other Other Segment Product Policy Fees Income Account Balances Expenses Expenses (1) ------------------ ------------------- ----------- ----------------- --------------- ------------- 2018 U.S............... $ 24,411 $ 6,429 $ 25,922 $ 75 $ 2,810 MetLife Holdings.. 4,306 4,653 5,649 395 2,079 Corporate & Other. 20 (163) 5 -- 917 ------------------- ----------- ----------------- --------------- ------------- Total........... $ 28,737 $ 10,919 $ 31,576 $ 470 $ 5,806 =================== =========== ================= =============== ============= 2017 U.S............... $ 20,500 $ 6,012 $ 22,019 $ 56 $ 2,680 MetLife Holdings.. 4,643 4,758 6,004 185 2,293 Corporate & Other. 9 (257) 4 -- 1,018 ------------------- ----------- ----------------- --------------- ------------- Total........... $ 25,152 $ 10,513 $ 28,027 $ 241 $ 5,991 =================== =========== ================= =============== ============= 2016 U.S............... $ 18,909 $ 5,811 $ 20,263 $ 56 $ 2,721 MetLife Holdings.. 5,739 5,355 7,128 342 2,797 Corporate & Other. 287 (83) 155 43 1,044 ------------------- ----------- ----------------- --------------- ------------- Total........... $ 24,935 $ 11,083 $ 27,546 $ 441 $ 6,562 =================== =========== ================= =============== =============
---------- (1) Includes other expenses and policyholder dividends, excluding amortization of DAC and VOBA charged to other expenses. 141 Metropolitan Life Insurance Company (A Wholly-Owned Subsidiary of MetLife, Inc.) Schedule IV Consolidated Reinsurance December 31, 2018, 2017 and 2016 (Dollars in millions)
% Amount Assumed Gross Amount Ceded Assumed Net Amount to Net ------------- ------------ ------------ ------------- ----------- 2018 Life insurance in-force..... $ 3,736,612 $ 260,086 $ 453,560 $ 3,930,086 11.5% ============= ============ ============ ============= Insurance premium Life insurance (1).......... $ 19,673 $ 894 $ 725 $ 19,504 3.7% Accident & health insurance. 7,210 128 27 7,109 0.4% ------------- ------------ ------------ ------------- Total insurance premium.... $ 26,883 $ 1,022 $ 752 $ 26,613 2.8% ============= ============ ============ ============= 2017 Life insurance in-force..... $ 3,377,964 $ 266,895 $ 490,033 $ 3,601,102 13.6% ============= ============ ============ ============= Insurance premium Life insurance (1).......... $ 16,022 $ 1,132 $ 1,097 $ 15,987 6.9% Accident & health insurance. 7,040 121 19 6,938 0.3% ------------- ------------ ------------ ------------- Total insurance premium.... $ 23,062 $ 1,253 $ 1,116 $ 22,925 4.9% ============= ============ ============ ============= 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% ============= ============ ============ =============
-------- (1) Includes annuities with life contingencies. For the year ended December 31, 2018, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $14.7 billion and $1.2 billion, respectively, and life insurance premiums of $117 million and $9 million, respectively. For the year ended December 31, 2017, reinsurance ceded and assumed included affiliated transactions for life insurance in-force of $16.2 billion and $1.3 billion, respectively, and life insurance premiums of $132 million and $122 million, respectively. 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. 142 [THIS PAGE INTENTIONALLY LEFT BLANK] [THIS PAGE INTENTIONALLY LEFT BLANK] METROPOLITAN LIFE SEPARATE ACCOUNT UL PART C: OTHER INFORMATION ITEM 26. EXHIBITS (a) Resolution of the Board of Directors of Metropolitan Life effecting the establishment of Metropolitan Life Separate Account UL (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-47927) filed April 30, 1997.) (b) Not Applicable (c) (i) Form of Selected Broker Agreement (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 30, 1997.) (ii) Schedule of Sales Commissions (Incorporated by reference from "Sales and Administration of the Policies" in the Prospectuses included herein and "Distribution of the Policies" in the Statement of Additional Information.) (iii) Form of Retail Sales Agreement (Incorporated herein by reference to the Post-Effective Amendment No. 20 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 25, 2006.) (iv) Amended and Restated Principal Underwriting Agreement with MLIDC dated October 1, 2018 (incorporated herein by reference to Post-Effective Amendment No. 31 to Registration Statement on Form N-4 for Metropolitan Life Separate Account E, File No. 333-52366/811-04001, filed April 23, 2019). (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) 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) Specimen Flexible Premium Variable Life Insurance Policy (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 30, 1997.) (ii) Alternative pages required by state law (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 30, 1997.) (iii) Endorsement for calculation of minimum death benefit using the Cash Value Accumulation test (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 30, 1997.) (iv) Accelerated Death Benefit and Zero Cost Loan Riders (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed on April 30, 1997.) (v) Yearly Renewable Term Rider (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 26, 1996.) (vi) Refund of sales load rider (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 26, 1996.) (vii) Amended Policy Specifications Page indicating alternate premium expense charges (Incorporated herein by reference to Post-Effective Amendment No. 5 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 26, 1996.) (viii) Enhanced Cash Surrender Value Rider (Incorporated herein by reference to Post-Effective Amendment No. 12 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 22, 2002.) (ix) Term Insurance Rider (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.) (e) Amended Application Forms for Policy and Form of Receipt (including State variations) (Incorporated herein by reference to Post-Effective Amendment No. 6 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 