Investments

12 Months Ended

Dec. 31, 2012

Investments [Abstract]

Investments

8.  Investments

See Note 10 for information about the fair value hierarchy for investments and the related valuation methodologies.

Investment Risks and Uncertainties

Investments are exposed to the following primary sources of risk: credit, interest rate, liquidity, market valuation, currency and real estate risk. The financial statement risks, stemming from such investment risks, are those associated with the determination of estimated fair values, the diminished ability to sell certain investments in times of strained market conditions, the recognition of impairments, the recognition of income on certain investments and the potential consolidation of VIEs. The use of different methodologies, assumptions and inputs relating to these financial statement risks may have a material effect on the amounts presented within the consolidated financial statements.

The determination of valuation allowances and impairments is highly subjective and is based upon periodic evaluations and assessments of known and inherent risks associated with the respective asset class. Such evaluations and assessments are revised as conditions change and new information becomes available.

The recognition of income on certain investments (e.g. structured securities, including mortgage-backed securities, asset-backed securities (“ABS”), certain structured investment transactions and FVO and trading securities) is dependent upon certain factors such as prepayments and defaults, and changes in such factors could result in changes in amounts to be earned.

Fixed Maturity and Equity Securities AFS

Fixed Maturity and Equity Securities AFS by Sector

The following table presents the fixed maturity and equity securities AFS by sector. The unrealized loss amounts presented below include the noncredit loss component of OTTI losses. 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 RMBS, CMBS and ABS.

	December 31, 2012											December 31, 2011
	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	$	102,669	$	11,887	$	430	$	—		$	114,126	$	98,621	$	8,544	$	1,380	$	—	$	105,785
Foreign corporate (1)		61,806		5,654		277		(1	)		67,184		61,568		3,789		1,338		1		64,018
Foreign government		51,967		5,440		71		—			57,336		49,840		3,053		357		—		52,536
U.S. Treasury and agency		41,874		6,104		11		—			47,967		34,132		5,882		2		—		40,012
RMBS		35,666		2,477		315		349			37,479		42,092		2,281		1,033		703		42,637
CMBS		18,177		1,009		57		—			19,129		18,565		730		218		8		19,069
ABS		15,762		404		156		13			15,997		13,018		278		305		12		12,979
State and political subdivision		12,949		2,169		70		—			15,048		11,975		1,416		156		—		13,235
Total fixed maturity securities	$	340,870	$	35,144	$	1,387	$	361		$	374,266	$	329,811	$	25,973	$	4,789	$	724	$	350,271
Equity Securities:
Common	$	2,034	$	147	$	19	$	—		$	2,162	$	2,219	$	83	$	97	$	—	$	2,205
Non-redeemable preferred		804		65		140		—			729		989		31		202		—		818
Total equity securities	$	2,838	$	212	$	159	$	—		$	2,891	$	3,208	$	114	$	299	$	—	$	3,023

(1) OTTI losses, as presented above, represent the noncredit portion of OTTI losses that is included in AOCI. OTTI losses include both the initial recognition of noncredit losses, and the effects of subsequent increases and decreases in estimated fair value for those fixed maturity securities that were previously noncredit loss impaired. The noncredit loss component of OTTI losses for foreign corporate securities was in an unrealized gain position of $1 million at December 31, 2012 due to increases in estimated fair value subsequent to initial recognition of noncredit losses on such securities. See also “—Net Unrealized Investment Gains (Losses).”

The Company held non-income producing fixed maturity securities with an estimated fair value of $85 million and $62 million with unrealized gains (losses) of $11 million and ($19) million at December 31, 2012 and 2011, respectively.

Methodology for Amortization of Discount or Premium on Structured Securities

Amortization of the discount or premium on structured securities considers the estimated timing and amount of prepayments of the underlying loans. Actual prepayment experience is periodically reviewed and effective yields are recalculated when differences arise between the originally anticipated and the actual prepayments received and currently anticipated. Prepayment assumptions for single class and multi-class mortgage-backed and ABS are estimated using inputs obtained from third-party specialists and based on management’s knowledge of the current market. For credit-sensitive mortgage-backed and ABS and certain prepayment-sensitive securities, the effective yield is recalculated on a prospective basis. For all other mortgage-backed and ABS, the effective yield is recalculated on a retrospective basis.

Maturities of Fixed Maturity Securities

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

	December 31,
	2012				2011
	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
	(In millions)
Due in one year or less	$	24,177	$	24,394	$	16,747	$	16,862
Due after one year through five years		66,973		70,759		62,819		64,414
Due after five years through ten years		82,376		91,975		82,694		88,036
Due after ten years		97,739		114,533		93,876		106,274
Subtotal		271,265		301,661		256,136		275,586
Structured securities (RMBS, CMBS and ABS)		69,605		72,605		73,675		74,685
Total fixed maturity securities	$	340,870	$	374,266	$	329,811	$	350,271

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. The unrealized loss amounts include the noncredit component of OTTI loss.

	December 31, 2012								December 31, 2011
	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	$	3,799	$	88	$	3,695	$	342	$	15,642	$	590	$	5,135	$	790
Foreign corporate		2,783		96		2,873		180		12,618		639		5,957		700
Foreign government		1,431		22		543		49		11,227		230		1,799		127
U.S. Treasury and agency		1,951		11		—		—		2,611		1		50		1
RMBS		735		31		4,098		633		4,040		547		4,724		1,189
CMBS		842		11		577		46		2,825		135		678		91
ABS		1,920		30		1,410		139		4,972		103		1,316		214
State and political subdivision		260		4		251		66		177		2		1,007		154
Total fixed maturity securities	$	13,721	$	293	$	13,447	$	1,455	$	54,112	$	2,247	$	20,666	$	3,266
Equity Securities:
Common	$	201	$	18	$	14	$	1	$	581	$	96	$	5	$	1
Non-redeemable preferred		—		—		295		140		204		30		370		172
Total equity securities	$	201	$	18	$	309	$	141	$	785	$	126	$	375	$	173
Total number of securities in an unrealized loss position		1,941				1,335				3,978				1,963

