MetLife 2006 Annual Report Download - page 140

class certification. Defendants have moved for summary judgment. The Company is continuing to vigorously defend against the claims in
this matter.
Metropolitan Life also has been named as a defendant in a number of silicosis, welding and mixed dust cases in various states. The
Company intends to vigorously defend against the claims in these matters.
Summary
Putative or certified class action litigation and other litigation and claims and assessments against the Company, in addition to those
discussed above 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, employer, investor, investment advisor and
taxpayer. Further, state insurance regulatory authorities and other federal and state authorities regularly make inquiries and conduct
investigations concerning the Company’s compliance with applicable insurance and other laws and regulations.
It is not possible to predict the ultimate outcome of all pending investigations and legal proceedings or provide reasonable ranges of
potential losses, except as noted above in connection with specific matters. In some of the matters referred to above, very large and/or
indeterminate amounts, including punitive and treble damages, are sought. Although in light of these considerations it is possible that an
adverse outcome in certain cases could have a material adverse effect upon the Company’s consolidated financial position, based on
information currently known by the Company’s management, in its opinion, the outcomes of such pending investigations and legal
proceedings are not likely to have such an effect. However, given the large and/or indeterminate amounts sought in certain of these matters
and the inherent unpredictability of litigation, it is possible that an adverse outcome in certain matters could, from time to time, have a
material adverse effect on the Company’s consolidated net income or cash flows in particular quarterly or annual periods.
Insolvency Assessments
Most of the jurisdictions in which the Company is admitted to transact business require life 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 life insurers. These associations levy assessments, up to prescribed limits, on all member insurers in
a particular state on the basis of the proportionate share of the premiums written by member insurers in the lines of business in which the
impaired, insolvent or failed insurer engaged. Some states permit member insurers to recover assessments paid through full or partial
premium tax offsets. Assets and liabilities held for insolvency assessments are as follows:
2006 2005
December 31,
(In millions)
Other Assets:
Premiumtaxoffsetforfutureundiscountedassessments.................................... $45 $45
Premium tax offsets currently available for paid assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 8
Receivableforreimbursementofpaidassessments(1)...................................... 10 10
$62 $63
Liability:
Insolvencyassessments......................................................... $90 $90
(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement.
Assessments levied against the Company were $2 million, $4 million and $10 million for the years ended December 31, 2006, 2005 and
2004, respectively.
Impact of Hurricanes
On August 29, 2005, Hurricane Katrina made landfall in the states of Louisiana, Mississippi and Alabama, causing catastrophic damage
to these coastal regions. MetLife’s cumulative gross losses from Hurricane Katrina were $333 million and $335 million at December 31,
2006 and 2005, respectively, primarily arising from the Company’s homeowners business. During the years ended December 31, 2006
and 2005, the Company recognized total net losses, net of income tax and reinsurance recoverables and including reinstatement
premiums and other reinsurance-related premium adjustments related to the catastrophe as follows:
2006 2005 2006 2005 2006 2005
Auto & Home
Years Ended
December 31,
Institutional
Years Ended
December 31,
Total Company
Years Ended
December 31,
(In millions)
NetultimatelossesatJanuary1,............................. $120 $ — $14 $— $134 $ —
Totalnetlossesrecognized................................. (2) 120 — 14 (2) 134
NetultimatelossesatDecember31,........................... $118 $120 $14 $14 $132 $134
On October 24, 2005, Hurricane Wilma made landfall across the state of Florida. MetLife’s cumulative gross losses from Hurricane
Wilma were $64 million and $57 million at December 31, 2006 and 2005, respectively, primarily arising from the Company’s homeowners
and automobile businesses. During the years ended December 31, 2006 and 2005, the Company’s Auto & Home segment recognized
total losses, net of income tax and reinsurance recoverables, of $29 million and $32 million, respectively, related to Hurricane Wilma.
Additional hurricane-related losses may be recorded in future periods as claims are received from insureds and claims to reinsurers are
processed. Reinsurance recoveries are dependent upon the continued creditworthiness of the reinsurers, which may be affected by their
F-57MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)