30, 1997.) (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 April 6, 2000.) (ii) 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.) (g) Reinsurance Contracts (Incorporated herein by reference to Post-Effective Amendment No. 18 to the Registrant's Registration Statement on Form N-6 (File No. 033-47927) filed April 30, 2004.) (h) (i) Participation Agreements with INVESCO Variable Investment Funds, Inc., Janus Aspen Series and Templeton Variable Products Series Fund (Incorporated herein by reference to Post-Effective Amendment No. 8 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed April 23, 1999.) (ii) Participation Agreements with Alliance Variable Product Series Fund, Inc. (Incorporated herein by reference to Post-Effective Amendment No. 10 to the Registrant's Registration Statement on Form S-6 (File No. 033-57320) filed September 18, 2000.) (iii) Participation Agreement with Met Investors Series Trust (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.) (iv) Participation Agreement with Fidelity Variable Insurance Products Funds (Incorporated herein by reference to Post-Effective Amendment No. 26 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 002-90380) filed April 30, 1997.) (v) Supplemental Agreements with Fidelity Variable Insurance Products Funds (Incorporated herein by reference to Post-Effective Amendment No. 10 to the Registrant's Registration Statement (File No. 033-57320) filed September 18, 2000.) (vi) Participation Agreements with AIM Variable Insurance Funds, American Century, Dreyfus Variable Investment Fund, Franklin Templeton Variable Insurance Products Trust, Goldman Sachs Variable Insurance Trust, Janus Aspen Series, MFS Variable Insurance Trust and Wells Fargo Variable Trust. (Incorporated herein by reference to Post-Effective Amendment No. 16 to the Registrant's Registration Statement (File No. 033-57320) filed April 30, 2004.) (vii) Participation Agreement among Metropolitan Series Fund, Inc., MetLife Advisers, LLC and Metropolitan Life Insurance Company (8/31/07) (Incorporation 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.) (viii) Amended and Restated Participation Agreement and First Amendment with Fidelity Variable Insurance Products Funds I, II, III, IV and V (Incorporated herein by reference to Post-Effective Amendment No. 20 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 18, 2008.) (ix) Participation Agreement among American Funds Insurance Series, Capital Research and Management Company and metropolitan Life Insurance Company dated April 30, 2001. (Incorporated herein by reference to Metropolitan Separate Account E's Registration Statement on Form N-4 (333-52366) filed August 3, 2001.) (x) First & 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.) (xi) Amendments to the Participation Agreements with AIM/Invesco, American Century, American Funds, Fidelity, Franklin Templeton, Legg Mason, and Royce (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.) (xii) Amendments to the Participation Agreements with AllianceBernstein Variable Products Series Fund, Inc., Dreyfus Variable Investment Fund, Franklin Templeton Variable Insurance Products Trust, Goldman Sachs Variable Insurance Trust, Janus Aspen Series, Met Investors Series Trust, Metropolitan Series Fund, MFS Variable Insurance Trust, Oppenheimer Variable Account Funds, PIMCO Variable Insurance Trust, Pioneer Variable Contracts Trust (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.) (xiii) Amendments to the Participation Agreements with Franklin Templeton Variable Insurance Products Trust and Wells Fargo Variable Trust (Incorporated herein by reference to Post-Effective No. 26 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 11, 2013.) (xiv) Amendments to the Participation Agreements with Franklin Templeton Variable Insurance Products Trust, Janus Aspen Series and Legg Mason Partners Variable Equity Trust and Legg Mason Partners Variable Income Trust (Incorporated herein by reference to Post-Effective No. 27 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 11, 2014.) (xv) Participation Agreement and Amendments among The Universal Institutional Funds, Inc., Morgan Stanley Investment Management and Metropolitan Life insurance Company and the Participation Agreement among PIMCO Variable Insurance Trust and Metropolitan Life insurance Company (Incorporated herein by reference to the Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-198448) filed August 28, 2014.) (xvi) Amendment to the Participation Agreement among PIMCO Variable Insurance Trust and Metropolitan Life insurance Company (Incorporated herein by reference to Pre-Effective Amendment No. 1 to Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-198448) filed November 10, 2014.) (xvii) Participation Agreement with Putnam Variable Trust (Incorporated herein by reference to Pre-Effective Amendment No. 1 to Paragon Separate Account D's Registration Statement on Form S-6 (File No. 333-80393) filed September 1, 1999.) (xviii) Participation Agreement with Royce Capital Fund (Incorporated herein by reference to Post-Effective No. 28 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 15, 2015.) (xix) Participation Agreement among Trust for Advised Portfolios, Quasar Distributors, LLC, 1919 Investment Counsel, LLC and Metropolitan Life Insurance Company dated November 7, 2014. (Incorporated herein by reference to Post-Effective No. 28 to the Registrant's Registration Statement on Form N-6 (File No. 033-57320) filed April 15, 2015.) (xx) Amendment No. 4 to the Participation Agreement among American Funds Insurance Series, Capital Research and Management Company and Metropolitan Life Insurance Company dated November 19, 2014. (Incorporated herein by reference to Post-Effective Amendment No. 18 to Metropolitan Separate Account E's Registration Statement on Form N-4 (333-176654) filed April 13, 2016.) (xxi) Amendment to the Participation Agreement between Franklin Templeton Variable