MetLife 2011 Annual Report Download - page 205

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
Assets and liabilities held for insolvency assessments were as follows:
December 31,
2011 2010
(In millions)
Other Assets:
Premium tax offset for future undiscounted assessments ............................................ $ 97 $55
Premium tax offsets currently available for paid assessments ......................................... 14 8
Receivable for reimbursement of paid assessments(1) .............................................. 6 6
$117 $69
Other Liabilities:
Insolvency assessments ...................................................................... $193 $94
(1) The Company holds a receivable from the seller of a prior acquisition in accordance with the purchase agreement.
On September 1, 2011, the New York State Department of Financial Services filed a liquidation plan for Executive Life Insurance Company of New
York (“ELNY”), which had been under rehabilitation by the Liquidation Bureau since 1991. The plan will involve the satisfaction of insurers’ financial
obligations under a number of state life and health insurance guaranty associations and also contemplates that additional industry support for certain
ELNY policyholders will be provided. The Company recorded a net charge of $40 million, after tax, related to ELNY.
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, insurance regulations and tax
rulings could adversely affect the results of the Company.
In 2007, pension reform legislation in Argentina was enacted which instituted substantial pension reforms, as well as reforms to death and disability
insurance coverage. The reform reinstituted the Argentine government’s pension plan system and allowed for pension participants to transfer their future
contributions to the Argentine government pension plan system. The death and disability insurance reforms relieved the Company of its obligation to
provide death and disability policy coverages and resulted in the elimination of related insurance liabilities.
In December 2008, the Argentine government, through adoption of the nationalization law, which nationalized the Social Security System by moving
all pension fund assets and new contributions to the government-run “pay as you go” system, effectively eliminated private pension companies in
Argentina.
In March 2009, in light of market developments resulting from the Argentine Supreme Court ruling against the 2002 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 reduced its related 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.
In February 2011, the Argentine Superintendent of Insurance (“SSN”) enacted Resolution No. 35,615, which affects the reinsurance regulatory
framework. From September 1, 2011, cross-border reinsurance operations were effectively prohibited, with some minor exceptions: Foreign reinsurers
that have not set up an Argentine reinsurance subsidiary or branch are only able to underwrite risks from Argentine cedants when, due to the importance
and type of risk to be ceded, there is no local capacity and subject to the approval of the SSN (which will be granted on a case by case basis) and to
the registration of such foreign reinsurer with the SSN.
In October 2011, the SSN enacted Resolution No. 36,162 which affects the Company’s ability to invest and diversify abroad. From November 4,
2011, insurers will have a term of: (i) 10 business days to file with the SSN an affidavit, reporting all investments located abroad; and (ii) 50 calendar
days to evidence with the SSN the transfer to Argentina of all the investments and funds located abroad. All investments and funds must be located in
Argentina no later than December 31, 2011. The Company was in compliance with this resolution at December 31, 2011.
Further governmental or legal actions are possible in Argentina. Such actions may impact the level of existing assets and 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 rights and obligations which could materially
impact the amounts presented in the consolidated financial statements.
MetLife, Inc. 201