-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, UCgXeRSRi1ztojl13qvBhILhZAiymVKOUMAv7tib2P5nSv/FWr0A+K42fOF/2znx K8DIU9gwLymiEvynZbAzcA== 0000950135-08-003184.txt : 20080501 0000950135-08-003184.hdr.sgml : 20080501 20080430184353 ACCESSION NUMBER: 0000950135-08-003184 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 20080501 DATE AS OF CHANGE: 20080430 EFFECTIVENESS DATE: 20080501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE CENTRAL INDEX KEY: 0001077712 IRS NUMBER: 060566090 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 497 SEC ACT: 1933 Act SEC FILE NUMBER: 333-113533 FILM NUMBER: 08791419 BUSINESS ADDRESS: STREET 1: ONE CITY PLACE STREET 2: 185 ASYLUM STREET CITY: HARTFORD STATE: CT ZIP: 06103-3415 BUSINESS PHONE: 860-277-0111 MAIL ADDRESS: STREET 1: ONE CITY PLACE STREET 2: 185 ASYLUM STREET CITY: HARTFORD STATE: CT ZIP: 06103-3415 FORMER COMPANY: FORMER CONFORMED NAME: TRAVELERS FUND UL III FOR VARIABLE LIFE INSURANCE DATE OF NAME CHANGE: 19990128 0001077712 S000004239 MetLife of CT Fund UL III for Variable Life Insurance C000011941 MetLife Corporate Owned VUL IV 497 1 y43757a2e497.txt METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE CORPORATE OWNED VARIABLE UNIVERSAL LIFE INSURANCE IV PROSPECTUS APRIL 28, 2008 CORPORATE OWNED FLEXIBLE PREMIUM VARIABLE LIFE INSURANCE POLICIES METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE ISSUED BY: METLIFE INSURANCE COMPANY OF CONNECTICUT This prospectus describes information you should know before you purchase Corporate Owned Variable Universal Life Insurance IV (the Policy), a flexible premium variable life insurance policy issued by MetLife Insurance Company of Connecticut (We, or the Company). Please be aware that this is a prospectus, which highlights many Policy provisions and communicates the Policy's primary features. SOME POLICY FEATURES MAY NOT BE AVAILABLE IN SOME STATES AND THERE MAY BE VARIATIONS IN YOUR POLICY FROM DESCRIPTIONS CONTAINED IN THIS PROSPECTUS BECAUSE OF DIFFERENCES IN STATE LAW THAT AFFECT THE POLICIES. Please consult your Policy for the provisions that apply in your state. We use certain terms throughout this prospectus, which are defined in APPENDIX A. The language of the Policy itself determines your rights and obligations under the Policy. Please keep this prospectus for future reference. As a LIFE INSURANCE POLICY, the Policy is a contract between you and the Company. The Policy is designed for corporations and employers to provide insurance protection on the life of Insured employees and to build Contract Value. The Policy has a MINIMUM TARGET PREMIUM OF $100,000 PER CASE. You agree to make sufficient Premium Payments to the Company and the Company agrees to pay a Death Benefit to your Beneficiary after the death of the Named Insured (INSURED). Premium Payments are flexible in both frequency and amount. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense. Variable life insurance policies are not deposits of any bank and are not insured or guaranteed by the Federal Deposit Insurance Corporation, or any other government agency. Replacing any existing life insurance policy with this Policy may not be to your advantage. You can build Contract Value by investing in a variety of INVESTMENT OPTIONS, which, in turn, invest in Mutual Funds (THE FUNDS). A fixed rate option (THE FIXED ACCOUNT) is also available. Except for amounts in the Fixed Account, the value of your Policy will vary based on the performance of the Funds you select. Investment Options that invest in the following Funds are available for Policies purchased on or after April 28, 2008: AIM VARIABLE INSURANCE FUNDS -- SERIES I AIM V.I. Global Real Estate Fund AIM V.I. International Growth Fund ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. Global Technology Portfolio -- Class B Intermediate Bond Portfolio -- Class A AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. -- CLASS I American Century VP Ultra(R) Fund American Century VP Vista(SM) Fund AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund American Funds Global Growth Fund American Funds Global Small Capitalization Fund American Funds Growth Fund American Funds Growth-Income Fund American Funds High-Income Bond Fund American Funds International Fund American Funds New World Fund American Funds U.S. Government/AAA Rated Securities Fund DELAWARE VIP TRUST -- STANDARD CLASS Delaware VIP Small Cap Value Series DREYFUS VARIABLE INVESTMENT FUND -- INITIAL SHARES Appreciation Portfolio Developing Leaders Portfolio FIDELITY(R) VARIABLE INSURANCE PRODUCTS Contrafund(R) Portfolio -- Service Class 2 Equity-Income Portfolio -- Initial Class Freedom 2010 Portfolio -- Initial Class Freedom 2015 Portfolio -- Initial Class Freedom 2020 Portfolio -- Initial Class Freedom 2025 Portfolio -- Initial Class Freedom 2030 Portfolio -- Initial Class Growth & Income Portfolio -- Service Class 2 High Income Portfolio -- Initial Class Index 500 Portfolio -- Initial Class Investment Grade Bond Portfolio -- Service Class Mid Cap Portfolio -- Service Class 2 Overseas Portfolio -- Service Class 2 FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Templeton Developing Markets Securities Fund -- Class 2 Templeton Foreign Securities Fund -- Class 2 Templeton Global Income Securities Fund -- Class 1 JANUS ASPEN SERIES -- SERVICE SHARES Global Life Sciences Portfolio Global Technology Portfolio International Growth Portfolio Mid Cap Growth Portfolio Mid Cap Value Portfolio LEGG MASON PARTNERS VARIABLE EQUITY TRUST Legg Mason Partners Variable Aggressive Growth Portfolio -- Class I Legg Mason Partners Variable Appreciation Portfolio -- Class I Legg Mason Partners Variable Capital and Income Portfolio -- Class I Legg Mason Partners Variable Equity Index Portfolio -- Class I Legg Mason Partners Variable Fundamental Value Portfolio -- Class I Legg Mason Partners Variable Investors Portfolio -- Class I Legg Mason Partners Variable Large Cap Growth Portfolio -- Class I Legg Mason Partners Variable Social Awareness Portfolio LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Legg Mason Partners Variable Global High Yield Bond Portfolio Legg Mason Partners Variable Strategic Bond Portfolio MET INVESTORS SERIES TRUST BlackRock High Yield Portfolio -- Class A BlackRock Large Cap Core Portfolio -- Class E Clarion Global Real Estate Portfolio -- Class A Harris Oakmark International Portfolio -- Class A Janus Forty Portfolio -- Class A Lazard Mid Cap Portfolio -- Class A Loomis Sayles Global Markets Portfolio -- Class A Lord Abbett Bond Debenture Portfolio -- Class A Lord Abbett Growth and Income Portfolio -- Class B Lord Abbett Mid Cap Value Portfolio -- Class B Met/AIM Capital Appreciation Portfolio -- Class A PIMCO Inflation Protected Bond Portfolio -- Class A Pioneer Fund Portfolio -- Class A Pioneer Strategic Income Portfolio -- Class A T. Rowe Price Mid Cap Growth Portfolio -- Class A Van Kampen Mid Cap Growth Portfolio -- Class A METROPOLITAN SERIES FUND, INC. BlackRock Aggressive Growth Portfolio -- Class D BlackRock Bond Income Portfolio -- Class A BlackRock Large Cap Value Portfolio -- Class B BlackRock Money Market Portfolio -- Class A Davis Venture Value Portfolio -- Class A FI Large Cap Portfolio -- Class A FI Mid Cap Opportunities Portfolio -- Class A FI Value Leaders Portfolio -- Class D Jennison Growth Portfolio -- Class A Julius Baer International Stock Portfolio -- Class A Lehman Brothers(R) Aggregate Bond Index Portfolio -- Class A MetLife Aggressive Allocation Portfolio -- Class B MetLife Conservative Allocation Portfolio -- Class B MetLife Conservative to Moderate Allocation Portfolio -- Class B MetLife Mid Cap Stock Index Portfolio -- Class A MetLife Moderate Allocation Portfolio -- Class B MetLife Moderate to Aggressive Allocation Portfolio -- Class B MetLife Stock Index Portfolio -- Class A MFS(R) Total Return Portfolio -- Class F MFS(R) Value Portfolio -- Class A Morgan Stanley EAFE(R) Index Portfolio -- Class A Oppenheimer Global Equity Portfolio -- Class B Russell 2000(R) Index Portfolio -- Class A Western Asset Management U.S. Government Portfolio -- Class A OPPENHEIMER VARIABLE ACCOUNT FUNDS -- NON-SERVICE SHARES Oppenheimer Main Street Small Cap Fund(R)/VA PIMCO VARIABLE INSURANCE TRUST -- ADMINISTRATIVE CLASS Low Duration Portfolio Total Return Portfolio PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Emerging Markets VCT Portfolio Pioneer Mid Cap Value VCT Portfolio PUTNAM VARIABLE TRUST -- CLASS IB Putnam VT International Growth and Income Fund ROYCE CAPITAL FUND Royce Micro-Cap Portfolio Royce Small-Cap Portfolio THE MERGER FUND VL The Merger Fund VL VAN KAMPEN LIFE INVESTMENT TRUST Comstock Portfolio -- Class II Government Portfolio -- Class I Certain Funds have been subject to a merger, substitution or other change. Please see Appendix B -- "Additional Information Regarding Funds" for more information. TABLE OF CONTENTS
PAGE ---- SUMMARY OF PRINCIPAL POLICY BENEFITS AND RISKS.......................... 3 Policy Summary.......................................................... 3 Principal Policy Benefits............................................... 3 Principal Policy Risks.................................................. 5 Fund Company Risks...................................................... 6 FEE TABLES.............................................................. 7 Transaction Fees........................................................ 7 Periodic Charges Other Than Fund Operating Expenses..................... 8 Charges for Optional Riders............................................. 10 Fund Charges and Expenses............................................... 11 DESCRIPTION OF THE COMPANY, SEPARATE ACCOUNT AND FUNDS.................. 15 The Insurance Company................................................... 15 The Separate Account and its Investment Options......................... 16 The Funds............................................................... 16 Voting Rights........................................................... 25 Conflicts of Interest................................................... 25 The Fixed Account....................................................... 25 POLICY CHARGES AND DEDUCTIONS........................................... 26 Charges Against Premium................................................. 26 Charges Against Contract Value.......................................... 27 Charges Against the Separate Account.................................... 28 Fund Charges............................................................ 28 Modification, Reserved Rights and Other Charges......................... 28 POLICY DESCRIPTION...................................................... 28 Applying for a Policy................................................... 29 Right to Cancel (free look period)...................................... 29 When Coverage Begins.................................................... 30 Income Tax Free 'Section 1035' Exchanges................................ 30 Ownership/Policy Rights................................................. 30 PREMIUMS................................................................ 32 Amount, Frequency and Duration of Premium Payments...................... 32 Allocation of Premium Payments.......................................... 33 VALUES UNDER YOUR POLICY................................................ 33 Contract Value.......................................................... 33 Investment Option Valuation............................................. 33 Fixed Account Valuation................................................. 34 Loan Account Valuation.................................................. 35 TRANSFER................................................................ 35 Transfers of Contract Value............................................. 35 Transfer of Contract Value from the Fixed Account to the Investment Options............................................................... 38 Transfer of Contract Value from the Investment Options to the Fixed Account............................................................... 38 Dollar-Cost Averaging (DCA Program)..................................... 38 Portfolio Rebalancing................................................... 38 DEATH BENEFIT........................................................... 38 Death Benefit Examples.................................................. 39 Changing the Death Benefit Option....................................... 40 Paying the Death Benefit and Payment Options............................ 41 BENEFITS AT MATURITY.................................................... 41 OTHER BENEFITS.......................................................... 41 Exchange Option......................................................... 41 Supplemental Insurance Benefits......................................... 41 Cash Value Enhancement Rider............................................ 42 POLICY SURRENDERS....................................................... 42 Full Surrender.......................................................... 42 Partial Surrender....................................................... 42 POLICY LOANS............................................................ 43 Loan Conditions......................................................... 43 Effects of Loans........................................................ 43 LAPSE AND REINSTATEMENT................................................. 44 Lapse................................................................... 44 Grace Period............................................................ 44 Reinstatement........................................................... 44 FEDERAL TAX CONSIDERATIONS.............................................. 45 Potential Benefits of Life Insurance.................................... 45 Tax Status of the Policy................................................ 46 Tax Treatment of Policy Benefits........................................ 46 OTHER TAX CONSIDERATIONS................................................ 49 Insurable Interest...................................................... 49 The Company's Income Taxes.............................................. 49 Alternative Minimum Tax................................................. 50 DISTRIBUTION & COMPENSATION............................................. 50 Distribution............................................................ 50 Compensation............................................................ 50 OTHER POLICY INFORMATION................................................ 52 Valuation and Payment................................................... 52 Suspension of Valuation and Postponement of Payment..................... 52 Policy Statements....................................................... 53 Limits on Right to Contest and Suicide Exclusion........................ 53 Misstatement as to Sex and Age.......................................... 53 Policy Changes.......................................................... 53 Restrictions on Financial Transactions.................................. 54 LEGAL PROCEEDINGS....................................................... 54 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM........................... 54 FINANCIAL STATEMENTS.................................................... 54 APPENDIX A: GLOSSARY OF TERMS USED THROUGHOUT THIS PROSPECTUS........... A-1 APPENDIX B: ADDITIONAL INFORMATION REGARDING FUNDS...................... B-1 APPENDIX C: TARGET PREMIUM PER $1,000 OF STATED AMOUNT.................. C-1 APPENDIX D: CASH VALUE ACCUMULATION TEST FACTORS........................ D-1 APPENDIX E: HYPOTHETICAL ILLUSTRATIONS.................................. E-1
2 SUMMARY OF PRINCIPAL POLICY BENEFITS AND RISKS - -------------------------------------------------------------------------------- This section provides a SUMMARY of the Policy and the principal policy benefits and risks. YOU SHOULD READ THE ENTIRE PROSPECTUS BEFORE PURCHASING THE POLICY. IMPORTANT DETAILS REGARDING THE POLICY ARE CONTAINED IN OTHER SECTIONS OF THIS PROSPECTUS. POLICY SUMMARY The Policy is both an insurance product and a security. The Policy is first and foremost a life insurance policy with death benefits, contract values, and other features traditionally associated with life insurance. To provide these benefits to you, we deduct amounts from your Premium Payments and Policy assets to pay insurance costs, sales and Policy expenses. The Policy is a security because the Contract Value and, under certain circumstances, the Amount Insured and Death Benefit may increase and decrease based on the performance of the Investment Options you select. PRINCIPAL POLICY BENEFITS - Death Benefit We will pay your Beneficiary a Death Benefit after the death of the Insured while this Policy is in effect. There are two primary amounts involved in determining the Death Benefit under this Policy. First, when you apply for your Policy you will state the amount of life insurance coverage (THE STATED AMOUNT) that you wish to purchase on the Insured. Second, for a Policy to qualify as life insurance under federal tax law, it must provide a minimum amount of insurance in relation to the Contract Value of your Policy (THE MINIMUM AMOUNT INSURED). Generally, the Contract Value of your Policy is the sum of the values in the Investment Options and the Fixed Account, plus your Loan Account Value. In addition to choosing the Stated Amount, you must also choose a Death Benefit option. There are three Death Benefit options available: - OPTION 1 -- LEVEL OPTION: the Death Benefit will be the greater of (i) the Stated Amount or (ii) the Minimum Amount Insured on the Insured's date of death. - OPTION 2 -- VARIABLE OPTION: the Death Benefit will be the greater of (i) the Stated Amount plus the Contract Value of the Policy or (ii) the Minimum Amount Insured on the Insured's date of death. - OPTION 3 -- ANNUAL INCREASE OPTION: the Death Benefit will be the greater of: 1. (a) plus (b) where: (a) is the Stated Amount as of the Insured's date of death; and (b) is the greater of zero and the lesser of (i) and (ii) where (i) is the Option 3 maximum increase shown on the Policy Summary and (ii) is the total Premium Payments less any partial surrenders accumulated at the interest rate shown on the Policy Summary; OR 2. the Minimum Amount Insured on the Insured's date of death. The Death Benefit may be increased or decreased by changes in the Stated Amount, surrenders and Outstanding Loans and charges. - Policy Surrenders (Withdrawals) You may withdraw some or all of your money from your Policy. - Policy Loans You may borrow against your Policy using your Policy as collateral. 3 - The Investment Options and the Corresponding Funds You may select from a wide variety of Investment Options. Each Investment Option invests directly in a professionally managed Fund. You may transfer Contract Value among any of the Investment Options and the Fixed Account while continuing to defer current income taxes. - The Fixed Account You may allocate Premium Payments and transfer Contract Value to the Fixed Account. The Fixed Account is credited interest at an effective annual rate guaranteed to be at least 3%. Transfers of Contract Value into or out of the Fixed Account are permitted subject to certain restrictions. - Flexible Premium Payments After you make the initial Premium Payment, you may choose the amount and frequency of future Premium Payments, within certain limits. - Tax-Free Death Benefit Your Beneficiary may receive the Death Benefit free of income tax, and with properly structured ownership you can also avoid estate tax on the Death Benefit. - Right to Cancel Period We urge you to examine your Policy closely. When you receive your Policy, the Right to Cancel Period begins. This period is at least ten (10) days, or more if required by state law. If, for any reason, you are not satisfied, you may return the Policy to us during the Right to Cancel Period for a refund. - Dollar-Cost Averaging Under this program, you invest the same amount of money at regular intervals, so you are buying more units when the market is down and fewer units when the market is high. The potential benefit is to lower your average cost per unit. - Portfolio Rebalancing This program can help prevent a structured investment strategy from becoming diluted over time. Investment performance will likely cause the allocation percentages for the Investment Options you most recently selected to shift. Under this program, you may instruct us to automatically reallocate values in your Policy periodically to help keep your investments properly aligned with your investment strategy. - Exchange Option During the first two Policy Years you can transfer all Contract Value in the Investment Options to the Fixed Account (subject to state law). - Personalized Illustrations You may request personalized illustrations for the Policy that reflect the Insured's age, sex, underwriting classification, the specified insurance benefits and the premium requested. These hypothetical illustrations may help you to understand how the Contract Value and Death Benefit can change over time and how the investment performance of the Funds impact the Contract Value and the Death Benefit. The illustrations may also help you compare the Policy to other life insurance policies. Personalized illustrations are based on hypothetical rates of return and are not a representation or guarantee of investment returns or Contract Value. We have included an example of such an illustration as Appendix E to this prospectus. 4 PRINCIPAL POLICY RISKS - Poor Fund Performance (Investment Risk) The value of your Policy is tied to the investment performance of the Funds and allocation percentages you choose. If those Funds perform poorly, the value of your Policy will decrease. Since we continue to deduct charges from the Contract Value, if investment results are too low, the Cash Surrender Value of your Policy may fall to zero, even if you send us your Planned Premium Payments (as illustrated). In that case, the Policy will, after a grace period, terminate without value and insurance coverage will no longer be in effect. - Tax Risks We believe, but do not guarantee, that the Policy should be considered a life insurance policy under federal tax law. If the Policy was determined not to be a life insurance policy for federal tax purposes, you may be considered to be in constructive receipt of Contract Value, with adverse tax consequences, and all or a part of the proceeds paid under the Policy may be taxable to the Beneficiary. There is also a possibility that even if your Policy is treated as life insurance for federal tax purposes, it could be treated as a modified endowment contract (MEC) under federal tax laws (usually if your Premium Payments in the first seven policy years or less exceed certain limits). If your Policy is a MEC, partial surrenders, collateral assignments and Policy loans could incur taxes, and any distributions or deemed distributions could incur the additional 10% tax on early withdrawals. Finally, tax laws and regulations impacting this Policy and your tax status are always subject to change. - Policy Lapse There is a risk that if partial surrenders, loans, and monthly deductions reduce your Cash Surrender Value to too low an amount and/or if the investment experience of your selected Investment Options is unfavorable, then your Policy could lapse. If your Policy lapses, then the Policy and all rights and benefits under it will terminate. - Policy Withdrawal Limitations The minimum partial surrender amount is $500. Surrenders will reduce the Death Benefit, the Amount Insured and the Contract Value of the Policy. Federal income taxes and a penalty tax may apply to partial surrenders. - Effects of Policy Loans A Policy loan, whether or not repaid, will affect your Policy's Contract Value over time because we transfer the amount of the loan from the Investment Options and the Fixed Account to the Loan Account and hold it as collateral. As a result, the loan collateral does not participate in the investment results of the Investment Options or the interest credited to the Fixed Account. A Policy loan also reduces the Death Benefit proceeds and could make it more likely that a Policy will lapse. - Credit Risk The Death Benefit guarantees, rider guarantees and the Fixed Account obligations depend on the Company's financial ability to fulfill their obligations. You should review the Company's financial statements, which are available upon request and are attached to the Statement of Additional Information. - Increase in Current Fees and Expenses Certain Policy fees and expenses are currently charged at less than their maximum amounts. We may increase these current fees and expenses up to the guaranteed maximum levels. - Flexible Premium Payments Even if you send us your Planned Premium (as illustrated) your Policy may still lapse if poor investment performance and/or certain Policy transactions substantially reduce your Contract Value. 5 - Policy is Not Suited for Short-Term Investment We designed the Policy to meet long-term financial goals. You should not purchase this Policy to meet any short-term investment goals or if you think you will surrender all or part of your Policy in the short- term. FUND COMPANY RISKS A comprehensive discussion of the risks of each Fund may be found in each Fund Company's prospectus. Each Fund has its own goal, investment objective and investment strategies that affect the risks associated with investing in that Fund. A Fund always carries investment risks although some types carry more risk than others. Generally, the higher the potential return, the higher the risk of loss. Before you decide which Funds to choose, you should consider whether the goals and risks of a Fund are a good fit for your investment plan. There is no assurance that any of the Funds will achieve their stated investment objective. 6 FEE TABLES - -------------------------------------------------------------------------------- The following tables describe the fees and expenses that you will pay when buying, owning, and surrendering the Policy. The first table describes the fees and expenses that you will pay at the time you buy the Policy or surrender the Policy. The tables disclose the Maximum Guaranteed Charge, the Current Charge and where the amount of a charge depends on the Insured's characteristics, such as age or rating classification, the charge for a Sample Insured. TRANSACTION FEES
WHEN WE DEDUCT THE CHARGE CHARGE AMOUNT DEDUCTED(1) - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Front-End Sales Expense Upon receipt of each Current Charge: Applied as a percentage of each Charges(2) Premium Payment Premium Payment (See Chart Below)(3) - ------------------------------------------------ GUARANTEED CHARGE: IN ALL POLICY YEARS: 12% OF PREMIUM PAYMENTS UP TO THE TARGET PREMIUM AND 8% ON PREMIUM PAYMENTS IN EXCESS OF THE TARGET PREMIUM - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Surrender Charge When you fully or Current Charge: No charge partially surrender your Policy - ------------------------------------------------ GUARANTEED CHARGE: NO CHARGE - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Transfer Charge When you transfer Current Charge: No charge Contract Value among the Investment Options - ------------------------------------------------ GUARANTEED CHARGE: UP TO SIX FREE TRANSFERS A YEAR; $10 PER TRANSFER THEREAFTER - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Dollar-Cost Averaging When you make a Current Charge: No charge (DCA Program) transfer under the DCA program - ------------------------------------------------ GUARANTEED CHARGE: UP TO SIX FREE TRANSFERS A YEAR; $10 PER TRANSFER THEREAFTER( (4)) - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Illustrations When you request an Current Charge: No charge illustration after the policy is issued - ------------------------------------------------ GUARANTEED CHARGE: $15 PER ILLUSTRATION - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
- --------- (1) Current and Guaranteed charges may vary in certain states but will not exceed the Guaranteed charges shown above. The rates may vary depending on the age, gender, policy duration and the amount of insurance coverage. This rate may not be representative of the charge that a particular policy owner would pay. To obtain information on the rates/charges that would apply to you, please contact your agent or registered representative. (2) The current and guaranteed charges for the Front-End Sales Expense Charge includes the Premium Tax Charge and the Federal Deferred Acquisition Cost Charge. See "Policy Charges and Deductions" for more information.
SALES EXPENSE CHARGES ON A CURRENT BASIS -------------------------------------------- POLICY YEARS UP TO TARGET PREMIUM ABOVE TARGET PREMIUM (3) ------------ -------------------- -------------------- Year 1-2 7% 2.25% Year 3-7 6% 2.25% Years 8+ 3.5% 2.25%
(4) For DCA Program purposes only, a transfer consists of all transfers occurring on the same day pursuant to your directions on the DCA authorization form. 7 The next two tables describe the fees and expenses that you will pay periodically during the time that you own the Policy, not including Fund expenses. PERIODIC CHARGES OTHER THAN FUND OPERATING EXPENSES
WHEN WE DEDUCT THE CHARGE CHARGE AMOUNT DEDUCTED(1) - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Cost of Insurance Monthly on the POLICIES WITH AN ISSUE DATE BEFORE 1/1/09: Charge (COI)(1) Deduction Day - ------------------------------------------------ Current Charge: Rates per $1000 of Insurance Risk for First Year of Coverage: Minimum: $0.015319(2) Maximum: $32.834480(3) - ------------------------------------------------ GUARANTEED CHARGE: RATES PER $1000 OF INSURANCE RISK FOR FIRST YEAR OF COVERAGE: MINIMUM: $0.0884((4)) MAXIMUM: $45.0595((3)) - ------------------------------------------------ Sample Charge for a 47 Rates per $1000 of Insurance Risk for year-old non-smoking First Year of Coverage: male (guaranteed issue) Current: $0.0842 Guaranteed: $0.4620 POLICIES WITH AN ISSUE DATE ON OR AFTER 1/1/09: - ------------------------------------------------ Current Charge: Rates per $1000 of Insurance Risk for First Year of Coverage: Minimum: $0.015(5) Maximum: $31.940(3) - ------------------------------------------------ GUARANTEED CHARGE: RATES PER $1000 OF INSURANCE RISK FOR FIRST YEAR OF COVERAGE: MINIMUM: $0.039( (4)) MAXIMUM: $31.940((3)) - ------------------------------------------------ Sample Charge for a 47 Rates per $1000 of Insurance Risk for year-old non-smoking First Year of Coverage: male (guaranteed issue) Current: $0.084 Guaranteed: $0.271 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Policy Administrative Monthly on the Current Charge: $5.00 Expense Charges Deduction Date - ------------------------------------------------ GUARANTEED CHARGE: $10.00 - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Mortality and Expense Daily from the unloaned Current Charge: 0.20% on an annual basis of the Risk (M&E) Charge(6) portion of the Contract amounts in the Investment Options for Value invested in the Policy Years 1-25 and 0.05% Separate Account thereafter - ------------------------------------------------ GUARANTEED CHARGE: 0.75% ON AN ANNUAL BASIS FOR ALL POLICY YEARS - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Monthly Sales Expense Monthly for the first Current Charge: The monthly rate per thousand is Charge 20 Policy Years and for equal to: $0.10 times the percentage 20 Policy Years of initial base Stated Amount. This following an increase monthly rate is applied to the in the Stated Amount on greater of (1) and (2) where (1) is the Deduction Date from equal to 6 times the first year unloaned portion of the premium, and (2) is equal to the Contract Value lesser of (a) and (b) where (a) is equal to the initial total Stated Amount and (b) is equal to the product of (i) initial total Death Benefit, and (ii) the target premium factor per thousand (see Appendix C), and (iii) 2%. - ------------------------------------------------ GUARANTEED CHARGE: SAME AS CURRENT CHARGE.
8
WHEN WE DEDUCT THE CHARGE CHARGE AMOUNT DEDUCTED(1) - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Net Cost of Policy In arrears, at the end Current Charge: 0.60% on an annual basis of the loan Loans(7) of each Policy Year amount for the first ten (10) Policy from the Loan Account Years, 0.50% for Policy Years eleven (11) through twenty (20), and 0.15% thereafter. - ------------------------------------------------ GUARANTEED CHARGE: 1.00% ON AN ANNUAL BASIS OF THE LOAN AMOUNT FOR ALL POLICY YEARS - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
- --------- (1) The current cost of insurance charges shown are for the underwriting and risk class identified in the footnotes below while the Guaranteed charges are based on the 1980 Commissioners Standard Ordinary Mortality Tables for Policies with an Issue Date before 1/1/09 and on the 2001 Commissioners Standard Ordinary Mortality Tables for Policies with an Issue Date on or after 1/1/09. The cost of insurance rates listed do not reflect the addition of any "flat extras." Flat extras account for adverse risks that, if applied, would increase the cost-of-insurance rates shown above. (2) Sample charge for a 27-year-old female preferred non-smoker. (3) Sample charge for an 80-year-old male fully underwritten as sub-standard smoker Table 10. (4) Sample charge for a 20-year-old female (any underwriting class). (5) Sample charge for a 25-year-old female preferred non-smoker. (6) We are waiving the following amounts of the Mortality and Expense Risk Charge on the Subaccounts investing in the following Funds: METROPOLITAN SERIES FUND, INC. Western Asset Management U.S. Government Portfolio 0.15% or, if greater, an amount, if any, equal to the fund expenses that are in excess of 0.68% MET INVESTORS SERIES TRUST BlackRock High Yield Portfolio 0.11% Harris Oakmark International Portfolio an amount equal to the fund expenses that are in excess of 0.90% Loomis Sayles Global Markets Portfolio an amount equal to the fund expenses that are in excess of 0.85% Lord Abbett Growth and Income Portfolio an amount equal to the fund expenses that are in excess of 0.87% Lord Abbett Mid-Cap Value Portfolio an amount equal to the fund expenses that are in excess of 1.12% MetLife Stock Index Portfolio an amount equal to the fund expenses that are in excess of 0.265% PIMCO Inflation Protected Bond Portfolio an amount equal to the fund expenses that are in excess of 0.65% Third Avenue Small Cap Value Portfolio an amount equal to the fund expenses that are in excess of 1.10%
(7) The Policy Loan cost reflects the difference between the loan interest rate charged and the loan interest rate credited (see the Policy Loans section for more information). 9 CHARGES FOR OPTIONAL RIDERS
WHEN WE DEDUCT THE CHARGE CHARGE AMOUNT DEDUCTED - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Insured Term Rider and Monthly on the POLICIES WITH AN ISSUE DATE BEFORE 1/1/09: Adjustable Term Deduction Day Insurance Rider (2 parts of the charge) (1) Cost of Insurance Current Charge: Rates per $1000 of Term Insurance Risk for First Year of Coverage: Minimum: $0.015319(1) Maximum: $32.834480(2) - ------------------------------------------------ - ------------------------------------------------ GUARANTEED CHARGE: RATES PER $1000 OF TERM INSURANCE RISK FOR FIRST YEAR OF COVERAGE: MINIMUM: $0.0972(3) MAXIMUM: $49.5655(2) - ------------------------------------------------ Sample Charge for a 47 Rates per $1000 of Term Insurance year-old non-smoking Risk for First Year of Coverage: male (guaranteed issue) Current: $0.0842 Guaranteed: $0.5082 POLICIES WITH AN ISSUE DATE ON OR AFTER 1/1/09: - ------------------------------------------------ Current Charge: Rates per $1000 of Term Insurance Risk for First Year of Coverage: Minimum: $0.015(4) Maximum: $31.940(2) - ------------------------------------------------ GUARANTEED CHARGE: RATES PER $1000 OF TERM INSURANCE RISK FOR FIRST YEAR OF COVERAGE: MINIMUM: $0.0429(3) MAXIMUM: $35.134(2) - ------------------------------------------------ Sample Charge for a 47 Rates per $1000 of Term Insurance year-old non-smoking Risk for First Year of Coverage: male (guaranteed issue) Current: $0.084 Guaranteed: $0.271 - ---------------------------------------------------------------------------------------------------------------- (2) Monthly Sales Load Current Charge: $0.00 - ------------------------------------------------ GUARANTEED CHARGE: THE MONTHLY RATE PER THOUSAND IS EQUAL TO $0.10 TIMES THE PERCENTAGE OF INITIAL TERM STATED AMOUNT. THIS MONTHLY RATE IS APPLIED TO THE GREATER OF (1) AND (2) WHERE (1) IS EQUAL TO 6 TIMES THE FIRST YEAR PREMIUM AND (2) IS EQUAL TO THE LESSER OF (A) AND (B) WHERE (A) IS EQUAL TO THE INITIAL TOTAL STATED AMOUNT AND (B) IS EQUAL TO THE PRODUCT OF (I) INITIAL TOTAL DEATH BENEFIT, (II) THE TARGET PREMIUM FACTOR PER THOUSAND (SEE APPENDIX C) AND (III) 2%. - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- Cash Value Enhancement Not applicable Current Charge: No Charge Rider - ------------------------------------------------ GUARANTEED CHARGE: NO CHARGE - ---------------------------------------------------------------------------------------------------------------- - ---------------------------------------------------------------------------------------------------------------- - ----------------------------------------------------------------------------------------------------------------
- --------- (1) Sample charge for a 27-year-old female preferred non-smoker. (2) Sample charge for an 80-year-old male fully underwritten as a sub-standard smoker Table 10. (3) Sample charge for a 20-year-old female (any underwriting class). (4) Sample charge for a 25-year-old female preferred non-smoker. 10 FUND CHARGES AND EXPENSES The next tables describe the Fund fees and expenses that you will indirectly pay periodically during the time that you own the Policy. The Investment Options purchase shares of the Funds at net asset value. The net asset value already reflects the deduction of each Fund's Total Operating Expenses. Therefore you are indirectly bearing the costs of Fund expenses. The first table below shows the minimum and maximum fees and expenses, as a percentage of average daily net assets, charged by any of the Funds as of December 31, 2007. The second table shows each Fund's fees and expenses, as a percentage of average daily net assets, as of December 31, 2007, unless otherwise noted. This information was provided by the Funds and we have not independently verified it. More detail concerning each Fund's fees and expenses is contained in the prospectus for each Fund. MINIMUM AND MAXIMUM TOTAL ANNUAL FUND OPERATING EXPENSES
MINIMUM MAXIMUM ------- ------- TOTAL ANNUAL FUND OPERATING EXPENSES (expenses that are deducted from Fund assets, including management fees, distribution and/or service (12b-1) fees, and other expenses) 0.10% 5.66%
FUND FEES AND EXPENSES (as a percentage of average daily net assets)
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL AND/OR ANNUAL WAIVER ANNUAL MANAGEMENT SERVICE OTHER ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** - ---- ---------- ------------ -------- ------------------ --------- --------------- --------------- AIM VARIABLE INSURANCE FUNDS -- SERIES I AIM V.I. Global Real Estate Fund........................ 0.75% -- 0.38% -- 1.13% -- 1.13%(1) AIM V.I. International Growth Fund........................ 0.71% -- 0.36% 0.01% 1.08% 0.01% 1.07%(2) ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. Global Technology Portfolio -- Class B........ 0.75% 0.25% 0.17% -- 1.17% -- 1.17% Intermediate Bond Portfolio -- Class A........ 0.45% -- 0.33% -- 0.78% -- 0.78% AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. -- CLASS I American Century VP Ultra(R) Fund........................ 1.00% -- 0.01% -- 1.01% -- 1.01% American Century VP Vista( SM) Fund........................ 1.00% -- 0.01% -- 1.01% -- 1.01% AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund....... 0.40% 0.25% 0.01% -- 0.66% -- 0.66% American Funds Global Growth Fund........................ 0.53% 0.25% 0.02% -- 0.80% -- 0.80% American Funds Global Small Capitalization Fund......... 0.70% 0.25% 0.03% -- 0.98% -- 0.98% American Funds Growth Fund..... 0.32% 0.25% 0.01% -- 0.58% -- 0.58% American Funds Growth-Income Fund........................ 0.26% 0.25% 0.01% -- 0.52% -- 0.52% American Funds High-Income Bond Fund........................ 0.47% 0.25% 0.01% -- 0.73% -- 0.73% American Funds International Fund........................ 0.49% 0.25% 0.03% -- 0.77% -- 0.77% American Funds New World Fund.. 0.76% 0.25% 0.06% -- 1.07% -- 1.07% American Funds U.S. Government/AAA Rated Securities Fund............. 0.45% 0.25% 0.01% -- 0.71% -- 0.71% DELAWARE VIP TRUST -- STANDARD CLASS Delaware VIP Small Cap Value Series...................... 0.71% -- 0.10% -- 0.81% -- 0.81% DREYFUS VARIABLE INVESTMENT FUND -- INITIAL SHARES Appreciation Portfolio......... 0.75% -- 0.05% -- 0.80% -- 0.80% Developing Leaders Portfolio... 0.75% -- 0.06% -- 0.81% -- 0.81% FIDELITY(R) VARIABLE INSURANCE PRODUCTS Contrafund(R) Portfolio -- Service Class 2........................... 0.56% 0.25% 0.09% -- 0.90% -- 0.90% Equity-Income Portfolio -- Initial Class.. 0.46% -- 0.09% -- 0.55% -- 0.55%
11
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL AND/OR ANNUAL WAIVER ANNUAL MANAGEMENT SERVICE OTHER ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** - ---- ---------- ------------ -------- ------------------ --------- --------------- --------------- Freedom 2010 Portfolio -- Initial Class.. -- -- -- 0.56% 0.56% -- 0.56%(3) Freedom 2015 Portfolio -- Initial Class.. -- -- -- 0.59% 0.59% -- 0.59%(3) Freedom 2020 Portfolio -- Initial Class.. -- -- -- 0.62% 0.62% -- 0.62%(3) Freedom 2025 Portfolio -- Initial Class.. -- -- -- 0.63% 0.63% -- 0.63%(3) Freedom 2030 Portfolio -- Initial Class.. -- -- -- 0.66% 0.66% -- 0.66%(3) Growth & Income Portfolio -- Service Class 2........................... 0.46% 0.25% 0.12% -- 0.83% -- 0.83% High Income Portfolio -- Initial Class.. 0.57% -- 0.11% -- 0.68% -- 0.68% Index 500 Portfolio -- Initial Class....................... 0.10% -- -- -- 0.10% -- 0.10% Investment Grade Bond Portfolio -- Service Class.. 0.32% 0.10% 0.11% -- 0.53% -- 0.53% Mid Cap Portfolio -- Service Class 2..................... 0.56% 0.25% 0.10% -- 0.91% -- 0.91% Overseas Portfolio -- Service Class 2..................... 0.71% 0.25% 0.14% -- 1.10% -- 1.10% FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Franklin Small-Mid Cap Growth Securities Fund -- Class 2+.......................... 0.47% 0.25% 0.28% 0.01% 1.01% 0.01% 1.00%(4) Templeton Developing Markets Securities Fund -- Class 2.. 1.23% 0.25% 0.25% -- 1.73% -- 1.73% Templeton Foreign Securities Fund -- Class 2............. 0.63% 0.25% 0.14% 0.02% 1.04% 0.02% 1.02%(4) Templeton Global Income Securities Fund -- Class 1.. 0.50% -- 0.14% -- 0.64% -- 0.64% JANUS ASPEN SERIES -- SERVICE SHARES Global Life Sciences Portfolio................... 0.64% 0.25% 0.45% -- 1.34% -- 1.34% Global Technology Portfolio.... 0.64% 0.25% 0.18% 0.01% 1.08% -- 1.08% International Growth Portfolio................... 0.64% 0.25% 0.06% -- 0.95% -- 0.95% Mid Cap Growth Portfolio....... 0.64% 0.25% 0.04% -- 0.93% -- 0.93% Mid Cap Value Portfolio........ 0.60% 0.25% 0.41% 0.01% 1.27% -- 1.27%(5) LEGG MASON PARTNERS VARIABLE EQUITY TRUST Legg Mason Partners Variable Aggressive Growth Portfolio -- Class I++...... 0.75% -- 0.07% -- 0.82% -- 0.82%(6) Legg Mason Partners Variable Appreciation Portfolio -- Class I........ 0.69% -- 0.11% 0.01% 0.81% -- 0.81%(6) Legg Mason Partners Variable Capital and Income Portfolio -- Class I........ 0.75% -- 0.13% -- 0.88% -- 0.88% Legg Mason Partners Variable Equity Index Portfolio -- Class I........ 0.31% -- 0.08% -- 0.39% -- 0.39%(6) Legg Mason Partners Variable Fundamental Value Portfolio -- Class I........ 0.75% -- 0.08% -- 0.83% -- 0.83%(6) Legg Mason Partners Variable Investors Portfolio -- Class I........................... 0.62% -- 0.14% -- 0.76% -- 0.76%(6) Legg Mason Partners Variable Large Cap Growth Portfolio -- Class I++...... 0.75% -- 0.15% -- 0.90% -- 0.90%(7) Legg Mason Partners Variable Social Awareness Portfolio++................. 0.67% -- 0.38% -- 1.05% -- 1.05%(6) LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Legg Mason Partners Variable Global High Yield Bond Portfolio................... 0.80% -- 0.41% -- 1.21% -- 1.21%(6) Legg Mason Partners Variable Strategic Bond Portfolio.... 0.65% -- 0.25% -- 0.90% -- 0.90%(6) MET INVESTORS SERIES TRUST BlackRock High Yield Portfolio -- Class A........ 0.60% -- 0.13% -- 0.73% -- 0.73% BlackRock Large Cap Core Portfolio -- Class E........ 0.58% 0.15% 0.06% -- 0.79% -- 0.79%
12
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL AND/OR ANNUAL WAIVER ANNUAL MANAGEMENT SERVICE OTHER ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** - ---- ---------- ------------ -------- ------------------ --------- --------------- --------------- Clarion Global Real Estate Portfolio -- Class A........ 0.61% -- 0.04% -- 0.65% -- 0.65% Harris Oakmark International Portfolio -- Class A........ 0.77% -- 0.09% -- 0.86% -- 0.86% Janus Forty Portfolio -- Class A........................... 0.65% -- 0.05% -- 0.70% -- 0.70% Lazard Mid Cap Portfolio -- Class A........ 0.69% -- 0.07% -- 0.76% -- 0.76% Loomis Sayles Global Markets Portfolio -- Class A........ 0.68% -- 0.06% -- 0.74% -- 0.74% Lord Abbett Bond Debenture Portfolio -- Class A........ 0.49% -- 0.05% -- 0.54% -- 0.54% Lord Abbett Growth and Income Portfolio -- Class B........ 0.49% 0.25% 0.03% -- 0.77% -- 0.77% Lord Abbett Mid Cap Value Portfolio -- Class B........ 0.67% 0.25% 0.09% -- 1.01% -- 1.01% Met/AIM Capital Appreciation Portfolio -- Class A........ 0.76% -- 0.10% -- 0.86% -- 0.86% Met/AIM Small Cap Growth Portfolio -- Class A+....... 0.86% -- 0.06% -- 0.92% -- 0.92% MFS(R) Emerging Markets Equity Portfolio -- Class A+....... 1.00% -- 0.25% -- 1.25% -- 1.25% PIMCO Inflation Protected Bond Portfolio -- Class A........ 0.50% -- 0.05% -- 0.55% -- 0.55% Pioneer Fund Portfolio -- Class A........................... 0.75% -- 0.23% -- 0.98% -- 0.98%(8) Pioneer Strategic Income Portfolio -- Class A........ 0.60% -- 0.09% -- 0.69% -- 0.69%(9) T. Rowe Price Mid Cap Growth Portfolio -- Class A........ 0.75% -- 0.05% -- 0.80% -- 0.80% Third Avenue Small Cap Value Portfolio -- Class B+....... 0.73% 0.25% 0.03% -- 1.01% -- 1.01% Van Kampen Mid Cap Growth Portfolio -- Class A........ 0.70% -- 0.17% -- 0.87% -- 0.87% METROPOLITAN SERIES FUND, INC. BlackRock Aggressive Growth Portfolio -- Class D........ 0.71% 0.10% 0.05% -- 0.86% -- 0.86% BlackRock Bond Income Portfolio -- Class A........ 0.38% -- 0.06% -- 0.44% 0.01% 0.43%(10) BlackRock Large Cap Value Portfolio -- Class B........ 0.68% 0.25% 0.06% -- 0.99% -- 0.99% BlackRock Money Market Portfolio -- Class A........ 0.33% -- 0.07% -- 0.40% 0.01% 0.39%(11) Capital Guardian U.S. Equity Portfolio -- Class A+....... 0.66% -- 0.05% -- 0.71% -- 0.71% Davis Venture Value Portfolio -- Class A........ 0.69% -- 0.04% -- 0.73% -- 0.73% FI Large Cap Portfolio -- Class A........................... 0.77% -- 0.07% -- 0.84% -- 0.84% FI Mid Cap Opportunities Portfolio -- Class A........ 0.68% -- 0.05% -- 0.73% -- 0.73% FI Value Leaders Portfolio -- Class D........ 0.64% 0.10% 0.07% -- 0.81% -- 0.81% Jennison Growth Portfolio -- Class A........ 0.63% -- 0.04% -- 0.67% -- 0.67% Julius Baer International Stock Portfolio -- Class A........ 0.84% -- 0.12% -- 0.96% 0.04% 0.92%(12) Lehman Brothers(R) Aggregate Bond Index Portfolio -- Class A........ 0.25% -- 0.05% -- 0.30% 0.01% 0.29%(13) MetLife Aggressive Allocation Portfolio -- Class B........ 0.10% 0.25% 0.04% 0.73% 1.12% 0.04% 1.08%(14) MetLife Conservative Allocation Portfolio -- Class B........ 0.10% 0.25% 0.05% 0.59% 0.99% 0.05% 0.94%(14)
13
DISTRIBUTION TOTAL CONTRACTUAL FEE NET TOTAL AND/OR ANNUAL WAIVER ANNUAL MANAGEMENT SERVICE OTHER ACQUIRED FUND FEES OPERATING AND/OR EXPENSE OPERATING FUND FEE (12b-1) FEES EXPENSES AND EXPENSES* EXPENSES REIMBURSEMENT EXPENSES** - ---- ---------- ------------ -------- ------------------ --------- --------------- --------------- MetLife Conservative to Moderate Allocation Portfolio -- Class B........ 0.10% 0.25% 0.01% 0.64% 1.00% 0.01% 0.99%(14) MetLife Mid Cap Stock Index Portfolio -- Class A........ 0.25% -- 0.07% 0.01% 0.33% 0.01% 0.32%(15) MetLife Moderate Allocation Portfolio -- Class B........ 0.08% 0.25% 0.01% 0.67% 1.01% -- 1.01%(14) MetLife Moderate to Aggressive Allocation Portfolio -- Class B........ 0.08% 0.25% 0.01% 0.70% 1.04% -- 1.04%(14) MetLife Stock Index Portfolio -- Class A........ 0.25% -- 0.04% -- 0.29% 0.01% 0.28%(15) MFS(R) Total Return Portfolio -- Class F........ 0.53% 0.20% 0.05% -- 0.78% -- 0.78% MFS(R) Value Portfolio -- Class A........................... 0.72% -- 0.05% -- 0.77% 0.07% 0.70%(16) Morgan Stanley EAFE(R) Index Portfolio -- Class A........ 0.30% -- 0.12% 0.01% 0.43% 0.01% 0.42%(17) Oppenheimer Global Equity Portfolio -- Class B........ 0.51% 0.25% 0.10% -- 0.86% -- 0.86% Russell 2000(R) Index Portfolio -- Class A........ 0.25% -- 0.07% 0.01% 0.33% 0.01% 0.32%(15) T. Rowe Price Large Cap Growth Portfolio -- Class B+....... 0.60% 0.25% 0.07% -- 0.92% -- 0.92% Western Asset Management U.S. Government Portfolio -- Class A........ 0.49% -- 0.05% -- 0.54% -- 0.54% OPPENHEIMER VARIABLE ACCOUNT FUNDS -- NON-SERVICE SHARES Oppenheimer Main Street Small Cap Fund(R)/VA.............. 0.70% -- 0.03% -- 0.73% -- 0.73% PIMCO VARIABLE INSURANCE TRUST -- ADMINISTRATIVE CLASS Low Duration Portfolio......... 0.25% -- 0.40% -- 0.65% -- 0.65% Total Return Portfolio......... 0.25% -- 0.58% -- 0.83% -- 0.83% PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Emerging Markets VCT Portfolio................... 1.15% 0.25% 0.24% -- 1.64% -- 1.64% Pioneer Mid Cap Value VCT Portfolio................... 0.65% 0.25% 0.06% -- 0.96% -- 0.96% PUTNAM VARIABLE TRUST -- CLASS IB Putnam VT International Growth and Income Fund............. 0.80% 0.25% 0.15% -- 1.20% 0.03% 1.17%(18) ROYCE CAPITAL FUND Royce Micro-Cap Portfolio...... 1.25% -- 0.06% -- 1.31% -- 1.31% Royce Small-Cap Portfolio...... 1.00% -- 0.08% -- 1.08% -- 1.08% THE MERGER FUND VL The Merger Fund VL............. 1.25% -- 4.41% -- 5.66% 4.26% 1.40%(19) VAN KAMPEN LIFE INVESTMENT TRUST Comstock Portfolio -- Class II.......................... 0.56% 0.25% 0.03% -- 0.84% -- 0.84% Government Portfolio -- Class I........................... 0.50% -- 0.12% -- 0.62% -- 0.62%
- --------- * Acquired Fund Fees and Expenses are fees and expenses incurred indirectly by a portfolio as a result of investing in shares of one or more underlying portfolios. ** Net Total Annual Operating Expenses do not reflect: (1) voluntary waivers of fees or expenses; (2) contractual waivers that are in effect for less than one year from the date of this Prospectus; or (3) expense reductions resulting from custodial fee credits or directed brokerage arrangements. + Not available under all Policies. Availability depends on Policy Issue Date. ++ Fees and expenses of this Portfolio are based on the Portfolio's fiscal year ended October 31, 2007. (1) Management Fees have been restated to reflect a new fee schedule that became effective July 1, 2007. (2) Effective July 1, 2007, AIM contractually agreed to waive 100% of the advisory fee AIM receives from affiliated money market funds on investments by the fund in such affiliated money market funds. The Fee Waiver reflects this agreement, which is in effect through at least April 30, 2009. (3) The Portfolio purchases Initial Class shares of underlying Fidelity funds. As an investor in an underlying Fidelity fund, the Portfolio will bear its pro rata share of the fees and expenses of the underlying Fidelity fund. 14 (4) The manager has agreed in advance to reduce its fee from assets invested by the Fund in a Franklin Templeton money market fund (the Sweep Money Fund which is the "acquired fund" in this case) to the extent of the Fund's fees and expenses of the acquired fund. This reduction is required by the Trust's board of trustees and an exemptive order by the Securities and Exchange Commission; this arrangement will continue as long as the exemptive order is relied upon. (5) The Portfolio pays an investment advisory fee rate that adjusts up or down based upon the Portfolio's performance relative to its benchmark index during a measuring period. This fee rate, prior to any performance adjustment, is 0.64%, and may go up or down by a variable of up to 0.15% (assuming constant assets) on a monthly basis. Any such adjustment to this fee rate commenced February 2007, and may increase or decrease the Management Fee. The Portfolio has entered into an agreement with Janus Capital to limit certain expenses. Because a fee waiver will have a positive effect upon the Portfolio's performance, a fee waiver that is in place during the period when the performance adjustment applies may affect the performance adjustment in a way that is favorable to Janus Capital. It is possible that the cumulative dollar amount of additional compensation ultimately payable to Janus Capital may, under some circumstances, exceed the cumulative dollar amount of management fees waived by Janus Capital. (6) Other Expenses have been revised to reflect the estimated effect of additional prospectus and shareholder report printing and mailing expenses expected to be incurred by the fund going forward. (7) Other Expenses have been revised to reflect the estimated effect of additional prospectus and shareholder report printing and mailing expenses expected to be incurred by the fund going forward. Due to contractual waivers and/or reimbursements in place through March 1, 2009, the Portfolio's actual total net operating expenses, excluding brokerage, taxes, interest and extraordinary expenses, are not expected to exceed 0.78% prior to that date. (8) Other Expenses have been Restated to reflect change in Transfer Agent fee schedule as if fees had been in effect during the previous fiscal year. (9) The Management Fee has been restated to reflect an amended management fee agreement, as if the agreement had been in effect during the preceding fiscal year. (10) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to the annual rate of 0.325% for the amounts over $1 billion but less than $2 billion. (11) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to the annual rate of 0.345% for the first $500 million of the Portfolio's average daily net assets and 0.335% for the next $500 million. (12) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to the annual rate of 0.81% for the first $500 million of the Portfolio's average daily net assets and 0.78% for the next $500 million. (13) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to 0.244%. (14) The Portfolio is a "fund of funds" that invests substantially all of its assets in other portfolios of the Metropolitan Series Fund, Inc. and the Met Investors Series Trust. Because the Portfolio invests in other underlying portfolios, the Portfolio will bear its pro rata portion of the operating expenses of the underlying portfolios in which it invests, including the management fee. MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to waive fees or pay all expenses (other than acquired fund fees and expenses, brokerage costs, taxes, interest and any extraordinary expenses) so as to limit the net operating expenses of the Portfolio (other than acquired fund fees and expenses, brokerage costs, taxes, interest and any extraordinary expenses) to 0.10% for the Class A shares, 0.35% for the Class B shares and 0.25% for the Class E shares. (15) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to 0.243%. (16) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to the annual rate of 0.65% for the first $1.25 billion of the Portfolio's average daily net assets, 0.60% for the next $250 million and 0.50% for amounts over $1.5 billion. (17) MetLife Advisers, LLC has contractually agreed, for the period April 28, 2008 through April 30, 2009, to reduce the Management Fee for each Class of the Portfolio to 0.293%. (18) Net Total Annual Operating Expenses reflect Putnam Management's contractual agreement to limit fund expenses through April 30, 2009. (19) The Adviser has contractually agreed to absorb expenses of the Fund and/or waive fees due to the Adviser in order to ensure that total Fund operating expenses, excluding dividends on short positions and interest expense, on an annual basis do not exceed 1.40%. This contract expires July 1, 2013. DESCRIPTION OF THE COMPANY, SEPARATE ACCOUNT AND FUNDS - -------------------------------------------------------------------------------- THE INSURANCE COMPANY METLIFE INSURANCE COMPANY OF CONNECTICUT is a stock insurance company chartered in 1863 in Connecticut and continuously engaged in the insurance business since that time. It is licensed to conduct life insurance business in all states of the United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. 15 The Company is a wholly owned subsidiary of MetLife, Inc., a publicly traded company. MetLife, Inc., through its subsidiaries and affiliates, is a leading provider of insurance and other financial services to individual and institutional customers. The Company's Home Office is located at One Cityplace, 185 Asylum Street, Hartford, Connecticut 06103-3415. THE SEPARATE ACCOUNT AND ITS INVESTMENT OPTIONS Under Connecticut law, MetLife Insurance Company of Connecticut sponsors a separate account: the MetLife of CT Fund UL III for Variable Life Insurance ("FUND UL III"). Separate accounts are primarily designed to keep policy assets separate from other company assets. Premium Payments that you invest in the Investment Options are deposited in Fund UL III. The income, gains, and losses are credited to, or charged against Fund UL III without regard to the income, gains or losses from any other Investment Option or from any other business of the Company. The MetLife of CT Fund UL III for Variable Life Insurance was established on January 15, 1999 under the laws of Connecticut and is registered with the Securities and Exchange Commission ("SEC") as a unit investment trust under the Investment Company Act of 1940 and qualifies as a "separate account." Fund UL III is divided into the various Investment Options to which you allocate your Premium Payments. Each Investment Option uses its assets to purchase shares of a corresponding Fund of the same name. Fund UL III purchases shares of the Funds at net asset value (i.e., without a sales charge) and receives all dividends and capital gains distributions from each Fund, and reinvests in additional shares of that Fund. Finally, the assets of Fund UL III may not be used to pay any liabilities of the Company other than those arising from the Policies, and the Company is obligated to pay all amounts promised to Policy Owners under the Policy. THE FUNDS The Funds offered through this Policy are listed below. From time to time we may make new Funds available. Some Funds may not be available in certain states. Each Fund is a portfolio of an open-end, management investment company that is registered under the Investment Company Act of 1940. These Funds are not publicly traded and are offered only through variable annuity contracts, variable life insurance products, and maybe in some instances, certain retirement plans. They are not the same retail mutual funds as those offered outside of a variable annuity or variable life insurance product, although the investment practices and fund names may be similar, and the portfolio managers may be identical. Accordingly, the performance of the retail mutual fund is likely to be different from that of the Fund. We select the Funds offered through this Policy based on a number of criteria, including asset class coverage, the strength of the adviser's or subadviser's reputation and tenure and brand recognition, performance and the capability and qualification of each investment firm. Another factor we consider during the selection process is whether the Fund's adviser or subadviser is one of our affiliates or whether the Fund, its adviser, its subadviser(s), or an affiliate will make payments to us or our affiliates. In this regard, the profit distributions we receive from our affiliated investment advisers are a component of the total revenue that we consider in configuring the features and investment choices available in the variable insurance products that we and our affiliated insurance companies issue. Since we and our affiliated insurance companies may benefit more from the allocation of assets to portfolios advised by our affiliates than those that are not, we may be more inclined to offer portfolios advised by our affiliates in the variable insurance products we issue. For additional information on these arrangements, see "Payments We Receive." We review the Funds periodically and may remove a Fund or limit its availability to new Premiums and/or transfers of Contract Value if we determine the Fund no longer meets one or more of the criteria and/or if the Fund has not attracted significant allocations from Policy Owners. In some cases, we have included Funds based on recommendations made by broker-dealer firms. These broker-dealer firms may receive payments from the Funds they recommend and may benefit accordingly from the allocation of Contract Value to such Funds. WE DO NOT PROVIDE INVESTMENT ADVICE AND DO NOT RECOMMEND OR ENDORSE ANY PARTICULAR FUND. YOU BEAR THE RISK OF ANY DECLINE IN THE CONTRACT VALUE OF YOUR POLICY RESULTING FROM PERFORMANCE OF THE FUNDS YOU HAVE CHOSEN. If investment in the Funds or a particular Fund is no longer possible, in our judgment becomes inappropriate for purposes of the Policy, or for any other reason in our sole discretion, we may substitute another Fund or Funds without your consent. The substituted Fund may have different fees and expenses. Substitution may be made with respect to existing investments or the investment of future Premiums, or both. However, we will not make such 16 substitution without any necessary approval of the Securities and Exchange Commission and applicable state insurance departments. Furthermore, we may close Funds to allocation of Premiums or Contract Value, or both, at any time in our sole discretion. In certain circumstances, the Company's ability to remove or replace a Fund may be limited by the terms of a five-year agreement between MetLife, Inc. (MetLife) and Legg Mason, Inc. (Legg Mason) relating to the use of certain Funds advised by Legg Mason affiliates. The agreement sets forth the conditions under which the Company can remove a Fund, which in some cases, may differ from the Company's own selection criteria. In addition, during the term of the agreement, subject to the Company's fiduciary and other legal duties, the Company is generally obligated in the first instance to consider Funds advised by Legg Mason affiliates in seeking to make a substitution for a Fund advised by a Legg Mason affiliate. The agreement was originally entered into on July 1, 2005 by MetLife and certain affiliates of Citigroup Inc. (Citigroup) as part of MetLife's acquisition of The Travelers Insurance Company and The Travelers Life and Annuity Company (now MetLife Insurance Company of Connecticut) from Citigroup. Legg Mason replaced the Citigroup affiliates as a party to the agreement when Citigroup sold its asset management business to Legg Mason. The agreement also obligates Legg Mason to continue making payments to the Company with respect to Funds advised by Legg Mason affiliates, on the same terms provided for in administrative services agreements between Citigroup's asset management affiliates and the Travelers insurance companies that predated the acquisition. PAYMENTS WE RECEIVE. As described above, an investment adviser (other than our affiliates MetLife Advisers, LLC, and Met Investors Advisory LLC) or subadviser of a Fund, or its affiliates, may make payments to the Company and/or certain of our affiliates. These payments may be used for a variety of purposes, including payment of expenses for certain administrative, marketing, and support services with respect to the Policies and, in the Company's role as an intermediary, with respect to the Funds. These payments may be derived, in whole or in part, from the advisory fees deducted from Fund assets. Policy Owners, through their indirect investment in the Funds, bear the costs of these advisory fees. See the Funds' prospectus for more information. The amount of the payments we receive is based on a percentage of assets of the Funds attributable to the Policies and certain other variable insurance products that the Company and its affiliates issue. These percentages differ and some advisers or subadvisers (or their affiliates) may pay the Company more than others. These percentages currently range up to 0.50%. Additionally, an investment adviser or subadviser of a Fund or its affiliates may provide the Company with wholesaling services that assist in the distribution of the Policies and may pay the Company and/or certain of our affiliates amounts to participate in sales meetings. These amounts may be significant and may provide the adviser or subadviser (or their affiliates) with increased access to persons involved in the distribution of the Policies. The Company and/or certain of its affiliated insurance companies have joint ownership interests in its affiliated investment advisers MetLife Advisers, LLC and Met Investors Advisory LLC, which are formed as "limited liability companies." The Company's ownership interests in MetLife Advisers, LLC and Met Investors Advisory LLC entitle us to profit distributions if the adviser makes a profit with respect to the advisory fees it receives from the Funds. The Company will benefit accordingly from assets allocated to the Funds to the extent they result in profits to the advisers. (See "Fund Fees and Expenses" for information on the management fees paid by the Funds and the Fund's Statement of Additional Information for information on the management fees paid by the advisers to the subadvisers.) Certain Funds have adopted a Distribution Plan under Rule 12b-1 of the Investment Company Act of 1940. The Distribution Plan is described in more detail in the Fund's prospectus. (See "Fund Fees and Expenses" and "Distribution and Compensation.") The payments are deducted from the assets of the Funds and are paid to us or our distributor, MetLife Investors Distribution Company. These payments decrease the Fund's investment return. We make certain payments to American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series. (See "Distribution and Compensation.") Each Fund has different investment objectives and risks. The Fund prospectuses contain more detailed information on each Fund's investment strategy, investment advisers and its fees. YOU MAY OBTAIN A FUND PROSPECTUS BY CALLING 1-732-602- 6400 OR THROUGH YOUR REGISTERED REPRESENTATIVE. We do not guarantee the investment results of the Funds. 17
FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- AIM VARIABLE INSURANCE FUNDS -- SERIES I AIM V.I. Global Real Estate Fund To achieve high total return Invesco Aim Advisors, Inc. through growth of capital and Subadvisers: Invesco Trimark current income. Investment Management Inc.; Invesco Global Asset Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset Management Deutschland, GmbH; and Invesco Australia Limited AIM V.I. International Growth Seeks long-term growth of Invesco Aim Advisors, Inc. Fund capital. Subadvisers: Invesco Trimark Investment Management Inc.; Invesco Global Asset Management (N.A.), Inc.; Invesco Institutional (N.A.), Inc.; Invesco Senior Secured Management, Inc.; Invesco Hong Kong Limited; Invesco Asset Management Limited; Invesco Asset Management (Japan) Limited; Invesco Asset Management Deutschland, GmbH; and Invesco Australia Limited ALLIANCEBERNSTEIN VARIABLE PRODUCTS SERIES FUND, INC. Global Technology Seeks long-term growth of AllianceBernstein L.P. Portfolio -- Class B capital. Intermediate Bond To generate income and price AllianceBernstein L.P. Portfolio -- Class A appreciation without assuming what the Advisor considers undue risk. AMERICAN CENTURY VARIABLE PORTFOLIOS, INC. -- CLASS I American Century VP Ultra(R) Fund Seeks long-term capital growth. American Century Investment Management, Inc. American Century VP Vista(SM) Seeks long-term capital growth. American Century Investment Fund Management, Inc. AMERICAN FUNDS INSURANCE SERIES(R) -- CLASS 2 American Funds Bond Fund Seeks to maximize current income Capital Research and Management and preserve capital by investing Company primarily in fixed-income securities. American Funds Global Growth Fund Seeks capital appreciation Capital Research and Management through stocks. Company American Funds Global Small Seeks capital appreciation Capital Research and Management Capitalization Fund through stocks. Company American Funds Growth Fund Seeks capital appreciation Capital Research and Management through stocks. Company American Funds Growth-Income Fund Seeks both capital appreciation Capital Research and Management and income. Company
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- American Funds High-Income Bond Seeks to provide a high level of Capital Research and Management Fund current income with capital Company appreciation as a secondary goal. American Funds International Fund Seeks growth of capital over time Capital Research and Management by investing primarily in common Company stocks of companies based outside the United States. American Funds New World Fund Seeks to provide long-term growth Capital Research and Management of capital by investing primarily Company in stocks of companies with significant exposure to countries with developing economies and/or markets. American Funds U.S. Seeks to provide a high level of Capital Research and Management Government/AAA Rated Securities current income and preservation Company Fund of capital. DELAWARE VIP TRUST -- STANDARD CLASS Delaware VIP Small Cap Value Seeks capital appreciation. Delaware Management Company Series DREYFUS VARIABLE INVESTMENT FUND -- INITIAL SHARES Appreciation Portfolio Seeks long-term capital growth The Dreyfus Corporation consistent with the preservation Subadviser: Fayez Sarofim & Co. of capital. Its secondary goal is current income. Developing Leaders Portfolio Seeks capital growth. The Dreyfus Corporation FIDELITY(R) VARIABLE INSURANCE PRODUCTS Contrafund(R) Seeks long-term capital Fidelity Management & Research Portfolio -- Service Class 2 appreciation. Company Equity-Income Seeks reasonable income. The fund Fidelity Management & Research Portfolio -- Initial Class will also consider the potential Company for capital appreciation. The fund's goal is to achieve a yield which exceeds the composite yield on the securities comprising the Standard & Poor's 500(SM) Index (S&P 500(R)). Freedom 2010 Portfolio -- Initial Seeks high total return with a Fidelity Management & Research Class secondary objective of principal Company preservation as the fund approaches its target date and beyond. Freedom 2015 Portfolio -- Initial Seeks high total return with a Fidelity Management & Research Class secondary objective of principal Company preservation as the fund approaches its target date and beyond. Freedom 2020 Portfolio -- Initial Seeks high total return with a Fidelity Management & Research Class secondary objective of principal Company preservation as the fund approaches its target date and beyond.