Insurance Products Trust and Metropolitan Life Insurance Company (Incorporated herein by reference to Post-Effective No. 9 to the Registrant's Registration Statement on Form N-6 (File No. 333-147508) filed April 14, 2016.) (xxii) Amendment No. 5 dated May 1, 2015 to the Participation Agreement among The Universal Institutional Funds, Inc., Morgan Stanley Investment Management and Metropolitan Life insurance Company and Metropolitan Life insurance Company (Incorporated herein by reference to Post-Effective Amendment No. 1 to the Metropolitan Life Separate Account E's Registration Statement on Form N-4 (File No. 333-198448) filed April 13, 2016.) (i) Not Applicable (j) Not Applicable (k) Opinion and Consent of Marie C. Swift as to the legality of the securities being registered (Incorporated herein by reference to the Post-Effective Amendment No. 17 to the Registrant's Registration Statement on Form N-6 (033-57320) filed April 28, 2005.) (l) Not Applicable (m) Not Applicable (n) Consent of Independent Registered Public Accounting Firm (Filed herewith) (o) Not Applicable (p) Not Applicable (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. 6 to the Registration Statement (File No. 033-57320) filed on April 30, 1997.) (r) Powers of Attorney for Metropolitan Life Insurance Company and its designated Separate Accounts (filed herewith) ITEM 27. DIRECTORS AND OFFICERS OF DEPOSITOR
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS AND OFFICES WITH DEPOSITOR ------------------------------------- ------------------------------------------------------------- Steven A. Kandarian Chairman of the Board, President and Chief Executive Officer MetLife, Inc. and Metropolitan Life and a Director Insurance Company 200 Park Avenue New York, NY 10166
Cheryl W. Grise Director Former Executive Vice President, Northeast Utilities 200 Park Avenue New York, NY 10166
Carlos M. Gutierrez Director Co-Chair Albright Stonebridge Group (ASG) 200 Park Avenue New York, NY 10166
Gerald L. Hassell Director Former Chairman of the Board and CEO The Bank of New York Mellon Corporation 200 Park Avenue New York, NY 10166
David L. Herzog Director Former Chief Financial Officer AIG 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 200 Park Avenue New York, NY 10166
Edward J. Kelly, III Director Former Chairman, Institutional Clients Group, Citigroup, Inc. 200 Park Avenue New York, NY 10166
William E. Kennard Director Former U.S. Ambassador to the European Union 200 Park Avenue New York, NY 10166
James M. Kilts Director Founding Partner, Centerview Capital 200 Park Avenue New York, NY 10166
Catherine R. Kinney Director Former President and Co-Chief Operating Officer, New York Stock Exchange, Inc. 200 Park Avenue New York, NY 10166
Diana McKenzie Director Chief Information Officer of Workday, Inc 200 Park Avenue New York, NY 10166
Denise M. Morrison Director Former President and Chief Executive Officer Campbell Soup Company 200 Park Avenue New York, NY 10166
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 noted below.
NAME AND PRINCIPAL BUSINESS ADDRESS POSITIONS WITH DEPOSITOR ------------------------------------- --------------------------------------------------------------- Steven A. Kandarian Chairman, President and Chief Executive Officer and a Director
Michel A. Khalaf President - U.S. Business & EMEA
Karl R. Erhardt Executive Vice President and Chief Auditor
Stephen W. Gauster Executive Vice President and General Counsel
Steven J. Goulart Executive Vice President, Interim President - Asia and Chief Investment Officer
John McCallion Executive Vice President and Chief Financial Officer
Esther Lee Executive Vice President and Global Chief Marketing Officer
Martin J. Lippert Executive Vice President and Global Technology & Operations Officer
Edward Spehar, Jr. Executive Vice President and Treasurer
Tamara Schock Executive Vice President and Chief Accounting Officer
Susan Podlogar Executive Vice President and Chief Human Resources Officer
Rebecca Tadikonda Executive Vice President and Chief Strategy Officer
Ramy Tadros Executive Vice President and Chief Risk Officer
Michael Zarcone 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, 2018 The following is a list of subsidiaries of MetLife, Inc. updated as of December 31, 2018. 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) 1. MetLife Services and Solutions, LLC (DE) a) MetLife Solutions Pte. Ltd. (Singapore) i) MetLife Services East Private Limited (India) - 99.99% is owned by MetLife Solutions Pte. Ltd. and .01% by Natiloportem Holdings, LLC ii) 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. B. MetLife Home Loans, LLC (DE) C. Metropolitan Tower Life Insurance Company (NE) 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) 4. MetLife Assignment Company, Inc. (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. 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. 3. 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. MetLife Digital Ventures, 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. Newbury Insurance Company, Limited (DE) H. MetLife Investors Group, LLC (DE) 1. MetLife Investors Distribution Company (MO) 2. MetLife Investments Securities, LLC (DE) I. Metropolitan Life Insurance Company ("MLIC") (NY) 1. ML Sloan's Lake Member, LLC (DE) - Metropolitan Life Insurance Company owns 55% and 45% by Metropolitan Tower Life Insurance Company. 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) b) 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) 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 a third party 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. Met II Office Mezzanine, LLC (FL) - 10.4167% of the membership interest is owned by Metropolitan Tower Life Insurance Company and 89.5833% is owned by Metropolitan Life Insurance Company. a) Met II Office, LLC (FL) 17. ML Southlands Member, LLC (DE) - Metropolitan Life Insurance Company owns 60% and 40% by Metropolitan Tower Life Insurance Company. 