Investments

9 Months Ended

Sep. 30, 2014

Investments, Debt and Equity Securities [Abstract]

Investments

6. Investments

Fixed Maturity and Equity Securities Available-for-Sale

Fixed Maturity and Equity Securities Available-for-Sale by Sector

The following table presents the fixed maturity and equity securities available-for-sale (“AFS”) by sector. Redeemable preferred stock is reported within U.S. corporate and foreign corporate fixed maturity securities and non-redeemable preferred stock is reported within equity securities. Included within fixed maturity securities are structured securities including residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”).

	September 30, 2014										December 31, 2013
	Cost or Amortized Cost		Gross Unrealized						Estimated Fair Value		Cost or Amortized Cost		Gross Unrealized						Estimated Fair Value
			Gains		Temporary Losses		OTTI Losses						Gains		Temporary Losses		OTTI Losses
	(In millions)
Fixed maturity securities
U.S. corporate	$	99,000	$	9,522	$	548	$	—	$	107,974	$	100,203	$	7,495	$	1,229	$	—	$	106,469
Foreign corporate	57,799		4,477		392		7		61,877		59,778		3,939		565		—		63,152
Foreign government	51,267		5,319		190		—		56,396		50,717		4,107		387		—		54,437
U.S. Treasury and agency	52,275		4,660		73		—		56,862		43,928		2,251		1,056		—		45,123
RMBS	39,011		1,950		244		98		40,619		34,167		1,584		490		206		35,055
CMBS	14,224		482		57		—		14,649		16,115		605		170		—		16,550
ABS	14,656		265		68		—		14,853		15,458		296		171		12		15,571
State and political subdivision	12,966		1,921		47		—		14,840		13,233		903		306		—		13,830
Total fixed maturity securities	$	341,198	$	28,596	$	1,619	$	105	$	368,070	$	333,599	$	21,180	$	4,374	$	218	$	350,187
Equity securities
Common stock	$	2,027	$	550	$	3	$	—	$	2,574	$	1,927	$	431	$	5	$	—	$	2,353
Non-redeemable preferred stock	1,084		68		37		—		1,115		1,085		76		112		—		1,049
Total equity securities	$	3,111	$	618	$	40	$	—	$	3,689	$	3,012	$	507	$	117	$	—	$	3,402

The Company held non-income producing fixed maturity securities with an estimated fair value of $96 million and $74 million with unrealized gains (losses) of $52 million and $23 million at September 30, 2014 and December 31, 2013, respectively.

Maturities of Fixed Maturity Securities

The amortized cost and estimated fair value of fixed maturity securities, by contractual maturity date, were as follows at:

	September 30, 2014				December 31, 2013
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Due in one year or less	$	14,389	$	14,603	$	15,828	$	16,030
Due after one year through five years	76,630		80,212		70,467		74,229
Due after five years through ten years	79,346		85,438		78,159		83,223
Due after ten years	102,942		117,696		103,405		109,529
Subtotal	273,307		297,949		267,859		283,011
Structured securities (RMBS, CMBS and ABS)	67,891		70,121		65,740		67,176
Total fixed maturity securities	$	341,198	$	368,070	$	333,599	$	350,187

Actual maturities may differ from contractual maturities due to the exercise of call or prepayment options. Fixed maturity securities not due at a single maturity date have been presented in the year of final contractual maturity. RMBS, CMBS and ABS are shown separately, as they are not due at a single maturity.

Continuous Gross Unrealized Losses for Fixed Maturity and Equity Securities AFS by Sector

The following table presents the estimated fair value and gross unrealized losses of fixed maturity and equity securities AFS in an unrealized loss position, aggregated by sector and by length of time that the securities have been in a continuous unrealized loss position.

	September 30, 2014								December 31, 2013
	Less than 12 Months				Equal to or Greater than 12 Months				Less than 12 Months				Equal to or Greater than 12 Months
	Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses		Estimated Fair Value		Gross Unrealized Losses
	(In millions, except number of securities)
Fixed maturity securities
U.S. corporate	$	11,929	$	212	$	5,070	$	336	$	13,889	$	808	$	3,807	$	421
Foreign corporate	7,043		251		2,275		148		9,019		402		2,320		163
Foreign government	1,707		66		1,478		124		5,052		336		1,846		51
U.S. Treasury and agency	9,654		25		2,025		48		15,225		1,037		357		19
RMBS	5,543		79		3,669		263		10,754		363		2,302		333
CMBS	1,579		26		864		31		3,696		142		631		28
ABS	4,159		28		801		40		3,772		59		978		124
State and political subdivision	159		2		678		45		3,109		225		351		81
Total fixed maturity securities	$	41,773	$	689	$	16,860	$	1,035	$	64,516	$	3,372	$	12,592	$	1,220
Equity securities
Common stock	$	97	$	3	$	2	$	—	$	81	$	4	$	16	$	1
Non-redeemable preferred stock	188		2		244		35		364		65		191		47
Total equity securities	$	285	$	5	$	246	$	35	$	445	$	69	$	207	$	48
Total number of securities in an unrealized loss position	2,644				1,667				4,480				1,571

Evaluation of AFS Securities for OTTI and Evaluating Temporarily Impaired AFS Securities

As described more fully in Notes 1 and 8 of the Notes to the Consolidated Financial Statements included in the 2013 Annual Report, the Company performs a regular evaluation of all investment classes for impairment, including fixed maturity securities, equity securities and perpetual hybrid securities, in accordance with its impairment policy, in order to evaluate whether such investments are other-than-temporarily impaired.