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- Freedom 2025 Portfolio -- Initial Seeks high total return with a Fidelity Management & Research Class secondary objective of principal Company preservation as the fund approaches its target date and beyond. Freedom 2030 Portfolio -- Initial Seeks high total return with a Fidelity Management & Research Class secondary objective of principal Company preservation as the fund approaches its target date and beyond. Growth & Income Seeks high total return through a Fidelity Management & Research Portfolio -- Service Class 2 combination of current income and Company capital appreciation. High Income Portfolio -- Initial Seeks a high level of current Fidelity Management & Research Class income, while also considering Company growth of capital. Index 500 Portfolio -- Initial Seeks investment results that Fidelity Management & Research Class correspond to the total return of Company common stocks publicly traded in Subadviser: Geode Capital the United States, as represented Management by the S&P 500. Investment Grade Bond Seeks as high a level of current Fidelity Management & Research Portfolio -- Service Class income as is consistent with the Company preservation of capital. Mid Cap Portfolio -- Service Seeks long-term growth of Fidelity Management & Research Class 2 capital. Company Overseas Portfolio -- Service Seeks long-term growth of Fidelity Management & Research Class 2 capital. Company FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST Franklin Small-Mid Cap Growth Seeks long-term capital growth. Franklin Advisers, Inc. Securities Fund -- Class 2+ Templeton Developing Markets Seeks long-term capital Templeton Asset Management Ltd. Securities Fund -- Class 2 appreciation. Templeton Foreign Securities Seeks long-term capital growth. Templeton Investment Counsel, LLC Fund -- Class 2 Subadviser: Franklin Templeton Investment Management Limited Templeton Global Income Seeks high current income, Franklin Advisers, Inc. Securities Fund -- Class 1 consistent with preservation of capital, with capital appreciation as a secondary consideration. JANUS ASPEN SERIES -- SERVICE SHARES Global Life Sciences Portfolio Seeks long-term growth of Janus Capital Management LLC capital. Global Technology Portfolio Seeks long-term capital growth. Janus Capital Management LLC International Growth Portfolio Seeks long-term growth of Janus Capital Management LLC capital. Mid Cap Growth Portfolio Seeks long-term growth of Janus Capital Management LLC capital. Mid Cap Value Portfolio Seeks capital appreciation. Janus Capital Management LLC LEGG MASON PARTNERS VARIABLE EQUITY TRUST Legg Mason Partners Variable Seeks capital appreciation. Legg Mason Partners Fund Advisor, Aggressive Growth LLC Portfolio -- Class I Subadviser: ClearBridge Advisors, LLC
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- Legg Mason Partners Variable Seeks long-term appreciation of Legg Mason Partners Fund Advisor, Appreciation Portfolio -- Class capital. LLC I Subadviser: ClearBridge Advisors, LLC Legg Mason Partners Variable Seeks total return (that is, a Legg Mason Partners Fund Advisor, Capital and Income combination of income and long- LLC Portfolio -- Class I term capital appreciation). Subadvisers: Western Asset Management Company; ClearBridge Advisors, LLC; Western Asset Management Company Limited Legg Mason Partners Variable Seeks investment results that, Legg Mason Partners Fund Advisor, Equity Index Portfolio -- Class before expenses, correspond to LLC I the price and yield performance Subadviser: Batterymarch of the S&P 500(R) Index. Financial Management, Inc. Legg Mason Partners Variable Seeks long-term capital growth. Legg Mason Partners Fund Advisor, Fundamental Value Current income is a secondary LLC Portfolio -- Class I consideration. Subadviser: ClearBridge Advisors, LLC Legg Mason Partners Variable Seeks long-term growth of Legg Mason Partners Fund Advisor, Investors Portfolio -- Class I capital. Current income is a LLC secondary objective. Subadviser: ClearBridge Advisors, LLC Legg Mason Partners Variable Seeks long-term growth of Legg Mason Partners Fund Advisor, Large Cap Growth capital. LLC Portfolio -- Class I Subadviser: ClearBridge Advisors, LLC Legg Mason Partners Variable Seeks capital appreciation and Legg Mason Partners Fund Advisor, Social Awareness Portfolio retention of net investment LLC income. Subadviser: Legg Mason Investment Counsel, LLC LEGG MASON PARTNERS VARIABLE INCOME TRUST -- CLASS I Legg Mason Partners Variable Seeks to maximize total return, Legg Mason Partners Fund Advisor, Global High Yield Bond consistent with the preservation LLC Portfolio of capital. Subadvisers: Western Asset Management Company; Western Asset Management Company Limited Legg Mason Partners Variable Seeks to maximize total return, Legg Mason Partners Fund Advisor, Strategic Bond Portfolio consistent with the preservation LLC of capital. Subadvisers: Western Asset Management Company; Western Asset Management Company Limited MET INVESTORS SERIES TRUST BlackRock High Yield Seeks to maximize total return, Met Investors Advisory, LLC Portfolio -- Class A consistent with income generation Subadviser: BlackRock Financial and prudent investment Management, Inc. management. BlackRock Large Cap Core Seeks long-term capital growth. Met Investors Advisory, LLC Portfolio -- Class E Subadviser: BlackRock Advisors, LLC Clarion Global Real Estate Seeks to provide total return Met Investors Advisory, LLC Portfolio -- Class A through investment in real estate Subadviser: ING Clarion Real securities, emphasizing both Estate Securities, L.P. capital appreciation and current income.
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- Harris Oakmark International Seeks long-term capital Met Investors Advisory, LLC Portfolio -- Class A appreciation. Subadviser: Harris Associates L.P. Janus Forty Portfolio -- Class A Seeks capital appreciation. Met Investors Advisory, LLC Subadviser: Janus Capital Management LLC Lazard Mid Cap Portfolio -- Class Seeks long-term growth of Met Investors Advisory, LLC A capital. Subadviser: Lazard Asset Management LLC Loomis Sayles Global Markets Seeks high total investment Met Investors Advisory, LLC Portfolio -- Class A return through a combination of Subadviser: Loomis, Sayles & capital appreciation and income. Company, L.P. Lord Abbett Bond Debenture Seeks high current income and the Met Investors Advisory, LLC Portfolio -- Class A opportunity for capital Subadviser: Lord, Abbett & Co. appreciation to produce a high LLC total return. Lord Abbett Growth and Income Seeks long-term growth of capital Met Investors Advisory, LLC Portfolio -- Class B and income without excessive Subadviser: Lord, Abbett & Co. fluctuation in market value. LLC Lord Abbett Mid Cap Value Seeks capital appreciation Met Investors Advisory, LLC Portfolio -- Class B through investments primarily in Subadviser: Lord, Abbett & Co. equity securities which are LLC believed to be undervalued in the marketplace. Met/AIM Capital Appreciation Seeks capital appreciation. Met Investors Advisory, LLC Portfolio -- Class A Subadviser: Invesco Aim Capital Management, Inc. Met/AIM Small Cap Growth Seeks long-term growth of Met Investors Advisory, LLC Portfolio -- Class A+ capital. Subadviser: Invesco Aim Capital Management, Inc. MFS(R) Emerging Markets Equity Seeks capital appreciation. Met Investors Advisory, LLC Portfolio -- Class A+ Subadviser: Massachusetts Financial Services Company PIMCO Inflation Protected Bond Seeks to provide maximum real Met Investors Advisory, LLC Portfolio -- Class A return, consistent with Subadviser: Pacific Investment preservation of capital and Management Company LLC prudent investment management. Pioneer Fund Portfolio -- Class A Seeks reasonable income and Met Investors Advisory, LLC capital growth. Subadviser: Pioneer Investment Management, Inc. Pioneer Strategic Income Seeks a high level of current Met Investors Advisory, LLC Portfolio -- Class A income. Subadviser: Pioneer Investment Management, Inc. T. Rowe Price Mid Cap Growth Seeks long-term growth of Met Investors Advisory, LLC Portfolio -- Class A capital. Subadviser: T. Rowe Price Associates, Inc. Third Avenue Small Cap Value Seeks long-term capital Met Investors Advisory, LLC Portfolio -- Class B+ appreciation. Subadviser: Third Avenue Management LLC Van Kampen Mid Cap Growth Seeks capital appreciation. Met Investors Advisory, LLC Portfolio -- Class A Subadviser: Morgan Stanley Investment Management, Inc. (d/b/a Van Kampen)
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- METROPOLITAN SERIES FUND, INC. BlackRock Aggressive Growth Seeks maximum capital MetLife Advisers, LLC Portfolio -- Class D appreciation. Subadviser: BlackRock Advisors, LLC BlackRock Bond Income Seeks a competitive total return MetLife Advisers, LLC Portfolio -- Class A primarily from investing in Subadviser: BlackRock Advisors, fixed-income securities. LLC BlackRock Large Cap Value Seeks long-term growth of MetLife Advisers, LLC Portfolio -- Class B capital. Subadviser: BlackRock Advisors, LLC BlackRock Money Market Seeks a high level of current MetLife Advisers, LLC Portfolio -- Class A income consistent with Subadviser: BlackRock Advisors, preservation of capital. LLC Capital Guardian U.S. Equity Seeks long-term growth of MetLife Advisers, LLC Portfolio -- Class A+ capital. Subadviser: Capital Guardian Trust Company Davis Venture Value Seeks growth of capital. MetLife Advisers, LLC Portfolio -- Class A Subadviser: Davis Selected Advisers, L.P. FI Large Cap Portfolio -- Class A Seeks long-term growth of MetLife Advisers, LLC capital. Subadviser: Pyramis Global Advisors, LLC FI Mid Cap Opportunities Seeks long-term growth of MetLife Advisers, LLC Portfolio -- Class A capital. Subadviser: Pyramis Global Advisors, LLC FI Value Leaders Seeks long-term growth of MetLife Advisers, LLC Portfolio -- Class D capital. Subadviser: Pyramis Global Advisors, LLC Jennison Growth Seeks long-term growth of MetLife Advisers, LLC Portfolio -- Class A capital. Subadviser: Jennison Associates LLC Julius Baer International Stock Seeks long-term growth of MetLife Advisers, LLC Portfolio -- Class A capital. Subadviser: Julius Baer Investment Management LLC Lehman Brothers(R) Aggregate Bond Seeks to equal the performance of MetLife Advisers, LLC Index Portfolio -- Class A the Lehman Brothers(R) Aggregate Subadviser: MetLife Investment Bond Index. Advisors Company, LLC MetLife Aggressive Allocation Seeks growth of capital. MetLife Advisers, LLC Portfolio -- Class B MetLife Conservative Allocation Seeks high level of current MetLife Advisers, LLC Portfolio -- Class B income, with growth of capital as a secondary objective. MetLife Conservative to Moderate Seeks high total return in the MetLife Advisers, LLC Allocation Portfolio -- Class B form of income and growth of capital, with a greater emphasis on income. MetLife Mid Cap Stock Index Seeks to equal the performance of MetLife Advisers, LLC Portfolio -- Class A the Standard & Poor's Mid Cap Subadviser: MetLife Investment 400(R) Composite Stock Price Advisors Company, LLC Index. MetLife Moderate Allocation Seeks a balance between a high MetLife Advisers, LLC Portfolio -- Class B level of current income and growth of capital, with a greater emphasis on growth of capital. MetLife Moderate to Aggressive Seeks growth of capital. MetLife Advisers, LLC Allocation Portfolio -- Class B
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- MetLife Stock Index Seeks to equal the performance of MetLife Advisers, LLC Portfolio -- Class A the Standard & Poor's 500(R) Subadviser: MetLife Investment Composite Stock Price Index. Advisors Company, LLC MFS(R) Total Return Seeks a favorable total return MetLife Advisers, LLC Portfolio -- Class F through investment in a Subadviser: Massachusetts diversified portfolio. Financial Services Company MFS(R) Value Portfolio -- Class A Seeks capital appreciation and MetLife Advisers, LLC reasonable income. Subadviser: Massachusetts Financial Services Company Morgan Stanley EAFE(R) Index Seeks to equal the performance of MetLife Advisers, LLC Portfolio -- Class A the MSCI EAFE(R) Index. Subadviser: MetLife Investment Advisors Company, LLC Oppenheimer Global Equity Seeks capital appreciation. MetLife Advisers, LLC Portfolio -- Class B Subadviser: OppenheimerFunds, Inc. Russell 2000(R) Index Seeks to equal the return of the MetLife Advisers, LLC Portfolio -- Class A Russell 2000(R) Index. Subadviser: MetLife Investment Advisors Company, LLC T. Rowe Price Large Cap Growth Seeks long-term growth of capital MetLife Advisers, LLC Portfolio -- Class B+ and, secondarily, dividend Subadviser: T. Rowe Price income. Associates, Inc. Western Asset Management U.S. Seeks to maximize total return MetLife Advisers, LLC Government Portfolio -- Class A consistent with preservation of Subadviser: Western Asset capital and maintenance of Management Company liquidity. OPPENHEIMER VARIABLE ACCOUNT FUNDS -- NON-SERVICE SHARES Oppenheimer Main Street Small Cap Seeks capital appreciation to OppenheimerFunds, Inc. Fund(R)/VA make your investment grow. It emphasizes investments in common stocks of companies with small market capitalizations. PIMCO VARIABLE INSURANCE TRUST -- ADMINISTRATIVE CLASS Low Duration Portfolio Seeks maximum total return, Pacific Investment Management consistent with preservation of Company LLC capital and prudent investment management. Total Return Portfolio Seeks maximum total return, Pacific Investment Management consistent with preservation of Company LLC capital and prudent investment management. PIONEER VARIABLE CONTRACTS TRUST -- CLASS II Pioneer Emerging Markets VCT Seeks long-term growth of Pioneer Investment Management, Portfolio capital. Inc. Pioneer Mid Cap Value VCT Seeks capital appreciation by Pioneer Investment Management, Portfolio investing in a diversified Inc. portfolio of securities consisting primarily of common stocks.
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FUNDING INVESTMENT INVESTMENT OPTION OBJECTIVE ADVISER/SUBADVISER - --------------------------------- --------------------------------- --------------------------------- PUTNAM VARIABLE TRUST -- CLASS IB Putnam VT International Growth Seeks capital growth. Current Putnam Investment Management, LLC and Income Fund income is a secondary objective. Subadviser: Putnam Investment Limited ROYCE CAPITAL FUND Royce Micro-Cap Portfolio Seeks long-term growth of Royce & Associates, LLC capital. Royce Small-Cap Portfolio Seeks long-term growth of Royce & Associates, LLC capital. THE MERGER FUND VL The Merger Fund VL Seeks to achieve capital growth Westchester Capital Management, by engaging in merger arbitrage. Inc. VAN KAMPEN LIFE INVESTMENT TRUST Comstock Portfolio -- Class II Seeks capital growth and income Van Kampen Asset Management through investments in equity securities, including common stocks, preferred stocks and securities convertible into common and preferred stocks. Government Portfolio -- Class I Seeks to provide investors with Van Kampen Asset Management high current return consistent with preservation of capital.
- --------- + Not available under all Policies. Availability depends on Policy Issue Date. VOTING RIGHTS The Company is the legal owner of Fund shares. However, we believe that when a Fund solicits proxies in conjunction with a vote of shareholders, we are required to obtain instructions on how to vote Fund shares from Policy Owners who have chosen the corresponding Investment Option. Accordingly, we will send you proxy materials and voting instructions. We will vote all shares, including those we may own on our own behalf, and those where we have not received instructions from Policy Owners, in the same proportion as shares for which we received voting instructions. The effect of this proportional voting is that a small number of Policy Owners may control the outcome of the vote. Should we determine that we are no longer required to comply with the above, we will vote the shares in our own right. In certain limited circumstances and when permitted by law, we may disregard voting instructions. If we do disregard voting instructions, a summary of that action and the reasons for such action would be included in the next annual or semi-annual report to Policy Owners. CONFLICTS OF INTEREST The Funds may also be available to separate accounts offering variable annuity and variable life products of other affiliated and unaffiliated insurance companies, as well as to qualified plans. Due to differences in redemption rates, tax treatment or other considerations, the interests of various shareholders participating in a Fund could conflict. Each will be monitored for the existence of any material conflicts by its Board of Directors to determine what action, if any, should be taken. The prospectuses for the Funds have more details. THE FIXED ACCOUNT (MAY NOT BE AVAILABLE IN ALL STATES) The staff of the SEC does not generally review the disclosure in the prospectus relating to the Fixed Account. Disclosure regarding the Fixed Account and the General Account may, however, be subject to certain provisions of the federal securities laws relating to the accuracy and completeness of statements made in the prospectus. 25 You may allocate some of your Net Premium Payments and transfer some of your Contract Value to the Fixed Account, subject to certain restrictions. (See "Transfers.") We credit the portion of Contract Value allocated to the Fixed Account with interest at not less than 3% per year. Any interest credited to amounts allocated to the Fixed Account in excess of 3% per year will be determined at our sole discretion and declared at the beginning of each calendar quarter and guaranteed only for that quarter. The interest rate will be included in your quarterly statements. Under the Fixed Account, which is part of the Company's General Account, we assume the risk of investment gain or loss and guarantee a specified interest rate. The investment gain or loss of the Separate Account, the Investment Options or the Funds does not affect the Fixed Account portion of the Policy Owner's Contract Value. The Fixed Account will not share in the investment performance of our General Account. See the Transfers section for information on restrictions on transfers into and out of the Fixed Account. POLICY CHARGES AND DEDUCTIONS - -------------------------------------------------------------------------------- We deduct the charges described below. The charges are for services and benefits we provide, costs and expenses we incur, and risks we assume under the Policies. The amount of a charge may not exactly correspond to the costs associated with providing the services or benefits indicated by the designated charge. We also may realize a profit on one or more of the charges. We may use any such profits for any corporate purpose, including the payment of sales expense charges. The SERVICES AND BENEFITS we provide include: - the ability for you to make withdrawals and surrenders under the Policies; - the ability for you to obtain a loan under the Policies; - the Death Benefit paid on the death of the Insured; - making available a variety of Investment Options and related programs (including dollar-cost averaging and portfolio rebalancing); - administration of the various elective options available under the Policies; and - the distribution of various reports to Policy Owners. The COSTS AND EXPENSES we incur include: - expenses associated with underwriting applications and increases in the Stated Amount; - losses associated with various overhead and other expenses associated with providing the services and benefits provided by the Policies; - sales and marketing expenses including commission payments to your sales agent; and - other costs of doing business. RISKS we assume include: - that the Insured may live for a shorter period of time than estimated resulting in the payment of greater Death Benefits than expected; and - that the costs of providing the services and benefits under the Policies will exceed the charges deducted. CHARGES AGAINST PREMIUM We deduct certain charges from each Premium Payment you make before we allocate that Premium Payment (NET PREMIUM PAYMENT) among the Investment Options and the Fixed Account. - Front-End Sales Expense Charge: We deduct a front-end sales charge from each Premium Payment received. This charge helps us defray our costs for sales and marketing expenses, including commission payments to your sales agent. The Sales Expense Charge is summarized in the chart below. 26
SALES EXPENSE CHARGES ON A SALES EXPENSE CHARGES ON A CURRENT BASIS GUARANTEED BASIS ---------------------------- ---------------------------- UP TO TARGET ABOVE TARGET UP TO TARGET ABOVE TARGET POLICY YEARS PREMIUM PREMIUM PREMIUM PREMIUM - ------------ ------------ ------------ ------------ ------------ Years 1 -- 2 7.0% 2.25% 12% 8% Years 3 -- 7 6.0% 2.25% 12% 8% Years 8+ 3.5% 2.25% 12% 8%
Currently, 2.25% of the Sales Expense Charge is designed to compensate the Company for STATE PREMIUM TAXES owed by the Company associated with the receipt of Premium Payments, which cost is borne by the Policy Owner. These taxes vary from state to state and currently range from 0.75% to 3.50%. Because there is a range of premium taxes, a Policy Owner may pay a premium charge that is higher or lower than the premium tax actually assessed or not assessed against the Company in his or her jurisdiction. Likewise, 1.25% of the Sales Expense Charge (up to Target Premium) is designed to compensate us for FEDERAL TAXES (federal deferred acquisition cost charge) associated with the receipt of Premium Payments, which cost is borne by the Policy Owner. CHARGES AGAINST CONTRACT VALUE MONTHLY DEDUCTION AMOUNT: Several charges are combined in the Monthly Deduction Amount, which we deduct pro rata from each of the Investment Option's values attributable to the Policy and the Fixed Account. We deduct the amount on the first day of each Policy Month (the DEDUCTION DATE). The dollar amount of the Monthly Deduction Amount will vary from month to month. The Monthly Deduction Amount consists of (1) the Cost of Insurance Charge, (2) the Policy Administrative Expense Charge, (3) Monthly Sales Expense Charge and (4) charges for any Riders. These are described below. - COST OF INSURANCE CHARGE: The cost of insurance charge is the primary charge under your Policy for the life insurance protection (Coverage Amount) we provide you. THE COVERAGE AMOUNT IS EQUAL TO THE AMOUNT INSURED LESS THE CONTRACT VALUE. Like other policy charges, we may profit from the cost of insurance charge and may use these profits for any lawful purpose such as the payment of distribution and administrative expenses. The amount of the cost of insurance charge depends on: (1) the amount of life insurance coverage; (2) the Contract Value of your Policy on the date of the deduction; and (3) the current cost per dollar for insurance coverage. - There are maximum or GUARANTEED COST OF INSURANCE RATES associated with your Policy that are shown on the Policy Summary page of your Policy. For Policies with an Issue Date before January 1, 2009, the guaranteed rates are based on the 1980 Commissioners Standard Ordinary Mortality Tables or the 1980 Commissioners Ordinary Mortality Table B, which are used for unisex cost of insurance rates. For Policies with an Issue Date on or after January 1, 2009, the guaranteed rates are based on the 2001 Commissioners Standard Ordinary Mortality Tables ("2001 CSO Tables"). Unisex guaranteed cost of insurance rates are based on the 2001 CSO Table weighted 80% male, 20% female. The rates are also based on the age, gender and risk class of the Insured. - The CURRENT COST OF INSURANCE RATES are based on the age, risk class and gender (unless unisex rates are required) of the Insured, as well as the method of underwriting we use in connection with processing your application for a Policy (See "Applying for a Policy"). The current rates are less than or equal to the guaranteed rates and they will never exceed the guaranteed rates in the future. We will base any future changes in these rates only on our future expectations as to mortality, expenses and persistency. Nothing in the Policy will be affected by our actual mortality and expenses experienced under Policies issued. We will determine the current rates for the initial base Stated Amount and for each increase to the Stated Amount at the start of each Policy Year and will guarantee them for that Policy Year. Any change that we make in the current rates will be on a uniform basis for Insureds of the same age, sex, duration and rate class. - POLICY ADMINISTRATIVE EXPENSE CHARGE: A $5.00 fee. Guaranteed not to exceed $10 per month. - MONTHLY SALES EXPENSE CHARGE (INCLUDING RIDERS): The monthly rate per thousand is equal to $0.10 times the percentage of initial base Stated Amount. The monthly rate per thousand is guaranteed not to exceed 27 $0.10. This monthly rate is applied to the greater of (1) and (2) where (1) is equal to 6 times first year premium and (2) is equal to the lesser of (a) and (b) where (a) is equal to the initial total Stated Amount and (b) is equal to the product of (i) initial total Death Benefit, (ii) the target premium factor per thousand (see Appendix C) and (iii) 2%. This charge applies for 20 years from the effective date of the initial total Stated Amount and any increases in coverage. Any increase in coverage after the original issue date will be assessed a charge for 20 years from the effective date of the increase. - CHARGES FOR RIDERS: The Company will include a supplemental benefits charge in the Monthly Deduction Amount if you have elected any Riders for which there is a charge. The amount of this charge will vary depending upon the actual Rider selected. - SURRENDER CHARGES: There is no surrender charge. CHARGES AGAINST THE SEPARATE ACCOUNT (NOT ASSESSED ON CONTRACT VALUES IN THE FIXED ACCOUNT) MORTALITY AND EXPENSE RISK CHARGE: We deduct a daily charge for mortality and expense risks from the assets in the Investment Options. The mortality risk assumed under the Policies is that the Insured may not live as long as expected. The expense risk charge assumed is that the expenses incurred in issuing and administering the Policies may be greater than expected. In addition, a portion of the mortality and expense risk charge may be used to pay sales commissions and expenses.
M&E CHARGE ON A M&E CHARGE ON A CURRENT BASIS GUARANTEED BASIS POLICY YEARS (ANNUAL) (ANNUAL) - ------------ --------------- ---------------- 1-25 0.20% 0.75% YEARS 26+ 0.05% 0.75%
FUND CHARGES Fund charges are not direct charges under the Policy. When you allocate money to the Investment Options, the Separate Account purchases shares of the corresponding Funds at net asset value. The net asset value reflects investment advisory fees and other expenses already deducted from the Funds. See the "Fee Tables" section in this prospectus and the Fund company prospectuses for information on the Fund charges. MODIFICATION, RESERVED RIGHTS AND OTHER CHARGES We may offer the Policy in arrangements where an employer or trustee will own a group of Policies on the lives of certain employees, or in other situations where groups of Policies will be purchased at one time. We may modify (increase, decrease or eliminate) the mortality and expense risk charge, front-end sales charges and monthly policy administrative expense charges in such arrangements to reflect the increased or decreased sales expenses, administrative costs and/or mortality and expense risks we expect to incur as a result of sales to a particular group. We will not modify these charges in ways that will be unfairly discriminatory to any person. We reserve the right to charge for transfers, Dollar Cost Averaging, illustrative reports and to charge the assets of each Investment Option for a reserve of any income taxes payable by the Company on the assets attributable to that Investment Option. POLICY DESCRIPTION - -------------------------------------------------------------------------------- The Policy is both an insurance product and a security. The Policy is first and foremost a life insurance policy with death benefits, contract values and other features traditionally associated with life insurance. The Policy is a security because the Contract Value and, under certain circumstances, the Amount Insured and Death Benefit may increase or decrease to reflect the performance of the Funds and/or the Fixed Account that you direct your Net Premium Payments to. The Policy is non-participating, which means the Company will not pay dividends on the Policy. 28 APPLYING FOR A POLICY To purchase a Policy, an APPLICATION on the Insured must be submitted to us with information that includes: - Requested Stated Amount (minimum of $50,000) - Death Benefit Option - Beneficiary - Investment Option selections, and - Rider selections. Policies generally will be issued only on the life of an Insured between the ages of 20-80. We will then follow certain underwriting procedures designed to determine the insurability of the proposed Insured and may require medical examinations and additional information about the proposed Insured before the application is approved. There are three types of underwriting available under the Policy. We decide which type to use based on the total number of eligible possible Insureds within the eligible group for whom a Policy could be purchased and the percentage of those Insureds for whom a Policy is actually purchased. The three types of underwriting are: - Guaranteed Issue -- requires the least evidence of insurability and rating classification. - Simplified Underwriting -- requires more evidence of insurability and rating classification. - Full Underwriting -- requires the most evidence of insurability and rating classification. An Insured who qualifies for standard or preferred risk classification under full underwriting may pay higher cost of insurance rates if simplified underwriting or guaranteed issue is applied. A Policy will be issued only after the underwriting process is completed to our satisfaction (ISSUE DATE). The POLICY DATE (shown on the Policy Summary) is the date we use to determine all future transactions on the Policy (e.g., deduction dates, policy years). If you pay your initial premium with your application, we will deposit that premium in a non-interest bearing account during the underwriting period. We reserve the right to reject an application for any reason subject to the requirements imposed by law in the jurisdiction where the requested insurance Policy was to be issued and delivered. If the application is declined or cancelled, the full amount paid with the application will be refunded. We may apply increased charges for the underwriting classification of a proposed Insured. RIGHT TO CANCEL (FREE LOOK PERIOD) An applicant may cancel the Policy by returning it via mail or personal delivery to the Company at our Administrative Office or to the agent who sold the Policy. The Policy must be returned by the latest of (1) 10 days after delivery of the Policy to the Policy Owner, or (2) 45 days of completion of the Policy application, or (3) 10 days after the Notice of Right to Cancel has been mailed or delivered to the Applicant whichever is latest, or (4) later if required by state law. Depending on state law, we will refund either: (1) All Premium Payments less any Outstanding Loans, or (2) The Contract Value of the Policy on the date we received the returned Policy, plus any charges and expenses that were deducted, less any Outstanding Loans. During the Right to Cancel period, we allocate Net Premium Payments to the BlackRock Money Market Portfolio or equivalent money market portfolio unless you purchase a Policy in a state that permits us to refund Contract Value. If 29 you purchase the Policy in a state that permits us to refund Contract Value, we will invest your Net Premium Payments in the Investment Options you select during the Right to Cancel period. WHEN COVERAGE BEGINS Except as stated in the Temporary Insurance Agreement, no insurance will take effect prior to the later of the Issue Date or the Policy Date shown on the Policy Summary. Insurance issued will take effect on the later of the Issue Date of the Policy Date shown on the Policy Summary if, on the later of the Policy Date or the Issue Date, the health and other conditions relating to insurability remain complete and true as described in the application. You may request a Policy Date of up to twelve months prior to the Issue Date for the purpose of preserving a younger Age, or other reasons, subject to our administrative procedures and state laws (a "back-dated policy"). In many but not all cases, a younger Age will result in a smaller Planned Premium and lower cost of insurance charges. However, we will deduct the Monthly Deduction Amount under the Policy beginning on the Policy Date even though insurance coverage will not be effective until the Issue Date of the Policy. INCOME TAX FREE 'SECTION 1035' EXCHANGES You can generally exchange one life insurance policy for another in a 'tax-free exchange' under Section 1035 of the Internal Revenue Code. Before making an exchange, you should compare both policies carefully. Remember that if you exchange another policy for the one described in this prospectus, you might have to pay a surrender charge on your old policy and other charges may be higher (or lower) and the benefits may be different. If the exchange does not qualify for Section 1035 treatment, you may have to pay federal income tax on the gain and potentially an early withdrawal or other penalty on the exchange. You should not exchange an existing life insurance policy for this one unless you determine, after knowing all the facts and consultation with a tax adviser, that the exchange is in your best interest and not just better for the person trying to sell you this Policy (that person will generally earn a commission if you buy this Policy through an exchange or otherwise). OWNERSHIP/POLICY RIGHTS The POLICY OWNER is the person who has the right to exercise all of the rights and options under the Policy, and to make changes to the Policy while the Insured is alive. Usually, the person who is buying the Policy is also the Policy Owner. However, in some instances, the Policy Owner can be an entity such as a trust or someone other than the person who is buying the Policy. In either situation, the Policy Owner may exercise certain rights that are described below. Some changes to the Policy require additional underwriting approval. - Assigning the Policy The Policy Owner may assign the Policy as collateral for a loan or other obligation. We are not responsible for any payment made or action taken before receipt of written notice of such assignment. Proof of interest must be filed with any claim under a collateral assignment. Assigning the Policy may have tax consequences. See "Tax Treatment of Policy Benefits." You should consult a tax adviser before assigning the Policy. - Receiving the Maturity Benefit If the Insured is living on the Maturity Date, we will pay you the Contract Value of the Policy as of the Maturity Date, less any: 1. Outstanding Loan; 2. Monthly Deduction Amount due but not paid; and 3. Amount payable to an assignee under a collateral assignment of the Policy. Upon maturity, insurance ends and we have no further obligation under the Policy. 30 - Changing or Revoking a Beneficiary The BENEFICIARY is named in the Policy application and is the person who receives the Death Benefit when the Insured dies. More than one Beneficiary may be named and you may make your Beneficiary designation irrevocable. When the Insured dies, if no Beneficiary is alive, the Death Benefit will be paid to you, if you are alive, otherwise to your estate. Unless you irrevocably named the Beneficiary, you may name a new Beneficiary while the Insured is living and while your Policy is in force by writing us at our Administrative Office. Subject to our receipt of the change, any change in beneficiary will be effective on the date you sign the notice of change regardless of whether the Insured has died at the time we receive the notice; however, we will have no further responsibility if we made any payment before we receive the notice of change. - Decreases in the Stated Amount of Insurance You may request a decrease in the Stated Amount after the first Policy Year, provided that the Stated Amount after any decrease is not less than the minimum amount of $50,000. For purposes of determining the Cost of Insurance charge, a decrease will reduce the Stated Amount in the following order: 1. against the most recent increase in the Stated Amount; 2. to other increases in the reverse order in which they occurred; and 3. to the initial Stated Amount. A decrease in Stated Amount in a substantially funded Policy may cause a cash distribution that is included in your gross income. We will send you a supplemental Policy Summary reflecting any change. We reserve the right to limit the number of decreases to the Stated Amount to one each Policy Year. - Changing the Death Benefit Option After the first Policy Year, if the Insured is still alive you may change the Death Benefit Option by sending a written request to the Company at our Administrative Office. The Stated Amount will be adjusted so the Coverage Amount remains level. There is no other direct consequence of changing a Death Benefit option, except as described under "Tax Treatment of Policy Benefits." However, the change could affect future values of the Coverage Amount. The Cost of Insurance Charge, which is based on the Coverage Amount, may be different in the future. The following changes in Death Benefit Options are permissible: Options 1-2, Options 2-1 and Options 3-1. If the option is changed from Option 1 to Option 2, the Stated Amount will be reduced by the amount of the Contract Value at the time of the change. If the option is changed from Option 2 to Option 1, the Stated Amount will be increased by the amount of the Contract Value at the time of the option change. If the option is changed from Option 3 to Option 1, the Stated Amount will be increased by the amount of accumulated premiums paid at the time of the option change. It is not permitted to change from Option 3 to Option 2, from Option 1 to Option 3 and from Option 2 to Option 3. - Increases in the Stated Amount (requires additional underwriting approval) You may request an increase to the Stated Amount after the first Policy Year and prior to the Policy Anniversary on which the Insured is age 80. We will not allow a requested increase to the Stated Amount for less than the Minimum Increase Amount shown on your Policy Summary page. The increase will be effective on the date shown on the supplemental Policy Summary that we will send you. We will require you to submit a new application and evidence of insurability. Any increase in Stated Amount (whether from a request by you or from a change in the Death Benefit) will result in overall higher cost of insurance charges and the cost of insurance charges associated with the increase amount may be higher than the cost of insurance charges associated with the original Stated Amount in consideration of the attained age of the Insured at the time the increase is requested. The effective date of any increase in 31 Stated Amount will generally be the Deduction Date next following either the date of a new application or, if different, the date requested by the applicant. If you have added the Insured Term Rider to the Policy, and you request an increase in Stated Amount, the increase will be effected by increasing both the Insured Term Rider Stated Amount and the base Policy Stated Amount, so that the ratio of the Insured Term Rider Stated Amount to the base Policy Stated Amount is the same both before and after the increase. If you have added the Adjustable Term Insurance Rider to the Policy and you request an increase in Stated Amount, the increase will be effected solely through an increase in the Stated Amount of the Adjustable Term Insurance Rider. The Stated Amount of the base Policy may not be increased. This means that an increase in insurance coverage under a Policy with the Adjustable Term Insurance Rider may be less expensive than an equivalent increase in coverage under a Policy with the Insured Term Rider. This is due to the fact that the Monthly Sales Expense Charge will not apply to any portion of the increase under a Policy with the Adjustable Term Insurance Rider since this charge does not currently apply to term insurance coverage. The Monthly Sales Expense Charge would apply to an increase in coverage under a Policy with the Insured Term Rider because some portion of the increase would have to be provided through an increase in the base Policy Stated Amount. In addition, as a result of this increase in base Policy Stated Amount, a higher Front-End Sales Expense Charge will be imposed on a portion of the premium as described in the "Fee Table -- Transaction Fees." Lastly, the current cost of insurance charge for an increase in coverage under the Adjustable Term Insurance Rider is determined differently than for an increase in coverage under the Insured Term Rider. As a result, the current cost of insurance charge under the Adjustable Term Insurance Rider will be higher in some Policy Years, and lower in other Policy Years, than the current cost of insurance charge under the Insured Term Rider. We reserve the right to limit the number of increases to the Stated Amount to one each Policy Year. Written requests for changes should be sent to our Administrative Office. Some of these Policy changes may have tax consequences. You should consult a tax adviser before requesting any of these changes. PREMIUMS - -------------------------------------------------------------------------------- AMOUNT, FREQUENCY AND DURATION OF PREMIUM PAYMENTS The Policy allows you to choose the amount and frequency (e.g., monthly, semi- annually, annually) of your Premium Payments within certain guidelines (PLANNED PREMIUM). The amount of your Premium Payment will vary based on factors including: the age, sex and rating classification of the Insured. The minimum initial premium we will accept is the amount necessary to pay the Monthly Deduction Amount due. Prior to the Maturity Date, you may request a change in the amount and frequency of your Planned Premium Payments and also make unscheduled Premium Payments as long as receipt of such payments or change would not disqualify the Policy as life insurance under applicable federal tax laws. We reserve the right to require evidence of insurability before we accept any additional Premium Payment that would increase insurance coverage. You may make Premium Payments by: - mailing a check, payable to MetLife Insurance Company of Connecticut, to: MetLife Insurance Company of Connecticut, Specialized Benefit Resources, at our Administrative Office; - by direct checking account deductions (you must complete a pre- authorization collection form) (this method of premium payment is not currently available); or - by wire transfer. If you send your Premium Payments or transaction requests to an address other than the one we have designated for receipt of such Premium Payments or requests, we may return the Premium Payment to you, or there may be a delay in applying the Premium Payment or transaction to your Policy. 32 We do not accept Premium Payments made in cash or by money orders. The form in which we receive a Premium Payment may determine how soon subsequent disbursement requests may be fulfilled. See "Other Policy Information -- Payment and Suspension of Valuation." If you do not make your Planned Premium Payment on schedule, your policy may lapse. In addition, even if you make your Planned Premiums on schedule, your Policy may lapse if the Cash Surrender Value of the Policy is insufficient to cover the Monthly Deduction Amount. In either of these cases, before your Policy lapses your Policy will be in default and a GRACE PERIOD will begin. Thirty days after the default happens we will send you a lapse notice stating the amount due to keep the Policy in effect and the date by which you must pay it. If the Insured dies during the Grace Period before you have paid the required premium, we will still pay the Death Benefit under the Policy although we will reduce the Death Benefit proceeds by any Monthly Deduction Amount due and the amount of any Outstanding Loans. If the required Premium Payment is not paid within 31 days (subject to state law) after the notice is sent, the Policy will lapse. ALLOCATION OF PREMIUM PAYMENTS During the underwriting period, any Net Premium Payments we receive will be placed in a non-interest bearing account. On the Policy Date we will allocate your Net Premium Payments to the Investment Options and Fixed Account in the percentages you indicate on the application (premium allocation instructions). However, if state law requires us to return Premium Payments if you exercise your right to cancel the Policy during the Right to Cancel period, then, we will allocate your Net Premium Payments to the BlackRock Money Market Portfolio or equivalent money market portfolio from the Policy Date until the end of the Right to Cancel period, and thereafter to the Investment Options and Fixed Account you selected. Any allocation must be at least 5% and must be a whole percentage. We are not currently enforcing these restrictions but reserve the right to do so in the future. You may change your Premium Payment allocation instructions upon written request to us (or any other notification we deem satisfactory) at our Administrative Office. Any allocation change will be effective on the date we record the change. Any future Premium Payments will be allocated in accordance with the new allocation, unless we receive contrary written instructions. Unless underwriting is required, we will process a Premium Payment or other transaction as of the next computed Accumulation Unit Value of an Investment Option following our receipt of the Premium Payment or other transaction request in good order. VALUES UNDER YOUR POLICY - -------------------------------------------------------------------------------- CONTRACT VALUE Each Policy has a CONTRACT VALUE that is used as the basis for determining Policy benefits and charges. On each business day your Policy has a Contract Value, which we use to determine how much money is available to you for loans, surrenders and in some cases the Death Benefit. A Policy's Contract Value is the sum of the values held in the Investment Options, the Fixed Account and the Loan Account. A Policy's Contract Value will change daily, has no guaranteed minimum value and may be more or less than the Premiums paid. We calculate the Policy's Contract Value each day the New York Stock Exchange is open for trading (a VALUATION DATE). The period between successive Valuation Dates is called a VALUATION PERIOD. The Contract Value will increase or decrease depending on the investment performance of the Investment Options, the Premium Payments you make, the fees and charges we deduct and any Policy transactions (loans, withdrawals, surrenders) you make. INVESTMENT OPTION VALUATION The value of each Investment Option is measured in ACCUMULATION UNITS. We value each Investment Option on each Valuation Date. Every time you allocate or transfer money to or from an Investment Option we convert that dollar 33 amount into units. The value of an Accumulation Unit for each Investment Option is initially set at $1.00 and may vary among Investment Options and from one Valuation Period to the next. We determine each Investment Option's Accumulation Unit Value (AUV) on each Valuation Date by multiplying the value on the immediately preceding Valuation Date by the corresponding NET INVESTMENT FACTOR (see below) for the Valuation Period just ended. For example, to calculate Monday's Valuation Date price, we would multiply Friday's Accumulation Unit Value by Monday's Net Investment Factor. The Net Investment Factor is simply an index we use to measure the investment performance of an Investment Option from one Valuation Period to the next. Each Investment Option has a Net Investment Factor for each Valuation Period that may be greater or less than one. Therefore, the value of an Accumulation Unit (and the value of the Investment Option) may increase or decrease. a We determine the NET INVESTMENT FACTOR for any Valuation Period using ------ - c the following equation: b