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

Evaluation and Measurement Methodologies

Management considers a wide range of factors about the security issuer and uses its best judgment in evaluating the cause of the decline in the estimated fair value of the security and in assessing the prospects for near-term recovery. Inherent in management’s evaluation of the security are assumptions and estimates about the operations of the issuer and its future earnings potential. Considerations used in the impairment evaluation process include, but are not limited to: (i) the length of time and the extent to which the estimated fair value has been below cost or amortized cost; (ii) the potential for impairments of securities when the issuer is experiencing significant financial difficulties; (iii) the potential for impairments in an entire industry sector or sub-sector; (iv) the potential for impairments in certain economically depressed geographic locations; (v) the potential for impairments of securities where the issuer, series of issuers or industry has suffered a catastrophic type of loss or has exhausted natural resources; (vi) with respect to fixed maturity securities, whether the Company has the intent to sell or will more likely than not be required to sell a particular security before the decline in estimated fair value below amortized cost recovers; (vii) with respect to structured securities, changes in forecasted 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 (viii) other subjective factors, including concentrations and information obtained from regulators and rating agencies.

The methodology and significant inputs used to determine the amount of credit loss on fixed maturity securities are as follows:

• The Company calculates the recovery value by performing a discounted cash flow analysis based on the present value of future cash flows. The discount rate is generally the effective interest rate of the security prior to impairment.

• When determining collectability and the period over which value is expected to recover, the Company applies considerations utilized in its overall impairment evaluation process which incorporates information regarding the specific security, fundamentals of the industry and geographic area in which the security issuer operates, and overall macroeconomic conditions. Projected future cash flows are estimated using assumptions derived from management’s best estimates of likely scenario-based outcomes after giving consideration to a variety of variables that include, but are not limited to: payment terms of the security; the likelihood that the issuer can service the interest and principal payments; the quality and amount of any credit enhancements; the security’s position within the capital structure of the issuer; possible corporate restructurings or asset sales by the issuer; and changes to the rating of the security or the issuer by rating agencies.

• Additional considerations are made when assessing the unique features that apply to certain structured securities including, but not limited to: the quality of underlying collateral, expected prepayment speeds; current and forecasted loss severity, consideration of the payment terms of the underlying loans or assets backing a particular security, and the payment priority within the tranche structure of the security.

• When determining the amount of the credit loss for U.S. and foreign corporate securities, foreign government securities and state and political subdivision securities, the estimated fair value is considered the recovery value when available information does not indicate that another value is more appropriate. When information is identified that indicates a recovery value other than estimated fair value, management considers in the determination of recovery value the same considerations utilized in its overall impairment evaluation process as described in (ii) above, as well as private and public sector programs to restructure such securities.

With respect to securities that have attributes of debt and equity (perpetual hybrid securities), consideration is given in the OTTI analysis as to whether there has been any deterioration in the credit of the issuer and the likelihood of recovery in value of the securities that are in a severe and extended unrealized loss position. Consideration is also given as to whether any perpetual hybrid securities, with an unrealized loss, regardless of credit rating, have deferred any dividend payments. When an OTTI loss has occurred, the OTTI loss is the entire difference between the perpetual hybrid security’s cost and its estimated fair value with a corresponding charge to earnings.

The cost or amortized cost of fixed maturity and equity securities is adjusted for OTTI in the period in which the determination is made. The Company does not change the revised cost basis for subsequent recoveries in value.

In periods subsequent to the recognition of OTTI on a fixed maturity security, the Company accounts for the impaired security as if it had been purchased on the measurement date of the impairment. Accordingly, the discount (or reduced premium) based on the new cost basis is accreted over the remaining term of the fixed maturity security in a prospective manner based on the amount and timing of estimated future cash flows.

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 December 31, 2012. Future OTTI will depend primarily on economic fundamentals, issuer performance (including changes in the present value of future cash flows expected to be collected), changes in credit ratings, changes in collateral valuation, changes in interest rates and changes in credit spreads. If economic fundamentals or any of the above factors deteriorate, additional OTTI may be incurred in upcoming periods.

Gross unrealized losses on fixed maturity securities in an unrealized loss position decreased $3.8 billion during the year ended December 31, 2012 from $5.5 billion to $1.7 billion. The decline in, or improvement in, gross unrealized losses for the year ended December 31, 2012, was primarily attributable to narrowing credit spreads and a decrease in interest rates.

At December 31, 2012, $659 million of the total $1.7 billion of gross unrealized losses were from 183 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 $659 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, $299 million, or 45%, are related to gross unrealized losses on 74 investment grade fixed maturity securities. Unrealized losses on investment grade fixed maturity securities are principally related to widening credit spreads or rising interest rates since purchase.

Below Investment Grade Fixed Maturity Securities

Of the $659 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, $360 million, or 55%, are related to gross unrealized losses on 109 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 and sub-prime residential mortgage loans), U.S and foreign corporate securities (primarily utility and financial services industry securities) and ABS (primarily collateralized debt obligations) 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 the financial services industry sector, unemployment levels and valuations of residential real estate supporting non-agency RMBS. Management evaluates these U.S. and 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; and 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.

Equity Securities

Equity securities in an unrealized loss position decreased $140 million during the year ended December 31, 2012 from $299 million to $159 million. Of the $159 million, $119 million were from 13 equity securities with gross unrealized losses of 20% or more of cost for 12 months or greater, of which 87% were financial services industry investment grade non-redeemable preferred stock, of which 75% were rated A, AA, or AAA.

