8-KOther Events

METLIFE INC 8-K Report, Corporate Update (Oct 13, 2015)

Filed October 13, 2015For Securities:METMET-PEMET-PFMET-PA

Summary

MetLife, Inc. (MET) filed an 8-K on October 13, 2015, to correct a previously reported internally defined combined risk-based capital (RBC) ratio. The company adjusted its Combined RBC Ratio at December 31, 2014, from over 400% (and 410% as communicated on the Q1 2015 earnings call) to 398%. This revision was due to an internal review of RBC models for its insurance subsidiaries, specifically related to projected claims on certain variable annuities with guaranteed lifetime withdrawal benefits within MetLife Insurance Company USA (MetLife USA). Importantly, the correction does not impact the financial statements in the 2014 10-K. The RBC ratio for MetLife USA at December 31, 2014, remains strong at over 350%, and this correction did not affect MetLife USA's statutory capital, surplus, or net income for that period. Previous years' RBC ratios for MetLife USA and the Company's Combined RBC Ratio are also unaffected. The filing also noted that the guarantees related to these variable annuities were reinsured by a former offshore subsidiary that merged into MetLife USA in November 2014, a move intended to increase capital allocation transparency and de-risk the variable annuity business.

Key Highlights

  • 1MetLife is correcting its internally defined Combined RBC Ratio for year-end 2014 from over 400% to 398%.
  • 2The correction stems from an internal review of risk-based capital models, specifically concerning projected claims on certain variable annuities with guaranteed lifetime withdrawal benefits.
  • 3The adjustment impacts MetLife Insurance Company USA (MetLife USA) but does not affect its statutory capital, surplus, or net income for year-end 2014.
  • 4MetLife USA's RBC ratio remains robust at over 350% as of December 31, 2014.
  • 5This correction does not affect financial statements filed in the 2014 10-K or prior year RBC ratios.
  • 6The company previously reinsured the affected variable annuity guarantees with an offshore subsidiary that has since merged into MetLife USA.
  • 7The merger was part of MetLife's strategy to enhance transparency in capital allocation and reduce risk associated with its variable annuity business.

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