A is: 1. the net asset value per share of the Fund held in the Investment Option as of the Valuation Date; plus 2. the per-share amount of any dividend or capital gain distribution on shares of the Fund held by the Investment Option if the ex-dividend date occurs in the Valuation Period just ended; plus or minus 3. a per-share charge or credit, as we may determine on the Valuation Date for tax reserves; and B is: 1. the net asset value per share of the Fund held in the Investment Option as of the last prior Valuation Date; plus or minus 2. the per-share or per-unit charge or credit for tax reserves as of the end of the last prior Valuation Date; and C is the applicable Investment Option deduction for the Valuation Period. The Accumulation Unit Value may increase or decrease. The number of Accumulation Units credited to your Policy will not change as a result of the Investment Option's investment experience. The Separate Account will redeem Fund shares at their net asset value, to the extent necessary to make payments under the Policy. Net Premium Payments will be credited to your Policy based on the Accumulation Unit Value next determined of the applicable Investment Option after we receive the Premium Payment in good order. Transfers between Investment Options will result in the addition or reduction of Accumulation Units having a total value equal to the dollar amount being transferred to or from a particular Investment Option. The number of Accumulation Units will be determined by dividing the amount transferred by the Accumulation Unit Value of the Investment Options involved as of the next Valuation Date after we receive your request for transfer at our Administrative Office. FIXED ACCOUNT VALUATION The Fixed Account value on the Policy Date is equal to the portion of the initial Net Premium Payment allocated to the Fixed Account. The Fixed Account value on each subsequent day is equal to the Fixed Account value on the preceding day, plus: a. Net Premium Payments allocated to the Fixed Account since the preceding day b. Amounts transferred to the Fixed Account from the Investment Options and the Loan Account since the preceding day c. Interest credited to the Fixed Account since the preceding day, 34 minus: d. Amounts transferred out of the Fixed Account to the Investment Options and the Loan Account since the preceding day e. Amounts transferred out of the Fixed Account to pay applicable Deduction Amount charges (the portion of the Deduction Amount charged will be based upon the proportion of the Fixed Account value relative to the CONTRACT VALUE) since the preceding day f. Any transfer charges that have been deducted from the Fixed Account since the preceding day g. Any surrender amounts that have been deducted from the Fixed Account since the preceding day h. Any Stated Amount decrease charges that have been deducted from the Fixed Account since the preceding day. LOAN ACCOUNT VALUATION When you borrow money from us using the Policy as collateral for the loan, we transfer an amount equal to the loan from the Investment Options (pro-rata) to the Loan Account as collateral for that loan. Loan amounts will be transferred from the Fixed Account only if insufficient amounts are available in the Investment Options. You may borrow up to 100% of the Policy's Cash Surrender Value. The value in the Loan Account is charged a fixed rate of interest declared by us that will not exceed 5.00%. We charge this interest in arrears at the end of each Policy Year. In addition, the value in the Loan Account will be credited, in arrears, with a fixed rate of interest declared by us that will be at least 4% annually. Currently, we credit the value in the Loan Account 4.40% in Policy Years 1-10, 4.50% in Policy Years 11-20, and 4.85% in Policy Years 21 and later. When we determine a Policy's Contract Value, the value in the Loan Account (i.e., the amount we transferred from the Investment Options and the Fixed Account to secure the loan, adjusted for any repayments or additional Policy loans) and the result of any interest charged or credited on such amount, is added together with the values in the Investment Options and the Fixed Account. TRANSFERS - -------------------------------------------------------------------------------- TRANSFERS OF CONTRACT VALUE Generally, you may transfer Contract Value among the Investment Options. Transfer requests received at our Administrative Office or Andesa Services, Inc. that are in good order before the close of the New York Stock Exchange (NYSE) will be processed according to the value(s) next computed following the close of business. Transfer requests received on a non-business day or after the close of the NYSE will be processed based on the value(s) next computed on the next business day. MARKET TIMING/EXCESSIVE TRADING THE CONTRACT IS INTENDED FOR USE AS A LONG-TERM INVESTMENT VEHICLE AND IS NOT DESIGNED TO SERVE AS A VEHICLE FOR EXCESSIVE TRADING OR MARKET TIMING IN AN ATTEMPT TO TAKE ADVANTAGE OF SHORT-TERM FLUCTUATIONS IN THE STOCK MARKET. Frequent requests from Policy Owners to transfer Contract Value may dilute the value of a Fund's shares if the frequent trading involves an attempt to take advantage of pricing inefficiencies created by a lag between a change in the value of the securities held by the Fund and the reflection of that change in the Fund's share price ("arbitrage trading"). Regardless of the existence of pricing inefficiencies, frequent transfers may also increase brokerage and administrative costs of the underlying Funds and may disrupt Fund management strategy, requiring a Fund to maintain a high cash position and possibly resulting in lost investment opportunities and forced liquidations ("disruptive trading"). Accordingly, arbitrage trading and disruptive trading activities (referred to collectively as "market timing") may adversely affect the long-term performance of the Funds, which in turn adversely affect Policy Owners and other persons who may have an interest in the Policies (e.g. beneficiaries). 35 We have policies and procedures that attempt to detect and deter frequent transfers in situations where we determine there is a potential for arbitrage trading. Currently, we believe that such situations may be presented in the international, small-cap, and high-yield Funds (i.e. AIM V.I. Global Real Estate Fund, AIM V.I. International Growth Fund, AllianceBernstein Global Technology Portfolio, American Funds Global Growth Fund, American Funds Global Small Capitalization Fund, American Funds High-Income Bond Fund, American Funds International Fund, American Funds New World Fund, Delaware Variable Investment Fund Developing Leaders Portfolio, Fidelity VIP High Income Portfolio, Fidelity VIP Overseas Portfolio, Franklin Small-Mid Cap Growth Securities Fund, Templeton Developing Markets Securities Fund, Templeton Foreign Securities Fund, Templeton Global Income Securities Fund, Janus Aspen Global Life Sciences Portfolio, Janus Aspen Global Technology Portfolio, Janus Aspen International Growth Portfolio, Legg Mason Partners Variable Global High Yield Bond Portfolio, Legg Mason Partners Variable Strategic Bond Portfolio, BlackRock High Yield Portfolio, Clarion Global Real Estate Portfolio, Harris Oakmark International Portfolio, Loomis Sales Global Markets Portfolio, Lord Abbett Bond Debenture Portfolio, Met/AIM Small Cap Growth Portfolio, MFS(R) Emerging Markets Equity Portfolio, Oppenheimer Global Equity Portfolio, Pioneer Strategic Income Portfolio, Third Avenue Small Cap Value Portfolio, Julius Baer International Stock Portfolio, Morgan Stanley EAFE(R) Index Portfolio, Oppenheimer Global Equity Portfolio, Russell 2000(R) Index Portfolio, Oppenheimer Main Street Small Cap Fund(R)/VA, Pioneer Emerging Markets VCT Portfolio, Putnam VT International Growth and Income Fund, Royce Microcap Portfolio and Royce Small Cap Portfolio -the "Monitored Funds") and we monitor transfer activity in those Monitored Funds. In addition, as described below, we intend to treat all American Funds Insurance Series portfolios, that is, American Funds Global Growth Fund, American Funds Growth Fund and American Funds Growth-Income Fund ("American Funds portfolios") as Monitored Funds. We employ various means to monitor transfer activity, such as examining the frequency and size of transfers into and out of the Monitored Funds within given periods of time. For example, we currently monitor transfer activity to determine if for each category of international, small-cap and high- yield Funds, in a 12-month period there were, (1) six or more transfers involving the given category; (2) cumulative gross transfers involving the given category that exceed the current Contract Value; and (3) two or more "round- trips" involving any Fund in the given category. A round-trip generally is defined as a transfer in followed by a transfer out within the next seven calendar days or a transfer out followed by a transfer in within the next seven calendar days, in either case subject to certain other criteria. We do not believe that other Funds present a significant opportunity to engage in arbitrage trading and therefore do not monitor transfer activity in those Funds. We may change the Monitored Funds at any time without notice in our sole discretion. In addition to monitoring transfer activity in certain Funds, we rely on the underlying Funds to bring any potential disruptive trading activity they identify to our attention for investigation on a case-by-case basis. We will also investigate other harmful transfer activity that we identify from time to time. We may revise these policies and procedures in our sole discretion at any time without prior notice. American Funds Monitoring Policy. As a condition to making their portfolios available in our products, American Funds requires us to treat all American Funds portfolios as Monitored Funds under our current market timing and excessive trading policies and procedures. Further, American Funds requires us to impose additional specified monitoring criteria for all American Funds portfolios available under the Policy, regardless of the potential for arbitrage trading. We are required to monitor transfer activity in American Funds portfolios to determine if there were two or more transfers in followed by transfers out, in each case of a certain dollar amount or greater, in any 30-day period. A first violation of the American Funds monitoring policy will result in a written notice of violation; any additional violation will result in the imposition of the transfer restrictions described below. Further, as Monitored Funds, American Funds portfolios also will be subject to our current market timing and excessive trading policies, procedures and restrictions, and transfer restrictions may be imposed upon a violation of either monitoring policy. Although we do not have the operational or systems capability at this time to impose the American Funds monitoring policy and/or to treat all of the American Funds portfolios as Monitored Funds under our policy, we intend to do so in the future. Our policies and procedures may result in transfer restrictions being applied to deter market timing. Currently, when we detect transfer activity in the Monitored Funds that exceeds our current transfer limits, or other transfer activity that we believe may be harmful to other Policy Owners or other persons who have an interest in the Policies, we will exercise our contractual right to revise, suspend or eliminate transfer privileges, including limiting the acceptable mode of requesting transfers, and thereafter will only accept transfer requests via regular U.S. mail (and overnight delivery services) and will reject transfer requests requested via facsimile, telephone or Internet. This restriction will apply to all Policies within a 'plan' (i.e. arrangements where an employer or trustee will own a group of Policies on the lives of certain employees or in other instances, where a group of Policies will be purchased at one time) unless 36 the employer, trustee or other administrator has the ability to apply a transfer restriction meeting our requirements to individual Policies. In addition, we also reserve the right, but do not have the obligation, to further restrict the right to request transfers by any market timing firm or any other third party who has been authorized to initiate transfers on behalf of multiple Policy Owners. We may, among other things: - reject the transfer instructions of any agent acting under a power of attorney on behalf of more than one Policy Owner, or - reject the transfer or exchange instructions of individual owners who have executed pre-authorized transfer forms which are submitted by market timing firms or other third parties on behalf of more than one Policy Owner. Transfers made under a Dollar Cost Averaging Program, a rebalancing program, or, if applicable, any asset allocation program described in this prospectus are not treated as a transfer when we evaluate trading patterns for market timing or excessive trading. The detection and deterrence of harmful transfer activity involves judgments that are inherently subjective, such as the decision to monitor only those Funds that we believe are susceptible to arbitrage trading or the determination of the transfer limits. Our ability to detect and/or restrict such transfer activity may be limited by operational and technological systems, as well as our ability to predict strategies employed by Policy Owners to avoid such detection. Our ability to restrict such transfer activity also may be limited by provisions of the Policy. Accordingly, there is no assurance that we will prevent all transfer activity that may adversely affect Policy Owners and other persons with interests in the Policies. We do not accommodate market timing in any Fund and there are no arrangements in place to permit any policy owner to engage in market timing; we apply our policies and procedures without exception, waiver, or special arrangement. The Funds may have adopted their own policies and procedures with respect to frequent purchases and redemptions of their respective shares, and we reserve the right to enforce these policies and procedures. For example, Funds may assess a redemption fee (which we reserve the right to collect) on shares held for a relatively short period. The prospectuses for the Funds describe any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted. Although we may not have the contractual obligation or the operational capacity to apply the frequent trading policies and procedures of the Funds, we have entered into a written agreement, as required by SEC regulation, with each Fund or its principal underwriter that obligates us to provide to the Fund promptly upon request certain information about the trading activity of individual Policy Owners, and to execute instructions from the Fund to restrict or prohibit further allocations or transfers by specific Policy Owners who violate the frequent trading policies established by the Fund. In addition, Policy Owners and other persons with interests in the Policies should be aware that the purchase and redemption orders received by the Funds are generally "omnibus" orders from intermediaries such as retirement plans or separate accounts funding variable insurance contracts. The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance contracts and/or individual retirement plan participants. The omnibus nature of these orders may limit the Funds in their ability to apply their frequent trading policies and procedures. In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations. For these reasons, we cannot guarantee that the Funds (and thus Policy Owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Funds. If a Fund believes that an omnibus order reflects one or more transfer requests from Policy Owners engaged in disruptive trading activity, the Fund may reject the entire omnibus order. In accordance with applicable law, we reserve the right to modify or terminate the transfer privilege at any time. We also reserve the right to defer or restrict the transfer privilege at any time that we are unable to purchase or redeem shares of any of the Funds, including any refusal or restriction on purchases or redemptions of their shares as a result of their own policies and procedures on market timing activities (even if an entire omnibus order is rejected due to the market timing activity of a single policy owner). You should read the Fund prospectuses for more details. We reserve the right to limit the number of free transfers among the Investment Options to six in any Policy Year and to charge a $10 transfer fee for each additional transfer that we allow. We also reserve the right to limit the number of transfers between the Fixed Account and the Separate Account to two in any Policy Year. See below for additional restrictions involving transfers between the Fixed Account and the Separate Account. 37 TRANSFER OF CONTRACT VALUE FROM THE FIXED ACCOUNT TO THE INVESTMENT OPTIONS Transfers from the Fixed Account must be made within 30 days after your Policy Anniversary or semi-anniversary. We reserve the right to limit the amount transferred from the Fixed Account to the Investment Options to 25% of the Contract Value in the Fixed Account. We are not currently enforcing these restrictions but reserve the right to do so in the future. TRANSFER OF CONTRACT VALUE FROM THE INVESTMENT OPTIONS TO THE FIXED ACCOUNT Transfers to the Fixed Account may not be made prior to the first Policy Anniversary or within 12 months of any prior transfer. We reserve the right to restrict the amount transferred to the Fixed Account to 20% of the portion of the Contract Value attributable to the Investment Options at the end of the prior Valuation Period. We reserve the right to refuse transfers to the Fixed Account if the Fixed Account is greater than or equal to 30% of the Contract Value. We are not currently enforcing these restrictions but reserve the right to do so in the future. DOLLAR-COST AVERAGING (DCA PROGRAM) You may establish automated transfers of CONTRACT VALUE on a monthly or quarterly basis from any Investment Option to any other available Investment Option by completing our DCA authorization form or through other written request acceptable to us. You must have a minimum of $1000 of CONTRACT VALUE to enroll in the DCA Program. The minimum automated transfer amount is $100. You may start or stop participation in the DCA Program at any time, but you must give the Company at least 30 days' notice to change any automated transfer instructions that are currently in place. Automated transfers are subject to all of the other provisions and terms of the Policy. The Company reserves the right to suspend or modify transfer privileges at any time and to assess a processing fee for this service. Before transferring any part of the CONTRACT VALUE, you should consider the risks involved in switching between Investment Options available under this Policy. Dollar-Cost Averaging requires regular investments regardless of fluctuating price levels and does not guarantee profits or prevent losses in a declining market. Potential investors should consider their financial ability to continue purchases through periods of low price levels. The Fixed Account is not eligible for participation in the Dollar-Cost Averaging program. PORTFOLIO REBALANCING This program can help prevent a structured investment strategy from becoming diluted over time. Investment performance will likely cause the allocation percentages for the Investment Options you most recently selected to shift. Under this program, you may instruct us to periodically, and automatically, reallocate values in your Policy to return your allocation percentages for the Investment Options to the allocation percentages you originally selected. You may participate in the Portfolio Rebalancing Program by completing our rebalancing form. DEATH BENEFIT - -------------------------------------------------------------------------------- The Death Benefit under the Policy is the amount paid to the Beneficiary upon the death of the Insured. The Death Benefit will be the Amount Insured at the time of death minus any unpaid Monthly Deduction Amount, any Outstanding Loans, and any amount payable to an assignee under a collateral assignment of the Policy. You may elect one of three Death Benefit options. As long as the Policy remains in effect, the Company guarantees that the Death Benefit under any option will be at least the current Stated Amount of the Policy less any Outstanding Loan and unpaid Monthly Deduction Amount. The Amount Insured under any option may vary with the Contract Value of the Policy. Under Option 1 (the "LEVEL OPTION"), the Amount Insured will be equal to the Stated Amount of the Policy or, if greater, a specified multiple of Contract Value (the "MINIMUM AMOUNT INSURED"). Under Option 2 (the "VARIABLE OPTION"), the Amount Insured will be equal to the Stated Amount of the Policy plus the Contract Value (determined as of the date of the Insured's death) or, if greater, the Minimum Amount Insured. Under Option 3 (the "ANNUAL INCREASE OPTION"), the Amount Insured will be equal to (a) plus (b) where: (a) is the Stated Amount of the Policy and (b) is the greater of zero and the lesser of (i) and (ii) where (i) is the Option 3 maximum increase 38 shown on the Policy Summary and (ii) is the total Premium Payments less partial surrenders accumulated at the interest rate shown on the Policy Summary; or if greater, the Minimum Amount Insured. The Minimum Amount Insured is the amount required to qualify the Policy as a life insurance policy under the current federal tax law. Under that law, the Minimum Amount Insured equals a stated percentage of the Policy's Contract Value determined as of the first day of each Policy Month. The percentages differ according to the attained age of the Insured and the definition of life insurance under Section 7702 of the Internal Revenue Code (the "Code") selected by you at the time of application. (Cash Value Accumulation Test or Guideline Premium Cash Value Corridor Test). The Minimum Amount Insured is set forth in the Policy and may change as federal income tax laws or regulations change. The following is a schedule of the applicable percentages for the Guideline Premium Cash Value Corridor Test. For attained ages not shown, the applicable percentages will decrease evenly:
ATTAINED AGE OF INSURED PERCENTAGE - --------------- ---------- 0-40 250 45 215 50 185 55 150 60 130 65 120 70 115 75-90 105 95+ 101
Federal tax law imposes another cash funding limitation on cash value life insurance policies that may increase the Minimum Amount Insured shown above. This limitation, known as the "guideline premium limitation," generally applies during the early years of variable universal life insurance policies. In the Cash Value Accumulation Test, the factors at the end of a Policy Year are set forth in APPENDIX D. The investment performance of the Funds, expenses and deduction of charges all impact Contract Value. In some circumstances, the Death Benefit may vary with the amount of the Contract Value. Under Death Benefit Option 1, the Death Benefit will vary with the Contract Value whenever the Contract Value multiplied by the applicable Minimum Amount Insured percentage set forth in Section 7702 of the Code is greater than the Stated Amount. Under Death Benefit Option 2, the Death Benefit will always vary with the Contract Value because the Death Benefit is equal to the Stated Amount of the Policy plus the Contract Value as of the date of the Insured's death (or if greater, the Minimum Amount Insured as of the date of the Insured's death). Under Death Benefit Option 3, the Death Benefit will vary with the Contract Value whenever the Contract Value multiplied by the applicable Minimum Amount Insured percentage set forth in Section 7702 of the Code is greater than the Stated Amount plus Premium Payments paid, minus partial surrenders, accumulated at the specified interest rate. Finally, if the investment performance of the Funds is too low and the Contract Value of your Policy falls below the amount necessary to pay the Monthly Deduction Amount due and you do not send us sufficient Premium Payments, your Policy may lapse and no coverage will be in effect. DEATH BENEFIT EXAMPLES The following examples demonstrate the relationship between the Death Benefit, the Cash Surrender Value and the Minimum Amount Insured under the various Death Benefit Options. The examples assume an Insured of age 40, a Minimum Amount Insured of 250% of Contract Value (assuming the preceding table is controlling as to Minimum Amount Insured), and no Outstanding Loan. OPTION 1 -- LEVEL DEATH BENEFIT In the following examples of an Option 1 Level Death Benefit, the Death Benefit under the Policy is generally equal to the Stated Amount of $50,000. Since the Policy is designed to qualify as a life insurance policy, the Death Benefit cannot be less than the Minimum Amount Insured (or, in this example, 250% of the Contract Value). 39 EXAMPLE ONE. If the Contract Value of the Policy equals $10,000, the Minimum Amount Insured would be $25,000 ($10,000 x 250%). Since the Death Benefit in the Policy is the greater of the Stated Amount ($50,000) or the Minimum Amount Insured ($25,000), the Death Benefit would be $50,000. EXAMPLE TWO. If the Contract Value of the Policy equals $40,000, the Minimum Amount Insured would be $100,000 ($40,000 x 250%). The resulting Death Benefit would be $100,000 since the Death Benefit is the greater of the Stated Amount ($50,000) or the Minimum Amount Insured ($100,000). OPTION 2 -- VARIABLE DEATH BENEFIT In the following examples of an Option 2 Variable Death Benefit, the Death Benefit varies with the investment experience of the applicable Investment Options and will generally be equal to the Stated Amount plus the Contract Value of the Policy (determined on the date of the Insured's death). The Death Benefit cannot, however, be less than the Minimum Amount Insured (or, in this example, 250% of the Contract Value). EXAMPLE ONE. If the Contract Value of the Policy equals $10,000, the Minimum Amount Insured would be $25,000 ($10,000 x 250%). The Death Benefit ($60,000) would be equal to the Stated Amount ($50,000) plus the Contract Value ($10,000), unless the Minimum Amount Insured ($25,000) was greater. EXAMPLE TWO. If the Contract Value of the Policy equals $60,000, then the Minimum Amount Insured would be $150,000 ($60,000 x 250%). The resulting Death Benefit would be $150,000 because the Minimum Amount Insured ($150,000) is greater than the Stated Amount plus the Contract Value ($50,000 + $60,000 = $110,000). OPTION 3 -- ANNUAL INCREASE OPTION In the following examples of an Option 3 Annual Increase Option, the Death Benefit is generally equal to the Stated Amount of $50,000 plus Premium Payments paid minus partial surrenders, accumulated at the specified interest rates. EXAMPLE ONE. If the Contract Value of the Policy equals $10,000, the Minimum Amount Insured would be $25,000 ($10,000 x 250%). The Death Benefit ($52,650) would be equal to the Stated Amount ($50,000) plus Premium Payments ($2,500) aggregated at 6.00% for one year, unless the Minimum Amount Insured ($25,000) was greater. EXAMPLE TWO. If the Contract Value of the Policy equals $40,000, the Minimum Amount Insured would be $100,000 ($40,000 x 250%). The Death Benefit would be $100,000 since the Minimum Amount Insured is greater than the Stated Amount plus Premium Payments aggregated at 6.00% for one year ($52,650). CHANGING THE DEATH BENEFIT OPTION After the first Policy Year, if the Insured is alive you may change the Death Benefit Option by sending a written request to the Company. The following changes in Death Benefit Options are permissible: Option 1 -- 2 Option 2 -- 1 Option 3 -- 1 It is not permitted to change from Option 3 to 2, Option 1 to 3, and Option 2 to 3. If the Option is changed from Option 1 to Option 2, the Stated Amount will be reduced by the amount of the Contract Value at the time of the change. If the Option is changed from Option 2 to Option 1, the Stated Amount will be increased by the amount of the Contract Value at the time of the Option change. Such an increase in Stated Amount will not require evidence of insurability. If the Option is changed from Option 3 to Option 1, the Stated Amount will be increased by the amount of accumulated premiums paid at the time of the option change. There are no other direct consequences of changing a Death Benefit option, except as described under "Tax Treatment of Policy Benefits." However, the change could affect future values of Net Amount At Risk. The cost of insurance charge which is based on the Net Amount At Risk may be different in the future. 40 PAYING THE DEATH BENEFIT AND PAYMENT OPTIONS Death Benefits are payable within seven days after we receive satisfactory proof of the Insured's death at our Administrative Office. The amount of Death Benefit paid may be adjusted to reflect any unpaid Monthly Deduction Amount, any Outstanding Loan, any material misstatements in the Policy application as to age or sex of the Insured, and any amounts payable to an assignee under a collateral assignment of the Policy. If no Beneficiary is living when the Insured has died, the Death Benefit will be paid to the Policy Owner, if living, otherwise, the Death Benefit will be paid to the Policy Owner's estate. Subject to state law, if the Insured commits suicide within two years following the Issue Date, limits on the amount of Death Benefit paid will apply (See "Limits on Right to Contest and Suicide Exclusion"). In addition, if the Insured dies during the 61-day period after the Company gives notice to the Policy Owner that the Cash Surrender Value of the Policy is insufficient to meet the Monthly Deduction Amount due against the Contract Value of the Policy, then the Death Benefit actually paid to the Policy Owner's Beneficiary will be reduced by the amount of the Deduction Amount that is due and unpaid. (See "Contract Value" for effects of partial surrenders on Death Benefits.) We will pay policy proceeds in a lump sum. We may defer payment of proceeds which exceed the Contract Value for up to six months from the date of the request for the payment. The amount of the Death Benefit that exceeds the Contract Value is paid from the Company's General Account. Death Benefit amounts paid from the General Account are subject to the claims paying ability of the Company. We will make any other arrangements for periodic payments as may be agreed upon. If any periodic payment due any payee is less than $50, we may make payments less often. If we have declared a higher rate under an option on the date the first payment under an option is due, we will base the payments on the higher rate. BENEFITS AT MATURITY - -------------------------------------------------------------------------------- If your Policy is in effect on the Maturity Date, we will pay the Policy's Contract Value less any Outstanding Loan, any unpaid Monthly Deduction Amount and any amounts payable to an assignee under a collateral assignment of the Policy. We will then have no further obligations under the Policy. OTHER BENEFITS - -------------------------------------------------------------------------------- EXCHANGE OPTION Once the Policy is in effect, during the first 24 months you may choose to irrevocably transfer all Contract Value in the Investment Options to the Fixed Account (subject to state law). Upon election of this option, no future transfers to the Investment Options will be permitted. All future Premium Payments will be allocated to the Fixed Account. No evidence of insurability is required to exercise this option. Cost of insurance rates will be based on the same risk classification as those of the former Policy. Any Outstanding Loan must be repaid before we will make an exchange. SUPPLEMENTAL INSURANCE BENEFITS You may choose to purchase the Insured Term Rider as an addition to the Policy. Qualifying Policy Owners may choose to purchase the Adjustable Term Insurance Rider as an addition to the Policy. Qualifying Policy Owners are those who purchase the Policy in connection with certain corporate executive benefit plans offered through designated broker-dealers. You should ask your registered representative if the broker-dealer with which he or she is associated is one through which the Adjustable Term Insurance Rider is available. Combining a Policy and a term rider, sometimes known as "blending," may be more economical than adding another Policy or purchasing a Policy with a higher base Policy Stated Amount. Combining a Policy and a term rider may lower costs and may improve Contract Value accrual for the same amount of Death Benefit. However, in general, your Policy is being used to informally fund certain executive benefits. Adding a term rider does not necessarily reduce the cost of offering benefits to your executives. 41 Adding a term rider may also affect the amount of premium you can pay on your Policy and still have it qualify as life insurance. Ultimately, individual needs and objectives vary, and they may change through time. It is important that you consider your goals and options carefully. You choose the proportion of your total coverage that is comprised of base Policy Stated Amount and term rider Stated Amount. You should discuss your insurance needs and financial objectives with your registered representative before purchasing any life insurance product. Your registered representative can provide you with additional illustrations showing the effects of different proportions of Policy and term rider coverage to help you make your decision. You should also consider a periodic review of your coverage with your registered representative. We will provide you with illustrations based on different sets of assumptions upon your request. You can request such illustrations at any time. Illustrations may help you understand how your Policy values would vary over time based on different assumptions. CASH VALUE ENHANCEMENT RIDER You also may choose to add the Cash Value Enhancement Rider to the Policy. There is no charge for the Rider. The Rider provides a benefit called the Cash Value Enhancement. The Cash Value Enhancement benefit is an amount in addition to the Cash Surrender Value that the Company may pay you if you surrender the Policy during a certain time frame set forth in the Rider. The maximum amount of the benefit for each Policy Year is set forth on a schedule in the Rider, and is a percentage of cumulative premiums paid less partial surrenders. The payment of the benefit is NOT guaranteed and may be changed at any time if future expectations in investment earnings, persistency and/or expenses (including taxes) differ from assumptions in pricing. The benefit will not be payable if the Policy has been assigned or is being exchanged in connection with a tax- exempt change under Section 1035. POLICY SURRENDERS - -------------------------------------------------------------------------------- You may withdraw all or a portion of the Cash Surrender Value from the Policy on any day that the Company is open for business. Withdrawing all or a portion of the Cash Surrender Value may have tax consequences. (See "Tax Treatment of Policy Benefits.") FULL SURRENDER You may surrender the Policy and receive its Cash Surrender Value. (You may request a surrender without the Beneficiary's consent provided the Beneficiary has not been designated as irrevocable. If so, you will need the Beneficiary's consent.) The Cash Surrender Value will be determined as of the date we receive the written request at our Administrative Office. The Cash Surrender Value is the Contract Value, minus any Outstanding Loans. We will pay you within seven (7) days after we receive your request in good order. The Policy will terminate on the date we receive your request in good order. PARTIAL SURRENDER You may request a partial surrender of the Policy. The minimum amount is $500. The amount paid to you will be the net amount requested. We will deduct the net amount surrendered pro rata from all your selected Investment Options and the Fixed Account, unless you give us other written instructions. When you request a partial surrender, the portion of the Contract Value deducted from the Fixed Account is based on the proportion of the Fixed Account value relative to the Contract Value of the Policy as of the date we receive your request. A deduction greater than this proportionate amount is not permitted. We will pay you within seven days after we receive your request in good order at our Administrative Office. In addition to reducing the Policy's Contract Value and Amount Insured, partial surrenders will reduce the Death Benefit payable under the Policy. We will reduce the Stated Amount by the amount necessary to prevent any increase in the Coverage Amount. We may require you to return the Policy to record this reduction. 42 You may request a partial surrender only after the first Policy Year. While we are not currently enforcing this restriction, we reserve our right to do so in the future. POLICY LOANS - -------------------------------------------------------------------------------- While the Policy is in force, you may borrow money using the Policy as the sole security (collateral) for the loan. A loan that is taken from, or secured by, a Policy may have tax consequences. (See "Federal Tax Considerations.") LOAN CONDITIONS - You may borrow up to 100% of the Policy's Cash Surrender Value as of the date we receive the written loan request in good order. We charge you interest on the amount of the loan. - The loan request must be at least $500, except where state law requires a different minimum. - To secure the loan, we transfer an amount equal to the loan from the Investment Options (pro-rata by assets) to the Loan Account. Loan amounts will be transferred from the Fixed Account only when insufficient amounts are available in the Investment Options. - We charge interest on the outstanding amount of your loan(s), and you must pay this interest in arrears at the end of each Policy Year. The annual effective loan interest rate charged is 5.00%. Interest not paid when due will be added to the amount of the loan. We will transfer an amount equal to the unpaid loan interest from the Investment Options to the Loan Account as security for the loan. If you have an Outstanding Loan and request a second loan, we will add the amount of Outstanding Loan to the loan request. - Amounts in the Loan Account are guaranteed to earn interest at a rate of at least 4% per year in arrears. Currently, the annual effective loan interest rate credited is 4.40% in years 1-10, 4.50% in years 11- 20 and 4.85% in years 21 and later. - We normally pay the amount of the loan within seven (7) days of our receipt of the written loan request. We may postpone the payment of the loans under certain conditions. - You may repay all or a part of your Outstanding Loans at any time while the Insured is alive by sending the repayment to our Administrative Office. - Unless you request otherwise, we will apply any payment that we receive while there is a loan on the Policy as follows: first, towards repayment of any loan interest due; next, towards repayment of the loan principal; and last, as a Premium Payment to the Policy. - As you repay the loan, we deduct the amount of the repayment from the Loan Account and credit the payment to the Investment Options based on which Investment Option(s) you took the loan from. Also, we will deduct the amount of the repayment from the Loan Account and credit the repayment to the Fixed Account based on the proportion of the Fixed Account value relative to the Policy's Contract Value as of the date we receive the loan request. - We will deduct any unpaid loan amount, including interest you owe, from your Contract Value when you surrender the Policy and from the Death Benefit proceeds if they become payable. - If any unpaid loan amount, including any interest you owe, equals or exceeds the Contract Value, causing the Cash Surrender Value of your Policy to become zero, then your Policy will enter a 31-day grace period, subject to state law. (See "Lapse and Reinstatement.") EFFECTS OF LOANS A loan affects the Policy, because we reduce the Death Benefit proceeds and Cash Surrender Value under the Policy by any Outstanding Loan amount. Repaying the loan causes the Death Benefit proceeds and Cash Surrender Value to increase by the amount of the repayment. As long as a loan is outstanding, we hold an amount equal to the loan 43 amount in the Loan Account. The amount is not affected by the performance of the Investment Options and may not be credited with the same interest rates currently accruing on amounts allocated to the Fixed Account. Amounts transferred from an Investment Option to the Loan Account will affect the value that was in that Investment Option because we credit such amounts with an interest rate we declare, rather than with a rate of return reflecting the investment results of that Investment Option. There are risks involved in taking a loan, a few of which include an increased potential for the Policy to lapse if projected earnings, taking into account Outstanding Loans, are not achieved. A loan may have tax consequences. (See "Tax Treatment of Policy Benefits.") You should consult a tax adviser before taking out a loan. We will notify you (and any assignee of record) if the sum of your loans plus interest you owe on the loans is more than the Cash Surrender Value. If you do not submit a sufficient payment within 31 days from the date of the notice, your Policy may lapse. LAPSE AND REINSTATEMENT - -------------------------------------------------------------------------------- LAPSE Generally, if on any Deduction Date, the Cash Surrender Value of your Policy is too low to cover the Monthly Deduction Amount, your Policy will be in default and a grace period will begin. Thirty days after the default happens, we will send you a lapse notice to your last known address that the Policy may terminate. The notice will state the amount due to keep the Policy in effect and the date by which you must pay the amount due. Generally, the amount due to keep the Policy in effect will be all Monthly Deduction Amounts past due plus premium at least equal to the following three Monthly Deduction Amounts and the amount to repay or restore any Outstanding Loans. GRACE PERIOD After the lapse notice is sent, if you do not pay the required amount within 31 days (subject to state law) the Policy will terminate without value, insurance coverage will no longer be in effect, and you will receive no benefits. As long as there is an Outstanding Loan, we will treat that portion of any sufficient payment received during the grace period that is less than or equal to the amount of the Outstanding Loan as a repayment of the Outstanding Loan and not as an additional Premium Payment unless you request otherwise. Accordingly, we will transfer the assumed loan repayment amount from the Contract Value held in our Loan Account to the Investment Options and/or Fixed Account, thereby increasing the Cash Surrender Value and potentially preventing a lapse. If the Insured dies during the Grace Period before you have paid the required premium, the Death Benefit will still be payable to the Beneficiary, although we will reduce the amount of the Death Benefit proceeds by the Monthly Deduction Amount due plus the amount of any Outstanding Loan. REINSTATEMENT You may reinstate the Policy within three (3) years from the date on which the Monthly Deduction Amount was last paid if: (1) the Policy was not surrendered for cash and it is before the Maturity Date; (2) you furnish us with acceptable evidence of insurability; (3) you pay all past due Monthly Deduction Amounts; (4) you pay Premium Payments equaling the next three Monthly Deduction Amounts (subject to state law); and (5) you pay the amount of any Outstanding Loan. Upon reinstatement, the Policy's Contract Value, prior to applying any premiums or loan repayments will be the Contract Value at the end of the Grace Period. The effective date of the reinstated policy will be the Deduction Date 44 on or following the date the application for reinstatement is approved by us. Unless it is specified otherwise, all amounts will be allocated based on the Fund allocation factors in effect at the start of the Grace Period. FEDERAL TAX CONSIDERATIONS - -------------------------------------------------------------------------------- The effect of federal income taxes on the economic benefits provided under the Policy depends on a variety of factors, including but not limited to the tax status of the Policy Owner and the tax treatment of the Policy (whether it is a modified endowment contract). This tax treatment is highly complex. The following SUMMARY PROVIDES A GENERAL DESCRIPTION OF THE MATERIAL FEDERAL TAX CONSEQUENCES to the Policy Owner and Beneficiary of buying, holding and exchanging rights under the Policy. This discussion is only a brief general summary and does not purport to be complete or cover all situations and is not intended as tax or legal advice. This discussion is based upon the Company's understanding of the federal income tax laws as currently interpreted by the U.S. Treasury ("Treasury") and the Internal Revenue Service ("IRS"). The Company cannot guarantee that those laws or interpretations will remain unchanged. IT SHOULD BE UNDERSTOOD THAT THIS IS NOT AN EXHAUSTIVE DISCUSSION OF ALL TAX QUESTIONS THAT MIGHT ARISE UNDER THE POLICIES. NO ATTEMPT HAS BEEN MADE TO ADDRESS ANY FEDERAL ESTATE TAX OR STATE AND LOCAL TAX CONSIDERATIONS THAT MAY ARISE IN CONNECTION WITH A POLICY. FOR COMPLETE INFORMATION, A QUALIFIED TAX OR LEGAL ADVISER SHOULD BE CONSULTED. IRS Circular 230 Notice: The tax information contained herein is not intended to (and cannot) be used by anyone to avoid IRS penalties. It is intended to support the sale of the Policy. You should seek tax advice based on your particular circumstances from an independent tax adviser. POTENTIAL BENEFITS OF LIFE INSURANCE Life insurance, including the Policy, is a unique financial instrument with a number of potential tax advantages including: - INCOME TAX-FREE DEATH BENEFITS (e.g., the Death Benefit under the Policy, including the portion attributable to the increase in value based on the Investment Options, may pass to your Beneficiary free of income taxes if the requirements of IRC Section 101 are satisfied.) - INCOME TAX-FREE GROWTH OF CONTRACT VALUE (e.g., within the Policy, any increase in value based on the Investment Options may be tax-deferred until withdrawn, and as mentioned above, will not be subject to federal income taxes if paid as a Death Benefit.) - INCOME TAX-FREE ACCESS TO CONTRACT VALUE THROUGH LOANS AND/OR WITHDRAWALS (e.g., under certain circumstances, such as where you adhere to certain premium limits, a Policy Owner may access cash from the Policy through a withdrawal, up to the tax basis, or a loan without facing tax consequences.) Whether and how these benefits may be utilized is largely governed by Sections 7702, 7702A, 817 and 101 of the Internal Revenue Code ("IRC" or the "CODE"). These federal tax laws were passed to ensure that the tax advantages of life insurance are not abused. In sum, these federal tax laws, among numerous other things, establish the following: - A definition of a life insurance contract. - Diversification requirements for separate account assets. - Limitations on policy owner's control over the assets in a separate account. - Guidelines to determine the maximum amount of premium that may be paid into a policy. - Limitations on withdrawals from a policy. - Qualification testing for all life insurance policies that have cash value features. 45 TAX STATUS OF THE POLICY DEFINITION OF LIFE INSURANCE In order for this Policy to offer some or all of the tax advantages described above, it must meet the definition of a life insurance contract under SECTION 7702 of the Code. Complying with either the cash value accumulation test or the guideline premium cash value corridor test set forth in IRC Section 7702 will satisfy this definition. Guidance as to how IRC Section 7702 is to be applied, however, is limited. If a Policy were determined not to be a life insurance contract for purposes of IRC Section 7702, such Policy would not provide the tax advantages normally described above. The insurance proceeds payable upon death of the insured under a Policy will never be less than the minimum amount required for the Policy to be treated as life insurance under section 7702 of the Internal Revenue Code, as in effect on the date the Policy was issued. The Company believes that it is reasonable to conclude that the Policy meets the IRC Section 7702 definition of a life insurance contract. The Company reserves the right to make changes in the Policy if such changes are deemed necessary to attempt to assure its qualification as a life insurance contract for tax purposes. DIVERSIFICATION In addition to meeting the definition of a life insurance contract in IRC Section 7702, to qualify as life insurance for federal income tax purposes, separate account investments (or the investments of a Fund, the shares of which are owned by separate accounts of insurance companies) underlying the Policy must also be "adequately diversified" pursuant to SECTION 817(H) of the IRC. The Separate Account, through the Funds, intends to comply with these requirements. Although the Company does not control the Funds, the Company intends to monitor the investments of the Funds to ensure compliance with the diversification requirements. If Fund shares are sold directly to tax-qualified retirement plans that later lose their tax-qualified status or to non-qualified plans, the separate accounts investing in the Fund may fail the diversification requirement of Section 817(h) of the Code, which could have adverse tax consequences for variable policy contract owners, including losing the benefit of tax deferral. INVESTOR CONTROL In certain circumstances, owners of variable life insurance contracts may be considered the owners, for federal income tax purposes, of the assets of the separate accounts used to support their policy or contract rather than the insurance company. In those circumstances, a proportionate share of the income and gains from the separate account assets would be includable in the variable contract owner's gross income each year. The IRS has stated in published rulings that a variable contract owner will be considered the owner of separate account assets IF THE CONTRACT OWNER POSSESSES INCIDENTS OF OWNERSHIP IN THOSE SEPARATE ACCOUNT ASSETS, such as the ability to exercise investment control over the assets. While we believe that the Policy does not give the Policy Owner investment control over the Separate Account assets, we reserve the right to modify the Policy as necessary to prevent a Policy Owner from being treated as the owner of the Separate Account assets supporting the Policy. TAX TREATMENT OF POLICY BENEFITS The remaining tax discussion assumes that the Policy qualifies as a life insurance contract for federal income tax purposes. IN GENERAL The Company believes that the DEATH BENEFIT UNDER THE POLICY WILL BE EXCLUDABLE FROM THE GROSS INCOME OF THE BENEFICIARY under IRC Section 101(a)(1), unless the Policy has been transferred for value and no exception to the transfer for value rules set forth in IRC Section 101 (a)(2) applies. 46 In the case of employer-owned life insurance as defined in IRC Section 101(j), the amount excludable from gross income is limited to premiums paid unless the policy falls within certain specified exceptions and a notice and consent requirement is satisfied before the policy is issued. Certain specified exceptions are based on the status of an employee as highly compensated or recently employed. There are also exceptions for policy proceeds paid to an employee's heirs. These exceptions only apply if proper notice is given to the insured employee and consent is received from the insured employee before the issuance of the policy. These rules apply to policies issued August 18, 2006 and later and also apply to policies issued before August 18, 2006 after a material increase in the death benefit or other material change. An IRS reporting requirement applies to employer-owned life insurance subject to these rules. Because these rules are complex and will affect the tax treatment of Death Benefits, it is advisable to consult tax counsel. In addition, the Policy Owner will generally not be deemed to be in constructive receipt of the Contract Value, including increments thereof, until there is a distribution. (See discussion of "Modified Endowment Contracts" below.) Depending on the circumstances, the exchange of one life insurance policy for another, a change in the policy's face amount, a change in the policy's death benefit option, a payment of an increased level of premiums, a policy loan, a partial or full surrender, a lapse with outstanding indebtedness, a change in ownership, or an assignment of the policy may have federal income tax consequences. In addition, such actions may have federal gift and estate, as well as state and local tax consequences that will depend upon the financial situation and other circumstances of each owner or beneficiary. You should consult your tax or legal adviser for further advice on all tax issues. THE TAX CONSEQUENCES OF DISTRIBUTION FROM, AND LOANS TAKEN FROM OR SECURED BY, A POLICY DEPEND ON WHETHER THE POLICY IS CLASSIFIED AS A "MODIFIED ENDOWMENT CONTRACT." MODIFIED ENDOWMENT CONTRACTS (MEC) Special tax considerations apply to "Modified Endowment Contracts" (MEC). A MEC is defined under tax law as ANY POLICY THAT SATISFIES THE PRESENT DEFINITION OF A LIFE INSURANCE CONTRACT FOR FEDERAL TAX PURPOSES BUT WHICH FAILS TO SATISFY A 7-PAY TEST AS SET FORTH IN THE IRC SECTION 7702A. A contract fails to satisfy the 7-pay test if the cumulative amount of premiums paid under the contract at any time during the first seven contract years exceeds the sum of the net level premiums that would have been paid on or before such time had the contract provided for paid-up future benefits after the payment of seven level annual premiums. If a material change in the contract occurs either during the first seven contract years, or later, a new seven-year testing period is begun to determine whether the policy constitutes a MEC. A decrease to the Stated Amount of the Policy may cause a retest under the 7-pay test and could cause your Policy to become a MEC. Tax regulations or other guidance will be needed to fully define those transactions that are material changes. Any POLICY ISSUED IN EXCHANGE FOR A MEC will be subject to the tax treatment accorded to MECs. However, the Company believes that any policy received in exchange for a life insurance contract that is not a MEC will generally not be treated as a MEC if the face amount of the policy is greater than or equal to the death benefit of the policy being exchanged. The payment of any premiums at the time of or after the exchange may, however, cause the policy to become a MEC. LOANS AND PARTIAL WITHDRAWALS from, as well as collateral assignments of, policies that are MECs will be treated as distributions to the policy owner for tax purposes. All pre-death distributions (including loans, partial withdrawals and collateral assignments) from MECs will be included in gross income on an income-first basis to the extent of any income in the policy (the contract value less the policy owner's investment in the policy) immediately before the distribution. The law also imposes an additional 10% TAX ON PRE-DEATH DISTRIBUTIONS (including loans, collateral assignments, partial withdrawals and full surrenders) FROM MECS to the extent they are included in income, unless a specific exception to the penalty applies. The penalty does not apply to amounts which are distributed on or after the date on which the taxpayer attains age 59 1/2, because the taxpayer is disabled, or as substantially equal periodic payments over the taxpayer's life (or life expectancy) or over the joint lives (or joint life expectancies) of the taxpayer and his or her beneficiary. If a Policy becomes a MEC, distributions that occur during the contract year will be taxed as distributions from a MEC. In addition, distributions from a Policy within two years before it becomes a MEC will be taxed in this manner. 