Investments

3 Months Ended

Mar. 31, 2013

Investments [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. The unrealized loss amounts presented below include the noncredit loss component of other-than-temporary impairments (“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 residential mortgage-backed securities (“RMBS”), commercial mortgage-backed securities (“CMBS”) and asset-backed securities (“ABS”).

	March 31, 2013										December 31, 2012
	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	$	102,086	$	11,364	$	444	$	—	$	113,006	$	102,669	$	11,887	$	430	$	—	$	114,126
Foreign corporate (1)		61,067		5,322		305		(2)		66,086		61,806		5,654		277		(1)		67,184
Foreign government		49,951		5,552		68		—		55,435		51,967		5,440		71		—		57,336
U.S. Treasury and agency		49,258		5,229		30		—		54,457		41,874		6,104		11		—		47,967
RMBS		34,403		2,391		198		249		36,347		35,666		2,477		315		349		37,479
CMBS		17,015		935		53		—		17,897		18,177		1,009		57		—		19,129
ABS		15,841		423		137		13		16,114		15,762		404		156		13		15,997
State and political subdivision		12,912		2,110		70		—		14,952		12,949		2,169		70		—		15,048
Total fixed maturity securities	$	342,533	$	33,326	$	1,305	$	260	$	374,294	$	340,870	$	35,144	$	1,387	$	361	$	374,266
Equity securities:
Common stock	$	1,985	$	305	$	8	$	—	$	2,282	$	2,034	$	147	$	19	$	—	$	2,162
Non-redeemable preferred stock		913		71		78		—		906		804		65		140		—		729
Total equity securities	$	2,898	$	376	$	86	$	—	$	3,188	$	2,838	$	212	$	159	$	—	$	2,891

(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 $2 million and $1 million at March 31, 2013 and December 31, 2012, respectively, 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 $80 million and $85 million with unrealized gains (losses) of $19 million and $11 million at March 31, 2013 and December 31, 2012, 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:

	March 31, 2013				December 31, 2012
	Amortized   Cost		Estimated   Fair Value		Amortized   Cost		Estimated   Fair Value
	(In millions)
Due in one year or less	$	23,879	$	24,118	$	24,177	$	24,394
Due after one year through five years		70,432		74,386		66,973		70,759
Due after five years through ten years		80,420		89,648		82,376		91,975
Due after ten years		100,543		115,784		97,739		114,533
Subtotal		275,274		303,936		271,265		301,661
Structured securities (RMBS, CMBS and ABS)		67,259		70,358		69,605		72,605
Total fixed maturity securities	$	342,533	$	374,294	$	340,870	$	374,266

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.

	March 31, 2013								December 31, 2012
	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	$	5,868	$	171	$	2,663	$	273	$	3,799	$	88	$	3,695	$	342
Foreign corporate		4,884		146		2,144		157		2,783		96		2,873		180
Foreign government		1,428		28		462		40		1,431		22		543		49
U.S. Treasury and agency		2,645		30		—		—		1,951		11		—		—
RMBS		1,284		42		3,235		405		735		31		4,098		633
CMBS		1,440		16		401		37		842		11		577		46
ABS		2,356		43		1,015		107		1,920		30		1,410		139
State and political subdivision		525		10		243		60		260		4		251		66
Total fixed maturity securities	$	20,430	$	486	$	10,163	$	1,079	$	13,721	$	293	$	13,447	$	1,455
Equity securities:
Common stock	$	67	$	7	$	12	$	1	$	201	$	18	$	14	$	1
Non-redeemable preferred stock		56		1		274		77		—		—		295		140
Total equity securities	$	123	$	8	$	286	$	78	$	201	$	18	$	309	$	141
Total number of securities in an unrealized loss position		2,188				1,070				1,941				1,335

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 2012 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 March 31, 2013. 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 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 in an unrealized loss position decreased $183 million during the three months ended March 31, 2013 from $1.7 billion to $1.6 billion. The decline in, or improvement in, gross unrealized losses for the three months ended March 31, 2013, was primarily attributable to narrowing credit spreads, partially offset by an increase in interest rates.

At March 31, 2013, $364 million of the total $1.6 billion of gross unrealized losses were from 116 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 $364 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, $179 million, or 49%, are related to gross unrealized losses on 51 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 $364 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, $185 million, or 51%, are related to gross unrealized losses on 65 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), ABS (primarily foreign ABS) and foreign government securities (primarily European sovereign bonds) 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 unemployment levels, sovereign debt levels and valuations of residential real estate supporting non-agency RMBS. Management evaluates foreign government 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 $73 million during the three months ended March 31, 2013 from $159 million to $86 million. Of the $86 million, $54 million were from 10 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 65% were rated A, AA, or AAA.

