MetLife 2007 Annual Report Download - page 168

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.
Under Connecticut State Insurance Law, MICC is permitted, without prior insurance regulatory clearance, to pay shareholder dividends
to its parent as long as the amount of such dividends, 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 end of the immediately preceding calendar year; or (ii) its statutory net
gain from operations for the immediately preceding calendar year. MICC 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. 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 MICC by the Holding Company on July 1,
2005, under Connecticut State Insurance Law, all dividend payments by MICC through June 30, 2007 required prior approval of the
Commissioner.
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 end of the
immediately preceding calendar year; or (ii) its statutory net gain from operations for the immediately preceding calendar year (excluding
realized 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 Commissioner of Insurance (the
“Delaware Commissioner”) and the Delaware Commissioner 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 last filed annual statutory statement requires insurance
regulatory approval. Under Delaware State Insurance Law, the Delaware 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.
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 end of the immediately preceding calendar year; or (ii) net income, not including realized
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 Commissioner of Insurance (the “Rhode Island Commissioner”) and the Rhode Island Commissioner does not disapprove the
distribution within 30 days of its filing. Under Rhode Island State Insurance Code, the Rhode Island Commissioner 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. Because MPC’s net income for the year ended December 31, 2007 excluding net realized capital gains and
dividends paid, was negative, MPC cannot pay any dividends in 2008 without regulatory approval.
Other Comprehensive Income (Loss)
The following table sets forth the reclassification adjustments required for the years ended December 31, 2007, 2006 and 2005 in other
comprehensive income (loss) that are included as part of net income for the current year that have been reported as a part of other
comprehensive income (loss) in the current or prior year:
2007 2006 2005
Years Ended December 31,
(In millions)
Holdinggains(losses)oninvestmentsarisingduringtheyear ....................... $(1,485) $(1,022) $(3,697)
Incometaxeffectofholdinggains(losses) ................................... 581 379 1,391
Reclassification adjustments:
Recognizedholding(gains)lossesincludedincurrentyearincome .................. 176 916 524
Amortization of premiums and accretion of discounts associated with investments . . . . . . . . (831) (600) (199)
Incometaxeffect.................................................... 254 (117) (122)
Allocation of holding losses on investments relating to other policyholder amounts. . . . . . . . . . 676 581 1,670
Income tax effect of allocation of holding losses to other policyholder amounts . . . . . . . . . . . . (264) (215) (629)
Unrealizedinvestmentgainsofsubsidiaryatdateofsale.......................... — — 15
Deferred income tax on unrealized investment gains of subsidiary at date of sale. . . . . . . . . . . — — (5)
Netunrealizedinvestmentgains(losses)..................................... (893) (78) (1,052)
Foreigncurrencytranslationadjustments .................................... 290 46 (86)
Foreigncurrencytranslationadjustmentsofsubsidiaryatdateofsale.................. — — 5
Foreigncurrencytranslationadjustment ..................................... 290 46 (81)
Minimumpensionliabilityadjustment....................................... — (18) 89
Deferredbenefitplanadjustment.......................................... 563 — —
Othercomprehensiveincome(loss)........................................ $ (40) $ (50) $(1,044)
F-72 MetLife, Inc.
MetLife, Inc.
Notes to Consolidated Financial Statements — (Continued)