MetLife 2009 Annual Report Download - page 118

Cost or
Amortized
Cost
Estimated
Fair
Value
Cost or
Amortized
Cost
Estimated
Fair
Value
Cost or
Amortized
Cost
Estimated
Fair
Value
Cost or
Amortized
Cost
Estimated
Fair
Value
Cost or
Amortized
Cost
Estimated
Fair
Value
Cost or
Amortized
Cost
Estimated
Fair
Value
Aaa Aa A Baa
Below
Investment
Grade Total
December 31, 2008
(In millions)
2003 & Prior . . . $ 96 $ 77 $ 92 $ 72 $ 26 $ 16 $ 83 $ 53 $ 8 $ 4 $ 305 $ 222
2004 . . . . . . . . 129 70 372 204 5 3 37 28 2 1 545 306
2005 . . . . . . . . 357 227 186 114 20 11 79 46 4 4 646 402
2006 . . . . . . . . 146 106 69 30 15 10 26 7 2 2 258 155
2007 . . . . . . . . — — 78 33 35 21 2 2 3 1 118 57
2008 . . . . . . . . — — — — — — — — — — — —
Total . . . . . . . $728 $ 480 $797 $ 453 $101 $ 61 $227 $ 136 $19 $ 12 $1,872 $1,142
Ratings
Distribution . . . 42.0% 39.7% 5.3% 11.9% 1.1% 100.0%
Concentrations of Credit Risk (Equity Securities). The Company is not exposed to any concentrations of credit risk in its equity securities
holdings of any single issuer greater than 10% of the Company’s stockholders’ equity at December 31, 2009 and 2008.
Maturities of Fixed Maturity Securities. The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity
date (excluding scheduled sinking funds), are as follows:
Amortized
Cost
Estimated
Fair
Value Amortized Cost
Estimated
Fair
Value
2009 2008
December 31,
(In millions)
Dueinoneyearorless............................... $ 6,845 $ 6,924 $ 5,556 $ 5,491
Due after one year through five years . . . . . . . . . . . . . . . . . . . . . . 38,408 39,399 33,604 30,884
Due after five years through ten years . . . . . . . . . . . . . . . . . . . . . 40,448 41,568 41,481 36,895
Dueaftertenyears ................................. 67,838 66,947 58,547 55,786
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153,539 154,838 139,188 129,056
RMBS,CMBSandABS .............................. 76,170 72,804 70,320 59,195
Totalfixedmaturitysecurities.......................... $229,709 $227,642 $209,508 $188,251
Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due
at a single maturity date have been included in the above table in the year of final contractual maturity. RMBS, CMBS and ABS are shown
separately in the table, as they are not due at a single maturity.
Evaluating Available-for-Sale Securities for Other-Than-Temporary Impairment
As described more fully in Note 1, the Company performs a regular evaluation, on a security-by-security basis, of its available-for-sale
securities holdings in accordance with its impairment policy in order to evaluate whether such investments are other-than-temporarily
impaired. As described more fully in Note 1, effective April 1, 2009, the Company adopted new OTTI guidance that amends the methodology
for determining for fixed maturity securities whether an OTTI exists, and for certain fixed maturity securities, changes how the amount of the
OTTI loss that is charged to earnings is determined. There was no change in the OTTI methodology for equity securities.
With respect to fixed maturity securities, the Company considers, amongst other impairment criteria, whether it has the intent to sell a
particular impaired fixed maturity security. The Company’s intent to sell a particular impaired fixed maturity security considers broad portfolio
management objectives such as asset/liability duration management, issuer and industry segment exposures, interest rate views and the
overall total return focus. In following these portfolio management objectives, changes in facts and circumstances that were present in past
reporting periods may trigger a decision to sell securities that were held in prior reporting periods. Decisions to sell are based on current
conditions or the Company’s need to shift the portfolio to maintain its portfolio management objectives including liquidity needs or duration
targets on asset/liability managed portfolios. The Company attempts to anticipate these types of changes and if a sale decision has been
made on an impaired security, the security will be deemed other-than-temporarily impaired in the period that the sale decision was made and
an OTTI loss will be recorded in earnings. In certain circumstances, the Company may determine that it does not intend to sell a particular
security but that it is more likely than not that it will be required to sell that security before recovery of the decline in estimated fair value below
amortized cost. In such instances, the fixed maturity security will be deemed other-than-temporarily impaired in the period during which it was
determined more likely than not that the security will be required to be sold and an OTTI loss will be recorded in earnings. If the Company does
not have the intent to sell (i.e., has not made the decision to sell) and it does not believe that it is more likely than not that it will be required to
sell the security before recovery of its amortized cost, an impairment assessment is made, as described in Note 1. Prior to April 1, 2009, the
Company’s assessment of OTTI for fixed maturity securities was performed in the same manner as described below for equity securities.
F-34 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)