Current Period Evaluation

Based on the Company’s current evaluation of its AFS securities in an unrealized loss position in accordance with its impairment policy, and the Company’s current intentions and assessments (as applicable to the type of security) about holding, selling and any requirements to sell these securities, the Company has concluded that these securities are not other-than-temporarily impaired at September 30, 2014. Future other-than-temporary impairment (“OTTI”) will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), and changes in credit ratings, collateral valuation, interest rates and credit spreads. If economic fundamentals deteriorate or if there are adverse changes in the above factors, OTTI may be incurred in upcoming periods.

Gross unrealized losses on fixed maturity securities decreased $2.9 billion during the nine months endedSeptember 30, 2014 from $4.6 billion to $1.7 billion. The decrease in gross unrealized losses for the nine months endedSeptember 30, 2014, was primarily attributable to a decrease in interest rates, and to a lesser extent narrowing credit spreads.

At September 30, 2014, $154 million of the total $1.7 billion of gross unrealized losses were from 58 fixed maturity securities with an unrealized loss position of 20% or more of amortized cost for six months or greater.

Investment Grade Fixed Maturity Securities

Of the $154 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $82 million, or 53%, are related to gross unrealized losses on 31 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads and, with respect to fixed-rate fixed maturity securities, rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities

Of the $154 million of gross unrealized losses on fixed maturity securities with an unrealized loss of 20% or more of amortized cost for six months or greater, $72 million, or 47%, are related to gross unrealized losses on 27 below investment grade fixed maturity securities. Unrealized losses on below investment grade fixed maturity securities are principally related to non-agency RMBS (primarily alternative residential mortgage loans), foreign corporate securities (primarily financial services industry securities) and ABS (primarily foreign ABS) and are the result of significantly wider credit spreads resulting from higher risk premiums since purchase, largely due to economic and market uncertainties including concerns over valuations of residential real estate supporting non-agency RMBS. Management evaluates non-agency RMBS and ABS based on actual and projected cash flows after considering the quality of underlying collateral, expected prepayment speeds, current and forecasted loss severity, consideration of the payment terms of the underlying assets backing a particular security, and the payment priority within the tranche structure of the security; and evaluates foreign corporate securities based on factors such as expected cash flows and the financial condition and near-term and long-term prospects of the issuer.

Equity Securities

Gross unrealized losses on equity securities decreased $77 million during the nine months endedSeptember 30, 2014 from $117 million to $40 million. Of the $40 million, $24 million were from seven equity securities with gross unrealized losses of 20% or more of cost for 12 months or greater, all of which were financial services industry investment grade non-redeemable preferred stock, of which 25% were rated A or better.

Mortgage Loans

Mortgage Loans by Portfolio Segment

Mortgage loans are summarized as follows at:

	September 30, 2014					December 31, 2013
	Carrying Value			% of Total		Carrying Value			% of Total
	(In millions)					(In millions)
Mortgage loans held-for-investment:
Commercial	$	40,540		69.8	%	$	40,926		70.9	%
Agricultural	11,929			20.6		12,391			21.5
Residential	5,265			9.1		2,772			4.8
Subtotal (1)	57,734			99.5		56,089			97.2
Valuation allowances	(307		)	(0.5	)	(322		)	(0.6	)
Subtotal mortgage loans held-for-investment, net	57,427			99.0		55,767			96.6
Residential — fair value option (“FVO”)	298			0.5		338			0.6
Commercial mortgage loans held by CSEs — FVO	313			0.5		1,598			2.8
Total mortgage loans held-for-investment, net	58,038			100.0		57,703			100.0
Mortgage loans held-for-sale	—			—		3			—
Total mortgage loans, net	$	58,038		100.0	%	$	57,706		100.0	%

__________________

(1) Purchases of mortgage loans were $2.1 billion and $3.5 billion for the three months and nine months endedSeptember 30, 2014, respectively. Purchases of mortgage loans were $676 million and $1.6 billion for the three months and nine months endedSeptember 30, 2013, respectively.

See “— Variable Interest Entities” for discussion of consolidated securitization entities (“CSEs”).