Fair Value Option and Trading Securities

See Note 8 for tables that present the categories of securities that comprise fair value option (“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 periods, as applicable.

Mortgage Loans

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

Mortgage loans are summarized as follows at:

	March 31, 2013					December 31, 2012
	Carrying     Value		% of     Total			Carrying     Value		% of     Total
	(In millions)					(In millions)
Mortgage loans held-for-investment:
Commercial	$	39,605		71.2	%	$	40,472		71.0	%
Agricultural		12,669		22.8			12,843		22.5
Residential		994		1.8			958		1.7
Subtotal (1)		53,268		95.8			54,273		95.2
Valuation allowances		(332)		(0.6)			(347)		(0.6)
Subtotal mortgage loans held-for-investment, net		52,936		95.2			53,926		94.6
Commercial mortgage loans held by CSEs		2,407		4.3			2,666		4.7
Total mortgage loans held-for-investment, net		55,343		99.5			56,592		99.3
Mortgage loans held-for-sale:
Residential — FVO		2		—			49		0.1
Mortgage loans — lower of amortized cost or estimated fair value		269		0.5			365		0.6
Total mortgage loans held-for-sale		271		0.5			414		0.7
Total mortgage loans, net	$	55,614		100.0	%	$	57,006		100.0	%

(1) Purchases of mortgage loans were $50 million for the three months ended March 31, 2013. There were no mortgage loan purchases for the three months ended March 31, 2012.

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:

	March 31, 2013								December 31, 2012
	Commercial		Agricultural		Residential		Total		Commercial		Agricultural		Residential		Total
	(In millions)
Mortgage loans:
Evaluated individually for credit losses	$	533	$	156	$	14	$	703	$	539	$	181	$	13	$	733
Evaluated collectively for credit losses		39,072		12,513		980		52,565		39,933		12,662		945		53,540
Total mortgage loans		39,605		12,669		994		53,268		40,472		12,843		958		54,273
Valuation allowances:
Specific credit losses		61		19		2		82		94		21		2		117
Non-specifically identified credit losses		214		35		1		250		199		31		—		230
Total valuation allowances		275		54		3		332		293		52		2		347
Mortgage loans, net of valuation allowance	$	39,330	$	12,615	$	991	$	52,936	$	40,179	$	12,791	$	956	$	53,926

Valuation Allowance Rollforward by Portfolio Segment

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

	Commercial		Agricultural		Residential		Total
	(In millions)
For the Three Months Ended March 31, 2013:
Balance, beginning of period	$	293	$	52	$	2	$	347
Provision (release)		(18)		6		1		(11)
Charge-offs, net of recoveries		—		(4)		—		(4)
Balance, end of period	$	275	$	54	$	3	$	332
For the Three Months Ended March 31, 2012:
Balance, beginning of period	$	398	$	81	$	2	$	481
Provision (release)		(30)		(6)		1		(35)
Charge-offs, net of recoveries		—		—		—		—
Balance, end of period	$	368	$	75	$	3	$	446

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								% of      Total
	> 1.20x		1.00x - 1.20x		< 1.00x		Total
	(In millions)											(In millions)
March 31, 2013:
Loan-to-value ratios:
Less than 65%	$	29,872	$	701	$	363	$	30,936		78.1	%	$	33,682		79.2	%
65% to 75%		4,864		645		158		5,667		14.3			5,912		13.9
76% to 80%		918		297		341		1,556		3.9			1,582		3.7
Greater than 80%		1,066		183		197		1,446		3.7			1,342		3.2
Total	$	36,720	$	1,826	$	1,059	$	39,605		100.0	%	$	42,518		100.0	%
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	%

Credit Quality of Agricultural Mortgage Loans

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

	March 31, 2013					December 31, 2012
	Recorded      Investment		% of     Total			Recorded      Investment		% of     Total
	(In millions)					(In millions)
Loan-to-value ratios:
Less than 65%	$	11,676		92.2	%	$	11,908		92.7	%
65% to 75%		679		5.4			590		4.6
76% to 80%		79		0.6			92		0.7
Greater than 80%		235		1.8			253		2.0
Total	$	12,669		100.0	%	$	12,843		100.0	%

The estimated fair value of agricultural mortgage loans held-for-investment was $13.1 billion and $13.3 billion at March 31, 2013 and December 31, 2012, respectively.