FVO and Trading Securities

See Note 10 for tables that present the four categories of securities that comprise FVO and trading securities. See “— Net Investment Income” and “— Net Investment Gains (Losses)” for the net investment income recognized on FVO and trading securities and the related changes in estimated fair value subsequent to purchase included in net investment income and net investment gains (losses) for securities still held as of the end of the respective years, as applicable.

Mortgage Loans

Mortgage Loans Held-for-Investment and Held-for-Sale by Portfolio Segment

Mortgage loans are summarized as follows at:

	December 31,
	2012						2011
	Carrying			% of			Carrying			% of
	Value			Total			Value			Total
	(In millions)
Mortgage loans held-for-investment:
Commercial	$	40,472			71.0	%	$	40,440			56.1	%
Agricultural		12,843			22.5			13,129			18.2
Residential (1)		958			1.7			689			1.0
Subtotal (2)		54,273			95.2			54,258			75.3
Valuation allowances (1)		(347	)		(0.6)			(481	)		(0.7)
Subtotal mortgage loans held-for-investment, net		53,926			94.6			53,777			74.6
Commercial mortgage loans held by CSEs		2,666			4.7			3,138			4.4
Total mortgage loans held-for-investment, net		56,592			99.3			56,915			79.0
Mortgage loans held-for-sale:
Residential — FVO (1)		49			0.1			3,064			4.2
Mortgage loans — lower of amortized cost or estimated fair value (1)		365			0.6			4,462			6.2
Securitized reverse residential mortgage loans (1), (3)		—			—			7,652			10.6
Total mortgage loans held-for-sale		414			0.7			15,178			21.0
Total mortgage loans, net	$	57,006			100.0	%	$	72,093			100.0	%

(1) As a result of the MetLife Bank Divestiture described in Note 3, the Company has disposed of certain mortgage loans and de-recognized its securitized reverse residential mortgage loans.

(2) Purchases of mortgage loans were $205 million and $64 million for the years ended December 31, 2012 and 2011, respectively.

(3) See Note 1 for a discussion of securitized reverse residential mortgage loans.

See “— Variable Interest Entities” for discussion of CSEs included in the table above.

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:

	December 31,
	2012								2011
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Mortgage loans:
Evaluated individually for credit losses	$	539	$	181	$	13	$	733	$	96	$	159	$	13	$	268
Evaluated collectively for credit losses		39,933		12,662		945		53,540		40,344		12,970		676		53,990
Total mortgage loans		40,472		12,843		958		54,273		40,440		13,129		689		54,258
Valuation allowances:
Specific credit losses		94		21		2		117		59		45		1		105
Non-specifically identified credit losses		199		31		—		230		339		36		1		376
Total valuation allowances		293		52		2		347		398		81		2		481
Mortgage loans, net of valuation allowance	$	40,179	$	12,791	$	956	$	53,926	$	40,042	$	13,048	$	687	$	53,777

Valuation Allowance Rollforward by Portfolio Segment

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

	Commercial			Agricultural			Residential			Total
	(In millions)
Balance at January 1, 2010	$	589		$	115		$	17		$	721
Provision (release)		(5	)		12			2			9
Charge-offs, net of recoveries		(22	)		(39	)		(5	)		(66	)
Balance at December 31, 2010		562			88			14			664
Provision (release)		(152	)		(3	)		10			(145	)
Charge-offs, net of recoveries		(12	)		(4	)		(3	)		(19	)
Transfer to held-for-sale (1)		—			—			(19	)		(19	)
Balance at December 31, 2011		398			81			2			481
Provision (release)		(92	)		—			6			(86	)
Charge-offs, net of recoveries		(13	)		(24	)		—			(37	)
Transfer to held-for-sale (1)		—			(5	)		(6	)		(11	)
Balance at December 31, 2012	$	293		$	52		$	2		$	347

(1) The valuation allowance on and the related carrying value of certain residential mortgage loans held-for-investment were transferred to mortgage loans held-for-sale in connection with the MetLife Bank Divestiture. See Note 3.

Valuation Allowance Methodology

Mortgage loans are considered to be impaired when it is probable that, based upon current information and events, the Company will be unable to collect all amounts due under the loan agreement. Specific valuation allowances are established using the same methodology for all three portfolio segments as the excess carrying value of a loan over either (i) the present value of expected future cash flows discounted at the loan’s original effective interest rate, (ii) the estimated fair value of the loan’s underlying collateral if the loan is in the process of foreclosure or otherwise collateral dependent, or (iii) the loan’s observable market price. A common evaluation framework is used for establishing non-specific valuation allowances for all loan portfolio segments; however, a separate non-specific valuation allowance is calculated and maintained for each loan portfolio segment that is based on inputs unique to each loan portfolio segment. Non-specific valuation allowances are established for pools of loans with similar risk characteristics where a property-specific or market-specific risk has not been identified, but for which the Company expects to incur a credit loss. These evaluations are based upon several loan portfolio segment-specific factors, including the Company’s experience for loan losses, defaults and loss severity, and loss expectations for loans with similar risk characteristics. These evaluations are revised as conditions change and new information becomes available.

Commercial and Agricultural Mortgage Loan Portfolio Segments

The Company typically uses several years of historical experience in establishing non-specific valuation allowances which captures multiple economic cycles. For evaluations of commercial loans, in addition to historical experience, management considers factors that include the impact of a rapid change to the economy, which may not be reflected in the loan portfolio, and recent loss and recovery trend experience as compared to historical loss and recovery experience. For evaluations of agricultural loans, in addition to historical experience, management considers factors that include increased stress in certain sectors, which may be evidenced by higher delinquency rates, or a change in the number of higher risk loans. On a quarterly basis, management incorporates the impact of these current market events and conditions on historical experience in determining the non-specific valuation allowance established for each portfolio segment.