18. Corporate Real Estate Holdings, LLC (DE) 19. MetLife Tower Resources Group, Inc. (DE) 20. ML Sentinel Square Member, LLC (DE) 21. MetLife Securitization Depositor, LLC (DE) 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) MPLife, S. de R.L. de C.V. (Mexico) - 99.99% of MPLife, 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) 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) i) The Building at 575 Fifth Retail Owner LLC (DE) 36. ML Bridgeside Apartments LLC (DE) 37. MetLife Chino Member, LLC (DE) 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 Metropolitan Tower 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 Metropolitan Tower Life Insurance Company. 45. 1001 Properties, LLC (DE) 46. 6104 Hollywood, LLC (DE) 47. Boulevard Residential, LLC (DE) 48. ML-AI MetLife Member 3, LLC (DE) 49. 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, Inc. 50. Marketplace Residences, LLC (DE) 51. ML Swan Mezz, LLC (DE) a) ML Swan GP, LLC (DE) 52. ML Dolphin Mezz, LLC (DE) a) ML Dolphin GP, LLC (DE) 53. Haskell East Village, LLC (DE) 54. MetLife Cabo Hilton Member, LLC (DE) - 83.1% of MetLife Cabo Hilton Member, LLC is owned by MLIC, 16.9% by Metropolitan Tower Life Insurance Company. 55. 150 North Riverside PE Member, LLC (DE) - MLIC owns an 81.45% membership interest and Metropolitan Tower Life Insurance Company owns a 18.55% membership interest 56. ML Terraces, LLC (DE) 57. Chestnut Flats Wind, LLC (DE) 58. MetLife 425 MKT Member, LLC (DE) 59. MetLife OFC Member, LLC (DE) 60. MetLife THR Investor, LLC (DE) 61. ML Southmore, LLC (DE) - 99% of ML Southmore, LLC is owned by MLIC and 1% by Metropolitan Tower Life Insurance Company. 62. 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. 63. MetLife CB W/A, LLC (DE) 64. MetLife Camino Ramon Member, LLC (DE) - 99% of MetLife Camino Ramon Member, LLC is owned by MLIC and 1% by Metropolitan Tower Life Insurance Company. 65. 10700 Wilshire, LLC (DE) 66. Viridian Miracle Mile, LLC (DE) 67. MetLife 555 12th Member, LLC (DE) - 94.6% is owned by MLIC and 5.4% by Metropolitan Tower Life Insurance Company. 68. MetLife OBS Member, LLC (DE) 69. MetLife 1007 Stewart, LLC (DE) 70. 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 Metropolitan Tower Life Insurance Company. 71. MetLife Treat Towers Member, LLC (DE) 72. 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) 73. ML Mililani Member, LLC (DE)- is owned at 95% by MLIC and 5% by Metropolitan Tower Life Insurance Company. 74. MetLife SP Holdings, LLC (DE) a) MetLife Private Equity Holdings, LLC (DE) 75. Buford Logistics Center, LLC (DE) 76. MetLife Park Tower Member, LLC (DE) a) Park Tower REIT, Inc. (DE) i) Park Tower JV Member, LLC (DE) 77. MCPP Owners, LLC (DE) - 87.34% is owned by MLIC, 1.81% by Metropolitan Tower Life Insurance Company, and 10.85% by MTL Leasing, LLC. 78. MetLife HCMJV 1 GP, LLC (DE) 79. MetLife ConSquare Member, LLC (DE) 80. MetLife Ontario Street Member, LLC (DE) 81. 1925 WJC Owner, LLC (DE) 82. MetLife Member Solaire, LLC (DE) 83. Sino-US United MetLife Insurance Company, Ltd. - 50% of Sino-US United MetLife Insurance Company, Ltd. Is owned by MLIC and 50% is owned by a third party. 84. MetLife Property Ventures Canada ULC (Canada) 85. MetLife Canadian Property Ventures, LLC (NY) 86. ML Cerritos TC Member, LLC (DE) - Metropolitan Life Insurance Company owns 60% and 40% by Metropolitan Tower Life Insurance Company. 87. MetLife Boro Station Member, LLC (DE) 88. MetLife 8280 Member, LLC (DE) 89. Southcreek Industrial Holdings, LLC (DE) 90. MMP Owners, LLC (DE) - 98.82% is owned by MLIC and 1.18% is owned by Metropolitan Property and Casualty Insurance Company. 91. ML-AI MetLife Member 4, LLC (DE) - 60% owned by MLIC and 40% owned by Metropolitan Tower Life Insurance Company. J. MetLife Capital Trust IV (DE) 3 K. 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 (Cayman Islands) - 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). f) MetLife International PE Fund V, LP (Cayman Islands) - 81.699% of the Limited partnership interests of this entity is owned by MetLife Insurance K.K., 15.033% is owned by MetLife Limited (Hong Kong) and the remaining 3.268% is owned by MetLife Insurance Company of Korea. g) MetLife International PE Fund VI, LP (Cayman Islands) - 76.323% of the Limited partnership interests of this entity is owned by MetLife Insurance K.K., 20.208% is owned by MetLife Limited and the remaining 3.469% is owned by MetLife Insurance Company of Korea. 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 limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 15.60%, Metropolitan Life Insurance Company (on behalf of Separate Account 746) owns 2.52%, MetLife Insurance Company of Korea Limited owns 2.04%, MetLife Insurance K.K. owns 6.94%, Metropolitan Property and Casualty Insurance Company owns 1.76% and Metropolitan Tower Life Insurance Company owns 0.05%. i) MetLife Core Property REIT, LLC (DE) 1) MetLife Core Property Holdings, LLC (DE) - MetLife Core Property Holdings, LLC also holds, directly or indirectly, the following limited liability companies (indirect ownership indicated in parenthesis): MCP Alley24 East, LLC; MCP Property Management, LLC; MCP One Westside, LLC; MCP 7 Riverway, LLC; MCPF Acquisition, LLC; MCP SoCal Industrial - Springdale, LLC; MCP SoCal Industrial - Concourse, LLC; MCP SoCal Industrial - Kellwood, LLC; MCP SoCal Industrial - Redondo, LLC; MCP SoCal Industrial - Fullerton, LLC; MCP SoCal Industrial - Loker, LLC; MCP Paragon Point, LLC; MCP 4600 South Syracuse, LLC; MCP The Palms at Doral, LLC; MCP Waterford Atrium, LLC; MCP EnV Chicago, LLC; MCP 1900 McKinney, LLC; MCP 550 West Washington, LLC; MCP 3040 Post Oak, LLC; MCP Plaza at Legacy, LLC; MetLife Core Property TRS, LLC; MCP SoCal Industrial - LAX, LLC; MCP SoCal Industrial - Anaheim, LLC; MCP SoCal Industrial - Canyon, LLC; MCP SoCal Industrial - Bernardo, LLC; MCP Ashton South End, LLC; MCP Lodge At Lakecrest, LLC; MCP Main Street Village, LLC; MCP Trimble Campus, LLC; MCP