Mortgage Loans and Valuation Allowance by Portfolio Segment

The carrying value prior to valuation allowance (“recorded investment”) in mortgage loans held-for-investment, by portfolio segment, by method of evaluation of credit loss, and the related valuation allowances, by type of credit loss, were as follows at:

	September 30, 2014								December 31, 2013
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Mortgage loans:
Evaluated individually for credit losses	$	189	$	62	$	24	$	275	$	506	$	100	$	16	$	622
Evaluated collectively for credit losses	40,351		11,867		5,241		57,459		40,420		12,291		2,756		55,467
Total mortgage loans	40,540		11,929		5,265		57,734		40,926		12,391		2,772		56,089
Valuation allowances:
Specific credit losses	24		2		—		26		58		7		1		66
Non-specifically identified credit losses	203		36		42		281		200		37		19		256
Total valuation allowances	227		38		42		307		258		44		20		322
Mortgage loans, net of valuation allowance	$	40,313	$	11,891	$	5,223	$	57,427	$	40,668	$	12,347	$	2,752	$	55,767

Valuation Allowance Rollforward by Portfolio Segment

The changes in the valuation allowance, by portfolio segment, were as follows:

	Three Months   Ended   September 30,
	2014												2013
	Commercial			Agricultural			Residential			Total			Commercial		Agricultural		Residential		Total
	(In millions)
Balance, beginning of period	$	230		$	42		$	22		$	294		$	242	$	49	$	11	$	302
Provision (release)	(4		)	(3		)	22			15			17		1		6		24
Charge-offs, net of recoveries	1			(1		)	(2		)	(2		)	—		—		—		—
Balance, end of period	$	227		$	38		$	42		$	307		$	259	$	50	$	17	$	326

	Nine Months   Ended   September 30,
	2014												2013
	Commercial			Agricultural			Residential			Total			Commercial			Agricultural			Residential		Total
	(In millions)
Balance, beginning of period	$	258		$	44		$	20		$	322		$	293		$	52		$	2	$	347
Provision (release)	(8		)	(5		)	25			12			(34		)	8			15		(11		)
Charge-offs, net of recoveries	(23		)	(1		)	(3		)	(27		)	—			(10		)	—		(10		)
Balance, end of period	$	227		$	38		$	42		$	307		$	259		$	50		$	17	$	326

Credit Quality of Commercial Mortgage Loans

The credit quality of commercial mortgage loans held-for-investment were as follows at:

	Recorded Investment										Estimated Fair Value		% of Total
	Debt Service Coverage Ratios								% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x		Total
	(In millions)										(In millions)
September 30, 2014
Loan-to-value ratios:
Less than 65%	$	32,361	$	825	$	899	$	34,085	84.1	%	$	35,851	84.6	%
65% to 75%	4,438		670		57		5,165		12.7		5,249		12.4
76% to 80%	139		192		57		388		1.0		396		0.9
Greater than 80%	411		276		215		902		2.2		874		2.1
Total	$	37,349	$	1,963	$	1,228	$	40,540	100.0	%	$	42,370	100.0	%
December 31, 2013
Loan-to-value ratios:
Less than 65%	$	30,552	$	614	$	841	$	32,007	78.2	%	$	33,519	78.9	%
65% to 75%	6,360		438		149		6,947		17.0		7,039		16.6
76% to 80%	525		192		189		906		2.2		892		2.1
Greater than 80%	661		242		163		1,066		2.6		1,006		2.4
Total	$	38,098	$	1,486	$	1,342	$	40,926	100.0	%	$	42,456	100.0	%

Credit Quality of Agricultural Mortgage Loans

The credit quality of agricultural mortgage loans held-for-investment were as follows at:

	September 30, 2014				December 31, 2013
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(In millions)				(In millions)
Loan-to-value ratios:
Less than 65%	$	11,280	94.6	%	$	11,461	92.5	%
65% to 75%	519		4.4		729		5.9
76% to 80%	52		0.4		84		0.7
Greater than 80%	78		0.6		117		0.9
Total	$	11,929	100.0	%	$	12,391	100.0	%

The estimated fair value of agricultural mortgage loans held-for-investment was $12.3 billion and $12.7 billion at September 30, 2014 and December 31, 2013, respectively.

Credit Quality of Residential Mortgage Loans

The credit quality of residential mortgage loans held-for-investment were as follows at:

	September 30, 2014				December 31, 2013
	Recorded Investment		% of Total		Recorded Investment		% of Total
	(In millions)				(In millions)
Performance indicators:
Performing	$	5,133	97.5	%	$	2,693	97.1	%
Nonperforming	132		2.5		79		2.9
Total	$	5,265	100.0	%	$	2,772	100.0	%

The estimated fair value of residential mortgage loans held-for-investment was $5.6 billion and $2.8 billion at September 30, 2014 and December 31, 2013, respectively.

