MetLife 2012 Annual Report Download - page 118

MetLife, Inc.
Notes to the Consolidated Financial Statements — (Continued)
the Company had $13.5 billion of net ceded reinsurance recoverables. Of this total, $10.3 billion, or 76%, were with the Company’s five largest ceded
reinsurers, including $3.2 billion of net ceded reinsurance recoverables which were unsecured.
The Company has reinsured with an unaffiliated third-party reinsurer, 49.25% of the closed block through a modified coinsurance agreement. The
Company accounts for this agreement under the deposit method of accounting. The Company, having the right of offset, has offset the modified
coinsurance deposit with the deposit recoverable.
The amounts in the consolidated statements of operations include the impact of reinsurance. Information regarding the significant effects of
reinsurance was as follows:
Years Ended December 31,
2012 2011 2010
(In millions)
Premiums:
Direct premiums ................................................................................ $38,719 $ 37,185 $ 27,596
Reinsurance assumed ........................................................................... 1,488 1,484 1,377
Reinsurance ceded .............................................................................. (2,232) (2,308) (1,902)
Net premiums ................................................................................ $37,975 $ 36,361 $ 27,071
Universal life and investment-type product policy fees:
Direct universal life and investment-type product policy fees .............................................. $ 9,216 $ 8,455 $ 6,621
Reinsurance assumed ........................................................................... 155 154 138
Reinsurance ceded .............................................................................. (815) (803) (731)
Net universal life and investment-type product policy fees .............................................. $ 8,556 $ 7,806 $ 6,028
Policyholder benefits and claims:
Direct policyholder benefits and claims ............................................................... $39,262 $ 37,588 $ 31,402
Reinsurance assumed ........................................................................... 1,167 1,101 1,275
Reinsurance ceded .............................................................................. (2,442) (3,218) (3,490)
Net policyholder benefits and claims ............................................................... $37,987 $ 35,471 $ 29,187
Other expenses:
Direct other expenses ............................................................................ $17,848 $ 18,672 $ 13,035
Reinsurance assumed ........................................................................... 228 168 116
Reinsurance ceded .............................................................................. (321) (303) (224)
Net other expenses ............................................................................ $17,755 $ 18,537 $ 12,927
The amounts in the consolidated balance sheets include the impact of reinsurance. Information regarding the significant effects of reinsurance was
as follows at:
December 31,
2012 2011
Direct Assumed Ceded
Total
Balance
Sheet Direct Assumed Ceded
Total
Balance
Sheet
(In millions)
Assets:
Premiums, reinsurance and other receivables ....... $ 6,286 $ 548 $14,800 $ 21,634 $ 5,601 $ 641 $16,239 $ 22,481
Deferred policy acquisition costs and value of
business acquired .......................... 24,789 92 (120) 24,761 24,412 340 (133) 24,619
Total assets ............................... $ 31,075 $ 640 $14,680 $ 46,395 $ 30,013 $ 981 $16,106 $ 47,100
Liabilities:
Future policy benefits ......................... $190,321 $2,031 $ (1) $192,351 $182,304 $1,972 $ (1) $184,275
Policyholder account balances .................. 223,229 2,594 (2) 225,821 214,206 3,494 — 217,700
Other policy-related balances ................... 15,142 313 8 15,463 14,880 339 380 15,599
Other liabilities ............................... 18,925 543 3,024 22,492 25,245 630 5,039 30,914
Total liabilities .............................. $447,617 $5,481 $ 3,029 $456,127 $436,635 $6,435 $ 5,418 $448,488
Reinsurance agreements that do not expose the Company to a reasonable possibility of a significant loss from insurance risk are recorded using the
deposit method of accounting. The deposit assets on reinsurance were $2.3 billion and $2.4 billion at December 31, 2012 and 2011, respectively. The
deposit liabilities on reinsurance were $45 million and $66 million at December 31, 2012 and 2011, respectively.
112 MetLife, Inc.