MetLife 2006 Annual Report Download - page 141

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other reinsured losses in connection with Hurricanes Katrina and Wilma and otherwise. In addition, lawsuits, including purported class
actions, have been filed in Louisiana, Mississippi and Alabama challenging denial of claims for damages caused to property during
Hurricane Katrina. MPC is a named party in some of these lawsuits. In addition, rulings in cases in which MPC is not a party may affect
interpretation of its policies. MPC intends to vigorously defend these matters. However, any adverse rulings could result in an increase in
the Company’s hurricane-related claim exposure and losses. Based on information known by management, it does not believe that
additional claim losses resulting from Hurricane Katrina will have a material adverse impact on the Company’s consolidated financial
statements.
Argentina
The Argentinean economic, regulatory and legal environment, including interpretations of laws and regulations by regulators and courts,
is uncertain. Potential legal or governmental actions related to pension reform, fiduciary responsibilities, performance guarantees and tax
rulings could adversely affect the results of the Company. Upon acquisition of Citigroup’s insurance operations in Argentina, the Company
established insurance liabilities, most significantly death and disability policy liabilities, based upon its interpretation of Argentinean law and
the Company’s best estimate of its obligations under such law. In 2006, a decree was issued by the Argentine Government regarding the
taxability of pesification-related gains resulting in the reduction of certain tax liabilities. See Note 2.
Commitments
Leases
In accordance with industry practice, certain of the Company’s income from lease agreements with retail tenants are contingent upon
the level of the tenants’ sales revenues. Additionally, the Company, as lessee, has entered into various lease and sublease agreements for
office space, data processing and other equipment. Future minimum rental and sublease income, and minimum gross rental payments
relating to these lease agreements are as follows:
Rental
Income Sublease
Income
Gross
Rental
Payments
(In millions)
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $328 $23 $ 247
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $278 $20 $ 198
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $225 $12 $ 196
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $185 $ 8 $ 172
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $155 $ 8 $ 146
Thereafter......................................................... $564 $15 $1,206
Commitments to Fund Partnership Investments
The Company makes commitments to fund partnership investments in the normal course of business. The amounts of these unfunded
commitments were $3.0 billion and $2.7 billion at December 31, 2006 and 2005, respectively. The Company anticipates that these
amounts will be invested in partnerships over the next five years.
Mortgage Loan Commitments
The Company commits to lend funds under mortgage loan commitments. The amounts of these mortgage loan commitments were
$4.0 billion and $3.0 billion at December 31, 2006 and 2005, respectively.
Commitments to Fund Bank Credit Facilities and Bridge Loans
The Company commits to lend funds under bank credit facilities and bridge loans. The amounts of these unfunded commitments were
$1.9 billion and $346 million at December 31, 2006 and 2005, respectively.
Other Commitments
MICCisamemberoftheFederalHomeLoanBankofBoston(the“FHLBofBoston”)andholds$70millionofcommonstockoftheFHLB
of Boston, which is included in equity securities on the Company’s consolidated balance sheets. MICC has also entered into several
funding agreements with the FHLB of Boston whereby MICC has issued such funding agreements in exchange for cash and for which the
FHLB of Boston has been granted a blanket lien on MICC’s residential mortgages and mortgage-backed securities to collateralize MICC’s
obligations under the funding agreements. MICC maintains control over these pledged assets, and may use, commingle, encumber or
dispose of any portion of the collateral as long as there is no event of default and the remaining qualified collateral is sufficient to satisfy the
collateral maintenance level. The funding agreements and the related security agreement represented by this blanket lien provide that upon
any event of default by MICC, the FHLB of Boston’s recovery is limited to the amount of MICC’s liability under the outstanding funding
agreements. The amount of the Company’s liability for funding agreements with the FHLB of Boston was $926 million and $1.1 billion at
December 31, 2006 and 2005, respectively, which is included in PABs.
MetLife Bank is a member of the FHLB of NY and holds $54 million and $43 million of common stock of the FHLB of NY, at December 31,
2006 and 2005, respectively, which is included in equity securities on the Company’s consolidated balance sheet. MetLife Bank has also
entered into repurchase agreements with the FHLB of NY whereby MetLife Bank has issued repurchase agreements in exchange for cash
and for which the FHLB of NY has been granted a blanket lien on MetLife Bank’s residential mortgages and mortgage-backed securities to
collateralize MetLife Bank’s obligations under the repurchase agreements. MetLife Bank maintains control over these pledged assets, and
may use, commingle, encumber or dispose of any portion of the collateral as long as there is no event of default and the remaining qualified
collateral is sufficient to satisfy the collateral maintenance level. The repurchase agreements and the related security agreement
represented by this blanket lien provide that upon any event of default by MetLife Bank, the FHLB of NY’s recovery is limited to the
amount of MetLife Bank’s liability under the outstanding repurchase agreements. The amount of the Company’s liability for repurchase
F-58 MetLife, Inc.
METLIFE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)