Past Due and Interest Accrual Status of Mortgage Loans

The Company has a high quality, well performing mortgage loan portfolio, with 99% of all mortgage loans classified as performing at both September 30, 2014 and December 31, 2013. The Company defines delinquency consistent with industry practice, when mortgage loans are past due as follows: commercial and residential mortgage loans — 60 days and agricultural mortgage loans — 90 days. The past due and accrual status of mortgage loans at recorded investment, prior to valuation allowances, by portfolio segment, were as follows at:

	Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual Status
	September 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013		September 30, 2014		December 31, 2013
	(In millions)
Commercial	$	12	$	12	$	12	$	12	$	85	$	191
Agricultural	17		44		1		—		42		47
Residential	132		79		—		—		123		65
Total	$	161	$	135	$	13	$	12	$	250	$	303

Impaired Mortgage Loans

Impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, by portfolio segment, were as follows at:

	Loans with a Valuation Allowance								Loans without a Valuation Allowance				All Impaired Loans
	Unpaid Principal Balance		Recorded Investment		Valuation Allowances		Carrying Value		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Carrying Value
	(In millions)
September 30, 2014
Commercial	$	85	$	85	$	24	$	61	$	105	$	104	$	190	$	165
Agricultural	50		47		2		45		16		15		66		60
Residential	—		—		—		—		26		24		26		24
Total	$	135	$	132	$	26	$	106	$	147	$	143	$	282	$	249
December 31, 2013
Commercial	$	214	$	210	$	58	$	152	$	299	$	296	$	513	$	448
Agricultural	68		66		7		59		35		34		103		93
Residential	12		12		1		11		5		4		17		15
Total	$	294	$	288	$	66	$	222	$	339	$	334	$	633	$	556

Unpaid principal balance is generally prior to any charge-offs.

The average recorded investment in impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, and the related interest income, which is primarily recognized on a cash basis, by portfolio segment, was:

	Impaired Mortgage Loans
	Three Months   Ended   September 30,								Nine Months   Ended   September 30,
	2014				2013				2014				2013
	Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income		Average Recorded Investment		Interest Income
	(In millions)
Commercial	$	302	$	—	$	525	$	4	$	405	$	7	$	530	$	11
Agricultural	69		1		165		5		84		7		167		8
Residential	17		1		14		—		15		1		14		—
Total	$	388	$	2	$	704	$	9	$	504	$	15	$	711	$	19

Mortgage Loans Modified in a Troubled Debt Restructuring

The number of mortgage loans and carrying value after specific valuation allowance of mortgage loans modified during the period in a troubled debt restructuring were as follows:

	Three Months Ended September 30,
	2014					2013
	Number of  Mortgage Loans	Carrying Value after Specific Valuation Allowance				Number of Mortgage Loans	Carrying Value after Specific Valuation Allowance
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		(In millions)					(In millions)
Commercial	—	$	—	$	—	1	$	49	$	49
Agricultural	—	—		—		2	24		24
Residential	57	15		13		5	1		1
Total	57	$	15	$	13	8	$	74	$	74

	Nine Months   Ended   September 30,
	2014					2013
	Number of   Mortgage Loans	Carrying Value after Specific     Valuation Allowance				Number of   Mortgage Loans	Carrying Value after Specific   Valuation Allowance
		Pre-Modification		Post-Modification			Pre-Modification		Post-Modification
		(In millions)					(In millions)
Commercial	—	$	—	$	—	1	$	49	$	49
Agricultural	1	1		1		3	28		28
Residential	101	24		20		11	2		2
Total	102	$	25	$	21	15	$	79	$	79

During the three months and nine months endedSeptember 30, 2014 and 2013, the Company held no commercial or agricultural mortgage loans that were modified in a troubled debt restructuring during the 12 months before September 30, 2014 and 2013, respectively, and became subject to a payment default after the restructuring. The number of residential mortgage loans and carrying value of residential mortgage loans with subsequent payment defaults that were modified in a troubled debt restructuring during the previous 12 months were as follows:

	Three Months Ended September 30,
	2014			2013
	Number of Mortgage Loans	Carrying Value		Number of Mortgage Loans	Carrying Value
		(In millions)			(In millions)
Residential (1)	2	$	—	—	$	—

	Nine Months Ended September 30,
	2014			2013
	Number of Mortgage Loans	Carrying Value		Number of Mortgage Loans	Carrying Value
		(In millions)			(In millions)
Residential	4	$	1	—	$	—

__________________

(1) Residential mortgage loans for the three months endedSeptember 30, 2014 had a carrying value of less than $1 million.

Payment default is determined in the same manner as delinquency status as described above.

Cash Equivalents

The carrying value of cash equivalents, which includes securities and other investments with an original or remaining maturity of three months or less at the time of purchase, was $3.7 billion and $3.8 billion at September 30, 2014 and December 31, 2013, respectively.

