MetLife 2008 Annual Report Download - page 180

Secondary
Guarantees Paid-Up Guarantees Secondary Guarantees Paid-Up Guarantees
2008 2007
December 31,
(In millions)
Universal and Variable Life Contracts(1)
Account value (general and separate account) . . . . . . . . . . . . . . . $ 7,825 $ 4,135 $ 9,347 $ 4,302
Net amount at risk(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $145,927(3) $ 31,274(3) $141,840(3) $ 33,855(3)
Averageattainedageofpolicyholders..................... 50years 56years 49years 55years
(1) The Company’s annuity and life contracts with guarantees may offer more than one type of guarantee in each contract. Therefore, the
amounts listed above may not be mutually exclusive.
(2) The net amount at risk is based on the direct amount at risk (excluding reinsurance).
(3) The net amount at risk for guarantees of amounts in the event of death is defined as the current guaranteed minimum death benefit in
excess of the current account balance at the balance sheet date.
(4) The net amount at risk for guarantees of amounts at annuitization is defined as the present value of the minimum guaranteed annuity
payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account
balance.
(5) The net amount at risk for two tier annuities is based on the excess of the upper tier, adjusted for a profit margin, less the lower tier.
Information regarding the liabilities for guarantees (excluding base policy liabilities) relating to annuity and universal and variable life
contracts is as follows:
Guaranteed
Death
Benefits
Guaranteed
Annuitization
Benefits Secondary Guarantees
Paid
Up
Guarantees Total
Annuity Contracts Universal and Variable Life Contracts
(In millions)
Balance at January 1, 2006 . . . . . . . . . . . . . . . . . . . . . $ 41 $ 29 $ 15 $39 $124
Incurredguaranteedbenefits.................... 18 7 29 1 55
Paidguaranteedbenefits ...................... (6) — — — (6)
Balance at December 31, 2006 . . . . . . . . . . . . . . . . . . 53 36 44 40 173
Incurredguaranteedbenefits.................... 29 38 53 6 126
Paidguaranteedbenefits ...................... (8) — — — (8)
Balance at December 31, 2007 . . . . . . . . . . . . . . . . . . 74 74 97 46 291
Incurredguaranteedbenefits.................... 249 329 94 4 676
Paidguaranteedbenefits ...................... (80) — — — (80)
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . $243 $403 $191 $50 $887
Account balances of contracts with insurance guarantees are invested in separate account asset classes as follows:
2008 2007
December 31,
(In millions)
Mutual Fund Groupings
Equity ........................................................... $39,842 $69,477
Balanced......................................................... 14,548 15,977
Bond............................................................ 5,671 6,284
MoneyMarket...................................................... 2,456 1,775
Specialty ......................................................... 488 870
Total........................................................... $63,005 $94,383
8. Reinsurance
The Company’s Individual segment life insurance operations participate in reinsurance activities in order to limit losses, minimize
exposure to large risks, and provide additional capacity for future growth. The Company has historically reinsured the mortality risk on new
individual life insurance policies primarily on an excess of retention basis or a quota share basis. Until 2005, the Company reinsured up to
90% of the mortality risk for all new individual life insurance policies that it wrote through its various franchises. This practice was initiated by
the different franchises for different products starting at various points in time between 1992 and 2000. During 2005, the Company
changed its retention practices for certain individual life insurance. Amounts reinsured in prior years remain reinsured under the original
F-57MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)