All commercial loans are reviewed on an ongoing basis which may include an analysis of the property financial statements and rent roll, lease rollover analysis, property inspections, market analysis, estimated valuations of the underlying collateral, loan-to-value ratios, debt service coverage ratios, and tenant creditworthiness. All agricultural loans are monitored on an ongoing basis. The monitoring process focuses on higher risk loans, which include those that are classified as restructured, potentially delinquent, delinquent or in foreclosure, as well as loans with higher loan-to-value ratios and lower debt service coverage ratios. The monitoring process for agricultural loans is generally similar to the commercial loan monitoring process, with a focus on higher risk loans, including reviews on a geographic and property-type basis. Higher risk loans are reviewed individually on an ongoing basis for potential credit loss and specific valuation allowances are established using the methodology described above for all loan portfolio segments. Quarterly, the remaining loans are reviewed on a pool basis by aggregating groups of loans that have similar risk characteristics for potential credit loss, and non-specific valuation allowances are established as described above using inputs that are unique to each segment of the loan portfolio.

For commercial loans, the primary credit quality indicator is the debt service coverage ratio, which compares a property’s net operating income to amounts needed to service the principal and interest due under the loan. Generally, the lower the debt service coverage ratio, the higher the risk of experiencing a credit loss. The Company also reviews the loan-to-value ratio of its commercial loan portfolio. Loan-to-value ratios compare the unpaid principal balance of the loan to the estimated fair value of the underlying collateral. Generally, the higher the loan-to-value ratio, the higher the risk of experiencing a credit loss. The debt service coverage ratio and loan-to-value ratio, as well as the values utilized in calculating these ratios, are updated annually, on a rolling basis, with a portion of the loan portfolio updated each quarter.

For agricultural loans, the Company’s primary credit quality indicator is the loan-to-value ratio. The values utilized in calculating this ratio are developed in connection with the ongoing review of the agricultural loan portfolio and are routinely updated. Additionally, the Company focuses the monitoring process on higher risk loans, including reviews on a geographic and property-type basis.

Residential Mortgage Loan Portfolio Segment

The Company’s residential loan portfolio is comprised primarily of closed end, amortizing residential loans. For evaluations of residential loans, the key inputs of expected frequency and expected loss reflect current market conditions, with expected frequency adjusted, when appropriate, for differences from market conditions and the Company’s historical experience. In contrast to the commercial and agricultural loan portfolios, residential loans are smaller-balance homogeneous loans that are collectively evaluated for impairment. Non-specific valuation allowances are established using the evaluation framework described above for pools of loans with similar risk characteristics from inputs that are unique to the residential segment of the loan portfolio. Loan specific valuation allowances are only established on residential loans when they have been restructured and are established using the methodology described above for all loan portfolio segments.

For residential loans, the Company’s primary credit quality indicator is whether the loan is performing or non-performing. The Company generally defines non-performing residential loans as those that are 90 or more days past due and/or in non-accrual status which is assessed monthly. Generally, non-performing residential loans have a higher risk of experiencing a credit loss.

Credit Quality of Commercial Mortgage Loans

Information about the credit quality of commercial mortgage loans held-for-investment is presented below at:

	Recorded Investment											Estimated Fair Value		% of Total
	Debt Service Coverage Ratios						Total		% of Total
	> 1.20x		1.00x - 1.20x		< 1.00x
	(In millions)											(In millions)
December 31, 2012:
Loan-to-value ratios:
Less than 65%	$	29,839	$	730	$	722	$	31,291		77.3	%	$	33,730		78.3	%
65% to 75%		5,057		672		153		5,882		14.6			6,129		14.2
76% to 80%		938		131		316		1,385		3.4			1,436		3.3
Greater than 80%		1,085		552		277		1,914		4.7			1,787		4.2
Total	$	36,919	$	2,085	$	1,468	$	40,472		100.0	%	$	43,082		100.0	%
December 31, 2011:
Loan-to-value ratios:
Less than 65%	$	24,983	$	448	$	564	$	25,995		64.3	%	$	27,581		65.5	%
65% to 75%		8,275		336		386		8,997		22.3			9,387		22.3
76% to 80%		1,150		98		226		1,474		3.6			1,473		3.5
Greater than 80%		2,714		880		380		3,974		9.8			3,664		8.7
Total	$	37,122	$	1,762	$	1,556	$	40,440		100.0	%	$	42,105		100.0	%

Credit Quality of Agricultural Mortgage Loans

Information about the credit quality of agricultural mortgage loans held-for-investment is presented below at:

	December 31,
	2012					2011
	Recorded Investment		% of Total			Recorded Investment		% of     Total
	(In millions)					(In millions)
Loan-to-value ratios:
Less than 65%	$	11,908		92.7	%	$	11,802		89.9	%
65% to 75%		590		4.6			874		6.7
76% to 80%		92		0.7			76		0.6
Greater than 80%		253		2.0			377		2.8
Total	$	12,843		100.0	%	$	13,129		100.0	%

The estimated fair value of agricultural mortgage loans held-for-investment was $13.3 billion and $13.6 billion at December 31, 2012 and 2011, respectively.

Credit Quality of Residential Mortgage Loans

Information about the credit quality of residential mortgage loans held-for-investment is presented below at:

	December 31,
	2012					2011
	Recorded Investment		% of Total			Recorded Investment		% of Total
	(In millions)					(In millions)
Performance indicators:
Performing	$	929		97.0	%	$	671		97.4	%
Non-performing		29		3.0			18		2.6
Total	$	958		100.0	%	$	689		100.0	%

The estimated fair value of residential mortgage loans held-for-investment was $1.0 billion and $737 million at December 31, 2012 and 2011, 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 December 31, 2012 and 2011. The Company defines delinquent mortgage loans consistent with industry practice, when interest and principal payments are past due as follows: commercial and residential mortgage loans – 60 days; and agricultural mortgage loans – 90 days. The recorded investment in mortgage loans held-for-investment, prior to valuation allowances, past due according to these aging categories, greater than 90 days past due and still accruing interest and in nonaccrual status, by portfolio segment, were as follows at:

	Past Due				Greater than 90 Days Past Due and Still Accruing Interest				Nonaccrual Status
	December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011		December 31, 2012		December 31, 2011
	(In millions)
Commercial	$	2	$	63	$	—	$	—	$	84	$	63
Agricultural		116		146		53		29		67		157
Residential		29		8		—		—		18		17
Total	$	147	$	217	$	53	$	29	$	169	$	237

Impaired Mortgage Loans

Information regarding impaired mortgage loans held-for-investment, including those modified in a troubled debt restructuring, by portfolio segment, were as follows at and for the periods ended:

	Loans with a Valuation Allowance								Loans without a Valuation Allowance				All Impaired Loans
December 31,	Unpaid Principal Balance		Recorded Investment		Valuation Allowances		Carrying Value		Unpaid Principal Balance		Recorded Investment		Unpaid Principal Balance		Carrying Value		Average Recorded Investment		Interest Income
	(In millions)
2012:
Commercial	$	445	$	436	$	94	$	342	$	103	$	103	$	548	$	445	$	464	$	14
Agricultural		110		107		21		86		79		74		189		160		204		8
Residential		13		13		2		11		—		—		13		11		13		—
Total	$	568	$	556	$	117	$	439	$	182	$	177	$	750	$	616	$	681	$	22
2011:
Commercial	$	96	$	96	$	59	$	37	$	252	$	237	$	348	$	274	$	313	$	6
Agricultural		160		159		45		114		71		69		231		183		252		5
Residential		13		13		1		12		1		1		14		13		23		—
Total	$	269	$	268	$	105	$	163	$	324	$	307	$	593	$	470	$	588	$	11

Unpaid principal balance is generally prior to any charge-offs. Interest income recognized is primarily cash basis income. The average recorded investment for commercial, agricultural and residential mortgage loans was $192 million, $284 million, $16 million, respectively, for the year ended December 31, 2010; and interest income recognized for commercial, agricultural and residential mortgage loans was $6 million, $8 million and $0, respectively, for the year ended December 31, 2010.

Mortgage Loans Modified in a Troubled Debt Restructuring

For a small portion of the mortgage loan portfolio, classified as troubled debt restructurings, concessions are granted related to borrowers experiencing financial difficulties. Generally, the types of concessions include: reduction of the contractual interest rate, extension of the maturity date at an interest rate lower than current market interest rates, and/or a reduction of accrued interest. The amount, timing and extent of the concession granted is considered in determining any impairment or changes in the specific valuation allowance recorded with the restructuring. Through the continuous monitoring process, a specific valuation allowance may have been recorded prior to the quarter when the mortgage loan is modified in a troubled debt restructuring. Accordingly, the carrying value (after specific valuation allowance) before and after modification through a troubled debt restructuring may not change significantly, or may increase if the expected recovery is higher than the pre-modification recovery assessment. 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:

	For the Years Ended December 31,
	2012						2011
	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	$	222	$	199		5	$	147	$	111
Agricultural		5		17		16		10		42		42
Residential		—		—		—		—		—		—
Total		6	$	239	$	215		15	$	189	$	153

There were no mortgage loans during the previous 12 months modified in a troubled debt restructuring with a subsequent payment default at December 31, 2012. During the 12 months ended December 31, 2011, the Company had four agricultural mortgage loans, with a carrying value after specific valuation allowance of $13 million, modified in a troubled debt restructuring with a subsequent payment default. Payment default is determined in the same manner as delinquency status — when interest and principal payments are past due.

Other Invested Assets

Other invested assets is comprised primarily of freestanding derivatives with positive estimated fair values (see Note 9), tax credit partnerships, and leveraged leases.

Leveraged Leases

Investment in leveraged leases, included in other invested assets, consisted of the following:

	December 31,
	2012			2011
	(In millions)
Rental receivables, net	$	1,564		$	1,859
Estimated residual values		1,474			1,657
Subtotal		3,038			3,516
Unearned income		(1,040	)		(1,268	)
Investment in leveraged leases	$	1,998		$	2,248

Rental receivables are generally due in periodic installments. The payment periods range from one to 15 years but, in certain circumstances can be over 30 years. For rental receivables, the primary credit quality indicator is whether the rental receivable is performing or non-performing, which is assessed monthly. The Company generally defines non-performing rental receivables as those that are 90 days or more past due. At December 31, 2012 and 2011, all rental receivables were performing.

The deferred income tax liability related to leveraged leases was $1.6 billion and $1.5 billion at December 31, 2012 and 2011, respectively.

The components of income from investment in leveraged leases, excluding net investment gains (losses) were as follows:

	Years Ended December 31,
	2012			2011			2010
	(In millions)
Income from investment in leveraged leases	$	57		$	125		$	123
Less: Income tax expense on leveraged leases		(20	)		(44	)		(43	)
Investment income after income tax from investment in leveraged leases	$	37		$	81		$	80

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 $6.1 billion and $5.0 billion at December 31, 2012 and 2011, respectively.