Net Unrealized Investment Gains (Losses)

The components of net unrealized investment gains (losses), included in AOCI, were as follows:

	September 30, 2014			December 31, 2013
	(In millions)
Fixed maturity securities	$	26,848		$	16,672
Fixed maturity securities with noncredit OTTI losses in AOCI	(105		)	(218		)
Total fixed maturity securities	26,743			16,454
Equity securities	602			390
Derivatives	1,326			375
Other	24			(73		)
Subtotal	28,695			17,146
Amounts allocated from:
Insurance liability loss recognition	(1,515		)	(898		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	2			6
DAC and VOBA	(1,866		)	(1,190		)
Policyholder dividend obligation	(2,825		)	(1,771		)
Subtotal	(6,204		)	(3,853		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	33			73
Deferred income tax benefit (expense)	(7,835		)	(4,956		)
Net unrealized investment gains (losses)	14,689			8,410
Net unrealized investment gains (losses) attributable to noncontrolling interests	—			4
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	14,689		$	8,414

The changes in fixed maturity securities with noncredit OTTI losses included in AOCI were as follows:

	Nine Months   Ended   September 30, 2014			Year   Ended   December 31, 2013
	(In millions)
Balance, beginning of period	$	(218	)	$	(361	)
Noncredit OTTI losses and subsequent changes recognized (1)	16			60
Securities sold with previous noncredit OTTI loss	42			149
Subsequent changes in estimated fair value	55			(66		)
Balance, end of period	$	(105	)	$	(218	)

__________________

(1) Noncredit OTTI losses and subsequent changes recognized, net of DAC, were $8 million and $52 million for the nine months endedSeptember 30, 2014 and the year ended December 31, 2013, respectively.

The changes in net unrealized investment gains (losses) were as follows:

	Nine Months   Ended   September 30, 2014
	(In millions)
Balance, beginning of period	$	8,414
Fixed maturity securities on which noncredit OTTI losses have been recognized	113
Unrealized investment gains (losses) during the period	11,436
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition	(617		)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI	(4		)
DAC and VOBA	(676		)
Policyholder dividend obligation	(1,054		)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI	(40		)
Deferred income tax benefit (expense)	(2,879		)
Net unrealized investment gains (losses)	14,693
Net unrealized investment gains (losses) attributable to noncontrolling interests	(4		)
Balance, end of period	$	14,689
Change in net unrealized investment gains (losses)	$	6,279
Change in net unrealized investment gains (losses) attributable to noncontrolling interests	(4		)
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	6,275

Concentrations of Credit Risk

Investments in any counterparty that were greater than 10% of the Company’s equity, other than the U.S. government and its agencies, were in fixed income securities of the Japanese government and its agencies with an estimated fair value of $22.1 billion and $21.7 billion at September 30, 2014 and December 31, 2013, respectively. The Company’s investment in fixed maturity and equity securities to counterparties that primarily conduct business in Japan, including Japan government and agency fixed maturity securities, was $27.5 billion and $26.9 billion at September 30, 2014 and December 31, 2013, respectively.

Securities Lending

Elements of the securities lending program are presented below at:

	September 30, 2014		December 31, 2013
	(In millions)
Securities on loan: (1)
Amortized cost	$	27,930	$	27,094
Estimated fair value	$	30,269	$	27,595
Cash collateral on deposit from counterparties (2)	$	30,943	$	28,319
Security collateral on deposit from counterparties (3)	$	67	$	—
Reinvestment portfolio — estimated fair value	$	31,306	$	28,481

_________________

(1) Included within fixed maturity securities, cash and cash equivalents, short-term investments and equity securities.

(2) Included within payables for collateral under securities loaned and other transactions.

(3) Security collateral on deposit from counterparties may not be sold or repledged, unless the counterparty is in default, and is not reflected in the consolidated financial statements.

Invested Assets on Deposit, Held in Trust and Pledged as Collateral

Invested assets on deposit, held in trust and pledged as collateral are presented below at estimated fair value for cash and cash equivalents, short-term investments, fixed maturity and equity securities and FVO and trading securities, and at carrying value for mortgage loans at:

	September 30, 2014		December 31, 2013
	(In millions)
Invested assets on deposit (regulatory deposits) (1)	$	9,140	$	2,153
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)	11,259		11,004
Invested assets pledged as collateral (2)	23,442		23,770
Total invested assets on deposit, held in trust and pledged as collateral	$	43,841	$	36,927

__________________

(1) MetLife Insurance Company of Connecticut (“MICC”) received all regulatory approvals to merge three U.S.-based life insurance companies and a former offshore reinsurance subsidiary to create one larger U.S.-based and U.S.-regulated life insurance company (the “Mergers”). The Mergers are expected to occur in the fourth quarter of 2014. The companies to be merged are MICC, MetLife Investors USA Insurance Company (“MLI-USA”) and MetLife Investors Insurance Company, each a U.S. insurance company that issues variable annuity products in addition to other products, and Exeter Reassurance Company, Ltd. (“Exeter”), a reinsurance company that mainly reinsures guarantees associated with variable annuity products. MICC, which is expected to be renamed and domiciled in Delaware, will be the surviving entity. In October 2014, MICC received regulatory approval from the Connecticut Insurance Department and the Delaware Department of Insurance to re-domesticate from Connecticut to Delaware, immediately prior to the Mergers. Exeter, formerly a Cayman Islands company, was re-domesticated to Delaware in October 2013. Effective January 1, 2014, following receipt of New York State Department of Financial Services (the “Department of Financial Services”) approval, MICC withdrew its license to issue insurance policies and annuity contracts in New York. Also effective January 1, 2014, MICC reinsured with an affiliate all existing New York insurance policies and annuity contracts that include a separate account feature and deposited investments with an estimated fair market value of $6.3 billion into a custodial account to secure MICC’s remaining New York policyholder liabilities not covered by the reinsurance.