47 This means that a distribution made from a Policy that is not a MEC (and therefore not taxable at the time of the distribution) could later become taxable as a distribution from a MEC if due to subsequent changes to the Policy, it later becomes a MEC. For purpose of applying the MEC rules, all MECs that are issued by the Company (or its affiliates) to the same owner during any calendar year will be treated as one MEC contract for purposes of determining the amount includable in the owner's gross income at the time of a distribution from any such contract. The death benefit of a MEC remains excludable from the gross income of the beneficiary to the extent described above in "Tax Treatment of Policy Benefits." Furthermore, no part of the investment growth of the Contract Value of a MEC is includable in the gross income of the owner unless the contract matures, is distributed or partially surrendered, is pledged, collaterally assigned, or borrowed against, or otherwise terminates with income in the contract prior to death. A full surrender of the MEC after age 59 1/2 will have the same tax consequences as life insurance policies generally as described above in the section entitled "Tax Treatment of Policy Benefits." Due to the complexity of the MEC tax rules, a policy owner should consult a qualified tax or legal adviser as to the potential MEC consequences before taking any actions with respect to the Policy. DISTRIBUTIONS FROM POLICIES NOT CLASSIFIED AS MODIFIED ENDOWMENT CONTRACTS Distributions from a policy that is not classified as a MEC are generally TREATED AS FIRST RECOVERING THE INVESTMENT IN THE POLICY (DESCRIBED BELOW) AND THEN, ONLY AFTER THE RETURN OF ALL SUCH INVESTMENT IN THE POLICY, AS DISTRIBUTING TAXABLE INCOME. An exception to this general rule occurs in the cases of a partial surrender, a decrease in the face amount, or any other change that reduces benefits under the policy in the first 15 years after the policy is issued and as a result of that action, a cash distribution to the owner is made by the Company in order for the policy to continue complying with the IRC Section 7702 definitional limits. In that case, such distribution will be taxed in whole or in part as ordinary income (to the extent of any gain in the policy) under rules prescribed in IRC Section 7702. Loans from, or secured by, a policy that is not a MEC are generally not treated as taxable distributions. Instead, such loans are generally treated as indebtedness of the owner. However, the tax consequences of some Policy loans are uncertain. You should consult a tax or legal adviser as to those consequences. Upon a full surrender or lapse of a policy that is not a MEC, or when benefits are paid at such a policy's maturity date, if the amount received plus the amount of indebtedness exceeds the total investment in the policy, the excess generally will be treated as ordinary income subject to tax. Finally, neither distributions (including distributions upon surrender or lapse) nor loans from or secured by, a policy that is not a MEC, are subject to the 10 percent additional tax previously referred to above regardless of when they are made. Certain changes to the policy may cause the policy to become a MEC. Therefore, a policy owner should consult a tax or legal advisor before effecting any change to a policy that is not a modified endowment contract. TREATMENT OF LOAN INTEREST If there is any borrowing under which the Policy is pledged as security or otherwise serves as collateral, the interest paid on loans will generally not be tax deductible. INVESTMENT IN THE POLICY Investment in the policy means (i) the aggregate amount of any premiums or other consideration paid for a policy, minus (ii) the aggregate amount received under the Policy which is excluded from the gross income of the owner (except that the amount of any loan from, or secured by, a policy that is a MEC, to the extent such amount is excluded from gross income, will be disregarded), plus (iii) the amount of any loan from, or secured by, a policy that is a MEC to the extent that such amount is included in the gross income of the owner. BUSINESS USES OF POLICY Businesses can use the Policies in various arrangements, including nonqualified deferred compensation or salary continuance plans, split dollar insurance plans, executive bonus plans, tax exempt and nonexempt welfare benefit 48 plans, retiree medical benefit plans and others. The tax consequences of such plans may vary depending on the particular facts and circumstances. In the case of a business owned Policy, the provisions of IRC Section 101(j) may limit the amount of the Death Benefit excludable from gross income unless a specified exception applies and a notice and consent requirement is satisfied, as discussed above. If you are purchasing the Policy for any arrangement the value of which depends in part on its tax consequences, you should consult a qualified tax or legal adviser. In recent years, moreover, Congress has adopted new rules relating to life insurance owned by businesses and the IRS has recently issued new guidelines on split dollar arrangements. Furthermore there have been recent proposals to restrict the tax advantages of corporate owned life insurance that are currently under considerations by Congress. Any business contemplating the purchase of a new Policy or a change in an existing Policy should consult a tax or legal adviser. TAX CREDITS AND DEDUCTIONS The Company may be entitled to certain tax benefits related to the assets of the Separate Account. These tax benefits, which may include foreign tax credits and corporate dividend received deductions, are not passed back to the Separate Account or to policy owners since the Company is the owner of the assets from which the tax benefits are derived. OTHER TAX CONSIDERATIONS - -------------------------------------------------------------------------------- The transfer of the Policy or designation of a beneficiary may have federal, state, and/or local transfer and inheritance tax consequences, including the imposition of gift, estate, and generation-skipping transfer taxes. For example, the transfer of the Policy to, or the designation as a Beneficiary of, or the payment of proceeds to, a person who is assigned to a generation which is two or more generations below the generation assignment of the owner may have generation skipping transfer tax consequences under federal tax law. The individual situation of each Policy Owner or Beneficiary will determine the extent, if any, to which federal, state, and local transfer and inheritance taxes may be imposed and how ownership or receipt of Policy proceeds will be treated for purposes of federal, state and local estate, inheritance, generation skipping and other taxes. INSURABLE INTEREST The Policy Owner must have an insurable interest in the life of the Insured in order for the Policy to be valid under applicable state law and for the Policy to be treated as a life insurance policy for federal income tax purposes. State laws on this subject vary widely, but typically require that the Policy Owner have a lawful and substantial economic interest in the continued life of the person insured, which interest must exist at the time the insurance is procured, but not necessarily at the time of the Insured's death. If no recognized insurable interest exists in a given situation, the Policy may be deemed void as against public policy under the state law and not entitled to treatment as a life insurance contract for federal income tax purposes. It is the responsibility of the Policy Owner, not the Company, to determine the existence of insurable interest in the life of the Insured under applicable state law. THE COMPANY'S INCOME TAXES The Company is taxed as a life insurance company under federal income tax law. Presently, the Company does not expect to incur any income tax on the earnings or the realized capital gains retained to meet the Company's obligations under the Policy. Based on these expectations, no charge is being made currently to the income of the Separate Account for federal income taxes that may be attributable to the Separate Account. However, the Company may assess a charge against the Investment Options for federal income taxes in the event that the Company incurs income or other tax liability attributable to the Separate Account under future tax law. Under present laws, the Company may incur state and local taxes in certain states. At present, these taxes are not significant. If there is a material change in applicable state or local tax laws, charges may be made for such taxes (including such taxes), if any, attributable to the Separate Account. 49 ALTERNATIVE MINIMUM TAX Please consult your tax or legal adviser for alternative minimum tax rules as they may impact your Policy. DISTRIBUTION & COMPENSATION - -------------------------------------------------------------------------------- DISTRIBUTION DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT. The Company has appointed MetLife Investors Distribution Company ("MLIDC") to serve as the principal underwriter and distributor of the securities offered through this prospectus, pursuant to the terms of a Distribution and Principal Underwriting Agreement. MLIDC, which is an affiliate of the Company, also acts as the principal underwriter and distributor of other variable life insurance policies and variable annuity contracts issued by the Company and its affiliated companies. The Company reimburses MLIDC for expenses MLIDC incurs in distributing the Policies (e.g., commissions payable to retail broker-dealers who sell the Policies). MLIDC does not retain any fees under the Policies; however, MLIDC may receive 12b-1 fees from the Funds. MLIDC's principal executive offices are located at 5 Park Plaza, Suite 1900, Irvine, California 92614. MLIDC is registered as a broker-dealer with the Securities and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as well as the securities commissions in the states in which it operates, and is a member of the Financial Industry Regulatory Authority ("FINRA"). An investor brochure that includes information describing FINRA's Public Disclosure Program is available by calling FINRA's Public Disclosure Program hotline at 1- 800-289-9999, or by visiting FINRA's website at www.finra.org. MLIDC and the Company enter into selling agreements with affiliated and unaffiliated broker-dealers who are registered with the SEC and are members of the FINRA, and with entities that may offer the Policies but are exempt from registration. Applications for the Policy are solicited by registered representatives who are associated persons of such broker-dealer firms. Such representatives act as appointed agents of the Company under applicable state insurance law and must be licensed to sell variable life insurance products. The Company intends to offer the Policy in all jurisdictions where it is licensed to do business and where the Policy is approved. The Policies are offered on a continuous basis. We pay American Funds Distributors, Inc., principal underwriter for the American Funds Insurance Series, a percentage of all premiums allocated to the Funds of the American Funds Insurance Series available under the Policy for services it provides in marketing the Fund's shares in connection with the Policy. COMPENSATION Broker-dealers having selling agreements with MLIDC and the Company are paid compensation for the promotion and sale of the Policies. Registered representatives who solicit sales of the Policy typically receive a portion of the compensation payable to the broker-dealer firm. The amount the registered representative receives depends on the agreement between the firm and the registered representative. This agreement may also provide for the payment of other types of cash and non-cash compensation and other benefits. A broker- dealer firm or registered representative of a firm may receive different compensation for selling one product over another and/or may be inclined to favor one product provider over another product provider due to differing compensation rates. Compensation paid on the Policies, as well as other incentives or payments, are not assessed as an additional direct charge to Policy owners or the Separate Account. Instead, you indirectly pay for sales and distribution expenses through overall charges and fees assessed under your Policy. For example, any profits the Company may realize through assessing the mortality and expense risk charge under your Policy may be used to pay for sales and distribution expenses. The Company may also pay for sales and distribution expenses out of any payments the Company or MLIDC may receive from the Funds. Compensation is a factor in setting pricing under the Policies, and as disclosed in the "Modifications, Reserved Rights and Other Charges" sub-section of this prospectus, the Company has the ability to customize pricing in 50 relation to the compensation payable to distributors for particular cases and the payments anticipated to be received for providing administrative, marketing and other support and services to the Funds. We generally pay compensation as a percentage of Premium Payments invested in the Policy ("commissions"). In addition, we pay periodic asset-based commission based on all or a portion of the Contract Value. To the extent permitted by FINRA rules and other applicable laws and regulations, MLIDC may pay or allow other promotional incentives or payments in the form of cash or other compensation. The amount and timing of overall compensation, which includes both commissions and the additional compensation as outlined above, may vary depending on the selling and other agreements in place. The additional compensation or reimbursement we pay to certain broker-dealers may be paid in the form of flat fees. However, these payments may be represented as a percentage of expected premium payments. When these additional payments are taken into account, the amount of overall compensation, including both commissions and additional compensation as outlined below, is not expected to exceed 40% of the premium paid in the first Contract Year or 15% of premiums paid in Contract Years 2-4. After Contract Year 4, the maximum compensation will not exceed 10% of premiums paid plus 0.50% of the current Contract Value. The preceding expected maximum overall compensation rates are based on the assumption that the broker-dealers who have selling agreements with MLIDC will have clients that make a certain minimum amount of premium payments over the course of the year. If this assumption proves to be inaccurate, the actual overall compensation rates may be higher than the preceding expected maximum overall compensation rates. SALE OF VARIABLE LIFE POLICIES BY ENTITIES HAVING OTHER CONTRACTUAL RELATIONSHIPS WITH THE COMPANY. The Company and MLIDC have entered into selling agreements with certain broker-dealer firms that have an affiliate that acts as investment adviser to one or more of the Funds which may be offered under the Policies. These investment advisory firms include Fidelity Management & Research Company, Morgan Stanley Investment Advisers Inc., Merrill Lynch Investment Managers, L.P., MetLife Investment Funds Management LLC, MetLife Advisers, LLC and Met Investors Advisory LLC. MetLife Investment Funds Management LLC, MetLife Advisers LLC and Met Investors Advisory LLC are affiliates of the Company. Registered representatives of broker-dealer firms with an affiliated company acting as an adviser or a sub-adviser may favor these Funds when offering the Policies. SALE OF VARIABLE LIFE INSURANCE BY AFFILIATES OF THE COMPANY. The Company and MLIDC may offer the Policies through retail broker-dealers that are affiliates of the Company, including Tower Square Securities, Inc., MetLife Securities, Inc., Walnut Street Securities, Inc. and New England Securities Corporation. The compensation paid to affiliated broker-dealer firms for sales of the Policies is generally not expected to exceed, on a present value basis, the percentages described above. These broker-dealer firms pay their registered representatives all or a portion of the commissions received for their sales of Policies; some firms may retain a portion of commissions. The amount the broker-dealer firms pass on to their registered representatives is determined in accordance with their internal compensation programs. These programs may also include other types of cash compensation, such as bonuses, equity awards (such as stock options), training allowances, supplementary salary, financing arrangements, marketing support, medical and other insurance benefits, retirement benefits, and other benefits. For registered representatives of certain affiliates, the amount of this additional cash compensation is based primarily on the amount of proprietary products sold and serviced by the representative. Proprietary products are those issued by the Company or its affiliates. The managers who supervise these registered representatives may also be entitled to additional cash compensation based on the sale of proprietary products by their representatives. Because the additional cash compensation paid to these registered representatives and their managers is primarily based on sales of proprietary products, these registered representatives and their managers have an incentive to favor the sale of proprietary products over other product issued by non-affiliates. MetLife registered representatives receive cash payments for the products they sell and service based upon a 'gross dealer concession' model. The cash payment is equal to a percentage of the gross dealer concession. For MetLife registered representatives other than those in our MetLife Resources (MLR) Division, the percentage is determined by a formula that takes into consideration the amount of premiums and purchase payments applied to proprietary products that the registered representative sells and services. The percentage could be as high as 100%. (MLR registered representatives receive compensation based upon premiums and purchase payments applied to all products sold and serviced by the representative.) In addition, all MetLife registered representatives are entitled to the additional compensation described above based on sales of proprietary products. Because sales of proprietary products are a factor in determining the percentage of gross dealer concession and/or the amount of additional compensation to which MetLife registered representatives are entitled, they have an incentive to favor the sale of proprietary products. In addition, because their sales managers' compensation is based on the sales made by the representatives they supervise, these sales managers also have an incentive to favor the sale of proprietary products. 51 The Company's affiliates also offer their registered representatives and their managers non-cash compensation incentives, such as conferences, trips, prizes and awards. Other non-cash compensation payments may be made for other services that are not directly related to the sale of products. These payments may include support services in the form of recruitment and training of personnel, production of promotional materials and similar services. PREFERRED DISTRIBUTION ARRANGEMENTS. The Company and MLIDC have also entered into preferred distribution arrangements with certain broker-dealer firms. These arrangements are sometimes called "shelf space" arrangements. Under these arrangements, the Company and MLIDC pay separate, additional compensation to the broker-dealer firm for services the broker-dealer provides in connection with the distribution of the Company's products. These services may include providing the Company with access to the distribution network of the broker-dealer, the hiring and training of the broker-dealer's sales personnel, the sponsoring of conferences and seminars by the broker-dealer, or general marketing services performed by the broker-dealer. The broker-dealer may also provide other services or incur other costs in connection with distributing the Company's products. These preferred distribution arrangements will not be offered to all broker- dealer firms and the terms of such arrangements may differ between broker-dealer firms. Compensation payable under such arrangements may be based on: aggregate, net or anticipated sales of the Policies; total assets attributable to sales of the Policies by registered representatives of the broker-dealer firm; the length of time that a Policy owner has owned the Policy; meeting certain sales thresholds; and/or actual or anticipated overhead expenses incurred by the broker-dealer firms in offering the Policies and other variable insurance products offered by the Company or its affiliates. Any such compensation payable to a broker-dealer firm will be made by MLIDC or the Company out of their own assets and will not result in any additional direct charge to you. Such compensation may cause the broker-dealer firm and its registered representative to favor the Company's products. The Company and MLIDC have entered into preferred distribution arrangements with their affiliate Tower Square Securities, Inc., as well as with the unaffiliated broker-dealer firms identified in the Statement of Additional Information. The Company and MLIDC may enter into similar arrangements with their other affiliates New England Securities Corporation, MetLife Securities, Inc. and Walnut Street Securities, Inc. See the Statement of Additional Information -- "UNDERWRITING AND DISTRIBUTION AGREEMENTS" for a list of the broker-dealer firms that received such compensation during 2007, as well as the range of additional compensation paid. OTHER POLICY INFORMATION - -------------------------------------------------------------------------------- VALUATION AND PAYMENT You may send your written requests for payment to our Administrative Office. We ordinarily pay any proceeds, loan amounts, or surrender or partial surrender proceeds in a lump sum within seven days after receipt at our Administrative Office of all the documents required for such a payment. Other than the Death Benefit proceeds, which we determine as of the date of the Insured's death, the amount we pay is as of the end of the Valuation Period during which our Administrative Office receives all required documents. We may pay our Death Benefit proceeds in a lump sum or under an optional payment plan. SUSPENSION OF VALUATION AND POSTPONEMENT OF PAYMENT We reserve the right to suspend valuation and postpone payment of any surrender, partial surrender, policy loan, or death benefit proceeds that involves a determination of Contract Value in the Separate Account in any case whenever: (1) the New York Stock Exchange or any stock exchange in which an Investment Option invests is closed (except for customary weekend and holiday closings) or trading on the New York Stock Exchange or other stock exchange is restricted as determined by the SEC or equivalent authority; or (2) the SEC has determined that a state of emergency exists so that valuation of the assets in an Investment Option or disposal of securities is not reasonably practicable. Allocations and transfers to, and deductions and transfers from, an Investment Option may be postponed as described in (1) and (2) above. We reserve the right to suspend or postpone the date of any payment of any benefit 52 or values (including the payments of cash surrenders and policy loans) for up to six months when Contract Value is being withdrawn from the Fixed Account. We may also withhold payment of proceeds, loan amounts, or surrenders or partial surrender proceeds if any portion of those proceeds would be derived from a Policy Owner's check or pre-authorized checking account deduction that has not yet cleared (i.e., that could still be dishonored by your banking institution). We may use telephone, fax, Internet or other means of communications to verify that payment from the Policy Owner's check or pre-authorized checking account deduction has been or will be collected. We will not delay payment longer than necessary for us to verify that payment has been or will be collected. Policy Owners may avoid the possibility of delay in the disbursement of proceeds coming from a check that has not yet cleared by providing us with a certified check. POLICY STATEMENTS We will maintain all records relating to the Separate Account, the Investment Options and the Fixed Account. At least once each Policy Year, we will send you a statement showing: - the Contract Value, Stated Amount and Amount Insured; - the date and amount of each Premium Payment; - the date and amount of each Monthly Deduction; - the amount of any Outstanding Loan as of the date of the statement, and the amount of any loan interest charged on the Loan Account; - the date and amount of any partial surrenders; - the annualized cost of any Riders purchased under the Policy; and - a reconciliation since the last report of any change in Contract Value and Cash Surrender Value. We will also send any other reports required by any applicable state or federal laws or regulations. LIMITS ON RIGHT TO CONTEST AND SUICIDE EXCLUSION The Company may not contest the validity of the Policy after it has been in effect during the Insured's lifetime for two years from the Issue Date. Subject to state law, if the Policy is reinstated, the two-year period will be measured from the date of reinstatement. Each requested increase in Stated Amount is contestable for two years from its effective date (subject to state law). In addition, if the Insured commits suicide during the two-year period following issue while sane or insane (subject to state law) the Death Benefit will be limited to the premiums paid less (i) the amount of any partial surrender and (ii) the amount of any Outstanding Loan. During the two-year period following an increase, the portion of the Death Benefit attributable to the increase in the case of suicide will be limited to an amount equal to the Deduction Amount paid for such increase (subject to state law) and if the policy is reinstated, the two year period will be measured from the date of reinstatement. MISSTATEMENT AS TO SEX AND AGE If there has been a misstatement with regard to sex or age, benefits payable will be adjusted to what the Policy would have provided with the corrected information. You may file proof of age at any time at our Administrative Office. POLICY CHANGES At any time, we may make such changes to your Policy as are necessary to assure compliance with the definition of life insurance prescribed in the Code. We may amend your Policy to conform with any law or regulation issued by any government agency to which it is subject. Only our officers have the right to change the Policy. No agent has the authority to change the Policy or waive any of its terms. Each endorsement, amendment, or rider must be signed by an officer of the Company to be valid. As required by law, we will notify you of any Policy changes. 53 Once the Policy is issued, you may make certain changes. Some of these changes will not require additional underwriting approval; some changes will. Certain requests must be made in writing, as indicated below: WRITTEN CHANGES REQUIRING UNDERWRITING APPROVAL: - increases in the Stated Amount of insurance WRITTEN CHANGES NOT REQUIRING UNDERWRITING APPROVAL: - decreases in the Stated Amount of insurance - changing the Death Benefit option - changes to the way your Premiums Payments are allocated - changing the Beneficiary (unless irrevocably named) Written requests for changes may be sent to the Company at our Administrative Office. RESTRICTIONS ON FINANCIAL TRANSACTIONS Federal laws designed to counter terrorism and prevent money laundering might, in certain circumstances, require us to block a Policy Owner's ability to make certain transactions and thereby refuse to accept any request for transfers, withdrawals, surrenders, or death benefits, until the instructions are received from the appropriate regulator. We may also be required to provide additional information about you and your Policy to government regulators. LEGAL PROCEEDINGS - -------------------------------------------------------------------------------- In the ordinary course of business, the Company, similar to other insurance companies, is involved in lawsuits (including class action lawsuits), arbitrations and other legal proceedings. Also, from time to time, state and federal regulators or other officials conduct formal and informal examinations or undertake other actions dealing with various aspects of the financial services and insurance industries. In some legal proceedings involving insurers, substantial damages have been sought and/or material settlement payments have been made. It is not possible to predict with certainty the ultimate outcome of any pending legal proceeding or regulatory action. However, the Company does not believe any such action or proceeding will have a material adverse effect on the Separate Account or upon the ability of MLIDC to perform its contract with the Separate Account or of the Company to meet its obligations under the applicable Policy. INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM - -------------------------------------------------------------------------------- The financial statements of each of the Investment Options of MetLife of CT Fund UL III for Variable Life Insurance included in this Prospectus have been audited by Deloitte & Touche LLP, an independent registered public accounting firm, as stated in their reports appearing herein, and are included in reliance upon the reports of such firm given upon their authority as experts in accounting and auditing. The principal address of Deloitte & Touche LLP is 201 East Kennedy Boulevard, Suite 1200, Tampa, Florida 33602-5827. FINANCIAL STATEMENTS - -------------------------------------------------------------------------------- The financial statements of the Separate Account, MetLife of CT Fund UL III for Variable Life Insurance, are attached to this prospectus. The financial statements of the Company are in the Statement of Additional Information. The financial statements of the Company should be considered only as bearing upon its ability to meet its obligations under the Policies. 54 APPENDIX A - -------------------------------------------------------------------------------- GLOSSARY OF TERMS USED THROUGHOUT THIS PROSPECTUS ACCUMULATION UNIT -- a standard of measurement used to calculate the value of the Investment Options. ADMINISTRATIVE OFFICE -- the administrative office of the Company located at Specialized Benefit Resources, 485-B Rt. One South, 4(th) Floor, Iselin, NJ 08830, or other location designated by the Company in writing. AGE -- the Insured's age as of his or her last birthday on the Policy Date. AMOUNT INSURED -- Under Option 1, the Amount Insured will be equal to the Stated Amount of the Policy or, if greater, a specified multiple of Contract Value (the "Minimum Amount Insured"). Under Option 2 the Amount Insured will be equal to the Stated Amount of the Policy plus the Contract Value (determined as of the date of the Insured's death) or, if greater, the Minimum Amount Insured. Under Option 3, the Amount Insured will generally be equal to the Stated Amount of the Policy, plus Premium Payments minus any partial surrender accumulated at the interest rate shown on the Policy Summary; or, if greater, the Minimum Amount Insured. ANDESA SERVICES, INC. -- the third party administrator for this product, located at 3435 Winchester Road, Suite 401, Allentown, PA, 18104-2351. BENEFICIARY (IES) -- the person(s) named to receive the Death Benefit of this Policy after the death of the Insured. CASE -- a grouping of one or more Policies connected by a non-arbitrary factor. Every Policy issued will be part of a Case. Each Case will have one Policy Owner. CASH SURRENDER VALUE -- the Contract Value less any Outstanding Loans. CODE -- the Internal Revenue Code. COMPANY (ISSUING COMPANY) -- MetLife Insurance Company of Connecticut CONTRACT VALUE -- the sum of the accumulated value held in the Investment Options plus the Loan Account value and the Fixed Account value attributable to the Policy. COST OF INSURANCE CHARGE -- a charge that reflects the anticipated mortality of the Insured. COVERAGE AMOUNT -- the Amount Insured less the Contract Value. DEATH BENEFIT -- the amount payable to the Beneficiary if this Policy is in force upon the death of the Insured. DEDUCTION DATE (OR DAY) -- the day in each Policy Month on which the Monthly Deduction Amount is deducted from the Policy's Contract Value. FIXED ACCOUNT -- part of the General Account of the Company. FUND -- see Mutual Fund. GENERAL ACCOUNT -- an account that consists of the Company's assets other than those held in any separate account. HOME OFFICE -- the home office of the Company located at One Cityplace, 185 Asylum Street, Hartford, Connecticut 06103-3415. INITIAL PREMIUM PAYMENT -- the first Premium Payment made under the Policy. INSURANCE COMPANY -- MetLife Insurance Company of Connecticut. INSURANCE RISK -- is equal to the Coverage Amount. INSURED -- the person whose life is insured under the Policy. INVESTMENT OPTIONS -- the segments of the Separate Account to which you may allocate Premium Payments or Contract Value. Each Investment Option invests directly in a corresponding Mutual Fund. A-1 INVESTMENT OPTION DEDUCTION -- the charge we deduct from each Investment Option to cover our mortality and expenses risk charges and administrative charges. It is shown on the Policy Summary. ISSUE DATE -- the date on which the Company issues the Policy for delivery to the Policy Owner. ISSUING COMPANY -- MetLife Insurance Company of Connecticut. LOAN ACCOUNT -- an account in the Company's General Account to which we transfer the amount of any Policy Loan, and to which we credit a fixed rate of interest. MATURITY BENEFIT -- an amount equal to the Policy's Contract Value, less any Outstanding Loan or unpaid Monthly Deduction Amount or amounts payable to an assignee, payable to the Policy Owner if the Insured is living on the Maturity Date. MATURITY DATE -- the anniversary of the Policy Date on which the Insured is age 100. MINIMUM AMOUNT INSURED -- the amount of Death Benefit required for this Policy to qualify as life insurance under federal tax law. It is a stated percentage of Contract Value determined as of the first day of the Policy Month and is shown in the Policy Summary. MONTHLY DEDUCTION AMOUNT -- the amount of charges deducted from the Policy's Contract Value, which includes cost of insurance charges, administrative charges, and any charges for benefits associated with any Rider(s). MUTUAL FUND (OR FUND) -- a registered open-end management investment company or a series thereof that corresponds to an Investment Option. Each Investment Option invests directly in a Mutual Fund of the same name. NET AMOUNT AT RISK (Coverage Amount) -- the Death Benefit minus the Contract Value at the beginning of each Policy Month. NET PREMIUM PAYMENT -- the amount of each Premium Payment, minus the deduction of any sales expense charges, Premium Taxes or Deferred Acquisition Cost Charges as shown on the Policy Summary. OUTSTANDING LOAN -- the amount owed the Company as a result of policy loans including both principal and accrued interest. PLANNED PREMIUM -- the amount of premium which the Policy Owner chooses to pay to the Company on a scheduled basis, and for which the Company will bill the Policy Owner. POLICY --Corporate Owned Variable Universal Life Insurance IV, a corporate owned variable flexible premium life insurance policy. POLICY ANNIVERSARY -- an anniversary of the Policy Date. POLICY DATE -- the date from which we begin charging the Monthly Deduction Amount and used to determine administrative transactions on the Policy (e.g. Deduction Days, Policy Years) -- shown on the Policy Summary. POLICY MONTH -- twelve one-month periods during the Policy Year, each of which begins on the Policy Date or the Deduction Day. POLICY OWNER(S) (YOU, YOUR OR OWNER) -- the person(s) having rights to benefits under the Policy during the lifetime of the Insured; the Policy Owner may or may not be the Insured. POLICY YEARS -- each successive twelve-month period; the first beginning with the Policy Date. PREMIUM PAYMENT -- the amounts you send us to be applied to your Policy. RIDERS -- supplemental insurance benefits offered under the Policy. SEPARATE ACCOUNT -- assets set aside by the Company, the investment performance of which is kept separate from that of other assets of the Company. STATED AMOUNT -- the amount selected by the Policy Owner used to determine the Death Benefit, which may be increased or decreased as described in the Policy. A-2 UNDERWRITING PERIOD -- the time period from when we receive a completed application until the Issue Date. VALUATION DATE -- a day on which the Separate Account is valued. A Valuation Date is any day on which the New York Stock Exchange is open for trading. The value of Accumulation Units will be determined as of the close of trading on the New York Stock Exchange. VALUATION PERIOD -- the period between the close of business on successive Valuation Dates. WE, US, OUR -- MetLife Insurance Company of Connecticut. YOU, YOUR -- the owner(s) of the Policy. A-3 THIS PAGE INTENTIONALLY LEFT BLANK. APPENDIX B - -------------------------------------------------------------------------------- ADDITIONAL INFORMATION REGARDING FUNDS Some of the Funds listed below were subject to a merger, substitution or other change. The chart below identifies the former name and new name of each of these Funds, and, where applicable, the former name and new name of the trust of which the Fund is part. FUND NAME CHANGES
FORMER NAME NEW NAME - --------------------------------------------- --------------------------------------------- MET INVESTORS SERIES TRUST MET INVESTORS SERIES TRUST Neuberger Berman Real Estate Clarion Global Real Estate Portfolio -- Class A Portfolio -- Class A
FUND MERGERS/REORGANIZATIONS The following former Funds were merged with and into the new Funds.
FORMER FUND NEW FUND - --------------------------------------------- --------------------------------------------- MET INVESTORS SERIES TRUST MET INVESTORS SERIES TRUST Batterymarch Mid-Cap Stock Lazard Mid Cap Portfolio -- Class A Portfolio -- Class A
FUND SUBSTITUTIONS The following new Funds were substituted for the former Funds.
FORMER FUND NEW FUND - --------------------------------------------- --------------------------------------------- LEGG MASON PARTNERS VARIABLE INCOME TRUST METROPOLITAN SERIES FUND, INC. Legg Mason Partners Variable Government Western Asset Management U.S. Government Portfolio -- Class I Portfolio -- Class A
B-1 THIS PAGE INTENTIONALLY LEFT BLANK. APPENDIX C - -------------------------------------------------------------------------------- TARGET PREMIUM PER $1,000 OF STATED AMOUNT ALL UNDERWRITING CLASSES STANDARD AND PREFERRED SMOKER AND NON-SMOKER FOR POLICIES WITH AN ISSUE DATE BEFORE 1/1/09
AGE MALE FEMALE UNISEX - --- --------- --------- --------- 20 25.49885 21.35312 24.67777 21 26.25533 22.05852 25.42278 22 27.04281 22.79038 26.19845 23 27.86586 23.54970 27.00937 24 28.72917 24.33773 27.85695 25 29.63486 25.15422 28.74463 26 30.58643 26.00205 29.67441 27 31.58335 26.88113 30.64690 28 32.62452 27.79141 31.66258 29 33.71079 28.73438 32.72066 30 34.84316 29.71150 33.82174 31 36.02088 30.72326 34.96677 32 37.24380 31.77143 36.15529 33 38.51130 32.85823 37.38654 34 39.82501 33.98300 38.66183 35 41.18470 35.14808 39.98270 36 42.59063 36.35310 41.34755 37 44.04142 37.59596 42.75638 38 45.53736 38.87592 44.20922 39 47.07884 40.19069 45.70492 40 48.66485 41.53957 47.24193 41 50.29448 42.92135 48.82045 42 51.96862 44.33684 50.44101 43 53.68801 45.78699 52.10416 44 55.45241 47.27608 53.81251 45 57.26368 48.80417 55.56579 46 59.12431 50.37449 57.36606 47 61.03580 51.99103 59.21574 48 63.00258 53.65371 61.11856 49 65.02827 55.36365 63.07747 50 67.11449 57.12257 65.09434 51 69.26320 58.93024 67.16829 52 71.47047 60.78640 69.29887 53 73.73607 62.68726 71.48414 54 76.05516 64.63067 73.71929 55 78.42689 66.61974 76.00345 56 80.85354 68.65902 78.34017 57 83.34160 70.75893 80.73560
C-1
AGE MALE FEMALE UNISEX - --- --------- --------- --------- 58 85.90006 72.93427 83.20014 59 88.53960 75.19989 85.74576 60 91.26869 77.56483 88.37912 61 94.09169 80.03119 91.10324 62 97.00755 82.59477 93.91915 63 100.01297 85.23864 96.81869 64 103.10493 87.94870 99.79450 65 106.28342 90.71791 102.84656 66 109.56101 93.55528 105.98510 67 112.96034 96.48236 109.23156 68 116.51614 99.53950 112.62104 69 120.26554 102.77254 116.19089 70 124.23658 106.21512 119.96965 71 128.44465 109.89099 123.97439 72 132.88796 113.80393 128.20151 73 137.54435 117.93734 132.63054 74 142.38323 122.27404 137.23573 75 147.39278 126.80803 142.00609 76 152.58944 131.55967 146.95678 77 158.02373 136.57999 152.13912 78 163.78802 141.95257 157.64536 79 169.99253 147.77602 163.58178 80 176.72991 154.13846 170.04077
C-2 TARGET PREMIUM PER $1,000 OF STATED AMOUNT ALL UNDERWRITING CLASSES STANDARD AND PREFERRED SMOKER AND NON-SMOKER FOR POLICIES WITH AN ISSUE DATE ON OR AFTER 1/1/09
AGE MALE FEMALE UNISEX - --- --------- --------- --------- 20 20.75046 17.76811 20.15660 21 21.43931 18.41151 20.83692 22 22.15540 19.07822 21.54229 23 22.89985 19.77061 22.27547 24 23.67203 20.49002 23.03759 25 24.47303 21.23587 23.82807 26 25.30237 22.00956 24.64648 27 26.15803 22.81058 25.49061 28 27.04391 23.64019 26.36478 29 27.96810 24.49974 27.27515 30 28.93223 25.39050 28.22519 31 29.93846 26.31420 29.21513 32 30.98879 27.26929 30.24699 33 32.08244 28.25862 31.31966 34 33.21998 29.28066 32.43372 35 34.40231 30.33542 33.58984 36 35.62875 31.42269 34.78864 37 36.89887 32.54581 36.02937 38 38.21380 33.70666 37.31331 39 39.57333 34.90869 38.64156 40 40.98082 36.15456 40.01542 41 42.43483 37.44393 41.43655 42 43.93497 38.77792 42.90320 43 45.47934 40.15795 44.41354 44 47.06408 41.58437 45.96532 45 48.68721 43.05748 47.55816 46 50.35153 44.57635 49.19205 47 52.05909 46.14015 50.86933 48 53.82129 47.74978 52.60081 49 55.65264 49.40329 54.39601 50 57.55331 51.10045 56.25603 51 59.52395 52.84293 58.18077 52 61.56006 54.62786 60.16500 53 63.65497 56.45561 62.20607 54 65.80535 58.32662 64.29880 55 68.00239 60.24140 66.43654 56 70.24448 62.19765 68.61843 57 72.53540 64.19326 70.84671 58 74.89684 66.22932 73.13829 59 77.34745 68.30904 75.50944 60 79.88828 70.43886 77.96041
C-3
AGE MALE FEMALE UNISEX - --- --------- --------- --------- 61 82.50695 72.62267 80.48453 62 85.18613 74.86294 83.06646 63 87.90817 77.16453 85.69409 64 90.67166 79.53113 88.36535 65 93.48089 81.96817 91.08574 66 96.35338 84.48046 93.86943 67 99.31975 87.07340 96.74203 68 102.40600 89.75142 99.72414 69 105.64164 92.52270 102.84177 70 109.04977 95.39222 106.11045 71 112.63969 98.36063 109.53631 72 116.38886 101.42742 113.10176 73 120.28963 104.60168 116.80131 74 124.39784 107.89189 120.67888 75 128.76831 111.31764 124.77812 76 133.45523 114.90649 129.14242 77 138.49658 118.69317 133.80624 78 143.89584 122.71355 138.77520 79 149.64681 127.01309 144.04965 80 155.77273 131.63730 149.65179
C-4 APPENDIX D - -------------------------------------------------------------------------------- CASH VALUE ACCUMULATION TEST FACTORS FOR POLICIES WITH AN ISSUE DATE BEFORE 1/1/09
ATTAINED AGE MALE FEMALE UNISEX - ------------ -------- -------- -------- 20 650.382% 752.585% 652.354% 21 631.595% 728.564% 633.208% 22 613.140% 705.215% 614.420% 23 594.964% 682.528% 595.936% 24 577.030% 660.486% 577.772% 25 559.356% 639.105% 559.912% 26 541.942% 618.334% 542.370% 27 524.848% 598.185% 525.182% 28 508.131% 578.667% 508.379% 29 491.793% 559.756% 492.001% 30 475.888% 541.434% 476.063% 31 460.427% 523.698% 460.573% 32 445.428% 506.528% 445.551% 33 430.905% 489.902% 431.013% 34 416.851% 473.833% 416.951% 35 403.270% 458.298% 403.356% 36 390.162% 443.304% 390.241% 37 377.531% 428.865% 377.601% 38 365.369% 414.977% 365.429% 39 353.664% 401.642% 353.723% 40 342.412% 388.845% 342.478% 41 331.603% 376.570% 331.677% 42 321.219% 364.789% 321.303% 43 311.242% 353.475% 311.338% 44 301.660% 342.586% 301.758% 45 292.453% 332.107% 292.551% 46 283.601% 322.011% 283.699% 47 275.092% 312.271% 275.185% 48 266.906% 302.881% 266.992% 49 259.029% 293.830% 259.107% 50 251.455% 285.103% 251.520% 51 244.174% 276.692% 244.229% 52 237.189% 268.587% 237.227% 53 230.493% 260.787% 230.511% 54 224.084% 253.281% 224.084% 55 217.953% 246.049% 217.953% 56 212.086% 239.072% 212.086% 57 206.467% 232.323% 206.467% 58 201.081% 225.780% 201.081% 59 195.912% 219.426% 195.912% 60 190.952% 213.258% 190.952%
D-1
ATTAINED AGE MALE FEMALE UNISEX - ------------ -------- -------- -------- 61 186.198% 207.286% 186.198% 62 181.649% 201.522% 181.649% 63 177.304% 195.985% 177.304% 64 173.162% 190.686% 173.162% 65 169.217% 185.621% 169.217% 66 165.459% 180.774% 165.459% 67 161.873% 176.122% 161.873% 68 158.445% 171.640% 158.445% 69 155.165% 167.310% 155.165% 70 152.031% 163.129% 152.031% 71 149.042% 159.103% 149.042% 72 146.204% 155.248% 146.204% 73 143.525% 151.581% 143.525% 74 141.009% 148.115% 141.009% 75 144.354% 144.850% 144.354% 76 142.053% 142.053% 142.053% 77 139.890% 139.890% 139.890% 78 137.843% 137.843% 137.843% 79 135.897% 135.897% 135.897% 80 134.309% 134.309% 134.309% 81 132.542% 132.542% 132.542% 82 130.872% 130.872% 130.872% 83 129.306% 129.306% 129.306% 84 127.850% 127.850% 127.850% 85 121.504% 121.504% 121.504% 86 120.301% 120.301% 120.301% 87 119.177% 119.177% 119.177% 88 118.113% 118.113% 118.113% 89 117.090% 117.090% 117.090% 90 116.088% 116.088% 116.088% 91 115.082% 115.082% 115.082% 92 114.047% 114.047% 114.047% 93 112.952% 112.952% 112.952% 94 111.772% 111.772% 111.772% 95 110.499% 110.499% 110.499% 96 109.159% 109.159% 109.159% 97 107.842% 107.842% 107.842% 98 106.841% 106.841% 106.841% 99 105.914% 105.914% 105.914%
D-2 CASH VALUE ACCUMULATION TEST FACTORS FOR POLICIES WITH AN ISSUE DATE ON OR AFTER 1/1/09
ATTAINED AGE MALE FEMALE UNISEX - ------------ -------- -------- -------- 20 796.856% 902.894% 796.856% 21 770.878% 871.381% 770.878% 22 745.677% 840.968% 745.677% 23 721.181% 811.562% 721.181% 24 697.376% 783.122% 697.376% 25 674.290% 755.675% 674.290% 26 651.938% 729.176% 651.938% 27 630.362% 703.635% 630.362% 28 609.463% 679.010% 609.463% 29 589.127% 655.262% 589.127% 30 569.320% 632.357% 569.320% 31 550.066% 610.257% 550.066% 32 531.358% 588.984% 531.358% 33 513.231% 568.474% 513.231% 34 495.687% 548.742% 495.687% 35 478.726% 529.769% 478.726% 36 462.344% 511.538% 462.344% 37 446.549% 493.984% 446.549% 38 431.325% 477.072% 431.325% 39 416.657% 460.756% 416.657% 40 402.531% 445.006% 402.531% 41 388.928% 429.826% 388.928% 42 375.852% 415.200% 375.852% 43 363.297% 401.115% 363.297% 44 351.258% 387.562% 351.258% 45 339.716% 374.532% 339.716% 46 328.651% 362.023% 328.651% 47 318.032% 350.027% 318.032% 48 307.803% 338.525% 307.803% 49 297.926% 327.511% 297.926% 50 288.403% 316.969% 288.403% 51 279.237% 306.875% 279.237% 52 270.441% 297.224% 270.441% 53 262.012% 287.995% 262.012% 54 253.952% 279.168% 253.952% 55 246.259% 270.721% 246.259% 56 238.921% 262.644% 238.921% 57 231.917% 254.922% 231.917% 58 225.204% 247.535% 225.204% 59 218.752% 240.457% 218.752% 60 212.561% 233.663% 212.561% 61 206.635% 227.134% 206.635% 62 200.988% 220.859% 200.988% 63 195.616% 214.823% 195.616%
D-3
ATTAINED AGE MALE FEMALE UNISEX - ------------ -------- -------- -------- 64 190.506% 209.017% 190.506% 65 185.637% 203.431% 185.637% 66 180.985% 198.056% 180.985% 67 176.526% 192.887% 176.526% 68 172.243% 187.918% 172.243% 69 168.122% 183.143% 168.122% 70 164.158% 178.556% 164.158% 71 160.357% 174.158% 160.357% 72 156.733% 169.949% 156.733% 73 153.291% 165.919% 153.291% 74 150.012% 162.063% 150.012% 75 146.885% 158.372% 146.885% 76 155.141% 155.141% 155.141% 77 152.556% 152.556% 152.556% 78 150.067% 150.067% 150.067% 79 147.665% 147.665% 147.665% 80 145.630% 145.630% 145.630% 81 143.404% 143.404% 143.404% 82 141.307% 141.307% 141.307% 83 139.321% 139.321% 139.321% 84 137.428% 137.428% 137.428% 85 130.271% 130.271% 130.271% 86 128.604% 128.604% 128.604% 87 127.012% 127.012% 127.012% 88 125.528% 125.528% 125.528% 89 124.135% 124.135% 124.135% 90 122.791% 122.791% 122.791% 91 121.378% 121.378% 121.378% 92 119.851% 119.851% 119.851% 93 118.274% 118.274% 118.274% 94 116.681% 116.681% 116.681% 95 115.085% 115.085% 115.085% 96 113.438% 113.438% 113.438% 97 111.634% 111.634% 111.634% 98 109.478% 109.478% 109.478% 99 106.779% 106.779% 106.779%
D-4 APPENDIX E - -------------------------------------------------------------------------------- HYPOTHETICAL ILLUSTRATIONS The tables in this Appendix are hypothetical illustrations that are intended to illustrate how the Policy's Contract Value, Cash Surrender Value and Death Benefit change over time based on a representative Insured's age and rating classification as well as a representative Premium Payment pattern. Each illustration assumes that all Premium Payments are invested in the Investment Options and corresponding Funds, and none is invested in the Fixed Account. Each illustration assumes gross rates of returns for the Funds, before deduction of Fund charges, of 0%, 6% and 10%. Each illustration shows Death Benefit Option 1, the Level Option. The first and second table (one for Policies with an Issue Date before 1/1/09 and one for Policies with an Issue Date on or after 1/1/09) assume that the maximum Guaranteed Cost of Insurance Rates and Policy Administrative Expense charge allowable under the Policy are charged in all years. These tables also reflect the deduction of an arithmetic average of Fund expenses and the maximum guaranteed (i) Front-End Sales Expense Charges (ii) Mortality and Expense Risk Charge and (iii) Monthly Sales Expense Charge. The third and fourth tables (one for Policies with an Issue Date before 1/1/09 and one for Policies with an Issue Date after 1/1/09) assume that the current Cost of Insurance Rates and Policy Administrative Expense charge are charged in all years. These tables also reflect the deduction of an arithmetic average of Fund expenses and the maximum guaranteed (i) Front-End Sales Expense Charges (ii) Mortality and Expense Risk Charge and (iii) Monthly Sales Expense Charge. The Cost of Insurance Rates charged varies by age, sex and underwriting classification. The Policy Administrative Expense Charge is a flat dollar amount. Both charges are deducted monthly on a pro rata basis from each of the Investment Options. The Mortality and Expense risk charge is deducted daily from the unloaned portion of the Cash Value. The illustrations assume that no increases in Stated Amount are made and that the Monthly Sales Expense Charge is deducted monthly for the first twenty Policy Years as to the initial Stated Amount. The charge is deducted on a pro rata basis from each of the Investment Options. The values also reflect the deduction from Premium Payments of the Front-End Sales Expense Charge. The charge for Fund expenses reflected in the illustrations assumes that Cash Value is allocated equally among all Investment Options and is an arithmetic average of investment advisory fees and other expenses charged by each of the available Funds during the most recent calendar year. The Fund expenses used do not reflect any expense reimbursement or fee waiver arrangements that may be in effect (and may be shown in the prospectus -- Fund Charges and Expenses). If the expense reimbursement or fee waiver arrangements were reflected, values shown in the illustrations may be higher. The actual charges under a Policy for expenses of the Funds will vary from year to year and will depend on the actual allocation of Cash Value and may be higher or lower than those illustrated. After deduction of the Fund expenses and Mortality and Expense Risk Charge, the illustrated gross annual investment rates of return of 0%, 6% and 10% correspond to approximate net annual rates of -1.07%, 4.93% and 8.93%, respectively, on a current basis, and to approximate net annual rates of -1.62%, 4.38% and 8.38%, respectively, on a guaranteed basis. These approximate net annual rates of return do not reflect the deduction of the Cost of Insurance Charge, the Policy Administrative Expense Charge and the Monthly Sales Expense Charge. The illustrations do not reflect any charges for federal income taxes against the Separate Account since the Company is not currently deducting such charges from Fund UL III. However, such charges may be made in the future, and in that event, the gross annual investment rates of return would have to exceed 0%, 6% and 10% by an amount sufficient to cover the tax charges in order to produce the Death Benefits, Contract Values and Cash Surrender Values illustrated. Policy values would be different (either higher or lower) from the illustrated amounts in certain circumstances. For example, illustrated amounts would be different where actual gross rates of return averaged 0%, 6%, or 10%, but (i) the rates of return varied above and below these averages during the period, (ii) Premium Payments were paid in other amounts or at other than annual intervals, or (iii) cash values were allocated differently among individual E-1 Investment Options with varying rates of return. They would also differ if a policy loan or partial withdrawal were made during the period of time illustrated, if the Insured were female or in another rating classification, if a different Death Benefit Option had been selected, or if the Policies were issued in situations where distinctions between male and female Insureds are not permitted. If actual gross rates of return on the Funds are higher or lower than those assumed in these illustrations, and/or if the actual current charges are higher or lower than those assumed in these illustrations, the actual results (Death Benefit, Contract Value, and Cash Surrender Value) will differ from the illustrated results. Where required by law or upon request, the Company, through its agent, will provide you a personalized illustration based upon the proposed Insured's age, sex, underwriting classification, the specified insurance benefits, and the premium requested. The illustration will show the weighted average Fund expenses, arithmetic average Fund expenses and/or the actual Fund expenses depending on what you request. An explanation of how the Fund expenses are calculated will appear on the illustration. The hypothetical gross annual investment return assumed in such an illustration would not exceed 10%. E-2 CORPORATE OWNED VARIABLE UNIVERSAL LIFE INSURANCE IV FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE POLICY LEVEL DEATH BENEFIT OPTION HYPOTHETICAL ILLUSTRATION WITH GUARANTEED CHARGES FOR POLICIES WITH AN ISSUE DATE BEFORE 01/01/2009 MALE ISSUE AGE 47 TOTAL FACE AMOUNT: 802,755 GUARANTEED ISSUE, NON-SMOKER BASE FACE AMOUNT: 802,755 ANNUAL PREMIUM: $42,891 TERM FACE AMOUNT: 0
ANNUAL TOTAL 0% 6% 10% PREMIUM PREMIUMS CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH YEAR OUTLAY WITH 5% INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT - ---- ------- ---------------- -------- --------- -------- -------- --------- -------- ---------- ---------- ---------- 1 $42,891 $45,036 $31,854 $31,854 $802,755 $33,952 $33,952 $802,755 $35,352 $35,352 $802,755 2 $42,891 $92,323 $63,043 $63,043 $802,755 $69,256 $69,256 $802,755 $73,543 $73,543 $802,755 3 $42,891 $141,975 $93,568 $93,568 $802,755 $105,978 $105,978 $802,755 $114,828 $114,828 $802,755 4 $42,891 $194,109 $123,429 $123,429 $802,755 $144,191 $144,191 $802,755 $159,496 $159,496 $802,755 5 $42,891 $248,850 $152,608 $152,608 $802,755 $183,956 $183,956 $802,755 $207,851 $207,851 $802,755 6 $42,891 $306,328 $181,105 $181,105 $802,755 $225,364 $225,364 $802,755 $260,255 $260,255 $802,755 7 $42,891 $366,680 $208,905 $208,905 $802,755 $268,506 $268,506 $802,755 $317,110 $317,110 $802,755 8 $0 $385,014 $198,506 $198,506 $802,755 $273,708 $273,708 $802,755 $337,572 $337,572 $802,755 9 $0 $404,265 $187,591 $187,591 $802,755 $278,676 $278,676 $802,755 $359,516 $359,516 $802,755 10 $0 $424,478 $176,106 $176,106 $802,755 $283,374 $283,374 $802,755 $383,101 $383,101 $802,755 15 $0 $541,753 $107,404 $107,404 $802,755 $300,999 $300,999 $802,755 $526,367 $526,367 $956,140 20 $0 $691,430 $5,269 $5,269 $802,755 $298,644 $298,644 $802,755 $715,198 $715,198 $1,157,710 25 $0 $882,459 $0 $0 $0 $257,801 $257,801 $802,755 $964,266 $964,266 $1,409,798 30 $0 $1,126,266 $0 $0 $0 $106,206 $106,206 $802,755 $1,262,496 $1,262,496 $1,766,101 35 $0 $1,437,432 $0 $0 $0 $0 $0 $0 $1,587,533 $1,587,533 $2,077,632 40 $0 $1,834,568 $0 $0 $0 $0 $0 $0 $1,956,272 $1,956,272 $2,331,418 45 $0 $2,341,426 $0 $0 $0 $0 $0 $0 $2,410,990 $2,410,990 $2,749,666 50 $0 $2,988,318 $0 $0 $0 $0 $0 $0 $2,939,429 $2,939,429 $3,169,937 53 $0 $3,632,320 $0 $0 $0 $0 $0 $0 $3,184,660 $3,184,660 $3,184,660
These hypothetical rates of returns are illustrative only and should not be considered a representation of past or future investment results. Actual investment results may be more or less than those shown and will depend on a number of factors. The Account Values and Cash Surrender Values will be different from those shown if the actual rates of return averaged 0%, 6%, or 10% over a period of years but fluctuated above or below the average for individual contract years. No representation can be made that these rates of return can be achieved for any one year or sustained over a period of time. E-3 CORPORATE OWNED VARIABLE UNIVERSAL LIFE INSURANCE IV FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE POLICY LEVEL DEATH BENEFIT OPTION HYPOTHETICAL ILLUSTRATION WITH GUARANTEED CHARGES FOR POLICIES WITH AN ISSUE DATE ON OR AFTER 01/01/2009 MALE ISSUE AGE 47 TOTAL FACE AMOUNT: 923,933 GUARANTEED ISSUE, NON-SMOKER BASE FACE AMOUNT: 923,933 ANNUAL PREMIUM: $42,891 TERM FACE AMOUNT: 0