Net Unrealized Investment Gains (Losses)

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

	Years Ended December 31,
	2012			2011			2010
	(In millions)
Fixed maturity securities	$	33,641		$	21,096		$	7,817
Fixed maturity securities with noncredit OTTI losses in accumulated other comprehensive income (loss)		(361	)		(724	)		(601	)
Total fixed maturity securities		33,280			20,372			7,216
Equity securities		97			(167	)		(3	)
Derivatives		1,274			1,514			(59	)
Other		(30	)		72			42
Subtotal		34,621			21,791			7,196
Amounts allocated from:
Insurance liability loss recognition		(6,049	)		(3,996	)		(672	)
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		19			47			38
DAC and VOBA		(2,485	)		(1,800	)		(1,003	)
Policyholder dividend obligation		(3,828	)		(2,919	)		(876	)
Subtotal		(12,343	)		(8,668	)		(2,513	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		119			236			197
Deferred income tax benefit (expense)		(7,973	)		(4,694	)		(1,762	)
Net unrealized investment gains (losses)		14,424			8,665			3,118
Net unrealized investment gains (losses) attributable to noncontrolling interests		(5	)		9			4
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	14,419		$	8,674		$	3,122

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

	Years Ended December 31,
	2012			2011
	(In millions)
Balance, January 1,	$	(724	)	$	(601	)
Noncredit OTTI losses recognized (1)		(29	)		31
Securities sold with previous noncredit OTTI loss		177			125
Subsequent changes in estimated fair value		215			(279	)
Balance, December 31,	$	(361	)	$	(724	)

(1) Noncredit OTTI losses recognized, net of DAC, were ($21) million and $33 million for the years ended December 31, 2012 and 2011, respectively.

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

	Years Ended December 31,
	2012			2011			2010
	(In millions)
Balance, beginning of period	$	8,674		$	3,122		$	(1,338	)
Cumulative effect of change in accounting principles, net of income tax		—			—			52
Fixed maturity securities on which noncredit OTTI losses have been recognized		363			(123	)		242
Unrealized investment gains (losses) during the year		12,467			14,823			9,117
Unrealized investment gains (losses) of subsidiary at the date of disposal		—			(105	)		—
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		(2,053	)		(3,406	)		(554	)
Insurance liability gain (loss) recognition of subsidiary at the date of disposal		—			82			—
DAC and VOBA related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		(28	)		9			(33	)
DAC and VOBA		(685	)		(808	)		(1,135	)
DAC and VOBA of subsidiary at date of disposal		—			11			—
Policyholder dividend obligation		(909	)		(2,043	)		(876	)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in accumulated other comprehensive income (loss)		(117	)		39			(73	)
Deferred income tax benefit (expense)		(3,279	)		(2,936	)		(2,283	)
Deferred income tax benefit (expense) of subsidiary at date of disposal		—			4			—
Net unrealized investment gains (losses)		14,433			8,669			3,119
Net unrealized investment gains (losses) attributable to noncontrolling interests		(14	)		5			3
Balance, end of period	$	14,419		$	8,674		$	3,122
Change in net unrealized investment gains (losses)	$	5,759		$	5,547		$	4,457
Change in net unrealized investment gains (losses) attributable to noncontrolling interests		(14	)		5			3
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	5,745		$	5,552		$	4,460

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 Japan government and its agencies of $22.4 billion and $21.0 billion, at estimated fair value, at December 31, 2012 and 2011, respectively. The Company’s investment in fixed maturity and equity securities to counterparties that primarily conduct business in Japan were $28.7 billion and $28.4 billion, including Japan government and agency fixed maturity securities, at December 31, 2012 and 2011, respectively.

Securities Lending

As described in Note 1, the Company participates in a securities lending program. Elements of the securities lending program are presented below at:

	December 31,
	2012		2011
	(In millions)
Securities on loan: (1)
Amortized cost	$	23,380	$	20,613
Estimated fair value	$	27,077	$	24,072
Cash collateral on deposit from counterparties (2)	$	27,727	$	24,223
Security collateral on deposit from counterparties (3)	$	104	$	371
Reinvestment portfolio — estimated fair value	$	28,112	$	23,940

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

(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.

	December 31,
	2012		2011
	(In millions)
Invested assets on deposit (regulatory deposits)	$	2,362	$	1,660
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)		12,434		11,135
Invested assets pledged as collateral (1)		23,251		29,899
Total invested assets on deposit, held in trust and pledged as collateral	$	38,047	$	42,694

(1) The Company has pledged fixed maturity securities, mortgage loans and cash and cash equivalents in connection with various agreements and transactions, including funding and advances agreements (see Notes 4 and 12), collateral financing arrangements (see Note 13) and derivative transactions (see Note 9).

Purchased Credit Impaired Investments

Investments acquired with evidence of credit quality deterioration since origination and for which it is probable at the acquisition date that the Company will be unable to collect all contractually required payments are classified as purchased credit impaired (“PCI”) investments. For each investment, the excess of the cash flows expected to be collected as of the acquisition date over its acquisition-date fair value is referred to as the accretable yield and is recognized as net investment income on an effective yield basis. If subsequently, based on current information and events, it is probable that there is a significant increase in cash flows previously expected to be collected or if actual cash flows are significantly greater than cash flows previously expected to be collected, the accretable yield is adjusted prospectively. The excess of the contractually required payments (including interest) as of the acquisition date over the cash flows expected to be collected as of the acquisition date is referred to as the nonaccretable difference, and this amount is not expected to be realized as net investment income. Decreases in cash flows expected to be collected can result in OTTI or the recognition of mortgage loan valuation allowances (see Note 1).

The Company’s PCI investments, by invested asset class, were as follows at:

	December 31,
	2012		2011		2012		2011
	Fixed Maturity Securities				Mortgage Loans
	(In millions)
Outstanding principal and interest balance (1)	$	4,905	$	4,547	$	440	$	471
Carrying value (2)	$	3,900	$	3,130	$	199	$	173

(1) Represents the contractually required payments, which is the sum of contractual principal, whether or not currently due, and accrued interest.

(2) Estimated fair value plus accrued interest for fixed maturity securities and amortized cost, plus accrued interest, less any valuation allowances, for mortgage loans.

The following table presents information about PCI investments acquired during the periods indicated:

	Years Ended December 31,
	2012		2011		2012		2011
	Fixed Maturity Securities				Mortgage Loans
	(In millions)
Contractually required payments (including interest)	$	2,083	$	5,141	$	—	$	—
Cash flows expected to be collected (1)	$	1,524	$	4,365	$	—	$	—
Fair value of investments acquired	$	991	$	2,590	$	—	$	—

(1) Represents undiscounted principal and interest cash flow expectations, at the date of acquisition.