(2) The Company has pledged invested assets in connection with various agreements and transactions, including funding agreements (see Notes 4 and 12 of the Notes to the Consolidated Financial Statements included in the 2013 Annual Report), collateral financing arrangements (see Note 13 of the Notes to the Consolidated Financial Statements included in the 2013 Annual Report) and derivative transactions (see Note 7).

See “— Securities Lending” for securities on loan and Note 5 for investments designated to the closed block.

Variable Interest Entities

The Company has invested in certain structured transactions (including CSEs), formed trusts to invest proceeds from certain collateral financing arrangements and has insurance operations that are VIEs. In certain instances, the Company holds both the power to direct the most significant activities of the entity, as well as an economic interest in the entity and, as such, is deemed to be the primary beneficiary or consolidator of the entity.

The determination of the VIE’s primary beneficiary requires an evaluation of the contractual and implied rights and obligations associated with each party’s relationship with or involvement in the entity, an estimate of the entity’s expected losses and expected residual returns and the allocation of such estimates to each party involved in the entity. The Company generally uses a qualitative approach to determine whether it is the primary beneficiary. However, for VIEs that are investment companies or apply measurement principles consistent with those utilized by investment companies, the primary beneficiary is based on a risks and rewards model and is defined as the entity that will absorb a majority of a VIE’s expected losses, receive a majority of a VIE’s expected residual returns if no single entity absorbs a majority of expected losses, or both. The Company reassesses its involvement with VIEs on a quarterly basis. The use of different methodologies, assumptions and inputs in the determination of the primary beneficiary could have a material effect on the amounts presented within the consolidated financial statements.

Consolidated VIEs

The following table presents the total assets and total liabilities relating to VIEs for which the Company has concluded that it is the primary beneficiary and which are consolidated at September 30, 2014 and December 31, 2013. Creditors or beneficial interest holders of VIEs where the Company is the primary beneficiary have no recourse to the general credit of the Company, as the Company’s obligation to the VIEs is limited to the amount of its committed investment.

	September 30, 2014				December 31, 2013
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
MRSC (collateral financing arrangement (primarily securities)) (1)	$	3,373	$	—	$	3,440	$	—
Operating joint venture (2)	2,380		2,014		2,095		1,777
CSEs (assets (primarily loans) and liabilities (primarily debt)) (3)	333		189		1,630		1,457
Investments:
Real estate and real estate joint ventures (4)	9		15		1,181		443
Other invested assets	59		—		82		7
FVO and trading securities	49		—		69		—
Other limited partnership interests	61		—		61		—
Total	$	6,264	$	2,218	$	8,558	$	3,684

__________________

(1) See Note 13 of the Notes to the Consolidated Financial Statements included in the 2013 Annual Report for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement.

(2) Assets of the operating joint venture are primarily fixed maturity securities and separate account assets. Liabilities of the operating joint venture are primarily future policy benefits, other policyholder funds and separate account liabilities.

(3) The Company consolidates entities that are structured as CMBS and as collateralized loan obligations. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company’s exposure was limited to that of its remaining investment in these entities of $125 million and $154 million at estimated fair value at September 30, 2014 and December 31, 2013, respectively. The long-term debt bears interest primarily at fixed rates ranging from 2.25% to 5.57%, payable primarily on a monthly basis. Interest expense related to these obligations, included in other expenses, was $3 million and $34 million for the three months and nine months endedSeptember 30, 2014, respectively, and $29 million and $96 million for the three months and nine months endedSeptember 30, 2013, respectively.

(4) At December 31, 2013, the Company consolidated an open ended core real estate fund formed in the fourth quarter of 2013 (the “MetLife Core Property Fund”), which represented the majority of the balances at December 31, 2013. As a result of the quarterly reassessment in the first quarter of 2014, the Company no longer consolidates the MetLife Core Property Fund, effective March 31, 2014, based on the terms of the revised partnership agreement. The Company accounts for its retained interest in the real estate fund under the equity method. Assets of the real estate fund are a real estate investment trust which holds primarily traditional core income-producing real estate which has associated liabilities that are primarily non-recourse debt secured by certain real estate assets of the fund. The assets of these entities can only be used to settle their respective liabilities, and under no circumstances is the Company liable for any principal or interest shortfalls should any arise. The Company’s exposure was limited to that of its investment in the real estate fund of $178 million at carrying value at December 31, 2013. The long-term debt bore interest primarily at fixed rates ranging from 1.39% to 4.45%, payable primarily on a monthly basis.