ANNUAL TOTAL 0% 6% 10% PREMIUM PREMIUMS CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH YEAR OUTLAY WITH 5% INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT - ---- ------- ---------------- -------- --------- -------- -------- --------- -------- ---------- ---------- ---------- 1 $42,891 $45,036 $33,059 $33,059 $923,933 $35,194 $35,194 $923,933 $36,618 $36,618 $923,933 2 $42,891 $92,323 $65,543 $65,543 $923,933 $71,900 $71,900 $923,933 $76,284 $76,284 $923,933 3 $42,891 $141,975 $97,432 $97,432 $923,933 $110,162 $110,162 $923,933 $119,234 $119,234 $923,933 4 $42,891 $194,109 $128,706 $128,706 $923,933 $150,031 $150,031 $923,933 $165,739 $165,739 $923,933 5 $42,891 $248,850 $159,329 $159,329 $923,933 $191,546 $191,546 $923,933 $216,076 $216,076 $923,933 6 $42,891 $306,328 $189,266 $189,266 $923,933 $234,752 $234,752 $923,933 $270,560 $270,560 $923,933 7 $42,891 $366,680 $218,502 $218,502 $923,933 $279,725 $279,725 $923,933 $329,564 $329,564 $923,933 8 $0 $385,014 $209,651 $209,651 $923,933 $286,901 $286,901 $923,933 $352,348 $352,348 $923,933 9 $0 $404,265 $200,398 $200,398 $923,933 $293,987 $293,987 $923,933 $376,780 $376,780 $923,933 10 $0 $424,478 $190,698 $190,698 $923,933 $300,954 $300,954 $923,933 $403,009 $403,009 $934,643 15 $0 $541,753 $134,623 $134,623 $923,933 $333,825 $333,825 $923,933 $562,963 $562,963 $1,131,485 20 $0 $691,430 $53,642 $53,642 $923,933 $355,157 $355,157 $923,933 $777,254 $777,254 $1,372,053 25 $0 $882,459 $0 $0 $0 $360,737 $360,737 $923,933 $1,069,431 $1,069,431 $1,676,147 30 $0 $1,126,266 $0 $0 $0 $314,808 $314,808 $923,933 $1,441,359 $1,441,359 $2,198,874 35 $0 $1,437,432 $0 $0 $0 $126,389 $126,389 $923,933 $1,839,117 $1,839,117 $2,598,809 40 $0 $1,834,568 $0 $0 $0 $0 $0 $0 $2,258,863 $2,258,863 $2,869,018 45 $0 $2,341,426 $0 $0 $0 $0 $0 $0 $2,701,688 $2,701,688 $3,237,989 50 $0 $2,988,318 $0 $0 $0 $0 $0 $0 $3,219,884 $3,219,884 $3,594,493 53 $0 $3,632,320 $0 $0 $0 $0 $0 $0 $3,747,304 $3,747,304 $3,747,304
These hypothetical rates of returns are illustrative only and should not be considered a representation of past or future investment results. Actual investment results may be more or less than those shown and will depend on a number of factors. The Account Values and Cash Surrender Values will be different from those shown if the actual rates of return averaged 0%, 6%, or 10% over a period of years but fluctuated above or below the average for individual contract years. No representation can be made that these rates of return can be achieved for any one year or sustained over a period of time. E-4 CORPORATE OWNED VARIABLE UNIVERSAL LIFE INSURANCE IV FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE POLICY LEVEL DEATH BENEFIT OPTION HYPOTHETICAL ILLUSTRATION WITH CURRENT CHARGES FOR POLICIES WITH AN ISSUE DATE BEFORE 01/01/2009 MALE ISSUE AGE 47 TOTAL FACE AMOUNT: 802,755 GUARANTEED ISSUE, NON-SMOKER BASE FACE AMOUNT: 802,755 ANNUAL PREMIUM: $42,891 TERM FACE AMOUNT: 0
ANNUAL TOTAL 0% 6% 10% PREMIUM PREMIUMS CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH YEAR OUTLAY WITH 5% INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT - ---- ------- ---------------- -------- --------- -------- ---------- ---------- ---------- ----------- ----------- ----------- 1 $42,891 $45,036 $37,680 $41,754 $802,755 $40,016 $44,091 $802,755 $41,574 $45,649 $802,755 2 $42,891 $92,323 $74,603 $80,823 $802,755 $81,647 $87,866 $802,755 $86,500 $92,719 $802,755 3 $42,891 $141,975 $111,345 $119,387 $802,755 $125,575 $133,617 $802,755 $135,705 $143,747 $802,755 4 $42,891 $194,109 $147,518 $156,096 $802,755 $171,512 $180,091 $802,755 $189,163 $197,741 $802,755 5 $42,891 $248,850 $183,388 $191,430 $802,755 $219,826 $227,868 $802,755 $247,529 $255,571 $802,755 6 $42,891 $306,328 $218,728 $224,518 $802,755 $270,423 $276,213 $802,755 $311,048 $316,838 $802,755 7 $42,891 $366,680 $253,622 $256,625 $802,755 $323,508 $326,511 $802,755 $380,208 $383,210 $851,984 8 $0 $385,014 $247,658 $247,658 $802,755 $336,430 $336,430 $802,755 $411,054 $411,054 $895,903 9 $0 $404,265 $241,515 $241,515 $802,755 $349,859 $349,859 $802,755 $444,398 $444,398 $942,506 10 $0 $424,478 $235,108 $235,108 $802,755 $363,766 $363,766 $802,755 $480,373 $480,373 $991,813 15 $0 $541,753 $193,414 $193,414 $802,755 $437,777 $437,777 $802,755 $702,023 $702,023 $1,275,217 20 $0 $691,430 $133,450 $133,450 $802,755 $523,632 $523,632 $847,617 $1,017,194 $1,017,194 $1,646,558 25 $0 $882,459 $41,530 $41,530 $802,755 $624,135 $624,135 $912,513 $1,462,233 $1,462,233 $2,137,848 30 $0 $1,126,266 $0 $0 $0 $762,042 $762,042 $1,066,018 $2,152,563 $2,152,563 $3,011,212 35 $0 $1,437,432 $0 $0 $0 $916,691 $916,691 $1,199,689 $3,121,973 $3,121,973 $4,085,780 40 $0 $1,834,568 $0 $0 $0 $1,095,780 $1,095,780 $1,305,913 $4,499,342 $4,499,342 $5,362,164 45 $0 $2,341,426 $0 $0 $0 $1,309,606 $1,309,606 $1,493,568 $6,482,984 $6,482,984 $7,393,661 50 $0 $2,988,318 $0 $0 $0 $1,571,075 $1,571,075 $1,694,277 $9,376,257 $9,376,257 $10,111,535 53 $0 $3,632,320 $0 $0 $0 $1,772,539 $1,772,539 $1,772,539 $11,834,294 $11,834,294 $11,834,294
These hypothetical rates of returns are illustrative only and should not be considered a representation of past or future investment results. Actual investment results may be more or less than those shown and will depend on a number of factors. The Account Values and Cash Surrender Values will be different from those shown if the actual rates of return averaged 0%, 6%, or 10% over a period of years but fluctuated above or below the average for individual contract years. No representation can be made that these rates of return can be achieved for any one year or sustained over a period of time. E-5 CORPORATE OWNED VARIABLE UNIVERSAL LIFE INSURANCE IV FLEXIBLE PREMIUM VARIABLE UNIVERSAL LIFE POLICY LEVEL DEATH BENEFIT OPTION HYPOTHETICAL ILLUSTRATION WITH CURRENT CHARGES FOR POLICIES WITH AN ISSUE DATE ON OR AFTER 01/01/2009 MALE ISSUE AGE 47 TOTAL FACE AMOUNT: 923,933 GUARANTEED ISSUE, NON-SMOKER BASE FACE AMOUNT: 923,933 ANNUAL PREMIUM: $42,891 TERM FACE AMOUNT: 0
ANNUAL TOTAL 0% 6% 10% PREMIUM PREMIUMS CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH CONTRACT SURRENDER DEATH YEAR OUTLAY WITH 5% INTEREST VALUE VALUE BENEFIT VALUE VALUE BENEFIT VALUE VALUE BENEFIT - ---- ------- ---------------- -------- --------- -------- ---------- ---------- ---------- ---------- ---------- ---------- 1 $42,891 $45,036 $37,414 $41,488 $923,933 $39,742 $43,816 $923,933 $41,294 $45,369 $923,933 2 $42,891 $92,323 $74,009 $80,228 $923,933 $81,017 $87,236 $923,933 $85,845 $92,065 $923,933 3 $42,891 $141,975 $110,377 $118,419 $923,933 $124,522 $132,564 $923,933 $134,592 $142,634 $923,933 4 $42,891 $194,109 $146,134 $154,712 $923,933 $169,966 $178,544 $923,933 $187,500 $196,078 $923,933 5 $42,891 $248,850 $181,591 $189,633 $923,933 $217,762 $225,804 $923,933 $245,267 $253,309 $923,933 6 $42,891 $306,328 $216,474 $222,264 $923,933 $267,763 $273,554 $923,933 $308,079 $313,869 $923,933 7 $42,891 $366,680 $250,877 $253,880 $923,933 $320,185 $323,187 $923,933 $376,478 $379,481 $956,073 8 $0 $385,014 $244,294 $244,294 $923,933 $332,271 $332,271 $923,933 $406,375 $406,375 $1,000,737 9 $0 $404,265 $237,489 $237,489 $923,933 $344,769 $344,769 $923,933 $438,633 $438,633 $1,047,986 10 $0 $424,478 $230,354 $230,354 $923,933 $357,624 $357,624 $923,933 $473,354 $473,354 $1,097,785 15 $0 $541,753 $182,859 $182,859 $923,933 $422,868 $422,868 $923,933 $684,290 $684,290 $1,375,337 20 $0 $691,430 $113,151 $113,151 $923,933 $493,800 $493,800 $923,933 $978,521 $978,521 $1,727,341 25 $0 $882,459 $4,556 $4,556 $923,933 $574,716 $574,716 $923,933 $1,385,470 $1,385,470 $2,171,485 30 $0 $1,126,266 $0 $0 $0 $694,440 $694,440 $1,059,406 $2,019,746 $2,019,746 $3,081,235 35 $0 $1,437,432 $0 $0 $0 $818,632 $818,632 $1,156,788 $2,870,737 $2,870,737 $4,056,564 40 $0 $1,834,568 $0 $0 $0 $954,370 $954,370 $1,212,160 $4,035,102 $4,035,102 $5,125,048 45 $0 $2,341,426 $0 $0 $0 $1,108,446 $1,108,446 $1,328,480 $5,650,356 $5,650,356 $6,771,987 50 $0 $2,988,318 $0 $0 $0 $1,291,966 $1,291,966 $1,442,276 $7,940,098 $7,940,098 $8,863,867 53 $0 $3,632,320 $0 $0 $0 $1,445,973 $1,445,973 $1,445,973 $9,941,637 $9,941,637 $9,941,637
These hypothetical rates of returns are illustrative only and should not be considered a representation of past or future investment results. Actual investment results may be more or less than those shown and will depend on a number of factors. The Account Values and Cash Surrender Values will be different from those shown if the actual rates of return averaged 0%, 6%, or 10% over a period of years but fluctuated above or below the average for individual contract years. No representation can be made that these rates of return can be achieved for any one year or sustained over a period of time. E-6 To learn more about the Policy, you should read the Statement of Additional Information (SAI) dated the same date as this prospectus, which is incorporated by reference into this prospectus. For a free copy of the SAI or for other Policy inquiries please contact us by writing to MetLife Insurance Company of Connecticut, Specialized Benefit Resources, 485-B Rt. One South, 4(th) Floor, Iselin, NJ 08830 or by calling us at 1-888-458-2654. To obtain free copies of personalized illustrations of Death Benefits, Cash Surrender Values, and Contract Values please contact your agent or registered representative. The SAI and additional information about the Registrant can be reviewed and copied at the Securities and Exchange Commission's Public Reference Room in Washington, DC. Information on the operation of the public reference room may be obtained by calling the Securities and Exchange Commission (the "SEC") at 202- 942-8090. Reports and other information about the Registrant, including the SAI, are available on the SEC's Internet site at http://www.sec.gov and copies of this information may be obtained, upon payment of a duplicating fee, by writing the Public Reference Section of the SEC, 100 F Street, NE, Washington, DC 20549. Investment Company Act File Numbers: 811-09215 Book 92 5/08 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Policy Owners of MetLife of CT Fund UL III for Variable Life Insurance and the Board of Directors of MetLife Insurance Company of Connecticut: We have audited the accompanying statements of assets and liabilities of MetLife of CT Fund UL III for Variable Life Insurance (the "Separate Account") of MetLife Insurance Company of Connecticut (the "Company") comprising each of the individual Investment Options listed in Appendix A as of December 31, 2007, and the related statements of operations for the periods presented in the year then ended, and the statements of changes in net assets for each of the periods presented in the two years then ended. We have also audited the statements of operations for the periods presented in the year ended December 31, 2007, and the statements of changes in net assets for each of the periods presented in the two years then ended for each of the individual Investment Options listed in Appendix B. These financial statements are the responsibility of the Separate Account's management. Our responsibility is to express an opinion on these financial statements based on our audits. The financial highlights of the Separate Account included in Note 5 for the periods in the two years ended December 31, 2004, were audited by other auditors whose report, dated March 21, 2005, expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Separate Account is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Separate Account's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of December 31, 2007, by correspondence with the custodian. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of each of the Investment Options constituting the Separate Account of the Company as of December 31, 2007, the results of their operations for the periods presented in the year then ended, and the changes in their net assets for each of the periods presented in the two years then ended, in conformity with accounting principles generally accepted in the United States of America. /s/ DELOITTE & TOUCHE LLP Certified Public Accountants Tampa, FL March 24, 2008 APPENDIX A AIM V.I. International Growth Investment Option (Series I) American Century VP Ultra Investment Option (Class I) American Funds Global Growth Investment Option (Class 2) American Funds Growth Investment Option (Class 2) American Funds Growth-Income Investment Option (Class 2) Delaware VIP Small Cap Value Investment Option (Standard Class) Dreyfus VIF Appreciation Investment Option (Initial Shares) Dreyfus VIF Developing Leaders Investment Option (Initial Shares) Fidelity VIP Contrafund Investment Option (Initial Class) Fidelity VIP Contrafund Investment Option (Service Class 2) Fidelity VIP Growth & Income Investment Option (Service Class 2) Fidelity VIP Mid Cap Investment Option (Service Class 2) Fidelity VIP Overseas Investment Option (Service Class 2) FTVIPT Franklin Small-Mid Cap Growth Securities Investment Option (Class 2) FTVIPT Templeton Developing Markets Securities Investment Option (Class 2) FTVIPT Templeton Foreign Securities Investment Option (Class 2) FTVIPT Templeton Global Income Securities Investment Option (Class 1) Janus Aspen Global Technology Investment Option (Service Shares) Janus Aspen Worldwide Growth Investment Option (Service Shares) LMPVET Aggressive Growth Investment Option (Class I) LMPVET Appreciation Investment Option (Class I) LMPVET Equity Index Investment Option (Class I) LMPVET Fundamental Value Investment Option (Class I) LMPVET International All Cap Opportunity Investment Option LMPVET Investors Investment Option (Class I) LMPVET Large Cap Growth Investment Option (Class I) LMPVET Social Awareness Stock Investment Option LMPVET Capital and Income Investment Option (Class I) LMPVIT Global High Yield Bond Investment Option (Class I) LMPVIT Government Investment Option (Class I) LMPVIT Strategic Bond Investment Option (Class I) MIST Batterymarch Mid-Cap Stock Investment Option (Class A) MIST BlackRock High Yield Investment Option (Class A) MIST BlackRock Large - Cap Core Investment Option (Class E) MIST Harris Oakmark International Investment Option (Class A) MIST Janus Forty Investment Option (Class A) MIST Loomis Sayles Global Markets Investment Option (Class A) MIST Lord Abbett Bond Debenture Investment Option (Class A) MIST Lord Abbett Growth and Income Investment Option (Class B) MIST Lord Abbett Mid-Cap Value Investment Option (Class B) MIST Met/AIM Capital Appreciation Investment Option (Class A) MIST Met/AIM Small Cap Growth Investment Option (Class A) MIST MFS Emerging Markets Equity Investment Option (Class A) MIST MFS Research International Investment Option (Class B) MIST Neuberger Berman Real Estate Investment Option (Class A) MIST PIMCO Inflation Protected Bond Investment Option (Class A) MIST Pioneer Fund Investment Option (Class A) MIST Third Avenue Small Cap Value Investment Option (Class B) MSF BlackRock Aggressive Growth Investment Option (Class D) MSF BlackRock Bond Income Investment Option (Class A) MSF BlackRock Diversified Investment Option (Class A) MSF BlackRock Money Market Investment Option (Class A) MSF Capital Guardian U.S. Equity Investment Option (Class A) MSF FI Large Cap Investment Option (Class A) MSF FI Value Leaders Investment Option (Class D) MSF MetLife Aggressive Allocation Investment Option (Class B) MSF MetLife Conservative Allocation Investment Option (Class B) MSF MetLife Conservative to Moderate Allocation Investment Option (Class B) APPENDIX A MSF MetLife Moderate Allocation Investment Option (Class B) MSF MetLife Moderate to Aggressive Allocation Investment Option (Class B) MSF MetLife Stock Index Investment Option (Class A) MSF MFS Total Return Investment Option (Class F) MSF Oppenheimer Global Equity Investment Option (Class B) MSF Russell 2000 Index Investment Option (Class A) MSF T. Rowe Price Large Cap Growth Investment Option (Class B) MSF Western Asset Management U.S. Government Investment Option (Class A) PIMCO VIT Low Duration Investment Option PIMCO VIT Total Return Investment Option (Administrative Class) Pioneer Mid Cap Value VCT Investment Option (Class II) Putnam VT Discovery Growth Investment Option (Class IB) Royce Micro Cap Investment Option Royce Small Cap Investment Option Vanguard VIF Diversified Value Investment Option Vanguard VIF Equity Index Investment Option Vanguard VIF International Investment Option Vanguard VIF Mid-Cap Index Investment Option Vanguard VIF Short-Term Investment-Grade Investment Option Vanguard VIF Small Company Growth Investment Option The Merger Fund VL Investment Option APPENDIX B Credit Suisse Trust Emerging Markets Investment Option Dreyfus Stock Index Investment Option (Initial Shares) DWS VIT Small Cap Index Investment Option (Class A) Fidelity VIP Asset Manager SM Investment Option (Initial Class) FTVIP Templeton Global Asset Allocation Investment Option (Class 1) LMPVPI All Cap Investment Option (Class I) LMPVPI Total Return Investment Option (Class I) Lord Abbett Growth and Income Investment Option (Class VC) Lord Abbett Mid-Cap Value Investment Option (Class VC) MIST BlackRock Large-Cap Core Investment Option (Class A) MSF Western Asset Management High Yield Bond Investment Option (Class A) Morgan Stanley UIF Emerging Markets Equity Investment Option (Class I) PIMCO VIT Real Return Investment Option (Administrative Class) Putnam VT International Equity Investment Option (Class IB) Putnam VT Small Cap Value Investment Option (Class IB) METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE OF METLIFE INSURANCE COMPANY OF CONNECTICUT STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 2007
AIM V.I. AMERICAN CENTURY AMERICAN FUNDS AMERICAN FUNDS INTERNATIONAL GROWTH VP ULTRA GLOBAL GROWTH GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERIES I) (CLASS I) (CLASS 2) (CLASS 2) -------------------- ----------------- ----------------- ----------------- ASSETS: Investments at fair value $55,472,664 $3,608,218 $15,120,888 $72,797,737 ----------- ---------- ----------- ----------- Total Assets 55,472,664 3,608,218 15,120,888 72,797,737 ----------- ---------- ----------- ----------- LIABILITIES: Other payables Insurance charges 809 60 268 1,129 Due to MetLife Insurance Company of Connecticut 16,495 -- -- -- ----------- ---------- ----------- ----------- Total Liabilities 17,304 60 268 1,129 ----------- ---------- ----------- ----------- NET ASSETS $55,455,360 $3,608,158 $15,120,620 $72,796,608 =========== ========== =========== ===========
The accompanying notes are an integral part of these financial statements. 1
AMERICAN FUNDS DELAWARE VIP DREYFUS VIF DREYFUS VIF GROWTH-INCOME SMALL CAP VALUE APPRECIATION DEVELOPING LEADERS INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 2) (STANDARD CLASS) (INITIAL SHARES) (INITIAL SHARES) ----------------- ----------------- ----------------- ------------------ ASSETS: Investments at fair value $50,782,118 $13,710,702 $4,065,047 $2,151,429 ----------- ----------- ---------- ---------- Total Assets 50,782,118 13,710,702 4,065,047 2,151,429 ----------- ----------- ---------- ---------- LIABILITIES: Other payables Insurance charges 776 218 75 37 Due to MetLife Insurance Company of Connecticut -- -- -- -- ----------- ----------- ---------- ---------- Total Liabilities 776 218 75 37 ----------- ----------- ---------- ---------- NET ASSETS $50,781,342 $13,710,484 $4,064,972 $2,151,392 =========== =========== ========== ==========
The accompanying notes are an integral part of these financial statements. 2
FIDELITY VIP FIDELITY VIP FIDELITY VIP GROWTH CONTRAFUND CONTRAFUND & INCOME INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (INITIAL CLASS) (SERVICE CLASS 2) (SERVICE CLASS 2) ----------------- ----------------- ------------------- ASSETS: Investments at fair value $18,489,821 $45,244,272 $7,694,219 ----------- ----------- ---------- Total Assets 18,489,821 45,244,272 7,694,219 ----------- ----------- ---------- LIABILITIES: Other payables Insurance charges 382 691 127 Due to MetLife Insurance Company of Connecticut -- -- -- ----------- ----------- ---------- Total Liabilities 382 691 127 ----------- ----------- ---------- NET ASSETS $18,489,439 $45,243,581 $7,694,092 =========== =========== ========== FTVIPT FRANKLIN FIDELITY VIP SMALL-MID CAP MID CAP FIDELITY VIP OVERSEAS GROWTH SECURITIES INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERVICE CLASS 2) (SERVICE CLASS 2) (CLASS 2) ----------------- --------------------- ----------------- ASSETS: Investments at fair value $65,398,645 $31,198,652 $11,375,124 ----------- ----------- ----------- Total Assets 65,398,645 31,198,652 11,375,124 ----------- ----------- ----------- LIABILITIES: Other payables Insurance charges 1,147 483 178 Due to MetLife Insurance Company of Connecticut -- -- 6,908 ----------- ----------- ----------- Total Liabilities 1,147 483 7,086 ----------- ----------- ----------- NET ASSETS $65,397,498 $31,198,169 $11,368,038 =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 3
FTVIPT TEMPLETON FTVIPT TEMPLETON DEVELOPING MARKETS FTVIPT TEMPLETON GLOBAL INCOME JANUS ASPEN GLOBAL SECURITIES FOREIGN SECURITIES SECURITIES TECHNOLOGY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 2) (CLASS 2) (CLASS 1) (SERVICE SHARES) ------------------ ------------------ ----------------- ------------------ ASSETS: Investments at fair value $47,052,771 $18,433,510 $10,292,107 $1,627,203 ----------- ----------- ----------- ---------- Total Assets 47,052,771 18,433,510 10,292,107 1,627,203 ----------- ----------- ----------- ---------- LIABILITIES: Other payables Insurance charges 738 315 195 28 Due to MetLife Insurance Company of Connecticut -- -- -- -- ----------- ----------- ----------- ---------- Total Liabilities 738 315 195 28 ----------- ----------- ----------- ---------- NET ASSETS $47,052,033 $18,433,195 $10,291,912 $1,627,175 =========== =========== =========== ==========
The accompanying notes are an integral part of these financial statements. 4
JANUS ASPEN LMPVET AGGRESSIVE LMPVET WORLDWIDE GROWTH GROWTH APPRECIATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERVICE SHARES) (CLASS I) (CLASS I) ----------------- ----------------- ----------------- ASSETS: Investments at fair value $2,320,739 $5,824,853 $42,990 ---------- ---------- ------- Total Assets 2,320,739 5,824,853 42,990 ---------- ---------- ------- LIABILITIES: Other payables Insurance charges 42 98 1 Due to MetLife Insurance Company of Connecticut -- -- -- ---------- ---------- ------- Total Liabilities 42 98 1 ---------- ---------- ------- NET ASSETS $2,320,697 $5,824,755 $42,989 ========== ========== ======= LMPVET EQUITY LMPVET LMPVET INDEX FUNDAMENTAL VALUE INTERNATIONAL ALL CAP INVESTMENT OPTION INVESTMENT OPTION OPPORTUNITY (CLASS I) (CLASS I) INVESTMENT OPTION ----------------- ----------------- --------------------- ASSETS: Investments at fair value $26,013,263 $4,704,464 $988,014 ----------- ---------- -------- Total Assets 26,013,263 4,704,464 988,014 ----------- ---------- -------- LIABILITIES: Other payables Insurance charges 464 80 19 Due to MetLife Insurance Company of Connecticut -- -- -- ----------- ---------- -------- Total Liabilities 464 80 19 ----------- ---------- -------- NET ASSETS $26,012,799 $4,704,384 $987,995 =========== ========== ========
The accompanying notes are an integral part of these financial statements. 5
LMPVET LARGE CAP LMPVET CAPITAL LMPVET INVESTORS GROWTH LMPVET SOCIAL AND INCOME INVESTMENT OPTION INVESTMENT OPTION AWARENESS STOCK INVESTMENT OPTION (CLASS I) (CLASS I) INVESTMENT OPTION (CLASS I) ----------------- ----------------- ----------------- ----------------- ASSETS: Investments at fair value $7,237,328 $8,324,738 $2,124,937 $1,663,153 ---------- ---------- ---------- ---------- Total Assets 7,237,328 8,324,738 2,124,937 1,663,153 ---------- ---------- ---------- ---------- LIABILITIES: Other payables Insurance charges 132 158 35 29 Due to MetLife Insurance Company of Connecticut -- -- -- -- ---------- ---------- ---------- ---------- Total Liabilities 132 158 35 29 ---------- ---------- ---------- ---------- NET ASSETS $7,237,196 $8,324,580 $2,124,902 $1,663,124 ========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. 6
LMPVIT GLOBAL HIGH LMPVIT STRATEGIC YIELD BOND LMPVIT GOVERNMENT BOND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS I) ------------------ ----------------- ----------------- ASSETS: Investments at fair value $15,660,358 $695,778 $4,977,586 ----------- -------- ---------- Total Assets 15,660,358 695,778 4,977,586 ----------- -------- ---------- LIABILITIES: Other payables Insurance charges 322 13 84 Due to MetLife Insurance Company of Connecticut -- -- -- ----------- -------- ---------- Total Liabilities 322 13 84 ----------- -------- ---------- NET ASSETS $15,660,036 $695,765 $4,977,502 =========== ======== ========== MIST BATTERYMARCH MIST BLACKROCK MIST BLACKROCK MID-CAP STOCK HIGH YIELD LARGE-CAP CORE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS E) ----------------- ----------------- ----------------- ASSETS: Investments at fair value $5,787,085 $18,755,742 $9,442,861 ---------- ----------- ---------- Total Assets 5,787,085 18,755,742 9,442,861 ---------- ----------- ---------- LIABILITIES: Other payables Insurance charges 100 129 192 Due to MetLife Insurance Company of Connecticut -- -- -- ---------- ----------- ---------- Total Liabilities 100 129 192 ---------- ----------- ---------- NET ASSETS $5,786,985 $18,755,613 $9,442,669 ========== =========== ==========
The accompanying notes are an integral part of these financial statements. 7
MIST HARRIS OAKMARK MIST LOOMIS SAYLES MIST LORD ABBETT INTERNATIONAL MIST JANUS FORTY GLOBAL MARKETS BOND DEBENTURE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) (CLASS A) ----------------- ----------------- ------------------ ----------------- ASSETS: Investments at fair value $23,645,314 $15,475,618 $9,893,850 $2,030,142 ----------- ----------- ---------- ---------- Total Assets 23,645,314 15,475,618 9,893,850 2,030,142 ----------- ----------- ---------- ---------- LIABILITIES: Other payables Insurance charges 343 287 201 35 Due to MetLife Insurance Company of Connecticut -- -- -- -- ----------- ----------- ---------- ---------- Total Liabilities 343 287 201 35 ----------- ----------- ---------- ---------- NET ASSETS $23,644,971 $15,475,331 $9,893,649 $2,030,107 =========== =========== ========== ==========
The accompanying notes are an integral part of these financial statements. 8
MIST LORD ABBETT MIST LORD ABBETT MIST MET/AIM GROWTH AND INCOME MID-CAP VALUE CAPITAL APPRECIATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS B) (CLASS A) ----------------- ----------------- -------------------- ASSETS: Investments at fair value $14,525,717 $31,478,495 $2,144,517 ----------- ----------- ---------- Total Assets 14,525,717 31,478,495 2,144,517 ----------- ----------- ---------- LIABILITIES: Other payables Insurance charges 208 480 42 Due to MetLife Insurance Company of Connecticut -- -- -- ----------- ----------- ---------- Total Liabilities 208 480 42 ----------- ----------- ---------- NET ASSETS $14,525,509 $31,478,015 $2,144,475 =========== =========== ========== MIST MET/AIM SMALL MIST MFS EMERGING MIST MFS RESEARCH CAP GROWTH MARKETS EQUITY INTERNATIONAL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS B) ------------------ ----------------- ----------------- ASSETS: Investments at fair value $457,906 $7,220,045 $7,961,710 -------- ---------- ---------- Total Assets 457,906 7,220,045 7,961,710 -------- ---------- ---------- LIABILITIES: Other payables Insurance charges 8 128 135 Due to MetLife Insurance Company of Connecticut -- -- -- -------- ---------- ---------- Total Liabilities 8 128 135 -------- ---------- ---------- NET ASSETS $457,898 $7,219,917 $7,961,575 ======== ========== ==========
The accompanying notes are an integral part of these financial statements. 9
MIST PIMCO MIST NEUBERGER INFLATION PROTECTED MIST THIRD AVENUE BERMAN REAL ESTATE BOND MIST PIONEER FUND SMALL CAP VALUE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) (CLASS B) ------------------ ------------------- ----------------- ----------------- ASSETS: Investments at fair value $40,028,471 $32,068,243 $53,279 $26,073,946 ----------- ----------- ------- ----------- Total Assets 40,028,471 32,068,243 53,279 26,073,946 ----------- ----------- ------- ----------- LIABILITIES: Other payables Insurance charges 668 523 2 485 Due to MetLife Insurance Company of Connecticut -- -- -- -- ----------- ----------- ------- ----------- Total Liabilities 668 523 2 485 ----------- ----------- ------- ----------- NET ASSETS $40,027,803 $32,067,720 $53,277 $26,073,461 =========== =========== ======= ===========
The accompanying notes are an integral part of these financial statements. 10
MSF BLACKROCK MSF BLACKROCK MSF BLACKROCK AGGRESSIVE GROWTH BOND INCOME DIVERSIFIED INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS D) (CLASS A) (CLASS A) ----------------- ----------------- ----------------- ASSETS: Investments at fair value $9,301,797 $10,493,568 $3,809,699 ---------- ----------- ---------- Total Assets 9,301,797 10,493,568 3,809,699 ---------- ----------- ---------- LIABILITIES: Other payables Insurance charges 166 182 77 Due to MetLife Insurance Company of Connecticut -- -- -- ---------- ----------- ---------- Total Liabilities 166 182 77 ---------- ----------- ---------- NET ASSETS $9,301,631 $10,493,386 $3,809,622 ========== =========== ========== MSF BLACKROCK MSF CAPITAL MONEY MARKET GUARDIAN U.S. EQUITY MSF FI LARGE CAP INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) ----------------- -------------------- ----------------- ASSETS: Investments at fair value $181,029,762 $2,351,297 $2,352,255 ------------ ---------- ---------- Total Assets 181,029,762 2,351,297 2,352,255 ------------ ---------- ---------- LIABILITIES: Other payables Insurance charges 3,206 41 44 Due to MetLife Insurance Company of Connecticut -- -- -- ------------ ---------- ---------- Total Liabilities 3,206 41 44 ------------ ---------- ---------- NET ASSETS $181,026,556 $2,351,256 $2,352,211 ============ ========== ==========
The accompanying notes are an integral part of these financial statements. 11
MSF METLIFE MSF METLIFE MSF FI VALUE MSF METLIFE CONSERVATIVE CONSERVATIVE TO LEADERS AGGRESSIVE ALLOCATION ALLOCATION MODERATE ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS D) (CLASS B) (CLASS B) (CLASS B) ----------------- --------------------- ----------------- ------------------- ASSETS: Investments at fair value $17,017,124 $6,807,647 $2,043,031 $8,102,044 ----------- ---------- ---------- ---------- Total Assets 17,017,124 6,807,647 2,043,031 8,102,044 ----------- ---------- ---------- ---------- LIABILITIES: Other payables Insurance charges 321 98 40 116 Due to MetLife Insurance Company of Connecticut -- -- -- -- ----------- ---------- ---------- ---------- Total Liabilities 321 98 40 116 ----------- ---------- ---------- ---------- NET ASSETS $17,016,803 $6,807,549 $2,042,991 $8,101,928 =========== ========== ========== ==========
The accompanying notes are an integral part of these financial statements. 12
MSF METLIFE MSF METLIFE MODERATE TO MSF METLIFE STOCK MODERATE ALLOCATION AGGRESSIVE ALLOCATION INDEX INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS B) (CLASS A) ------------------- --------------------- ----------------- ASSETS: Investments at fair value $12,802,702 $1,850,612 $76,909,909 ----------- ---------- ----------- Total Assets 12,802,702 1,850,612 76,909,909 ----------- ---------- ----------- LIABILITIES: Other payables Insurance charges 174 39 972 Due to MetLife Insurance Company of Connecticut -- -- -- ----------- ---------- ----------- Total Liabilities 174 39 972 ----------- ---------- ----------- NET ASSETS $12,802,528 $1,850,573 $76,908,937 =========== ========== =========== MSF MFS TOTAL MSF OPPENHEIMER MSF RUSSELL 2000 RETURN GLOBAL EQUITY INDEX INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS F) (CLASS B) (CLASS A) ----------------- ----------------- ----------------- ASSETS: Investments at fair value $37,564,166 $1,099,909 $28,667,922 ----------- ---------- ----------- Total Assets 37,564,166 1,099,909 28,667,922 ----------- ---------- ----------- LIABILITIES: Other payables Insurance charges 638 19 428 Due to MetLife Insurance Company of Connecticut -- -- -- ----------- ---------- ----------- Total Liabilities 638 19 428 ----------- ---------- ----------- NET ASSETS $37,563,528 $1,099,890 $28,667,494 =========== ========== ===========
The accompanying notes are an integral part of these financial statements. 13
MSF WESTERN ASSET MSF T. ROWE PRICE MANAGEMENT PIMCO VIT TOTAL LARGE CAP GROWTH U.S. GOVERNMENT PIMCO VIT LOW RETURN INVESTMENT OPTION INVESTMENT OPTION DURATION INVESTMENT OPTION (CLASS B) (CLASS A) INVESTMENT OPTION (ADMINISTRATIVE CLASS) ----------------- ----------------- ----------------- ---------------------- ASSETS: Investments at fair value $3,046,864 $23,801,394 $17,613,496 $140,177,180 ---------- ----------- ----------- ------------ Total Assets 3,046,864 23,801,394 17,613,496 140,177,180 ---------- ----------- ----------- ------------ LIABILITIES: Other payables Insurance charges 51 86 271 2,182 Due to MetLife Insurance Company of Connecticut -- -- -- -- ---------- ----------- ----------- ------------ Total Liabilities 51 86 271 2,182 ---------- ----------- ----------- ------------ NET ASSETS $3,046,813 $23,801,308 $17,613,225 $140,174,998 ========== =========== =========== ============
The accompanying notes are an integral part of these financial statements. 14
PIONEER MID CAP PUTNAM VT DISCOVERY VALUE VCT GROWTH INVESTMENT OPTION INVESTMENT OPTION ROYCE MICRO CAP (CLASS II) (CLASS IB) INVESTMENT OPTION ----------------- ------------------- ----------------- ASSETS: Investments at fair value $4,920,982 $329,409 $6,343,280 ---------- -------- ---------- Total Assets 4,920,982 329,409 6,343,280 ---------- -------- ---------- LIABILITIES: Other payables Insurance charges 88 6 84 Due to MetLife Insurance Company of Connecticut -- -- -- ---------- -------- ---------- Total Liabilities 88 6 84 ---------- -------- ---------- NET ASSETS $4,920,894 $329,403 $6,343,196 ========== ======== ========== VANGUARD VIF VANGUARD VIF EQUITY ROYCE SMALL CAP DIVERSIFIED VALUE INDEX INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ----------------- ----------------- ------------------- ASSETS: Investments at fair value $6,094,542 $18,863,252 $26,263,799 ---------- ----------- ----------- Total Assets 6,094,542 18,863,252 26,263,799 ---------- ----------- ----------- LIABILITIES: Other payables Insurance charges 101 397 556 Due to MetLife Insurance Company of Connecticut -- -- -- ---------- ----------- ----------- Total Liabilities 101 397 556 ---------- ----------- ----------- NET ASSETS $6,094,441 $18,862,855 $26,263,243 ========== =========== ===========
The accompanying notes are an integral part of these financial statements. 15
VANGUARD VIF VANGUARD VIF VANGUARD VIF SHORT-TERM VANGUARD VIF SMALL INTERNATIONAL MID-CAP INDEX INVESTMENT-GRADE COMPANY GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ----------------- ----------------- ----------------- ------------------- ASSETS: Investments at fair value $907,738 $15,960,796 $227,718 $4,011,778 -------- ----------- -------- ---------- Total Assets 907,738 15,960,796 227,718 4,011,778 -------- ----------- -------- ---------- LIABILITIES: Other payables Insurance charges 18 329 8 83 Due to MetLife Insurance Company of Connecticut -- -- -- -- -------- ----------- -------- ---------- Total Liabilities 18 329 8 83 -------- ----------- -------- ---------- NET ASSETS $907,720 $15,960,467 $227,710 $4,011,695 ======== =========== ======== ==========
The accompanying notes are an integral part of these financial statements. 16
THE MERGER FUND VL INVESTMENT OPTION ------------------ ASSETS: Investments at fair value $106,792 -------- Total Assets 106,792 -------- LIABILITIES: Other payables Insurance charges 1 Due to MetLife Insurance Company of Connecticut -- -------- Total Liabilities 1 -------- NET ASSETS $106,791 ========
The accompanying notes are an integral part of these financial statements. 17 METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE OF METLIFE INSURANCE COMPANY OF CONNECTICUT STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2007
AIM V.I. INTERNATIONAL AMERICAN CENTURY AMERICAN FUNDS AMERICAN FUNDS GROWTH VP ULTRA GLOBAL GROWTH GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERIES I) (CLASS I) (CLASS 2) (CLASS 2) ---------------------- ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 219,514 $ -- $ 527,675 $ 567,882 ---------- -------- ----------- ----------- EXPENSES: Mortality and expense risk charges 57,753 7,087 46,047 147,008 ---------- -------- ----------- ----------- Net investment income (loss) 161,761 (7,087) 481,628 420,874 ---------- -------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- 1,041,083 5,299,081 Realized gains (losses) on sale of investments 1,257,313 163,603 3,237,101 5,992,874 ---------- -------- ----------- ----------- Net realized gains (losses) 1,257,313 163,603 4,278,184 11,291,955 ---------- -------- ----------- ----------- Change in unrealized gains (losses) on investments 836,287 514,556 (1,486,743) (1,732,357) ---------- -------- ----------- ----------- Net increase (decrease) in net assets resulting from operations $2,255,361 $671,072 $ 3,273,069 $ 9,980,472 ========== ======== =========== ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 18
AMERICAN FUNDS DELAWARE VIP SMALL GROWTH-INCOME CREDIT SUISSE TRUST CAP VALUE INVESTMENT OPTION EMERGING MARKETS INVESTMENT OPTION (CLASS 2) INVESTMENT OPTION (a) (STANDARD CLASS) ----------------- --------------------- ------------------ INVESTMENT INCOME: Dividends $ 737,777 $ -- $ 54,949 ----------- ---------- ----------- EXPENSES: Mortality and expense risk charges 72,557 2,604 27,491 ----------- ---------- ----------- Net investment income (loss) 665,220 (2,604) 27,458 ----------- ---------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,145,939 -- 872,974 Realized gains (losses) on sale of investments 2,429,654 1,078,385 (33,987) ----------- ---------- ----------- Net realized gains (losses) 3,575,593 1,078,385 838,987 ----------- ---------- ----------- Change in unrealized gains (losses) on investments (3,065,386) (861,085) (2,242,480) ----------- ---------- ----------- Net increase (decrease) in net assets resulting from operations $ 1,175,427 $ 214,696 $(1,376,035) =========== ========== =========== DREYFUS VIF DREYFUS VIF DREYFUS STOCK INDEX APPRECIATION DEVELOPING LEADERS INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (INITIAL SHARES) (a) (INITIAL SHARES) (INITIAL SHARES) -------------------- ----------------- ------------------ INVESTMENT INCOME: Dividends $ 257,768 $ 387,801 $ 22,424 ----------- ----------- ----------- EXPENSES: Mortality and expense risk charges 33,870 37,384 10,889 ----------- ----------- ----------- Net investment income (loss) 223,898 350,417 11,535 ----------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- 392,054 Realized gains (losses) on sale of investments 12,127,499 3,339,271 520,454 ----------- ----------- ----------- Net realized gains (losses) 12,127,499 3,339,271 912,508 ----------- ----------- ----------- Change in unrealized gains (losses) on investments (8,716,781) (2,378,252) (1,338,853) ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations $ 3,634,616 $ 1,311,436 $ (414,810) =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 19
DWS VIT FIDELITY VIP ASSET FIDELITY VIP FIDELITY VIP SMALL CAP INDEX MANAGER SM CONTRAFUND CONTRAFUND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (a) (INITIAL CLASS) (a) (INITIAL CLASS) (SERVICE CLASS 2) ----------------- ------------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 241,218 $ 117,046 $ 165,563 $ 320,699 ----------- --------- ----------- ----------- EXPENSES: Mortality and expense risk charges 16,386 3,029 37,614 77,854 ----------- --------- ----------- ----------- Net investment income (loss) 224,832 114,017 127,949 242,845 ----------- --------- ----------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,767,742 107,055 4,410,648 10,957,808 Realized gains (losses) on sale of investments 4,004,171 232,764 682,748 1,328,591 ----------- --------- ----------- ----------- Net realized gains (losses) 5,771,913 339,819 5,093,396 12,286,399 ----------- --------- ----------- ----------- Change in unrealized gains (losses) on investments (4,498,858) (254,382) (2,100,054) (5,832,475) ----------- --------- ----------- ----------- Net increase (decrease) in net assets resulting from operations $ 1,497,887 $ 199,454 $ 3,121,291 $ 6,696,769 =========== ========= =========== ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 20
FIDELITY VIP GROWTH FIDELITY VIP & INCOME MID CAP FIDELITY VIP OVERSEAS INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERVICE CLASS 2) (SERVICE CLASS 2) (SERVICE CLASS 2) ------------------- ----------------- --------------------- INVESTMENT INCOME: Dividends $ 119,658 $ 274,657 $ 772,582 --------- ---------- ---------- EXPENSES: Mortality and expense risk charges 16,815 127,686 49,642 --------- ---------- ---------- Net investment income (loss) 102,843 146,971 722,940 --------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 381,277 4,346,615 1,433,612 Realized gains (losses) on sale of investments 616,961 2,596,338 544,398 --------- ---------- ---------- Net realized gains (losses) 998,238 6,942,953 1,978,010 --------- ---------- ---------- Change in unrealized gains (losses) on investments (141,304) 2,430,556 1,101,545 --------- ---------- ---------- Net increase (decrease) in net assets resulting from operations $ 959,777 $9,520,480 $3,802,495 ========= ========== ========== FTVIP FTVIPT FRANKLIN FTVIPT TEMPLETON TEMPLETON GLOBAL SMALL-MID CAP DEVELOPING MARKETS ASSET ALLOCATION GROWTH SECURITIES SECURITIES INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 1) (a) (CLASS 2) (CLASS 2) ----------------- ----------------- ------------------ INVESTMENT INCOME: Dividends $ -- $ -- $ 794,920 --------- ---------- ---------- EXPENSES: Mortality and expense risk charges 3,789 22,188 72,460 --------- ---------- ---------- Net investment income (loss) (3,789) (22,188) 722,460 --------- ---------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 800,465 2,731,451 Realized gains (losses) on sale of investments 557,939 1,351,676 3,511,763 --------- ---------- ---------- Net realized gains (losses) 557,939 2,152,141 6,243,214 --------- ---------- ---------- Change in unrealized gains (losses) on investments (244,459) (690,312) 2,286,092 --------- ---------- ---------- Net increase (decrease) in net assets resulting from operations $ 309,691 $1,439,641 $9,251,766 ========= ========== ==========
The accompanying notes are an integral part of these financial statements. 21
FTVIPT TEMPLETON FTVIPT TEMPLETON GLOBAL INCOME JANUS ASPEN GLOBAL JANUS ASPEN FOREIGN SECURITIES SECURITIES TECHNOLOGY WORLDWIDE GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 2) (CLASS 1) (SERVICE SHARES) (SERVICE SHARES) ------------------ ----------------- ------------------ ------------------ INVESTMENT INCOME: Dividends $ 310,796 $195,184 $ 5,175 $ 12,927 ----------- -------- -------- -------- EXPENSES: Mortality and expense risk charges 41,220 16,609 3,627 5,127 ----------- -------- -------- -------- Net investment income (loss) 269,576 178,575 1,548 7,800 ----------- -------- -------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 708,887 -- -- -- Realized gains (losses) on sale of investments 4,657,820 (47,978) 375,045 202,767 ----------- -------- -------- -------- Net realized gains (losses) 5,366,707 (47,978) 375,045 202,767 ----------- -------- -------- -------- Change in unrealized gains (losses) on investments (2,220,549) 226,395 (43,025) (13,743) ----------- -------- -------- -------- Net increase (decrease) in net assets resulting from operations $ 3,415,734 $356,992 $333,568 $196,824 =========== ======== ======== ========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 22
LMPVET AGGRESSIVE LMPVET LMPVET EQUITY GROWTH APPRECIATION INDEX INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS I) ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ -- $ 439 $ 486,143 --------- ------- ----------- EXPENSES: Mortality and expense risk charges 13,324 24 59,917 --------- ------- ----------- Net investment income (loss) (13,324) 415 426,226 --------- ------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 33,710 3,162 1,215,659 Realized gains (losses) on sale of investments 378,636 (7) 1,974,227 --------- ------- ----------- Net realized gains (losses) 412,346 3,155 3,189,886 --------- ------- ----------- Change in unrealized gains (losses) on investments (284,944) (4,710) (2,293,350) --------- ------- ----------- Net increase (decrease) in net assets resulting from operations $ 114,078 $(1,140) $ 1,322,762 ========= ======= =========== LMPVET LMPVET FUNDAMENTAL VALUE INTERNATIONAL ALL CAP LMPVET INVESTORS INVESTMENT OPTION OPPORTUNITY INVESTMENT OPTION (CLASS I) INVESTMENT OPTION (CLASS I) ----------------- --------------------- ----------------- INVESTMENT INCOME: Dividends $ 60,833 $ 9,411 $ 92,184 --------- --------- --------- EXPENSES: Mortality and expense risk charges 15,874 2,502 16,682 --------- --------- --------- Net investment income (loss) 44,959 6,909 75,502 --------- --------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 258,645 492,754 194,682 Realized gains (losses) on sale of investments 473,744 42,806 475,394 --------- --------- --------- Net realized gains (losses) 732,389 535,560 670,076 --------- --------- --------- Change in unrealized gains (losses) on investments (751,679) (474,683) (437,140) --------- --------- --------- Net increase (decrease) in net assets resulting from operations $ 25,669 $ 67,786 $ 308,438 ========= ========= =========
The accompanying notes are an integral part of these financial statements. 23
LMPVET LARGE CAP LMPVET CAPITAL GROWTH LMPVET SOCIAL LMPVPI ALL CAP AND INCOME INVESTMENT OPTION AWARENESS STOCK INVESTMENT OPTION INVESTMENT OPTION (CLASS I) INVESTMENT OPTION (CLASS I) (a) (CLASS I) (b) ----------------- ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 3,526 $ 28,361 $ 30,190 $ 23,191 -------- --------- ---------- --------- EXPENSES: Mortality and expense risk charges 18,111 4,059 8,095 2,676 -------- --------- ---------- --------- Net investment income (loss) (14,585) 24,302 22,095 20,515 -------- --------- ---------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 328,921 523,387 266,669 Realized gains (losses) on sale of investments 291,389 100,810 863,643 6,320 -------- --------- ---------- --------- Net realized gains (losses) 291,389 429,731 1,387,030 272,989 -------- --------- ---------- --------- Change in unrealized gains (losses) on investments 112,891 (238,456) (864,468) (273,454) -------- --------- ---------- --------- Net increase (decrease) in net assets resulting from operations $389,695 $ 215,577 $ 544,657 $ 20,050 ======== ========= ========== =========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 24
LMPVIT GLOBAL LMPVIT STRATEGIC HIGH YIELD BOND LMPVIT GOVERNMENT BOND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS I) ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $1,162,319 $ 37,324 $ 242,742 ---------- -------- --------- EXPENSES: Mortality and expense risk charges 43,534 1,587 10,672 ---------- -------- --------- Net investment income (loss) 1,118,785 35,737 232,070 ---------- -------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 77,244 -- -- Realized gains (losses) on sale of investments 225,218 16,409 (17,747) ---------- -------- --------- Net realized gains (losses) 302,462 16,409 (17,747) ---------- -------- --------- Change in unrealized gains (losses) on investments (962,511) (21,551) (130,762) ---------- -------- --------- Net increase (decrease) in net assets resulting from operations $ 458,736 $ 30,595 $ 83,561 ========== ======== ========= LMPVPI LORD ABBETT GROWTH LORD ABBETT TOTAL RETURN AND INCOME MID-CAP VALUE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (a) (CLASS VC) (a) (CLASS VC) (a) ----------------- ------------------ ----------------- INVESTMENT INCOME: Dividends $ 13,898 $ -- $ -- -------- --------- ---------- EXPENSES: Mortality and expense risk charges 732 3,447 12,285 -------- --------- ---------- Net investment income (loss) 13,166 (3,447) (12,285) -------- --------- ---------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 10,872 -- -- Realized gains (losses) on sale of investments 59,591 569,744 2,514,760 -------- --------- ---------- Net realized gains (losses) 70,463 569,744 2,514,760 -------- --------- ---------- Change in unrealized gains (losses) on investments (40,631) (334,733) (796,797) -------- --------- ---------- Net increase (decrease) in net assets resulting from operations $ 42,998 $ 231,564 $1,705,678 ======== ========= ==========
The accompanying notes are an integral part of these financial statements. 25
MIST BATTERYMARCH MIST BLACKROCK MIST BLACKROCK MIST BLACKROCK MID-CAP STOCK HIGH YIELD LARGE-CAP CORE LARGE-CAP CORE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (b) (CLASS E) (b) (CLASS A) (a) ----------------- ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 20,693 $ -- $ -- $ 7,192 --------- --------- ------- -------- EXPENSES: Mortality and expense risk charges 16,696 10,825 7,821 666 --------- --------- ------- -------- Net investment income (loss) 3,997 (10,825) (7,821) 6,526 --------- --------- ------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 825,098 -- -- 62,655 Realized gains (losses) on sale of investments 47,930 (48,061) 25,947 42,377 --------- --------- ------- -------- Net realized gains (losses) 873,028 (48,061) 25,947 105,032 --------- --------- ------- -------- Change in unrealized gains (losses) on investments (124,645) (306,919) 10,007 (54,909) --------- --------- ------- -------- Net increase (decrease) in net assets resulting from operations $ 752,380 $(365,805) $28,133 $ 56,649 ========= ========= ======= ========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 26
MIST HARRIS OAKMARK MIST LOOMIS SAYLES INTERNATIONAL MIST JANUS FORTY GLOBAL MARKETS INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) (b) ----------------- ----------------- ------------------ INVESTMENT INCOME: Dividends $ 137,442 $ 19,483 $ -- ----------- ---------- --------- EXPENSES: Mortality and expense risk charges 40,370 28,619 11,158 ----------- ---------- --------- Net investment income (loss) 97,072 (9,136) (11,158) ----------- ---------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,179,304 1,873,502 -- Realized gains (losses) on sale of investments (174,594) 287,748 (403,331) ----------- ---------- --------- Net realized gains (losses) 1,004,710 2,161,250 (403,331) ----------- ---------- --------- Change in unrealized gains (losses) on investments (2,508,938) 1,308,212 865,956 ----------- ---------- --------- Net increase (decrease) in net assets resulting from operations $(1,407,156) $3,460,326 $ 451,467 =========== ========== ========= MIST LORD ABBETT MIST LORD ABBETT MIST LORD ABBETT BOND DEBENTURE GROWTH AND INCOME MID-CAP VALUE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS B) (CLASS B) ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 409,036 $ 85,077 $ 82,911 --------- --------- ----------- EXPENSES: Mortality and expense risk charges 11,145 23,139 49,442 --------- --------- ----------- Net investment income (loss) 397,891 61,938 33,469 --------- --------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 9,433 437,160 1,748,056 Realized gains (losses) on sale of investments 142,099 129,680 (269,559) --------- --------- ----------- Net realized gains (losses) 151,532 566,840 1,478,497 --------- --------- ----------- Change in unrealized gains (losses) on investments (256,798) (325,220) (3,736,719) --------- --------- ----------- Net increase (decrease) in net assets resulting from operations $ 292,625 $ 303,558 $(2,224,753) ========= ========= ===========
The accompanying notes are an integral part of these financial statements. 27
MIST MET/AIM MIST MET/AIM MIST MFS EMERGING MIST MFS RESEARCH CAPITAL APPRECIATION SMALL CAP GROWTH MARKETS EQUITY INTERNATIONAL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) (b) (CLASS B) (b) -------------------- ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 2,473 $ -- $ -- $ -- -------- -------- ---------- -------- EXPENSES: Mortality and expense risk charges 6,199 801 9,528 10,659 -------- -------- ---------- -------- Net investment income (loss) (3,726) (801) (9,528) (10,659) -------- -------- ---------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 6,788 3,588 -- -- Realized gains (losses) on sale of investments (53,832) 65,267 250,580 38,652 -------- -------- ---------- -------- Net realized gains (losses) (47,044) 68,855 250,580 38,652 -------- -------- ---------- -------- Change in unrealized gains (losses) on investments 344,428 (11,743) 1,282,745 390,136 -------- -------- ---------- -------- Net increase (decrease) in net assets resulting from operations $293,658 $ 56,311 $1,523,797 $418,129 ======== ======== ========== ========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 28
MIST PIMCO MIST NEUBERGER INFLATION PROTECTED BERMAN REAL ESTATE BOND MIST PIONEER FUND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (b) (CLASS A) ------------------ ------------------- ----------------- INVESTMENT INCOME: Dividends $ 769,273 $ -- $ 560 ------------ ---------- ------ EXPENSES: Mortality and expense risk charges 135,003 51,504 230 ------------ ---------- ------ Net investment income (loss) 634,270 (51,504) 330 ------------ ---------- ------ NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 6,164,403 -- -- Realized gains (losses) on sale of investments (1,514,911) (18,311) 5,807 ------------ ---------- ------ Net realized gains (losses) 4,649,492 (18,311) 5,807 ------------ ---------- ------ Change in unrealized gains (losses) on investments (15,240,973) 2,204,576 333 ------------ ---------- ------ Net increase (decrease) in net assets resulting from operations $ (9,957,211) $2,134,761 $6,470 ============ ========== ====== MIST THIRD AVENUE MSF BLACKROCK MSF BLACKROCK SMALL CAP VALUE AGGRESSIVE GROWTH BOND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (b) (CLASS D) (CLASS A) ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ -- $ -- $317,820 ----------- ---------- -------- EXPENSES: Mortality and expense risk charges 47,177 17,999 20,828 ----------- ---------- -------- Net investment income (loss) (47,177) (17,999) 296,992 ----------- ---------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- -- Realized gains (losses) on sale of investments (555,147) 163,046 32,342 ----------- ---------- -------- Net realized gains (losses) (555,147) 163,046 32,342 ----------- ---------- -------- Change in unrealized gains (losses) on investments (1,992,793) 1,369,910 265,348 ----------- ---------- -------- Net increase (decrease) in net assets resulting from operations $(2,595,117) $1,514,957 $594,682 =========== ========== ========
