MetLife 2011 Annual Report Download - page 227

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
The following table presents a summary of Liability Award activity for the year ended December 31, 2011:
Unit Options Performance Units Restricted Units
Outstanding at January 1, 2011 ............................................. 811,221 139,893 216,251
Granted ............................................................... 369,665 125,710 340,750
Exercised .............................................................. (29,068) — —
Forfeited ............................................................... (68,448) (6,825) (44,680)
Paid .................................................................. — (25,521) (1,640)
Outstanding at December 31, 2011 ......................................... 1,083,370 233,257 510,681
Units expected to vest at a future date as of December 31, 2011 .................. 1,083,370 209,931 459,613
Statutory Equity and Income
Except for American Life, each insurance company’s state of domicile imposes minimum risk-based capital (“RBC”) requirements that were
developed by the National Association of Insurance Commissioners (“NAIC”). The formulas for determining the amount of RBC specify various weighting
factors that are applied to financial balances or various levels of activity based on the perceived degree of risk. Regulatory compliance is determined by
a ratio of total adjusted capital, as defined by the NAIC, to authorized control level RBC, as defined by the NAIC. Companies below specific trigger
points or ratios are classified within certain levels, each of which requires specified corrective action. Each of MetLife, Inc.’s U.S. insurance subsidiaries
exceeded the minimum RBC requirements for all periods presented herein.
American Life does not write business in Delaware or any other domestic state and, as such, is exempt from RBC by Delaware law. American Life
operations are regulated by applicable authorities of the countries in which the company operates and are subject to capital and solvency requirements
in those countries.
The NAIC has adopted the Codification of Statutory Accounting Principles (“Statutory Codification”). Statutory Codification is intended to standardize
regulatory accounting and reporting to state insurance departments. However, statutory accounting principles continue to be established by individual
state laws and permitted practices. Modifications by the various state insurance departments may impact the effect of Statutory Codification on the
statutory capital and surplus of MetLife, Inc.’s U.S. insurance subsidiaries.
Statutory accounting principles differ from GAAP primarily by charging policy acquisition costs to expense as incurred, establishing future policy
benefit liabilities using different actuarial assumptions, reporting surplus notes as surplus instead of debt and valuing securities on a different basis.
In addition, certain assets are not admitted under statutory accounting principles and are charged directly to surplus. The most significant assets not
admitted by the Company are net deferred income tax assets resulting from temporary differences between statutory accounting principles basis and
tax basis not expected to reverse and become recoverable within three years. Further, statutory accounting principles do not give recognition to
purchase accounting adjustments.
Statutory net income (loss) (unaudited) was as follows:
Years Ended December 31,
State of Domicile 2011 2010 2009
(In millions)
Metropolitan Life Insurance Company ................................. NewYork $1,970 $2,066 $1,221
American Life Insurance Company(1) ................................. Delaware $ 334 $ 803 N/A
MetLife Insurance Company of Connecticut ............................ Connecticut $ 46 $ 668 $ 81
Metropolitan Property and Casualty Company .......................... Rhode Island $ 41 $ 273 $ 266
Metropolitan Tower Life Insurance Company ........................... Delaware $ 63 $ 151 $ 57
MetLife Investors Insurance Company ................................. Missouri $ 94 $ 153 $ 49
Delaware American Life Insurance Company ........................... Delaware $ 13 $ 6 N/A
(1) Represents approximate statutory net income (loss) (unaudited).
Statutory capital and surplus (unaudited) was as follows at:
December 31,
2011 2010
(In millions)
Metropolitan Life Insurance Company ....................................................... $13,507 $13,217
American Life Insurance Company(1) ........................................................ $ 3,310 $ 4,321
MetLife Insurance Company of Connecticut .................................................. $ 5,133 $ 5,105
Metropolitan Property and Casualty Company ................................................. $ 1,857 $ 1,845
Metropolitan Tower Life Insurance Company .................................................. $ 828 $ 805
MetLife Investors Insurance Company ....................................................... $ 600 $ 499
Delaware American Life Insurance Company .................................................. $ 51 $ 29
(1) Represents approximate statutory capital and surplus (unaudited).
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