Unconsolidated VIEs

The carrying amount and maximum exposure to loss relating to VIEs in which the Company holds a significant variable interest but is not the primary beneficiary and which have not been consolidated were as follows at:

	September 30, 2014				December 31, 2013
	Carrying Amount		Maximum Exposure to Loss (1)		Carrying Amount		Maximum Exposure to Loss (1)
	(In millions)
Fixed maturity securities AFS:
Structured securities (RMBS, CMBS and ABS) (2)	$	70,121	$	70,121	$	67,176	$	67,176
U.S. and foreign corporate	3,881		3,881		3,966		3,966
Other limited partnership interests	5,320		7,044		5,041		6,994
Other invested assets	1,614		1,822		1,509		1,897
FVO and trading securities	590		590		619		619
Mortgage loans	106		106		106		106
Real estate joint ventures	65		67		70		71
Equity securities AFS:
Non-redeemable preferred stock	41		41		35		35
Total	$	81,738	$	83,672	$	78,522	$	80,864

__________________

(1) The maximum exposure to loss relating to fixed maturity securities AFS, FVO and trading securities and equity securities AFS is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests, mortgage loans and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments of the Company. For certain of its investments in other invested assets, the Company’s return is in the form of income tax credits which are guaranteed by creditworthy third parties. For such investments, the maximum exposure to loss is equal to the carrying amounts plus any unfunded commitments, reduced by income tax credits guaranteed by third parties of $224 million and $257 million at September 30, 2014 and December 31, 2013, respectively. Such a maximum loss would be expected to occur only upon bankruptcy of the issuer or investee.

(2) For these variable interests, the Company’s involvement is limited to that of a passive investor in mortgage-backed or asset-backed securities issued by trusts that do not have substantial equity.

As described in Note 14, the Company makes commitments to fund partnership investments in the normal course of business. Excluding these commitments, the Company did not provide financial or other support to investees designated as VIEs during the nine months endedSeptember 30, 2014 and 2013.

Net Investment Income

The components of net investment income were as follows:

	Three Months   Ended   September 30,				Nine Months   Ended   September 30,
	2014		2013		2014		2013
	(In millions)
Investment income:
Fixed maturity securities	$	3,695	$	3,784	$	11,106	$	11,319
Equity securities	31		28		98		88
FVO and trading securities — Actively Traded Securities and FVO general account securities (1)	14		14		95		24
Mortgage loans	775		725		2,192		2,179
Policy loans	158		158		473		465
Real estate and real estate joint ventures	245		227		724		663
Other limited partnership interests	299		144		834		665
Cash, cash equivalents and short-term investments	42		42		130		136
International joint ventures	2		16		5		7
Other	60		25		136		137
Subtotal	5,321		5,163		15,793		15,683
Less: Investment expenses	298		302		873		889
Subtotal, net	5,023		4,861		14,920		14,794
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)	379		132		739		1,485
FVO CSEs — interest income:
Commercial mortgage loans	8		33		44		104
Securities	—		—		1		2
Subtotal	387		165		784		1,591
Net investment income	$	5,410	$	5,026	$	15,704	$	16,385

__________________

(1) Changes in estimated fair value subsequent to purchase for securities still held as of the end of the respective periods included in net investment income were as follows:

	Three Months   Ended   September 30,						Nine Months   Ended   September 30,
	2014			2013			2014		2013
	(In millions)
Actively Traded Securities and FVO general account securities	$	(18	)	$	2		$	7	$	(14	)
FVO contractholder-directed unit-linked investments	$	248		$	(9	)	$	329	$	1,069

See “— Variable Interest Entities” for discussion of CSEs.

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

The components of net investment gains (losses) were as follows:

	Three Months   Ended   September 30,						Nine Months   Ended   September 30,
	2014			2013			2014			2013
	(In millions)
Total gains (losses) on fixed maturity securities:
Total OTTI losses recognized — by sector and industry:
U.S. and foreign corporate securities — by industry:
Utility	$	—		$	(1	)	$	—		$	(33	)
Consumer	—			(3		)	(7		)	(11		)
Finance	—			—			—			(10		)
Transportation	—			(3		)	(2		)	(3		)
Communications	—			—			—			(2		)
Total U.S. and foreign corporate securities	—			(7		)	(9		)	(59		)
RMBS	(18		)	(27		)	(27		)	(74		)
ABS	—			—			(7		)	—
CMBS	(13		)	—			(13		)	—
OTTI losses on fixed maturity securities recognized in earnings	(31		)	(34		)	(56		)	(133		)
Fixed maturity securities — net gains (losses) on sales and disposals	184			(44		)	349			504
Total gains (losses) on fixed maturity securities	153			(78		)	293			371
Total gains (losses) on equity securities:
Total OTTI losses recognized — by sector:
Non-redeemable preferred stock	—			—			(23		)	(20		)
Common stock	(1		)	—			(12		)	(2		)
OTTI losses on equity securities recognized in earnings	(1		)	—			(35		)	(22		)
Equity securities — net gains (losses) on sales and disposals	15			3			99			2
Total gains (losses) on equity securities	14			3			64			(20		)
FVO and trading securities — FVO general account securities	—			1			8			9
Mortgage loans	(30		)	(13		)	(25		)	22
Real estate and real estate joint ventures	86			4			150			(19		)
Other limited partnership interests	(14		)	—			(52		)	(41		)
Other investment portfolio gains (losses)	(20		)	12			(26		)	46
Subtotal — investment portfolio gains (losses)	189			(71		)	412			368
FVO CSEs:
Commercial mortgage loans	1			(14		)	(14		)	(46		)
Securities	—			1			—			1
Long-term debt — related to commercial mortgage loans	3			18			21			66
Long-term debt — related to securities	(1		)	(1		)	(1		)	(1		)
Non-investment portfolio gains (losses) (1)	(83		)	(18		)	(845		)	(49		)
Subtotal FVO CSEs and non-investment portfolio gains (losses)	(80		)	(14		)	(839		)	(29		)
Total net investment gains (losses)	$	109		$	(85	)	$	(427	)	$	339