Credit Quality of Residential Mortgage Loans

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

	March 31, 2013					December 31, 2012
	Recorded      Investment		% of     Total			Recorded      Investment		% of     Total
	(In millions)					(In millions)
Performance indicators:
Performing	$	967		97.3	%	$	929		97.0	%
Nonperforming		27		2.7			29		3.0
Total	$	994		100.0	%	$	958		100.0	%

The estimated fair value of residential mortgage loans held-for-investment was $1.0 billion at both March 31, 2013 and December 31, 2012.

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 March 31, 2013 and December 31, 2012. 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
	March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012		March 31, 2013		December 31, 2012
	(In millions)
Commercial	$	—	$	2	$	—	$	—	$	223	$	84
Agricultural		105		116		44		53		75		67
Residential		27		29		—		—		18		18
Total	$	132	$	147	$	44	$	53	$	316	$	169

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:

	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)
March 31, 2013:
Commercial	$	261	$	245	$	61	$	184	$	302	$	288	$	563	$	472
Agricultural		91		90		19		71		71		66		162		137
Residential		12		12		2		10		2		2		14		12
Total	$	364	$	347	$	82	$	265	$	375	$	356	$	739	$	621
December 31, 2012:
Commercial	$	445	$	436	$	94	$	342	$	103	$	103	$	548	$	445
Agricultural		110		107		21		86		79		74		189		160
Residential		13		13		2		11		—		—		13		11
Total	$	568	$	556	$	117	$	439	$	182	$	177	$	750	$	616

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
	Average Recorded  Investment		Interest              Income
	(In millions)
For the Three Months Ended March 31, 2013:
Commercial	$	536	$	3
Agricultural		169		1
Residential		14		—
Total	$	719	$	4
For the Three Months Ended March 31, 2012:
Commercial	$	273	$	3
Agricultural		229		1
Residential		14		—
Total	$	516	$	4

Mortgage Loans Modified in a Troubled Debt Restructuring

At March 31, 2013 and 2012, the Company had no mortgage loans modified during the period in a troubled debt restructuring.

During the three months ended March 31, 2013, the Company had no mortgage loans with subsequent payment defaults that were modified in a troubled debt restructuring during the previous 12 months. During the three months ended March 31, 2012, the Company had one agricultural mortgage loan that had a payment default with a carrying value after specific valuation allowance of $8 million, which was modified as a troubled debt restructuring during the previous 12 months. Payment default is determined in the same manner as delinquency status — when interest and principal payments are past due 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 $6.3 billion and $6.1 billion at March 31, 2013 and December 31, 2012, respectively.

Net Unrealized Investment Gains (Losses)

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

	March 31, 2013		December 31, 2012
	(In millions)
Fixed maturity securities	$	31,932	$	33,641
Fixed maturity securities with noncredit OTTI losses in AOCI		(260)		(361)
Total fixed maturity securities		31,672		33,280
Equity securities		341		97
Derivatives		1,393		1,274
Other		(16)		(30)
Subtotal		33,390		34,621
Amounts allocated from:
Insurance liability loss recognition		(5,613)		(6,049)
DAC and VOBA related to noncredit OTTI losses recognized in AOCI		9		19
DAC and VOBA		(2,242)		(2,485)
Policyholder dividend obligation		(3,599)		(3,828)
Subtotal		(11,445)		(12,343)
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI		87		119
Deferred income tax benefit (expense)		(7,788)		(7,973)
Net unrealized investment gains (losses)		14,244		14,424
Net unrealized investment gains (losses) attributable to noncontrolling interests		(7)		(5)
Net unrealized investment gains (losses) attributable to MetLife, Inc.	$	14,237	$	14,419

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

	Three Months Ended     March 31, 2013		Year Ended  December 31, 2012
	(In millions)
Balance, beginning of period	$	(361)	$	(724)
Noncredit OTTI losses and subsequent changes recognized (1)		31		(29)
Securities sold with previous noncredit OTTI loss		54		177
Subsequent changes in estimated fair value		16		215
Balance, end of period	$	(260)	$	(361)

(1) Noncredit OTTI losses and subsequent changes recognized, net of DAC, were $24 million and ($21) million for the three months ended March 31, 2013 and year ended December 31, 2012, respectively.

