MetLife 2013 Annual Report Download - page 98

MetLife, Inc.
Notes to the Consolidated Financial Statements
1. Business, Basis of Presentation and Summary of Significant Accounting Policies
Business
“MetLife” or the “Company” refers to MetLife, Inc., a Delaware corporation incorporated in 1999, its subsidiaries and affiliates. MetLife is a leading
global provider of insurance, annuities and employee benefit programs throughout the United States, Japan, Latin America, Asia, Europe and the Middle
East. MetLife offers life insurance, annuities, property & casualty insurance, and other financial services to individuals, as well as group insurance and
retirement & savings products and services to corporations and other institutions.
MetLife is organized into six segments: Retail; Group, Voluntary & Worksite Benefits; Corporate Benefit Funding; and Latin America (collectively, the
“Americas”); Asia; and Europe, the Middle East and Africa (“EMEA”).
Basis of Presentation
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires
management to adopt accounting policies and make estimates and assumptions that affect amounts reported in the consolidated financial statements.
In applying these policies and estimates, management makes subjective and complex judgments that frequently require assumptions about matters that
are inherently uncertain. Many of these policies, estimates and related judgments are common in the insurance and financial services industries; others
are specific to the Company’s business and operations. Actual results could differ from estimates.
Consolidation
The accompanying consolidated financial statements include the accounts of MetLife, Inc. and its subsidiaries, as well as partnerships and joint
ventures in which the Company has control, and variable interest entities (“VIEs”) for which the Company is the primary beneficiary. Intercompany
accounts and transactions have been eliminated.
Certain international subsidiaries have a fiscal year-end of November 30. Accordingly, the Company’s consolidated financial statements reflect the
assets and liabilities of such subsidiaries as of November 30, 2013 and 2012 and the operating results of such subsidiaries for the years ended
November 30, 2013, 2012 and 2011.
Discontinued Operations
The results of operations of a component of the Company that has either been disposed of or is classified as held-for-sale are reported in
discontinued operations if certain criteria are met. In order to qualify for a discontinued operation, the operations and cash flows of the component have
been or will be eliminated from the ongoing operations of the Company, and the Company will not have any significant continuing involvement in the
operations of the component after the disposal transaction.
Separate Accounts
Separate accounts are established in conformity with insurance laws and are generally not chargeable with liabilities that arise from any other
business of the Company. Separate account assets are subject to general account claims only to the extent the value of such assets exceeds the
separate account liabilities. The Company reports separately, as assets and liabilities, investments held in separate accounts and liabilities of the
separate accounts if:
‰such separate accounts are legally recognized;
‰assets supporting the contract liabilities are legally insulated from the Company’s general account liabilities;
‰investments are directed by the contractholder; and
‰all investment performance, net of contract fees and assessments, is passed through to the contractholder.
The Company reports separate account assets at their fair value which is based on the estimated fair values of the underlying assets comprising
the individual separate account portfolios. Investment performance (including investment income, net investment gains (losses) and changes in
unrealized gains (losses)) and the corresponding amounts credited to contractholders of such separate accounts are offset within the same line in the
statements of operations. Separate accounts credited with a contractual investment return are combined on a line-by-line basis with the Company’s
general account assets, liabilities, revenues and expenses and the accounting for these investments is consistent with the methodologies described
herein for similar financial instruments held within the general account. Unit-linked separate account investments that are directed by contractholders
but do not meet one or more of the other above criteria are included in fair value option (“FVO”) and trading securities.
The Company’s revenues reflect fees charged to the separate accounts, including mortality charges, risk charges, policy administration fees,
investment management fees and surrender charges. Such fees are included in universal life and investment-type product policy fees in the
statements of operations.
Reclassifications
Certain amounts in the prior years’ consolidated financial statements and related footnotes thereto have been reclassified to conform with the
current year presentation as discussed throughout the Notes to the Consolidated Financial Statements.
90 MetLife, Inc.