MetLife 2005 Annual Report Download - page 118

METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
The Company did not acquire any shares of the Holding Company’s common stock during the year ended December 31, 2005. The Company
acquired 26,373,952 and 2,997,200 shares of the Holding Company’s common stock for $1,000 million and $97 million during the years ended
December 31, 2004 and 2003, respectively. During the years ended December 31, 2005, 2004 and 2003, 25,049,065, 1,675,814 and
59,904,925 shares of common stock were issued from treasury stock for $819 million, $50 million and $1,667 million, respectively, of which
22,436,617 shares for approximately $1 billion were issued in connection with the acquisition of Travelers on July 1, 2005 (see Note 2) and
59,771,221 shares were issued on May 15, 2003 in connection with the settlement of common stock purchase contracts (see Note 10) for
$1,006 million in cash. At December 31, 2005, the Holding Company had approximately $716 million remaining on the October 26, 2004 common
stock repurchase program.
On October 25, 2005, the Holding Company’s board of directors approved an annual dividend for 2005 of $0.52 per share of common stock, for a
total of $394 million, payable on December 15, 2005 to common shareholders of record on November 7, 2005. On September 28, 2004, the Holding
Company’s board of directors approved an annual dividend for 2004 of $0.46 per share of common stock, for a total of $343 million, payable on
December 13, 2004 to shareholders of record on November 5, 2004. On October 21, 2003, the Holding Company’s board of directors approved an
annual dividend for 2003 of $0.23 per share of common stock, for a total of $175 million, payable on December 15, 2003 to shareholders of record on
November 7, 2003.
Dividend Restrictions
Under New York State Insurance Law, Metropolitan Life is permitted, without prior insurance regulatory clearance, to pay stockholder dividends to
the Holding Company as long as the aggregate amount of all such dividends in any calendar year does not exceed the lesser of (i) 10% of its surplus to
policyholders as of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year
(excluding realized capital gains). Metropolitan Life will be permitted to pay a cash dividend to the Holding Company in excess of the lesser of such two
amounts only if it files notice of its intention to declare such a dividend and the amount thereof with the New York Superintendent of Insurance (the
‘‘Superintendent’’) and the Superintendent does not disapprove the distribution within 30 days of its filing. Under 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 shareholders. The New York State Department of Insurance has established informal guidelines for such determinations. The guidelines,
among other things, focus on the insurer’s overall financial condition and profitability under statutory accounting practices. During the years ended
December 31, 2005, 2004 and 2003, Metropolitan Life paid to the Holding Company $880 million, $797 million and $698 million, respectively, in
ordinary dividends, the maximum amount which could be paid to the Holding Company without prior regulatory approval, and an additional $2,320 mil-
lion, $0 million and $750 million, respectively, in special dividends, as approved by the Superintendent. The maximum amount of the dividend which
Metropolitan Life may pay to the Holding Company in 2006 without prior regulatory approval is $863 million.
Under Connecticut State Insurance Law, TIC is permitted, without prior insurance regulatory clearance, to pay shareholder dividends to its parent as
long as the amount of such dividend, when aggregated with all other dividends in the preceding twelve months, does not exceed the greater of (i) 10% of
its surplus to policyholders as of the immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding
calendar year. TIC will be permitted to pay a cash dividend in excess of the greater of such two amounts only if it files notice of its declaration of such a
dividend and the amount thereof with the Connecticut Commissioner of Insurance (‘‘Commissioner’’) and the Commissioner does not disapprove the
payment within 30 days after notice or until the Commissioner has approved the dividend, whichever is sooner. In addition, any dividend that exceeds
earned surplus (unassigned funds, reduced by 25% of unrealized appreciation in value or revaluation of assets or unrealized profits on investments) as of
the last filed annual statutory statement requires insurance regulatory approval. Under Connecticut State Insurance Law, the Commissioner has broad
discretion in determining whether the financial condition of a stock life insurance company would support the payment of such dividends to its
shareholders. The Connecticut State Insurance Law requires prior approval for any dividends for a period of two years following a change in control. As a
result of the acquisition of TIC by the Holding Company, under Connecticut State Insurance Law all dividend payments by TIC through June 30, 2007
require prior approval of the Commissioner. TIC has not paid any dividends since its acquisition by the Holding Company.
Under Rhode Island State Insurance Law, MPC is permitted, without prior insurance regulatory clearance, to pay a stockholder dividend to the
Holding Company as long as the aggregate amount of all such dividends in any twelve-month period does not exceed the lesser of (i) 10% of its surplus
to policyholders as of the immediately preceding calendar year; or (ii) net income, not including capital gains, for the immediately preceding calendar year.
MPC will be permitted to pay a cash dividend to the Holding Company in excess of the lesser of such two amounts only if it files notice of its intention to
declare such a dividend and the amount thereof with the Rhode Island Superintendent of Insurance (the ‘‘Rhode Island Superintendent’’) and the Rhode
Island Superintendent does not disapprove the distribution within 30 days of its filing. Under Rhode Island State Insurance Code, the Rhode Island
Superintendent has broad discretion in determining whether the financial condition of a stock property and casualty insurance company would support
the payment of such dividends to its shareholders. During the years ended December 31, 2005, 2004 and 2003, MPC paid to the Holding Company
$0 million, $0 million and $75 million, respectively, in ordinary dividends, the maximum amount which could be paid to the Holding Company without prior
regulatory approval and an additional $400 million, $300 million and $0 million, respectively, in special dividends, as approved by the Rhode Island
Superintendent. The maximum amount of the dividend which MPC may pay to the Holding Company in 2006 without prior regulatory approval is
$178 million for dividends with a scheduled date of payment subsequent to June 1, 2006. Any dividend payment prior to June 1, 2006 will require prior
regulatory approval.
Under Delaware State Insurance Law, Metropolitan Tower Life Insurance Company (‘‘MTL’’) is permitted, without prior insurance regulatory
clearance, to pay a stockholder dividend to the Holding Company as long as the amount of the dividend when aggregated with all other dividends in the
preceding 12 months does not exceed the greater of (i) 10% of its surplus to policyholders as of the immediately preceding calendar year; or (ii) its
statutory net gain from operations for the immediately preceding calendar year (excluding capital gains). MTL will be permitted to pay a cash dividend to
the Holding Company in excess of the greater of such two amounts only if it files notice of the declaration of such a dividend and the amount thereof with
the Delaware Superintendent of Insurance (the ‘‘Delaware Superintendent’’) and the Delaware Superintendent does not disapprove the distribution within
30 days of its filing. In addition, any dividend that exceeds earned surplus (defined as unassigned funds) as of the immediately preceding calendar year
requires insurance regulatory approval. Under Delaware State Insurance Law, the Delaware 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 shareholders. During the year ended
December 31, 2005, MTL paid to the Holding Company $54 million in ordinary dividends, the maximum amount which could be paid to the Holding
MetLife, Inc.
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