The following table presents activity for the accretable yield on PCI investments for:

	Years Ended December 31,
	2012			2011			2012			2011
	Fixed Maturity Securities						Mortgage Loans
	(In millions)
Accretable yield, January 1,	$	2,311		$	541		$	254		$	170
Investments purchased		533			1,775			—			—
Accretion recognized in earnings		(203	)		(114	)		(71	)		(56	)
Disposals		(102	)		(65	)		—			—
Reclassification (to) from nonaccretable difference		126			174			1			140
Accretable yield, December 31,	$	2,665		$	2,311		$	184		$	254

Collectively Significant Equity Method Investments

The Company holds investments in real estate joint ventures, real estate funds and other limited partnership interests consisting of leveraged buy-out funds, hedge funds, private equity funds, joint ventures and other funds. The portion of these investments accounted for under the equity method had a carrying value of $10.6 billion at December 31, 2012. The Company’s maximum exposure to loss related to these equity method investments is limited to the carrying value of these investments plus unfunded commitments of $3.0 billion at December 31, 2012. Except for certain real estate joint ventures, the Company’s investments in real estate funds and other limited partnership interests are generally of a passive nature in that the Company does not participate in the management of the entities.

As described in Note 1, the Company generally records its share of earnings in its equity method investments using a three-month lag methodology and within net investment income. Aggregate net investment income from these equity method investments exceeded 10% of the Company’s consolidated pre-tax income (loss) from continuing operations for two of the three most recent annual periods: 2012 and 2010. The Company is providing the following aggregated summarized financial data for such equity method investments, for the most recent annual periods, in order to provide comparative information. This aggregated summarized financial data does not represent the Company’s proportionate share of the assets, liabilities, or earnings of such entities.

The aggregated summarized financial data presented below reflects the latest available financial information and is as of, and for, the years ended December 31, 2012, 2011 and 2010. Aggregate total assets of these entities totaled $285.2 billion and $266.4 billion at December 31, 2012 and 2011, respectively. Aggregate total liabilities of these entities totaled $28.8 billion and $31.2 billion at December 31, 2012 and 2011, respectively. Aggregate net income (loss) of these entities totaled $17.9 billion, $9.7 billion and $18.7 billion for the years ended December 31, 2012, 2011 and 2010, respectively. Aggregate net income (loss) from the underlying entities in which the Company invests is primarily comprised of investment income, including recurring investment income and realized and unrealized investment gains (losses).

Variable Interest Entities

The Company has invested in certain structured transactions 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 December 31, 2012 and 2011. 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.

	December 31,
	2012				2011
	Total Assets		Total Liabilities		Total Assets		Total Liabilities
	(In millions)
CSEs (assets (primarily loans) and liabilities (primarily debt)) (1)	$	2,730	$	2,545	$	3,299	$	3,103
MRSC (collateral financing arrangement (primarily securities)) (2)		3,439		—		3,333		—
Other limited partnership interests		356		8		360		6
FVO and trading securities		71		—		163		—
Other invested assets		85		—		102		1
Real estate joint ventures		11		14		16		18
Total	$	6,692	$	2,567	$	7,273	$	3,128

(1) The Company consolidates former QSPEs that are structured as CMBS and as collateralized debt 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 assets and liabilities of these CSEs are primarily commercial mortgage loans held-for-investment and long-term debt, respectively, and to a lesser extent include FVO and trading securities, accrued investment income, cash and cash equivalents, premiums, reinsurance and other receivables and other liabilities. The Company’s exposure was limited to that of its remaining investment in the former QSPEs of $168 million and $172 million at estimated fair value at December 31, 2012 and 2011, 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 $163 million, $324 million and $411 million for the years ended December 31, 2012, 2011 and 2010 respectively.

(2) See Note 13 for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement. These assets primarily consist of fixed maturity securities and, to a much lesser extent, mortgage loans and cash and cash equivalents.

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:

	December 31,
	2012				2011
	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)	$	72,605	$	72,605	$	74,685	$	74,685
U.S. and foreign corporate		5,287		5,287		4,998		4,998
Other limited partnership interests		4,436		5,908		4,340		6,084
Other invested assets		1,117		1,431		799		1,194
FVO and trading securities		563		563		671		671
Mortgage loans		351		351		456		456
Real estate joint ventures		150		157		61		79
Equity securities AFS:
Non-redeemable preferred		32		32		—		—
Total	$	84,541	$	86,334	$	86,010	$	88,167

(1) The maximum exposure to loss relating to fixed maturity securities and the FVO and trading securities is equal to their carrying amounts or the carrying amounts of retained interests. The maximum exposure to loss relating to other limited partnership interests and real estate joint ventures is equal to the carrying amounts plus any unfunded commitments of the Company. The maximum exposure to loss relating to mortgage loans 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 $318 million and $267 million at December 31, 2012 and 2011, 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.

As described in Note 21, 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 years ended December 31, 2012, 2011 and 2010.

Net Investment Income

The components of net investment income were as follows:

	Years Ended December 31,
	2012		2011			2010
	(In millions)
Investment income:
Fixed maturity securities	$	15,218	$	15,037		$	12,407
Equity securities		133		141			128
FVO and trading securities — Actively Traded Securities and FVO general account securities (1)		88		31			73
Mortgage loans		3,191		3,164			2,824
Policy loans		626		641			649
Real estate and real estate joint ventures		834		688			372
Other limited partnership interests		845		681			879
Cash, cash equivalents and short-term investments		163		167			101
International joint ventures		19		(12	)		(92	)
Other		131		178			236
Subtotal		21,248		20,716			17,577
Less: Investment expenses		1,090		1,019			882
Subtotal, net		20,158		19,697			16,695
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)		1,473		(453	)		372
Securitized reverse residential mortgage loans		177		—			—
FVO CSEs - interest income:
Commercial mortgage loans		172		332			411
Securities		4		9			15
Subtotal		1,826		(112	)		798
Net investment income	$	21,984	$	19,585		$	17,493

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

	Years Ended December 31,
	2012		2011			2010
	(In millions)
Actively Traded Securities and FVO general account securities	$	51	$	(3	)	$	30
FVO contractholder-directed unit-linked investments	$	1,170	$	(647	)	$	322

See “— Variable Interest Entities” for discussion of CSEs included in the table above.