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

	Three Months Ended     March 31, 2013
	(In millions)
Balance, beginning of period	$	14,419
Fixed maturity securities on which noncredit OTTI losses have been recognized		101
Unrealized investment gains (losses) during the period		(1,332)
Unrealized investment gains (losses) relating to:
Insurance liability gain (loss) recognition		436
DAC and VOBA related to noncredit OTTI losses recognized in AOCI		(10)
DAC and VOBA		243
Policyholder dividend obligation		229
Deferred income tax benefit (expense) related to noncredit OTTI losses recognized in AOCI		(32)
Deferred income tax benefit (expense)		185
Net unrealized investment gains (losses)		14,239
Net unrealized investment gains (losses) attributable to noncontrolling interests		(2)
Balance, end of period	$	14,237
Change in net unrealized investment gains (losses)	$	(180)
Change in net unrealized investment gains (losses) attributable to noncontrolling interests		(2)
Change in net unrealized investment gains (losses) attributable to MetLife, Inc.	$	(182)

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 and Mexican governments and their agencies with an estimated fair value, at March 31, 2013, of $20.6 billion and $6.6 billion, respectively, and in fixed income securities of the Japanese government and its agencies with an estimated fair value, at December 31, 2012, of $22.4 billion. 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 $26.6 billion and $28.7 billion at March 31, 2013 and December 31, 2012, respectively.

Securities Lending

The Company participates in a securities lending program. Elements of the securities lending program are presented below at:

	March 31, 2013		December 31, 2012
	(In millions)
Securities on loan: (1)
Amortized cost	$	27,034	$	23,380
Estimated fair value	$	29,605	$	27,077
Cash collateral on deposit from counterparties (2)	$	30,284	$	27,727
Security collateral on deposit from counterparties (3)	$	23	$	104
Reinvestment portfolio — estimated fair value	$	30,776	$	28,112

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

(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.

	March 31, 2013		December 31, 2012
	(In millions)
Invested assets on deposit (regulatory deposits)	$	2,335	$	2,362
Invested assets held in trust (collateral financing arrangements and reinsurance agreements)		11,702		12,434
Invested assets pledged as collateral (1)		23,763		23,251
Total invested assets on deposit, held in trust and pledged as collateral	$	37,800	$	38,047

(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 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report), collateral financing arrangements (see Note 13 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report) and derivative transactions (see Note 7).

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 March 31, 2013 and December 31, 2012. 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.

	March 31, 2013				December 31, 2012
	Total      Assets		Total   Liabilities		Total      Assets		Total   Liabilities
	(In millions)
MRSC (collateral financing arrangement (primarily securities)) (1)	$	3,449	$	—	$	3,439	$	—
CSEs (assets (primarily loans) and liabilities (primarily debt)) (2)		2,453		2,282		2,730		2,545
Operating joint venture (3)		2,364		1,976		—		—
Investments:
Other limited partnership interests		187		14		356		8
FVO and trading securities		67		—		71		—
Other invested assets		85		—		85		—
Real estate joint ventures		11		14		11		14
Total	$	8,616	$	4,286	$	6,692	$	2,567

(1) See Note 13 of the Notes to the Consolidated Financial Statements included in the 2012 Annual Report for a description of the MetLife Reinsurance Company of South Carolina (“MRSC”) collateral financing arrangement. These assets primarily consist of fixed maturity securities.

(2) The Company consolidates former qualified special purpose entities (“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. The Company’s exposure was limited to that of its remaining investment in the former QSPEs of $155 million and $168 million at estimated fair value at March 31, 2013 and December 31, 2012, 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 $33 million and $43 million for the three months ended March 31, 2013 and 2012, respectively.

(3) 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. The assets and liabilities of the operating joint venture were consolidated in earlier periods, however as a result of the quarterly reassessment in the first quarter of 2013 it was determined to be a consolidated VIE.

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:

	March 31, 2013				December 31, 2012
	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)	$	70,358	$	70,358	$	72,605	$	72,605
U.S. and foreign corporate		5,150		5,150		5,287		5,287
Other limited partnership interests		4,717		6,259		4,436		5,908
Other invested assets		1,210		1,469		1,117		1,431
FVO and trading securities		603		603		563		563
Mortgage loans		199		199		351		351
Real estate joint ventures		114		119		150		157
Equity securities AFS:
Non-redeemable preferred		33		33		32		32
Total	$	82,384	$	84,190	$	84,541	$	86,334

(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 $309 million and $318 million at March 31, 2013 and December 31, 2012, 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 13, 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 three months ended March 31, 2013 and 2012.