__________________

(1) There were no non-investment portfolio gains (losses) for the three months ended September 30, 2014 related to the disposition of MAL. Non-investment portfolio gains (losses) for the nine months endedSeptember 30, 2014 includes a loss of ($633) million related to the disposition of MAL. See Note 3.

See “— Variable Interest Entities” for discussion of CSEs.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($118) million and ($225) million for the three months and nine months endedSeptember 30, 2014, respectively, and $90 million and $165 million for the three months and nine months endedSeptember 30, 2013, respectively.

Sales or Disposals and Impairments of Fixed Maturity and Equity Securities

Proceeds from sales or disposals of fixed maturity and equity securities and the components of fixed maturity and equity securities net investment gains (losses) are as shown in the tables below. Investment gains and losses on sales of securities are determined on a specific identification basis.

	Three Months   Ended   September 30,
	2014			2013			2014			2013			2014			2013
	Fixed Maturity Securities						Equity Securities						Total
	(In millions)
Proceeds	$	20,105		$	20,003		$	96		$	173		$	20,201		$	20,176
Gross investment gains	$	297		$	238		$	21		$	5		$	318		$	243
Gross investment losses	(113		)	(282		)	(6		)	(2		)	(119		)	(284		)
Total OTTI losses:
Credit-related	(31		)	(33		)	—			—			(31		)	(33		)
Other (1)	—			(1		)	(1		)	—			(1		)	(1		)
Total OTTI losses	(31		)	(34		)	(1		)	—			(32		)	(34		)
Net investment gains (losses)	$	153		$	(78	)	$	14		$	3		$	167		$	(75	)

	Nine Months   Ended   September 30,
	2014			2013			2014			2013			2014			2013
	Fixed Maturity Securities						Equity Securities						Total
	(In millions)
Proceeds	$	62,096		$	61,625		$	523		$	528		$	62,619		$	62,153
Gross investment gains	$	787		$	1,061		$	108		$	23		$	895		$	1,084
Gross investment losses	(438		)	(557		)	(9		)	(21		)	(447		)	(578		)
Total OTTI losses:
Credit-related	(56		)	(114		)	—			—			(56		)	(114		)
Other (1)	—			(19		)	(35		)	(22		)	(35		)	(41		)
Total OTTI losses	(56		)	(133		)	(35		)	(22		)	(91		)	(155		)
Net investment gains (losses)	$	293		$	371		$	64		$	(20	)	$	357		$	351

_________________

(1) Other OTTI losses recognized in earnings include impairments on (i) equity securities, (ii) perpetual hybrid securities classified within fixed maturity securities where the primary reason for the impairment was the severity and/or the duration of an unrealized loss position and (iii) fixed maturity securities where there is an intent to sell or it is more likely than not that the Company will be required to sell the security before recovery of the decline in estimated fair value.

Credit Loss Rollforward

The table below presents a rollforward of the cumulative credit loss component of OTTI loss recognized in earnings on fixed maturity securities still held for which a portion of the OTTI loss was recognized in other comprehensive income (loss) (“OCI”):

	Three Months   Ended   September 30,						Nine Months   Ended   September 30,
	2014			2013			2014			2013
	(In millions)
Balance, beginning of period	$	359		$	381		$	378		$	392
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired	1			3			1			5
Additional impairments — credit loss OTTI recognized on securities previously impaired	15			23			23			64
Reductions:
Sales (maturities, pay downs or prepayments) during the period of securities previously impaired as credit loss OTTI	(11		)	(21		)	(31		)	(75		)
Securities impaired to net present value of expected future cash flows	—			—			(7		)	—
Increase in cash flows accretion of previous credit loss OTTI	—			(1		)	—			(1		)
Balance, end of period	$	364		$	385		$	364		$	385