MetLife 2009 Annual Report Download - page 186

insurer engaged. Some states permit member insurers to recover assessments paid through full or partial premium tax offsets. Assets and
liabilities held for insolvency assessments are as follows:
2009 2008
December 31,
(In millions)
Other Assets:
Premiumtaxoffsetforfutureundiscountedassessments ............................... $54 $50
Premiumtaxoffsetscurrentlyavailableforpaidassessments ............................ 9 7
Receivableforreimbursementofpaidassessments(1)................................. 4 7
$67 $64
Other Liabilities:
Insolvencyassessments .................................................... $86 $83
(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement.
Assessments levied against the Company were $2 million, $2 million and ($1) million for the years ended December 31, 2009, 2008 and
2007, respectively.
Argentina
The Argentine 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.
In 2007, pension reform legislation in Argentina was enacted which relieved the Company of its obligation to provide death and disability
policy coverages and resulted in the elimination of related insurance liabilities. The reform reinstituted the government’s pension plan system
and allowed for pension participants to transfer their future contributions to the government pension plan system.
Although it no longer received compensation, the Company continued to be responsible for managing the funds of those participants that
transferred to the government system. This change resulted in the establishment of a liability for future servicing obligations and the
elimination of the Company’s obligations under death and disability policy coverages. The impact of the 2007 Argentine pension reform was
an increase to net income of $114 million, net of income tax, due to the reduction of the insurance liabilities and other balances associated
with the death and disability coverages of $197 million, net of income tax, which exceeded the establishment of the liability for future service
obligations of $83 million, net of income tax, during the year ended December 31, 2007. During 2008, the future servicing obligation was
reduced by $23 million, net of income tax, when information regarding the level of participation in the government pension plan became fully
available.
In September 2008, the Argentine Supreme Court ruled against the validity of the 2002 Pesification Law enacted by the Argentine
government. This ruling applied to certain social security pension annuity contractholders that had filed a lawsuit against the 2002 Pesification
Law. The annuity contracts impacted by this ruling, which were deemed peso denominated under the 2002 Pesification Law, are now
considered to be U.S. Dollar denominated obligations of the Company. The applicable contingent liabilities were then adjusted and refined to
be consistent with this ruling. The impact of the refinements resulting from the change in these contingent liabilities and the associated future
policyholder benefits was an increase to net income of $34 million, net of income tax, during the year ended December 31, 2008.
In October 2008, the Argentine government announced its intention to nationalize private pensions and, in December 2008, the Argentine
government nationalized the private pension system seizing the underlying investments of participants which were being managed by the
Company (“Nationalization”). With this action, the Company’s pension business in Argentina ceased to exist and the Company eliminated
certain assets and liabilities held in connection with the pension business. Deferred acquisition costs, deferred tax assets, and liabilities —
primarily the liability for future servicing obligation referred to above — were eliminated and the Company incurred severance costs
associated with the termination of employees. The impact of the elimination of assets and liabilities and the incurral of severance costs
was an increase to net income of $6 million, net of income tax, during the year ended December 31, 2008.
As part of Nationalization, the Company may receive compensation from the Argentine government for the loss of the pension business in
the form of government bonds. The amount of any such compensation, as well as the terms and value of the government bonds to be
received, cannot be determined at this time. The compensation will only be reflected in the consolidated financial statements of the Company
if and when the fair value of the compensation is received.
In March 2009, in light of market developments resulting from the Supreme Court ruling contrary to the Pesification Law and the
implementation by the Company of a program to allow the contractholders that had not filed a lawsuit to convert to U.S. Dollars the social
security annuity contracts denominated in pesos by the Pesification Law, the Company further reduced the outstanding contingent liabilities
by $108 million, net of income tax, which was partially offset by the establishment of contingent liabilities from the implementation of the
program to convert these contracts to U.S. Dollars of $13 million, net of income tax, resulting in a decrease to net loss of $95 million, net of
income tax, for the year ended December 31, 2009.
Further governmental or legal actions are possible in Argentina. Such actions may impact the level of existing liabilities or may create
additional obligations or benefits to the Company’s operations in Argentina. Management has made its best estimate of its obligations based
upon information currently available; however, further governmental or legal actions could result in changes in obligations which could
materially impact the amounts presented within the consolidated financial statements.
F-102 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)