MetLife 2010 Annual Report Download - page 185

and participating close-out contracts. The average interest rate credited on these contracts was 3.32% and 3.35% at December 31, 2010
and 2009, respectively.
Fees charged to the separate accounts by the Company (including mortality charges, policy administration fees and surrender charges)
are reflected in the Company’s revenues as universal life and investment-type product policy fees and totaled $3.2 billion, $2.6 billion and
$3.2 billion for the years ended December 31, 2010, 2009 and 2008, respectively.
The Company’s proportional interest in separate accounts was included in the consolidated balance sheets as follows at:
2010 2009
December 31,
(In millions)
Fixedmaturitysecurities .................................................... $257 $11
Equitysecurities ......................................................... $ 33 $57
Cashandcashequivalents .................................................. $ 74 $ 2
For the years ended December 31, 2010, 2009 and 2008, there were no investment gains (losses) on transfers of assets from the general
account to the separate accounts.
Obligations Under Funding Agreements
The Company issues fixed and floating rate funding agreements, which are denominated in either U.S. dollars or foreign currencies, to
certain SPEs that have issued either debt securities or commercial paper for which payment of interest and principal is secured by such
funding agreements. During the years ended December 31, 2010, 2009 and 2008, the Company issued $34.1 billion, $28.6 billion and
$20.9 billion, respectively, and repaid $30.9 billion, $32.0 billion and $19.8 billion, respectively, of such funding agreements. At
December 31, 2010 and 2009, funding agreements outstanding, which are included in policyholder account balances, were $27.2 billion
and $23.3 billion, respectively. During the years ended December 31, 2010, 2009 and 2008, interest credited on the funding agreements,
which is included in interest credited to policyholder account balances, was $0.6 billion, $0.7 billion and $1.1 billion, respectively.
MetLife Insurance Company of Connecticut (“MICC”) is a member oftheFHLBofBostonandheld$70millionofcommonstockofthe
FHLB of Boston at both December 31, 2010 and 2009, which is included in equity securities. MICC has also entered into funding agreements
withtheFHLBofBostoninexchangeforcashandforwhichtheFHLBofBostonhasbeengrantedablanketlienoncertainMICCassets,
including RMBS, 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 $100 million and $326 million at December 31, 2010 and 2009, respectively, which is included in policyholder account
balances. The advances on these funding agreements are collateralized by mortgage-backed securities with estimated fair values of
$211 million and $419 million at December 31, 2010 and 2009, respectively. During the years ended December 31, 2010, 2009 and 2008,
interest credited on the funding agreements, which is included in interest credited to policyholder account balances, was $1 million,
$6 million and $15 million, respectively.
Metropolitan Life Insurance Company (“MLIC”) is a member of the FHLB of NY and held $890 million and $742 million of common stock of
the FHLB of NY at December 31, 2010 and 2009, respectively, which is included in equity securities. MLIC has also entered into funding
agreements with the FHLB of NY in exchange for cash and for which the FHLB of NY has been granted a lien on certain MLIC assets, including
RMBS 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 MLIC’s liability for funding agreements with the FHLB of NY was $12.6 billion
and $13.7 billion at December 31, 2010 and 2009, respectively, which is included in policyholder account balances. The advances on these
agreements were collateralized by mortgage-backed securities with estimated fair values of $14.2 billion and $15.1 billion at December 31,
2010 and 2009, respectively. During the years ended December 31, 2010, 2009 and 2008, interest credited on the funding agreements,
which is included in interest credited to policyholder account balances, was $276 million, $333 million and $229 million, respectively.
During 2010, MetLife Investors Insurance Company (“MLIIC”) and General American Life Insurance Company (“GALIC”) became members
of the Federal Home Loan Bank of Des Moines (“FHLB of Des Moines) and each held $10 million of common stock of the FHLB of Des Moines
at December 31, 2010, which is included in equity securities. MLIIC and GALIC had no funding agreements with the FHLB of Des Moines at
December 31, 2010.
MLIC and MICC have each issued funding agreements to certain SPEs that have issued debt securities for which payment of interest and
principal is secured by such funding agreements, and such debt securities are also guaranteed as to payment of interest and principal by
Farmer Mac, 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 circumstances, be secured by other qualified
collateral. The amount of the Company’s liability for funding agreements issued to such SPEs was $2.8 billion and $2.5 billion at December 31,
2010 and 2009, respectively, 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 $3.2 billion and $2.9 billion at December 31,
2010 and 2009, respectively. During the years ended December 31, 2010, 2009 and 2008, interest credited on the funding agreements,
which is included in interest credited to policyholder account balances, was $135 million, $132 million and $132 million, respectively.
F-96 MetLife, Inc.
MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)