MetLife 2001 Annual Report Download - page 65

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METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
Information regarding the policyholder dividend obligation is as follows:
For the Period
For the April 7, 2000
Year Ended through
December 31, December 31,
2001 2000
(Dollars in millions)
Balance at beginning of period(1) ******************************************************* $ 385 $ —
Change in policyholder dividend obligation before allocable net investment losses*************** 159 85
Net investment losses **************************************************************** (159) (85)
Change in unrealized investment and derivative gains ************************************** 323 385
Balance at end of period ************************************************************** $ 708 $385
(1) For the period ended at December 31, 2000, the beginning of the period is April 7, 2000. See Note 1 ‘‘Summary of Significant Accounting
Policies—Demutualization and Initial Public Offering.’’
Closed block revenues and expenses were as follows:
For the
Period
For the April 7, 2000
Year Ended through
December 31, December 31,
2001 2000
(Dollars in millions)
REVENUES
Premiums ******************************************************************* $3,658 $2,900
Net investment income ******************************************************** 2,711 1,949
Net investment losses (net of amounts allocable to the policyholder dividend
obligation of $(159) and $(85), respectively) ************************************* (20) (150)
Total revenues ******************************************************* 6,349 4,699
EXPENSES
Policyholder benefits and claims ************************************************ 3,862 2,874
Policyholder dividends ********************************************************* 1,544 1,132
Change in policyholder dividend obligation (excludes amounts directly
related to net investment losses of $(159) and $(85), respectively) ****************** 159 85
Other expenses ************************************************************** 508 425
Total expenses ******************************************************* 6,073 4,516
Revenues net of expenses before income taxes *********************************** 276 183
Income taxes **************************************************************** 97 67
Revenues net of expenses and income taxes ************************************* $ 179 $ 116
The change in maximum future earnings of the closed block was as follows:
For the
Period
For the April 7, 2000
Year Ended through
December 31, December 31,
2001 2000
(Dollars in millions)
Beginning of period *********************************************************** $5,512 $5,628
End of period **************************************************************** 5,333 5,512
Change during the period ****************************************************** $ (179) $ (116)
Metropolitan Life charges the closed block with federal income taxes, state and local premium taxes, and other additive state or local taxes, as well
as investment management expenses relating to the closed block as provided in the plan of reorganization. Metropolitan Life also charges the closed
block for expenses of maintaining the policies included in the closed block.
Many of the derivative instrument strategies used by the Company are also used for the closed block. The cumulative effect of the adoption of SFAS
133 and SFAS 138, as of January 1, 2001, resulted in $11 million of other comprehensive income, net of income taxes of $6 million. For the year ended
December 31, 2001, the closed block recognized net investment gains of $5 million primarily relating to non-speculative derivative uses that are
permitted by the Department but that have not met the requirements of SFAS 133 to qualify for hedge accounting. Excluding the adoption adjustment,
the changes in other comprehensive income were $6 million, net of taxes of $3 million, for the year ended December 31, 2001.
8. Separate Accounts
Separate accounts reflect two categories of risk assumption: non-guaranteed separate accounts totaling $48,912 million and $53,656 million at
December 31, 2001 and 2000, respectively, for which the policyholder assumes the investment risk, and guaranteed separate accounts totaling
MetLife, Inc.
F-26