Highland Park Lender, LLC; MCP Buford Logistics Center Bldg B, LLC; MCP 22745 & 22755 Relocation Drive, LLC; MCP 9020 Murphy Road, LLC; MCP Atlanta Gateway, LLC; MCP Northyards Holdco, LLC; MCP Northyards Owner, LLC (100%); MCP Northyards Master Lessee, LLC (100%); MCP VOA Holdings, LLC; MCP VOA I & III, LLC (100%); MCP VOA II, LLC (100%); MCP West Broad Marketplace, LLC; MCP Union Row, LLC; MCP Fife Enterprise Center, LLC; MCP 2 Ames, LLC; MCP 2 Ames Two, LLC (100%); MCP 2 Ames One, LLC (100%); MCP 2 Ames Owner, LLC (89%); MCP 350 Rohlwing, LLC; MCP - Wellington, LLC; MCP Onyx, LLC; MCP Valley Forge, LLC; MCP Valley Forge Two, LLC (100%); MCP Valley Forge One, LLC (100%); MCP Valley Forge Owner, LLC (89%); MCP MA Property REIT, LLC; MCPF - Needham, LLC (100%); MCP 60 11th Street Member, LLC; 60 11th Street, LLC (100%); MCP Fife Enterprise Member, LLC; Fife Enterprise Center Venture, LLC (100%); MCP-English Village, LLC; MCP 100 Congress Member, LLC; 100 Congress Venture, LLC (55%); 100 Congress REIT, LLC (55%); 100 Congress Owner, LLC (55%); MCP DMCBP Phase II Member, LLC; DMCBP Phase II Venture, LLC (95%); Des Moines Creek Business Park Phase II, LLC (95%); MCP Magnolia Park Member, LLC; Magnolia Park Greenville Venture, LLC (90%); Magnolia Park Greenville, LLC (90%); MCP Denver Pavilions Member, LLC; Denver Pavilions Venture, LLC (80%); Denver Pavilions OwnerCo, LLC (80%); MCP Buford Logistics Center 2 Member, LLC; Buford Logistics Center 2 Venture, LLC (95%); Buford Logistics Center Bldg A Venture, LLC (95%); MCP Seattle Gateway I Member, LLC; Seattle Gateway I Venture, LLC (95%); Seattle Gateway Industrial I, LLC (95%); MCP 249 Industrial Business Park Member, LLC; 249 Industrial Business Park Venture, LLC (95%); 249 Industrial Business Park, LLC (95%); MCP Seattle Gateway II Member, LLC; Seattle Gateway II Venture, LLC (95%); Seattle Gateway Industrial II, LLC (95%); MCP Seventh and Osborn Retail Member, LLC; Seventh and Osborn Retail Venture, LLC (92.5%); Seventh and Osborn Retail, LLC (92.5%); MCP Seventh and Osborn MF Member, LLC; Seventh and Osborn MF Venture, LLC (92.5%); High Street Seventh and Osborn Apartments, LLC (92.5%); MCP Block 23 Member, LLC; Block 23 Residential Investors, LLC (90%); SLR Block 23 Residential Owner, LLC (90%); MCP Burnside Member, LLC; Alta Burnside Venture, LLC (92.5%); Alta Burnside, LLC (92.5%); MCP Mountain Technology Center Member TRS, LLC; Mountain Technology Center Venture, LLC (95%); Mountain Technology Center Venture Sub A, LLC (95%); Mountain Technology Center Venture Sub B, LLC (95%); Mountain Technology Center Venture Sub C, LLC (95%); Mountain Technology Center Venture Sub D, LLC (95%); Mountain Technology Center Venture Sub E, LLC (95%). aa) MCP Property Management, LLC (DE) bb) MCP Core Property TRS, LLC (DE) 4. MIM Property Management, LLC (DE) a) MIM Property Management of Georgia 1, 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 limited partnership interests in the Fund: Metropolitan Life Insurance Company owns 26.6%, MetLife Insurance Company of Korea Limited owns 2.1%, MetLife Limited owns 2.7%, Metropolitan Life Insurance Company of Hong Kong Limited owns 0.03% and Metropolitan Tower Life Insurance Company owns 2.7% (the remainder is held by third party investors). i) MetLife Commercial Mortgage REIT, LLC (DE) 1) MetLife Commercial Mortgage Originator, LLC (DE) aa) MCMIF Holdco I, LLC (DE) bb) MCMIF Holdco II, LLC (DE) 6. MLIA SBAF Manager, LLC (DE) 7. MLIA Manager I, LLC (DE) 8. MetLife Middle Market Private Debt GP, LLC (DE) a. MetLife Middle Market Private Debt Fund, LP (DE) - MetLife Middle Market Private Debt GP, LLC is the general partner of MetLife Middle Market Private Debt Fund, LP (the "Fund"). The following affiliates hold limited partnership interests in the Fund: MetLife Private Equity Holdings, LLC (31.15%) and Metropolitan Life Insurance Company (31.15%). The remainder is held by third party investors. 9. MetLife Middle Market Private Debt Parallel GP, LLC (DE) a. MetLife Middle Market Private Debt Parallel Fund, LP (Cayman Islands) - MetLife Middle Market Private Debt Parallel GP, LLC is the general partner of MetLife Middle Market Private Debt Parallel Fund, LP. The following affiliate holds a limited partnership interest in the Fund: MetLife Insurance K.K. (100%). L. 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. (TX) M. Cova Life Management Company (DE) N. MetLife Reinsurance Company of Charleston (SC) O. MetLife Reinsurance Company of Vermont (VT) P. Delaware American Life Insurance Company (DE) Q. Federal Flood Certification LLC (TX) R. MetLife Global Benefits, Ltd. (Cayman Islands) S. 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. T. MetLife Consumer Services, Inc. (DE) U. MetLife Global, Inc. (DE) V. MetLife Insurance Brokerage, Inc. (NY) 4 W. 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) Closed Joint-stock Company Master-D (Russia) aa) Joint-Stock Company MetLife Insurance Company (Russia) - 51% of Joint Stock Company MetLife Insurance Company is owned by Closed Joint-stock Company 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) 2) LumenLab Malaysia Sdn. Bhd. (Malaysia) 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 0.00049095% 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) - 89.999965713458300000% of MetLife Colombia Seguros de Vida S.A. is owned by MetLife Global Holding Company II GmbH , 10.000031593881300000000% is owned by MetLife Global Holding Company I GmbH, 0.000000897553447019009% is owned by International Technical and Advisory Services Limited, 0.000000897553447019009% is owned by Borderland Investments Limited and 0.000000897553447019009% 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) 1. MetLife Pension Trustees Limited (United Kingdom) 2) Agenvita S.r.l. (Italy) 3) MetLife Europe Insurance d.a.c (Ireland) 4) MetLife Europe Services Limited (Ireland) 5) MetLife Services, Sociedad Limitada (Spain) 6) 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. 