MetLife 2002 Annual Report Download - page 83

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The amounts in the consolidated statements of income are presented net of reinsurance ceded. The effects of reinsurance were as follows:
Years Ended December 31,
2002 2001 2000
(Dollars in millions)
Direct premiums ********************************************************************** $18,392 $16,332 $15,661
Reinsurance assumed ***************************************************************** 3,018 2,907 2,918
Reinsurance ceded ******************************************************************* (2,324) (2,027) (2,262)
Net premiums ************************************************************************ $19,086 $17,212 $16,317
Reinsurance recoveries netted against policyholder benefits ********************************** $ 3,043 $ 2,255 $ 1,942
Reinsurance recoverables, included in premiums and other receivables, were $3,574 million and $3,393 million at December 31, 2002 and 2001,
respectively, including $1,348 million and $1,356 million, respectively, relating to reinsurance of long-term guaranteed interest contracts and structured
settlement lump sum contracts accounted for as a financing transaction. Reinsurance and ceded commissions payables, included in other liabilities,
were $50 million and $112 million at December 31, 2002 and 2001, respectively.
The following provides an analysis of the activity in the liability for benefits relating to property and casualty and group accident and non-medical
health policies and contracts:
Years Ended December 31,
2002 2001 2000
(Dollars in millions)
Balance at January 1 ******************************************************************** $ 4,597 $ 4,226 $ 3,790
Reinsurance recoverables ************************************************************** (457) (410) (415)
Net balance at January 1 **************************************************************** 4,140 3,816 3,375
Incurred related to:
Current year ************************************************************************* 4,215 4,182 3,786
Prior years *************************************************************************** (85) (84) (112)
4,130 4,098 3,674
Paid related to:
Current year ************************************************************************* (2,559) (2,538) (2,215)
Prior years *************************************************************************** (1,332) (1,236) (1,018)
(3,891) (3,774) (3,233)
Net Balance at December 31 ************************************************************* 4,379 4,140 3,816
Add: Reinsurance recoverables ********************************************************* 481 457 410
Balance at December 31 **************************************************************** $ 4,860 $ 4,597 $ 4,226
16. Other Expenses
Other expenses were comprised of the following:
Years Ended December 31,
2002 2001 2000
(Dollars in millions)
Compensation************************************************************************** $ 2,481 $ 2,459 $ 2,712
Commissions ************************************************************************** 2,000 1,651 1,696
Interest and debt issue costs ************************************************************* 403 332 436
Amortization of policy acquisition costs (excludes amortization of $5, $25 and ($95), respectively,
related to net investment losses) ******************************************************** 1,639 1,413 1,478
Capitalization of policy acquisition costs **************************************************** (2,340) (2,039) (1,863)
Rent, net of sublease income ************************************************************* 295 282 230
Minority interest************************************************************************* 73 57 115
Other ********************************************************************************* 2,510 2,867 2,597
Total other expenses **************************************************************** $ 7,061 $ 7,022 $ 7,401
17. Stockholders’ Equity
Preferred Stock
On September 29, 1999, the Holding Company adopted a stockholder rights plan (the ‘‘rights plan’’) under which each outstanding share of
common stock issued between April 4, 2000 and the distribution date (as defined in the rights plan) will be coupled with a stockholder right. Each right
will entitle the holder to purchase one one-hundredth of a share of Series A Junior Participating Preferred Stock. Each one one-hundredth of a share of
Series A Junior Participating Preferred Stock will have economic and voting terms equivalent to one share of common stock. Until it is exercised, the right
itself will not entitle the holder thereof to any rights as a stockholder, including the right to receive dividends or to vote at stockholder meetings.
MetLife, Inc. F-39