Net Investment Gains (Losses)

Components of Net Investment Gains (Losses)

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

	Years Ended December 31,
	2012			2011			2010
	(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	$	(61	)	$	(10	)	$	(3	)
Finance		(32	)		(56	)		(126	)
Consumer		(19	)		(50	)		(36	)
Communications		(19	)		(41	)		(16	)
Transportation		(17	)		—			—
Technology		(6	)		(1	)		—
Industrial		(5	)		(11	)		(2	)
Total U.S. and foreign corporate securities		(159	)		(169	)		(183	)
RMBS		(97	)		(214	)		(117	)
CMBS		(51	)		(32	)		(86	)
ABS		(9	)		(54	)		(84	)
State and political subdivision		(1	)		—			—
Foreign government		—			(486	)		—
OTTI losses on fixed maturity securities recognized in earnings		(317	)		(955	)		(470	)
Fixed maturity securities — net gains (losses) on sales and disposals		253			25			215
Total gains (losses) on fixed maturity securities (1)		(64	)		(930	)		(255	)
Total gains (losses) on equity securities:
Total OTTI losses recognized — by sector:
Common		(34	)		(22	)		(7	)
Non-redeemable preferred		—			(38	)		(7	)
OTTI losses on equity securities recognized in earnings		(34	)		(60	)		(14	)
Equity securities — net gains (losses) on sales and disposals		38			37			118
Total gains (losses) on equity securities		4			(23	)		104
FVO and trading securities — FVO general account securities — changes in estimated fair value subsequent to consolidation		17			(2	)		—
Mortgage loans (1)		57			175			22
Real estate and real estate joint ventures		(36	)		134			(54	)
Other limited partnership interests		(36	)		4			(18	)
Other investment portfolio gains (losses)		(151	)		(7	)		(6	)
Subtotal — investment portfolio gains (losses) (1)		(209	)		(649	)		(207	)
FVO CSEs — changes in estimated fair value subsequent to consolidation:
Commercial mortgage loans		7			(84	)		758
Securities		—			—			(78	)
Long-term debt — related to commercial mortgage loans		25			97			(722	)
Long-term debt — related to securities		(7	)		(8	)		48
Non-investment portfolio gains (losses) (2)		(168	)		(223	)		(207	)
Subtotal FVO CSEs and non-investment portfolio gains (losses)		(143	)		(218	)		(201	)
Total net investment gains (losses)	$	(352	)	$	(867	)	$	(408	)

(1) Investment portfolio gains (losses) for the years ended December 31, 2012 and 2011 includes a net gain (loss) of $37 million and ($153) million, respectively, as a result of the MetLife Bank Divestiture, which is comprised of gains (losses) on investments sold of $78 million and $1 million, and impairments of ($41) million and ($154) million, respectively. See Note 3.

(2) Non-investment portfolio gains (losses) for the year ended December 31, 2012 includes a gain of $33 million related to certain dispositions as more fully described in Note 3. Non-investment portfolio gains (losses) for the year ended December 31, 2011 includes a loss of $106 million related to certain dispositions and a goodwill impairment loss of $65 million. See Notes 3 and 11. Non-investment portfolio gains (losses) for the year ended December 31, 2010 includes a loss of $209 million related to a disposition. See Note 3.

See “— Variable Interest Entities” for discussion of CSEs included in the table above.

Gains (losses) from foreign currency transactions included within net investment gains (losses) were ($112) million, $37 million and $230 million for the years ended December 31, 2012, 2011 and 2010, 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 table below. Investment gains and losses on sales of securities are determined on a specific identification basis.

	Years Ended December 31,
	2012			2011			2010			2012			2011			2010			2012			2011			2010
	Fixed Maturity Securities									Equity Securities									Total
	(In millions)
Proceeds	$	59,219		$	67,449		$	54,514		$	1,648		$	1,241		$	616		$	60,867		$	68,690		$	55,130
Gross investment gains	$	944		$	892		$	831		$	73		$	108		$	129		$	1,017		$	1,000		$	960
Gross investment losses		(691	)		(867	)		(616	)		(35	)		(71	)		(11	)		(726	)		(938	)		(627	)
Total OTTI losses recognized in earnings:
Credit-related		(223	)		(645	)		(423	)		—			—			—			(223	)		(645	)		(423	)
Other (1)		(94	)		(310	)		(47	)		(34	)		(60	)		(14	)		(128	)		(370	)		(61	)
Total OTTI losses recognized in earnings		(317	)		(955	)		(470	)		(34	)		(60	)		(14	)		(351	)		(1,015	)		(484	)
Net investment gains (losses)	$	(64	)	$	(930	)	$	(255	)	$	4		$	(23	)	$	104		$	(60	)	$	(953	)	$	(151	)

(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 OCI:

	Years Ended December 31,
	2012			2011
	(In millions)
Balance, at January 1,	$	471		$	443
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		46			45
Additional impairments — credit loss OTTI recognized on securities previously impaired		70			143
Reductions:
Sales (maturities, pay downs or prepayments) during the period of securities previously impaired as credit loss OTTI		(176	)		(90	)
Securities impaired to net present value of expected future cash flows		(17	)		(57	)
Increases in cash flows — accretion of previous credit loss OTTI		(2	)		(13	)
Balance, at December 31,	$	392		$	471