7) MetLife Solutions S.A.S. (France) 8) 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. 9) MetLife Towarzystwo Ubiezpieczen 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) 10) 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. 11) MetLife Services EOOD (Bulgaria) 12) 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 by a third party. 13) First American-Hungarian Insurance Agency Limited (Hungary) xi) MetLife Investment Management Holdings (Ireland)Limited (Ireland) 1) MetLife Investments Asia Limited (Hong Kong) 2) MetLife Syndicated Bank Loan Lux GP, S.a.r.l. (Luxembourg) aa) MetLife BL Feeder (Cayman), LP (Cayman Islands) - MetLife BL (Cayman), LP is an investors in the Fund. The following affiliates hold limited partnership interest in the feeder: MetLife Limited (3.14%), MetLife Insurance K.K. (93.72%) and MetLife Insurance Company of Korea Limited (3.14%). bb) MetLife BL Feeder, LP (DE) - MetLife BL Feeder, LP is an investor in the Fund. The following affiliate holds a limited partnership interest in the feeder: Metropolitan Life Insurance Company (49.26%). In addition, there is one third party investor (50.74%). cc) MetLife Syndicated Bank Loan Fund, SCSp (Luxembourg) - MetLife Syndicated Bank Loan Lux GP, Sarl is the general partner of MetLife Syndicated Bank Loan Fund, SCSp (the "Fund"). The only investors in the Fund are MetLife BL Feeder (Cayman), LP and MetLife BL Feeder, LP. 3) MetLife Investments Limited (United Kingdom) - 99.9% of MetLife Investments Limited (UK) is MetLife Investment Management Holdings (Ireland) Limited and .01% by MetLife Global Holding Company II GmbH. 4) MetLife Latin America Asesorias e Inversiones Limitada (Chile) - 99.99% of MetLife Latin American Asesorias e Inversiones Limitada is owned by MetLife Investment Management Holdings (Ireland) Limited and .01% is owned by MetLife Global Holding Company II GmbH (Swiss). 5) MetLife Global Infrastructure LUX GP, S.a.r.l. (Luxembourg) xii) ALICO Operations, LLC (DE) 1) MetLife Asset Management Corp. (Japan) - The official entity name is "MetLife Asset Management Corp. (Japan)" and it is domiciled in Japan. 2) MetLife Seguros S.A. (Uruguay) xiii) 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)- 32.05% is owned by MetLife International Holdings, LLC and the remainder is owned by third parties. 3) Metropolitan Life Insurance Company of Hong Kong Limited (Hong Kong)- 99.99935% is owned by MetLife International Holdings, LLC 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. is 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) - 50.000002% 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) - 49.999997% 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 d.a.c and 8.83532% is owned by MetLife Global Holdings Corp. S.A. de C.V. aaa) The Direct Call Centre PTY Limited (Australia) bbb) 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. 1) MetLife Mexico Holdings, S. de R.L. de C.V. (Mexico) - 99.99995% is owned by Metropolitan Global Management, LLC, and .00005% is owned by Excelencia Operativa y Tecnologica,S.A. de C.V. aaa) MetLife Pensiones Mexico S.A. (Mexico)- 97.5125% is owned by MetLife Mexico Holdings, S. de R.L. de C.V. and 2.4875% is owned by MetLife International Holdings, LLC. bbb) MetLife Mexico Servicios, S.A. de C.V. (Mexico) - 98% is owned by MetLife Mexico Holdings, S. de R.L. de C.V. and 2% is owned by MetLife International Holdings, LLC. ccc) MetLife Mexico S.A. (Mexico)- 99.050271% is owned by MetLife Mexico Holdings, S. de R.L. de C.V. and 0.949729% is owned by MetLife International Holdings, LLC. i) ML Capacitacion Comercial S.A. de C.V.(Mexico) - 99% is owned by MetLife Mexico S.A. and 1% is owned by MetLife Mexico Servicios, S.A. de C.V. 2) 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. aaa) MetLife Financial Services, Co., Ltd. (South Korea) 3. International Investment Holding Company Limited (Russia) 4. Borderland Investments Limited (DE) a) ALICO Hellas Single Member Limited Liability Company (Greece) 5. International Technical and Advisory Services Limited ("ITAS") (DE) 6. ALICO Properties, Inc. (DE) - 51% of ALICO Properties, Inc. is owned by ALICO and the remaining interests are owned by third parties. a) Global Properties, Inc. (DE) 7. 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. X. MetLife European Holdings, LLC (DE) Y. MetLife Investment Management Holdings, LLC (DE) 1) Logan Circle Partners GP, LLC (PA) 2) Logan Circle Partners, L.P. (PA) a) Logan Circle Partners I LLC (PA) b) Logan Circle Partners Investment Management, LLC (DE) 3) MetLife Real Estate Lending Manager LLC (DE) 4) MetLife Real Estate Lending LLC (DE) 5) ML Venture 1 Manager, S. de R.L. de C.V. (Mexico) - 99.9% is owned by MetLife Investment Management Holdings, LLC and 0.1% is owned by MetLife Investment Management Holdings (Ireland) Limited. 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 and distributor of the Policies. 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) 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 ------------------------------------ ------------------------------------------------------ Derrick Kelson Director and Chairman of the Board, President and CEO 200 Park Avenue New York, NY 10166
Todd Nevenhoven Director and Vice President 4700 Westown Pkwy Suite 200 West Des Moines, IA 50266
Bradd Chignoli Director and Senior Vice President 501 Route 22 Bridgewater, NJ 08807
Dina Lumerman Director and Vice President 501 Route 22 Bridgewater, NJ 08807
Thomas Schuster Director 200 Park Avenue New York, NY 10166
Frank Cassandra Senior Vice President 501 Route 22 Bridgewater, NJ 08807
Elisabeth Bedore Vice President and Chief Compliance Officer One MetLife Way Whippany, NJ 07981
Kelli Buford Secretary 200 Park Avenue New York, NY 10166
Charles Connery Vice President and Treasurer One MetLife Way Whippany, NJ 07981
Heather Harker Chief Legal Officer 200 Park Avenue New York, NY 10166
(c) Compensation from the Registrant.