The accompanying notes are an integral part of these financial statements. 29
MSF BLACKROCK MSF BLACKROCK MSF CAPITAL DIVERSIFIED MONEY MARKET GUARDIAN U.S. EQUITY MSF FI LARGE CAP INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (b) (CLASS A) (CLASS A) (CLASS A) ----------------- ----------------- -------------------- ----------------- INVESTMENT INCOME: Dividends $ -- $7,611,946 $ 13,163 $ 4,400 ------- ---------- --------- -------- EXPENSES: Mortality and expense risk charges 6,630 332,856 5,211 5,915 ------- ---------- --------- -------- Net investment income (loss) (6,630) 7,279,090 7,952 (1,515) ------- ---------- --------- -------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- 163,735 182,528 Realized gains (losses) on sale of investments 13,480 -- 22,645 29,037 ------- ---------- --------- -------- Net realized gains (losses) 13,480 -- 186,380 211,565 ------- ---------- --------- -------- Change in unrealized gains (losses) on investments 51,977 -- (185,318) (95,713) ------- ---------- --------- -------- Net increase (decrease) in net assets resulting from operations $58,827 $7,279,090 $ 9,014 $114,337 ======= ========== ========= ========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 30
MSF METLIFE MSF FI VALUE MSF METLIFE CONSERVATIVE LEADERS AGGRESSIVE ALLOCATION ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS D) (CLASS B) (CLASS B) ----------------- --------------------- ----------------- INVESTMENT INCOME: Dividends $ 131,874 $ 3,573 $ -- ----------- ------- --------- EXPENSES: Mortality and expense risk charges 38,150 9,493 5,971 ----------- ------- --------- Net investment income (loss) 93,724 (5,920) (5,971) ----------- ------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,427,715 10,272 1,092 Realized gains (losses) on sale of investments 172,247 69,784 240,789 ----------- ------- --------- Net realized gains (losses) 1,599,962 80,056 241,881 ----------- ------- --------- Change in unrealized gains (losses) on investments (1,108,149) (4,090) (185,094) ----------- ------- --------- Net increase (decrease) in net assets resulting from operations $ 585,537 $70,046 $ 50,816 =========== ======= ========= MSF METLIFE MSF METLIFE CONSERVATIVE TO MSF METLIFE MODERATE TO MODERATE ALLOCATION MODERATE ALLOCATION AGGRESSIVE ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS B) (CLASS B) ------------------- ------------------- --------------------- INVESTMENT INCOME: Dividends $ -- $ 1,031 $ 267 --------- -------- ------- EXPENSES: Mortality and expense risk charges 13,665 21,014 2,560 --------- -------- ------- Net investment income (loss) (13,665) (19,983) (2,293) --------- -------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 11,823 18,566 1,067 Realized gains (losses) on sale of investments 591,664 4,500 29,413 --------- -------- ------- Net realized gains (losses) 603,487 23,066 30,480 --------- -------- ------- Change in unrealized gains (losses) on investments (413,513) 144,960 (7,962) --------- -------- ------- Net increase (decrease) in net assets resulting from operations $ 176,309 $148,043 $20,225 ========= ======== =======
The accompanying notes are an integral part of these financial statements. 31
MSF METLIFE MSF MFS TOTAL MSF OPPENHEIMER MSF RUSSELL 2000 STOCK INDEX RETURN GLOBAL EQUITY INDEX INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (b) (CLASS F) (CLASS B) (CLASS A) (b) ----------------- ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ -- $ 745,707 $ 11,509 $ -- --------- ----------- -------- ----------- EXPENSES: Mortality and expense risk charges 81,140 82,791 2,471 37,825 --------- ----------- -------- ----------- Net investment income (loss) (81,140) 662,916 9,038 (37,825) --------- ----------- -------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 1,258,188 19,083 -- Realized gains (losses) on sale of investments 58,048 1,226,558 65,830 (172,080) --------- ----------- -------- ----------- Net realized gains (losses) 58,048 2,484,746 84,913 (172,080) --------- ----------- -------- ----------- Change in unrealized gains (losses) on investments (531,203) (1,472,329) (17,814) (1,974,665) --------- ----------- -------- ----------- Net increase (decrease) in net assets resulting from operations $(554,295) $ 1,675,333 $ 76,137 $(2,184,570) ========= =========== ======== ============
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 32
MSF WESTERN ASSET MSF WESTERN ASSET MORGAN STANLEY UIF MSF T. ROWE PRICE MANAGEMENT HIGH MANAGEMENT U.S EMERGING MARKETS LARGE CAP GROWTH YIELD BOND GOVERNMENT EQUITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS A) (a) (CLASS A) (CLASS I) (a) ----------------- ----------------- ----------------- ------------------ INVESTMENT INCOME: Dividends $ 3,828 $ 1,967,743 $535,051 $ -- --------- ----------- -------- ------------ EXPENSES: Mortality and expense risk charges 5,761 10,798 10,604 933 -------- ----------- -------- --------- Net investment income (loss) (1,933) 1,956,945 524,447 (933) -------- ----------- -------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 17,658 168,716 -- -- Realized gains (losses) on sale of investments 195,319 (311,721) 66,439 366,479 -------- ----------- -------- --------- Net realized gains (losses) 212,977 (143,005) 66,439 366,479 -------- ----------- -------- --------- Change in unrealized gains (losses) on investments (48,211) (1,068,568) 370,980 (230,310) -------- ----------- -------- --------- Net increase (decrease) in net assets resulting from operations $162,833 $ 745,372 $961,866 $ 135,236 ======== =========== ======== ========= PIMCO VIT PIMCO VIT LOW REAL RETURN DURATION INVESTMENT OPTION INVESTMENT OPTION (ADMINISTRATIVE CLASS) (a) ----------------- -------------------------- INVESTMENT INCOME: Dividends $1,193,940 $ 767,185 ---------- ----------- EXPENSES: Mortality and expense risk charges 53,357 33,346 ---------- ----------- Net investment income (loss) 1,140,583 733,839 ---------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- -- Realized gains (losses) on sale of investments (24,671) (2,209,876) ---------- ----------- Net realized gains (losses) (24,671) (2,209,876) ---------- ----------- Change in unrealized gains (losses) on investments 368,924 2,726,285 ---------- ----------- Net increase (decrease) in net assets resulting from operations $1,484,836 $ 1,250,248 ========== ===========
The accompanying notes are an integral part of these financial statements. 33
PIMCO VIT PIONEER MID CAP PUTNAM VT DISCOVERY PUTNAM VT TOTAL RETURN VALUE VCT GROWTH INTERNATIONAL EQUITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (ADMINISTRATIVE CLASS) (CLASS II) (CLASS IB) (CLASS IB) (a) ---------------------- ----------------- ------------------- -------------------- INVESTMENT INCOME: Dividends $ 6,670,548 $ 51,784 $ -- $ 221,329 ----------- --------- ------- ----------- EXPENSES: Mortality and expense risk charges 273,067 15,137 685 4,985 ----------- --------- ------- ----------- Net investment income (loss) 6,397,481 36,647 (685) 216,344 ----------- --------- ------- ----------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions -- 925,333 23,854 958,126 Realized gains (losses) on sale of investments (938,637) (373,131) 8,376 812,963 ----------- --------- ------- ----------- Net realized gains (losses) (938,637) 552,202 32,230 1,771,089 ----------- --------- ------- ----------- Change in unrealized gains (losses) on investments 5,415,631 (179,802) (7,085) (1,350,606) ----------- --------- ------- ----------- Net increase (decrease) in net assets resulting from operations $10,874,475 $ 409,047 $24,460 $ 636,827 =========== ========= ======= ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 34
PUTNAM VT SMALL CAP VALUE INVESTMENT OPTION ROYCE MICRO CAP ROYCE SMALL CAP (CLASS IB) (a) INVESTMENT OPTION INVESTMENT OPTION ----------------- ----------------- ----------------- INVESTMENT INCOME: Dividends $ 219,605 $ 96,642 $ 3,292 ----------- ---------- --------- EXPENSES: Mortality and expense risk charges 26,954 24,304 13,018 ----------- ---------- --------- Net investment income (loss) 192,651 72,338 (9,726) ----------- ---------- --------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 4,392,097 550,689 286,382 Realized gains (losses) on sale of investments 3,248,086 1,316,168 73,106 ----------- ---------- --------- Net realized gains (losses) 7,640,183 1,866,857 359,488 ----------- ---------- --------- Change in unrealized gains (losses) on investments (5,024,482) (707,530) (621,157) ----------- ---------- --------- Net increase (decrease) in net assets resulting from operations $ 2,808,352 $1,231,665 $(271,395) =========== ========== ========= VANGUARD VIF VANGUARD VIF EQUITY VANGUARD VIF DIVERSIFIED VALUE INDEX INTERNATIONAL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ----------------- ------------------- ----------------- INVESTMENT INCOME: Dividends $ 393,757 $ 417,548 $ 8,592 ----------- ---------- ------- EXPENSES: Mortality and expense risk charges 53,383 67,995 1,688 ----------- ---------- ------- Net investment income (loss) 340,374 349,553 6,904 ----------- ---------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 673,197 1,039,428 19,332 Realized gains (losses) on sale of investments 1,249,223 947,247 4,575 ----------- ---------- ------- Net realized gains (losses) 1,922,420 1,986,675 23,907 ----------- ---------- ------- Change in unrealized gains (losses) on investments (1,063,651) (734,640) 63,813 ----------- ---------- ------- Net increase (decrease) in net assets resulting from operations $ 1,199,143 $1,601,588 $94,624 =========== ========== =======
The accompanying notes are an integral part of these financial statements. 35
VANGUARD VIF VANGUARD VIF SHORT-TERM VANGUARD VIF SMALL MID-CAP INDEX INVESTMENT-GRADE COMPANY GROWTH THE MERGER FUND VL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ----------------- ----------------- ------------------ ------------------ INVESTMENT INCOME: Dividends $ 211,508 $ 353 $ 11,735 $ -- ---------- ------ --------- ------- EXPENSES: Mortality and expense risk charges 40,057 176 9,158 457 ---------- ------ --------- ------- Net investment income (loss) 171,451 177 2,577 (457) ---------- ------ --------- ------- NET REALIZED AND UNREALIZED GAINS (LOSSES) ON INVESTMENTS: Realized gain distributions 1,781,547 -- 207,159 16,584 Realized gains (losses) on sale of investments 59,915 2 (199,262) (8,017) ---------- ------ --------- ------- Net realized gains (losses) 1,841,462 2 7,897 8,567 ---------- ------ --------- ------- Change in unrealized gains (losses) on investments (345,109) 1,478 (165,661) (9,461) ---------- ------ --------- ------- Net increase (decrease) in net assets resulting from operations $1,667,804 $1,657 $(155,187) $(1,351) ========== ====== ========= =======
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 36 This page is intentionally left blank. METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE OF METLIFE INSURANCE COMPANY OF CONNECTICUT STATEMENTS OF CHANGES IN NET ASSETS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
AIM V.I. INTERNATIONAL GROWTH AMERICAN CENTURY VP ULTRA AMERICAN FUNDS GLOBAL GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERIES I) (CLASS I) (CLASS 2) ----------------------------- ------------------------- ---------------------------- 2007 2006 2007 2006 2007 2006 ------------- -------------- ----------- ------------ ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 161,761 $ 121,406 $ (7,087) $ (9,727) $ 481,628 $ 91,460 Net realized gain (loss) 1,257,313 53,136 163,603 92,276 4,278,184 413,621 Change in unrealized gains (losses) on investments 836,287 1,933,406 514,556 (287,357) (1,486,743) 2,191,474 ----------- ----------- ----------- ----------- ------------ ----------- Net increase (decrease) in net assets resulting from operations 2,255,361 2,107,948 671,072 (204,808) 3,273,069 2,696,555 ----------- ----------- ----------- ----------- ------------ ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 581,441 981,512 -- -- 1,031,394 814,537 Transfers from other funding options 48,149,555 11,932,471 96,342 244,209 6,825,558 9,216,917 Growth rate intra-fund transfers in (328) 470,102 -- -- (474) 973,377 Policy surrenders (3,036,945) (53,863) (43,018) (76,455) (2,721,612) (546,231) Transfers to other funding options (7,851,527) (869,956) (1,467,546) (1,361,178) (14,546,941) (2,013,388) Growth rate intra-fund transfers out 328 (470,103) -- -- 474 (973,378) Other receipts (payments) (13,335) (1,988) -- (30,659) (20,218) (13,138) ----------- ----------- ----------- ----------- ------------ ----------- Net increase (decrease) in net assets resulting from policy transactions 37,829,189 11,988,175 (1,414,222) (1,224,083) (9,431,819) 7,458,696 ----------- ----------- ----------- ----------- ------------ ----------- Net increase (decrease) in net assets 40,084,550 14,096,123 (743,150) (1,428,891) (6,158,750) 10,155,251 NET ASSETS: Beginning of period 15,370,810 1,274,687 4,351,308 5,780,199 21,279,370 11,124,119 ----------- ----------- ----------- ----------- ------------ ----------- End of period $55,455,360 $15,370,810 $ 3,608,158 $ 4,351,308 $ 15,120,620 $21,279,370 =========== =========== =========== =========== ============ ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 38
AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME INVESTMENT OPTION INVESTMENT OPTION (CLASS 2) (CLASS 2) -------------------------- ---------------------------- 2007 2006 2007 2006 ------------ ------------ ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 420,874 $ 434,514 $ 665,220 $ 545,878 Net realized gain (loss) 11,291,955 4,342,017 3,575,593 3,036,298 Change in unrealized gains (losses) on investments (1,732,357) 942,184 (3,065,386) 2,166,725 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 9,980,472 5,718,715 1,175,427 5,748,901 ------------ ------------ ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 5,030,878 8,606,443 3,189,013 6,810,140 Transfers from other funding options 15,472,997 37,744,712 25,205,640 28,831,330 Growth rate intra-fund transfers in -- 508,577 -- 9,800 Policy surrenders (1,767,158) (7,379,385) (1,068,871) (6,644,821) Transfers to other funding options (32,743,608) (25,313,668) (18,227,315) (30,030,361) Growth rate intra-fund transfers out -- (508,577) -- (9,800) Other receipts (payments) (652,108) (87,717) (538,816) (28,201) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions (14,658,999) 13,570,385 8,559,651 (1,061,913) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets (4,678,527) 19,289,100 9,735,078 4,686,988 NET ASSETS: Beginning of period 77,475,135 58,186,035 41,046,264 36,359,276 ------------ ------------ ------------ ------------ End of period $ 72,796,608 $ 77,475,135 $ 50,781,342 $ 41,046,264 ============ ============ ============ ============ CREDIT SUISSE TRUST EMERGING DELAWARE VIP SMALL CAP VALUE MARKETS INVESTMENT OPTION INVESTMENT OPTION (STANDARD CLASS) ---------------------------- ---------------------------- 2007 (a) 2006 2007 2006 ------------ -------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (2,604) $ (12,304) $ 27,458 $ 2,890 Net realized gain (loss) 1,078,385 11,043,637 838,987 635,045 Change in unrealized gains (losses) on investments (861,085) (4,273,658) (2,242,480) 487,965 ----------- ------------ ----------- ----------- Net increase (decrease) in net assets resulting from operations 214,696 6,757,675 (1,376,035) 1,125,900 ----------- ------------ ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 33,277 831,552 1,859,758 2,321,107 Transfers from other funding options 543,900 17,959,577 6,758,302 3,990,888 Growth rate intra-fund transfers in -- 28,724 -- 17,966 Policy surrenders (17,428) (244,293) (263,548) (160,923) Transfers to other funding options (4,411,312) (46,202,634) (3,750,113) (2,018,248) Growth rate intra-fund transfers out -- (28,713) -- (17,966) Other receipts (payments) (3,894) (5,200) (50,850) -- ----------- ------------ ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (3,855,457) (27,660,987) 4,553,549 4,132,824 --------- ------------ ----------- ----------- Net increase (decrease) in net assets (3,640,761) (20,903,312) 3,177,514 5,258,724 NET ASSETS: Beginning of period 3,640,761 24,544,073 10,532,970 5,274,246 ----------- ------------ ----------- ----------- End of period $ -- $ 3,640,761 $13,710,484 $10,532,970 =========== ============ =========== ===========
The accompanying notes are an integral part of these financial statements. 39
DREYFUS STOCK INDEX DREYFUS VIF APPRECIATION DREYFUS VIF DEVELOPING LEADERS INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (INITIAL SHARES) (INITIAL SHARES) (INITIAL SHARES) -------------------------- -------------------------- ------------------------------ 2007 (a) 2006 2007 2006 2007 2006 ------------ ------------ ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 223,898 $ 657,571 $ 350,417 $ 21,088 $ 11,535 $ 50,698 Net realized gain (loss) 12,127,499 591,702 3,339,271 273,655 912,508 2,655,154 Change in unrealized gains (losses) on investments (8,716,781) 5,459,217 (2,378,252) 2,672,926 (1,338,853) (3,218,930) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 3,634,616 6,708,490 1,311,436 2,967,669 (414,810) (513,078) ------------ ------------ ------------ ------------ ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 1,770,499 4,148,671 1,338,368 1,862,618 379,082 484,838 Transfers from other funding options 13,439,913 21,432,476 1,561,502 21,901,561 440,915 10,233,021 Growth rate intra-fund transfers in -- 16,331,306 (13,669) 20,055,136 -- 23,628 Policy surrenders (523,552) (2,020,476) (10,603,029) (325,354) (63,295) (247,758) Transfers to other funding options (73,931,786) (4,614,972) (15,514,187) (4,234,331) (13,136,512) (19,879,187) Growth rate intra-fund transfers out -- (16,330,784) 13,675 (20,055,151) -- (23,628) Other receipts (payments) -- (174,617) (57,156) (46,206) (3,598) (10,786) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions (59,244,926) 18,771,604 (23,274,496) 19,158,273 (12,383,408) (9,419,872) ------------ ------------ ------------ ------------ ------------ ------------ Net increase (decrease) in net assets (55,610,310) 25,480,094 (21,963,060) 22,125,942 (12,798,218) (9,932,950) NET ASSETS: Beginning of period 55,610,310 30,130,216 26,028,032 3,902,090 14,949,610 24,882,560 ------------ ------------ ------------ ------------ ------------ ------------ End of period $ -- $ 55,610,310 $ 4,064,972 $ 26,028,032 $ 2,151,392 $ 14,949,610 ============ ============ ============ ============ ============ ============
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 40
DWS VIT SMALL CAP INDEX FIDELITY VIP ASSET MANAGER SM INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (INITIAL CLASS) -------------------------- ----------------------------- 2007 (a) 2006 2007 (a) 2006 ------------ ------------ ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 224,832 $ 191,003 $ 114,017 $ 65,602 Net realized gain (loss) 5,771,913 6,274,698 339,819 23,857 Change in unrealized gains (losses) on investments (4,498,858) (225,416) (254,382) 119,274 ------------ ------------ ----------- ----------- Net increase (decrease) in net assets resulting from operations 1,497,887 6,240,285 199,454 208,733 ------------ ------------ ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 291,286 1,425,521 177,940 455,686 Transfers from other funding options 3,536,157 19,618,543 266,127 1,176,215 Growth rate intra-fund transfers in -- 18,694 -- 256,518 Policy surrenders (93,763) (1,017,312) (13,250) (129,051) Transfers to other funding options (32,911,865) (31,371,331) (4,298,911) (746,842) Growth rate intra-fund transfers out -- (18,688) -- (256,518) Other receipts (payments) (5,368) (30,453) -- -- ------------ ------------ ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (29,183,553) (11,375,026) (3,868,094) 756,008 ------------ ------------ ----------- ----------- Net increase (decrease) in net assets (27,685,666) (5,134,741) (3,668,640) 964,741 NET ASSETS: Beginning of period 27,685,666 32,820,407 3,668,640 2,703,899 ------------ ------------ ----------- ----------- End of period $ -- $ 27,685,666 $ -- $ 3,668,640 ============ ============ =========== =========== FIDELITY VIP CONTRAFUND FIDELITY VIP CONTRAFUND INVESTMENT OPTION INVESTMENT OPTION (INITIAL CLASS) (SERVICE CLASS 2) --------------------------- -------------------------- 2007 2006 (b) 2007 2006 ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 127,949 $ 82,825 $ 242,845 $ 251,008 Net realized gain (loss) 5,093,396 982,109 12,286,399 3,903,406 Change in unrealized gains (losses) on investments (2,100,054) (622,275) (5,832,475) (508,371) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 3,121,291 442,659 6,696,769 3,646,043 ------------ ------------ ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 286,684 731,814 2,838,426 3,014,778 Transfers from other funding options 10,238,025 14,980,870 12,771,261 21,127,578 Growth rate intra-fund transfers in (7,236) 11,021,675 -- 21,690 Policy surrenders (6,453,770) (57,021) (849,207) (750,057) Transfers to other funding options (2,272,124) (2,475,681) (14,128,504) (7,893,525) Growth rate intra-fund transfers out 7,239 (11,021,683) -- (21,689) Other receipts (payments) (34,444) (18,859) (25,861) (14,532) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions 1,764,374 13,161,115 606,115 15,484,243 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 4,885,665 13,603,774 7,302,884 19,130,286 NET ASSETS: Beginning of period 13,603,774 -- 37,940,697 18,810,411 ------------ ------------ ------------ ------------ End of period $ 18,489,439 $ 13,603,774 $ 45,243,581 $ 37,940,697 ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements. 41
FIDELITY VIP GROWTH & INCOME FIDELITY VIP MID CAP FIDELITY VIP OVERSEAS INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERVICE CLASS 2) (SERVICE CLASS 2) (SERVICE CLASS 2) ---------------------------- -------------------------- ------------------------ 2007 2006 2007 2006 2007 2006 ------------- ------------- ------------ ------------ ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 102,843 $ 46,796 $ 146,971 $ (47,087) $ 722,940 $ 77,908 Net realized gain (loss) 998,238 261,645 6,942,953 3,527,964 1,978,010 946,077 Change in unrealized gains (losses) on investments (141,304) 1,235,377 2,430,556 (1,066,759) 1,101,545 1,925,940 ----------- ----------- ------------ ------------ ----------- ----------- Net increase (decrease) in net assets resulting from operations 959,777 1,543,818 9,520,480 2,414,118 3,802,495 2,949,925 ----------- ----------- ------------ ------------ ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners -- 6,649 2,516,162 4,940,268 872,585 1,652,898 Transfers from other funding options 282,398 3,693,681 36,380,411 45,685,738 10,611,330 7,223,326 Growth rate intra-fund transfers in -- -- (10,617) 16,949,364 -- 26,858 Policy surrenders (110,096) (97,432) (8,098,523) (6,512,266) (237,448) (144,974) Transfers to other funding options (6,853,915) (1,297,614) (22,848,033) (21,121,861) (3,851,705) (6,189,003) Growth rate intra-fund transfers out -- -- 10,621 (16,949,375) -- (26,858) Other receipts (payments) -- -- (55,770) (95,797) (4,593) -- ----------- ----------- ------------ ------------ ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (6,681,613) 2,305,284 7,894,251 22,896,071 7,390,169 2,542,247 ----------- ----------- ------------ ------------ ----------- ----------- Net increase (decrease) in net assets (5,721,836) 3,849,102 17,414,731 25,310,189 11,192,664 5,492,172 NET ASSETS: Beginning of period 13,415,928 9,566,826 47,982,767 22,672,578 20,005,505 14,513,333 ----------- ----------- ------------ ------------ ----------- ----------- End of period $ 7,694,092 $13,415,928 $ 65,397,498 $ 47,982,767 $31,198,169 $20,005,505 =========== =========== ============ ============ =========== ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 42
FTVIP TEMPLETON GLOBAL ASSET FTVIPT FRANKLIN SMALL-MID CAP ALLOCATION GROWTH SECURITIES INVESTMENT OPTION INVESTMENT OPTION (CLASS 1) (CLASS 2) ---------------------------- ----------------------------- 2007 (a) 2006 (b) 2007 2006 ------------- ------------- ------------- -------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (3,789) $ 35,112 $ (22,188) $ (27,196) Net realized gain (loss) 557,939 32,671 2,152,141 2,428,320 Change in unrealized gains (losses) on investments (244,459) 244,459 (690,312) (637,562) ----------- ---------- ----------- ------------ Net increase (decrease) in net assets resulting from operations 309,691 312,242 1,439,641 1,763,562 ----------- ---------- ----------- ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 196,997 25,777 790,664 2,232,752 Transfers from other funding options 1,308,446 3,988,982 2,371,301 4,034,800 Growth rate intra-fund transfers in (265) 395,554 -- 18,492 Policy surrenders (12,051) (8,543) (359,210) (763,036) Transfers to other funding options (5,963,503) (150,108) (6,084,586) (14,227,842) Growth rate intra-fund transfers out 265 (395,555) -- (18,489) Other receipts (payments) (6,522) (1,407) (177,997) (2,242) ----------- ---------- ----------- ------------ Net increase (decrease) in net assets resulting from policy transactions (4,476,633) 3,854,700 (3,459,828) (8,725,565) ----------- ---------- ----------- ------------ Net increase (decrease) in net assets (4,166,942) 4,166,942 (2,020,187) (6,962,003) NET ASSETS: Beginning of period 4,166,942 -- 13,388,225 20,350,228 ----------- ---------- ----------- ------------ End of period $ -- $4,166,942 $11,368,038 $ 13,388,225 =========== ========== =========== ============ FTVIPT TEMPLETON DEVELOPING FTVIPT TEMPLETON FOREIGN MARKETS SECURITIES SECURITIES INVESTMENT OPTION INVESTMENT OPTION (CLASS 2) (CLASS 2) --------------------------- -------------------------- 2007 2006 2007 2006 ------------ ------------- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 722,460 $ 306,955 $ 269,576 $ 287,250 Net realized gain (loss) 6,243,214 1,655,933 5,366,707 1,692,074 Change in unrealized gains (losses) on investments 2,286,092 5,468,216 (2,220,549) 2,784,729 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 9,251,766 7,431,104 3,415,734 4,764,053 ------------ ------------ ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 1,552,117 2,472,232 2,436,329 3,563,699 Transfers from other funding options 17,470,830 15,603,609 5,840,170 6,830,768 Growth rate intra-fund transfers in -- 41,203 -- 158,682 Policy surrenders (378,877) (406,480) (311,667) (882,025) Transfers to other funding options (17,117,161) (12,097,456) (20,343,118) (11,169,209) Growth rate intra-fund transfers out -- (41,203) -- (158,682) Other receipts (payments) (11,060) (73,992) (360,065) (8,724) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions 1,515,849 5,497,913 (12,738,351) (1,665,491) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets 10,767,615 12,929,017 (9,322,617) 3,098,562 NET ASSETS: Beginning of period 36,284,418 23,355,401 27,755,812 24,657,250 ------------ ------------ ------------ ------------ End of period $ 47,052,033 $ 36,284,418 $ 18,433,195 $ 27,755,812 ============ ============ ============ ============
The accompanying notes are an integral part of these financial statements. 43
FTVIPT TEMPLETON GLOBAL INCOME SECURITIES JANUS ASPEN GLOBAL TECHNOLOGY JANUS ASPEN WORLDWIDE GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 1) (SERVICE SHARES) (SERVICE SHARES) ------------------------ ----------------------------- ---------------------------- 2007 2006 2007 2006 2007 2006 ----------- ----------- ----------- ----------- ----------- ---------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 178,575 $ 57,914 $ 1,548 $ (3,530) $ 7,800 $ 26,788 Net realized gain (loss) (47,978) 11,878 375,045 257,561 202,767 88,726 Change in unrealized gains (losses) on investments 226,395 209,863 (43,025) (94,808) (13,743) 230,218 ----------- ----------- ----------- ----------- ----------- ---------- Net increase (decrease) in net assets resulting from operations 356,992 279,655 333,568 159,223 196,824 345,732 ----------- ----------- ----------- ----------- ----------- ---------- POLICY TRANSACTIONS: Premium payments received from policy owners 327,381 155,703 236,778 188,178 152,452 174,304 Transfers from other funding options 8,337,110 4,269,094 3,210,523 1,556,670 967,603 905,221 Growth rate intra-fund transfers in (111) 189,827 -- 15,856 -- 33 Policy surrenders (1,718,497) (58,478) (21,810) (27,494) (35,005) (37,132) Transfers to other funding options (1,281,721) (1,306,164) (3,757,615) (2,187,722) (1,148,641) (894,438) Growth rate intra-fund transfers out 111 (189,827) -- (15,856) -- (33) Other receipts (payments) (14,182) (856) (2,299) (3,601) (1,970) (7,215) ----------- ----------- ----------- ----------- ----------- ---------- Net increase (decrease) in net assets resulting from policy transactions 5,650,091 3,059,299 (334,423) (473,969) (65,561) 140,740 ----------- ----------- ----------- ----------- ----------- ---------- Net increase (decrease) in net assets 6,007,083 3,338,954 (855) (314,746) 131,263 486,472 NET ASSETS: Beginning of period 4,284,829 945,875 1,628,030 1,942,776 2,189,434 1,702,962 ----------- ----------- ----------- ----------- ----------- ---------- End of period $10,291,912 $ 4,284,829 $ 1,627,175 $ 1,628,030 $ 2,320,697 $2,189,434 =========== =========== =========== =========== =========== ==========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 44
LMPVET AGGRESSIVE GROWTH LMPVET APPRECIATION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) ------------------------ ------------------- 2007 2006 2007 2006 ----------- ----------- ------- ---- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (13,324) $ (11,958) $ 415 $ -- Net realized gain (loss) 412,346 430,086 3,155 -- Change in unrealized gains (losses) on investments (284,944) 93,221 (4,710) -- ----------- ----------- ------- ---- Net increase (decrease) in net assets resulting from operations 114,078 511,349 (1,140) -- ----------- ----------- ------- ---- POLICY TRANSACTIONS: Premium payments received from policy owners 575,791 1,056,346 -- -- Transfers from other funding options 1,986,201 3,981,906 46,486 -- Growth rate intra-fund transfers in -- 15,996 -- -- Policy surrenders (245,600) (1,071,505) (88) -- Transfers to other funding options (3,149,399) (3,381,204) (2,269) -- Growth rate intra-fund transfers out -- (15,996) -- -- Other receipts (payments) (1,640) -- -- -- ----------- ----------- ------- ---- Net increase (decrease) in net assets resulting from policy transactions (834,647) 585,543 44,129 -- ----------- ----------- ------- ---- Net increase (decrease) in net assets (720,569) 1,096,892 42,989 -- NET ASSETS: Beginning of period 6,545,324 5,448,432 -- -- ----------- ----------- ------- ---- End of period $ 5,824,755 $ 6,545,324 $42,989 $ -- =========== =========== ======= ==== LMPVET EQUITY INDEX LMPVET FUNDAMENTAL VALUE INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) ------------------------- ------------------------ 2007 2006 2007 2006 ----------- ------------ ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 426,226 $ 320,741 $ 44,959 $ 64,764 Net realized gain (loss) 3,189,886 8,862,231 732,389 335,303 Change in unrealized gains (losses) on investments (2,293,350) (3,788,241) (751,679) 344,640 ----------- ------------ ----------- ----------- Net increase (decrease) in net assets resulting from operations 1,322,762 5,394,731 25,669 744,707 ----------- ------------ ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 1,266,279 1,993,915 247,304 188,626 Transfers from other funding options 7,420,811 29,238,856 11,635,998 1,121,972 Growth rate intra-fund transfers in -- 379,789 -- 22,355 Policy surrenders (1,592,656) (5,932,994) (4,923,420) (90,047) Transfers to other funding options (9,850,524) (77,511,671) (7,213,360) (2,137,932) Growth rate intra-fund transfers out -- (379,779) -- (22,355) Other receipts (payments) (16,765) (183,340) (6,776) (17,901) ----------- ------------ ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (2,772,855) (52,395,224) (260,254) (935,282) ----------- ------------ ----------- ----------- Net increase (decrease) in net assets (1,450,093) (47,000,493) (234,585) (190,575) NET ASSETS: Beginning of period 27,462,892 74,463,385 4,938,969 5,129,544 ----------- ------------ ----------- ----------- End of period $26,012,799 $ 27,462,892 $ 4,704,384 $ 4,938,969 =========== ============ =========== ===========
The accompanying notes are an integral part of these financial statements. 45
LMPVET INTERNATIONAL ALL CAP LMPVET INVESTORS LMPVET LARGE CAP GROWTH OPPORTUNITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) ---------------------------- ------------------------- ------------------------ 2007 2006 2007 2006 2007 2006 --------- --------- ----------- ------------ ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 6,909 $ 17,685 $ 75,502 $ 107,505 $ (14,585) $ (7,606) Net realized gain (loss) 535,560 57,495 670,076 5,283,539 291,389 283,307 Change in unrealized gains (losses) on investments (474,683) 16,271 (437,140) (2,600,283) 112,891 (58,484) --------- --------- ----------- ------------ ----------- ----------- Net increase (decrease) in net assets resulting from operations 67,786 91,451 308,438 2,790,761 389,695 217,217 --------- --------- ----------- ------------ ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 52,910 68,384 264,326 413,675 788,742 1,276,365 Transfers from other funding options 307,369 709,397 1,268,768 8,594,259 2,551,629 3,119,652 Growth rate intra-fund transfers in -- 25,854 -- 27,421 -- 179,591 Policy surrenders (9,771) (15,365) (89,776) (175,206) (128,715) (951,106) Transfers to other funding options (390,386) (239,626) (2,177,338) (34,817,535) (2,650,618) (5,339,355) Growth rate intra-fund transfers out -- (25,854) -- (27,416) -- (179,591) Other receipts (payments) (2,885) -- (5,827) (18,594) (4,421) -- --------- --------- ----------- ------------ ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (42,763) 522,790 (739,847) (26,003,396) 556,617 (1,894,444) --------- --------- ----------- ------------ ----------- ----------- Net increase (decrease) in net assets 25,023 614,241 (431,409) (23,212,635) 946,312 (1,677,227) NET ASSETS: Beginning of period 962,972 348,731 7,668,605 30,881,240 7,378,268 9,055,495 --------- --------- ----------- ------------ ----------- ----------- End of period $ 987,995 $ 962,972 $ 7,237,196 $ 7,668,605 $ 8,324,580 $ 7,378,268 ========= ========= =========== ============ =========== ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 46
LMPVPI ALL CAP LMPVET SOCIAL AWARENESS STOCK INVESTMENT OPTION INVESTMENT OPTION (CLASS I) ----------------------------- ------------------------- 2007 2006 2007 (a) 2006 ---------- ---------- ------------ ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 24,302 $ 6,659 $ 22,095 $ 114,696 Net realized gain (loss) 429,731 32,290 1,387,030 1,265,322 Change in unrealized gains (losses) on investments (238,456) 100,141 (864,468) 96,068 ---------- ---------- ------------ ----------- Net increase (decrease) in net assets resulting from operations 215,577 139,090 544,657 1,476,086 ---------- ---------- ------------ ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 47,821 99,602 396,744 997,658 Transfers from other funding options 388,449 337,093 403,321 7,321,187 Growth rate intra-fund transfers in -- -- (5,345) 7,967,940 Policy surrenders (20,639) (22,707) (29,922) (253,903) Transfers to other funding options (631,647) (407,539) (11,854,141) (6,640,572) Growth rate intra-fund transfers out -- -- 5,347 (7,967,944) Other receipts (payments) (530) (8,156) (21,350) (22,142) ---------- ---------- ------------ ----------- Net increase (decrease) in net assets resulting from policy transactions (216,546) (1,707) (11,105,346) 1,402,224 ---------- ---------- ------------ ----------- Net increase (decrease) in net assets (969) 137,383 (10,560,689) 2,878,310 NET ASSETS: Beginning of period 2,125,871 1,988,488 10,560,689 7,682,379 ---------- ---------- ------------ ----------- End of period $2,124,902 $2,125,871 $ -- $10,560,689 ========== ========== ============ =========== LMPVET CAPITAL AND INCOME LMPVIT GLOBAL HIGH YIELD BOND INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) ------------------------- ----------------------------- 2007 (c) 2006 2007 2006 (b) ----------- ---- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 20,515 $-- $ 1,118,785 $ 1,110,185 Net realized gain (loss) 272,989 -- 302,462 182,387 Change in unrealized gains (losses) on investments (273,454) -- (962,511) (18,355) ----------- --- ------------ ------------ Net increase (decrease) in net assets resulting from operations 20,050 -- 458,736 1,274,217 ----------- --- ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 23,816 -- 450,256 1,225,897 Transfers from other funding options 2,641,626 -- 10,173,837 19,567,840 Growth rate intra-fund transfers in -- -- (12,491) 19,429,093 Policy surrenders (19,415) -- (12,176,347) (89,247) Transfers to other funding options (1,002,065) -- (3,193,269) (1,953,099) Growth rate intra-fund transfers out -- -- 12,496 (19,429,106) Other receipts (payments) (888) -- (48,881) (29,896) ----------- --- ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions 1,643,074 -- (4,794,399) 18,721,482 ----------- --- ------------ ------------ Net increase (decrease) in net assets 1,663,124 -- (4,335,663) 19,995,699 NET ASSETS: Beginning of period -- -- 19,995,699 -- ----------- --- ------------ ------------ End of period $ 1,663,124 $-- $ 15,660,036 $ 19,995,699 =========== === ============ ============
The accompanying notes are an integral part of these financial statements. 47
LMPVIT GOVERNMENT LMPVIT STRATEGIC BOND LMPVPI TOTAL RETURN INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS I) --------------------- ------------------------ ---------------------- 2007 2006 2007 2006 2007 (a) 2006 ---------- --------- ----------- ----------- ----------- --------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 35,737 $ 5,696 $ 232,070 $ 230,718 $ 13,166 $ 14,427 Net realized gain (loss) 16,409 (780) (17,747) 32,761 70,463 35,360 Change in unrealized gains (losses) on investments (21,551) 4,190 (130,762) 54,889 (40,631) 32,803 ---------- --------- ----------- ----------- ----------- --------- Net increase (decrease) in net assets resulting from operations 30,595 9,106 83,561 318,368 42,998 82,590 ---------- --------- ----------- ----------- ----------- --------- POLICY TRANSACTIONS: Premium payments received from policy owners 74,808 8,750 284,386 1,006,881 126,768 226,688 Transfers from other funding options 1,426,972 341,965 2,021,063 3,548,115 894,068 761,495 Growth rate intra-fund transfers in -- -- -- 15,264 -- 36 Policy surrenders (11,476) (3,322) (38,207) (2,812,669) (3,837) (26,019) Transfers to other funding options (976,146) (398,718) (2,046,527) (1,313,296) (1,949,914) (643,452) Growth rate intra-fund transfers out -- -- -- (15,264) -- (36) Other receipts (payments) (1,042) -- (5,961) -- -- -- ---------- --------- ----------- ----------- ----------- --------- Net increase (decrease) in net assets resulting from policy transactions 513,116 (51,325) 214,754 429,031 (932,915) 318,712 ---------- --------- ----------- ----------- ----------- --------- Net increase (decrease) in net assets 543,711 (42,219) 298,315 747,399 (889,917) 401,302 NET ASSETS: Beginning of period 152,054 194,273 4,679,187 3,931,788 889,917 488,615 ---------- --------- ----------- ----------- ----------- --------- End of period $ 695,765 $ 152,054 $ 4,977,502 $ 4,679,187 $ -- $ 889,917 ========== ========= =========== =========== =========== =========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 48
LORD ABBETT GROWTH AND INCOME LORD ABBETT MID-CAP VALUE INVESTMENT OPTION INVESTMENT OPTION (CLASS VC) (CLASS VC) ----------------------------- -------------------------- 2007 (a) 2006 2007 (a) 2006 ---------- ----------- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (3,447) $ 44,570 $ (12,285) $ 33,337 Net realized gain (loss) 569,744 314,069 2,514,760 2,717,043 Change in unrealized gains (losses) on investments (334,733) 326,447 (796,797) 41,940 ----------- ----------- ----------- ------------ Net increase (decrease) in net assets resulting from operations 231,564 685,086 1,705,678 2,792,320 ----------- ----------- ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 22,687 550,789 1,070,080 3,759,807 Transfers from other funding options 1,272,865 2,788,579 1,181,568 8,345,202 Growth rate intra-fund transfers in -- 1,273 -- 296,327 Policy surrenders (18,183) (155,460) (72,836) (298,231) Transfers to other funding options (6,221,402) (2,257,724) (19,428,356) (14,529,614) Growth rate intra-fund transfers out -- (1,273) -- (296,327) Other receipts (payments) -- (1,880) -- (5,496) ----------- ----------- ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions (4,944,033) 924,304 (17,249,544) (2,728,332) ---------- ----------- ------------ ------------ Net increase (decrease) in net assets (4,712,469) 1,609,390 (15,543,866) 63,988 NET ASSETS: Beginning of period 4,712,469 3,103,079 15,543,866 15,479,878 ----------- ----------- ------------ ------------ End of period $ -- $ 4,712,469 $ -- $ 15,543,866 =========== =========== ============ ============ MIST BATTERYMARCH MID-CAP STOCK MIST BLACKROCK HIGH YIELD INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) -------------------------- ------------------------- 2007 2006 (b) 2007 (c) 2006 ------------ ------------ ----------- ---- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 3,997 $ (16,801) $ (10,825) $-- Net realized gain (loss) 873,028 54,633 (48,061) -- Change in unrealized gains (losses) on investments (124,645) (410,683) (306,919) -- ------------ ------------ ----------- --- Net increase (decrease) in net assets resulting from operations 752,380 (372,851) (365,805) -- ------------ ------------ ----------- --- POLICY TRANSACTIONS: Premium payments received from policy owners 526,148 183,111 1,060,054 -- Transfers from other funding options 1,180,223 40,036,248 23,724,429 -- Growth rate intra-fund transfers in -- 1,867 -- -- Policy surrenders (104,886) (1,030,703) (87,554) -- Transfers to other funding options (11,298,989) (24,075,424) (5,562,512) -- Growth rate intra-fund transfers out -- (1,864) -- -- Other receipts (payments) (7,738) (537) (12,999) -- ------------ ------------ ----------- --- Net increase (decrease) in net assets resulting from policy transactions (9,705,242) 15,112,698 19,121,418 -- ------------ ------------ ----------- --- Net increase (decrease) in net assets (8,952,862) 14,739,847 18,755,613 -- NET ASSETS: Beginning of period 14,739,847 -- -- -- ------------ ------------ ----------- --- End of period $ 5,786,985 $ 14,739,847 $18,755,613 $-- ============ ============ =========== ===
The accompanying notes are an integral part of these financial statements. 49
MIST HARRIS OAKMARK MIST BLACKROCK LARGE-CAP CORE MIST BLACKROCK LARGE-CAP CORE INTERNATIONAL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS E) (CLASS A) (CLASS A) ----------------------------- ----------------------------- ------------------------ 2007 (c) 2006 2007 (a) 2006 2007 2006 (b) ------------- -------------- ------------- -------------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (7,821) $-- $ 6,526 $ (1,179) $ 97,072 $ (12,842) Net realized gain (loss) 25,947 -- 105,032 1,971 1,004,710 59,591 Change in unrealized gains (losses) on investments 10,007 -- (54,909) 54,904 (2,508,938) 1,131,444 ----------- --- ----------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from operations 28,133 -- 56,649 55,696 (1,407,156) 1,178,193 ----------- --- ----------- ---------- ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 35,780 -- 43,021 91,176 2,061,687 519,711 Transfers from other funding options 14,195,384 -- 203,030 1,153,811 17,667,518 17,972,724 Growth rate intra-fund transfers in -- -- -- -- -- 271 Policy surrenders (36,258) -- (2,577) (6,326) (2,627,062) (642,214) Transfers to other funding options (4,778,421) -- (1,144,031) (450,449) (4,318,637) (6,740,240) Growth rate intra-fund transfers out -- -- -- -- -- (270) Other receipts (payments) (1,949) -- -- -- (16,106) (3,448) ----------- --- ----------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions 9,414,536 -- (900,557) 788,212 12,767,400 11,106,534 ----------- --- ----------- ---------- ----------- ----------- Net increase (decrease) in net assets 9,442,669 -- (843,908) 843,908 11,360,244 12,284,727 NET ASSETS: Beginning of period -- -- 843,908 -- 12,284,727 -- ----------- --- ----------- ---------- ----------- ----------- End of period $ 9,442,669 $-- $ -- $ 843,908 $23,644,971 $12,284,727 =========== === =========== ========== =========== ===========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 50
MIST LOOMIS SAYLES GLOBAL MIST JANUS FORTY MARKETS INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) ------------------------- ------------------------- 2007 2006 (b) 2007 (c) 2006 ----------- ------------ ----------- ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (9,136) $ (21,206) $ (11,158) $-- Net realized gain (loss) 2,161,250 (541,474) (403,331) -- Change in unrealized gains (losses) on investments 1,308,212 531,570 865,956 -- ----------- ------------ ----------- --- Net increase (decrease) in net assets resulting from operations 3,460,326 (31,110) 451,467 -- ----------- ------------ ----------- --- POLICY TRANSACTIONS: Premium payments received from policy owners 621,454 1,024,240 29,857 -- Transfers from other funding options 5,945,232 27,452,431 11,221,673 -- Growth rate intra-fund transfers in -- 710,825 -- -- Policy surrenders (542,253) (1,154,023) (996,796) -- Transfers to other funding options (6,663,542) (14,610,844) (807,054) -- Growth rate intra-fund transfers out -- (710,822) -- -- Other receipts (payments) (8,162) (18,421) (5,498) -- ----------- ------------ ----------- --- Net increase (decrease) in net assets resulting from policy transactions (647,271) 12,693,386 9,442,182 -- ----------- ------------ ----------- --- Net increase (decrease) in net assets 2,813,055 12,662,276 9,893,649 -- NET ASSETS: Beginning of period 12,662,276 -- -- -- ----------- ------------ ----------- --- End of period $15,475,331 $ 12,662,276 $ 9,893,649 $-- =========== ============ =========== === MIST LORD ABBETT GROWTH AND MIST LORD ABBETT BOND DEBENTURE INCOME INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS B) ------------------------------- --------------------------- 2007 2006 (b) 2007 2006 (b) --------------- -------------- ------------ ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 397,891 $ (9,063) $ 61,938 $ (3,544) Net realized gain (loss) 151,532 12,182 566,840 (2,183) Change in unrealized gains (losses) on investments (256,798) 331,766 (325,220) 473,116 ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from operations 292,625 334,885 303,558 467,389 ----------- ----------- ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 330,363 326,448 745,357 12,674 Transfers from other funding options 1,410,257 8,678,627 9,840,010 8,622,169 Growth rate intra-fund transfers in (2,664) 4,170,703 -- -- Policy surrenders (2,679,764) (59,154) (100,719) (209,428) Transfers to other funding options (4,018,853) (2,559,726) (3,720,767) (1,427,971) Growth rate intra-fund transfers out 2,665 (4,170,706) -- -- Other receipts (payments) (18,946) (6,653) (5,276) (1,487) ----------- ----------- ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (4,976,942) 6,379,539 6,758,605 6,995,957 ----------- ----------- ----------- ----------- Net increase (decrease) in net assets (4,684,317) 6,714,424 7,062,163 7,463,346 NET ASSETS: Beginning of period 6,714,424 -- 7,463,346 -- ----------- ----------- ----------- ----------- End of period $ 2,030,107 $ 6,714,424 $14,525,509 $ 7,463,346 =========== =========== =========== ===========
The accompanying notes are an integral part of these financial statements. 51
MIST MET/AIM CAPITAL MIST LORD ABBETT MID-CAP VALUE APPRECIATION MIST MET/AIM SMALL CAP GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS A) (CLASS A) ------------------------------ ------------------------- ------------------------------- 2007 2006 (b) 2007 2006 (b) 2007 2006 (b) ----------- ----------- ----------- ------------ ----------- -------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 33,469 $ (1,094) $ (3,726) $ (1,430) $ (801) $ (275) Net realized gain (loss) 1,478,497 71,689 (47,044) 214,471 68,855 1,810 Change in unrealized gains (losses) on investments (3,736,719) (19,145) 344,428 (339,868) (11,743) 11,451 ----------- ----------- ----------- ------------ ----------- -------- Net increase (decrease) in net assets resulting from operations (2,224,753) 51,450 293,658 (126,827) 56,311 12,986 ----------- ----------- ----------- ------------ ----------- -------- POLICY TRANSACTIONS: Premium payments received from policy owners 1,571,168 -- 167,008 51,832 22,846 -- Transfers from other funding options 29,517,241 11,103,069 387,731 17,297,229 1,677,538 259,322 Growth rate intra-fund transfers in -- -- -- 2,380 -- -- Policy surrenders (189,040) (1,740) (206,762) (247,212) (3,566) (1,208) Transfers to other funding options (6,783,563) (1,560,868) (1,268,205) (14,194,901) (1,539,878) (26,079) Growth rate intra-fund transfers out -- -- -- (2,376) -- -- Other receipts (payments) (4,949) -- (4,154) (4,926) (374) -- ----------- ----------- ----------- ------------ ----------- -------- Net increase (decrease) in net assets resulting from policy transactions 24,110,857 9,540,461 (924,382) 2,902,026 156,566 232,035 ----------- ----------- ----------- ------------ ----------- -------- Net increase (decrease) in net assets 21,886,104 9,591,911 (630,724) 2,775,199 212,877 245,021 NET ASSETS: Beginning of period 9,591,911 -- 2,775,199 -- 245,021 -- ----------- ----------- ----------- ------------ ----------- -------- End of period $31,478,015 $ 9,591,911 $ 2,144,475 $ 2,775,199 $ 457,898 $245,021 =========== =========== =========== ============ =========== ========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 52
MIST MFS EMERGING MIST MFS RESEARCH MIST NEUBERGER BERMAN REAL MIST PIMCO INFLATION PROTECTED MARKETS EQUITY INTERNATIONAL ESTATE BOND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS B) (CLASS A) (CLASS A) ----------------- ----------------- -------------------------- ------------------------------ 2007 (c) 2006 2007 (c) 2006 2007 2006 (b) 2007 (c) 2006 ----------- ---- ----------- ---- ------------ ------------ ------------ ---- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (9,528) $-- $ (10,659) $-- $ 634,270 $ (81,508) $ (51,504) $-- Net realized gain (loss) 250,580 -- 38,652 -- 4,649,492 187,714 (18,311) -- Change in unrealized gains (losses) on investments 1,282,745 -- 390,136 -- (15,240,973) 11,479,947 2,204,576 -- ----------- --- ----------- --- ------------ ------------ ------------ --- Net increase (decrease) in net assets resulting from operations 1,523,797 -- 418,129 -- (9,957,211) 11,586,153 2,134,761 -- ----------- --- ----------- --- ------------ ------------ ------------ --- POLICY TRANSACTIONS: Premium payments received from policy owners 337,609 -- 107,946 -- 2,706,192 2,791,308 210,507 -- Transfers from other funding options 8,090,396 -- 8,835,500 -- 16,896,795 79,776,878 53,565,523 -- Growth rate intra-fund transfers in -- -- -- -- (17,543) 21,283,729 -- -- Policy surrenders (178,975) -- (75,234) -- (5,638,314) (569,132) (6,697,219) -- Transfers to other funding options (2,541,905) -- (1,320,531) -- (34,762,020) (22,671,890) (17,130,160) -- Growth rate intra-fund transfers out -- -- -- -- 17,550 (21,283,743) -- -- Other receipts (payments) (11,005) -- (4,235) -- (90,125) (40,824) (15,692) -- ----------- --- ----------- --- ------------ ------------ ------------ --- Net increase (decrease) in net assets resulting from policy transactions 5,696,120 -- 7,543,446 -- (20,887,465) 59,286,326 29,932,959 -- ----------- --- ----------- --- ------------ ------------ ------------ --- Net increase (decrease) in net assets 7,219,917 -- 7,961,575 -- (30,844,676) 70,872,479 32,067,720 -- NET ASSETS: Beginning of period -- -- -- -- 70,872,479 -- -- -- ----------- --- ----------- --- ------------ ------------ ------------ --- End of period $ 7,219,917 $-- $ 7,961,575 $-- $ 40,027,803 $ 70,872,479 $ 32,067,720 $-- =========== === =========== === ============ ============ ============ ===
The accompanying notes are an integral part of these financial statements. 53
MIST THIRD AVENUE SMALL CAP MIST PIONEER FUND VALUE MSF BLACKROCK AGGRESSIVE GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS B) (CLASS D) -------------------- --------------------------- ------------------------------- 2007 2006 (b) 2007 (c) 2006 2007 2006 (b) --------- --------- ------------ ---- ----------- ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 330 $ (35) $ (47,177) $-- $ (17,999) $ (12,797) Net realized gain (loss) 5,807 7 (555,147) -- 163,046 (46,330) Change in unrealized gains (losses) on investments 333 2,073 (1,992,793) -- 1,369,910 (61,015) --------- -------- ------------ --- ----------- ------------ Net increase (decrease) in net assets resulting from operations 6,470 2,045 (2,595,117) -- 1,514,957 (120,142) --------- -------- ------------ --- ----------- ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 552 4,932 276,488 -- 433,886 266,156 Transfers from other funding options 71,264 118,892 47,089,132 -- 2,006,387 31,768,362 Growth rate intra-fund transfers in -- -- -- -- -- 3,781 Policy surrenders (741) (162) (3,543,886) -- (142,910) (94,607) Transfers to other funding options (149,975) -- (15,131,977) -- (2,118,936) (24,191,376) Growth rate intra-fund transfers out -- -- -- -- -- (3,775) Other receipts (payments) -- -- (21,179) -- (6,430) (13,722) --------- -------- ------------ --- ----------- ------------ Net increase (decrease) in net assets resulting from policy transactions (78,900) 123,662 28,668,578 -- 171,997 7,734,819 --------- -------- ------------ --- ----------- ------------ Net increase (decrease) in net assets (72,430) 125,707 26,073,461 -- 1,686,954 7,614,677 NET ASSETS: Beginning of period 125,707 -- -- -- 7,614,677 -- --------- -------- ------------ --- ----------- ------------ End of period $ 53,277 $125,707 $ 26,073,461 $-- $ 9,301,631 $ 7,614,677 ========= ======== ============ === =========== ============