Net Investment Income

The components of net investment income were as follows:

	Three Months Ended March 31,
	2013		2012
	(In millions)
Investment income:
Fixed maturity securities	$	3,826	$	3,808
Equity securities		24		32
FVO and trading securities — Actively Traded Securities and FVO general account securities (1)		21		45
Mortgage loans		738		830
Policy loans		155		158
Real estate and real estate joint ventures		193		177
Other limited partnership interests		246		182
Cash, cash equivalents and short-term investments		49		36
International joint ventures		(14)		3
Other		63		41
Subtotal		5,301		5,312
Less: Investment expenses		300		259
Subtotal, net		5,001		5,053
FVO and trading securities — FVO contractholder-directed unit-linked investments (1)		1,039		1,015
Securitized reverse residential mortgage loans		—		85
FVO CSEs — interest income:
Commercial mortgage loans		37		45
Securities		—		2
Subtotal		1,076		1,147
Net investment income	$	6,077	$	6,200

(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:

	Three Months Ended March 31,
	2013		2012
	(In millions)
Actively Traded Securities and FVO general account securities	$	13	$	29
FVO contractholder-directed unit-linked investments	$	956	$	877

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 March 31,
	2013		2012
	(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:
Finance	$	(10)	$	(32)
Consumer		(8)		(3)
Utility		(5)		(38)
Communications		—		(17)
Industrial		—		(1)
Total U.S. and foreign corporate securities		(23)		(91)
RMBS		(37)		(9)
CMBS		—		(30)
ABS		—		(2)
State and political subdivision		—		(1)
OTTI losses on fixed maturity securities recognized in earnings		(60)		(133)
Fixed maturity securities — net gains (losses) on sales and disposals		369		(7)
Total gains (losses) on fixed maturity securities (1)		309		(140)
Total gains (losses) on equity securities:
Total OTTI losses recognized — by sector:
Non-redeemable preferred stock		(20)		—
Common stock		(1)		(15)
OTTI losses on equity securities recognized in earnings		(21)		(15)
Equity securities — net gains (losses) on sales and disposals		(6)		6
Total gains (losses) on equity securities		(27)		(9)
FVO and trading securities — FVO general account securities — changes in estimated fair value		4		4
Mortgage loans (1)		12		36
Real estate and real estate joint ventures		(14)		(4)
Other limited partnership interests		—		(2)
Other investment portfolio gains (losses)		7		(25)
Subtotal — investment portfolio gains (losses) (1)		291		(140)
FVO CSEs — changes in estimated fair value subsequent to consolidation:
Commercial mortgage loans		(13)		6
Long-term debt — related to commercial mortgage loans		22		—
Long-term debt — related to securities		(1)		(11)
Non-investment portfolio gains (losses) (2)		15		35
Subtotal FVO CSEs and non-investment portfolio gains (losses)		23		30
Total net investment gains (losses)	$	314	$	(110)

(1) For the three months ended March 31, 2012, net investment gains (losses) includes a net gain of $95 million, as a result of the MetLife Bank Divestiture, which is comprised of gains (losses) on investments sold of $102 million, and impairments on mortgage loans of ($7) million. See Note 3.

(2) Non-investment portfolio gains (losses) for the three months ended March 31, 2013 includes a gain of $30 million related to the MetLife Bank Divestiture. See Note 3.

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

Gains (losses) from foreign currency transactions included within net investment gains (losses) were $58 million for both the three months ended March 31, 2013 and 2012.

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.

	Three Months Ended March 31,
	2013		2012		2013		2012		2013		2012
	Fixed Maturity Securities				Equity Securities				Total
	(In millions)
Proceeds	$	19,550	$	19,394	$	86	$	125	$	19,636	$	19,519
Gross investment gains	$	500	$	325	$	8	$	10	$	508	$	335
Gross investment losses		(131)		(332)		(14)		(4)		(145)		(336)
Total OTTI losses recognized in earnings:
Credit-related		(42)		(73)		—		—		(42)		(73)
Other (1)		(18)		(60)		(21)		(15)		(39)		(75)
Total OTTI losses recognized in earnings		(60)		(133)		(21)		(15)		(81)		(148)
Net investment gains (losses)	$	309	$	(140)	$	(27)	$	(9)	$	282	$	(149)

(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 March 31,
	2013		2012
	(In millions)
Balance, beginning of period	$	392	$	471
Additions:
Initial impairments — credit loss OTTI recognized on securities not previously impaired		1		16
Additional impairments — credit loss OTTI recognized on securities previously impaired		35		6
Reductions:
Sales (maturities, pay downs or prepayments) during the period of securities previously impaired as credit loss OTTI		(30)		(104)
Securities impaired to net present value of expected future cash flows		—		(8)
Balance, end of period	$	398	$	381