(3) COMPENSATION ON (2) EVENTS OCCASIONING NET UNDERWRITING THE DEDUCTION OF A (4) (5) (1) DISCOUNTS AND DEFERRED SALES BROKERAGE OTHER NAME OF PRINCIPAL UNDERWRITER COMMISSIONS LOAD COMMISSIONS COMPENSATION --------------------------------------------- ------------------ -------------------- ------------- ------------- MetLife Investors Distribution Company....... $997,392 $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) MetLife 18210 Crane Nest Drive Tampa, FL 33647 ITEM 32. MANAGEMENT SERVICES Not applicable ITEM 33. FEE REPRESENTATION Metropolitan Life represents that the fees and charges deducted under the Policies offered and sold pursuant to this Registration Statement, in the aggregate, are reasonable in relation to the services rendered, the expenses to be incurred, and the risks assumed by Metropolitan Life under the Policies. 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 Act 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 Bridgewater, and state of New Jersey on April 23, 2019. Metropolitan Life Separate Account UL (Registrant) By: Metropolitan Life Insurance Company (Depositor) By: /s/ Sabrina K. Model ------------------------------------- Sabrina K. Model Vice President Metropolitan Life Insurance Company Metropolitan Life Insurance Company (Depositor) By: /s/ Sabrina K. Model ------------------------------------- Sabrina K. Model Vice President Metropolitan Life Insurance Company SIGNATURES Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed below by the following persons, in the capacities indicated, on April 23, 2019. * Chairman, President, Chief Executive Officer -------------------------------- and Director Steven A. Kandarian * Executive Vice President and Chief Financial -------------------------------- Officer John McCallion * Vice President and Chief Accounting Officer -------------------------------- Tamara Schock * Director -------------------------------- Cheryl W. Grise * Director -------------------------------- Carlos M. Gutierrez * Director -------------------------------- Gerald L. Hassell * Director -------------------------------- R. Glenn Hubbard * Director -------------------------------- Edward J. Kelly, III * Director -------------------------------- William E. Kennard * Director -------------------------------- James J. Kilts * Director -------------------------------- Catherine R. Kinney * Director -------------------------------- Diana McKenzie * Director -------------------------------- Denise M. Morrison * Executive Vice President and Treasurer -------------------------------- Edward Spehar, Jr. By: /s/ Heather Harker ----------------------------------- Heather Harker Vice President and Attorney-In-Fact April 23, 2019 *Metropolitan Life Insurance Company. Executed by Heather Harker, on behalf of those indicated pursuant to powers of attorney filed herewith. EXHIBIT INDEX (n) Consent of Independent Registered Public Accounting Firm (r) Powers of Attorney EX-99.(N) 2 d660247dex99n.txt CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We consent to the use in this Post-Effective Amendment No. 32/Amendment No. 93 to Registration Statement File Nos. 033-57320/811-06025 on Form N-6 of our report dated March 22, 2019, relating to the financial statements and financial highlights comprising each of the Divisions of Metropolitan Life Separate Account UL, and our report dated March 18, 2019, relating to the consolidated financial statements and financial statement schedules of Metropolitan Life Insurance Company and subsidiaries, both appearing in the Statement of Additional Information, which is part of such Registration Statement, and to the reference to us under the heading "Independent Registered Public Accounting Firm" also in such Statement of Additional Information. /s/ DELOITTE & TOUCHE LLP Tampa, Florida April 23, 2019 EX-99.(R) 3 d660247dex99r.txt POWER OF ATTORNEY EXHIBIT 99.13 POWERS OF ATTORNEY FOR METROPOLITAN LIFE INSURANCE COMPANY METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Cheryl W. Grise Director KNOW ALL MEN BY THESE PRESENTS, that I, Cheryl W. Grise, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Cheryl W. Grise -------------------------- Cheryl W. Grise METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Carlos M. Gutierrez Director KNOW ALL MEN BY THESE PRESENTS, that I, Carlos M. Gutierrez, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Carlos M. Gutierrez -------------------------- Carlos M. Gutierrez METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Gerald L. Hassell Director KNOW ALL MEN BY THESE PRESENTS, that I, Gerald L. Hassell, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Gerald L. Hassell -------------------------- Gerald L. Hassell METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY David L. Herzog Director KNOW ALL MEN BY THESE PRESENTS, that I, David L. Herzog, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ David L. Herzog -------------------------- David L. Herzog METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY R. Glenn Hubbard Director KNOW ALL MEN BY THESE PRESENTS, that I, R. Glenn Hubbard, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ R. Glenn Hubbard -------------------------- R. Glenn Hubbard METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Edward J. Kelly, III Director KNOW ALL MEN BY THESE PRESENTS, that I, Edward J. Kelly, III, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Edward J. Kelly, III -------------------------- Edward J. Kelly, III METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY William E. Kennard Director KNOW ALL MEN BY THESE PRESENTS, that I, William E. Kennard, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ William E. Kennard -------------------------- William E. Kennard METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY James M. Kilts Director KNOW ALL MEN BY THESE PRESENTS, that I, James M. Kilts, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ James M. Kilts -------------------------- James M. Kilts METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Catherine R. Kinney Director KNOW ALL MEN BY THESE