MetLife 2008 Annual Report Download - page 178

The Company’s proportional interest in separate accounts is included in the consolidated balance sheets as follows:
2008 2007
December 31,
(In millions)
Fixedmaturitysecurities...................................................... $21 $35
Equitysecurities........................................................... $19 $41
Cashandcashequivalents.................................................... $ 3 $ 5
For the years ended December 31, 2008, 2007 and 2006, there were no investment gains (losses) on transfers of assets from the
general account to the separate accounts.
Obligations Under Guaranteed Interest Contract Program
The Company issues fixed and floating rate obligations under its GIC program which are denominated in either U.S. dollars or foreign
currencies. During the years ended December 31, 2008, 2007 and 2006, the Company issued $5.8 billion, $5.2 billion and $5.2 billion,
respectively, and repaid $8.3 billion, $4.3 billion and $2.6 billion, respectively, of GICs under this program. At December 31, 2008 and
2007, GICs outstanding, which are included in policyholder account balances, were $21.6 billion and $24.2 billion, respectively. During the
years ended December 31, 2008, 2007 and 2006, interest credited on the contracts, which are included in interest credited to
policyholder account balances, was $1.0 billion, $1.1 billion and $834 million, respectively.
Obligations Under Funding Agreements
MetLife Insurance Company of Connecticut is a member of the FHLB of Boston and holds $70 million of common stock of the FHLB of
Boston at both December 31, 2008 and 2007, which is included in equity securities. MICC has also entered into 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 certain MICC assets, including residential 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. Upon any event of default by MICC, the FHLB of Boston’s recovery on the collateral is limited to the amount of MICC’s liability to the
FHLB of Boston. The amount of MICC’s liability for funding agreements with the FHLB of Boston was $526 million and $726 million at
December 31, 2008 and 2007, respectively, which is included in policyholder account balances. In addition, at December 31, 2008, MICC
had advances of $300 million from the FHLB of Boston with original maturities of less than one year and therefore, such advances are
included in short-term debt. These advances and the advances on these funding agreements are collateralized by mortgage-backed
securities with estimated fair values of $1.3 billion and $901 million at December 31, 2008 and 2007, respectively.
Metropolitan Life Insurance Company is a member of the FHLB of NY and holds $830 million and $339 million of common stock of the
FHLB of NY at December 31, 2008 and 2007, respectively, which is included in equity securities. MLIC has also entered into funding
agreements with the FHLB of NY whereby MLIC has issued such funding agreements in exchange for cash and for which the FHLB of NY
has been granted a lien on certain MLIC assets, including residential mortgage-backed securities to collateralize MLIC’s obligations under
the funding agreements. MLIC 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. Upon any event of default by MLIC, the FHLB of NY’s recovery on the collateral is limited to the amount of MLIC’s liability to the FHLB
of NY. The amount of the Company’s liability for funding agreements with the FHLB of NY was $15.2 billion and $4.6 billion at December 31,
2008 and 2007, respectively, which is included in policyholder account balances. The advances on these agreements are collateralized by
mortgage-backed securities with estimated fair values of $17.8 billion and $4.8 billion at December 31, 2008 and 2007, respectively.
MLIC has issued funding agreements to certain trusts that have issued securities guaranteed as to payment of interest and principal by
the Federal Agricultural Mortgage Corporation, a federally chartered instrumentality of the United States. The obligations under these
funding agreements are secured by a pledge of certain eligible agricultural real estate mortgage loans and may, under certain circum-
stances, be secured by other qualified collateral. The amount of the Company’s liability for funding agreements issued to such trusts was
$2.5 billion at both December 31, 2008 and 2007, which is included in policyholder account balances. The obligations under these funding
agreements are collateralized by designated agricultural real estate mortgage loans with estimated fair values of $2.9 billion at both
December 31, 2008 and 2007.
Approximately $3.0 billion of the obligations outstanding at MLIC at December 31, 2008 are subject to a temporary contingent increase
in MLIC’s borrowing capacity which is scheduled to expire at December 31, 2009. The Company does not expect to have any difficulties in
meeting the contingencies associated with the increased capacity.
F-55MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)