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 54
MSF BLACKROCK BOND INCOME MSF BLACKROCK DIVERSIFIED INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) ------------------------- ------------------------- 2007 2006 (b) 2007 (c) 2006 ----------- ------------ ---------- ---- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 296,992 $ (16,822) $ (6,630) $-- Net realized gain (loss) 32,342 120,988 13,480 -- Change in unrealized gains (losses) on investments 265,348 411,815 51,977 -- ----------- ------------ ---------- --- Net increase (decrease) in net assets resulting from operations 594,682 515,981 58,827 -- ----------- ------------ ---------- --- POLICY TRANSACTIONS: Premium payments received from policy owners 292,285 173,988 290,222 -- Transfers from other funding options 1,802,157 28,722,728 4,291,546 -- Growth rate intra-fund transfers in -- (619) -- -- Policy surrenders (227,510) (2,984,690) (51,248) -- Transfers to other funding options (861,295) (17,497,448) (776,999) -- Growth rate intra-fund transfers out -- 624 -- -- Other receipts (payments) (8,306) (29,191) (2,726) -- ----------- ------------ ---------- --- Net increase (decrease) in net assets resulting from policy transactions 997,331 8,385,392 3,750,795 -- ----------- ------------ ---------- --- Net increase (decrease) in net assets 1,592,013 8,901,373 3,809,622 -- NET ASSETS: Beginning of period 8,901,373 -- -- -- ----------- ------------ ---------- --- End of period $10,493,386 $ 8,901,373 $3,809,622 $-- =========== ============ ========== === MSF BLACKROCK MONEY MARKET MSF CAPITAL GUARDIAN U.S. EQUITY INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) ---------------------------- -------------------------------- 2007 2006 (b) 2007 2006 (b) ------------- ------------- ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 7,279,090 $ 3,694,350 $ 7,952 $ (3,511) Net realized gain (loss) -- -- 186,380 (7,139) Change in unrealized gains (losses) on investments -- -- (185,318) 96,069 ------------- ------------- ---------- ---------- Net increase (decrease) in net assets resulting from operations 7,279,090 3,694,350 9,014 85,419 ------------- ------------- ---------- ---------- POLICY TRANSACTIONS: Premium payments received from policy owners 55,935,917 26,829,967 63,699 13,744 Transfers from other funding options 115,140,953 217,033,060 538,464 2,856,708 Growth rate intra-fund transfers in -- 249,921 -- -- Policy surrenders (4,944,788) (15,307,900) (28,097) (21,435) Transfers to other funding options (110,286,366) (114,317,434) (806,842) (358,570) Growth rate intra-fund transfers out -- (249,901) -- -- Other receipts (payments) (13,740) (16,573) (848) -- ------------- ------------- ---------- ---------- Net increase (decrease) in net assets resulting from policy transactions 55,831,976 114,221,140 (233,624) 2,490,447 ------------- ------------- ---------- ---------- Net increase (decrease) in net assets 63,111,066 117,915,490 (224,610) 2,575,866 NET ASSETS: Beginning of period 117,915,490 -- 2,575,866 -- ------------- ------------- ---------- ---------- End of period $ 181,026,556 $ 117,915,490 $2,351,256 $2,575,866 ============= ============= ========== ==========
The accompanying notes are an integral part of these financial statements. 55
MSF FI LARGE CAP MSF FI VALUE LEADERS MSF METLIFE AGGRESSIVE ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS D) (CLASS B) ------------------------- ------------------------- --------------------------------- 2007 2006 (b) 2007 2006 (b) 2007 2006 (b) ----------- ------------ ----------- ------------ ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (1,515) $ (7,191) $ 93,724 $ (37,682) $ (5,920) $ (1,042) Net realized gain (loss) 211,565 (335,761) 1,599,962 266,862 80,056 (2,766) Change in unrealized gains (losses) on investments (95,713) 76,013 (1,108,149) 650,886 (4,090) 128,062 ----------- ------------ ----------- ------------ ---------- ---------- Net increase (decrease) in net assets resulting from operations 114,337 (266,939) 585,537 880,066 70,046 124,254 ----------- ------------ ----------- ------------ ---------- ---------- POLICY TRANSACTIONS: Premium payments received from policy owners 332,805 172,063 1,656,540 688,771 190,061 58,210 Transfers from other funding options 801,887 35,793,294 4,511,023 54,001,840 6,163,415 1,320,899 Growth rate intra-fund transfers in -- 5,845 -- 330,675 (206) 304,641 Policy surrenders (401,213) (567,409) (221,367) (203,631) (259,358) (5,042) Transfers to other funding options (1,016,526) (32,594,912) (7,317,042) (37,543,189) (702,038) (151,223) Growth rate intra-fund transfers out -- (5,838) -- (330,668) 206 (304,642) Other receipts (payments) (11,339) (3,844) (10,885) (10,867) (1,282) (392) ----------- ------------ ----------- ------------ ---------- ---------- Net increase (decrease) in net assets resulting from policy transactions (294,386) 2,799,199 (1,381,731) 16,932,931 5,390,798 1,222,451 ----------- ------------ ----------- ------------ ---------- ---------- Net increase (decrease) in net assets (180,049) 2,532,260 (796,194) 17,812,997 5,460,844 1,346,705 NET ASSETS: Beginning of period 2,532,260 -- 17,812,997 -- 1,346,705 -- ----------- ------------ ----------- ------------ ---------- ---------- End of period $ 2,352,211 $ 2,532,260 $17,016,803 $ 17,812,997 $6,807,549 $1,346,705 =========== ============ =========== ============ ========== ==========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 56
MSF METLIFE CONSERVATIVE MSF METLIFE CONSERVATIVE TO ALLOCATION MODERATE ALLOCATION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS B) ------------------------ --------------------------- 2007 2006 (b) 2007 2006 (b) ----------- ---------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (5,971) $ (3,019) $ (13,665) $ (6,227) Net realized gain (loss) 241,881 18,742 603,487 1,767 Change in unrealized gains (losses) on investments (185,094) 232,905 (413,513) 735,632 ----------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from operations 50,816 248,628 176,309 731,172 ----------- ---------- ----------- ----------- POLICY TRANSACTIONS: Premium payments received from policy owners 74,686 28,149 32,171 2,864 Transfers from other funding options 2,747,670 5,124,570 3,591,603 9,731,292 Growth rate intra-fund transfers in -- -- (29) 44,795 Policy surrenders (845,139) (6,018) (462,962) (6,126) Transfers to other funding options (4,924,595) (453,066) (5,665,118) (26,434) Growth rate intra-fund transfers out -- -- 29 (44,796) Other receipts (payments) (2,710) -- (2,300) (542) ----------- ---------- ----------- ----------- Net increase (decrease) in net assets resulting from policy transactions (2,950,088) 4,693,635 (2,506,606) 9,701,053 ----------- ---------- ----------- ----------- Net increase (decrease) in net assets (2,899,272) 4,942,263 (2,330,297) 10,432,225 NET ASSETS: Beginning of period 4,942,263 -- 10,432,225 -- ----------- ---------- ----------- ----------- End of period $ 2,042,991 $4,942,263 $ 8,101,928 $10,432,225 =========== ========== =========== =========== MSF METLIFE MODERATE ALLOCATION MSF METLIFE MODERATE TO INVESTMENT OPTION AGGRESSIVE ALLOCATION (CLASS B) INVESTMENT OPTION ------------------------------- ----------------------- 2007 2006 (b) 2007 2006 (b) ----------- ---------- ---------- --------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (19,983) $ (1,476) $ (2,293) $ (267) Net realized gain (loss) 23,066 344 30,480 2,192 Change in unrealized gains (losses) on investments 144,960 146,921 (7,962) 20,326 ----------- ---------- ---------- -------- Net increase (decrease) in net assets resulting from operations 148,043 145,789 20,225 22,251 ----------- ---------- ---------- -------- POLICY TRANSACTIONS: Premium payments received from policy owners 152,209 31,937 19,816 -- Transfers from other funding options 13,064,575 2,193,855 1,740,558 591,345 Growth rate intra-fund transfers in -- -- -- -- Policy surrenders (571,804) (9,742) (273,434) (802) Transfers to other funding options (2,344,377) (4,977) (176,938) (90,706) Growth rate intra-fund transfers out -- -- -- -- Other receipts (payments) (2,980) -- (1,742) -- ----------- ---------- ---------- -------- Net increase (decrease) in net assets resulting from policy transactions 10,297,623 2,211,073 1,308,260 499,837 ----------- ---------- ---------- -------- Net increase (decrease) in net assets 10,445,666 2,356,862 1,328,485 522,088 NET ASSETS: Beginning of period 2,356,862 -- 522,088 -- ----------- ---------- ---------- -------- End of period $12,802,528 $2,356,862 $1,850,573 $522,088 =========== ========== ========== ========
The accompanying notes are an integral part of these financial statements. 57
MSF METLIFE STOCK INDEX MSF MFS TOTAL RETURN MSF OPPENHEIMER GLOBAL EQUITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS F) (CLASS B) ----------------------- -------------------------- ----------------------------- 2007 (c) 2006 2007 2006 (b) 2007 2006 (b) ----------- ---- ------------ ------------ ---------- ---------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (81,140) $-- $ 662,916 $ (62,470) $ 9,038 $ (1,497) Net realized gain (loss) 58,048 -- 2,484,746 (79,315) 84,913 (2,822) Change in unrealized gains (losses) on investments (531,203) -- (1,472,329) 3,329,262 (17,814) 85,235 ----------- --- ------------ ------------ ---------- ---------- Net increase (decrease) in net assets resulting from operations (554,295) -- 1,675,333 3,187,477 76,137 80,916 ----------- --- ------------ ------------ ---------- ---------- POLICY TRANSACTIONS: Premium payments received from policy owners 490,184 -- 1,513,353 2,576,683 166,370 39,744 Transfers from other funding options 85,679,461 -- 3,701,776 88,332,720 600,516 1,381,208 Growth rate intra-fund transfers in -- -- -- (256) -- -- Policy surrenders (359,289) -- (706,913) (891,458) (13,390) (9,218) Transfers to other funding options (8,340,363) -- (13,915,943) (47,759,967) (942,153) (278,665) Growth rate intra-fund transfers out -- -- -- 262 -- -- Other receipts (payments) (6,761) -- (133,292) (16,247) (1,575) -- ----------- --- ------------ ------------ ---------- ---------- Net increase (decrease) in net assets resulting from policy transactions 77,463,232 -- (9,541,019) 42,241,737 (190,232) 1,133,069 ----------- --- ------------ ------------ ---------- ---------- Net increase (decrease) in net assets 76,908,937 -- (7,865,686) 45,429,214 (114,095) 1,213,985 NET ASSETS: Beginning of period -- -- 45,429,214 -- 1,213,985 -- ----------- --- ------------ ------------ ---------- ---------- End of period $76,908,937 $-- $ 37,563,528 $ 45,429,214 $1,099,890 $1,213,985 =========== === ============ ============ ========== ==========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 58
MSF T. ROWE PRICE MSF RUSSELL 2000 INDEX LARGE CAP GROWTH INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS B) ---------------------- ------------------------ 2007 (c) 2006 2007 2006 (b) ----------- ----- ---------- ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (37,825) $-- $ (1,933) $ (5,514) Net realized gain (loss) (172,080) -- 212,977 20,844 Change in unrealized gains (losses) on investments (1,974,665) -- (48,211) 252,605 ----------- --- ---------- ------------ Net increase (decrease) in net assets resulting from operations (2,184,570) -- 162,833 267,935 ----------- --- ---------- ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 270,831 -- 185,809 158,958 Transfers from other funding options 34,899,154 -- 2,230,808 29,471,967 Growth rate intra-fund transfers in -- -- -- 2,243 Policy surrenders (1,329,533) -- (107,236) (97,848) Transfers to other funding options (2,985,228) -- 2,800,516) (26,412,234) Growth rate intra-fund transfers out -- -- -- (2,235) Other receipts (payments) (3,160) -- (13,036) (635) ----------- --- ---------- ------------ Net increase (decrease) in net assets resulting from policy transactions 30,852,064 -- (504,171) 3,120,216 ----------- --- ---------- ------------ Net increase (decrease) in net assets 28,667,494 -- (341,338) 3,388,151 NET ASSETS: Beginning of period -- -- 3,388,151 -- ----------- --- ---------- ------------ End of period $28,667,494 $-- $3,046,813 $ 3,388,151 =========== === ========== ============ MSF WESTERN ASSET MANAGEMENT MSF WESTERN ASSET MANAGEMENT HIGH YIELD BOND U.S. GOVERNMENT INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) ---------------------------- ---------------------------- 2007 (a) 2006 (b) 2007 2006 (b) ------------ -------------- ------------- ------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 1,956,945 $ (26,232) $ 524,447 $ (7,456) Net realized gain (loss) (143,005) 74,066 66,439 133,088 Change in unrealized gains (losses) on investments (1,068,568) 1,068,568 370,980 624,969 ------------ ------------ ----------- ------------ Net increase (decrease) in net assets resulting from operations 745,372 1,116,402 961,866 750,601 ------------ ------------ ----------- ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 1,029,188 741,744 848,449 310,567 Transfers from other funding options 2,737,293 46,638,859 5,684,125 41,778,790 Growth rate intra-fund transfers in (59) 90,459 -- (456) Policy surrenders (149,783) (3,270,915) (237,946) (5,731,156) Transfers to other funding options (20,682,889) (28,872,445) (3,025,083) (17,214,169) Growth rate intra-fund transfers out 59 (90,454) -- 459 Other receipts (payments) (5,680) (27,151) (10,589) (314,150) ------------ ------------ ----------- ------------ Net increase (decrease) in net assets resulting from policy transactions (17,071,871) 15,210,097 3,258,956 18,829,885 ------------ ------------ ----------- ------------ Net increase (decrease) in net assets (16,326,499) 16,326,499 4,220,822 19,580,486 NET ASSETS: Beginning of period 16,326,499 -- 19,580,486 -- ------------ ------------ ----------- ------------ End of period $ -- $ 16,326,499 $23,801,308 $ 19,580,486 ============ ============ =========== ============
The accompanying notes are an integral part of these financial statements. 59
MORGAN STANLEY UIF EMERGING MARKETS EQUITY PIMCO VIT REAL RETURN INVESTMENT OPTION PIMCO VIT LOW DURATION INVESTMENT OPTION (CLASS I) INVESTMENT OPTION (ADMINISTRATIVE CLASS) --------------------------- -------------------------- -------------------------- 2007 (a) 2006 2007 2006 2007 (a) 2006 -------------- ----------- ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (933) $ 8,727 $ 1,140,583 $ 906,897 $ 733,839 $ 1,796,387 Net realized gain (loss) 366,479 42,277 (24,671) (6,397) (2,209,876) 501,365 Change in unrealized gains (losses) on investments (230,310) 229,991 368,924 96,108 2,726,285 (2,574,737) ----------- ---------- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 135,236 280,995 1,484,836 996,608 1,250,248 (276,985) ----------- ---------- ------------ ------------ ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 273,728 4,430 1,807,093 2,563,765 990,410 39,873,583 Transfers from other funding options 437,487 2,011,779 13,614,798 25,850,714 3,641,200 18,652,630 Growth rate intra-fund transfers in -- -- (9,014) 14,914,790 (7,620) 12,766,029 Policy surrenders (4,945) (304,422) (8,698,917) (558,566) (477,406) (609,599) Transfers to other funding options (1,989,412) (851,681) (23,652,432) (2,743,547) (53,916,617) (42,035,323) Growth rate intra-fund transfers out -- -- 9,017 (14,914,801) 7,623 (12,766,038) Other receipts (payments) -- -- (101,718) (22,395) (197,400) (28,089) ----------- ---------- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions (1,283,142) 860,106 (17,031,173) 25,089,960 (49,959,810) 15,853,193 ----------- ---------- ------------ ------------ ------------ ------------ Net increase (decrease) in net assets (1,147,906) 1,141,101 (15,546,337) 26,086,568 (48,709,562) 15,576,208 NET ASSETS: Beginning of period 1,147,906 6,805 33,159,562 7,072,994 48,709,562 33,133,354 ----------- ---------- ------------ ------------ ------------ ------------ End of period $ -- $1,147,906 $ 17,613,225 $ 33,159,562 $ -- $ 48,709,562 =========== ========== ============ ============ ============ ============
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 60
PIMCO VIT TOTAL RETURN PIONEER MID CAP VALUE VCT INVESTMENT OPTION INVESTMENT OPTION (ADMINISTRATIVE CLASS) (CLASS II) -------------------------- ------------------------- 2007 2006 2007 2006 ------------ ------------ ------------------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 6,397,481 $ 5,082,803 $ 36,647 $ (18,025) Net realized gain (loss) (938,637) (867,938) 552,202 1,738,705 Change in unrealized gains (losses) on investments 5,415,631 (33,058) (179,802) (1,056,207) ------------ ------------ ----------- ------------ Net increase (decrease) in net assets resulting from operations 10,874,475 4,181,807 409,047 664,473 ------------ ------------ ----------- ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 4,694,730 12,556,117 604,337 1,035,067 Transfers from other funding options 42,782,319 62,486,934 4,443,396 4,747,690 Growth rate intra-fund transfers in (8,308) 20,734,800 (30) 74,625 Policy surrenders (10,768,929) (4,541,150) (1,346,219) (597,142) Transfers to other funding options (47,032,600) (63,421,563) (5,491,008) (11,688,673) Growth rate intra-fund transfers out 8,311 (20,734,639) 30 (74,625) Other receipts (payments) (275,539) (241,393) (7,716) (4,225) ------------ ------------ ----------- ------------ Net increase (decrease) in net assets resulting from policy transactions (10,600,016) 6,839,106 (1,797,210) (6,507,283) ------------ ------------ ----------- ------------ Net increase (decrease) in net assets 274,459 11,020,913 (1,388,163) (5,842,810) NET ASSETS: Beginning of period 139,900,539 128,879,626 6,309,057 12,151,867 ------------ ------------ ----------- ------------ End of period $140,174,998 $139,900,539 $ 4,920,894 $ 6,309,057 ============ ============ =========== ============ PUTNAM VT DISCOVERY GROWTH PUTNAM VT INTERNATIONAL EQUITY INVESTMENT OPTION INVESTMENT OPTION (CLASS IB) (CLASS IB) -------------------------- ------------------------------ 2007 2006 2007 (a) 2006 ------------ ------------ ------------- --------------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ (685) $ (581) $ 216,344 $ 154,278 Net realized gain (loss) 32,230 64,097 1,771,089 8,129,542 Change in unrealized gains (losses) on investments (7,085) (22,199) (1,350,606) (2,633,126) --------- --------- ----------- ------------ Net increase (decrease) in net assets resulting from operations 24,460 41,317 636,827 5,650,694 --------- --------- ----------- ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 41,643 58,843 74,611 1,064,411 Transfers from other funding options 115,918 369,553 1,123,378 13,433,378 Growth rate intra-fund transfers in -- 718 (355) 512,519 Policy surrenders (2,535) (11,044) (31,930) (175,128) Transfers to other funding options (123,895) (557,346) (8,824,815) (36,562,124) Growth rate intra-fund transfers out -- (718) 355 (512,511) Other receipts (payments) (1,245) -- (4,456) (10,854) --------- --------- ----------- ------------ Net increase (decrease) in net assets resulting from policy transactions 29,886 (139,994) (7,663,212) (22,250,309) --------- --------- ----------- ------------ Net increase (decrease) in net assets 54,346 (98,677) (7,026,385) (16,599,615) NET ASSETS: Beginning of period 275,057 373,734 7,026,385 23,626,000 --------- --------- ----------- ------------ End of period $ 329,403 $ 275,057 $ -- $ 7,026,385 ========= ========= =========== ============
The accompanying notes are an integral part of these financial statements. 61
PUTNAM VT SMALL CAP VALUE INVESTMENT OPTION ROYCE MICRO CAP ROYCE SMALL CAP (CLASS IB) INVESTMENT OPTION INVESTMENT OPTION ------------ ------------ ------------ ----------- ----------- ----------- 2007 (a) 2006 2007 2006 (b) 2007 2006 ------------ ------------ ------------ ----------- ----------- ----------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 192,651 $ 49,071 $ 72,338 $ 5,923 $ (9,726) $ (4,362) Net realized gain (loss) 7,640,183 6,406,224 1,866,857 296,719 359,488 267,364 Change in unrealized gains (losses) on investments (5,024,482) (381,979) (707,530) 346,943 (621,157) 233,575 ------------ ------------ ------------ ---------- ----------- ---------- Net increase (decrease) in net assets resulting from operations 2,808,352 6,073,316 1,231,665 649,585 (271,395) 496,577 ------------ ------------ ------------ ---------- ----------- ---------- POLICY TRANSACTIONS: Premium payments received from policy owners 1,455,914 4,998,558 243,081 11,301 135,702 699,617 Transfers from other funding options 2,396,304 18,371,058 13,968,812 4,999,015 3,375,803 4,960,720 Growth rate intra-fund transfers in (12,812) 19,729,782 -- -- -- -- Policy surrenders (119,752) (883,604) (87,554) (5,688) (382,974) (175,861) Transfers to other funding options (46,732,370) (23,907,512) (14,472,062) (194,074) (2,502,320) (541,195) Growth rate intra-fund transfers out 12,816 (19,729,788) -- -- -- -- Other receipts (payments) (211,364) (32,563) (885) -- (1,083) -- ------------ ------------ ------------ ---------- ----------- ---------- Net increase (decrease) in net assets resulting from policy transactions (43,211,264) (1,454,069) (348,608) 4,810,554 625,128 4,943,281 ------------ ------------ ------------ ---------- ----------- ---------- Net increase (decrease) in net assets (40,402,912) 4,619,247 883,057 5,460,139 353,733 5,439,858 NET ASSETS: Beginning of period 40,402,912 35,783,665 5,460,139 -- 5,740,708 300,850 ------------ ------------ ------------ ---------- ----------- ---------- End of period $ -- $ 40,402,912 $ 6,343,196 $5,460,139 $ 6,094,441 $5,740,708 ============ ============ ============ ========== =========== ==========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 62
VANGUARD VIF DIVERSIFIED VALUE VANGUARD VIF EQUITY INDEX INVESTMENT OPTION INVESTMENT OPTION ------------------------------ ------------ ------------ 2007 2006 2007 2006 ------------ ------------ ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 340,374 $ (23,739) $ 349,553 $ (39,890) Net realized gain (loss) 1,922,420 21,846 1,986,675 122,193 Change in unrealized gains (losses) on investments (1,063,651) 1,879,118 (734,640) 2,344,862 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from operations 1,199,143 1,877,225 1,601,588 2,427,165 ------------ ------------ ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 329,478 856,409 601,131 1,648,372 Transfers from other funding options 6,901,979 17,039,978 6,396,294 26,434,410 Growth rate intra-fund transfers in (9,208) 13,248,699 (17,305) 25,384,535 Policy surrenders (4,765,232) (74,935) (5,882,638) (124,826) Transfers to other funding options (4,222,358) (229,795) (4,306,275) (2,640,225) Growth rate intra-fund transfers out 9,212 (13,248,709) 17,311 (25,384,552) Other receipts (payments) (51,975) (22,909) (64,232) (40,694) ------------ ------------ ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions (1,808,104) 17,568,738 (3,255,714) 25,277,020 ------------ ------------ ------------ ------------ Net increase (decrease) in net assets (608,961) 19,445,963 (1,654,126) 27,704,185 NET ASSETS: Beginning of period 19,471,816 25,853 27,917,369 213,184 ------------ ------------ ------------ ------------ End of period $ 18,862,855 $ 19,471,816 $ 26,263,243 $ 27,917,369 ============ ============ ============ ============ VANGUARD VIF INTERNATIONAL VANGUARD VIF MID-CAP INDEX INVESTMENT OPTION INVESTMENT OPTION ------------ ------------ -------------------------- 2007 2006 (b) 2007 2006 (b) --------- --------- ------------ ------------ INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 6,904 $ (67) $ 171,451 $ (26,952) Net realized gain (loss) 23,907 22 1,841,462 (208,927) Change in unrealized gains (losses) on investments 63,813 9,468 (345,109) 569,625 --------- --------- ------------ ------------ Net increase (decrease) in net assets resulting from operations 94,624 9,423 1,667,804 333,746 --------- --------- ------------ ------------ POLICY TRANSACTIONS: Premium payments received from policy owners 1,105 9,864 472,269 1,254,539 Transfers from other funding options 633,234 218,678 4,776,953 19,973,795 Growth rate intra-fund transfers in -- -- (12,898) 18,966,322 Policy surrenders (5,517) (317) (3,787,872) (78,940) Transfers to other funding options (53,374) -- (3,605,162) (4,978,190) Growth rate intra-fund transfers out -- -- 12,903 (18,966,335) Other receipts (payments) -- -- (40,463) (28,004) --------- --------- ------------ ------------ Net increase (decrease) in net assets resulting from policy transactions 575,448 228,225 (2,184,270) 16,143,187 --------- --------- ------------ ------------ Net increase (decrease) in net assets 670,072 237,648 (516,466) 16,476,933 NET ASSETS: Beginning of period 237,648 -- 16,476,933 -- --------- --------- ------------ ------------ End of period $ 907,720 $ 237,648 $ 15,960,467 $ 16,476,933 ========= ========= ============ ============
The accompanying notes are an integral part of these financial statements. 63
VANGUARD VIF SHORT-TERM VANGUARD VIF SMALL COMPANY INVESTMENT-GRADE GROWTH THE MERGER FUND VL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ----------------------- -------------------------- ------------------- 2007 2006 2007 2006 (b) 2007 2006 (b) -------- --------- ---------- ---------- -------- -------- INCREASE (DECREASE) IN NET ASSETS: FROM OPERATIONS: Net investment income (loss) $ 177 $ 144 $ 2,577 $ (1,624) $ (457) $ (168) Net realized gain (loss) 2 480 7,897 8,021 8,567 17,795 Change in unrealized gains (losses) on investments 1,478 4 (165,661) 110,504 (9,461) (9,305) -------- --------- ---------- ---------- -------- -------- Net increase (decrease) in net assets resulting from operations 1,657 628 (155,187) 116,901 (1,351) 8,322 -------- --------- ---------- ---------- -------- -------- POLICY TRANSACTIONS: Premium payments received from policy owners -- -- 17,088 22,914 117,191 -- Transfers from other funding options 228,052 180,480 3,891,533 1,382,900 244,361 229,158 Growth rate intra-fund transfers in -- -- (223) 345,132 -- -- Policy surrenders (439) (95) (546,701) (4,817) (1,819) (701) Transfers to other funding options (3,707) (182,461) (606,998) (99,887) 416,202) ( (71,644) Growth rate intra-fund transfers out -- -- 223 (345,133) -- -- Other receipts (payments) -- -- (4,636) (1,414) (524) -- -------- --------- ---------- ---------- -------- -------- Net increase (decrease) in net assets resulting from policy transactions 223,906 (2,076) 2,750,286 1,299,695 (56,993) 156,813 -------- --------- ---------- ---------- -------- -------- Net increase (decrease) in net assets 225,563 (1,448) 2,595,099 1,416,596 (58,344) 165,135 NET ASSETS: Beginning of period 2,147 3,595 1,416,596 -- 165,135 -- -------- --------- ---------- ---------- -------- -------- End of period $227,710 $ 2,147 $4,011,695 $1,416,596 $106,791 $165,135 ======== ========= ========== ========== ======== ========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period May 1, 2006 to December 31, 2006. (c) For the period April 30, 2007 to December 31, 2007. The accompanying notes are an integral part of these financial statements. 64 METLIFE OF CT FUND UL III FOR VARIABLE LIFE INSURANCE OF METLIFE INSURANCE COMPANY OF CONNECTICUT NOTES TO THE FINANCIAL STATEMENTS 1. ORGANIZATION MetLife of CT Fund UL III for Variable Life Insurance (the "Separate Account"), a separate account of MetLife Insurance Company of Connecticut (the "Company"), was established by the Company's Board of Directors on January 15, 1999 to support operations of the Company with respect to certain variable life insurance policies (the "Policies"). The Company is a direct wholly-owned subsidiary of MetLife, Inc., a Delaware corporation. The Separate Account is registered as a unit investment trust under the Investment Company Act of 1940, as amended, and exists in accordance with the regulations of the Connecticut Department of Insurance. The Separate Account is divided into Investment Options, each of which is treated as an individual accounting entity for financial reporting purposes. Each Investment Option invests in shares of the corresponding portfolio, series, or fund (with the same name) of registered investment management companies (the "Trusts") which are presented below: AIM Variable Insurance Funds ("AIM V.I.") American Century Variable Portfolios, Inc. ("American Century VP") American Funds Insurance Series ("American Funds") Delaware VIP Trust ("Delaware VIP") Dreyfus Variable Investment Fund ("Dreyfus VIF") Fidelity Variable Insurance Products Funds ("Fidelity VIP") Franklin Templeton Variable Insurance Products Trust ("FTVIPT") Janus Aspen Series ("Janus Aspen") Legg Mason Partners Variable Equity Trust ("LMPVET") Legg Mason Partners Variable Income Trust ("LMPVIT") Met Investors Series Trust ("MIST") Metropolitan Series Fund, Inc. ("MSF") PIMCO Variable Insurance Trust ("PIMCO VIT") Pioneer Variable Contracts Trust ("Pioneer VCT") Putnam Variable Trust ("Putnam VT") Royce Capital Fund ("Royce") Vanguard Variable Insurance Fund ("Vanguard VIF") The Merger Fund VL The assets of the Separate Account are registered in the name of the Company. Under applicable insurance law, the assets and liabilities of the Separate Account are clearly identified and distinguished from the Company's other assets and liabilities. The portion of the Separate Account's assets applicable to the Policies is not chargeable with liabilities arising out of any other business the Company may conduct. Premium payments applied to the Separate Account are invested in one or more Investment Options in accordance with the selection made by the policy owner. The following Investment Options were available for investment as of December 31, 2007 (the share class indicated in parentheses is that of the portfolio, series, or fund in which the Investment Option invests): AIM V.I. International Growth Investment Option (Series I) American Century VP Ultra Investment Option (Class I) American Funds Global Growth Investment Option (Class 2) American Funds Growth Investment Option (Class 2) American Funds Growth-Income Investment Option (Class 2) Delaware VIP Small Cap Value Investment Option (Standard Class) Dreyfus VIF Appreciation Investment Option (Initial Shares) Dreyfus VIF Developing Leaders Investment Option (Initial Shares) Fidelity VIP Contrafund Investment Option (Initial Class) Fidelity VIP Contrafund Investment Option (Service Class 2) Fidelity VIP Growth & Income Investment Option (Service Class 2) Fidelity VIP Mid Cap Investment Option (Service Class 2) Fidelity VIP Overseas Investment Option (Service Class 2) FTVIPT Franklin Small-Mid Cap Growth Securities Investment Option (Class 2) 65 FTVIPT Templeton Developing Markets Securities Investment Option (Class 2) FTVIPT Templeton Foreign Securities Investment Option (Class 2) FTVIPT Templeton Global Income Securities Investment Option (Class 1) Janus Aspen Global Technology Investment Option (Service Shares) Janus Aspen Worldwide Growth Investment Option (Service Shares) LMPVET Aggressive Growth Investment Option (Class I) LMPVET Appreciation Investment Option (Class I) LMPVET Equity Index Investment Option (Class I) LMPVET Fundamental Value Investment Option (Class I) LMPVET International All Cap Opportunity Investment Option LMPVET Investors Investment Option (Class I) LMPVET Large Cap Growth Investment Option (Class I) LMPVET Social Awareness Stock Investment Option LMPVET Capital and Income Investment Option (Class I) LMPVIT Global High Yield Bond Investment Option (Class I) LMPVIT Government Investment Option (Class I) LMPVIT Strategic Bond Investment Option (Class I) MIST Batterymarch Mid-Cap Stock Investment Option (Class A) MIST BlackRock High Yield Investment Option (Class A) MIST BlackRock Large-Cap Core Investment Option (Class E) MIST Harris Oakmark International Investment Option (Class A) MIST Janus Forty Investment Option (Class A) MIST Loomis Sayles Global Markets Investment Option (Class A) MIST Lord Abbett Bond Debenture Investment Option (Class A) MIST Lord Abbett Growth and Income Investment Option (Class B) MIST Lord Abbett Mid-Cap Value Investment Option (Class B) MIST Met/AIM Capital Appreciation Investment Option (Class A) MIST Met/AIM Small Cap Growth Investment Option (Class A) MIST MFS Emerging Markets Equity Investment Option (Class A) MIST MFS Research International Investment Option (Class B) MIST Neuberger Berman Real Estate Investment Option (Class A) MIST PIMCO Inflation Protected Bond Investment Option (Class A) MIST Pioneer Fund Investment Option (Class A) MIST Pioneer Strategic Income Investment Option (Class A)* MIST Third Avenue Small Cap Value Investment Option (Class B) MSF BlackRock Aggressive Growth Investment Option (Class D) MSF BlackRock Bond Income Investment Option (Class A) MSF BlackRock Diversified Investment Option (Class A) MSF BlackRock Money Market Investment Option (Class A) MSF Capital Guardian U.S. Equity Investment Option (Class A) MSF FI Large Cap Investment Option (Class A) MSF FI Value Leaders Investment Option (Class D) MSF MetLife Aggressive Allocation Investment Option (Class B) MSF MetLife Conservative Allocation Investment Option (Class B) MSF MetLife Conservative to Moderate Allocation Investment Option (Class B) MSF MetLife Moderate Allocation Investment Option (Class B) MSF MetLife Moderate to Aggressive Allocation Investment Option (Class B) MSF MetLife Stock Index Investment Option (Class A) MSF MFS Total Return Investment Option (Class F) 66 MSF Oppenheimer Global Equity Investment Option (Class B) MSF Russell 2000 Index Investment Option (Class A) MSF T. Rowe Price Large Cap Growth Investment Option (Class B) MSF Western Asset Management U.S. Government Investment Option (Class A) PIMCO VIT Low Duration Investment Option PIMCO VIT Total Return Investment Option (Administrative Class) Pioneer Mid Cap Value VCT Investment Option (Class II) Putnam VT Discovery Growth Investment Option (Class IB) Royce Micro Cap Investment Option Royce Small Cap Investment Option Vanguard VIF Diversified Value Investment Option Vanguard VIF Equity Index Investment Option Vanguard VIF International Investment Option Vanguard VIF Mid-Cap Index Investment Option Vanguard VIF Short-Term Investment-Grade Investment Option Vanguard VIF Small Company Growth Investment Option Vanguard Total Stock Market Index Investment Option* The Merger Fund VL Investment Option * This Investment Option had no net assets as of December 31, 2007. The following Investment Options ceased operations during the year ended December 31, 2007: Credit Suisse Emerging Markets Investment Option Dreyfus Stock Index Investment Option DWS VIT Small Cap Index VIP Investment Option Fidelity VIP Asset ManagerSM Investment Option FTVIP Templeton Global Asset Allocation Investment Option LMPVPI All Cap Investment Option LMPVPI Total Return Investment Option Lord Abbett Growth and Income Investment Option Lord Abbett Mid-Cap Value Investment Option MSF Western Asset Management High Yield Bond Investment Option Morgan Stanley UIF Emerging Markets Equity Investment Option PIMCO VIT Real Return Investment Option Putnam VT International Equity Investment Option Putnam VT Small Cap Value Investment Option The operations of the Investment Options were affected by the following changes that occurred during the year ended December 31, 2007: NAME CHANGES:
OLD NAME NEW NAME - --------------------------------------------------- -------------------------------------------------- Legg Mason Partners Variable International All Cap Legg Mason Partners Variable International All Cap Growth Portfolio Opportunity Portfolio Legg Mason Partners Variable Social Awareness Stock Legg Mason Partners Variable Social Awareness Portfolio Portfolio Janus Capital Appreciation Portfolio Janus Forty Portfolio Legg Mason Partners Variable Multiple Discipline Legg Mason Partners Variable Capital and Income Portfolio - Balanced All Cap Growth and Value Portfolio
67 MERGERS:
OLD NAME NEW NAME - --------------------------------------------------- -------------------------------------------------------- Legg Mason Partners Variable All Cap Portfolio Legg Mason Partners Variable Fundamental Value Portfolio Western Asset Management High Yield Bond Portfolio BlackRock High Yield Portfolio Legg Mason Partners Variable Total Return Portfolio Legg Mason Partners Variable Multiple Discipline Portfolio - Balanced All Cap Growth and Value
SUBSTITUTIONS:
OLD NAME NEW NAME - ---------------------------------------------- ---------------------------------------- Credit Suisse Emerging Markets Portfolio MFS Emerging Markets Equity Portfolio UIF Emerging Markets Equity Portfolio MFS Emerging Markets Equity Portfolio Dreyfus Stock Index Fund MetLife Stock Index Portfolio Lord Abbett Series Growth and Income Portfolio Lord Abbett Growth and Income Portfolio Putnam VT International Equity Fund MFS Research International Portfolio DWS Small Cap Index VIP Russell 2000 Index Portfolio Fidelity VIP Asset ManagerSM Portfolio BlackRock Diversified Portfolio Putnam VT Small Cap Value Fund Third Avenue Small Cap Value Portfolio Lord Abbett Series Mid-Cap Value Portfolio Lord Abbett Mid-Cap Value Portfolio PIMCO VIT Real Return Portfolio PIMCO Inflation Protected Bond Portfolio Templeton Global Asset Allocation Portfolio Loomis Sayles Global Markets Portfolio
PORTFOLIO SHARE CLASS EXCHANGE:
OLD PORTFOLIO NEW PORTFOLIO - -------------------------------------------- -------------------------------------------- BlackRock Large-Cap Core Portfolio (Class A) BlackRock Large-Cap Core Portfolio (Class E)
This report is prepared for the general information of policy owners and is not an offer of units of the Separate Account or shares of the Separate Account's underlying investments. It should not be used in connection with any offer except in conjunction with the prospectus for the Separate Account products offered by the Company and the prospectus of the underlying portfolio, series, or fund which collectively contain all the pertinent information, including additional information on charges and expenses. 2. SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The financial statements included herein have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for variable life separate accounts registered as unit investment trusts. VALUATION OF INVESTMENTS Investments are reported at fair value and are based on the net asset value per share as determined by the underlying assets of the portfolio, series, or fund of the Trusts, which value their investment securities at fair value. Changes in fair value are recorded in the statement of operations. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses on the sales of investments are computed on the basis of the average cost of the investment sold. Income from dividends and realized gain distributions are recorded on the ex-distribution date. 68 FEDERAL INCOME TAXES The operations of the Separate Account form a part of the total operations of the Company and are not taxed separately. The Company is taxed as a life insurance company under the provisions of the Internal Revenue Code ("IRC"). Under the current provisions of the IRC, the Company does not expect to incur federal income taxes on the earnings of the Separate Account to the extent the earnings are credited under the Policies. Accordingly, no charge is being made currently to the Separate Account for federal income taxes. The Company will periodically review the status of this policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the Policies. PREMIUM PAYMENTS The Company deducts a sales charge and a state premium tax charge from premiums before amounts are allocated to the Separate Account. In the case of certain Policies, the Company also deducts a federal income tax charge before amounts are allocated to the Separate Account. The federal income tax charge is imposed in connection with certain Policies to recover a portion of the federal income tax adjustment attributable to policy acquisition expenses. Net premiums are credited as accumulation units as of the end of the valuation period in which received, as provided in the prospectus. NET TRANSFERS The policy owner has the opportunity to transfer funds between Investment Options within the Separate Account or the fixed account, which is an investment option in the Company's general account. OTHER RECEIPTS (PAYMENTS) Included in "other receipts (payments)" in the statements of changes in net assets are primarily contract benefits which have been re-deposited with the Company and distributions for payouts. USE OF ESTIMATES The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect amounts reported herein. Actual results could differ from these estimates. ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT Effective January 1, 2007, the Company adopted Financial Accounting Standards Board ("FASB") Interpretation ("FIN") No. 48, ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES -- AN INTERPRETATION OF FASB STATEMENT NO. 109 ("FIN 48"). FIN 48 clarifies the accounting for uncertainty in income tax recognized in a company's financial statements. FIN 48 requires companies to determine whether it is "more likely than not" that a tax position will be sustained upon examination by the appropriate taxing authorities before any part of the benefit can be recorded in the financial statements. It also provides guidance on the recognition, measurement, and classification of income tax uncertainties, along with any related interest and penalties. Previously recorded income tax benefits that no longer meet this standard are required to be charged to earnings in the period that such determination is made. The adoption of FIN 48 had no impact on the financial statements of the Separate Account. FUTURE ADOPTION OF NEW ACCOUNTING PRONOUNCEMENT In September 2006, the FASB issued Statement of Financial Accounting Standards No. 157, FAIR VALUE MEASUREMENTS ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value under GAAP and requires enhanced disclosures about fair value measurements. SFAS 157 does not require additional fair value measurements. The pronouncement is effective for fiscal years beginning after November 15, 2007. The guidance in SFAS 157 will be applied prospectively with certain exceptions. The Company believes the adoption of SFAS 157 will have no material impact on the financial statements of the Separate Account. 69 3. EXPENSES AND RELATED PARTY TRANSACTIONS The following annual Separate Account charge is an asset-based charge assessed through a daily reduction in unit values which is recorded as an expense in the accompanying statement of operations: MORTALITY AND EXPENSE RISK -- The mortality risk assumed by the Company is the risk that those insured may die sooner than anticipated and therefore, the Company will pay an aggregate amount of death benefits greater than anticipated. The expense risk assumed is where expenses incurred in issuing and administering the Policies will exceed the amounts realized from the administrative charges assessed against the Policies. The table below represents the range of effective annual rates for the respective charge for the year ended December 31, 2007: Mortality and Expense Risk 0.05% - 0.50%
The above referenced charge may not necessarily correspond to the costs associated with providing the services or benefits indicated by the designation of the charge or associated with a particular policy. Policy charges are assessed on a monthly basis. These charges generally include: cost of insurance ("COI") charges, administrative charges, a policy fee, and charges for benefits provided by rider. The COI charge is the primary charge under the policy for the death benefit provided by the Company. An administrative charge of $5 is assessed monthly. These charges are assessed through the redemption of units and are recorded as policy charges in the accompanying statements of changes in net assets. Certain investments in the various portfolios, series or funds of the MIST and MSF Trusts hold shares which are managed by Met Investors Advisory, LLC and MetLife Advisers, LLC, respectively. Both act in the capacity of investment advisor and are indirect affiliates of the Company. 70 4. STATEMENT OF INVESTMENTS
FOR THE YEAR ENDED AS OF DECEMBER 31, 2007 DECEMBER 31, 2007 ----------------------- ----------------------------- MARKET COST OF PROCEEDS SHARES VALUE ($) PURCHASES ($) FROM SALES ($) --------- ----------- ------------- -------------- AIM V.I. International Growth Investment Option (Series I) (Cost $52,573,578) 1,649,499 55,456,169 48,213,699 10,222,107 American Century VP Ultra Investment Option (Class I) (Cost $2,780,175) 296,973 3,608,218 96,057 1,517,353 American Funds Global Growth Investment Option (Class 2) (Cost $12,384,336) 604,836 15,120,888 8,303,610 16,212,697 American Funds Growth Investment Option (Class 2) (Cost $49,076,266) 1,091,093 72,797,737 22,755,436 31,694,111 American Funds Growth-Income Investment Option (Class 2) (Cost $62,362,977) 1,201,659 50,782,118 28,408,265 18,037,045 Credit Suisse Trust Emerging Markets Investment Option (Cost $0) (a) -- -- 519,497 4,377,601 Delaware VIP Small Cap Value Investment Option (Standard Class) (Cost $15,205,031) 478,559 13,710,702 9,203,008 3,748,927 Dreyfus Stock Index Investment Option (Initial Shares) (Cost $0) (a) -- -- 13,976,929 72,998,485 Dreyfus VIF Appreciation Investment Option (Initial Shares) (Cost $3,528,148) 90,616 4,065,047 2,839,534 25,763,886 Dreyfus VIF Developing Leaders Investment Option (Initial Shares) (Cost $2,551,178) 66,525 2,151,429 1,490,598 13,470,545 DWS VIT Small Cap Index Investment Option (Class A) (Cost $0) (a) -- -- 5,334,543 32,525,802 Fidelity VIP Asset Manager SM Investment Option (Initial Class) (Cost $0) (a) -- -- 649,605 4,296,675 Fidelity VIP Contrafund Investment Option (Initial Class) (Cost $21,212,150) 662,718 18,489,821 23,573,556 17,270,389 Fidelity VIP Contrafund Investment Option (Service Class 2) (Cost $48,294,691) 1,647,643 45,244,272 23,655,876 11,848,800 Fidelity VIP Growth & Income Investment Option (Service Class 2) (Cost $6,712,078) 459,082 7,694,219 782,981 6,980,483 Fidelity VIP Mid Cap Investment Option (Service Class 2) (Cost $59,931,387) 1,835,494 65,398,645 48,880,187 36,491,779 Fidelity VIP Overseas Investment Option (Service Class 2) (Cost $25,799,518) 1,241,985 31,198,652 13,015,567 3,468,569 FTVIP Templeton Global Asset Allocation Investment Option (Class 1) (Cost $0) (a) -- -- 1,470,081 5,950,558 FTVIPT Franklin Small-Mid Cap Growth Securities Investment Option (Class 2) (Cost $9,921,308) 496,513 11,375,124 3,984,634 6,659,221 FTVIPT Templeton Developing Markets Securities Investment Option (Class 2) (Cost $35,792,374) 2,940,799 47,052,771 19,683,361 14,713,245 FTVIPT Templeton Foreign Securities Investment Option (Class 2) (Cost $14,599,965) 910,297 18,433,510 7,538,471 19,298,294 FTVIPT Templeton Global Income Securities Investment Option (Class 1) (Cost $9,892,895) 605,418 10,292,107 20,867,685 15,038,877 Janus Aspen Global Technology Investment Option (Service Shares) (Cost $1,492,268) 314,132 1,627,203 3,162,529 3,495,394 Janus Aspen Worldwide Growth Investment Option (Service Shares) (Cost $1,974,937) 66,250 2,320,739 995,856 1,053,600 LMPVET Aggressive Growth Investment Option (Class I) (Cost $5,256,706) 357,134 5,824,853 2,079,136 2,893,373 LMPVET Appreciation Investment Option (Class I) (Cost $47,700) 1,631 42,990 50,087 2,380 LMPVET Equity Index Investment Option (Class I) (Cost $24,045,029) 775,127 26,013,263 11,933,317 13,064,147
71
FOR THE YEAR ENDED AS OF DECEMBER 31, 2007 DECEMBER 31, 2007 ----------------------- ----------------------------- MARKET COST OF PROCEEDS SHARES VALUE ($) PURCHASES ($) FROM SALES ($) --------- ----------- ------------- -------------- LMPVET Fundamental Value Investment Option (Class I) (Cost $4,981,384) 216,896 4,704,464 11,909,553 11,866,178 LMPVET International All Cap Opportunity Investment Option (Cost $1,399,590) 110,393 988,014 837,398 380,492 LMPVET Investors Investment Option (Class I) (Cost $6,269,410) 438,095 7,237,328 1,980,115 2,449,739 LMPVET Large Cap Growth Investment Option (Class I) (Cost $7,454,808) 501,490 8,324,738 2,948,921 2,406,823 LMPVET Social Awareness Stock Investment Option (Cost $2,084,352) 85,270 2,124,937 771,721 635,032 LMPVPI All Cap Investment Option (Class I) (Cost $0) (a) -- -- 1,240,709 11,800,714 LMPVET Capital and Income Investment Option (Class I) (Cost $1,936,607) (b) 134,017 1,663,153 2,896,340 966,053 LMPVIT Global High Yield Bond Investment Option (Class I) (Cost $16,641,224) 1,730,426 15,660,358 18,426,861 22,025,184 LMPVIT Government Investment Option (Class I) (Cost $721,275) 65,393 695,778 1,526,049 977,186 LMPVIT Strategic Bond Investment Option (Class I) (Cost $5,229,860) 501,267 4,977,586 2,509,162 2,062,306 LMPVPI Total Return Investment Option (Class I) (Cost $0) (a) -- -- 1,023,398 1,932,287 Lord Abbett Growth and Income Investment Option (Class VC) (Cost $0) (a) -- -- 1,131,643 6,079,175 Lord Abbett Mid-Cap Value Investment Option (Class VC) (Cost $0) (a) -- -- 2,050,048 19,312,072 MIST Batterymarch Mid-Cap Stock Investment Option (Class A) (Cost $6,322,413) 320,437 5,787,085 2,336,219 11,212,429 MIST BlackRock High Yield Investment Option (Class A) (Cost $19,062,660) (b) 2,276,182 18,755,742 23,900,327 4,789,606 MIST BlackRock Large-Cap Core Investment Option (Class E) (Cost $9,432,853) (b) 853,014 9,442,861 14,225,501 4,818,595 MIST BlackRock Large-Cap Core Investment Option (Class A) (Cost $0) (a) -- -- 311,898 1,143,284 MIST Harris Oakmark International Investment Option (Class A) (Cost $25,022,807) 1,369,155 23,645,314 20,506,258 6,462,267 MIST Janus Forty Investment Option (Class A) (Cost $13,635,836) 184,651 15,475,618 7,640,427 6,423,200 MIST Loomis Sayles Global Markets Investment Option (Class A) (Cost $9,027,894) (b) 745,019 9,893,850 23,337,948 13,906,723 MIST Lord Abbett Bond Debenture Investment Option (Class A) (Cost $1,955,175) 160,740 2,030,142 2,074,124 6,643,795 MIST Lord Abbett Growth and Income Investment Option (Class B) (Cost $14,377,821) 506,299 14,525,717 10,492,558 3,234,715 MIST Lord Abbett Mid-Cap Value Investment Option (Class B) (Cost $35,234,360) 1,615,939 31,478,495 32,327,670 6,434,893 MIST Met/AIM Capital Appreciation Investment Option (Class A) (Cost $2,139,957) 177,526 2,144,517 477,105 1,398,420 MIST Met/AIM Small Cap Growth Investment Option (Class A) (Cost $458,198) 30,815 457,906 1,702,985 1,543,626 MIST MFS Emerging Markets Equity Investment Option (Class A) (Cost $5,937,299) (b) 502,089 7,220,045 8,067,580 2,380,860 MIST MFS Research International Investment Option (Class B) (Cost $7,571,573) (b) 555,985 7,961,710 8,860,691 1,327,770
72
FOR THE YEAR ENDED AS OF DECEMBER 31, 2007 DECEMBER 31, 2007 ------------------------ ----------------------------- MARKET COST OF PROCEEDS SHARES VALUE ($) PURCHASES ($) FROM SALES ($) ---------- ----------- ------------- -------------- MIST Neuberger Berman Real Estate Investment Option (Class A) (Cost $43,789,497) 2,842,931 40,028,471 34,335,737 48,424,714 MIST PIMCO Inflation Protected Bond Investment Option (Class A) (Cost $29,863,667) (b) 2,925,935 32,068,243 53,076,238 23,194,259 MIST Pioneer Fund Investment Option (Class A) (Cost $50,873) 3,498 53,279 72,368 150,938 MIST Third Avenue Small Cap Value Investment Option (Class B) (Cost $28,066,740) (b) 1,662,879 26,073,946 54,641,274 26,019,387 MSF BlackRock Aggressive Growth Investment Option (Class D) (Cost $7,992,901) 324,557 9,301,797 2,179,440 2,025,366 MSF BlackRock Bond Income Investment Option (Class A) (Cost $9,816,406) 93,936 10,493,568 2,131,630 837,226 MSF BlackRock Diversified Investment Option (Class A) (Cost $3,757,722) (b) 209,554 3,809,699 4,558,289 814,047 MSF BlackRock Money Market Investment Option (Class A) (Cost $181,029,762) 1,810,297 181,029,762 162,869,283 99,756,433 MSF Capital Guardian U.S. Equity Investment Option (Class A) (Cost $2,440,546) 189,011 2,351,297 742,305 804,231 MSF FI Large Cap Investment Option (Class A) (Cost $2,371,955) 160,454 2,352,255 1,707,503 1,820,862 MSF FI Value Leaders Investment Option (Class D) (Cost $17,474,387) 86,920 17,017,124 6,700,676 6,560,864 MSF MetLife Aggressive Allocation Investment Option (Class B) (Cost $6,683,675) 539,861 6,807,647 8,021,196 2,625,961 MSF MetLife Conservative Allocation Investment Option (Class B) (Cost $1,995,221) 183,726 2,043,031 18,905,400 21,860,373 MSF MetLife Conservative to Moderate Allocation Investment Option (Class B) (Cost $7,779,923) 702,692 8,102,044 18,766,076 21,274,499 MSF MetLife Moderate Allocation Investment Option (Class B) (Cost $12,510,822) 1,070,460 12,802,702 31,510,465 21,214,111 MSF MetLife Moderate to Aggressive Allocation Investment Option (Class B) (Cost $ 1,838,247) 149,484 1,850,612 1,761,193 454,128 MSF MetLife Stock Index Investment Option (Class A) (Cost $77,441,112) (b) 2,078,646 76,909,909 83,614,210 6,231,146 MSF MFS Total Return Investment Option (Class F) (Cost $35,707,234) 244,797 37,564,166 7,209,987 14,829,777 MSF Oppenheimer Global Equity Investment Option (Class B) (Cost $1,032,488) 63,068 1,099,909 661,797 823,903 MSF Russell 2000 Index Investment Option (Class A) (Cost $30,642,587) (b) 2,021,715 28,667,922 34,865,372 4,050,705 MSF T. Rowe Price Large Cap Growth Investment Option (Class B) (Cost $2,842,469) 185,784 3,046,864 2,190,794 2,679,228 MSF Western Asset Management High Yield Bond Investment Option (Class A) (Cost $0) (a) -- -- 5,539,327 20,485,711 MSF Western Asset Management U.S. Government Investment Option (Class A) (Cost $22,805,444) 1,905,636 23,801,394 6,685,874 2,902,441 Morgan Stanley UIF Emerging Markets Equity Investment Option (Class I) (a) -- -- 702,752 1,986,841 PIMCO VIT Low Duration Investment Option (Cost $17,251,625) 1,710,067 17,613,496 15,386,129 31,276,840 PIMCO VIT Real Return Investment Option (Administrative Class) (Cost $0) (a) -- -- 4,668,078 53,894,597 PIMCO VIT Total Return Investment Option (Administrative Class) (Cost $136,804,510) 13,363,266 140,177,180 48,947,611 53,149,516