PRESENTS, that I, Catherine R. Kinney, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Catherine R. Kinney -------------------------- Catherine R. Kinney METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Diana McKenzie Director KNOW ALL MEN BY THESE PRESENTS, that I, Diana McKenzie, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Diana McKenzie -------------------------- Diana McKenzie METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Denise M. Morrison Director KNOW ALL MEN BY THESE PRESENTS, that I, Denise M. Morrison, a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Denise M. Morrison -------------------------- Denise M. Morrison METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Edward Spehar, Jr. Executive Vice President and Treasurer KNOW ALL MEN BY THESE PRESENTS, that I, Edward Spehar, Jr., a Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Edward Spehar, Jr. -------------------------- Edward Spehar, Jr. METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Steven A. Kandarian Chairman, President, Chief Executive Officer and Director KNOW ALL MEN BY THESE PRESENTS, that I, Steven A. Kandarian, Chairman, President, Chief Executive Officer and Director of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Steven A. Kandarian -------------------------- Steven A. Kandarian METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY John McCallion Executive Vice President and Chief Financial Officer KNOW ALL MEN BY THESE PRESENTS, that I, John McCallion, Executive Vice President and Chief Financial Officer of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ John McCallion -------------------------- John McCallion METROPOLITAN LIFE INSURANCE COMPANY POWER OF ATTORNEY Tamara Schock Executive Vice President and Chief Accounting Officer KNOW ALL MEN BY THESE PRESENTS, that I, Tamara Schock, Executive Vice President and Chief Accounting Officer of Metropolitan Life Insurance Company, a New York company, do hereby constitute and appoint Heather Harker, Piotr Urbanik and Lawrence Wolff as my attorney-in-fact and agent, each of whom may act individually and none of whom is required to act jointly with any of the others, to sign and file on my behalf and to execute and file any instrument or document required to be filed as part of or in connection with or in any way related to, the registration statements to be filed on Forms N-4, N-6, S-6 and S-3, as the case may be (the "Registration Statements") and any and all amendments thereto filed by Metropolitan Life Insurance Company under the Securities Act of 1933 and/or the Investment Company Act of 1940, pertaining to: . Metropolitan Life Separate Account E (SEC File No. 811-04001) File No. 002-90380 Preference Plus Account (APPA and BPPA), Enhanced Preference Plus Account (EPPA), Financial Freedom Account (FFA), Preference Plus Account for Enhanced Contracts (CPPA) and VestMet; File No. 333-43970 MetLife Income Security Plan; File No. 333-52366 Preference Plus Select; File No. 333-69320 MetLife Asset Builder VA; File No. 333-80547 MetLife Settlement Plus; File No. 333-83716 MetLife Financial Freedom Select B, L and C Class and MetLife Financial Freedom Select e and e Bonus Class; File No. 333-122883 Preference Plus Income Advantage; File No. 333-122897 MetLife Personal IncomePlus; File No. 333-153109 Preference Premier Variable Annuity; File No. 333-160722 Zenith Accumulator; File No. 333-162586 MetLife Growth and Guaranteed Income Variable Annuity; File No. 333-176654 Preference Premier Variable Annuity; File No. 333-190296 Gold Track Select; File No. 333-198314 MetLife Accumulation Annuity; File No. 333-198448 MetLife Investment Portfolio Architect/SM/ (Standard Version and C Share Option); . Metropolitan Life Separate Account UL (SEC File No. 811-06025) File No. 033-32813 MetLife UL II; File No. 033-47927 Equity Advantage VUL and UL II; File No. 033-57320 MetFlex; File No. 033-91226 Group VUL; File No. 333-40161 Equity Additions and Equity Enricher; File No. 333-147508 Equity Advantage VUL; . Metropolitan Life Variable Annuity Separate Account II (SEC File No 811-08628) File No. 333-138113 Flexible Premium Variable Annuity; File No. 333-138115 Flexible Premium Deferred Variable Annuity; File No. 333-161093 Flexible Premium Variable Annuity (B); File No. 333-161094 Flexible Premium Deferred Variable Annuity (B) . New England Life Retirement Investment Account (SEC File No. 811-03285) File No. 333-11133 Preference . New England Variable Annuity Fund I (SEC File No. 811-01930) File No. 333-11137 . Paragon Separate Account A (SEC File No. 811-05382) File No. 333-133674 AFIS; File No. 333-133699 Group America Plus . Paragon Separate Account B (SEC File No. 811-07534) File No. 333-133671 DWS C, Met Flex GVUL C, Multi Manager C, Morgan Stanley product, Putnam product, MFS product and Multi Manager III; File No. 333-133675 DWS D, Met Flex GVUL D, Multi Manager D, and Multi Manager II . Paragon Separate Account C (SEC File No. 811-07982) File No. 333-133673 Fidelity C; File No. 333-133678 Fidelity D . Paragon Separate Account D (SEC File No. 811-08385) File No. 333-133672 Individual Variable Life; File No. 333-133698 Joint Survivor VUL . Security Equity Separate Account Twenty-Six (SEC File No. 811-08888) File No. 333-110183 Variable Annuity . Security Equity Separate Account Twenty-Seven (SEC File No. 811-08892) File No. 333-110184 Variable Annuity . Separate Account No. 13S (SEC File No. 811-08938) File No. 333-110185 LCL2 Flexible Premium Variable Life and the Registered Fixed Account Option for Gold Track Select Fixed Annuity (also marketed as "Strategic Value Annuity") Filed on Form S-3 and to have full power and authority to do or cause to be done in my name, place and stead each and every act and thing necessary or appropriate in order to effectuate the same, as fully to all intents and purposes as I might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact or any of them, may do or cause to be done by virtue hereof. IN WITNESS WHEREOF, I have hereunto set my hand this 22 day of April, 2019. /s/ Tamara Schock -------------------------- Tamara Schock