73
FOR THE YEAR ENDED AS OF DECEMBER 31, 2007 DECEMBER 31, 2007 ------------------------ ----------------------------- MARKET COST OF PROCEEDS SHARES VALUE ($) PURCHASES ($) FROM SALES ($) --------- ---------- ------------- -------------- Pioneer Mid Cap Value VCT Investment Option (Class II) (Cost $5,523,559) 257,239 4,920,982 5,328,239 6,163,455 Putnam VT Discovery Growth Investment Option (Class IB) (Cost $315,184) 55,456 329,409 175,422 122,365 Putnam VT International Equity Investment Option (Class IB) (Cost $0) (a) -- -- 2,292,802 8,781,623 Putnam VT Small Cap Value Investment Option (Class IB) (Cost $0) (a) -- -- 7,793,960 46,420,943 Royce Micro Cap Investment Option (Cost $6,703,868) 470,919 6,343,280 14,455,976 14,181,519 Royce Small Cap Investment Option (Cost $6,483,298) 611,902 6,094,542 3,681,834 2,780,012 Vanguard VIF Diversified Value Investment Option (Cost $18,047,588) 1,155,129 18,863,252 10,849,472 11,643,877 Vanguard VIF Equity Index Investment Option (Cost $24,648,042) 889,093 26,263,799 8,556,792 10,423,355 Vanguard VIF International Investment Option (Cost $834,457) 38,076 907,738 662,222 60,522 Vanguard VIF Mid-Cap Index Investment Option (Cost $15,736,280) 859,031 15,960,796 17,664,726 17,895,896 Vanguard VIF Short-Term Investment-Grade Investment Option (Cost $226,223) 21,144 227,718 228,143 4,052 Vanguard VIF Small Company Growth Investment Option (Cost $4,066,935) 221,035 4,011,778 27,587,161 24,627,076 The Merger Fund VL Investment Option (Cost $125,558) 10,722 106,792 372,824 413,691
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. 74 5. FINANCIAL HIGHLIGHTS The following table is a summary of unit values and units outstanding for the Policies, net investment income ratios, and expense ratios, excluding expenses for the underlying portfolio, series, or fund for each of the five years in the period ended December 31, 2007:
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- AIM V.I. International Growth 2007 31,576 1.753 - 1.760 55,455 0.67 0.10 - 0.25 4.02 - 14.53 Investment Option (Series I) 2006 10,023 1.527 - 1.535 15,371 1.89 0.15 - 0.45 16.64 - 27.96 2005 1,064 1.196 - 1.198 1,275 0.84 0.20 - 0.45 0.76 - 13.45 American Century VP Ultra 2007 3,035 1.189 3,608 -- 0.20 20.83 Investment Option (Class I) 2006 4,421 0.984 4,351 -- 0.20 (3.53) 2005 5,669 1.020 5,780 -- 0.20 2.00 2004 6,852 1.000 6,852 -- 0.20 10.50 2003 6,255 0.905 5,663 -- 0.20 24.66 American Funds Global Growth 2007 7,358 2.025 - 2.057 15,121 2.45 0.20 - 0.45 14.33 - 14.66 Investment Option (Class 2) 2006 11,867 1.772 - 1.794 21,279 0.84 0.20 - 0.45 19.89 - 20.25 2005 7,454 1.478 - 1.496 11,124 0.69 0.15 - 0.45 13.60 - 13.94 2004 6,003 1.301 - 1.313 7,871 0.40 0.15 - 0.45 10.99 - 13.21 2003 3,611 1.152 - 1.158 4,181 0.41 0.20 - 0.45 0.26 - 34.97 American Funds Growth 2007 44,052 1.627 - 1.661 72,797 0.72 0.10 - 0.45 11.90 - 12.23 Investment Option (Class 2) 2006 52,553 1.454 - 1.480 77,475 0.83 0.10 - 0.45 9.74 - 10.12 2005 43,428 1.325 - 1.344 58,186 0.77 0.10 - 0.45 (0.22) - 16.09 2004 29,768 1.146 - 1.156 34,379 0.24 0.15 - 0.45 12.02 - 12.35 2003 13,618 1.023 - 1.029 14,000 0.15 0.15 - 0.45 0.10 - 36.22 American Funds Growth-Income 2007 33,212 1.505 - 1.537 50,781 1.78 0.10 - 0.45 4.59 - 4.91 Investment Option (Class 2) 2006 28,115 1.439 - 1.465 41,046 1.52 0.10 - 0.45 14.66 - 15.08 2005 28,652 1.255 - 1.273 36,359 1.39 0.10 - 0.45 (0.31) - 5.66 2004 21,268 1.191 - 1.202 25,533 1.75 0.15 - 0.45 2.91 - 10.19 2003 6,149 1.084 - 1.089 6,695 1.49 0.20 - 0.45 31.87 - 32.16 Credit Suisse Trust Emerging 2007 -- 1.606 - 2.206 -- -- 0.20 - 0.45 5.13 - 5.24 Markets Investment Option (a) 2006 2,197 1.526 - 2.097 3,641 0.12 0.20 - 0.45 31.91 - 32.24 2005 21,058 1.154 - 1.586 24,544 0.67 0.20 - 0.45 27.40 - 27.65 2004 15,850 0.904 - 1.243 14,648 0.33 0.20 - 0.45 24.37 - 24.69 2003 7,545 0.725 - 0.997 5,683 -- 0.20 - 0.45 42.30 - 42.72 Delaware VIP Small Cap Value 2007 5,508 1.982 - 2.584 13,710 0.39 0.10 - 0.45 (12.96) - (6.78) Investment Option (Standard Class) 2006 3,804 2.650 - 2.772 10,533 0.24 0.20 - 0.45 15.67 - 15.93 2005 2,207 2.291 - 2.391 5,274 0.27 0.20 - 0.45 8.94 - 9.23 2004 35 2.103 - 2.189 76 -- 0.20 - 0.45 18.59 - 21.21 Dreyfus Stock Index Investment Option 2007 -- 1.715 - 1.741 -- 0.42 0.15 - 0.45 5.67 - 5.80 (Initial Shares) (a) 2006 33,827 1.624 - 1.646 55,610 1.75 0.15 - 0.45 12.51 - 15.23 2005 21,154 1.412 - 1.425 30,130 1.67 0.20 - 0.45 4.21 - 4.55 2004 16,586 1.355 - 1.363 22,612 2.01 0.20 - 0.45 10.16 - 10.37 2003 9,504 1.230 - 1.235 11,735 1.50 0.20 - 0.45 0.24 - 28.11 Dreyfus VIF Appreciation 2007 3,283 1.217 - 1.268 4,065 2.51 0.20 - 0.45 6.67 - 6.94 Investment Option (Initial Shares) 2006 22,045 1.138 - 1.187 26,028 0.36 0.20 - 0.45 15.96 - 16.24 2005 3,961 0.979 - 1.022 3,902 0.02 0.20 - 0.45 3.91 - 4.18 2004 6,687 0.940 - 0.981 6,302 1.73 0.20 - 0.45 4.63 - 4.91 2003 9,741 0.896 - 0.936 8,771 1.72 0.20 - 0.45 10.38 - 20.92
75
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- Dreyfus VIF Developing Leaders 2007 1,987 1.043 - 1.371 2,151 0.43 0.20 - 0.45 (11.49) - (11.23) Investment Option (Initial Shares) 2006 12,612 1.175 - 1.545 14,950 0.48 0.15 - 0.45 3.32 - 3.62 2005 20,962 1.134 - 1.493 24,883 -- 0.15 - 0.45 5.36 - 5.65 2004 19,453 1.074 - 1.414 21,633 0.20 0.15 - 0.45 10.77 - 11.21 2003 20,307 0.967 - 1.273 20,400 0.04 0.15 - 0.45 31.15 - 31.51 DWS VIT Small Cap Index 2007 -- 1.508 - 2.034 -- 0.87 0.15 - 0.45 5.37 - 5.51 Investment Option (Class A) (a) 2006 18,032 1.430 - 1.929 27,686 0.85 0.15 - 0.45 16.98 - 17.27 2005 25,978 1.220 - 1.646 32,820 0.72 0.15 - 0.45 3.77 - 4.10 2004 28,096 1.172 - 1.582 34,267 0.43 0.15 - 0.45 15.13 - 17.45 2003 18,430 0.998 - 1.347 18,941 0.83 0.20 - 0.45 45.85 - 46.12 Fidelity VIP Asset Manager SM 2007 -- 1.177 - 1.282 -- 3.01 0.20 - 0.45 5.07 - 5.18 Investment Option (Initial Class) (a) 2006 3,048 1.119 - 1.219 3,669 2.35 0.20 - 0.45 6.84 - 7.08 2005 2,417 1.045 - 1.139 2,704 2.96 0.20 - 0.45 3.59 - 3.88 2004 3,610 1.006 - 1.097 3,789 2.23 0.20 - 0.45 5.03 - 5.23 2003 2,600 0.956 - 1.043 2,660 2.92 0.20 - 0.45 2.25 - 17.73 Fidelity VIP Contrafund 2007 12,341 1.498 18,489 1.10 0.25 17.31 Investment Option (Initial Class) 2006 10,651 1.277 - 1.278 13,604 0.84 0.20 - 0.25 2.73 - 8.59 Fidelity VIP Contrafund 2007 26,163 1.602 - 1.916 45,244 0.76 0.15 - 0.45 16.76 - 17.11 Investment Option (Service Class 2) 2006 25,667 1.372 - 1.636 37,941 1.08 0.15 - 0.45 10.91 - 11.29 2005 15,004 1.237 - 1.470 18,810 0.11 0.15 - 0.45 16.15 - 16.48 2004 9,276 1.065 - 1.262 9,991 0.16 0.15 - 0.45 14.64 - 14.94 2003 5,190 0.929 - 1.098 5,010 0.24 0.15 - 0.45 0.21 - 27.97 Fidelity VIP Growth & Income 2007 6,032 1.275 - 1.277 7,694 1.42 0.15 - 0.20 11.55 - 11.72 Investment Option (Service Class 2) 2006 11,740 1.143 13,416 0.63 0.15 - 0.20 11.84 - 12.72 2005 9,431 1.014 9,567 -- 0.20 (1.17) Fidelity VIP Mid Cap Investment Option 2007 26,881 2.398 - 2.439 65,397 0.46 0.10 - 0.45 5.39 - 15.10 (Service Class 2) 2006 22,674 2.089 - 2.119 47,983 0.11 0.20 - 0.45 11.89 - 12.18 2005 12,010 1.867 - 1.889 22,673 -- 0.20 - 0.45 17.50 - 17.84 2004 6,111 1.589 - 1.603 9,798 -- 0.20 - 0.45 24.14 - 24.40 2003 3,166 1.280 - 1.289 4,081 0.26 0.20 - 0.45 (0.54) - 38.01 Fidelity VIP Overseas Investment Option 2007 17,231 1.793 - 1.813 31,198 2.91 0.15 - 0.45 16.50 - 16.89 (Service Class 2) 2006 12,909 1.539 - 1.551 20,006 0.62 0.15 - 0.45 17.21 - 17.59 2005 11,009 1.313 - 1.319 14,513 0.35 0.15 - 0.45 10.93 - 20.68 2004 3,341 1.111 - 1.112 3,714 -- 0.20 - 0.25 16.34 - 19.06 FTVIP Templeton Global Asset Allocation Investment Option 2007 -- 1.312 - 1.314 -- -- 0.20 - 0.25 6.23 - 6.31 (Class 1) (a) 2006 3,375 1.235 - 1.236 4,167 2.00 0.20 - 0.25 7.48 - 11.97 FTVIPT Franklin Small-Mid Cap Growth 2007 11,243 0.951 - 1.289 11,368 -- 0.10 - 0.45 10.84 - 11.12 Securities Investment Option (Class 2) 2006 14,001 0.858 - 1.160 13,388 -- 0.10 - 0.45 8.20 - 8.61 2005 24,072 0.793 - 1.068 20,350 -- 0.10 - 0.45 (0.19) - 4.68 2004 19,247 0.761 - 1.019 15,778 -- 0.15 - 0.45 11.09 - 11.37 2003 14,731 0.685 - 0.915 11,094 -- 0.15 - 0.45 36.45 - 37.03
76
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- FTVIPT Templeton Developing Markets 2007 12,114 3.837 - 3.891 47,052 2.09 0.15 - 0.45 28.20 - 28.59 Securities Investment Option (Class 2) 2006 12,009 2.993 - 3.026 36,284 1.19 0.15 - 0.45 27.52 - 27.90 2005 9,884 2.347 - 2.366 23,355 0.76 0.15 - 0.45 26.86 - 27.20 2004 1,316 1.850 - 1.860 2,445 2.38 0.15 - 0.45 18.70 - 24.45 2003 257 1.490 - 1.493 384 -- 0.20 - 0.45 1.43 - 28.15 FTVIPT Templeton Foreign Securities 2007 9,673 1.879 - 1.918 18,433 1.39 0.10 - 0.45 14.92 - 15.33 Investment Option (Class 2) 2006 16,747 1.635 - 1.663 27,756 1.31 0.10 - 0.45 20.93 - 21.39 2005 18,041 1.352 - 1.370 24,657 1.10 0.10 - 0.45 (0.15) - 10.06 2004 13,747 1.233 - 1.243 17,075 0.93 0.15 - 0.45 15.74 - 18.29 2003 1,240 1.045 - 1.050 1,301 1.61 0.20 - 0.45 1.16 - 28.36 FTVIPT Templeton Global Income 2007 7,255 1.407 - 1.420 10,292 2.71 0.20 - 0.45 10.79 - 11.04 Securities Investment Option (Class 1) 2006 3,353 1.270 - 1.279 4,285 2.75 0.20 - 0.45 12.59 - 12.89 2005 836 1.128 - 1.133 946 7.33 0.20 - 0.45 (3.08) - (2.67) 2004 125 1.169 146 -- 0.20 7.25 Janus Aspen Global Technology 2007 3,055 0.523 - 0.533 1,627 0.29 0.20 - 0.45 21.06 - 21.51 Investment Option (Service Shares) 2006 3,711 0.432 - 0.439 1,628 -- 0.20 - 0.45 7.37 - 7.60 2005 4,765 0.402 - 0.408 1,943 -- 0.20 - 0.45 11.05 - 11.51 2004 3,235 0.362 - 0.366 1,185 -- 0.20 - 0.45 0.00 - 0.27 2003 2,359 0.362 - 0.365 861 -- 0.20 - 0.45 0.55 - 46.00 Janus Aspen Worldwide Growth 2007 2,895 0.800 - 0.803 2,321 0.55 0.20 - 0.25 9.10 - 9.14 Investment Option (Service Shares) 2006 2,980 0.723 - 0.736 2,189 1.63 0.20 - 0.45 17.37 - 17.76 2005 2,727 0.616 - 0.868 1,703 1.27 0.15 - 0.45 5.12 - 5.47 2004 3,408 0.586 - 0.823 2,021 0.62 0.15 - 0.45 4.09 - 4.31 2003 9,305 0.563 - 0.789 6,100 0.83 0.15 - 0.45 8.68 - 33.33 LMPVET Aggressive Growth 2007 3,941 1.455 - 1.478 5,825 -- 0.20 - 0.45 1.04 - 1.30 Investment Option (Class I) 2006 4,487 1.440 - 1.459 6,545 -- 0.20 - 0.45 8.27 - 8.58 2005 4,055 1.330 - 1.344 5,448 -- 0.20 - 0.45 11.11 - 11.44 2004 1,825 1.197 - 1.206 2,201 -- 0.20 - 0.45 9.52 - 9.74 2003 1,053 1.093 - 1.099 1,157 -- 0.20 - 0.45 0.00 - 34.19 LMPVET Appreciation Investment Option (Class I) 2007 34 1.273 43 1.01 0.25 (2.60) LMPVET Equity Index Investment Option 2007 23,721 1.057 - 1.199 26,013 1.75 0.20 - 0.45 4.71 - 4.97 (Class I) 2006 26,356 1.007 - 1.215 27,463 0.80 0.15 - 0.45 14.90 - 15.28 2005 80,403 0.875 - 1.054 74,463 1.41 0.15 - 0.45 4.03 - 4.36 2004 91,860 0.839 - 1.010 80,455 1.74 0.15 - 0.45 10.05 - 10.39 2003 78,889 0.760 - 0.915 63,484 1.49 0.15 - 0.45 27.57 - 27.81 LMPVET Fundamental Value 2007 2,763 1.677 - 1.703 4,704 0.84 0.20 - 0.45 0.84 - 1.07 Investment. Option (Class I) 2006 2,932 1.663 - 1.685 4,939 1.58 0.20 - 0.45 16.29 - 16.53 2005 3,551 1.430 - 1.446 5,130 0.99 0.20 - 0.45 4.30 - 4.63 2004 3,388 1.371 - 1.382 4,681 0.66 0.20 - 0.45 7.70 - 7.97 2003 2,908 1.273 - 1.280 3,720 0.86 0.20 - 0.45 38.07 - 38.38 LMPVET International All Cap 2007 975 0.854 - 1.124 988 0.88 0.20 - 0.45 5.84 - 6.09 Opportunity Investment Option 2006 1,007 0.805 - 1.060 963 5.36 0.20 - 0.45 25.30 - 25.59 2005 427 0.641 - 0.844 349 0.59 0.20 - 0.45 11.20 - 11.49 2004 2,875 0.575 - 0.757 1,773 1.04 0.20 - 0.45 17.37 - 17.59 2003 1,505 0.489 - 0.644 934 0.99 0.20 - 0.45 1.42 - 27.34
77
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- LMPVET Investors Investment Option 2007 4,491 1.551 - 1.712 7,237 1.23 0.20 - 0.45 3.44 - 3.75 (Class I) 2006 4,952 1.318 - 1.652 7,669 0.71 0.15 - 0.45 17.72 - 18.10 2005 25,475 1.116 - 1.400 30,881 1.30 0.15 - 0.45 6.06 - 6.39 2004 24,028 1.049 - 1.318 27,970 1.61 0.15 - 0.45 9.86 - 10.19 2003 20,015 0.952 - 1.197 21,352 1.85 0.15 - 0.45 31.74 - 32.22 LMPVET Large Cap Growth 2007 7,946 0.936 - 1.141 8,325 0.04 0.20 - 0.45 4.86 - 5.06 Investment Option (Class I) 2006 7,481 0.891 - 1.086 7,378 0.14 0.20 - 0.45 4.08 - 4.45 2005 9,676 0.853 - 1.041 9,055 0.11 0.20 - 0.45 4.79 - 5.05 2004 12,356 0.812 - 0.992 10,955 0.42 0.20 - 0.45 (0.10) - 0.12 2003 6,011 0.811 - 0.991 5,001 0.03 0.20 - 0.45 46.94 - 47.25 LMPVET Social Awareness Stock 2007 2,020 1.052 - 1.098 2,125 1.40 0.20 - 0.25 10.69 - 10.74 Investment Option 2006 2,235 0.950 - 0.992 2,126 0.52 0.20 - 0.45 7.23 - 7.47 2005 2,249 0.884 - 0.924 1,988 0.75 0.20 - 0.45 3.87 - 4.17 2004 2,201 0.849 - 0.887 1,868 0.80 0.20 - 0.45 5.78 - 6.13 2003 1,615 0.800 - 0.837 1,293 0.88 0.20 - 0.45 0.00 - 28.62 LMPVPI All Cap Investment Option 2007 -- 1.602 - 1.915 -- 0.29 0.20 - 0.45 5.30 - 5.39 (Class I) (a) 2006 5,985 1.520 - 1.817 10,561 1.51 0.20 - 0.45 17.60 - 17.92 2005 5,928 1.289 - 1.542 7,682 0.96 0.20 - 0.45 3.54 - 3.78 2004 5,893 1.242 - 1.486 7,405 0.61 0.20 - 0.45 7.84 - 8.09 2003 4,890 1.149 - 1.375 5,797 0.34 0.20 - 0.45 38.34 - 38.77 LMPVET Capital and Income Investment Option (Class I) (b) 2007 1,111 1.494 - 1.511 1,663 1.23 0.20 - 0.25 1.00 - 1.01 LMPVIT Global High Yield Bond 2007 13,822 1.133 15,660 6.68 0.25 (0.35) Investment Option (Class I) 2006 17,593 1.137 - 1.138 19,996 5.93 0.20 - 0.25 6.95 - 7.47 LMPVIT Government Investment Option 2007 625 1.104 - 1.114 696 4.84 0.20 - 0.45 2.30 - 2.68 (Class I) 2006 140 1.089 152 2.83 0.20 3.91 - 4.00 2005 185 1.048 - 1.50 194 7.60 0.10 - 0.20 1.35 - 1.45 LMPVIT Strategic Bond Investment Option 2007 3,109 1.596 - 1.657 4,978 4.68 0.20 - 0.45 1.50 - 1.79 (Class I) 2006 2,971 1.568 - 1.628 4,679 4.17 0.20 - 0.45 4.56 - 4.85 2005 2,547 1.381 - 1.554 3,932 4.33 0.15 - 0.45 2.06 - 2.37 2004 3,279 1.349 - 1.521 4,896 4.99 0.15 - 0.45 6.14 - 6.47 2003 2,916 1.267 - 1.429 4,098 5.77 0.15 - 0.45 3.48 - 12.98 LMPVPI Total Return Investment Option 2007 -- 1.479 - 1.496 -- 1.32 0.20 - 0.25 3.31 - 3.35 (Class I) (a) 2006 619 1.428 - 1.448 890 2.31 0.20 - 0.45 12.00 - 12.32 2005 382 1.274 - 1.290 489 2.14 0.20 - 0.45 2.91 - 3.07 2004 343 1.236 - 1.252 425 1.83 0.20 - 0.45 8.21 - 8.61 2003 282 1.138 - 1.154 321 1.40 0.20 - 0.45 0.35 - 15.65 Lord Abbett Growth and Income 2007 -- 1.758 - 1.776 -- -- 0.20 - 0.45 4.33 - 4.41 Investment Option (Class VC) (a) 2006 2,772 1.685 - 1.701 4,712 1.18 0.20 - 0.45 16.69 - 17.07 2005 2,136 1.444 - 1.453 3,103 1.17 0.20 - 0.45 2.85 - 3.05 2004 1,082 1.404 - 1.410 1,525 1.07 0.20 - 0.45 12.14 - 12.44 2003 28 1.252 - 1.254 35 0.64 0.20 - 0.45 0.32 - 17.20
78
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- Lord Abbett Mid-Cap Value 2007 -- 2.084 - 2.105 -- -- 0.20 - 0.45 10.62 - 10.70 Investment Option (Class VC) (a) 2006 8,183 1.884 - 1.905 15,544 0.40 0.15 - 0.45 11.74 - 15.52 2005 9,127 1.686 - 1.698 15,480 0.56 0.20 - 0.45 7.73 - 8.02 2004 4,301 1.565 - 1.572 6,755 0.62 0.20 - 0.45 23.42 - 23.80 2003 25 1.268 - 1.269 31 0.52 0.25 - 0.45 0.24 - 8.84 MIST Batterymarch Mid-Cap Stock 2007 3,459 1.640 - 2.060 5,787 0.26 0.20 - 0.45 5.57 - 5.81 Investment Option (Class A) 2006 9,431 1.550 - 1.947 14,740 -- 0.20 - 0.45 (4.00) - (3.85) MIST BlackRock High Yield Investment Option (Class A) (b) 2007 10,497 1.689 - 1.855 18,756 -- 0.04 - 0.34 (1.94) - (1.69) MIST BlackRock Large - Cap Core Investment Option (Class E) (b) 2007 8,261 0.920 - 1.169 9,443 -- 0.20 - 0.45 0.70 - 0.88 MIST BlackRock Large-Cap Core 2007 -- 0.912 - 1.160 -- 0.77 0.20 - 0.45 5.25 - 5.36 Investment Option (Class A) (a) 2006 905 0.866 - 1.101 844 -- 0.20 - 0.45 6.69 - 6.91 MIST Harris Oakmark International 2007 17,976 1.217 - 1.519 23,645 0.62 0.09 - 0.44 (7.55) - (1.02) Investment Option (Class A) 2006 9,828 1.230 - 1.269 12,285 -- 0.16 - 0.41 11.00 - 11.31 MIST Janus Forty Investment Option 2007 16,612 0.823 - 1.344 15,475 0.15 0.20 - 0.45 29.89 - 30.23 (Class A) 2006 17,823 0.632 - 1.032 12,662 -- 0.20 - 0.45 3.25 - 3.44 MIST Loomis Sayles Global Markets Investment Option (Class A) (b) 2007 6,255 1.582 - 1.584 9,894 -- 0.20 - 0.25 20.55 - 20.58 MIST Lord Abbett Bond Debenture 2007 1,307 1.534 - 1.760 2,030 8.65 0.20 - 0.45 6.39 - 6.68 Investment Option (Class A) 2006 4,173 1.438 - 1.652 6,714 -- 0.20 - 0.45 5.58 - 5.76 MIST Lord Abbett Growth and Income 2007 10,590 1.350 - 1.374 14,526 0.64 0.15 - 0.45 3.29 - 3.62 Investment Option (Class B) 2006 5,631 1.307 - 1.326 7,463 -- 0.15 - 0.45 8.29 - 8.96 MIST Lord Abbett Mid-Cap Value 2007 28,967 1.082 - 1.088 31,478 0.31 0.10 - 0.45 (9.56) - 0.46 Investment Option (Class B) 2006 8,862 1.082 9,592 -- 0.15 - 0.20 1.41 - 15.35 MIST Met/AIM Capital Appreciation 2007 2,024 0.757 - 1.240 2,144 0.09 0.20 - 0.45 11.42 - 11.65 Investment Option (Class A) 2006 2,877 0.678 - 1.111 2,775 0.12 0.20 - 0.45 (0.45) - (0.27) MIST Met/AIM Small Cap Growth 2007 308 1.485 458 -- 0.20 11.24 Investment Option (Class A) 2006 184 1.335 245 -- 0.20 8.27 MIST MFS Emerging Markets Equity Investment Option (Class A) (b) 2007 3,321 2.030 - 2.788 7,220 -- 0.20 - 0.45 26.23 - 26.40 MIST MFS Research International Investment Option (Class B) (b) 2007 4,573 1.713 - 1.742 7,962 -- 0.20 - 0.45 5.29 - 5.51 MIST Neuberger Berman Real Estate 2007 13,852 2.353 - 3.134 40,028 1.21 0.10 - 0.45 (17.27) - (14.93) Investment Option (Class A) 2006 19,986 2.766 - 3.685 70,872 -- 0.15 - 0.45 22.64 - 22.88 MIST PIMCO Inflation Protected Bond Investment Option (Class A) (b) 2007 24,800 1.278 - 1.299 32,068 -- 0.10 - 0.45 7.12 - 7.36
79
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- MIST Pioneer Fund Investment Option 2007 48 1.114 53 0.61 0.25 4.80 (Class A) 2006 118 1.063 126 -- 0.25 11.66 MIST Third Avenue Small Cap Value Investment Option (Class B) (b) 2007 12,584 1.952 - 2.075 26,073 -- 0.10 - 0.45 (9.33) - (9.12) MSF BlackRock Aggressive Growth 2007 11,829 0.720 - 1.118 9,302 -- 0.20 - 0.45 19.96 - 20.20 Investment Option (Class D) 2006 11,630 0.599 - 0.931 7,615 -- 0.20 - 0.45 (1.71) - (1.48) MSF BlackRock Bond Income 2007 7,808 1.323 - 1.345 10,493 3.21 0.20 - 0.45 5.84 - 6.09 Investment Option (Class A) 2006 7,024 1.250 - 1.268 8,901 -- 0.20 - 0.45 4.69 - 4.88 MSF BlackRock Diversified Investment Option (Class A) (b) 2007 2,962 1.192 - 1.298 3,810 -- 0.20 - 0.45 1.11 - 1.27 MSF BlackRock Money Market 2007 143,562 1.176 - 1.284 181,027 4.93 0.15 - 0.45 4.56 - 4.91 Investment Option (Class A) 2006 97,923 1.121 - 1.225 117,915 3.27 0.15 - 0.45 2.09 - 3.20 MSF Capital Guardian U.S. Equity 2007 3,758 0.607 - 0.834 2,351 0.53 0.20 - 0.45 (0.48) - (0.33) Investment Option (Class A) 2006 4,169 0.609 - 0.837 2,576 -- 0.20 - 0.45 3.64 - 3.75 MSF FI Large Cap Investment Option 2007 2,730 0.788 - 1.022 2,352 0.16 0.20 - 0.45 3.50 - 3.68 (Class A) 2006 3,110 0.760 - 1.042 2,532 -- 0.15 - 0.45 2.21 - 2.36 MSF FI Value Leaders Investment Option 2007 11,271 1.449 - 1.565 17,017 0.78 0.20 - 0.45 3.64 - 3.87 (Class D) 2006 12,363 1.395 - 1.507 17,813 -- 0.20 - 0.45 3.34 - 3.56 MSF MetLife Aggressive Allocation 2007 5,147 1.320 - 1.324 6,808 0.06 0.15 - 0.25 3.04 - 3.12 Investment Option (Class B) 2006 1,050 1.281 - 1.284 1,347 -- 0.15 - 0.25 6.92 - 13.83 MSF MetLife Conservative Allocation 2007 1,760 1.161 - 1.164 2,043 -- 0.15 - 0.25 5.35 - 5.43 Investment Option (Class B) 2006 4,478 1.102 - 1.104 4,942 -- 0.15 - 0.25 2.23 - 5.44 MSF MetLife Conservative to Moderate 2007 6,733 1.201 - 1.204 8,102 -- 0.15 - 0.25 4.52 - 4.60 Allocation Investment Option (Class B) 2006 9,068 1.149 - 1.151 10,432 -- 0.15 - 0.25 5.60 - 7.57 MSF MetLife Moderate Allocation 2007 10,244 1.247 - 1.250 12,803 0.01 0.15 - 0.25 4.09 - 4.17 Investment Option (Class B) 2006 1,966 1.198 - 1.200 2,357 -- 0.15 - 0.25 5.09 - 9.69 MSF MetLife Moderate to Aggressive 2007 1,458 1.269 - 1.271 1,851 0.03 0.20 - 0.25 3.59 - 3.67 Allocation Investment Option (Class B) 2006 426 1.225 - 1.226 522 -- 0.20 - 0.25 4.26 - 11.15 MSF MetLife Stock Index Investment Option (Class A) (b) 2007 44,521 1.702 - 1.730 76,909 -- 0.13 - 0.43 (0.82) - (0.63) MSF MFS Total Return Investment Option 2007 21,883 1.713 - 1.741 37,564 1.86 0.20 - 0.45 3.76 - 3.94 (Class F) 2006 27,517 1.385 - 1.676 45,429 -- 0.15 - 0.45 7.70 - 7.95 MSF Oppenheimer Global Equity 2007 736 1.495 1,100 0.92 0.20 6.10 Investment Option (Class B) 2006 861 1.407 - 1.409 1,214 -- 0.19 - 0.24 6.42 - 6.43 MSF Russell 2000 Index Investment Option (Class A) (b) 2007 18,889 1.402 - 1.890 28,667 -- 0.15 - 0.45 (7.19) - (6.98)
80
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- MSF T. Rowe Price Large Cap Growth 2007 2,807 1.068 - 1.086 3,047 0.13 0.20 - 0.45 8.65 - 8.93 Investment Option (Class B) 2006 3,400 0.983 - 0.997 3,388 -- 0.20 - 0.45 8.02 - 8.13 MSF Western Asset Management High Yield Bond Investment Option 2007 -- 1.718 - 1.888 -- 11.37 0.15 - 0.45 4.20 - 4.31 (Class A) (a) 2006 9,348 1.647 - 1.811 16,326 -- 0.15 - 0.45 7.08 - 7.30 MSF Western Asset Management U.S. 2007 15,127 1.417 - 1.597 23,801 2.48 0.05 - 0.30 4.04 - 4.81 Government Investment Option (Class A) 2006 12,848 1.510 - 1.532 19,580 -- 0.05 - 0.30 4.28 - 4.46 Morgan Stanley UIF Emerging Markets 2007 -- 2.016 -- -- 0.20 7.98 Equity Investment Option (Class I) (a) 2006 615 1.865 - 1.867 1,148 1.69 0.20 - 0.25 36.63 - 36.88 2005 5 1.364 7 -- 0.20 6.07 PIMCO VIT Low Duration 2007 15,490 1.126 - 1.139 17,613 4.76 0.15 - 0.45 6.83 - 7.25 Investment Option 2006 31,275 1.054 - 1.062 33,160 4.31 0.15 - 0.45 2.12 - 3.82 2005 6,919 1.018 - 1.022 7,073 2.90 0.20 - 0.45 0.79 - 0.89 2004 2,317 1.014 2,350 0.52 0.20 0.40 PIMCO VIT Real Return Investment Option 2007 -- 1.193 - 1.210 -- 1.55 0.10 - 0.45 2.40 - 2.56 (Administrative Class) (a) 2006 41,440 1.165 - 1.180 48,710 4.29 0.10 - 0.45 0.26 - 0.60 2005 28,316 1.162 - 1.173 33,133 2.80 0.10 - 0.45 (0.26) - 1.92 2004 18,765 1.143 - 1.149 21,547 1.02 0.15 - 0.45 2.50 - 8.71 2003 232 1.054 - 1.056 245 0.29 0.20 - 0.45 0.00 - 6.56 PIMCO VIT Total Return Investment Option 2007 96,209 1.437 - 1.461 140,175 4.80 0.10 - 0.45 8.29 - 8.61 (Administrative Class) 2006 104,174 1.327 - 1.346 139,901 4.41 0.10 - 0.45 3.35 - 3.73 2005 99,384 1.284 - 1.299 128,880 3.41 0.10 - 0.45 (0.31) - 2.31 2004 100,032 1.256 - 1.270 126,939 1.90 0.15 - 0.45 4.48 - 4.75 2003 62,072 1.199 - 1.214 75,254 2.78 0.15 - 0.45 4.51 - 4.90 Pioneer Mid Cap Value VCT 2007 2,793 1.738 - 1.764 4,921 0.75 0.20 - 0.45 4.83 - 5.13 Investment Option (Class II) 2006 3,764 1.658 - 1.682 6,309 -- 0.15 - 0.45 11.80 - 12.13 2005 8,112 1.483 - 1.500 12,152 0.23 0.15 - 0.45 7.15 - 7.45 2004 4,014 1.384 - 1.396 5,595 0.26 0.15 - 0.45 14.43 - 21.53 2003 944 1.142 - 1.147 1,083 0.25 0.20 - 0.45 0.09 - 32.60 Putnam VT Discovery Growth 2007 307 1.056 - 1.074 329 -- 0.20 - 0.45 9.77 - 10.04 Investment Option (Class IB) 2006 282 0.962 - 0.976 275 -- 0.20 - 0.45 10.57 - 10.91 2005 425 0.870 - 0.880 374 -- 0.20 - 0.45 6.75 - 7.06 2004 502 0.815 - 0.822 412 -- 0.20 - 0.45 7.10 - 7.32 2003 447 0.761 - 0.766 342 -- 0.20 - 0.45 (0.26) - 31.84 Putnam VT International Equity 2007 -- 1.627 - 1.651 -- 2.93 0.20 - 0.45 8.68 - 8.76 Investment Option (Class IB) (a) 2006 4,629 1.497 - 1.518 7,026 1.34 0.20 - 0.45 27.19 - 27.46 2005 19,833 1.177 - 1.191 23,626 1.33 0.20 - 0.45 11.67 - 11.96 2004 13,701 1.054 - 1.064 14,576 1.43 0.20 - 0.45 15.70 - 16.03 2003 15,130 0.911 - 0.917 13,878 0.57 0.20 - 0.45 1.66 - 28.25 Putnam VT Small Cap Value 2007 -- 2.148 - 2.285 -- 0.55 0.10 - 0.45 7.19 - 7.29 Investment Option (Class IB) (a) 2006 19,153 2.002 - 2.130 40,403 0.33 0.10 - 0.45 16.73 - 17.21 2005 19,820 1.704 - 1.820 35,784 0.17 0.10 - 0.45 (0.23) - 6.87 2004 17,673 1.595 - 1.703 29,863 0.33 0.15 - 0.45 15.25 - 25.96 2003 10,280 1.343 - 1.352 13,895 0.27 0.20 - 0.45 48.89 - 49.28
81
AS OF DECEMBER 31 FOR THE YEAR ENDED DECEMBER 31 --------------------------------- ------------------------------------------------ UNIT VALUE(1) INVESTMENT(2) EXPENSE RATIO(3) TOTAL RETURN(4) UNITS LOWEST TO NET ASSETS INCOME LOWEST TO LOWEST TO (000s) HIGHEST ($) ($000s) RATIO (%) HIGHEST (%) HIGHEST (%) ------- -------------- ---------- ------------- ---------------- ----------------- Royce Micro Cap Investment Option 2007 4,128 1.535 - 1.537 6,343 0.72 0.15 - 0.20 3.78 - 3.79 2006 3,688 1.479 - 1.481 5,460 0.28 0.15 - 0.20 14.10 - 20.83 2005 -- 1.224 -- -- 0.20 10.77 Royce Small Cap Investment Option 2007 4,791 1.270 - 1.272 6,094 0.05 0.20 - 0.25 (2.38) - (2.30) 2006 4,408 1.301 - 1.302 5,741 0.09 0.20 - 0.25 1.80 - 15.32 2005 266 1.129 301 -- 0.20 0.27 Vanguard VIF Diversified Value 2007 10,524 1.777 - 1.793 18,863 1.87 0.25 - 0.45 3.43 - 3.70 Investment Option 2006 11,262 1.718 - 1.732 19,472 0.02 0.20 - 0.45 11.67 - 18.32 2005 18 1.452 26 -- 0.45 (1.22) Vanguard VIF Equity Index 2007 17,279 1.507 - 1.520 26,263 1.56 0.25 - 0.45 4.87 - 5.12 Investment Option 2006 19,304 1.437 - 1.449 27,917 0.01 0.20 - 0.45 9.77 - 15.24 2005 171 1.247 213 -- 0.45 1.63 Vanguard VIF International 2007 542 1.675 908 1.27 0.25 17.13 Investment Option 2006 166 1.430 238 -- 0.25 19.07 Vanguard VIF Mid-Cap Index 2007 11,874 1.344 15,960 1.32 0.25 5.83 Investment Option 2006 12,978 1.270 - 1.271 16,477 -- 0.20 - 0.25 3.84 - 9.39 Vanguard VIF Short-Term 2007 198 1.148 228 0.89 0.45 5.51 Investment-Grade Investment Option 2006 2 1.088 2 2.08 0.45 4.41 2005 3 1.042 4 -- 0.45 0.48 Vanguard VIF Small Company Growth 2007 2,713 1.479 - 1.482 4,012 0.32 0.20 - 0.25 3.50 - 3.56 Investment Option 2006 991 1.429 - 1.431 1,417 -- 0.20 - 0.25 (1.78) - 3.85 The Merger Fund VL Investment Option 2007 87 1.222 107 -- 0.20 1.83 2006 138 1.200 165 -- 0.20 8.70
(1) The Company sells a number of variable life products which have unique combinations of features and fees that are charged against the policy owner's account balance. Differences in the fee structures result in a variety of unit values, expense ratios, and total returns. (2) These amounts represent the dividends, excluding distributions of capital gains, received by the Investment Option from the underlying portfolio, series, or fund, net of management fees assessed by the fund manager, divided by the average net assets. These ratios exclude those expenses, such as mortality and expense charges, that are assessed against policy owner accounts either through reductions in the unit values or the redemption of units. The investment income ratio is calculated for each period indicated or from the effective date through the end of the reporting period. The recognition of investment income by the Investment Option is affected by the timing of the declaration of dividends by the underlying portfolio, series, or fund in which the Investment Option invests. (3) These amounts represent the annualized policy expenses of the Separate Account, consisting primarily of mortality and expense risk charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to policy owner accounts through the redemption of units and expenses of the underlying portfolio, series, or fund have been excluded. (4) These amounts represent the total return for the period indicated, including changes in the value of the underlying portfolio, series, or fund, and expenses assessed through the reduction of unit values. These ratios do not include any expenses assessed through the redemption of units. The total return is calculated for each period indicated or from the effective date through the end of the reporting period. As the total return is presented as a range of minimum to maximum values, based on the product grouping representing the minimum and maximum expense ratio amounts, some individual policy total returns are not within the ranges presented. (a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. 82 This page is intentionally left blank. 6. SCHEDULES OF ACCUMULATION UNITS FOR THE YEARS ENDED DECEMBER 31, 2007 AND 2006
AIM V.I. INTERNATIONAL GROWTH AMERICAN CENTURY VP ULTRA AMERICAN FUNDS GLOBAL GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERIES I) (CLASS I) (CLASS 2) ----------------------------- ------------------------- ---------------------------- 2007 2006 2007 2006 2007 2006 ---------- ---------- ---------- ----------- ---------- ---------- Units beginning of year 10,023,431 1,063,811 4,421,032 5,669,118 11,866,818 7,454,459 Units issued and transferred from other funding options 27,945,724 10,002,278 90,294 256,143 4,110,165 6,614,662 Units redeemed and transferred to other funding options (6,393,378) (1,042,658) (1,475,969) (1,504,229) (8,618,514) (2,202,303) ---------- ---------- ---------- ---------- ---------- ---------- Units end of year 31,575,777 10,023,431 3,035,357 4,421,032 7,358,469 11,866,818 ========== ========== ========== ========== ========== ==========
DELAWARE VIP SMALL CAP VALUE DREYFUS STOCK INDEX DREYFUS VIF APPRECIATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (STANDARD CLASS) (INITIAL SHARES) (INITIAL SHARES) ---------------------------- ------------------------ ------------------------ 2007 2006 2007 (a) 2006 2007 2006 ---------- --------- ----------- ----------- ----------- ----------- Units beginning of year 3,803,732 2,206,940 33,827,335 21,153,835 22,045,488 3,961,249 Units issued and transferred from other funding options 3,171,080 2,462,639 9,172,769 28,423,068 2,416,275 42,693,564 Units redeemed and transferred to other funding options (1,467,147) (865,847) (43,000,104) (15,749,568) (21,179,007) (24,609,325) ---------- --------- ----------- ----------- ----------- ----------- Units end of year 5,507,665 3,803,732 -- 33,827,335 3,282,756 22,045,488 ========== ========= =========== =========== =========== ===========
FIDELITY VIP CONTRAFUND FIDELITY VIP CONTRAFUND FIDELITY VIP GROWTH & INCOME INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (INITIAL CLASS) (SERVICE CLASS 2) (SERVICE CLASS 2) ----------------------- ----------------------- ---------------------------- 2007 2006 2007 2006 2007 2006 ---------- ----------- ---------- ----------- ------- ------------- Units beginning of year 10,651,181 -- 25,666,834 15,003,501 11,740,284 9,431,000 Units issued and transferred from other funding options 7,697,099 22,077,142 10,142,799 17,249,353 239,781 3,621,831 Units redeemed and transferred to other funding options (6,006,793) (11,425,961) (9,646,894) (6,586,020) (5,947,678) (1,312,547) ---------- ----------- ---------- ---------- ---------- ---------- Units end of year 12,341,487 10,651,181 26,162,739 25,666,834 6,032,387 11,740,284 ========== =========== ========== ========== ========== ==========
FTVIPT FRANKLIN SMALL-MID CAP FTVIPT TEMPLETON DEVELOPING FTVIPT TEMPLETON GROWTH SECURITIES MARKETS SECURITIES FOREIGN SECURITIES INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 2) (CLASS 2) (CLASS 2) ----------------------- --------------------------- ----------------------- 2007 2006 2007 2006 2007 2006 ---------- ----------- ---------- ---------- ----------- ---------- Units beginning of year 14,001,194 24,072,492 12,009,404 9,883,511 16,746,659 18,040,869 Units issued and transferred from other funding options 3,326,249 7,232,467 5,539,424 6,976,336 4,738,809 7,111,197 Units redeemed and transferred to other funding options (6,084,288) (17,303,765) (5,434,366) (4,850,443) (11,812,798) (8,405,407) ---------- ----------- ---------- ---------- ----------- ---------- Units end of year 11,243,155 14,001,194 12,114,462 12,009,404 9,672,670 16,746,659 ========== =========== ========== ========== =========== ==========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. 84
AMERICAN FUNDS GROWTH AMERICAN FUNDS GROWTH-INCOME CREDIT SUISSE TRUST EMERGING INVESTMENT OPTION INVESTMENT OPTION MARKETS (CLASS 2) (CLASS 2) INVESTMENT OPTION ------------------------ ---------------------------- ---------------------------- 2007 2006 2007 2006 2007 (a) 2006 ----------- ----------- ----------- ----------- ---------- ----------- Units beginning of year 52,552,658 43,428,155 28,115,420 28,651,542 2,196,904 21,057,883 Units issued and transferred from other funding options 13,108,230 33,592,016 18,012,203 27,006,920 331,379 14,124,052 Units redeemed and transferred to other funding options (21,608,407) (24,467,513) (12,915,748) (27,543,042) (2,528,283) (32,985,031) ----------- ----------- ----------- ----------- ---------- ----------- Units end of year 44,052,481 52,552,658 33,211,875 28,115,420 -- 2,196,904 =========== =========== =========== =========== ========== ===========
DREYFUS VIF DEVELOPING LEADERS DWS VIT SMALL CAP INDEX FIDELITY VIP ASSET MANAGER SM INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (INITIAL SHARES) (CLASS A) (INITIAL CLASS) ------------------------------ ------------------------ ----------------------------- 2007 2006 2007 (a) 2006 2007 (a) 2006 ----------- ----------- ----------- ----------- ---------- --------- Units beginning of year 12,612,359 20,962,247 18,031,913 25,978,028 3,048,299 2,417,203 Units issued and transferred from other funding options 694,396 8,934,568 2,412,988 15,053,943 361,914 1,628,474 Units redeemed and transferred to other funding options (11,319,771) (17,284,456) (20,444,901) (23,000,058) (3,410,213) (997,378) ----------- ----------- ----------- ----------- ---------- --------- Units end of year 1,986,984 12,612,359 -- 18,031,913 -- 3,048,299 =========== =========== =========== =========== ========== =========
FTVIP TEMPLETON GLOBAL FIDELITY VIP MID CAP FIDELITY VIP OVERSEAS ASSET ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (SERVICE CLASS 2) (SERVICE CLASS 2) (CLASS 1) ------------------------ ---------------------- ---------------------- 2007 2006 2007 2006 2007 (a) 2006 ----------- ----------- ---------- ---------- ---------- ---------- Units beginning of year 22,673,521 12,009,948 12,909,259 11,009,148 3,374,783 -- Units issued and transferred from other funding options 17,279,834 32,921,033 6,811,960 6,453,610 1,212,289 3,868,206 Units redeemed and transferred to other funding options (13,072,396) (22,257,460) (2,490,334) (4,553,499) (4,587,072) (493,423) ----------- ----------- ---------- ---------- ---------- --------- Units end of year 26,880,959 22,673,521 17,230,885 12,909,259 -- 3,374,783 =========== =========== ========== ========== ========== =========
FTVIPT TEMPLETON GLOBAL INCOME SECURITIES JANUS ASPEN GLOBAL TECHNOLOGY JANUS ASPEN WORLDWIDE GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS 1) (SERVICE SHARES) (SERVICE SHARES) ----------------------- ----------------------------- ---------------------------- 2007 2006 2007 2006 2007 2006 ---------- ---------- ---------- ---------- ---------- ---------- Units beginning of year 3,352,892 835,723 3,710,951 4,764,842 2,979,742 2,727,102 Units issued and transferred from other funding options 6,134,758 3,788,001 6,874,392 4,169,997 1,400,131 1,664,018 Units redeemed and transferred to other funding options (2,232,322) (1,270,832) (7,530,839) (5,223,888) (1,485,199) (1,411,378) ---------- ---------- ---------- ---------- ---------- ---------- Units end of year 7,255,328 3,352,892 3,054,504 3,710,951 2,894,674 2,979,742 ========== ========== ========== ========== ========== ==========
85
LMPVET AGGRESSIVE GROWTH LMPVET APPRECIATION LMPVET EQUITY INDEX INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS I) ------------------------ ------------------- ------------------------- 2007 2006 2007 2006 2007 2006 ---------- ---------- ------ ---- ----------- ----------- Units beginning of year 4,486,576 4,054,819 -- -- 26,356,275 80,402,534 Units issued and transferred from other funding options 1,724,036 3,655,595 35,569 -- 8,131,536 32,722,981 Units redeemed and transferred to other funding options (2,270,026) (3,223,838) (1,806) -- (10,766,635) (86,769,240) ---------- ---------- ------ --- ----------- ----------- Units end of year 3,940,586 4,486,576 33,763 -- 23,721,176 26,356,275 ========== ========== ====== === =========== ===========
LMPVET LARGE CAP GROWTH LMPVPI ALL CAP INVESTMENT OPTION LMPVET SOCIAL AWARENESS STOCK INVESTMENT OPTION (CLASS I) INVESTMENT OPTION (CLASS I) ----------------------- ----------------------------- ----------------------- 2007 2006 2007 2006 2007 (a) 2006 ---------- ---------- --------- --------- ---------- ----------- Units beginning of year 7,480,827 9,675,698 2,235,404 2,249,007 5,984,935 5,927,589 Units issued and transferred from other funding options 3,411,580 5,218,321 442,461 479,472 474,386 10,585,930 Units redeemed and transferred to other funding options (2,946,787) (7,413,192) (658,298) (493,075) (6,459,321) (10,528,584) ---------- ---------- --------- --------- ---------- ----------- Units end of year 7,945,620 7,480,827 2,019,567 2,235,404 -- 5,984,935 ========== ========== ========= ========= ========== ===========
LMPVIT STRATEGIC BOND LMPVPI TOTAL RETURN LORD ABBETT GROWTH AND INCOME INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS VC) ----------------------- --------------------- ----------------------------- 2007 2006 2007 (a) 2006 2007 (a) 2006 ---------- ---------- ---------- -------- ---------- ---------- Units beginning of year 2,971,179 2,547,493 618,994 381,759 2,771,537 2,135,507 Units issued and transferred from other funding options 1,448,355 3,037,048 703,249 739,530 755,727 2,141,587 Units redeemed and transferred to other funding options (1,310,789) (2,613,362) (1,322,243) (502,295) (3,527,264) (1,505,557) ---------- ---------- ---------- -------- ---------- ---------- Units end of year 3,108,745 2,971,179 -- 618,994 -- 2,771,537 ========== ========== ========== ======== ========== ==========
MIST BLACKROCK MIST BLACKROCK LARGE-CAP CORE LARGE-CAP CORE MIST HARRIS OAKMARK INVESTMENT OPTION INVESTMENT OPTION INTERNATIONAL INVESTMENT OPTION (CLASS E) (CLASS A) (CLASS A) ----------------- ---------------------- ------------------------------- 2007 (b) 2006 2007 (a) 2006 2007 2006 ---------- ---- ---------- --------- ---------- ---------- Units beginning of year -- -- 904,781 -- 9,827,544 -- Units issued and transferred from other funding options 12,368,822 -- 236,900 1,353,772 13,713,613 16,387,655 Units redeemed and transferred to other funding options (4,108,227) -- (1,141,681) (448,991) (5,565,466) (6,560,111) ---------- --- ---------- --------- ---------- ---------- Units end of year 8,260,595 -- -- 904,781 17,975,691 9,827,544 ========== === ========== ========= ========== ==========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. 86
LMPVET FUNDAMENTAL VALUE LMPVET INTERNATIONAL LMPVET INVESTORS INVESTMENT OPTION ALL CAP OPPORTUNITY INVESTMENT OPTION (CLASS I) INVESTMENT OPTION (CLASS I) ------------------------ --------------------- ------------------------ 2007 2006 2007 2006 2007 2006 ---------- ---------- --------- --------- ---------- ----------- Units beginning of year 2,932,147 3,550,693 1,007,220 427,269 4,952,272 25,474,639 Units issued and transferred from other funding options 6,722,603 871,428 377,208 896,355 967,552 6,972,099 Units redeemed and transferred to other funding options (6,891,412) (1,489,974) (409,852) (316,404) (1,428,536) (27,494,466) ---------- ---------- --------- --------- ---------- ----------- Units end of year 2,763,338 2,932,147 974,576 1,007,220 4,491,288 4,952,272 ========== ========== ========= ========= ========== ===========
LMPVET CAPITAL AND INCOME LMPVIT GLOBAL HIGH YIELD BOND LMPVIT GOVERNMENT INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS I) (CLASS I) (CLASS I) ------------------------- ----------------------------- -------------------- 2007 (b) 2006 2007 2006 2007 2006 --------- ---- ----------- ----------- --------- -------- Units beginning of year -- -- 17,593,279 -- 139,645 185,366 Units issued and transferred from other funding options 1,794,030 -- 9,477,534 37,830,796 1,372,296 330,594 Units redeemed and transferred to other funding options (682,815) -- (13,248,707) (20,237,517) (887,019) (376,315) --------- --- ----------- ----------- --------- -------- Units end of year 1,111,215 -- 13,822,106 17,593,279 624,922 139,645 ========= === =========== =========== ========= ========
MIST BATTERYMARCH LORD ABBETT MID-CAP VALUE MID-CAP STOCK MIST BLACKROCK HIGH YIELD INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS VC) (CLASS A) (CLASS A) ------------------------- ------------------------ ------------------------- 2007 (a) 2006 2007 2006 2007 (b) 2006 ---------- ---------- ---------- ----------- ---------- ---- Units beginning of year 8,183,226 9,126,608 9,431,096 -- -- -- Units issued and transferred from other funding options 1,131,395 7,267,810 1,005,090 24,942,292 13,684,395 -- Units redeemed and transferred to other funding options (9,314,621) (8,211,192) (6,977,521) (15,511,196) (3,187,171) -- ---------- ---------- ---------- ----------- ---------- --- Units end of year -- 8,183,226 3,458,665 9,431,096 10,497,224 -- ========== ========== ========== =========== ========== ===
MIST LOOMIS SAYLES MIST LORD ABBETT MIST JANUS FORTY GLOBAL MARKETS BOND DEBENTURE INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) ------------------------ ------------------ ----------------------- 2007 2006 2007 (b) 2006 2007 2006 ---------- ----------- ---------- ---- ---------- ---------- Units beginning of year 17,823,011 -- -- -- 4,172,978 -- Units issued and transferred from other funding options 8,615,178 43,070,983 7,552,179 -- 1,118,262 9,175,755 Units redeemed and transferred to other funding options (9,826,597) (25,247,972) (1,296,940) -- (3,984,192) (5,002,777) ---------- ----------- ---------- --- ---------- ---------- Units end of year 16,611,592 17,823,011 6,255,239 -- 1,307,048 4,172,978 ========== =========== ========== === ========== ==========
87
MIST LORD ABBETT MIST LORD ABBETT MIST MET/AIM GROWTH AND INCOME MID-CAP VALUE CAPITAL APPRECIATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS B) (CLASS A) ---------------------- ---------------------- ----------------------- 2007 2006 2007 2006 2007 2006 ---------- ---------- ---------- ---------- ---------- ----------- Units beginning of year 5,631,229 -- 8,861,872 -- 2,876,941 -- Units issued and transferred from other funding options 7,743,579 6,977,729 26,154,038 10,451,977 724,911 23,083,066 Units redeemed and transferred to other funding options (2,784,825) (1,346,500) (6,049,124) (1,590,105) (1,577,875) (20,206,125) ---------- ---------- ---------- ---------- ---------- ----------- Units end of year 10,589,983 5,631,229 28,966,786 8,861,872 2,023,977 2,876,941 ========== ========== ========== ========== ========== ===========
MIST NEUBERGER MIST PIMCO BERMAN REAL ESTATE INFLATION PROTECTED BOND MIST PIONEER FUND INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) ------------------------ ------------------------ ----------------- 2007 2006 2007 (b) 2006 2007 2006 ----------- ----------- ----------- ---- -------- ------- Units beginning of year 19,986,349 -- -- -- 118,220 -- Units issued and transferred from other funding options 5,867,565 35,141,988 44,618,211 -- 66,905 118,375 Units redeemed and transferred to other funding options (12,001,683) (15,155,639) (19,817,815) -- (137,290) (155) ----------- ----------- ----------- --- -------- ------- Units end of year 13,852,231 19,986,349 24,800,396 -- 47,835 118,220 =========== =========== =========== === ========= =======
MSF CAPITAL MSF BLACKROCK DIVERSIFIED MSF BLACKROCK MONEY MARKET GUARDIAN U.S.EQUITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS A) ------------------------- -------------------------- --------------------- 2007 (b) 2006 2007 2006 2007 2006 --------- ---- ----------- ------------ ---------- --------- Units beginning of year -- -- 97,923,083 -- 4,168,943 -- Units issued and transferred from other funding options 3,615,390 -- 142,085,046 210,047,351 891,371 4,814,861 Units redeemed and transferred to other funding options (653,188) -- (96,445,725) (112,124,268) (1,302,599) (645,918) --------- ---- ----------- ------------ ---------- --------- Units end of year 2,962,202 -- 143,562,404 97,923,083 3,757,715 4,168,943 ========= ==== =========== ============ ========== =========
MSF METLIFE MSF METLIFE CONSERVATIVE TO MSF METLIFE CONSERVATIVE ALLOCATION MODERATE ALLOCATION MODERATE ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS B) (CLASS B) ----------------------- --------------------------- --------------------- 2007 2006 2007 2006 2007 2006 ---------- --------- ---------- --------- ---------- --------- Units beginning of year 4,478,240 -- 9,068,317 -- 1,965,704 -- Units issued and transferred from other funding options 2,460,138 4,893,764 2,955,760 9,139,665 10,616,086 1,978,570 Units redeemed and transferred to other funding options (5,178,632) (415,524) (5,291,046) (71,348) (2,337,344) (12,866) ---------- --------- ---------- --------- ---------- --------- Units end of year 1,759,746 4,478,240 6,733,031 9,068,317 10,244,446 1,965,704 ========== ========= ========== ========= ========== =========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. 88
MIST MET/AIM MIST MFS MIST MFS SMALL CAP GROWTH EMERGING MARKETS EQUITY RESEARCH INTERNATIONAL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS B) ------------------- ----------------------- ---------------------- 2007 2006 2007 (b) 2006 2007 (b) 2006 ---------- ------- ---------- ---- --------- ---- Units beginning of year 183,500 -- -- -- -- -- Units issued and transferred from other funding options 1,128,563 205,784 4,778,350 -- 5,396,668 -- Units redeemed and transferred to other funding options (1,003,622) (22,284) (1,457,541) -- (823,704) -- ---------- ------- ---------- --- --------- --- Units end of year 308,441 183,500 3,320,809 -- 4,572,964 -- ========== ======= ========== === ========= ===
MIST THIRD AVENUE MSF BLACKROCK MSF BLACKROCK SMALL CAP VALUE AGGRESSIVE GROWTH BOND INCOME INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS D) (CLASS A) ----------------- ----------------------- ---------------------- 2007 (b) 2006 2007 2006 2007 2006 ---------- ---- ---------- ----------- --------- ----------- Units beginning of year -- -- 11,629,711 -- 7,023,508 -- Units issued and transferred from other funding options 21,003,022 -- 3,375,951 50,632,969 1,632,602 23,893,505 Units redeemed and transferred to other funding options (8,418,810) -- (3,176,545) (39,003,258) (848,425) (16,869,997) ---------- --- ---------- ----------- --------- ----------- Units end of year 12,584,212 -- 11,829,117 11,629,711 7,807,685 7,023,508 ========== === ========== =========== ========= ===========
MSF METLIFE MSF FI LARGE CAP MSF FI VALUE LEADERS AGGRESSIVE ALLOCATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS D) (CLASS B) ----------------------- ----------------------- --------------------- 2007 2006 2007 2006 2007 2006 ---------- ----------- ---------- ----------- --------- --------- Units beginning of year 3,109,748 -- 12,362,958 -- 1,049,578 -- Units issued and transferred from other funding options 1,385,592 46,711,723 4,087,915 39,979,922 4,807,490 1,449,185 Units redeemed and transferred to other funding options (1,765,214) (43,601,975) (5,179,650) (27,616,964) (710,451) (399,607) ---------- ----------- ---------- ----------- --------- --------- Units end of year 2,730,126 3,109,748 11,271,223 12,362,958 5,146,617 1,049,578 ========== =========== ========== =========== ========= =========
MSF METLIFE MODERATE TO AGGRESSIVE ALLOCATION MSF METLIFE STOCK INDEX MSF MFS TOTAL RETURN INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS A) (CLASS F) ----------------------- ----------------------- ----------------------- 2007 2006 2007 (b) 2006 2007 2006 --------- ------- ---------- ---- ---------- ----------- Units beginning of year 426,130 -- -- -- 27,516,843 -- Units issued and transferred from other funding options 1,379,111 505,557 49,513,492 -- 3,065,415 60,506,141 Units redeemed and transferred to other funding options (347,151) (79,427) (4,992,370) -- (8,698,882) (32,989,298) --------- ------- ---------- --- ---------- ----------- Units end of year 1,458,090 426,130 44,521,122 -- 21,883,376 27,516,843 ========= ======= ========== === ========== ===========
89
MSF T. ROWE PRICE MSF OPPENHEIMER GLOBAL EQUITY MSF RUSSELL 2000 INDEX LARGE CAP GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS B) (CLASS A) (CLASS B) ----------------------------- ---------------------- ----------------------- 2007 2006 2007 (b) 2006 2007 2006 --------------- ------------ ----------- --------- ---------- ----------- Units beginning of year 861,392 -- -- -- 3,400,165 -- Units issued and transferred from other funding options 520,471 1,083,220 21,816,505 -- 2,252,070 32,139,349 Units redeemed and transferred to other funding options (645,974) (221,828) (2,927,246) -- (2,845,578) (28,739,184) -------- --------- ---------- --- ---------- ----------- Units end of year 735,889 861,392 18,889,259 -- 2,806,657 3,400,165 ======== ========= ========== === ========== ===========
PIMCO VIT REAL RETURN PIMCO VIT TOTAL RETURN PIMCO VIT LOW DURATION INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (ADMINISTRATIVE CLASS) (ADMINISTRATIVE CLASS) ------------------------ ------------------------ ------------------------ 2007 2006 2007 (a) 2006 2007 2006 ----------- ----------- ----------- ----------- ----------- ----------- Units beginning of year 31,275,170 6,919,197 41,440,287 28,315,613 104,174,251 99,383,726 Units issued and transferred from other funding options 14,138,628 42,027,176 3,918,302 60,230,347 34,521,379 73,396,328 Units redeemed and transferred to other funding options (29,923,395) (17,671,203) (45,358,589) (47,105,673) (42,486,489) (68,605,803) ----------- ----------- ----------- ----------- ----------- ----------- Units end of year 15,490,403 31,275,170 -- 41,440,287 96,209,141 104,174,251 =========== =========== =========== =========== =========== ===========
PUTNAM VT SMALL CAP VALUE INVESTMENT OPTION ROYCE MICRO CAP ROYCE SMALL CAP (CLASS IB) INVESTMENT OPTION INVESTMENT OPTION ------------------------- --------------------- --------------------- 2007 (a) 2006 2007 2006 2007 2006 ------------ ----------- ---------- --------- ---------- --------- Units beginning of year 19,152,836 19,819,570 3,688,500 -- 4,407,807 266,421 Units issued and transferred from other funding options 1,776,654 21,860,886 9,453,962 3,826,590 2,576,415 4,734,268 Units redeemed and transferred to other funding options (20,929,490) (22,527,620) (9,014,402) (138,090) (2,193,037) (592,882) ----------- ----------- ---------- --------- ---------- --------- Units end of year -- 19,152,836 4,128,060 3,688,500 4,791,185 4,407,807 =========== =========== ========== ========= ========== =========
VANGUARD VIF VANGUARD VIF SHORT-TERM VANGUARD VIF MID-CAP INDEX INVESTMENT-GRADE SMALL COMPANY GROWTH INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ----------------------- ----------------------- -------------------- 2007 2006 2007 2006 2007 2006 ---------- ----------- ------- -------- --------- --------- Units beginning of year 12,978,089 -- 1,973 3,451 991,484 -- Units issued and transferred from other funding options 3,950,211 33,640,876 199,988 172,757 2,480,457 1,316,743 Units redeemed and transferred to other funding options (5,054,545) (20,662,787) (3,659) (174,235) (759,241) (325,259) ---------- ----------- ------- -------- --------- --------- Units end of year 11,873,755 12,978,089 198,302 1,973 2,712,700 991,484 ========== =========== ======= ======== ========= =========
(a) For the period January 1, 2007 to April 27, 2007. (b) For the period April 30, 2007 to December 31, 2007. 90
MSF WESTERN ASSET MANAGEMENT MSF WESTERN ASSET MANAGEMENT MORGAN STANLEY UIF HIGH YIELD BOND U.S. GOVERNMENT EMERGING MARKETS EQUITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS A) (CLASS A) (CLASS I) ---------------------------- ---------------------------- ----------------------- 2007 (a) 2006 2007 2006 2007 (a) 2006 ------------- ------------- ------------- ------------- ---------- ----------- Units beginning of year 9,348,183 -- 12,848,012 -- 614,965 4,989 Units issued and transferred from other funding options 2,123,268 28,556,649 4,402,349 28,635,596 382,239 1,403,698 Units redeemed and transferred to other funding options (11,471,451) (19,208,466) (2,123,319) (15,787,584) (997,204) (793,722) ----------- ---------- ---------- ----------- -------- --------- Units end of year -- 9,348,183 15,127,042 12,848,012 -- 614,965 =========== ========== ========== =========== ======== =========
PIONEER MID CAP VALUE VCT PUTNAM VT DISCOVERY GROWTH PUTNAM VT INTERNATIONAL EQUITY INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION (CLASS II) (CLASS IB) (CLASS IB) ------------------------- -------------------------- ------------------------------ 2007 2006 2007 2006 2007 (a) 2006 ------------ ----------- ------------ ------------ ------------- --------------- Units beginning of year 3,764,070 8,112,364 282,448 425,019 4,628,676 19,832,788 Units issued and transferred from other funding options 2,783,167 3,800,987 146,576 464,468 777,207 11,195,252 Units redeemed and transferred to other funding options (3,754,456) (8,149,281) (121,907) (607,039) (5,405,883) (26,399,364) ---------- ---------- -------- -------- ---------- ----------- Units end of year 2,792,781 3,764,070 307,117 282,448 -- 4,628,676 ========== ========== ======== ======== ========== ===========
VANGUARD VIF DIVERSIFIED VALUE VANGUARD VIF EQUITY INDEX VANGUARD VIF INTERNATIONAL INVESTMENT OPTION INVESTMENT OPTION INVESTMENT OPTION ------------------------------ ------------------------- -------------------------- 2007 2006 2007 2006 2007 2006 -------------- -------------- ------------ ----------- ------------ ------------ Units beginning of year 11,261,851 17,811 19,303,659 170,904 166,210 -- Units issued and transferred from other funding options 4,037,486 20,241,180 4,637,075 41,072,795 412,002 166,441 Units redeemed and transferred to other funding options (4,775,123) (8,997,140) (6,661,961) (21,940,040) (36,162) (231) ---------- ---------- ---------- ----------- ------- ------- Units end of year 10,524,214 11,261,851 17,278,773 19,303,659 542,050 166,210 ========== ========== ========== =========== ======= =======
THE MERGER FUND VL INVESTMENT OPTION ------------------ 2007 2006 -------- -------- Units beginning of year 137,661 -- Units issued and transferred from other funding options 291,445 198,572 Units redeemed and transferred to other funding options (341,749) (60,911) -------- ------- Units end of year 87,357 137,661 ======== =======
91 7. SUBSEQUENT EVENT The Company anticipates merging the Separate Account with and into MetLife of CT Fund UL for Variable Life Insurance, which is another separate account of the Company, during the fourth quarter of 2008 at the earliest, subject to regulatory approval. This merger will have no effect on the provisions of, and the rights and obligations under, the Policies. 92 -----END PRIVACY-ENHANCED MESSAGE-----